Canadian Chamber Sends Congratulatory Letter to New Finance Minister Dominic LeBlanc

The letter highlights key concerns, including the uncertainty surrounding the proposed capital gains tax increase and the retroactive nature of the digital services tax, both of which risk undermining Canada’s economic competitiveness and trade relationships. The Canadian Chamber urges immediate action to provide clarity and stability for businesses and Canadians alike.

The full letter below can be accessed below.

The Honourable Dominic LeBlanc 
Department of Finance Canada 
90 Elgin Street 
Ottawa, Ontario K1A 0G5 

Delivered via electronic mail 

January 8, 2025 

Dear Minister LeBlanc: 

On behalf of 400 chambers of commerce and boards of trade, and more than 200,000 businesses of all sizes, from all sectors of the economy, and from every part of the country, the Canadian Chamber of Commerce would like to congratulate you on your recent appointment as Minister of Finance. 

Your appointment comes at a critical time, while Canadians continue to struggle with the affordability of the goods and services they need most. Canadians and Canadian businesses deserve an economy and tax system that provides the clarity and stability they need to feel confident about their financial future. 

At a time of considerable uncertainty in our political environment and trade relationships, we need a government which is committed to placing economic certainty above partisan considerations — one that empowers new businesses to launch, helps existing ones grow and create jobs, ensures major projects get built, and keeps supply chains running smoothly without constant disruptions and rising costs. 

Tax measures such as the proposed increase to the capital gains inclusion rate and the digital services tax are limiting our ability to attract and retain investment. Given the recent prorogation of Parliament, the capital gains increase remains an acute concern to Canadians and businesses, who remain unsure how to structure their affairs and whether this measure will be enforced in the future. This increased uncertainty compounds the impact of this tax increase in driving away new investment and entrepreneurship from our country at the exact moment we need it most. 

It is inappropriate, and by our analysis unprecedented, for a government to continue to implement a tax change solely based on a Ways and Means motion, with the clear threat of a non-confidence motion and no clear timeline to table legislation. Given the likely possibility that this tax increase may no longer be enacted in 2025, it is imperative that the government provide certainty to Canadians and direct the CRA not to enforce this measure until after an election. If followed through, this tax increase will make Canada even less competitive in the face of likely significant tax cuts in the United States and will potentially force the CRA to administer costly, confusing and time-consuming tax refunds, potentially exposing the government to legal action. 

In addition, Canada’s digital services tax remains a concern for businesses on both sides of the border and is already a significant trade irritant. Its retroactive nature is also highly unusual and a very concerning precedent for businesses in all sectors. Aside from the negative impacts this new tax will have throughout the Canadian digital economy, affecting small and medium businesses in sectors such as tourism and advertising, the DST is also likely to compromise our trade relationship with the United States, at a time when we cannot afford to be instigators. Both outgoing and incoming American administrations have been clear that they view the DST as an inflammatory and discriminatory tax. 

Instead of giving President-elect Trump more ammunition to target Canada, we should be trying to eliminate key irritants such as the DST to focus on substantive trade issues. The Canadian Chamber calls on you to reverse this damaging, retroactive tax before the damage is done. The time for action is now. 

The recent Fall Economic Statement had some promising measures within such as significant investments in provisions that will act as force multipliers for growth, helping to ensure our economy is competitive and working for Canadians. Measures such as the reinstatement of the Accelerated Investment Incentive and investments in SR&ED are positive commitments working to support an economic future Canadians can depend on. Unfortunately, however, the full potential of these investments will not be realized while Parliament is prorogued and Canada continues to run significant deficits, while our broader tax environment chases away investment. 

It’s time to move away from tax-and-spend policies and red tape that drive up the cost of goods and services, and for the government to prioritize an economy that creates stability, certainty and opportunities for Canadians. In the immediate future, this starts with providing clarity and committing to not proceed with policies which will harm our economy at such a sensitive moment. 

The Canadian Chamber is always available to leverage our network of businesses and local boards of trade from coast to coast to coast to support you in creating a future we can all trust. 

We wish you the best of luck with your new portfolio and would be pleased to meet with you at your earliest convenience to discuss how we can assist in ensuring that Canada remains the best place in the world to do business and call home. 

Sincerely, 

Matthew Holmes 
Executive Vice President, International & Chief of Public Policy 
Canadian Chamber of Commerce