Ontario legislature defeats Conservative bill to cap ‘death tax’ at $3,250

TORONTO – An attempt by a Progressive Conservative member of the legislature to roll back and cap Ontario’s “death tax” failed Thursday.

PC Monte McNaughton’s private member’s bill would have capped the province’s estate administration tax, which he calls a death tax, at $3,250, regardless of the size of the estate. Estate taxes in Alberta are about $400 and in Quebec just $100, so $3,250 is hardly too low a cap, said McNaughton.

“This is a vulgar, heartless tax,” he said.

“This morbid tax means we are being taxed to death at death and after death.”

Tweet This Click to share quote on Twitter: "This morbid tax means we are being taxed to death at death and after death."

Ontario’s tax is $5 per thousand for the first $50,000 of an estate, and $15 for each $1,000 after that, so a $1 million estate would pay $14,500.

The “death tax” on grieving families amounts to another government cash grab of about $143 million a year, McNaughton told the legislature.

“We continue to complicate our tax system, making it difficult to navigate for families and small businesses that don’t have the benefit of expensive legal counsel,” he said. “It’s not fair and it’s not right.”

The tax can amount to tens of thousands of dollars on farms and small businesses, which McNaughton said can force the next generation to sell.

“This tax is extremely punishing for family farms and family-owned businesses,” he said. “Farmers may have equipment and property worth millions but still be cash-poor, so when the finance minister comes to collect the estate tax after the head of the family passes away, there is no available cash.”

The Liberals made significant changes to the estate tax this year, including the threat of fines and jail time for trustees if an assessment isn’t filed within 90 days, said McNaughton.

“Grieving families trying to settle the affairs of their loved ones have new, harsh deadlines and penalties hanging over their heads,” he said.

“When this tax was reviewed and modified by the government, it’s clear that compassion and sensitivity were not top of mind.”

Tweet This Click to share quote on Twitter: "When this tax was reviewed and modified by the government, it's clear that compassion and sensitivity were not top of mind."

The Liberals said McNaughton was just trying to reduce taxes for wealthy people, an accusation he dismissed as ridiculous.

“The fact of the matter is this tax can be levied on anyone with property worth over $1,000,” he said.

The New Democrats agreed the 90-day limit to provide an itemized account of the estate is too onerous on grieving families.

“Ninety days is a timeline that is completely unworkable,” said NDP finance critic Catherine Fife.

However, the NDP didn’t like the proposed cap on the estate tax, so they joined with the Liberals to defeat McNaughton’s bill.

The Canadian Taxpayers’ Federation said nothing is certain but death and taxes “and Premier Kathleen Wynne is managing to make both worse for Ontarians.”

Private member’s bills rarely become law in Ontario.