Sidesteps parliamentary approval to implement his increase in the capital gains tax
Prime Minister Justin Trudeau has every intention of ramming through the capital gains tax hike without a vote in Parliament.
The capital gains tax hike is scheduled to take effect on June 25, but the legislation to impose it hasn’t even been introduced and the House of Commons is scheduled to break for summer June 21.
“The government says that even if a bill has not yet passed, the change will take effect on June 25,” reported the Canadian Press.
That means the tax hike will occur before being passed by elected members of Parliament. Essentially, Trudeau is getting unelected bureaucrats to impose tax hikes on Canadians.
That’s wrong and fundamentally undemocratic. If a couple of cabinet ministers want to take more money from you, they should at least have the spine to give elected representatives the chance to vote on the tax hike first.
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Our elected representatives aren’t voting on the tax hike. And Canadians didn’t vote for it either.
The last Liberal platform included a bunch of new taxes, including taxes on banks and insurance companies, a so-called anti-flipping home tax, and higher taxes on tobacco and vaping.
But there wasn’t a single mention of a capital gains tax hike in the 2021 Liberal election platform.
Simply put, this government has no mandate to hike capital gains taxes.
The reason MPs won’t vote on the tax hike is because of the incompetence of Trudeau and Finance Minister Chrystia Freeland.
First, the government tabled a late budget, more than two weeks after the start of its fiscal year. Then the government decided to separate the capital gains tax hike from its budget implementation legislation.
If Trudeau and Freeland left the tax hike in the budget bill, MPs would have had the chance to hash out the details in committee.
And this isn’t the first time Trudeau has hammered Canadians with tax hikes without letting MPs vote. Since 2017, the feds have increased alcohol taxes every year without a vote in Parliament.
These automatic alcohol tax hikes are also undemocratic and wrong. However, while those hikes cost Canadians tens of millions of dollars annually, the capital gains tax hike will cost Canadians $6.9 billion this year alone.
With Trudeau spending $535 billion this year, he will blow through that extra capital gains tax cash in less than a week.
The capital gains tax hike also has serious implications for professional tax planners and Canadians preparing for retirement. At a minimum, they deserve to know how the tax hike will affect them before it’s implemented.
“Since [the federal budget], tax practitioners have fielded an unending number of questions from people wondering what they should do,” said Kim Moody, a tax policy expert. “Unfortunately, tax practitioners and their clients are planning in the dark.”
And the tax hike will have real-life implications for countless Canadians.
For example, the Canadian Medical Association explained that many doctors rely on “professional corporations as a means of saving for retirement since most do not have access to employer retirement plans.” The CMA warns that the capital gains tax hike “will have adverse effects on physician recruitment and retention across the country.”
The government doesn’t deserve a penny more from Canadians. And it shouldn’t be increasing taxation without representation.
Trudeau must do away with his democracy-free capital gains tax hike.
Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation.
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