world
Canada's Budget Adds Tax Exemption for Founders and Investors Selling Private Firms
Canada's federal budget exempts founders and investors from tax on the first $15-million of private business share sales
Key points
- The exemption covers the first $15-million founders, staff and investors make when selling shares in certain private Canadian businesses.
- Eligibility excludes architects, lawyers and doctors in professional corporations, and firms in agriculture, forestry, mining and insurance.
- The exemption applies only to shares issued from Thursday on, limiting benefits for founders and investors with existing stakes.
Why it matters. Finance Canada's own analysis finds the Canada Growth Incentive will predominantly benefit high-income people, though it says it will generate prosperity nationwide.
Ottawa proposed a Canada Growth Incentive in Thursday's budget, exempting the first $15-million that founders, staff and investors make when selling shares in certain private Canadian businesses. Finance Canada estimates the measure will cost $565-million in tax revenue through the 2030–31 fiscal year, while extending the rollover deadline will cost $150-million over the next five fiscal years.
Latest updates
Canada's Budget Adds Tax Exemption for Founders and Investors Selling Private Firms
The federal government's budget, tabled on Thursday, includes a New Canada Growth Incentive. It would exempt the first $15 million that founders, employees and investors of certain private companies earn when they sell shares. The measure responds to calls from entrepreneurs and investors to lower taxes on selling businesses. The budget also plans to expand the corporate research and development incentive to cover a larger share of companies' costs. It stops short of the comprehensive tax overhaul that Bay Street has long advocated.