The profit realized when an investment is sold for more than its original purchase price. In Canada, only a portion of a capital gain — currently one-half (50%) — is added to taxable income, in a non-registered account.
If you buy a stock for $1,000 and later sell it for $1,500, your capital gain is $500. Unlike a dividend (income received just for holding something), a capital gain only exists once you actually sell — until then, it's just an unrealized "paper" gain that isn't taxed yet.
On that $500 gain, only 50% ($250) currently gets added to your taxable income in Canada, taxed at your marginal rate — not the full $500. This inclusion rate has been the subject of proposed changes in recent years, so it's worth double-checking the current rate before relying on it for tax planning.