By Shachi Kurl, President
June 21, 2024 – New taxes, or increases to existing taxes, are never an easy sell at the best of times. They’re a particularly unpalatable combination in the midst of a cost-of-living crisis, something the federal Liberals understand very well these days.
They’ve already spent the last nine months trying to explain to Canadians that the carbon tax implemented in 2016 costs most people less than they pay once rebates are factored in. Millions in the country are profoundly skeptical anyway. Two-thirds believe the tax makes their lives either a little or a lot more expensive; nearly 70 per cent believe the policy is ineffective at reducing greenhouse gas emissions. Back in March, only 22 per cent supported a scheduled April 1 increase to the tax. The Liberals, unwilling to be seen to abandon a signature tax policy, marched on.
The latest patch of wet cement they are determined to slog through is an increase to the capital gains inclusion amount. This time next week, the sale of an asset such as an investment property, a stock or a mutual fund that earns more than $250,000 in profit will be subject to taxes on 67 per cent of the gain, an increase from 50 per cent.
It was the centrepiece of the spring budget, designed to capture the attention of Gen Z and Millennials whose access to economic upward mobility feels more and more remote as years go by.
The problems for the Trudeau government are multifold. First, the young voters they are aiming to woo with a tax increase aimed at “generational fairness” are checked out on the matter. More than half of 18-to-34-year-olds have heard nothing about it. Among those who have heard something about it, more are inclined to oppose the tax increase than support it. This is not exactly the warm, youthful embrace the Liberals were hoping for. (Although to be fair, when was the last time you tried to hug your 20-something nephew? Awkward at best).
Perhaps worse, there is a massive disconnect between the number of people Prime Minister Justin Trudeau says will be adversely affected by this tax increase (less than one per cent,) and those who believe they’re on the hook (a whopping 20 per cent).