Business groups criticize capital-gains tax changes as opposition continues to mount

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CEOs of the Canadian Chamber of Commerce, the Canadian Federation for Independent Business and others sign letter calling for Finance Minister Chrystia Freeland to axe the proposal

Several major business groups are calling on Finance Minister Chrystia Freeland to kill the planned increase to the capital-gains tax, saying they are alarmed by the potential impact on Canada’s competitiveness.Canadian Federation for Independent Business

“This measure will limit opportunities for all generations and make Canada a less competitive, and less innovative nation,” the groups wrote. “At a time when we are already urgently struggling to reignite our nation’s lagging productivity, increasing taxes on productive investments and throttling Canadian potential will have profound, long-lasting and potentially irreversible repercussions.

The Liberal government said these added taxes will raise $19.4-billion in revenue over five years to fund spending commitments in housing, health care, defence and scientific research. A number of innovation-friendly measures in the budget, including $2.4-billion in funding for“This proposed tax hike will only serve to undermine the government’s stated policy objectives,” the letter says.

She followed up with The Globe and Mail with the names of three authors, including the late Simon Fraser University economics professor Jonathan Kesselman. Mr. Kesselman found in a 2023 review of the academic literature that evidence about the long-run economic impact of higher capital-gains taxes are “mixed and not easily quantified,” but “economic analysis confirms the adverse effects of higher capital-gains taxes” on the creation and success of young enterprises.

 

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