Business leaders unite against proposed capital gains tax increase in letter to Federal government
The Canadian Federation of Independent Business (CFIB), alongside 20 other industry organizations, has formally requested the federal government to abandon plans to raise the capital gains inclusion rate. In a letter addressed to Minister of Finance Chrystia Freeland, the coalition called for more equitable tax policies to support Canadian entrepreneurs across all sectors.
The CFIB cautioned that the proposed increase in the capital gains inclusion rate could impose significant challenges for small and medium-sized enterprises (SMEs). They noted many business owners rely on investments within their corporations to reinvest in their operations, purchase new machinery, and support growth initiatives. The coalition further argued that this tax hike could hinder businesses’ ability to access financing and make necessary investments, ultimately impacting their stability during economic downturns.
The organization expressed its support for recent announcements regarding the Lifetime Capital Gains Exemption (LCGE) and its future indexation. However, it emphasized that the CEI should not be restricted to specific sectors, as all business owners, regardless of their industry, deserve access to supportive tax policies.
“The assertion that the increase of the inclusion rate to 66.7 per cent will only affect a small percentage of the wealthiest Canadians is misleading,” the letter stated. “Many business owners, those they employ, and those they serve will also be affected.”
Organizations including Restaurants Canada, Grain Growers of Canada, and the Canadian Medical Association joined the CFIB in advocating for changes to the proposed tax reforms. The group also urged the government to broaden access to the Canadian Entrepreneurs’ Incentive (CEI), arguing that its current exclusions are unjustified.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association representing small and medium-sized businesses, with 97,000 members from various sectors and regions. The CFIB focuses on enhancing the success of business owners by advocating for policy changes at all government levels and providing expert advice and resources.
