The federal government is increasing the capital gains inclusion rate from 50% to 67% for individuals with more than $250,000 in capital gains per year, as well as for all corporations and trusts.

• The 2024 Federal Budget introduced a major change to increase the capital gains inclusion rate from 50% to 67% for capital gains realized by corporations, trusts, and individuals with more than $250,000 in capital gains per year123.
• This means that for capital gains over $250,000, 67% of the gains will be taxable, up from the previous 50%13. Gains under $250,000 will still be taxed at the 50% inclusion rate3.
• The change is expected to affect the wealthiest 0.13% of Canadians, as well as about 12% of Canadian corporations1.
• The government says the change will help offset new spending on housing and social programs, and prevent younger generations from inheriting a bigger deficit1.
• However, some experts argue the change could negatively impact entrepreneurship, investment, and the competitiveness of the Canadian economy, especially in the tech and startup sectors45.
• The new capital gains inclusion rate will take effect on June 25, 202413.

In summary, the Canadian government is increasing the capital gains inclusion rate to 67% for gains over $250,000 in an effort to raise revenue, but this change has raised concerns about its potential impact on investment and economic growth12345.