The Joint Committee recommends clarification that there be no adverse consequences to ignoring the CGIR proposals when filing your 2024 returns

While the proposals to generally increase the capital gains inclusion rate (the “Capital Gains Proposals”) were not tabled in Parliament in the form of a bill before Parliament was prorogued on January 6, 2025 and there is substantial possibility that they will never be enacted, Finance and CRA have confirmed that the ITA will be administered as though they were enacted.

This uncertainty as to enactment is unlikely to be resolved prior to the time at which many taxpayers will be required to pay tax and file for their 2024 taxation years. They will have the unattractive choices of: paying tax (and filing their returns) on the basis of existing law, and filing an amendment with additional tax payable in the event the Capital Gains Proposals are enacted with retroactive effect; or paying and filing on the basis of the proposals, and then filing an amendment (or objecting to their own filing) - and applying for a refund if the proposals are withdrawn.

The Joint Committee recommends that: the Government announce that the Capital Gains Proposals, if enacted, will only be applicable to gains realized after the relevant bill is introduced in Parliament; or (failing that) the CRA provide administrative relief by waiving arrears interest and confirming (for greater certainty) that penalties are not applicable to taxpayers paying tax and filing on the basis of existing legislation– until at least the date of the introduction of the relevant bill in Parliament.

Neal Armstrong. Summary of Joint Committee, Federal Budget 2024 – Capital Gains Inclusion Rate, 22 January 2025 Joint Committee submission under s. 38(a).