Capital gains tax hike to hit one in five Canadians: poll

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The federal government said a tenth of one per cent of Canadians will be affected by the hike to the capital gains tax inclusion rate coming down the pike.

Canadians, according to a recent poll, disagree.

One in five of those surveyed by Angus Reid Institute believe their after-tax income will take a hit as a result of the change over the next five years.

“Not unlike Canadians’ reactions over the last several months regarding the impact on their household wallets from carbon pricing and rebates, people in this country — and critically — the young people Liberals desperately need to woo back from the Conservatives and NDP – aren’t convinced an increase in the capital gains tax will make their lives more affordable or their opportunities more equitable,” said Angus Reid in its report.

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Canadians currently pay tax on 50 per cent of capital gains, or the profits they make on the sale of assets like secondary residences and investments. The change coming on June 25 will mean all corporations will pay tax on 66 per cent of capital gains and individuals will pay 66 per cent on any capital gains that exceed $250,000 in a single year.

Primary residences remain exempt.

The Liberals say the aim is to level the playing field between lower- and middle-income Canadians who earn their money mostly from their jobs and the wealthy, who earn more of their money from the sale of investments. The change was estimated to impact just 0.13 per cent of Canadians and 12.6 per cent of businesses.

The move, however, has been controversial. A host of business leaders and groups ranging from doctors to farmers have opposed the inclusion rate hike, saying it will add to the burden on the middle class, discourage investment and drag down the country’s already lagging productivity.

Half of the Canadians in the Angus Reid poll opposed the tax change, while one third supported it and the survey  suggests that the government’s “generational fairness” message is not getting through, said Agnus Reid.

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“In terms of selling this policy, there is a clear gap in communication from the Liberals to those who the government says will gain most from this change,” said the report.

Half of the people polled aged 18 to 34 said they’ve heard little or nothing about the capital gains tax change and 30 per cent said they don’t know if they support it or not. Uncertainty was also evident among the 35 to 44 age group.

Older generations were better informed — and more opposed. More than 55 per cent of people aged 45 to 54 are against it, and almost 60 per cent of those aged 55 to 64.

When broken down by income, more than 60 per cent of households with incomes higher than $200,000 a year oppose the higher inclusion rate, but 40 per cent of lower-income households are also against it.

“Another 27 per cent are unsure, suggesting the Liberal government’s communication on this file is not punching through,” said the report.

Politically, Liberal voters showed the most support at 58 per cent. Conservative supporters were 84 per cent against it.

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This map of China just before and just after the COVID-19 lockdown illustrates the connection between economic growth and pollution, say the team of strategists who put out BofA’s 2024 Investment Altas. “Societies want to combat climate change but also want jobs & prosperity.”

In a more recent example of environment vs commerce, BofA cites New York City’s decision to pause plans for a congestion charge. The $15 fee for drivers entering Manhattan would have been the first of its kind in the United States.

• Today’s Data: United States current account balance, housing starts and building permits
• Earnings: Algoma Steel Group Inc., Empire Co Ltd., Darden Restaurants Inc., Accenture PLC, Jabil Inc., The Kroger Co.

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Today’s Posthaste was written by Pamela Heaven, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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