Following the 2019 federal election, the Liberal Party of Canada formed a minority government and may be reliant on support from another federal party in order to execute on certain measures from their election platform. The support may come from the New Democratic Party (NDP), whose ideologies, particularly their social agenda, are similar to those of the Liberal Party. In their election platform, the NDP proposed to increase the capital gains inclusion rate to 75% from 50%. This has Canada speculating, again, if a hike to the capital gains inclusion rate may occur in the upcoming federal budget.

The federal budget date has not yet been announced, but if a change is made in the upcoming budget, it is not known whether it would be effective immediately, be retroactive, or start at a future date. If you would like to plan for a potential increase in the inclusion rate, the following article details some planning items (not necessarily exhaustive) you may wish to consider along with your qualified tax advisor. It is important that you consult with your qualified tax advisor to assist you in assessing the costs and benefits of implementing any planning strategies.

With the Liberal Party’s new minority government, Canadians are wondering what changes lie ahead. There are speculations as to what may or may not be included as tax changes in the upcoming federal budget, but as always, we will only know for certain on budget day. Speak with your qualified tax advisor to explore any opportunities or strategies that may mitigate effects of any potentially adverse tax changes to the capital gains inclusion rate.