A tech uprising is stirring in opposition to the Liberal government’s capital gains tax hike.
Over 1000 Canadian CEOs and tech leaders have signed an open letter to Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland, urging them to reconsider the proposed increases to capital gains taxes outlined in the 2024 federal budget.
It started with 150 signatures but the list of those putting their name to it has ballooned in just a couple of days.
The letter, linked in a post to X by the Council of Canadian Innovators, called for more CEOs and tech leaders to add their names as signatories.
“You cannot tax your way to prosperity. But in the 2024 federal budget, we see a government trying to hike taxes on investment. Anybody with experience in entrepreneurship and investment can see how this will stifle growth,” reads the letter.
True North previously reported that the budget raises the inclusion rate for capital gains tax from 50% to 66% for individuals on amounts exceeding $250,000. The amendments to the Income Tax Act come into effect on June 25, 2024.
The Liberals expect to make $19.4 billion from raising the capital gains tax over the next five years.
The letter alerts people to a productivity emergency in Canada, which it contends will lead to even further inflation.
Higher interest rates and economic uncertainty already result in companies struggling to secure growth capital on decent terms, said the letter. It added that a standard compensation for skilled talent is stock options, subject to capital gains tax.
“Canada’s economy needs productivity growth, innovation and above all, we need investment. As signatories of this letter, we’re investing in Canada,” reads the letter.
Although he has not yet signed the letter, Shopify president Harley Finkelstein has been very outspoken against the tax increase on X. He said that Canada should do everything in its power to turn the country into the best place for entrepreneurs to build.
“What’s proposed in the federal budget will do the complete opposite. Innovators and entrepreneurs will suffer, and their success will be penalized — this is not a wealth tax, it’s a tax on innovation and risk taking,” he said.
The Council of Canadian Innovators posted several new posts with updates on Thursday. Very early in the morning, they said that the letter had reached over 600 signatures from CEOs, tech leaders, and citizens. Later that same morning, they issued a new post, signalling that it had reached over 750 signatures.
“We are calling on the federal government to scrap this disastrous tax hike on investment and listen to the innovators who are trying to create a more prosperous future for every generation,” concluded the letter.
Prior to releasing its letter, the Council of Canadian Innovators issued a response to the Liberals’ budget.
“We hope that Minister Freeland and the Liberal government will listen to innovators and adjust the proposed tax hike before they do irreparable harm to the Canadian innovation economy,” wrote the council’s president, Benjamin Bergen.
At the time of writing this article, on Thursday afternoon, the letter had 861 signatories. Every signature included the person’s full name, their role (primarily CEOs), and where they live.