Canadian Tax Agency Will Collect New Taxes That Haven’t Become Law Yet
Liberal government needs the additional money to cover the deficit
(via The Daily Bell)
In the Canadian federal budget this past April, the Trudeau Liberals introduced a new capital gains inclusion rate, hiking it from 50% to 66% (to be clear, this doesn’t make the amount of taxes paid on capital gains 66%, it raises the taxable amount of a capital gain to the new level).
For example: let’s say that a sale on a small business produces a capital gain of one million dollars – instead of having your tax rate applied against half of it, it would henceforth be applied against two-thirds of it.
So in our hypothetical case, a small business owner sells a company they spent their life building and gets a million bucks (after allowable exemptions) off the table:
Under the old rate = $1,000,000 X 50% inclusion rate X 53% (top tax rate in Canada) = $265,000 in taxes.
Under the new rate it comes out to $349,000 in taxes.
It’s enough of a difference to change the retirement calculations for a lot of people and I do remember a flurry of M&A activity as some Canadian business owners and property investors decided this was their cue to realize their sweat equity before the new rate kicked in (which was supposedly in June).
For many it was the final straw from the most small business, family business and farm hostile government in Canadian history.
Remember when our PM (a trust fund baby who was born a millionaire), said small business owners were all tax cheats?
— Mark Jeftovic, The ₿itcoin Capitalist (@StuntPope) November 9, 2024
Then his government went on increase taxes on so-called "passive income" for small businesses while exempting holdco's that he and his cronies kept their own… https://t.co/HNhw23uwyP pic.twitter.com/PABf5bUAAm
There’s only one problem: The new tax rate isn’t actually in effect yet
“The Canada Revenue Agency yesterday would not comment on warnings it will enforce a $17.4 billion increase in capital gains taxes though the measure never passed Parliament. An Agency manager publicly stated auditors will “continue to administer the proposed legislation” as if it was law.”
The CRA is Canada’s version of the IRS – and they’ve done this before, prompting a former Liberal MP to observe that the CRA cannot bypass Parliament (which hasn’t enacted the new rate yet).
“Parliament is supreme. Parliament is above cabinet, it is above the Department of Finance. We can’t allow that to be undermined.”
Undermining Parliament indeed – the CRA is forging ahead because Trudeau’s “Cabinet was counting on its share of higher capital gains taxes to cover a portion of this year’s deficit.”
That deficit just clocked in north of $60 billion CAD, fully 50% higher than the Liberal government’s own projections.
The CRA says “no law be damned”, they are collecting the new rate – and even the suspension of Parliament or a new election will not negate that.
Canadian’s have already endured the invocation of martial law in the Emergencies Act declaration that brutally suppressed the #FreedomConvoy in 2022. It was later ruled unconstitutional by a Federal court judge.
None of that matters – the government is simply doing what they want, ruling by edict, confiscating our wealth and trampling our rights regardless of our protections under the law or prevailing legislation.
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