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Trudeau's latest budget

Started by DKG, April 17, 2024, 04:04:44 PM

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It keeps the deficit capped at $40 billion, but introduces new taxes that largely offset billions in new spending. Here is what the economists say about changes to the capital gains tax.

Canada's federal budget 2024 means high-worth individuals, corporations and trusts will pay more in capital gains taxes , which some economists say will be another blow to Canada's already dismal productivity .

"Canada's productivity is in crisis and the best way to get it back up is to attract new investments," said Renaud Brossard, vice-president of communications at the Montreal Economic Institute in a statement after the budget. "And few are those who have been able to lure investments and job creators with promises of higher taxes.
"With this budget, the Trudeau government is shooting us in the foot."

The inclusion rate increases to 66 per cent, up from 50 per cent, on capital gains above $250,000 for individuals and on all capital gains for corporations and trusts. The change is expected to yield an additional $19.4 billion over four years.

The Canadian Chamber of Commerce said not only did the tax changes add to businesses' burden, the budget also lacked a clear plan to promote productivity and economic growth.

"We oppose any measure which will increase the costs for businesses and Canadians when both are currently experiencing challenging economic headwinds," said Jessica Brandon-Jepp, senior director of the Chamber's fiscal and financial services policy.

"Throttling the success of Canadian businesses with new taxes will limit opportunities and employment for Canadians, putting economic growth and productivity even further out of reach," she said.

Canada is in the midst of a "prolonged slump" in capital spending and in that environment the capital gains tax changes are "at best unhelpful in promoting capital investment that Canada desperately needs," said economists at Toronto Dominion Bank.

"Consider the decision of an entrepreneur deciding where to locate their start-up," said the team led by chief economist Beata Caranci.

"We oppose any measure which will increase the costs for businesses and Canadians when both are currently experiencing challenging economic headwinds," said Jessica Brandon-Jepp, senior director of the Chamber's fiscal and financial services policy.

"Throttling the success of Canadian businesses with new taxes will limit opportunities and employment for Canadians, putting economic growth and productivity even further out of reach," she said.

Canada is in the midst of a "prolonged slump" in capital spending and in that environment the capital gains tax changes are "at best unhelpful in promoting capital investment that Canada desperately needs," said economists at Toronto Dominion Bank.

"Consider the decision of an entrepreneur deciding where to locate their start-up," said the team led by chief economist Beata Caranci.
https://www.msn.com/en-ca/money/topstories/canada-s-capital-gains-tax-hike-another-blow-to-productivity-say-economists/ar-BB1lJYsL?ocid=mailsignout&pc=U591&cvid=f1b17aaabbb34639b1b326e8b9798868&ei=41

Canada is facing a productivity crisis. This budget only exacerbates the problem.