The Saskatchewan Chamber of Commerce has been closely monitoring the federal government’s recent changes to the Capital Gains inclusion rate and has heard from our membership about the profound effects these changes are already having on businesses across the province.

While the government asserts that these changes will only impact the wealthiest 0.13% of Canadians, the reality for small businesses tells a different story. In fact, 80% of small businesses have either already experienced negative impacts or expect to be affected in the near future.

The increase in the Capital Gains inclusion rate from 50% to 67% introduces a new level of uncertainty and poses significant risks to the stability of our business community. For many entrepreneurs, the sale of their business is not just a financial transaction but a key part of their retirement plan, especially in the absence of pensions. The recent changes makes it more challenging for entrepreneurs to secure their financial futures.

Moreover, the higher inclusion rate threatens to discourage investment in small and medium-sized enterprises (SMEs), which are the backbone of our economy. Aspiring entrepreneurs may be dissuaded from starting new ventures, and current business owners may be less motivated to expand their operations, knowing that a larger portion of their gains will be taxed. This could stifle innovation, slow economic growth, and ultimately weaken our provincial economy.

Additionally, many businesses rely on investments or properties held within their corporations as part of their long-term strategy. The increased capital gains tax makes these businesses more vulnerable during economic downturns, as they may find it harder to weather financial challenges without these assets.

The Saskatchewan Chamber of Commerce remains steadfast in its position that the federal government should repeal these changes to the Capital Gains inclusion rate. We believe it is essential for the government to prioritize policies that encourage investment, support business growth, and maintain economic stability. The long-term health of our economy depends on a strong and vibrant business community, and it is imperative that government policies reflect this reality.