On April 16, 2024, Canada’s Deputy Prime Minister and Minister of Finance, Chrystia Freeland, delivered the Liberal Government’s federal budget, Fairness for Every Generation (Budget 2024). The most notable tax measure in Budget 2024 is the proposal to increase the capital gains inclusion rate from one-half to two-thirds, for capital gains realized on or after June 25, 2024. This measure will apply to all capital gains realized by corporations and trusts, but only will apply to individuals in respect of the portion of capital gains realized in the year that exceeds $250,000.

In addition, among other things, Budget 2024 proposes to:

• temporarily increase the capital cost allowance rate for eligible purpose-built rental housing; and
• provide for an elective exemption from the proposed “excessive interest and financing expenses limitation” (EIFEL) rules for certain arm’s length interest and financing expenses incurred to build or acquire eligible purpose-built rental housing.

Budget 2024 also announces the upcoming launch of a consultation process regarding a new tax on residentially zoned vacant land.

For a discussion of these tax measures and others in Budget 2024, please see McCarthy Tétrault’s Budget 2024 Commentary.