On the T5008 screen did you make sure the Type of Income box on the bottom left side shows Capital gains in the drop down menu?

Yes, I've also tried to switch it to "investment" as a type but it makes no difference. So we've gained a measly few hundred dollars on investments but now we have to pay $4000 in taxes??? I don't get it, can't be right!

For  stock transactions, reported on a T5008, the Proceeds of Disposition (what you sold it for) minus the Cost or Book Value (what you bought it for) will give you a capital gain.  Only half of the capital gain is taxable.  If you only made a few hundred dollars on your stock transactions this should not increase your taxes by that much.  You may want to look at your Detailed Tax Summary to see what else may be causing that amount owing.