Good afternoon, committee members.
My name is Kim Moody. I'm a fellow of the chartered accountants of Alberta. I have a very long history of serving the Canadian tax profession with a variety of significant leadership positions. I'm also a prolific writer and speaker on taxation matters, including writing a weekly column in the Financial Post.
Today, I'd like to briefly comment on three key matters regarding these proposals. The first is the policy underpinning the capital gains inclusion rate increase. Canada has a long and interesting history on the taxation of capital gains, and one can have respectful debates on whether the inclusion rate for capital gains should be 50%, two-thirds, 75% or even 100%. Given Canada's historical debate and treatment on this, put me on record as an advocate for a low inclusion rate, like 50%, since that lower inclusion rate provides incentive and acknowledgement of a key issue that most people experience when they originally invest capital to generate such gains. That key differentiator is risk.
It takes guts to buy land, to build a building and to rent it out, to buy a farm, to start a business or to buy a business. Most Canadians are not wired to accept that risk, so why is this important?