ARTICLE
22 January 2025

Trudeau's Resignation And Tax Changes: Implications For 2025 Capital Gains Taxation

BM
Bateman MacKay LLP

Contributor

We are a full-service mid-market accounting firm. Our CPAs and business advisors leverage their expertise to proactively position businesses for success. Serving a diverse client base, we help businesses grow, preserve wealth, and achieve lasting success.
The recent announcement that Prime Minister Justin Trudeau is stepping down as Liberal Party leader and proroguing (delaying return of) Parliament until March 24, 2025, has left many legislative measures.
Canada Tax

The recent announcement that Prime Minister Justin Trudeau is stepping down as Liberal Party leader and proroguing (delaying return of) Parliament until March 24, 2025, has left many legislative measures in limbo—including the capital gains tax changes as proposed in the 2024 Federal Budget.

The prorogation may effectively defeat all unfinished legislative measures, raising questions about whether these tax changes will ultimately be enacted. Notwithstanding such legislative uncertainty, the Canada Revenue Agency (CRA) has confirmed it will proceed with implementing the proposed capital gains tax changes unless the Federal government explicitly abandons them when Parliament resumes.

What Happens to the Proposed Capital Gains Tax Changes?

Since these proposals were tabled through a Notice of Ways and Means Motion prior to the proroguing of parliament, the CRA has the authority to enforce taxation proposals as soon as they are introduced through such Motion.

What This Means:

  • CRA will proceed as if the capital gains tax changes are in force, issuing taxpayer forms that reflect the new rules by January 31, 2025.
  • If the new government signals a reversal, CRA will halt implementation and adjust accordingly.

Final Thoughts: Uncertainty, but Caution is Advised

With Parliament prorogued, tax measures from 2024, including the Fall Economic Statement, remain uncertain, making 2025 tax planning more complex for business owners and investors. Until there is more legislative certainty concerning the taxation of capital gains, multiple approaches can be considered and consulting a tax advisor in instances of significant 2024 capital gains is highly advisable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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