Taxpayer advocates take CRA to court over capital gains tax hike

Taxpayers are taking a stand against unlegislated capital gains hikes with Canadian parliament at a standstill, citing unlawful enforcement by the Canada Revenue Agency.

A taxpayer advocacy group is preparing to take the Canada Revenue Agency (CRA) to court for pushing through an unlegislated tax hike on capital gains, according to email correspondence.

“You can fight Prime Minister Justin Trudeau’s capital gains tax hike in court,” Devon Drover, General Counsel for the Canadian Taxpayers Federation (CTF), said in an email to supporters.

“There should be NO taxation without representation: That’s why we are now taking Trudeau and the CRA to court,” it reads.

The Conservative Party of Canada wants voters — not an unelected government agency — to determine if more taxes are necessary for capital gains, earning praise from the taxpayer advocates.

However, Drover contends taxpayers can’t wait for an election. “That is why we are filing an application in Federal Court to stop the CRA from trying to enforce this undemocratic tax hike.”

Parliament passed a June 11 ways and means motion to increase taxation from 50% to 67% on capital gains over $250,000, though no tax bill ever followed. Meanwhile, the CRA warned it would collect interest on unpaid taxes starting on March 3, reported Blacklock’s.

“Taxpayers are demanding the Canada Revenue Agency immediately halt enforcement for the proposed tax increase,” reads a CTF statement.

Should the federal government lose a non-confidence vote slated for March 26, a potential cabinet bill on the tax hike will not proceed further under a likely Conservative government.

If that happens, “there’s no ability for the House to consider legislation during that time,” testified then-law clerk Philippe Dufresne in 2021.

Conservative Leader Pierre Poilievre previously called the proposal a “job-killing tax hike” at a time when Canadians struggled to make ends meet. A new CD Howe Institute report shows 400,000 jobs will be lost and shrink Canada’s GDP by nearly $90 billion.

“It’s great that Poilievre plans to scrap the capital gains tax hike, but he shouldn’t have to because the legislation has never passed and the CRA shouldn’t be enforcing it,” said Franco Terrazzano, CTF Federal Director.

“The capital gains tax hike will punish Canadian doctors, entrepreneurs and people saving for their retirement,” he added. It will “blow a huge hole in Canada’s economy” taxpayers can ill-afford.

“Parliamentary convention dictates that taxation proposals are effective as soon as the government tables a notice of ways and means motion; this approach provides consistency and fairness in the treatment of all taxpayers," explained the Department of Finance in a statement to CBC News.

At the time, former finance minister Chrystia Freeland lauded the measure for promoting “tax fairness,” a claim refuted by focus groups.

Many were left with the impression that auditors would target middle and lower classes, with roughly 340,000 tax filers recording less than $50,000 in capital gains from the sale of small businesses, stocks or vacation and rental homes.

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Alex Dhaliwal

Calgary Based Journalist

Alex Dhaliwal is a Political Science graduate from the University of Calgary. He has actively written on relevant Canadian issues with several prominent interviews under his belt.

COMMENTS

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  • Bernhard Jatzeck
    commented 2025-01-22 20:27:03 -0500
    One of the “benefits” for proroguing Parliament is that certain actions can be taken without public scrutiny or debate by the MPs. But, then, in a post-national state, a legislature is irrelevant.
  • Bruce Atchison
    commented 2025-01-22 20:02:11 -0500
    This is one step closer to a totalitarian state. The notion of making the rich pay their fair share is false and must constantly be debunked.