Poilievre says Tories will vote against capital gains tax hike, calls it a ‘job killer’
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Conservative Leader Pierre Poilievre said Tuesday his party will oppose the government’s proposed capital gains inclusion rate increase — a tax hike that is projected to pull in roughly $19 billion in new revenue.
Weeks after the budget was tabled, Poilievre finally made his position known when he stood in the House of Commons to blast the Liberals’ plan and their so-called “high tax agenda.”
Poilievre’s team also released a 15-minute social media video narrated by the leader to explain why the party is taking a stand against a policy that disproportionately affects wealthy people and big corporations.
“Businesses, jobs, doctors and food production will leave Canada,” Poilievre says in the video.
The government has tabled legislation to increase the capital gains inclusion rate from one-half to two-thirds on capital gains above $250,000 per year for individuals, and on all capital gains realized by corporations and trusts.
Poilievre said there could be damaging consequences to the policy.
He claimed the tax increase will worsen the country’s family doctor shortage because it will levy higher taxes on a physicians’ retirement savings — possibly driving these doctors to retire now or move their practices abroad.
The Canadian Medical Association has steadfastly opposed the inclusion rate increase, saying the tax hike will make primary care worse in a country where 6.5 million people already don’t have access to a family doctor or nurse practitioner.
Conservative Leader Pierre Poilievre says small business owners will be hugely impacted by the Liberals’ proposed capital gains tax hike. Prime Minister Justin Trudeau responded by saying Conservatives would be voting against middle-class Canadians.
Poilievre also said some farmers could be on the hook for higher taxes when they sell a family farm. The Grain Growers of Canada has estimated the inclusion rate increase will raise the average tax paid by some of its members by 30 per cent.
“This job-killing Trudeau tax will drive billions of dollars of machines, technology, business and paycheques out of our country,” Poilievre said, echoing former Liberal finance minister Bill Morneau, who has said the tax hike will discourage investment.
Poilievre said some of the richest Canadians can dodge the worst effects of the increase because they’ve already had two months since the budget was tabled to sell their assets and move money offshore before the measure takes effect at month’s end.
“So, who will pay for this tax? Firstly, people who have one-time sales or disposal of long-term assets, like a grandmother trying to give some of her farmland to her children for homes,” Poilievre said.
The increase has been pitched by the government as a way to restore “fairness” to the tax code by making wealthy people and big businesses pay more to help fund new social programs like child care, dental care and pharmacare.
The government also has said it needs the extra revenue to help build more homes for younger generations locked out of the housing market.
While the measure will raise large sums of money, the government projects that the changes will only affect 0.13 per cent of Canadians — people with an average income of about $1.4 million a year — in a given tax year.
Finance Minister Chrystia Freeland separated the capital gains changes from the budget itself to force Poilievre to take a stand on the tax measure.
It’s become something of a political wedge issue, with the Liberals trying to get Poilievre to stand against it so they can paint him as a friend of the “ultra wealthy.”
Indeed, after Poilievre came out against the tax, Trudeau accused Poilievre in question period of “defending advantages for the wealthiest Canadians when they sell really profitable investments.”
“We’re stepping up for Canadians. They’re stepping up for the rich,” Trudeau said.
Freeland said the Conservatives have been “squiggling and squirming” for weeks since the budget was released, trying to come up with a coherent a position on the tax increase.
She said Conservative opposition shows the party’s not standing up for working class people.
“The Conservatives are coming out against fairness,” Freeland said.
“Canadians are watching. Canadians are now seeing what side the Conservatives are on. The Conservatives are very clearly saying they’re against fairness, they’re in favour of the wealthy lobbyists who advise them.”
While it faces opposition from some business groups and professionals, the government’s capital gains tax increase has been praised by some groups who feel the wealthy and well-off don’t already pay enough in taxes.
“The tax break on capital gains is grossly unfair for a vast majority of Canadians who depend on their wages to build a life,” said Katrina Miller, the executive director of Canadians for Tax Fairness, a group that advocates for a more progressive tax regime.
“This is about everyone paying their fair share back into the communities we all live in. Our economic sustainability depends on maintaining a livable and stable society, and a fair tax system is a critical building block. We applaud the government for taking this important step towards that goal.”
Some Canadian doctors warned that the Liberal government’s new capital gain tax increase could push more doctors out of family medicine for financial reasons at a time when millions of Canadians don’t have a family doctor.
In his social media video explaining the party’s stance, Poilievre said he doesn’t support policies that could hurt the economy at a time when Canada’s GDP per capita has slumped and growth has stagnated.
Poilievre said taxpayers have already paid taxes on the income used to buy an investment and it’s unfair to claw more tax back through a higher capital gains inclusion rate when an investment is sold.
He said capital gain taxes are particularly punitive because a capital gain is based on the price of an investment sold now compared to what a person or corporation paid when they first bought it.
The initial purchase price is not adjusted for inflation, which means a capital gains is like a tax on inflation, Poilievre said.
“Given that capital gains are already double taxed and partly inflated away, adding new taxes is unfair,” he said.
“With this tax hike, Canada’s capital gains will be one of the highest in the advanced world so businesses, jobs and money will pour out of our country at an even faster rate,” he said.
