Quebec intends to follow Ottawa’s lead and increase its capital gains tax rate.
The Quebec government announced late on Thursday that its tax system will be adjusted to bring it into line with five measures proposed in the latest federal budget.
The Quebec Finance Ministry said it wants to incorporate the increase in the capital gains inclusion rate, which is one of the key proposals in the federal budget tabled earlier this week.
Starting June 25, Ottawa intends to tax two-thirds rather than half of capital gains, which refer to profits made on the sale of assets.
The increase in the so-called inclusion rate would apply to capital gains in excess of $250,000 for individuals, as well as to all capital gains realised by corporations.
Quebec’s desire to follow in the footsteps of the federal government on capital gains was greeted with disappointment by Quebec Manufacturers and Exporters.
“This measure will hamper investment by manufacturing companies, which is not desirable at a time when we are going through a difficult economic period and companies need to invest in order to modernise and decarbonise,” said president CEO Véronique Proulx, in a press release.
Other measures taken into account by Quebec in Chrystia Freeland’s budget include an increase in the lifetime capital gains exemption and the introduction of an incentive for Canadian entrepreneurs.
The CAQ government also wants to include an increase in the Home Buyers’ Plan withdrawal limit and temporary relief for repayments under the plan.
“Our desire remains to reduce the overall tax burden on taxpayers while maintaining sound management of public finances,” said Quebec Finance Minister Eric Girard in a news release.
In an information bulletin, the Ministry of Finance states that these changes will begin to apply on the same dates as the federal measures.
This report by The Canadian Press was first published in French on April 18, 2024.