Prime Minister Justin Trudeau's government will continue to collect a modified capital gains tax, the finance ministry said on Tuesday, after the proposed measure was thrown into limbo when Trudeau suspended parliament.

The Canada Revenue Agency expects Canadians to adhere to a proposed capital gains tax increase – despite the fact the measure may never be passed into law.

When Parliament was prorogued, all bills and motions that had not yet received royal assent were essentially killed. So why is the Canada Revenue Agency charging higher capital gains taxes that were never formally adopted by Parliament?

The Canada Revenue Agency has yet to offer guidance on how the Liberals’ capital gains tax proposal will be handled.

Despite the current prorogation, the finance department says the CRA will issue taxpayer forms in accordance with the proposed capital gains rules by January 31. The department says the CRA will stop administering the policy if Parliament resumes and the government signals it will no longer proceed with the proposed changes.

Whether Parliament is prorogued or dissolved, the agency generally continues to administer proposed legislation

Canada’s tax authority will continue applying the higher capital gains inclusion rate despite Prime Minister Justin Trudeau’s suspension of Parliament.