What is the capital gains tax rate on index funds in Canada?

The headline capital gains tax rate in Canada is 26.8%. Average capital gains tax rate. Allowances, holding periods and tax-advantaged accounts can change what you actually pay.

How much tax would I pay on a $100,000.00 gain in Canada?

At the headline rate of 26.8%, a $100,000.00 gain would attract roughly $26,800.00 in capital gains tax, leaving $73,200.00 before any allowances.

How does Canada compare with the rest of North America?

The average headline capital gains rate across North America in our dataset is 23.4%, so Canada at 26.8% is above the regional average.

Index Fund Taxes in Canada

Investors in Canada face a headline capital gains rate of 26.8% on index funds and ETFs. Average capital gains tax rate.

Headline rate: 26.8%
Tax on a $100,000.00 gain: $26,800.00
North America average: 23.4%

What this means for your returns

Tax applies to your gain, not your whole balance. If you invest and your portfolio grows by $100,000.00, a 26.8% rate leaves you with $73,200.00 of that growth before allowances.

Because the tax is usually triggered when you sell, holding for longer defers it and lets the untaxed amount keep compounding. That deferral is one of the structural advantages of buy-and-hold index investing over frequent trading.

Run your own projection with Canada tax applied →

How Canada compares in North America

Capital gains tax rates across North America
Country	Capital gains rate
United States	20%

Frequently Asked Questions

Headline statutory rates as of 2025-01-01, collected from national tax authority publications. Rates exclude allowances, exemptions, tax-advantaged accounts, local surcharges and treaty relief, and change frequently. Confirm your position with a tax professional in Canada.