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New capital gains hike won’t work as claimed but will harm the economy

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4 minute read

From the Fraser Institute

By Alex Whalen and Jake Fuss

Capital taxes are among the most economically-damaging forms of taxation precisely because they reduce the incentive to innovate and invest.

Amid a federal budget riddled with red ink and tax hikes, the Trudeau government has increased capital gains taxes. The move will be disastrous for Canada’s growth prospects and its already-lagging investment climate, and to make matters worse, research suggests it won’t work as planned.

Currently, individuals and businesses who sell a capital asset in Canada incur capital gains taxes at a 50 per cent inclusion rate, which means that 50 per cent of the gain in the asset’s value is subject to taxation at the individual or business’ marginal tax rate. The Trudeau government is raising this inclusion rate to 66.6 per cent for all businesses, trusts and individuals with capital gains over $250,000.

The problems with hiking capital gains taxes are numerous.

First, capital gains are taxed on a “realization” basis, which means the investor does not incur capital gains taxes until the asset is sold. According to empirical evidence, this creates a “lock-in” effect where investors have an incentive to keep their capital invested in a particular asset when they might otherwise sell.

For example, investors may delay selling capital assets because they anticipate a change in government and a reversal back to the previous inclusion rate. This means the Trudeau government is likely overestimating the potential revenue gains from its capital gains tax hike, given that individual investors will adjust the timing of their asset sales in response to the tax hike.

Second, the lock-in effect creates a drag on economic growth as it incentivises investors to hold off selling their assets when they otherwise might, preventing capital from being deployed to its most productive use and therefore reducing growth.

And Canada’s growth prospects and investment climate have both been in decline. Canada currently faces the lowest growth prospects among all OECD countries in terms of GDP per person. Further, between 2014 and 2021, business investment (adjusted for inflation) in Canada declined by $43.7 billion. Hiking taxes on capital will make both pressing issues worse.

Contrary to the government’s framing—that this move only affects the wealthy—lagging business investment and slow growth affect all Canadians through lower incomes and living standards. Capital taxes are among the most economically-damaging forms of taxation precisely because they reduce the incentive to innovate and invest. And while taxes on capital do raise revenue, the economic costs exceed the amount of tax collected.

Previous governments in Canada understood these facts. In the 2000 federal budget, then-finance minister Paul Martin said a “key factor contributing to the difficulty of raising capital by new start-ups is the fact that individuals who sell existing investments and reinvest in others must pay tax on any realized capital gains,” an explicit acknowledgement of the lock-in effect and costs of capital gains taxes. Further, that Liberal government reduced the capital gains inclusion rate, acknowledging the importance of a strong investment climate.

At a time when Canada badly needs to improve the incentives to invest, the Trudeau government’s 2024 budget has introduced a damaging tax hike. In delivering the budget, Finance Minister Chrystia Freeland said “Canada, a growing country, needs to make investments in our country and in Canadians right now.” Individuals and businesses across the country likely agree on the importance of investment. Hiking capital gains taxes will achieve the exact opposite effect.

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Latest shakedown attempt by Canada Post underscores need for privatization

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From the Fraser Institute

By Alex Whalen and Jake Fuss

For the second time in just six months, the Canadian Union of Postal Workers (CUPW) is threatening strike action. As Canadians know all too well, postal strikes can be highly disruptive given the federal government provides Canada Post with a near-monopoly on letter mail across the country. CUPW is well aware of this and uses it to their advantage in negotiations. While CUPW has the right to ask for whatever they like, Canadians should finally be freed from this albatross.

In January, the Trudeau government loaned Canada Post a whopping $1.034 billion to help “maintain its solvency and continue operating.” Since 2018, Canada Post has lost more than $4.6 billion, and according to its latest financial update, lost more than $100 million in the first quarter of 2025 alone. Canadians are on the hook for these losses because the federal government owns Canada Post.

Salaries and other employee costs comprise more than 66 per cent of Canada Post’s expenses, and CUPW and Canada Post management both know they can simply pass any losses on to Canadians. Consequently, there’s less incentive for management to control the bottom line or make reasonable budget requests when negotiating with the government. But if the government privatizes Canada Post, it would impose a proper constraint on costs that doesn’t currently exist. This is only fair given there’s no compelling reason why Canadians should underwrite the inflation of salaries in a money-losing Crown corporation.

Of course, government ownership of Canada Post is archaic. When the organization was founded more than 250 years ago, the world was quite different. In today’s age of Amazon, a plethora of delivery services exist coast-to-coast that serve Canadian consumers. Other countries including the Netherlands, Austria and Germany long ago privatized their postal services. The result was increased competition, which in turn reduced prices and improved quality.

Alongside privatization, the federal government should also eliminate Canada Post’s near-monopoly status on letter mail. This policy is purportedly meant to ensure universal service. But in reality, it prohibits other potential service providers from entering the letter-delivery market (including in remote areas that may experience less Canada Post service post-privatization), deprives Canadians of choice, and crucially, reduces the incentive for Canada Post to improve its service.

Simply put, the federal government should focus on its core responsibilities, and delivering mail is clearly not one of them. Given Canada Post’s latest attempted shakedown of Canadians, it’s never been clearer that it’s time for Canada Post to go the way of Air Canada, de Havilland and CN Rail. Once upon a time, the federal government owned all three of these entities until it became clear there was no reason for the government to own an airline, build planes or deliver goods by train. Why is letter mail any different? Canadians deserve better.

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RFK Jr. says Hep B vaccine is linked to 1,135% higher autism rate

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From LifeSiteNews

By Matt Lamb

They got rid of all the older children essentially and just had younger children who were too young to be diagnosed and they stratified that, stratified the data

The Centers for Disease Control and Prevention (CDC) found newborn babies who received the Hepatitis B vaccine had 1,135-percent higher autism rates than those who did not or received it later in life, Robert F. Kennedy Jr. told Tucker Carlson recently. However, the CDC practiced “trickery” in its studies on autism so as not to implicate vaccines, Kennedy said.

RFK Jr., who is the current Secretary of Health and Human Services, said the CDC buried the results by manipulating the data. Kennedy has pledged to find the causes of autism, with a particular focus on the role vaccines may play in the rise in rates in the past decades.

The Hepatitis B shot is required by nearly every state in the U.S. for children to attend school, day care, or both. The CDC recommends the jab for all babies at birth, regardless of whether their mother has Hep B, which is easily diagnosable and commonly spread through sexual activity, piercings, and tattoos.

“They kept the study secret and then they manipulated it through five different iterations to try to bury the link and we know how they did it – they got rid of all the older children essentially and just had younger children who were too young to be diagnosed and they stratified that, stratified the data,” Kennedy told Carlson for an episode of the commentator’s podcast. “And they did a lot of other tricks and all of those studies were the subject of those kind of that kind of trickery.”

But now, Kennedy said, the CDC will be conducting real and honest scientific research that follows the highest standards of evidence.

“We’re going to do real science,” Kennedy said. “We’re going to make the databases public for the first time.”

He said the CDC will be compiling records from variety of sources to allow researchers to do better studies on vaccines.

“We’re going to make this data available for independent scientists so everybody can look at it,” the HHS secretary said.

Health and Human Services also said it has put out grant requests for scientists who want to study the issue further.

Carlson asked if the answers would “differ from status quo kind of thinking.”

“I think they will,” Kennedy said. He continued on to say that people “need to stop trusting the experts.”

“We were told at the beginning of COVID ‘don’t look at any data yourself, don’t do any investigation yourself, just trust the experts,”‘ he said.

In a democracy, Kennedy said, we have the “obligation” to “do our own research.”

“That’s the way it should be done,” Kennedy said.

He also reiterated that HHS will return to “gold standard science” and publish the results so everyone can review them.

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