The first budget for 2016 is set to be released by the Liberal government today (March 22), and while details remain tight under wraps, an analyst has offered predictions on probable developments based on the administration’s previous statements and campaign promises.
In a breakdown piece for the Financial Post
, CIBC Wealth Strategies tax and estate managing director Jamie Golombek noted that taxpayers need to pay particular attention to a possible round of increases in the capital gains inclusion rate, although major shifts are unlikely.
“In fact, if anything, the government may wish to consider dropping or even eliminating capital gains taxes altogether, based on a 2015 study by the Fraser Institute that showed reducing capital gains taxes ‘improves the incentives for entrepreneurs and assists those financing business startups,’” Golombek wrote.
The analyst said that Canada could learn from the example set by other nations, which experienced entrepreneurial booms after removing capital gains taxation altogether.
Golombek added that revisions to the current tax rules governing small businesses are equally unlikely. Professionals in the micro-venture sector previously voiced their apprehensions that such regulatory changes might prevent future participants from joining the market.
“The [House of Commons Standing Committee on Finance], which issued its final report on budget 2016 consultations last week, stated that the government should ‘not make any changes to the current federal taxation regime and other rules as they apply to small businesses, including professional businesses, incorporated as Canadian-controlled private corporations,’” Golombek said.