Behind the Headlines February, 2006

Article Excerpt

The Conservative minority government of Stephen Harper plans to make tax changes that will affect Canadians for the better. During the election campaign, the Conservatives proposed the elimination of the capital gains tax for individuals on the sale of assets when the proceeds are reinvested within six months. This includes assets such as family cottages, as well as stocks. Our view is that the capital-gains proposal is a great idea, but it needs a lot of work. Otherwise, tax-shelter promoters will figure out ways to convert risk-free interest income into tax-deferred capital gains. The Conservatives have said they will proceed with the Liberal plan to increase the federal dividend tax credit on Canadian dividend income. If fully matched by the provinces, this will lower taxes on dividends by about five percentage points for top income earners, and make dividend income more tax-efficient than capital gains. The GST rate will be cut from 7% to 6%, and then to 5% over 5 years. The Conservatives will…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.