Canadian Government Imposes Higher Taxes on Wealthiest Citizens in Federal Budget

In a bold move to address economic inequality, Canadian Prime Minister Justin Trudeau’s government announced on Tuesday that it will be imposing higher taxes on the wealthiest Canadians as part of the federal budget. The budget proposes to increase the capital gains inclusion rate, affecting the taxable share of profit made on the sale of assets.

Under the new plan, the taxable portion of capital gains above $250,000 Canadian (US$181,000) would rise from half to two-thirds. The federal government estimates that this change will only impact 0.1% of Canadians but will raise nearly $20 billion Canadian (US$14.5 billion) in revenue over the next five years.

Finance Minister Chrystia Freeland defended the tax increase, stating, “No one likes paying more tax, even — or perhaps particularly — those who can afford it the most. But before they complain too bitterly, I would like Canada’s one per cent — Canada’s 0.1% — to consider this: What kind of Canada do you want to live in?”

Freeland presented a federal budget that pledges $53 billion Canadian (US$38 billion) in new spending focused on economic justice for younger generations. Despite denying that the budget is a political exercise, Freeland acknowledged the challenges faced by Canadians under 40 in establishing themselves compared to previous generations.

The budget also aims to cap the federal deficit at $40 billion Canadian (US$29 billion). However, Trudeau’s Liberal government is currently facing a tough battle in the polls due to concerns over the cost of living in Canada.

Political science professor Nelson Wiseman from the University of Toronto commented, “This budget will do very little to improve Liberal prospects. They will be going down to defeat, and they know it.” Wiseman suggested that the only hope for the Liberal party may be if Trudeau steps aside and a new leader is selected, but even then, victory would be challenging to achieve.