Economy
Prime minister’s misleading capital gains video misses the point
From the Fraser Institute
By Jake Fuss and Alex Whalen
According to a 2021 study published by the Fraser Institute, 38.4 per cent of those who paid capital gains taxes in Canada earned less than $100,000 per year, and 18.3 per cent earned less than $50,000. Yet in his video, Prime Minister Trudeau claims that his capital gains tax hike will affect only the richest “0.13 per cent of Canadians”
This week, Prime Minister Trudeau released a video about his government’s decision to increase capital gains taxes. Unfortunately, he made several misleading claims while failing to acknowledge the harmful effects this tax increase will have on a broad swath of Canadians.
Right now, individuals and businesses who sell capital assets pay taxes on 50 per cent of the gain (based on their full marginal rate). Beginning on June 25, however, the Trudeau government will increase that share to 66.7 per cent for capital gains above $250,000. People with gains above that amount will again pay their full marginal rate, but now on two-thirds of the gain.
In the video, which you can view online, the prime minister claims that this tax increase will affect only the “very richest” people in Canada and will generate significant new revenue—$20 billion, according to him—to pay for social programs. But economic research and data on capital gains taxes reveal a different picture.
For starters, it simply isn’t true that capital gains taxes only affect the wealthy. Many Canadians who incur capital gains taxes, such as small business owners, may only do so once in their lifetimes.
For example, a plumber who makes $90,000 annually may choose to sell his business for $500,000 at retirement. In that year, the plumber’s income is exaggerated because it includes the capital gain rather than only his normal income. In fact, according to a 2021 study published by the Fraser Institute, 38.4 per cent of those who paid capital gains taxes in Canada earned less than $100,000 per year, and 18.3 per cent earned less than $50,000. Yet in his video, Prime Minister Trudeau claims that his capital gains tax hike will affect only the richest “0.13 per cent of Canadians” with an “average income of $1.4 million a year.”
But this is a misleading statement. Why? Because it creates a distorted view of who will pay these capital gains taxes. Many Canadians with modest annual incomes own businesses, second homes or stocks and could end up paying these higher taxes following a onetime sale where the appreciation of their asset equals at least $250,000.
Moreover, economic research finds that capital taxes remain among the most economically damaging forms of taxation precisely because they reduce the incentive to innovate and invest. By increasing them the government will deter investment in Canada and chase away capital at a time when we badly need it. Business investment, which is crucial to boost living standards and incomes for Canadians, is collapsing in Canada. This tax hike will make a bad economic situation worse.
Finally, as noted, in the video the prime minister claims that this tax increase will generate “almost $20 billion in new revenue.” But investors do not incur capital gains taxes until they sell an asset and realize a gain. A higher capital gains tax rate gives them an incentive to hold onto their investments, perhaps until the rate is reduced after a change in government. According to economists, this “lock-in” effect can stifle economic activity. The Trudeau government likely bases its “$20 billion” number on an assumption that investors will sell their assets sooner rather than later—perhaps before June 25, to take advantage of the old inclusion rate before it disappears (although because the government has not revealed exactly how the new rate will apply that seems less likely). Of course, if revenue from the tax hike does turn out to be less than anticipated, the government will incur larger budget deficits than planned and plunge us further into debt.
Contrary to Prime Minister Trudeau’s claims, raising capital gains taxes will not improve fairness. It’s bad for investment, the economy and the living standards of Canadians.
Authors:
From Energy Now
By Canada Powered by Women
Canada has entered a new period of energy cooperation, marking one of the biggest shifts in federal–provincial alignment on energy priorities in years.
Last week as Prime Minister Mark Carney and Alberta Premier Danielle Smith signed a memorandum of understanding (MOU) that outlines how both governments will approach a potential pipeline to British Columbia’s coast.
The agreement, which has been described as a “new starting point” after years of tension, lays the groundwork for a privately financed pipeline while also linking this commitment to a broader set of infrastructure priorities across oil and gas, LNG, renewables, critical minerals and electricity transmission.
It also sets out how a privately financed project, moving roughly 300,000 to 400,000 barrels of oil to global markets each day, will be reviewed.
Now that the announcement is behind us, attention has turned to how (or if) a pipeline is going to get built.
Alberta has set out its ambitions, British Columbia has its conditions, and the federal government has its own expectations. Together, these positions are shaping what some are calling a “grand bargain” which will be made up of trade-offs.
Trade-offs are not a new concept for the engaged women that Canada Powered by Women (CPW) represents, as they’ve been showing up in our research for several years now. And anyone who reads us also knows we like to look at what the data says.
According to new polling from the Angus Reid Institute, a clear majority of Canadians support a pipeline, with national backing above 60 per cent. And there’s strong support for the pipeline among those in B.C. This aligns with other emerging data points that show Canadians are looking for practical solutions that strengthen affordability and long-term reliability.
By the numbers:
• 60 per cent of Canadians support the pipeline concept, while 25 per cent oppose it.
• 53 per cent of people support in British Columbia, compared to 37 percent opposed.
• 74 per cent of people in Alberta and Saskatchewan support the pipeline.
Our research shows the same trends.
A large majority (85 per cent) of engaged women agree that building pipelines and refining capacity within the country should be prioritized. They favour policies that will progress stability, affordability and long-term economic opportunity.
A key feature of the MOU is the expectation of Indigenous ownership and benefit sharing, which Alberta and B.C. governments identify as essential, and which aligns with public opinion. As of right now, Indigenous groups remain split on support for a pipeline.
The agreement also signals that changes to the federal Oil Tanker Moratorium Act may need to be considered. The moratorium, in place since 2019, is designed to limit large tanker traffic on the North Coast of B.C. because of navigation risks in narrow channels and the need to protect sensitive coastal ecosystems.
Those in favour of the pipeline point to this as a critical barrier to moving Canadian oil to international markets.
Polling from the Angus Reid Institute shows that 47 per cent of Canadians believe the moratorium could be modified or repealed if stronger safety measures are in place. Again, we come back to trade-offs.
The MOU is a starting point and does not replace consultation, environmental review or provincial alignment. These steps are still required before any project can advance. Taken together, the agreement and the data show broad support for strengthening Canada’s energy options.
This will be an issue that engaged women are no doubt going to watch, and the conversation is likely to move from ideas to discussing what trade-offs can be made to bring this opportunity to life.
From the Daily Caller News Foundation
During the latest marathon cabinet meeting on Dec. 2, Energy Secretary Chris Wright made news when he told President Donald Trump that “The biggest determinant of the price of energy is politicians, political leaders, and polices — that’s what drives energy prices.”
He’s right about that, and it is why the back-and-forth struggle over federal energy and climate policy plays such a key role in America’s economy and society. Just 10 months into this second Trump presidency, the administration’s policies are already having a profound impact, both at home and abroad.
While the rapid expansion of AI datacenters over the past year is currently being blamed by many for driving up electric costs, power bills were skyrocketing long before that big tech boom began, driven in large part by the policies of the Obama and Biden administration designed to regulate and subsidize an energy transition into reality. As I’ve pointed out here in the past, driving up the costs of all forms of energy to encourage conservation is a central objective of the climate alarm-driven transition, and that part of the green agenda has been highly effective.
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President Trump, Wright, and other key appointees like Interior Secretary Doug Burgum and EPA Administrator Lee Zeldin have moved aggressively throughout 2025 to repeal much of that onerous regulatory agenda. The GOP congressional majorities succeeded in phasing out Biden’s costly green energy subsidies as part of the One Big Beautiful Bill Act, which Trump signed into law on July 4. As the federal regulatory structure eases and subsidy costs diminish, it is reasonable to expect a gradual easing of electricity and other energy prices.
This year’s fading out of public fear over climate change and its attendant fright narrative spells bad news for the climate alarm movement. The resulting cracks in the green facade have manifested rapidly in recent weeks.
Climate-focused conflict groups that rely on public fears to drive donations have fallen on hard times. According to a report in the New York Times, the Sierra Club has lost 60 percent of the membership it reported in 2019 and the group’s management team has fallen into infighting over elements of the group’s agenda. Greenpeace is struggling just to stay afloat after losing a huge court judgment for defaming pipeline company Energy Transfer during its efforts to stop the building of the Dakota Access Pipeline.
350.org, an advocacy group founded by Bill McKibben, shut down its U.S. operations in November amid funding woes that had forced planned 25 percent budget cuts for 2025 and 2026. Employees at EDF voted to form their own union after the group went through several rounds of budget cuts and layoffs in recent months.
The fading of climate fears in turn caused the ESG management and investing fad to also fall out of favor, leading to a flood of companies backtracking on green investments and climate commitments. The Net Zero Banking Alliance disbanded after most of America’s big banks – Goldman Sachs, J.P. Morgan Chase, Citigroup, Wells Fargo and others – chose to drop out of its membership.
The EV industry is also struggling. As the Trump White House moves to repeal Biden-era auto mileage requirements, Ford Motor Company is preparing to shut down production of its vaunted F-150 Lightning electric pickup, and Stellantis cancelled plans to roll out a full-size EV truck of its own. Overall EV sales in the U.S. collapsed in October and November following the repeal of the $7,500 per car IRA subsidy effective Sept 30.
The administration’s policy actions have already ended any new leasing for costly and unneeded offshore wind projects in federal waters and have forced the suspension or abandonment of several projects that were already moving ahead. Capital has continued to flow into the solar industry, but even that industry’s ability to expand seems likely to fade once the federal subsidies are fully repealed at the end of 2027.
Truly, public policy matters where energy is concerned. It drives corporate strategies, capital investments, resource development and movement, and ultimately influences the cost of energy in all its forms and products. The speed at which Trump and his key appointees have driven this principle home since Jan. 20 has been truly stunning.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
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