Business organizations call on federal government to scrap the capital gains tax increase

TORONTO, Oct. 17, 2024 /CNW/ – The Canadian Federation of Independent Business (CFIB) and 20 other industry organizations have sent a letter to Minister of Finance Chrystia Freeland, calling on the federal government to scrap the planned increase to the capital gains inclusion rate and to make the Canadian Entrepreneurs’ Incentive available to business owners in all sectors. Several industry and business organizations, such as Restaurants Canada, Grain Growers of Canada and the Canadian Medical Association, have signed the letter to this effect.

Lifetime Capital Gains Exemption

The increase in the LCGE and its indexation into the future are welcomed announcements and should be retained and protected.

Canadian Entrepreneurs’ Incentive

For the CEI to encourage and support investment and entrepreneurship across the Canadian economy, it should not exclude any sectors. There is no public policy rationale to exclude a restaurant, hotel owner, physician’s office, or accounting practice from a beneficial tax policy available to a retailer or construction company. CFIB urges the government to simplify the CEI and broaden its eligibility to all sectors to support equity, simplicity, and transparency.

Inclusion rate

For its part, the increase in the inclusion rate will have significant negative consequences for Canadian SMEs owners holding investments within their corporations to re-invest in the future (e.g., support the purchase of new machinery, business expansion), as a cushion for economic disruptions and downturns, and eventually retirement. These changes will make it harder for many businesses to access financing to enhance productivity or grow, or to even withstand challenging times. CFIB urges the government to scrap the increase in the inclusion rate to 66.7%, which will affect many business owners who are part of Canada’s middle or aspiring middle class.

The assertion that the increase of the inclusion rate to 66.7% will only affect a small percentage of the wealthiest Canadians is misleading; many business owners, those they employ, and those they serve will also be affected.

To truly support Canada’s middle class and aspiring middle class, from plumbers to physician, from dentists to chocolatiers, from veterinary examiners to farmers, the government needs to consider the above recommendations.

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.

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SOURCE Canadian Federation of Independent Business

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