On January 31, 2025, the Department of Finance Canada announced its intention to:

• defer until January 1, 2026, the change to the capital gains inclusion rate;
• maintain the implementation date for the increase in the amount of the lifetime capital gains exemption;
• maintain the implementation date for the introduction of the Canadian Entrepreneurs' Incentive.

On February 3, 2025, the Ministère des Finances du Québec announced its intention to harmonize Québec tax legislation and regulations with the deferral until January 1, 2026, of the change to the capital gains inclusion rate and the maintaining of the implementation date for the increase in the amount of the lifetime capital gains exemption and the introduction of the Canadian Entrepreneurs' Incentive. The deferral until January 1, 2026, will also apply to the Québec particularities that were subject to additional details in the information bulletins.

The amendments to the Québec tax system will only be adopted after the assent of any federal legislation or the adoption of any federal regulation giving effect to these measures and will be applicable on the same dates as the federal measures.

Deferral of the implementation of the change to the capital gains inclusion rate

The date on which the capital gains inclusion rate will be increased from 50% to 66.67% has been deferred until January 1, 2026, on:

• capital gains realized annually above $250,000 by individuals, graduated rate estates and qualified disability trusts; and
• all capital gains realized by corporations and other types of trusts. 

As a result, barring an exemption or incentive, capital gains realized before January 1, 2026, will be subject to the 50% inclusion rate. The inclusion rate represents the taxable portion of a capital gain.

Maintaining of the implementation date for the increase in the amount of the lifetime capital gains exemption

On June 25, 2024, the amount of the lifetime capital gains exemption for the disposition of qualifying small business shares and qualifying farming and fishing property was increased from $1,016,836 to $1,250,000. This measure is being maintained.

Introduction of the Canadian Entrepreneurs' Incentive

To encourage entrepreneurship, the Canadian Entrepreneurs' Incentive took effect on January 1, 2025. It reduces the inclusion rate to 33.33% on a lifetime maximum of $2 million in eligible capital gains. The maximum incentive for 2025 is $400,000, and it will increase by $400,000 each year, reaching $2 million in 2029.

For more information, see information bulletin 2025-1 on Québec.ca.