An economic research organization in Canada is advocating for the removal of the Canadian capital gains tax, which was introduced in 1972. They point out that Canada has a need for increased business investment, and the tax suppresses how much capital is available to support such ventures. Investment in Canada has fallen 18 percent since 2014, so reducing or abolishing the tax, like other countries have, might help spur economic growth. They argue that capital gain is more sensitive than other types of investments to the tax rate, and as a result a high tax rate can hurt economic growth by discouraging a natural reallocation of capital to its most productive uses. Some investors avoid paying this tax by delaying the realization of their capital gains, but not everyone (often low-and middle-income taxpayers) has the financial flexibility to delay a sale. However, not all economists agree that removing capital gains will increase investment in Canada.

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