The Canada Revenue Agency (CRA) treats cryptocurrency as a commodity. Most crypto transactions are taxed as capital gains or business income depending on your trading activity level.
What Is Taxable in Canada
| Event | Taxable? | Type |
|---|---|---|
| Sell crypto for CAD | Yes | Capital gain/loss (usually) |
| Trade crypto for crypto | Yes | Capital gain/loss |
| Spend crypto on goods | Yes | Capital gain/loss |
| Mining rewards | Yes | Business income |
| Staking rewards | Yes | Business income (usually) |
| Airdrops | Yes | Income |
| Gift to spouse | No | Tax-free between spouses |
| Donate to charity | No | No capital gains tax |
| Gift to non-spouse | Yes | Deemed disposition at FMV |
Tax Rates
Capital Gains
50% of capital gains are included in taxable income (50% inclusion rate).
For example: If you have $10,000 in capital gains:
- $5,000 is included in your income
- You pay tax at your marginal tax rate on that $5,000
Marginal Tax Rates (Provincial + Federal)
| Income Bracket | Approximate Rate |
|---|---|
| Up to $55,867 | 20-25% |
| $55,867 - $111,733 | 30-35% |
| $111,733 - $173,205 | 37-43% |
| Over $173,205 | 47-53% |
The “Business vs Capital” Distinction
Capital gains: Buying and holding crypto, occasional selling. 50% inclusion rate. Business income: Frequent trading, day trading, running a node or validator. 100% included as income.
CRA factors to consider:
- Frequency of transactions
- Length of holding period
- Knowledge of crypto markets
- Intention to profit from short-term price movements
- Whether you’ve advertised yourself as a trader
Record Keeping
The CRA requires detailed records:
- Transaction date and time
- Fair market value in CAD at time of transaction
- Purpose of the transaction
- Exchange or wallet used
- Transaction fees paid
Reporting threshold: Any crypto transaction that results in a capital gain or loss must be reported — there’s no minimum threshold.
Verdict
Canada’s crypto tax rules are generally clear. The 50% capital gains inclusion rate is favorable compared to many countries. Use crypto tax software (Koinly, CoinTracker) that supports Canadian cost-basis methods (adjusted cost basis/ACB).
Related: Crypto Tax Guide by Country | How to Report Crypto Losses | Staking, Airdrops, DeFi Tax