Key insights

• 💰 The government plans to increase the inclusion rate for capital gains taxation to 2/3, but with a $250,000 individual exemption and tax on only half of gains below that threshold, the impact is limited and still favors the wealthy.
• 📈 New capital gains tax rates affect more people over their lifetime, indicating it is not just the top 1% of society. Even a simple transfer of assets can count as a capital gain, complicating passing on farms and other assets to the next generation.
• 👨‍💼 Criticism of tax policies affecting small business owners and professionals in Canada, leading to increased tax burdens and financial challenges.
• ⚕️ Many doctors incorporate to save on personal income taxes and plan for retirement by reinvesting through their companies. New rules on capital gains tax will increase taxes for doctors when selling company assets for personal use.
• 🏠 Tax change impacts doctors, homebuilders, and entrepreneurs, Canada's tax code is complex with exceptions and eligibility requirements.
• 🤔 Misconception about the impact of the inclusion rate increase on profits, Introduction of a $250,000 individual exemption for capital gains, Taxation only on half of gains below the $250,000 threshold, Impact still favoring the wealthy
• 💼 Impact of tax policies on doctors and healthcare shortage, Discussion of the financial implications for Canadians with inherited cottages
• 📊 Government estimates an additional $20 billion in revenue over the next five years from the tax change.

Q&A

• Who does the tax change affect, and what is the estimated revenue impact?

  The tax change affects a wide range of people, including doctors, homebuilders, and entrepreneurs. Canada's tax code is complex, with numerous exceptions and eligibility requirements. The government estimates an additional $20 billion in revenue over the next five years as a result of these proposed changes to the capital gains tax.

• Why are physicians concerned about the impact of higher capital gains tax?

  Many doctors incorporate to save on personal income taxes and plan for retirement by reinvesting through their companies. However, new rules on capital gains tax will increase taxes for doctors when selling company assets for personal use. The Canadian Medical Association expresses concern that the change will hurt healthcare in Canada, especially for incorporated professionals like doctors.

• What are the critiques of the tax policies impacting small businesses and professionals in Canada?

  There are criticisms of tax policies affecting small business owners and professionals in Canada, such as doctors, leading to increased tax burdens and financial challenges. This includes calculations showing increased tax burden on selling a small business under new tax rules and the impact of tax policies on doctors and healthcare shortage. There is also a discussion of the financial implications for Canadians with inherited cottages.

• How do new capital gains tax rates affect individuals over their lifetime?

  New capital gains tax rates affect more people over their lifetime than just in a given year. Most people file capital gains only once or very infrequently, indicating that it is not just the top 1% of society. Even a simple transfer of assets can count as a capital gain. This can complicate passing on farms and other assets to the next generation.

• What is the impact of the inclusion rate increase on profits and who does it favor?

  While there is a misconception about the impact of the inclusion rate increase on profits, the reality is that the impact is limited and still favors the wealthy. The introduction of a $250,000 individual exemption for capital gains and taxation only on half of gains below the $250,000 threshold are factors influencing this impact.

• What is the planned increase in inclusion rate for capital gains taxation in Canada?

  The government plans to increase the inclusion rate for capital gains taxation to 2/3 (66%), but with a $250,000 individual exemption and tax on only half of gains below that threshold. This is a proposed change to the capital gains tax by the government.

• 00:00 Understanding the impact of the capital gains tax increase in Canada and unraveling the different perspectives in a simple manner.
• 02:41 The government plans to increase the inclusion rate for capital gains taxation to 2/3, but with a $250,000 individual exemption and tax on only half of gains below that threshold, the impact is limited and still favors the wealthy.
• 05:22 The impact of new capital gains tax rates affects more people over their lifetime than just in a given year. Most people file capital gains only once or very infrequently, indicating that it is not just the top 1% of society. Even a simple transfer of assets can count as a capital gain. This can complicate passing on farms and other assets to the next generation.
• 07:38 Critique of tax policies impacting small businesses and professionals in Canada, such as doctors, leading to increased tax burdens and financial challenges.
• 10:06 Physicians incorporating to save on personal income taxes but facing higher capital gains tax, impacting retirement savings and financial planning.
• 12:31 The tax change affects a wide range of people, including doctors, homebuilders, and entrepreneurs. Canada's tax code is complex, with numerous exceptions and eligibility requirements. The government estimates an additional $20 billion in revenue over the next five years.