Prime Minister Justin Trudeau touted his budgetary plan to increase capital gain taxes while addressing his caucus April 17, saying the system is unfair to younger adults.
Generation Z and Millennials “are the engine of our economy” the Liberal leader told his colleagues, adding that “everything that is created, built, served, and sold in this country is increasingly being created, built, served, and sold by Millennials and Gen Z.”
The economy is not rewarding younger generations the same way their parents’ and grandparents’ generations were rewarded, he said, adding the idea of working hard and buying a home is out of reach for many middle-class Canadians today.
“We want to ask people who really succeeded in life to contribute their fair share today,” Mr. Trudeau said.
He added that he did not believe it was fair that a teacher or electrician paid taxes on all of their income, while a multimillionaire may pay taxes on only 50 percent of the passive income they make through capital gains.
The federal budget makes a similar comparison, stating that a nurse earning $70,000 a year would have nearly the same marginal tax rate as a person earning a million dollars a year from passive capital gains income.
The prime minister was clear in his speech that the increase in capital gains tax would not apply to the sale of a primary residence of anyone in Canada. He said the changes were designed to help younger people benefit from the economy, adding that he wants the Baby Boomers and Generation X to “pay their fair share.”
Generation Z and Millennials are now the majority of the workforce and “deserve the same advantages” of past generations, he added.
The Canadian tech industry has criticized the proposed capital gains increase. President of the Council of Canadian Innovators Benjamin Bergen said the increase could cause “irreparable harm” and encourage entrepreneurs not to start businesses in Canada.
“Such policy change undermines Canada’s position to attract the talent needed to grow and scale companies here,” Ms. Furlong said, adding that the CVCA would work to reverse the decision by the federal government.
