Photo: Justin Tang The Canadian Press “We want to ensure fairness, for example the owner of a small plex who paid this to finance his retirement, we do not want him to be unduly affected” by the new measure, explained the Bloc leader Gabriel Ste-Marie.
After causing indignation in the Conservative Party, the federal government's plan to increase the inclusion rate for capital gains after $250,000 also makes the Bloc Québécois fear possible repercussions on property owners. small buildings in Quebec.
“We want to ensure fairness, for example the owner of a small plex who paid this to finance his retirement, we do not want him to be unduly affected” by the new tax measure, explained the Bloc member Gabriel Ste-Marie.
The member for Joliette had just listened to the arguments of the Corporation of Real Estate Owners of Quebec (CORPIQ), visiting Ottawa on Thursday to be heard by the parliamentary finance committee. Its director of economic affairs, Paul Cardinal, deplored in front of elected officials the “tile” represented by the increase in the capital gains inclusion rate, ratified Tuesday by all elected officials except the conservatives and two independents.
“It penalizes people who own small rental properties in Quebec, and who are, in a very high proportion, middle class people. […] Of course, making a gain of $250,000 on a building that you bought 25 years ago is not exceptional,” argued Mr. Cardinal.
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His arguments found an echo within the Bloc, “for the principle” of subjecting the very rich to a tax rate comparable to that of the rest of taxpayers. The second opposition party does not want the measure to hurt the owners of buildings with a few units, “the Quebec model,” who risk declaring a large capital gain only once in their life, at the time of sale.
Hope for compromise
MP Gabriel Ste-Marie has promised to try to exclude them from the announced increase in the capital gains inclusion rate by convincing the government to amend the bill on this subject, expected in the fall.
For their part, the elected members of the Conservative Party of Canada alleged in the House that a large segment of society risks paying more taxes, even for taxpayers who earn less than $120,000 per year, such as farmers, welders, carpenters, restaurateurs, fishermen or electricians. And this, despite assurances to the contrary from the Canadian Department of Finance.
The Liberal government formalized at the beginning of the week in a motion one of the main new measures announced during the 2024 budget, namely to now subject two dollars out of three to the tax on capital gains for those who declare the most , or more than $250,000 in winnings for individuals. According to officials' calculations, only 40,000 taxpayers will have to pay more taxes, or 0.13% of the population.
An apartment building that is resold for more that the price at which it was purchased causes its owner to realize a capital gain. CORPIQ would like an exemption for the sale of a first apartment building, for example, or a calculation that allows a capital gain made over several decades to be spread over time.
Cast in concrete
Canada's Finance Minister, Chrystia Freeland, tried to reassure small owners on Thursday during a visit to Montreal. “A couple who has a duplex or triplex is not going to pay additional taxes on the first $500,000 of profits from the sale of their rental units,” she explained.
She also recalled that a capital gain realized following the sale of a principal residence is not subject to tax, and that various exemptions are also provided, as for small business owners and farmers.
Even though Ms. Freeland has already mentioned that capital gains taxation is not a “partisan” issue. , she invited voters to “question [the] motivations” of her political opponents who are trying to “protect a tax system that favors the wealthiest.”
When asked if she could amend the bill on this subject which must be tabled this fall, as the Bloc Québécois wishes, her office redirected Le Devoir towards statements from Ms. Freeland that show no flexibility regarding the measure that is proposed. The text must be unveiled this summer as a legislative proposal, before being formally presented to elected officials upon their return from the summer break.