Capital gains tax on stocks & ETFs in Canada

When you sell a stock or ETF for more than you paid, the profit is a capital gain. Canada doesn't tax it at a special rate. Instead, only 50% of the gain — the 2026 inclusion rateThe share of a capital gain added to your taxable income. In Canada it's 50%, so only half the gain is taxed. — is added to your income and taxed at your normal marginal rate. The other half is completely tax-free.

The trigger is the sale. A stock that doubles but stays in your account creates no tax at all, however large the paper gain. This is what gives long-term investors so much control: you decide when to realize the gain, and therefore which year it lands in. The capital gains calculator works out the exact tax for any purchase and sale price you enter, and our capital gains tax explained guide covers the mechanics across every asset type.

Where you hold a stock matters more than almost anything else about it:

• Taxable (non-registered) account. Gains are taxed at 50% inclusion when you sell. Dividends and interest are taxable each year too.
• TFSA. Every gain is permanently tax-free. The trade-off: US dividends face a 15% withholding taxTax a foreign country deducts at source before paying you a dividend. The US withholds 15% on dividends paid to Canadians — recoverable in a taxable account, but lost inside a TFSA. that you can't recover here.
• RRSP. Gains grow tax-deferred, and thanks to the Canada–US treaty, US dividends are exempt from withholding — making the RRSP the natural home for US dividend payers.
• FHSA. Like a TFSA for gains, with an RRSP-style deduction going in.

The practical rule: hold your highest-growth and US-dividend investments where the tax disappears, and keep simpler, tax-efficient holdings in the taxable account. This is the core idea behind asset location and pairs with our RRSP vs TFSA comparison.

A common question is whether Wealthsimple, Questrade, or a bank brokerage changes how gains are taxed. It doesn't. The brokerage is just where the account lives — the tax rules follow the account type, not the platform. Gains in a Wealthsimple TFSA or RRSP are tax-free; gains in a Wealthsimple personal (non-registered) account are taxable exactly like any other.

Your broker issues a T5008A tax slip listing your securities sales for the year. It often omits your cost base, so you still need to track your own ACB to report the gain correctly. slip listing your sales for the year, but it frequently leaves out your cost base — so the responsibility for the adjusted cost baseThe average you paid for all shares of a security, including commissions and reinvested dividends. Your gain is proceeds minus this figure. stays with you. That matters most if you hold the same security in more than one account.

As a Canadian resident, you're taxed on worldwide gains, including US and other foreign stocks. Two wrinkles apply:

• Everything converts to Canadian dollars. You translate your purchase at the exchange rate on the buy date and your sale at the rate on the sell date. A swing in the loonie can create — or erase — part of your gain even if the US-dollar price barely moved.
• Dividend withholding tax. The US withholds 15% on dividends paid into a taxable or TFSA account. In a taxable account you can usually claim a foreign tax creditA credit on your Canadian return for tax already paid to another country, so the same income isn't taxed twice. It offsets the US withholding tax — but only in a non-registered account.; in a TFSA you can't. An RRSP is exempt under the treaty.

Capital gains on US stocks themselves are sheltered in any registered account, just like Canadian stocks. It's the dividends, not the gains, that drive the account-placement decision.

Selling losers to offset gains — tax-loss harvesting — is one of the best tools for cutting a stock-gain tax bill. But the superficial loss ruleDenies your capital loss if you (or your spouse, or a corporation you control) buy the same security back within 30 days before or after the sale. The loss is added to the new shares' cost base instead. can deny the loss if you're not careful. If you sell at a loss and buy the same or an identical security back within 30 days — before or after, in any of your accounts or your spouse's — the loss is disallowed and added to the cost base of the new shares.

To harvest a loss cleanly, either wait out the 30-day window before rebuying, or replace the position with something similar but not identical (a different provider's index ETF, for example) so you stay invested without triggering the rule.

For stocks and ETFs, the gain is only as accurate as your cost base. Three things quietly change your ACB over time:

• Multiple purchases. Each buy at a different price re-averages your per-share cost.
• Reinvested distributions. ETFs and dividend-reinvestment plans buy more units with your distributions — each one raises your ACB, even though no cash left your pocket.
• Return of capital. Some ETF distributions are return of capital, which lowers your ACB and increases the eventual gain.

If you hold the same security in more than one non-registered account, the CRA requires you to pool them into a single average cost base. Getting this right is its own skill — our guide to tracking adjusted cost base walks through the mechanics step by step.

This guide is for educational purposes only and is not financial or tax advice. It describes the general rules for capital gains on stocks and ETFs under 2026 figures, including the 50% inclusion rate. It does not cover every situation — day-trading treated as business income, employee shares, or complex foreign-reporting rules, among others. Confirm the current rules and your own situation with the CRA or a qualified tax professional before acting. See our capital gains tax explained guide for the broader picture.