(Quebec) Quebec would collect three billion dollars in five years if it follows the federal lead and increases the tax on capital gains, that is to say the income obtained from the sale of a second home, a chalet, a plex or shares. Finance Minister Eric Girard will announce his decision by the end of the week.
He confirmed that the government is considering following the tabling of the federal budget. https://www.lapresse.ca/actualites/politique/2024-04-16/impot-sur-les-gains-en-capital/legault-pourrait-mite-trudeau-et-recolter-gros.php
He recalled that Quebec has always followed Ottawa when making changes to the taxation of capital gains, both for individuals and corporations. All the other provinces will do so.
He raised a single reason that could perhaps lead his government to abandon following suit with the federal government. “We want to see if there is an economic opportunity for us: is it possible that being a jurisdiction with (a tax on) capital gains lower would bring, that would attract investments, companies? We have to analyze this carefully. »
Otherwise, he recalled all the reasons justifying the tax treatment being identical in Ottawa and Quebec, as has been the case for decades.
“I must say that, historically, Quebec has always been harmonized in terms of capital gains rules. And this is for reasons of cohesion between the Quebec and federal tax systems. »
The question is under analysis. “We will see the impacts. It’s an increase in income, an increase in taxes, we want to see the extent of the measure, what it will give us, confirm all of that,” he said, promising a response by the weekend.
On March 12, when he tabled his $11 billion deficit budget, he ruled out a tax increase to get out of the hole. Is this an immutable promise requiring the government to refrain from increasing capital gains taxation? he was asked.
” No. I repeat, Quebec has always been harmonized (with the federal government) in terms of capital gains rules. This is for a reason of fiscal cohesion between the two regimes. You have to understand that corporate tax has complicated income inclusion rules. So for reasons of fiscal cohesion, we have always been harmonized. We will take the time to study the question and we are not excluding anything. »
Furthermore, Eric Girard maintained that his counterpart Chrystia Freeland tabled a “spendthrift” and “inconsistent” budget with the Bank of Canada’s policy to fight inflation.
“The growth rate of spending in 2024-2025 of 6.5%, at least if it does not delay the start of the Bank of Canada’s rate cuts, it could reduce the extent of the rate cuts. This fiscal stimulus, this significant level of spending in 2024-2025, is an inconsistency in terms of the harmonization between fiscal policy and monetary policy,” said Mr. Girard, who had faced the same criticism with the decision to cut taxes last year.
“Despite the fact that the budget is spendthrift, there are no labor transfers, there is no money for public transportation. It’s very disappointing. Even housing (…). We are talking about 600 million over five years (for Quebec), we do not think that these are sums which will make the difference in terms of housing. »
He still noted “good things” in the Freeland budget, such as the improvement in the regime for access to property. “We will analyze it carefully, but there is a strong probability, very strong probability, that we will harmonize” and therefore imitate Ottawa. He welcomed investments in artificial intelligence, “a strategic sector of Quebec”.
reference: www.lapresse.ca