THUNDER BAY – The Thunder Bay Chamber of Commerce hosted an information session on Thursday with tax experts on how business owners will be affected by changes to the capital gains tax.
“With the recent announcement to the changes to capital gains, we felt it was important for business owners or property owners, anyone who handles investments, to understand what the changes are and how it will impact their business,” said Thunder Bay Chamber of Commerce president Charla Robinson.
Held at the Prince Arthur Hotel, the information session included presentations from David Fitzpatrick, partner in Taxation Services with MNP LLP and Jennifer Whelan, partner with BDO Canada LLP.
Changes to the capital gains tax were announced as part of the federal government’s 2024 budget. One of the biggest changes is the inclusion rate changing from one half to two thirds.
According to Whelan, individuals selling a business will pay less capital gains tax.
“There is a new tax credit called the Canadian entrepreneur’s incentives, which allows people to sell their business and pay less capital gains tax,” she said. “It’s very beneficial. It’s phase in from 2025 to 2034, so there’s a lot of planning that goes into that.”
The maximum credit is $2 million, so if someone is able to realize the whole credit they will pay $416,000 less.
Robinson said the Chamber of Commerce holds information sessions anytime there is a significant change to tax or labour laws in the country that could affect business owners.
“Having tax experts explain the real-life implications is definitely helpful,” she said.
Robinson added the Chamber believes there are more negative impacts associated with the changes to the capital gains tax than positives.
“It is a very complicated process and depends on the particular instance of what you are dealing with as to whether this will be a positive or a negative,” she said.
“Generally the Chamber’s view is the changes of the increase of the inclusion rate is a negative. We believe it will be a real drag on further investment in the country because it does increase the tax burden, especially in those innovation heavy and investment heavy industries like innovation economy.”
