Bill Morneau slams Freeland's budget as a threat to investment, economic growth

Morneau said the wealthy, business owners and corporations — the people most likely to face a higher tax burden as a result of Freeland's change — will think twice about putting money to work in Canada because they stand to make less on their investments.

KPMG accountants on hand for Morneau's remarks said they've already received calls from some clients worried about how the capital gains change will affect their investments.

While Freeland's move to tax the well-off to pay for new spending is catching heat from wealthy businesspeople like Morneau, and from the Canadian Chamber of Commerce, progressive groups said they were pleased by the change.

The new investment and changes to funding models will also cut through red tape and break down zoning barriers for people who want to build homes faster, she said

According to government data, only 0.13 per cent of Canadians — people with an average income of about $1.4 million a year — are expected to pay more on their capital gains as a result of this change.

But there's some protection for people who sell a small business or a farming or fishing property — the lifetime capital gains exemption is going up by about 25 per cent to $1.25 million for those taxpayers.