The Surroundup


  • by Andrew Hawryluk
  • May 29, 2024

The last Federal Budget was delivered on April 16 of this year with several new tax measures.

Perhaps the biggest news of this budget was the proposal to increase the capital gains inclusion rate from 50% to two thirds (66.7%) effective for transactions after June 25th, 2024. Capital gains incurred prior to this date will be subject to the inclusion rate of 50% for individuals, trusts and corporations.

It is interesting to note the Federal Government removed the Capital Gains change from its budget implementation bill (Bill C-6) on April 30th, 2024, and is expected to introduce a stand-alone bill to address the motion before the house breaks for summer. The change even if not passed before then will still become effective June 25th, 2024. The Stand-alone Bill will force all parties to take a position on the issue.

For Individuals:

The changes to the proposed Capital Gains Inclusion rate will see an individual subject to the top marginal tax rate can expect an 8% to 9% increase for in taxes on capital gains in excess of $250,000 – realized on or after June 25th, 2024.

For individuals, it only makes sense to realize accrued capital gains if they expect the capital gains realized on or after June 25th, 2024. Some people may choose to realize gains prematurely before June 25th at the lower inclusion rate, or wait to realize the gains until funds are actually needed at the higher inclusion rate. If you have gains to consider in the more immediate future it might make sense to do before June 25th 2024, however there are items to consider before doing so:

  • Potential changes to the 2024 proposals when implemented or potential subsequent changes to the legislation in future years.
  • Probability of annual gains in future years exceeding $250,000
  • Investment time horizon – including lump sum requirements for future expenses, purchases and gifts
  • Rate of return assumptions
  • Source of funds for any taxed owed
  • Marginal tax rate in 2024 versus future years.
  • Potential impact of the alternative minimum tax (AMT tax)
For Corporations:

All Corporations will have to face the hike in the inclusion rate from 50% to 66.7% for all capital gains, with no lower rate on the first $250,000.

Some things to consider are material shareholder loans owing to you in addition to corporately owned investment which could be beneficially changed to personally owed loans prior to June 25, 2024. In addition, if your corporation has non-capital losses, it may be worthwhile reviewing whether it’s beneficial to realize gains before June 25th, 2024. There are many significant factors to be considered when determining your corporations needs. Any changes you may be considering should be via a well-planned out strategy.

For Trust:

Since Capital Gains realized by most trusts are distributed to beneficiaries and claim a corresponding deduction, the increase in the inclusion rate would not impact trusts. Any individual beneficiary of a trust that received a distributed capital gain could still access the lower 50% inclusion rate for the first $250,000 of capital gains after June 25th, 2024.

We are here to help with any questions you may have about your specific situation leading up to the June 25, 2024, deadline.
Please reach out to us with any questions you may have.

Be well, stay connected, and remember, there’s more than one way to wealth!

By Andrew Hawryluk
Wealth Advisor
Assante Financial Management Ltd.


This material is provided for general information and should not be considered individual investment, tax, accounting, or legal advice, or construed as an offer or solicitation to buy or sell securities. The statements and opinions expressed are those of the presenter(s) and not necessarily those of Assante Financial Management Ltd. All opinions expressed and information provided herein are subject to change without notice. Every effort has been made to compile this material from reliable sources as at the date indicated however, no warranty can be made as to its accuracy or completeness Market conditions may change which may impact the information contained herein. All charts and illustrations in this document are for illustrative purposes only and they are not intended to predict or project investment results. In considering any particular investment or investment strategy, please remember that past performance is no guarantee of future performance. The information contained herein may not apply to all types of investors. Before acting on the information presented, please seek professional financial advice based on your personal circumstances.