What impact will Canada’s new capital gains tax hike have?
The policy is being implemented in a challenging fundraising environment with low liquidity and minimal merger activity.
Scotiabank economist Rebekah Young described the tax-and-spend approach as potentially shortsighted and risky, given the current economic climate marked by low productivity and economic drivers.
“The government continues to take a punitive approach to corporate taxation despite waning momentum in profitability and compressed margins against persistent inflationary, and relatedly wage, pressures,” Young said.
John McKenzie, CEO of TMX Group, which operates the Toronto Stock Exchange, criticized the policy on BNN Bloomberg Television.
“It sends a very negative message,” McKenzie said. “Let’s be candid, I think this is a mistake for productivity. When you’re talking about more taxes on that income group, you’re talking about the income group that does the most investing into small and medium Canadian companies.”