Government cancels the capital gains inclusion rate increase
The proposed rise from one half to two thirds, deferred to January 2026 and then abandoned, never took effect. The inclusion rate remains one half for individuals, corporations and trusts.
DividendsCanada editorial · Published August 21, 2026
The federal government cancelled its proposed increase to the capital gains inclusion rate in March 2025. The rate remains at one half.
Budget 2024 had proposed raising the inclusion rate — the proportion of a capital gain that is taxable — from one half to two thirds on gains above $250,000 a year for individuals, and on all gains realised by corporations and most trusts.
Sequence
The measure was announced in Budget 2024 with an effective date of 25 June 2024.
In January 2025 the Department of Finance announced that implementation would be deferred to 1 January 2026.
In March 2025 the increase was cancelled.
No tiered inclusion rate and no $250,000 threshold is in effect for 2026. The one-half inclusion applies to individuals, corporations and trusts alike.
What was retained
The increase to the Lifetime Capital Gains Exemption survived the cancellation. The limit stands at $1.25 million on the disposition of qualifying small business shares and qualifying farming and fishing property.
The deferral and subsequent cancellation followed a period in which some taxpayers had accelerated dispositions in anticipation of the higher rate taking effect.
Event dated March 21, 2025. Primary document: Canada Revenue Agency — update on administration of the proposed changes.
General information, not advice. Tax treatment depends on your circumstances and can change. Verify figures against the CRA and issuer documents before acting.