Capital gains are partially included in income at an inclusion rate set by legislation, with proposals to change it having been announced, deferred and revised in recent years. Business income, by contrast, is fully included.
The line between investing and trading is drawn on factors the Canada Revenue Agency has published: frequency of transactions, holding period, knowledge of markets, time spent, use of leverage and whether purchases are financed. Day trading sits squarely on the business income side.
Business treatment is not purely bad news, since losses then become fully deductible against other income rather than restricted to capital gains. It also removes the superficial-loss-rule problem for inventory.
This is general information about Canada, not tax advice. Rules change and depend on your circumstances; consult a qualified Canadian tax professional or cra-canada.
Related: cra-canada, tfsa-day-trading-risk, superficial-loss-rule, rrsp, ciro