Liberals’ capital gains tax hike is dead, lifetime exemption limit increase to stay

Prime Minister Mark Carney has officially announced that the Government of Canada will cancel its proposed hike to the capital gains tax inclusion rate.

Carney promised to do this earlier this month after the Liberals elected him to replace Justin Trudeau as party leader and prime minister, following nearly a year of backlash from Canadian technology and business leaders since the Liberals first announced the tax changes in Budget 2024.

The feds said they intend to maintain the planned increase to the Lifetime Capital Gains Exemption limit to $1.25 million on the sale of small business shares and farming and fishing property. Carney indicated that the government will introduce legislation to facilitate this “in due course.” Their announcement made no mention of the Canadian Entrepreneurs’ Incentive.

“Canada is a country of builders,” Carney said in a statement. “Cancelling the hike in capital gains tax will catalyze investment across our communities and incentivize builders, innovators, and entrepreneurs to grow their businesses in Canada, creating more higher paying jobs. It’s time to build one Canadian economy—the strongest economy in the G7.”

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Feature image courtesy Mark Carney via LinkedIn.