Freeland plans to trigger a vote on capital gains tax changes next week

The Liberal government plans to force the Conservatives to vote this coming week on changes to the country's capital gains tax regime set to go into effect on June 25.

A senior federal government source said Finance Minister Chrystia Freeland will start the legislative process on Monday morning.

Freeland is expected to table a ways and means motion in the House of Commons Monday morning to signal the government's intention to increase the capital gains inclusion rate.

Freeland is expected to announce this in a speech Sunday in Toronto.

A ways and means motion is a first step that must be completed before tax change legislation can be tabled. The motion is expected to be voted on later next week.

But the increase to the inclusion rate can go ahead before a bill is passed.

A capital gain is the difference between an asset's cost and its total sale price. That asset could be a cottage, an investment property, a stock or a mutual fund. In Canada, primary residences are not included.

Right now, only 50 per cent of capital gains are taxable — what's known as the inclusion rate. For individuals, the inclusion rate is set to increase from one half to two-thirds on capital gains above $250,000 on June 25. So for the first $250,000 in capital gains, a taxpayer will pay tax on $125,000 of it. Two-thirds of every dollar beyond $250,000 will be taxable.

For corporations, there will be no $250,000 threshold. Two-thirds of all capital gains earned by corporations and trusts will be taxable.

When asked whether actual legislation will be introduced before the end of this parliamentary sitting, a senior government source said, «That depends on whether or not the opposition parties also believe in tax fairness.»

The Trudeau government has made no