The proposed increase to Canada’s capital gains inclusion rate appears to be on hold – at least for now. Here’s a breakdown of the current situation:

• Background: Last spring, the federal government announced plans to increase the capital gains inclusion rate from 50% to 66.6%. However, the motion failed to receive Royal Assent due to parliamentary gridlock.
  
• Recent Developments: Prime Minister Trudeau recently announced his intention to step down and prorogue Parliament. This effectively halts all government bills and motions currently in process.
  
• Election Implications: With a potential spring election on the horizon, Conservative leader Pierre Poilievre has pledged to eliminate the proposed capital gains increase if elected.
  
• CRA’s Position: Interestingly, the CRA has indicated plans to administer changes to the capital gains tax but clarified that they will cease doing so if Parliament does not introduce or pass a relevant bill and signals its intent not to proceed.

What Does This Mean for You?

For now, uncertainty remains around how the capital gains tax will impact Canadians filing their 2024 taxes. Staying informed about legislative changes and preparing for potential outcomes is essential.