TAX FAIRNESS
Lowering taxes on the middle class:
- Cutting the second income tax bracket rate to reduce the tax burden on middle-class Canadians.
- Increasing the basic personal amount, ensuring more income remains untaxed for middle-income earners.
- Expected savings for over 20 million middle-class Canadians, averaging more than $450 in 2024.
Introducing a top tax bracket:
- Implementing a 33 percent top tax bracket for the wealthiest Canadians, ensuring they contribute proportionately to their income.
Modernizing the Alternative Minimum Tax (AMT):
- The AMT has been updated to prevent excessive deductions, credits, and tax preferences by the wealthiest Canadians, ensuring they pay their fair share.
Boosting benefits through the tax system:
- Enhancing benefits like the Canada Child Benefit and Canada Workers Benefit to provide income support to families and low-income workers.
Tax measures for corporations:
- Introducing a two-per-cent tax on share buybacks by public corporations to encourage reinvestment in workers and businesses.
- Implementing a luxury tax on private jets, yachts, and luxury vehicles to generate revenue from high-end purchases.
Property flipping regulations:
- Capital gains from property flipping have been treated as business income since January 1, 2023, to discourage speculative real estate activities and prioritize housing for Canadians.
TAX-FREE SAVINGS FOR MIDDLE CLASS
Tax-sheltered savings plans:
- Canadians can earn investment income tax-free through Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), and First Home Savings Accounts (FHSAs).
- Contributions to RRSPs and FHSAs are tax-deductible, reducing taxable income.
- Withdrawals from FHSAs are tax-free, providing financial flexibility for home purchases.
IMPROVING TAX FAIRNESS
Capital gains inclusion rate increase:
- Proposing an increase in the capital gains inclusion rate to address disparities in taxation between different income sources.
- Lifetime capital gains exemption raised to $1.25 million, benefiting entrepreneurs and investors.
Canadian Entrepreneurs’ Incentive:
- Lowering the inclusion rate to 33.3 percent for eligible entrepreneurs, encouraging investment and business growth.
- Combined with the enhanced lifetime capital gains exemption, entrepreneurs can benefit from significant tax savings.
Expected revenue impact:
- Anticipated revenue increase of $19.4 billion over five years from proposed tax fairness measures.
ENSURING GLOBAL TAX FAIRNESS
OECD/G20 Inclusive Framework:
- Supporting international efforts to address base erosion and profit shifting, ensuring multinational corporations pay their fair share of taxes.
Digital Services Tax:
- Introducing a Digital Services Tax to ensure digital businesses operating in Canada contribute to tax revenues, preventing tax avoidance in the digital economy.
Estimated revenue impact:
- Anticipated revenue increase of $5.9 billion over five years from global tax fairness initiatives.
MODERNIZING TAX SYSTEM AND SERVICES
Automatic tax filing pilot:
- Launching a pilot program to simplify tax filing for low-income individuals, ensuring they receive entitled benefits without complex paperwork.
Preventing tax evasion:
- Taking measures to prevent wealthy Canadians from using foreign shell companies to evade taxes, ensuring fairness and compliance.
Improving service delivery:
- Investing in Canada Revenue Agency (CRA) resources to reduce call center wait times and enhance service efficiency for taxpayers.
Single sign-in portal:
- Establishing a modern portal for accessing government services, streamlining access, and improving user experience.
Expanding tax transparency:
- Enhancing transparency in reporting crypto-asset transactions to prevent tax evasion and ensure compliance with tax laws.
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