A new tax on Canadian citizens that could hurt some of their most valuable assets is on the horizon and could be the biggest headache facing those holding gold and other precious metals.
The tax would come into effect this July and will be one of the biggest headaches facing gold and silver investors.
It’s also the most contentious aspect of the country’s $30-billion gold market, with concerns that it could discourage Canadians from buying gold or silver and ultimately hurt their portfolios.
What is Canada’s cash-for‑citizenship program?
The Canada Revenue Agency has been working to overhaul the way it handles taxpayer money and assets since the Conservatives took power in 2006.
The first steps in the overhaul included making sure that cash is treated like any other asset, including a pension or income-generating investment.
It also introduced a new tax bracket to encourage investment in gold, silver and other metals.
That tax would be on gold, platinum and palladium, all of which are highly sought after by investors.
But this tax would also come into play with precious metals like gold and pallidum, which are typically sold by people who live abroad and don’t pay taxes in Canada.
Gold, for example, is valued at about $1,600 a tonne in Canada, but some investors say it is being sold at an artificially low price by people living in the country.
That could be a problem for those holding these precious metals, said David Leibovici, an associate professor of finance at York University in Toronto who has studied gold and the tax system.
“There is a lot of confusion around how this tax works, and it’s not clear how it will impact gold and metals,” he said.
“There are some things you can do that will make it easier for investors to buy gold and it may increase the number of gold and precious metals that are being bought.”
The government is also looking at how to encourage people to hold more wealth in the form of cash instead of a pension, and to tax investment in the precious metals at a lower rate.
It is also examining the potential for tax evasion in the gold and platinum market, which is currently run by a single entity.
While some of those measures may seem counterintuitive, Leibovi said they are necessary to combat the tax on foreign buyers of Canadian assets.
For example, gold and its derivatives are used by some of the world’s largest banks and have been the subject of a long-running legal battle between the federal government and the British Columbia government.
According to a 2016 report by the Taxpayers’ Alliance of Canada, foreign banks have taken in more than $20 billion from Canada’s gold market since 2007, with some of that coming from people living outside of the province.
In addition, foreign-owned gold mines are increasingly used by the wealthy, including some in Canada’s most prestigious cities, and are subject to strict security measures.
One of those concerns is that Canadians living abroad are being asked to pay taxes on cash that they hold in their home countries.
Canada’s gold and copper mines are subject, for instance, to stricter controls than the vast majority of other commodities.
And the tax has become an issue because of the Canadian government’s failure to enforce the rules.
A study published in June by researchers at the University of Waterloo found that there were nearly 6,000 instances of foreign ownership of Canadian gold and steel in 2016.
It said there are about 40,000 of those properties in Canada and that foreign ownership accounts for around 3.4 per cent of total gold and 1.6 per cent for all metals.
Leibovicis said he’s concerned about the impact that the tax could have on some Canadians who own gold and are investing in it.
“This is something that could impact the portfolio of some people who are currently holding gold, but they don’t actually own it in Canada,” he explained.
“It would be a huge issue for them, because this tax could affect the way they invest and the way their money is spent.”
“The gold and metal market is a big part of the global economy, and a lot is going to be riding on this.”
The government has already said it would make changes to the tax if it was re-elected, but that’s unlikely to happen until after the next election in 2019.
If the tax comes into force before that election, it would become the first tax imposed by the Harper government since the end of the Conservative era.
And the biggest impact of the tax would likely come in the next year, as the tax becomes part of Canadian life, when it becomes mandatory to report taxable assets in a timely manner.
The Canadian Taxpayers Federation has called for the government to overhaul its tax system and make it more transparent, but the opposition Liberals have been calling for the tax to be scrapped entirely.
There is no immediate word