Liberal leadership candidate Chrystia Freeland kicked off her campaign by backtracking on two key policies that she was once the foremost supporter of — the capital gains and carbon taxes.
While the Liberal Party of Canada’s leadership race is shaping up as a battle between Chrystia Freeland and Mark Carney, Conservative Leader Pierre Poilievre said it might as well be Freeland versus Freeland.
“She says she was wrong again — wrong on the carbon tax; wrong on the capital gains tax hike; wrong on her GST gimmick,” wrote Poilievre in a post to X. “Her slogan should be: ‘I’m Chrystia, and I was wrong about everything.’”
The capital gains tax has taken centre stage because the CRA is planning to go ahead with the tax hike despite the fact it hasn’t been passed in Parliament.
The Canadian Taxpayers Federation is urging Finance Minister Dominic LeBlanc to cancel the capital gains tax hike in light of Freeland’s opposition.
“If even the finance minister who introduced the capital gains tax hike no longer thinks it’s a good idea, then the government shouldn’t force Canadians to pay it,” said Franco Terrazzano, federal director of the Canadian Taxpayers Federation. “LeBlanc must step in and immediately put an end to the undemocratic capital gains tax hike.”
The former finance minister’s change in stance was first reported by Bloomberg, citing an unnamed campaign source. A separate source told Global News that Freeland’s change of heart was influenced by President Donald Trump’s election because he plans to implement policies that make the United States more tax-friendly, which already risks Canadians emigrating.
Freeland introduced the capital gains tax hike in the Liberals’ 2024 budget. She said the tax increase was a “fair” way to fund Liberal spending.
The capital gains tax change would raise the inclusion rate for capital gains tax from 50% to 66.7% on amounts exceeding $250,000. The Liberals estimate receiving an extra $19.4 billion in revenue from raising the tax.
A previous report highlighted that the capital gains tax hike could cost nearly $90 billion in lost GDP and over 400,000 jobs. Another study said it would drive down competition and chase away investment.
On top of costing Canadians money, Terrazzano said the tax hike was “fundamentally undemocratic” and defies the principle of no taxation without representation.
A ways and means motion was passed last year, but the legislation required to make the motion law was never introduced, debated, or passed.
Canadian Taxpayers Federation Atlantic director Devin Drover said Canadians can’t wait for the next Liberal prime minister to save the day.
He echoed Terrazzano’s concerns and said that the CRA is planning to enforce the capital gains increase despite Parliament never voting on amendments to the Income Tax Act.
“That’s why we need to keep pressure on the current government, including Prime Minister Justin Trudeau, the new Minister of Finance, and the new Minister of National Revenue, so that they can tell the CRA to stop enforcing a tax hike that is not authorized by law,” said Drover.
Parliament is prorogued until Mar. 24. Poilievre has demanded that Parliament be recalled immediately to deal with Trump’s tariff threats. He also vowed that he would reverse the capital gains tax hike.
Freeland also recently revealed that she would cut the consumer carbon price of the carbon tax.
She said that her turning point came when she talked with Manitoba Premier Wab Kinew after he was elected. Freeland said he asked for a carbon tax plan without a consumer price, similar to the cap and trade in Quebec.
“I think it’s actually a very arrogant position for a political leader to think they know everything. If people are telling you something, you really have to listen,” said Freeland.
Kinew was elected as Manitoba’s premier in Oct. 2023.