capital gains decision pending until canadian parliament reconvenes

To tax or not to tax, that is the question.

Like a page from Romeo and Juliet, Canadian taxpayers with significant capital gains are in limbo now that Prime Minister Trudeau has prorogued Parliament. If you recall, last spring the Liberal government increased the inclusion rate for capital gains, meaning that capital gains above $250,000 would be taxed at a 66% inclusion rate versus the typical 50. The problem is that this was never approved by Parliament. However, because of the way the Canadian system works, once the government tables a notice of this, it is effective immediately with the assumption Parliament will improve.

With Parliament prorogued, nothing can be done. No bills can be passed, nada until they reconvene.

The Department of Finance is already collecting the gains at the new higher rate and will continue to do so with the assumption that it will be passed— but it’s not yet law.

So, pull out the popcorn and enjoy the drama.