Derek Holt, Vice President and Head of Capital Markets Economics at Scotiabank, didn’t mince words when asked by a reporter for his thoughts on the 2024 budget unveiled by the Trudeau Liberals. 

Holt called the budget “extremely unfair,” highlighting the detrimental impact on future generations from the capital gains tax increase (i.e., profits from sales).

According to the budget, the inclusion rate on all capital gains above $250,000 will now rise from 50% to 66%, while the inclusion rate below that number will remain at 50%.

“We will have among the highest capital gains tax rates anywhere in the world,” Holt said, stating that such policies undermine incentives for investment.

He further lamented that taxes are imposed on earnings, company profits, and potential capital gains. Even after-tax earnings reinvested by companies face higher taxes on potential gains. Moreover, profits distributed to shareholders through dividends or capital gains face additional taxation. This discourages investment and adds to the financial burden.

“So this whole fairness argument is extremely misleading. It is an extremely unfair method of taxation to compound the taxation at every single stage of the investment process.” 

“I think Minister Freeland is the heaviest spending finance minister we’ve had in decades,” he added. 

Future generations foot the bill

Addressing the issue of affordability and fairness, Holt criticized the heavy-handed taxation of savings as a short-sighted solution to fund “here today, gone tomorrow” consumption patterns. 

He also sounded the alarm on the burden that will be imposed on future generations, despite the budget’s purported aim of fairness and assistance to youth. 

With a projected $65 billion annual interest charge looming over the horizon, Holt said he’s worried about the mounting structural deficit.

“They’re patently misleading in terms of what they are saying to younger voters right now because they’re the ones who are going to be footing the bill for this indebtedness.”

Budget 2024 was released on Tuesday by the Trudeau Government. The Counter Signal has analyzed the entire 430 page document and found 5 alarming new tax hikes that all Canadians need to hear about.