The Conservatives released their party platform today and unveiled a significant tax cut on capital gains:
[A Conservative government will] Eliminate the capital gains tax for individuals on the sale of assets when the proceeds are reinvested within six months. Canadians who invest, or inherit cottages or family heirlooms, should be able to sell those assets and plough their profits back into the economy without taking a tax hit. It is time government rewarded Canadians who reinvest their money and create jobs.
News reports indicate that the plan also applies to stocks and bonds. Since taxes are the enemy of long-term investing (why sell a stock that has good fundamentals, but is overvalued, when 25% of the capital is lost to taxes on selling), the deferral of capital gains is a very significant benefit for investors. Combined with the increase in the dividend tax credit, the Tory plan is likely to reopen the whole debate on saving inside or outside a RRSP.
(As an aside, I found it ironic that the Liberals are calling the Tory fiscal plan “a formula for fudge”, when the same people have underestimated the federal surplus for years.)
PS: I just noticed that Investing Intelligently also has a post on this issue.