Affluent Canadians disappointed with economic conditions following changes to capital gains taxes

Ottawa’s recent changes to the capital gains tax have sparked discontent among Canada’s highest-income group, according to a new poll tracking the financial outlook of Canadians. The Maru Household Outlook Index, conducted after the federal budget announcement that included an increase in the inclusion rate for capital gains over $250,000, revealed a significant decline in optimism among respondents in the top income bracket.

Only 31% of those earning $100,000 or more believe the national economy is heading in the right direction, marking a nine-point drop from the previous survey. Additionally, their outlook for the economy over the next 60 days deteriorated, with 31% expressing pessimism about any improvement.

John Wright, executive vice-president of Maru Public Opinion, noted that this group exhibited a more pronounced negative sentiment in this report compared to previous ones. While the exact cause of this shift cannot be definitively attributed to the budget changes, Wright suggested that the capital gains tax increase likely played a role.

The survey also revealed a broader decline in economic optimism across Canada, with only one-third of Canadians overall believing the economy is on the right track. This sentiment was echoed in various regions, except for Ontario, where a slight uptick was observed.

Financial anxiety has also increased, with 41% of respondents expressing concerns about making ends meet in the coming months. This anxiety was particularly prevalent among older age groups and lower-income earners, indicating a widespread unease about financial stability.

Overall, the Maru Household Outlook Index fell to 86, reflecting a negative sentiment among Canadians regarding the economy and personal finances. The index has remained in the red since December 2021, reaching its lowest point in March 2023 at 83. The survey was conducted among 1,532 Canadian adults, highlighting a growing sense of economic uncertainty and financial strain among the population.