A controversial Liberal plan to hike the capital gains tax is no longer going ahead.
Prime Minister Mark Carney announced Friday he is cancelling the proposed changes.
Carney committed to scrapping the increase — introduced in last year’s federal budget — when running for the Liberal leadership.
All capital gains are currently taxed at a rate of 50 per cent, meaning half of the profits are added to taxable income for that year.
The changes would have seen that rate increase to 67 per cent for all annual gains above $250,000 for individuals and for all gains made by corporations and most trusts.
The Liberal government had said the changes are expected to generate billions in new revenue to help build millions of new homes.
However, critics of the capital gains tax changes argued the move will hurt medium-sized business owners and undermine retirement plans for many doctors.
Earlier this year, Ottawa announced that the tax changes would be delayed until Jan. 1, 2026.
Carney said his government will also maintain the increase in the Lifetime Capital Gains Exemption limit to $1,250,000 on the sale of small business shares and farming and fishing property.
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