Capital gains tax hike will reduce Quebec deficit by $1 billion: Girard
Girard told a parliamentary committee that keeping an inclusion rate lower than neighbouring provinces would not have generated additional investments in Quebec.
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QUEBEC — The increase in taxes on capital gains should bring in $1 billion to the Quebec treasury, decreasing the deficit to $10 billion from the $11 billion announced in last month’s budget, Finance Minister Eric Girard told a parliamentary committee on Tuesday.
Ottawa announced in its budget on April 16 that 66 per cent of capital gains above $250,000 for individuals, and 66 per cent of capital gains for corporations, would be taxed, up from 50 per cent.
Quebec quickly announced it would follow suit and apply the same rules for provincial taxes.
Girard told the committee keeping a rate lower than neighbouring provinces would not have generated additional investments in Quebec.
Therefore, it was preferable to simplify the tax system, rather than maintaining a more complex structure without bringing additional gains, he said.
He added that the decision had to be made quickly because the federal measure comes into force on June 25.
Liberal MNA Frédéric Beauchemin vigorously denounced the harmonization recommended by the CAQ government.
“You jumped on the tax like a child in a candy store,” he told Girard. “It’s a tax on innovation. It’s a tax on productivity.”
PQ Leader Paul St-Pierre Plamondon reminded the minister that his party had a motion adopted by the National Assembly in which it committed not to increase the burden on taxpayers.
He called for new rules so that, for example, an owner who has invested his entire life in a triplex is not penalized compared with a speculator who makes a short-term gain.
Girard said he was first waiting to read the federal application rules.
Ottawa estimates the tax measure will affect approximately 0.13 per cent of taxpayers, but should bring in nearly $20 billion over five years into federal coffers.
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