The capital gains inclusion rate is still 50% — the increase was cancelled, not deferred
A lot of commentary still says the 66.67% rate was 'postponed to 2026'. It was cancelled in March 2025. Here is what actually changed, and the one increase that did survive.
If you searched this in 2024 or early 2025, you probably read that the capital gains inclusion rate was rising to 66.67% on gains above $250,000. Then that it was delayed to January 2026. Plenty of pages still say exactly that, which is why the question keeps coming up.
What happened
| When | What |
|---|---|
| April 2024 | Federal budget proposes raising the inclusion rate to 66.67% on individual gains above $250,000, and on all corporate and most trust gains |
| January 2025 | Implementation deferred to 1 January 2026 |
| 21 March 2025 | The increase is cancelled outright |
The increase that did survive
One part of the 2024 package stayed: the Lifetime Capital Gains Exemption went up to $1.25 million and is now indexed. For 2026 it is $1,275,000 (2025: $1,250,000).
That matters if you own qualified small business corporation shares or qualified farm or fishing property. On a share sale that fully uses the exemption, the indexing alone added $25,000 of shelter between 2025 and 2026.
Who paid for the confusion
Some people triggered gains in 2024 specifically to get ahead of a rate that never arrived — paying tax years earlier than necessary and giving up the compounding on the tax paid. That cost is unrecoverable, and it is a good argument against restructuring around a proposal before it is law.
It is worth being precise about one thing the proposal got right, though: corporations never had a $250,000 threshold in the design. Had it passed, every dollar of corporate capital gain would have been included at 66.67%. If you hold investments inside a corporation, that asymmetry is a reminder that personal and corporate capital gains planning are not the same exercise.
What to actually do now
- 1If you accelerated gains in 2024 on this basis, there is nothing to undo — but check whether the resulting higher cost base changes your holding strategy.
- 2If you are planning a business sale, confirm your shares meet the QSBC tests well ahead of closing. Purification often takes more than one tax year.
- 3If you own investments corporately, model capital gains at the corporate rate rather than assuming personal treatment.
- 4Do not restructure around announced-but-unlegislated measures. This episode is the case study.
Tax policies and statutory inclusion thresholds interact directly with business succession and holding timelines. Always review your corporate share registry and purification status with your CPA and wealth advisor before executing transaction structures.
Sources
- Cancellation of the proposed inclusion rate increase (summary)
- CRA: indexed amounts including the Lifetime Capital Gains Exemption
【Professional & Fiduciary Disclosure】
This article is provided for general educational context on Canadian wealth, tax, and insurance planning. Because sound strategies depend strictly on individual parameters — including your marginal tax bracket, corporate holding structure, residency status, and time horizon — this content does not substitute for tailored advice. We encourage coordinating with your CPA, estate lawyer, and licensed wealth advisor to verify current statutory figures and evaluate options for your specific situation.
Want to know how this applies to you?
Marginal rates, asset structure and time horizon change the answer. A 30-minute conversation is usually enough to tell which of the above is relevant to you.