Not an expert in Canadian tax, but am an expert in South African tax which typically refers to UK case law. Due to the link between Canada and UK, I am assuming that the Canadian tax law draws heavily from the UK tax law.
If that is the case, then the following applies:
1. If you apply a lot of your time to the buying and selling of futures, then it will most likely be considered your business and be taxed as income. The typical case law in the UK stated that betting on horses is a capital gain, but developing a system to bet on horses transforms that into income.
2. The Guidelines for Quebec in the above link state the following: "8. However, none of the above-mentioned factors is itself determinative. All of the facts and circumstances surrounding the transactions must be considered." This means that each case will be considered individually on its own merits. That is done intentionally so that the tax authorities are not boxed in. The guidelines seem to apply more to business who wish to hedge a certain risk.
Based on the above, day-traders and swing traders will have their income taxed as income and not capital gains. In the UK and South Africa that would definitely be the case.
Based just on the Guidelines, even longer term traders my find that their income is taxed as income. This is where paragraph 8 quoted above may come into play.
Commodities and index futures will generally also be treated the same since the underlying principle is whether or not you are trading as a business or not.
Now all of this could be entirely wrong and your best bet would be to talk to a CA friend if you have one. Other option would be to consult with a tax advisor. However, my gut feeling says it will be income.
The following user says Thank You to grausch for this post:
It looks like CRA is being watchful about individuals that make a lot of money in their TFSA. When I say a lot of money it seems that they are talking about several 6 figures and growing. They are being forced to pay taxes on this money gain.
I have been quite successful in my own TFSA having doubled it in the last 5 years but my stocks are held for minimum of 3-6 months and are high paying dividend stocks. So I think I won't attract attention but seeing this article is worrisome.
The TFSA is the only thing that the Harper government has introduced that I like. But speculators that abuse this product scare me sometimes.
The following user says Thank You to Underexposed for this post:
Harper is thinking about increasing the max contribution to our TFSA to 11000$/year if i remember. That's a terrific vehicle for us, beeing able to make money without beeing taxed. I can't complain. Obviously, it is not for day traders but perfect for swing trading. Thanks for the link.