Facing pushback from physicians and businesspeople over the coming increase to the capital gains inclusion rate, Prime Minister Justin Trudeau and his deputy Chrystia Freeland are standing by their plan to target Canada’s highest earners.

In respective press conferences on Tuesday, both Trudeau and his finance minister defended their proposal to rake in $19.3 billion over the next five years by increasing the capital gains inclusion rate — the portion of capital gains on which tax is paid – for individuals with more than $250,000 in capital gains in a year.

This new revenue stream comes as the federal government plans to spend billions of dollars to increase Canada’s housing supply and enhance social programs, with the Liberals framing the new revenue as helping to offset those investments in a way that’s fair and doesn’t offload a larger deficit on younger generations.

“At a time when young people have started to give up on the dream of eventually ever being able to own a home, it was really important to rebalance the situation,” Trudeau said, speaking to reporters in Saskatchewan.

“I understand for some people this may cost more if they sell a cottage or a secondary residence. But, young people can’t buy their primary residences yet.”

What is the capital gains tax change?

As revealed in last week’s federal budget, the capital gains inclusion rate will increase from 50 per cent to 67 per cent, and will also apply to all capital gains realized by corporations and trusts.

That means that as of June 25, people with more than $250,000 in profit made on the sale of assets in a year will have to pay taxes on a larger portion of that money.

This incoming amendment to the Income Tax Act is expected to affect the wealthiest 0.13 per cent, and approximately 12 per cent of Canada’s corporations and Canadians with an average income of $1.42 million.

The inclusion rate for capital gains realized annually up to $250,000 is not changing, the existing capital gains exemption on primary residences will remain, and the lifetime exemption limit for small business shares, as well as farming and fishing properties is increasing.

What is the criticism?

While not the direct wealth tax or excess profit taxes some had anticipated – given Freeland’s dodging of questions about whether those were revenue routes the government was considering – since the budget was tabled, many Canadian business owners and entrepreneurs have raised concerns that the move could stunt innovation.

“At a time when our country is facing critically low productivity and business investment our political leaders are failing our country’s entrepreneurs,” wrote Shopify president Harley Finkelstein in a post on “X” last week.

On Tuesday, the Canadian Medical Association (CMA) also came out against the move, asking the Liberals to reconsider as the change will impact doctors’ retirement savings as most incorporate and operate their practice as a small business. 

“It is completely unfair, late in the game taxation for those physicians who did follow the rules of the day and save for their retirement inside of our professional corporations,” CMA president Dr. Kathleen Ross said Tuesday. 

PBO cautions ‘collateral damage’

It’s this kind of potential for “collateral damage” that Canada’s Parliamentary Budget Officer Yves Giroux voiced caution about in an interview on CTV News Channel’s Power Play on Friday, with host Mike Le Couteur.

Citing the sale of secondary residences such as cottages, or rental properties in the current housing market as examples of how Canadians could feel the impact of this tax change, Giroux said it’s not unusual for capital gains to be realized “well in excess of $250,000.”

“The moment you have a capital gain that’s higher than a quarter million, then you’re captured by that higher capital gains inclusion rate,” he said.

The PBO also cautioned that it’s difficult to determine based on the government’s current numbers, whether they will actually be able to generate the amount of revenue expected, but his office plans to assess that over the next couple of weeks.

What is the Liberals’ rationale?

In defending the capital gains reforms, both Trudeau and Freeland said the way the tax system currently works means a nurse, student, or carpenter could be paying income tax at a higher marginal rate than a multimillionaire who can use accountants to pay a lower tax rate.

“That’s not fair,” Freeland said, speaking in Toronto on Tuesday. “It is fair to ask those who are doing really well to contribute a little bit more.”

In the budget, the Liberals made a point of noting that this change will not impact 99.87 per cent of Canadians. Further, the 416-page document notes that in 2021, only around five per cent of Canadians under 30 had any capital gains at all.

And, next year, 28.5 million Canadians are not expected to have any capital gains income, while three million are expected to earn capital gains below the $250,000 annual threshold.

In an interview on CTV’s Question Period with Vassy Kapelos that aired Sunday, Conservative deputy leader Melissa Lantsman would not say whether her party would reverse the increase in the capital gains inclusion rate.

With files from CTV News’ Spencer Van Dyk 

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U.K. tabloids and Loch Ness monster believers are abuzz after an expat Canadian couple photographed what some say could be the legendary water creature.

Parry Malm and Shannon Wiseman aren’t fully convinced themselves, but say they are coming around to the idea — particularly if it keeps their kids happy.

The family, which currently lives in the English city of Wimbledon, spent Easter vacation sightseeing in Scotland. To prepare for the trip, they loaded up on books about the Loch Ness monster.

While staying in a nearby cabin on a cold, blustery day in early April, the couple decided to visit a body of water where the sea creature is rumoured to live.

And that’s when they saw something moving through the waves.

“Its head was craning up above the water and it was slowly but gradually moving toward us,” Malm, who is originally from Coquitlam, B.C., said, quipping that it was “bigger than a Sasquatch but smaller than Ogopogo.”

WATCH | Malm and Wiseman speak about the sighting: 

B.C. couple unsure if they saw Loch Ness Monster … but they want to believe

1 day ago

Duration 7:28

A Canadian expat couple took a photo of something in the water of Loch Ness while on vacation in Scotland recently. They thought it might be a seal or an otter but their kids believed it could be the Loch Ness Monster, a claim that was picked up by U.K. tabloids. Parry Malm and Shannon Wiseman speak about the attention they’re receiving.

“So we obviously play it up. We have two little kids who are almost three and almost five,” he continued.

Wiseman, originally from Calgary, asked her sons, “Do you think it’s Nessie?” while taking a picture of the blurry object.

Little did they know that the image, and their names, would soon be plastered in U.K. tabloids as the first sighting of the Loch Ness monster of 2024.

Hundreds of years of history, but no official proof

Sightings of some sort of unexplained creature in Loch Ness date back to around 500 A.D., though modern sightings re generally traced to 1933, when a local newspaper reported a couple’s claims of seeing “an enormous animal rolling and plunging on the surface.”

Some have argued it’s a freshwater plesiosaur, though studies have found the creature went extinct before Loch Ness was formed. A DNA study of hundreds of water samples from Loch Ness found that if anything, sightings of the creature were most likely a giant eel.

Even a massive hunt in 2023 using state-of-the-art technology failed to turn up anything definitive.

WATCH | The business of Loch Ness monster sightings:

A lucrative legend: the biggest Loch Ness monster hunt in 50 years | About That

8 months ago

Duration 7:32

Hundreds of ‘monster hunters’ are headed to the Scottish Highlands to take part in the biggest Loch Ness monster search in half a century. Andrew Chang explores why the event is a win for Scotland’s tourism industry in a post-pandemic world.

But the allure remains, with hundreds of tourists visiting the water every year in the hopes of seeing the creature — or at least coming away with a story to tell.

Among the believers is Gary Campbell and his daughter Page Daley, who have maintained a website since 1996 titled “The Official Loch Ness Monsters Sightings Register,” which aims to document all potential sightings of the creature, filtering out photos they are able to identify as waves, logs or other animals — as detailed on their page, “What’s not a sighting.”

Malm submitted their photo “just for a bit of a laugh” and, the next day, he says he got a reply telling him he had taken “the first confirmed sighting this year.”

The photo was posted to the website and picked up by U.K. tabloids including the Scottish Sun, Irish Star and the Daily Mirror.

‘We’re not tinfoil-hat-wearing people’

The couple is enjoying the attention and say their boys are fully on board with the notion they saw the Loch Ness monster, even if the adults aren’t quite convinced.

“My instinct says it might have been a seal but I am told that seals do not go in that lake,” Wiseman said.

“I mean, we’re not tinfoil-hat-wearing people,” Malm added. “There’s probably a perfectly logical explanation for what it was. Maybe species X lost its way home or something like that.”

But he says he’s not completely closed to the idea.

“There’s every possibility that there’s some sort of unexplained species that, from time to time, makes an appearance.”

For Wiseman, the fun comes in sharing an extraordinary memory with her kids.

“I want their childhood to be filled with the magic of the unbelievable,” she said. “And this is just one of those things: It is unbelievable, and they believe it so I believe it — and I am all in on that.”

Malm agrees: “What it sort of reaffirmed for me is there’s still things in the world that can surprise and delight you,” he said.

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The head of one of Canada’s largest police forces met with a Sri Lankan inspector general of police who two weeks earlier had been found by the South Asian country’s highest court to have “participated in the torture” of an arrested man.

Photos published by Sri Lankan media, including the Ceylon Today, an English-language daily newspaper, show Peel Regional Police Chief Nishan Duraiappah in uniform posing alongside senior Sri Lankan officers on Dec. 29, 2023 at police headquarters in the capital Colombo – a visit a Peel police spokesperson says Global Affairs Canada and the RCMP had been made aware of ahead of time.

One of the law enforcement officials in the photos was the inspector-general of Sri Lankan police, Deshabandu Tennakoon, who earlier that month was ordered to pay compensation for taking part in “mercilessly” beating a man.

On Dec. 14, 2023, Sri Lanka’s Supreme Court ruled Tennakoon was involved in the brutal arrest of a man suspected of theft, holding him in what the court called the “torture chamber” of the police station for more than 24 hours, striking and suffocating him, and rubbing chili powder on his genitals.

Dr. Thusiyan Nandakumar, a physician who also runs the London, U.K.-based outlet the Tamil Guardian, called it a “stain on Canada’s reputation.”

“To see someone of (Duraiappah’s) stature receive a guard of honour from that very same institution that’s responsible for so many abuses was shocking, to say the least,” Nandakumar said.

Duraiappah declined Global News’ request for an interview. In a statement, a Peel Regional Police spokesperson called his trip to Sri Lanka “personal” and said there is “no ongoing initiative or collaboration between Peel Regional Police and any organization in Sri Lanka.”

Duraippah was photographed multiple times during his visit wearing his Peel police uniform.

Rathika Sitsabaiesan – a former NDP MP and Canada’s first Tamil member of Parliament – says when someone wears a uniform, “you’re representing the organization for which you are the chief.”

Duraippah is the only police chief of Sri Lankan descent outside the South Asian nation, according to Peel police, which operates in Mississauga and Brampton, Ont.

“(It’s) very harmful to me as a Canadian, as someone who grew up in the region of Peel, and all the people who continue to live in Peel and who identify as Tamil, in my opinion,” Sitsabaiesan said.

The Peel spokesperson said Duraiappah accepted an invitation from Sri Lankan police officers while he was on a family vacation to the country of his birth.

The spokesperson would not confirm when asked if Duraiappah had met directly with Tennakoon beyond the photos, which show them holding a plaque together and Tennakoon standing behind Duraiappah while he signed a guestbook.

It’s not clear whether the event photographed was the only meeting or whether any additional ones were held, including whether Duraiappah and Tennakoon met outside of the moment they were photographed together.

Another Peel spokesperson added that “the Chief discussed the requests for meetings received with Global Affairs Canada and the RCMP.”

The RCMP says the force provided information to Duraiappah about Tennakoon, including about the recent court ruling, ahead of time.

“The Government of Canada did not organize the visit, which was considered a personal visit. However, given the RCMP’s close working relationship with Peel Regional Police, the RCMP Liaison Officer for Sri Lanka offered to facilitate Chief Duraiappah with arrangements involving police agencies in Sri Lanka,” an RCMP spokesperson said in response to questions from Global News.

“Information was provided to Chief Duraiappah for his situational awareness about recent developments in Sri Lanka, including the Sri Lankan Supreme Court’s ruling on Chief Tennakoon.”

Global Affairs Canada also said the visit was “personal.”

“The Government of Canada did not organize the visit” and “as is customary for meetings with high-level officials, staff from the High Commission of Canada to Sri Lanka accompanied the Chief as a courtesy,” Global Affairs Canada spokesperson Marilyn Guèvremont said.

Sitsabaiesan says “alarm bells should have gone off” given the country’s human rights record.

In October 2022, Canada adopted a United Nations Human Rights Council resolution calling on Sri Lanka to address the “human rights, economic and political crises” in the country.

The following year it sanctioned four government officials for “human rights violations on the island” and commemorated the Tamil Genocide Remembrance Day for the first time – marking the deaths of tens of thousands of Tamils during the country’s 26-year civil war.

“Canada is well-versed in the crimes that took place. It’s not something that Ottawa is blind to,” Nandakumar said.

While it’s not unusual for western officers to visit, collaborate or train police forces in developing countries, some have recently distanced themselves from Sri Lankan authorities.

In 2021, Scotland ended its training program for officers in the country over allegations of human rights abuses.

In January of this year, the United Nations criticized Sri Lankan police for their “heavy handed” anti-drug crackdown, with reports of arbitrary arrests, torture and public strip searches.

Tennakoon’s recent appointment as police chief shows “much about how law enforcement authorities in the island operate with impunity,” Neil DeVotta, an expert on South Asia and politics professor at Wake Forest University in North Carolina, said in an e-mail to Global News.

Nandakumar says the Peel chief’s visit to the Sri Lankan police headquarters raises questions about judgement.

“When a senior Canadian official goes to meet with forces accused of such egregious crimes … to see something like that take place, it was very disconcerting.”

“I think an apology is needed,” he said.

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