Wayne Long unsure if raising capital gains tax is the right move

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OTTAWA • Wayne Long says he’s “reserving judgment” on his own government’s pivotal budget move to increase the tax on capital gains, suggesting he first wants to fully understand the impact on entrepreneurs and doctors before endorsing it.

That’s as the New Brunswick Medical Society is raising concerns.

The Trudeau government says the tax change is aimed at wealthy Canadians to achieve “tax fairness.”

The new revenue stream is projected to rake in $19.3 billion over the next five years by increasing the share of capital gains that are taxed from 50 per cent to 66.7 per cent for individuals with more than $250,000 in capital gains in a year.

That’s to offset what is billions in new spending on housing and other programs in the federal budget.

But the Saint John-Rothesay MP says he’s concerned with potential wider implications.

“I understand it’s only 0.13 per cent of the population, about 40,000 Canadians from coast to coast, but I want to fully understand how it impacts business owners and what it means,” Long said.

Ottawa’s internal projections, provided to Brunswick News, anticipate that just 300 people in New Brunswick, less than 0.04 per cent of the population, will have capital gains above $250,000 in the fiscal year ahead.

Meanwhile, only 1.7 per cent of the 307,000 corporations reporting net capital gains in 2022 were located exclusively in New Brunswick.

“I reserve judgment on that, and I’m going to do my due diligence,” Long said. “Being a former business guy, I’m keenly interested in talking to businesses to see how these changes will affect people.”

And he specifically mentioned he wants to know the impact on doctors.

Long said his office has already received some calls from business owners with questions about the move.

“But I think that normally when you don’t hear much it means it landed pretty well and it has been quiet so far,” he said.

Brunswick News also polled the Trudeau Liberal government’s three other backbench MPs with only Fredericton MP Jenica Atwin weighing in.

“Millennials and Gen Z are facing an increasing wealth gap when compared with older generations, making even a primary place of residence out of reach for many younger Canadians,” Atwin said, endorsing the move.

“That is why we are focused on making life more affordable for younger generations, and to do that we need the wealthiest among us to pay their share.”

Atwin said she would encourage entrepreneurs to contact their accountants for expert tax advice.

The feds point to the introduction of a new Canadian Entrepreneurs Incentive, “which will leave an entrepreneur better off with up to $6.25 million in capital gains,” according to Finance Minister Chrystia Freeland’s office.

Meanwhile, the New Brunswick Medical Society says it is “concerned about the negative impact proposed changes to capital gains tax will have on physicians.”

“Physicians, many of whom are small business owners, face significant operational costs which have been exacerbated by rising inflation in recent years,” president Dr. Paula Keating said in a statement.

“In addition, they are already subject to some of the highest income tax rates in the country, and these proposed changes will further limit their ability to maintain their practice and save for retirement in the process.”

Keating adds that the move comes at a time when the country is facing a national physician shortage.

“Any measure which could disincentivize current physicians from practicing, discourage new graduates from choosing to practice in Canada, and steer incoming medical students away from medicine altogether is ill-advised, to say the least,” she said.