Canadian Prime Minister Justin Trudeau’s government has announced a new federal budget that includes higher taxes for the wealthiest Canadians. The budget proposes an increase in the capital gains inclusion rate, affecting the taxable portion of profits made from asset sales. Specifically, the taxable portion of capital gains exceeding $250,000 Canadian (US$181,000) will rise from half to two-thirds. This change is expected to impact only 0.1% of Canadians and generate nearly $20 billion Canadian (US$14.5 billion) in revenue over the next five years.
Finance Minister Chrystia Freeland emphasized the importance of this tax adjustment, noting that while no one enjoys paying more taxes, it is crucial for those who can afford it to contribute their fair share. She urged the wealthiest individuals in Canada to consider the type of society they wish to live in, highlighting the budget's focus on economic justice for younger generations.
The federal budget, presented by Freeland, outlines $53 billion Canadian (US$38 billion) in new spending aimed at addressing economic disparities. Despite facing criticism, Freeland defended the budget as a necessary step towards creating a more equitable society, particularly for Canadians under 40 who are experiencing greater challenges in establishing themselves compared to previous generations.
The budget also aims to cap the federal deficit at $40 billion Canadian (US$29 billion), signaling the government's commitment to fiscal responsibility. Prime Minister Trudeau's Liberal government, currently facing a decline in popularity due to concerns over the cost of living, hopes that these measures will address key economic issues and improve the overall well-being of Canadians.
