FACT Sheet: Capital Gains Increase Helps Us All

Introduction 

With every new policy around taxation, citizens are rightfully interested and concerned about how their personal finances will be affected. As Canadians face pressing issues like inflation, stagnant wages, and rising living costs, the need for a fair and predictable tax system becomes increasingly important. A fair and predictable tax system supports individuals in making informed financial decisions, such as investments, business planning, and retirement. It also ensures they receive the benefits they are entitled to from their tax contributions. 

In today’s digital era, where misinformation can easily spread, it’s essential to have a clear understanding of new tax policies to avoid misunderstandings and undue fear about their financial implications. The recent amendments to the Capital Gains Tax (CGT), introduced in the 2024 federal budget, are a prime example of such policy changes (Canada Department of Finance, 2024). While these amendments have sparked considerable discussion, some of which is based on misinformation, their purpose is to ensure that taxes are reinvested into the communities that need them most, rather than exacerbating financial concerns. 

To address the widening gap in income inequality and to enhance funding for essential social services, the Canadian government has revised the Capital Gains Tax. This FACT Sheet provides a detailed overview of these policy changes, outlining who will be affected, the extent of the impact, and dispelling common myths surrounding the new regulations. It also emphasizes the role of the updated Capital Gains Tax in directing funds towards initiatives that benefit socio-economically marginalized Canadians.