If you had capital gains this year—large or small—you may have been negatively impacted by proposals, delays, and eventual policy reversals.
Proposed Increase and Subsequent Delay
In the April 2024 budget, the federal government of Justin Trudeau proposed raising the capital gains and losses inclusion rate from approximately one-half to two-thirds for individuals with annual capital gains exceeding $250,000, as well as for corporations and most trusts.
The government had anticipated raising approximately $19.4 billion over five years from this measure, intended to fund affordable housing projects and reduce the national deficit. Initially set to take effect on June 25, 2024, and despite the lack of parliamentary approval, the Canada Revenue Agency (CRA) began preparing to collect the modified capital gains tax. Then, a new implementation date of January 1, 2026, was announced on January 31, 2025, due to political uncertainties, including the suspension of Parliament, but not before causing havoc.
Many people in the midst of a real estate transaction scrambled to secure an earlier closing date to avoid an increase in the capital gains inclusion rate, while others prematurely liquidated their stock portfolios.
“All that running around people did to liquify their stock portfolio prior to June 25 and some of those real estate deals that were rushed because what you actually saw as well were vendors taking less money to get their deal done by June 24th… so they went back to the purchaser and said ‘would you mind if we could close on June 24 and the purchaser said yeah, for $20,000 less I’ll do it,’ so you had people negotiating like this,” explained Scott Conner a partner at BDO.
“You look back now, and hindsight is 20/20, and now it’s just like, Oh my gosh, all this craziness for what is now a January 1, 2026 issue,” added Conner. “And of course now, we hear basically commentary that depending on who wins the next election, they will basically undo all this. There will be no two-thirds inclusion rate; they will keep it at one-half.”
Then, on March 21, 2025, just days before calling an election, Prime Minister Mark Carney issued a media release announcing the cancellation of the increase to the capital gains inclusion rate, which would remain at 50%.
“Canada is a country of builders. Cancelling the hike in capital gains tax will catalyze investment across our communities and incentivize builders, innovators, and entrepreneurs to grow their businesses in Canada, creating more higher paying jobs. It’s time to build one Canadian economy – the strongest economy in the G7,” he said in the release.
On March 30, 2025, the leader of the Official Opposition, Pierre Poilievre, said the capital gains tax “punishes people for selling an old investment and reinvesting in a new one.” Poilievre said his government would remove the capital gains tax for those who reinvest the money in Canada.
The back-and-forth on the capital gains policy also resulted in tax filing confusion at the beginning of the season, as a result of software used by tax preparation firms that did not include a capital gains schedule, explained Conner. The filing of all taxes with capital gains was delayed until the issue was resolved in March. As a result of the confusion, the Canada Revenue Agency has extended the filing deadline for personal tax returns with capital gains from April 30 to June 2.
Currently, there is no mechanism in place to recoup the losses incurred as a result of the perceived policy changes.
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