The federal government's proposal to raise the capital gains inclusion rate from one-half to two-thirds was announced April 16, 2024, deferred in January 2025, and scrapped entirely in March 2025 ahead of the federal election. It never took effect for a single taxpayer. Federal revenue data published this week shows it did not need to, in order to cost people money.
Total federal government revenue rose $51.4 billion, 11%, to $511 billion in fiscal 2024-25. Personal income tax collections rose $16.6 billion, corporate income tax rose $14.5 billion. Tax practitioners interviewed this week point to one specific driver inside those totals: a wave of clients who realised capital gains ahead of the original June 25, 2024 deadline, before the government’s own reversal made that realisation unnecessary.
What the Proposal Actually Covered
The measure would have applied the higher two-thirds inclusion rate to individual capital gains above $250,000 in a given year, and to all corporate and most trust capital gains with no threshold at all. That asymmetry is why the corporate and trust response was sharper than the individual one. A CCPC holding company or a family trust realising gains had no exemption to plan around, only a deadline.
Tax practitioner Ryan Minor described what followed as a period where there was a lot of real activity, corporations moving to trigger gains before the effective date. Carson Hamill said the number of clients intentionally realising gains ahead of the June 25 deadline was noticeably higher than in a typical year. Laura Paglia called the pattern direct evidence of a large timing response, a very real behavioural sensitivity to capital taxation.
Ottawa's Own Number Versus the Independent One
Finance Canada projected the measure would raise $6.9 billion in 2024-25, including $4.9 billion from corporations. The Parliamentary Budget Officer, working independently, put the total closer to $5.0 billion, with $3.0 billion from the corporate side. The gap between the two matters less than what both numbers agree on: this was always expected to be a corporate-heavy measure, which is exactly where the CCPC and trust community had the least room to wait and see.
The chart below sets Finance's projection against the PBO's independent estimate for the same measure.
Finance Canada's original revenue estimate for the abandoned capital gains measure came in well above the Parliamentary Budget Officer's independent projection. Source: Department of Finance Canada; PBO.
The Planning Lesson for Right Now
Jamie Golombek flagged the mechanism that made early realisation costly even for clients who otherwise made a reasonable-looking decision: the time value of money tied up in a tax prepayment against a rate change that ultimately did not happen. Hamill added the other side of it, investors who sold appreciated holdings to beat the deadline gave up whatever those positions would have returned had they simply been left alone.
None of this was registered-account exposure. RRSPs, TFSAs and FHSAs were never touched by the proposal, since gains inside registered accounts are not taxed on realisation in the first place. The clients affected were non-registered individual investors above the $250,000 annual threshold, CCPC holding companies, and family trusts, the three account types that had a reason to move before a deadline that ended up not mattering.
The lesson lands again this week for a different reason. WTI crude is up 18% in thirteen sessions on the Persian Gulf tanker war, and clients with non-registered or corporate energy positions are sitting on gains that were paper-thin a month ago and are real today. Budget season chatter about future capital taxation changes will resurface, as it always does. The 2024-25 data is the clearest available argument for the same planning bridge every time: act on enacted legislation, not on a proposal, however credible it looks, until it is actually law.