In the 2024 Budget, the federal government announced changes to capital gains taxation to make Canada's tax system fairer.

Starting June 25, 2024, the capital gains inclusion rate will be increased from one-half to two-thirds for capital gains over $250,000 per year for Canadians, and on all capital gains for corporations and most types of trusts.

An increased Lifetime Capital Gains Exemption would ensure most middle-class entrepreneurs won’t pay more tax because of these changes, and the new Canadian Entrepreneurs’ Incentive would encourage entrepreneurs to invest in capital-intensive and high-growth sectors.

These changes will make Canada’s tax system fairer by making taxation more income-neutral—these changes narrow the tax advantage between capital gains and other forms of income, particularly paycheques.

A fair and predictable taxation environment is important for Canadians planning for retirement and for businesses planning to invest in Canada.

To that end, the government is clarifying that forthcoming legislation and Budget 2024 changes to capital gains: These clarifications ensure that measures to improve tax fairness do not provide new loopholes or uncertainties about the tax system.