January 22, 2025 | Investors

The Not-So-Silent War on Wealth: How Canada’s Policies Are Targeting Investors

In Canada, and more specifically in Ontario, recent policy changes, including increased capital gains taxes and Ontarioโ€™s landlord-tenant regulations, are creating significant challenges for investors and landlords. This opinion piece explores the implications of these changes and their broader impact on Ontarioโ€™s investment landscape.

Expert advice is the key to succeeding with your investments in spite of the market or policy. Learn more about how our team can help right here.

Capital Gains Tax Hike: A New Burden for Investors

What Are the New Rules? As of June 25, 2024, the capital gains inclusion rate has risen from 50% to 66.67%. This means a greater portion of profits from selling investments like property or stocks is taxable. For example:

  • Before: A $450,000 capital gain would have $225,000 taxed.
  • After: The same gain would have approximately $258,340 taxed, increasing taxable income by $33,340.

To the non-investor, a gain of this magnitude may seem outrageous. However, for most investors, this amount could represent over 10 years or more of growth. The gain just happens to be realized in one given year.

Our policies must, at the very least, remain competitive with those of other countries to keep Canada attractive to investors and rents affordable.


Now, more than ever, you need a well-thought-out strategy before investing in real estate. The posts below will help you decide when and whether to buy or sell a property:


How Does Canada Compare to Other G7 Countries?

Canadaโ€™s capital gains tax is now one of the highest among G7 countries, making it less competitive for investors. Comparatively, countries like the United States tax long-term capital gains at lower rates, often incentivizing investment. This disparity is already prompting investors to look south of the border for more lucrative opportunities.

What Does Prorogation Mean for Investors?

With Parliament prorogued until March 2025, the increased tax rate remains a proposal, leaving taxpayers in a difficult position.

  • CRAโ€™s Stance: The Canada Revenue Agency advises taxpayers to pay the higher rate to avoid late fees and interest. It promises a “probable” refund if the legislation doesnโ€™t pass. But in my opinion, “probable” is far from a guarantee.
  • Penalties: The CRA charges interest at approximately 10% annually on unpaid taxes, compounding daily. This would be in addition to late fees.

You would think the CRA could provide clearer guidelines. For instance, it could definitively state that refunds will be issued or late fees and interest will be waived if the legislation is delayed. Greater clarity is essential to restoring investor confidence.

Why Is Ontarioโ€™s Landlord-Tenant Board Still Broken?

Over the years, Ontarioโ€™s Landlord and Tenant Board (LTB) has been plagued with inefficiencies. The system heavily favours tenants, and with a lack of consequences for abuse, many tenants are exploiting the system. It is not uncommon for landlords to go over a year without rent while being unable to evict non-paying tenants.

What Are the Problems with Tenant-Friendly Policies?

ย Ontarioโ€™s LTB has long been criticized for its tenant-friendly policies:

  • Problematic renters often exploit loopholes to avoid paying rent.
  • Repeat offenders leave multiple landlords struggling with unpaid rents and damaged properties.
  • LTB delays in processing eviction applications worsen financial pressures on landlords.

How Does This Impact Housing Investment? These challenges are discouraging many landlords from staying in the rental market. As landlords leave, housing supply diminishes. This shift could result in higher rents and fewer housing options for tenants, leaving corporate landlords to dominate the market.

Corporate Landlords vs. Small Landlords: What Tenants Should Know

Why Choose Small Landlords? Small landlords bring unique benefits to the rental market:

  • Personalized relationships: They often offer more flexible arrangements tailored to individual tenant needs.
  • Diverse housing options: With small landlords, tenants can choose from a wider variety of properties and living arrangements.

What Are the Risks of Corporate Dominance? As small landlords exit the market, tenants are left with fewer options and face risks such as:

  • Standardized management: While professional, corporate landlords often lack the personal touch and flexibility small landlords provide.
  • Higher rents: Corporate landlords typically prioritize profit margins, which can drive up rental prices.

What Are the Consequences of Canadaโ€™s Investment Climate?

The combination of high capital gains taxes and a broken landlord-tenant system sends a clear message: Canada may no longer be an attractive place to grow wealth.

Why Are Investors Being Discouraged? Policies that burden investors with heavy taxes and bureaucratic challenges discourage them from contributing to Canadaโ€™s economy. Business investors create jobs, while real estate investors provide much-needed rental housing. We risk losing both.

What Are the Ripple Effects?

  • Reduced rental housing availability.
  • Higher living costs for tenants.
  • A potential economic slowdown as investments in real estate and other sectors decline.

Are you looking for ways to increase your equity without necessarily having a tenant? Here’s How to Generate Passive Income From Your Primary Residence.

Conclusion Canadaโ€™s new capital gains tax rules and Ontarioโ€™s landlord-tenant policies reflect a growing challenge for investors. These changes risk alienating the very people who drive economic growth and provide essential rental housing. While Premier Ford has made progress in addressing the inefficiencies of Ontarioโ€™s LTB, there is still a long way to go before the system is on par with other provinces or the United States. Policymakers must recognize the need for competitive capital gains policies and fair regulations to sustain a healthy investment climate. Small businesses and small landlords are integral pillars of our economyโ€”we cannot afford to lose them.

Are you curious how these new realities may affect you? Our Guelph real estate agents are happy to address any questions or concerns you may have. Reach out today at info@gowylde.ca or call 519-826-7109 to learn more.

GoWylde Team
Author: GoWylde Team

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