First, the government currently maintains that as of 2029, an individual could, for example, get up to $6.5 million in capital gains and pay less tax than before June 25, 2024, due to the lifetime capital gains exemption, Canadian Entrepreneurs' Incentive and $250,000 threshold. The problem is that this calculation will only be valid in five years' time and, in the meantime, many businesses will be sold or transferred.
Second, since the entrepreneurs' incentive only applies to certain sectors, the break-even point will be much lower than for others, sitting at around $2.25 million, which is relatively low. A very large number of sales of businesses and SME transfers will generate over $2.25 million in capital gains in the next few years. There's no doubt about that.
Finally, in terms of companies' actual capital gains, tax payable will be 33% higher than it was before June 25, regardless of circumstance. Keep in mind that over 300,000 Canadian businesses declare capital gains every year. Therefore, it's an important aspect that will affect many people. That is why we think, specifically for reasons of fairness, that a $500,000 threshold should apply to businesses, just as it does to individuals.