
The 2016 Budget is just out and concerns from entrepreneurs and investors were heard loud and clear. Despite Trudeau's election promises to increase the taxation on stock options, the government has decided to not touch this innovation lever. “I heard from many small firms and innovators that they use stock options as a legitimate form of compensation, so we decided not to put that in our budget,” Finance Minister Bill Morneau told reporters. Asked if his government might increase options taxes in future budgets, he said: “It’s not in our plan.”
Similar to the US, startups and high-growth companies use stock options to offset expensive salaries in order to attract and retain high-caliber employees. At McRock, we are breathing a huge sigh of relief as a change to the stock option tax treatment would have instantly made Canadian tech companies unable to compete on the global stage.
Another piece of good news from the 2016 budget, was the reinstatement of the 15% federal tax credit for Labour-Sponsored Venture Capital Corporations (LSVCC). This is a u-turn in the previous government's plan to wind down the federal LSVCC tax credit. In provinces like Quebec, which still have an active Federal and Provincial LSVCC tax credit program, this ensures a return of investment capital to the innovation ecosystem. Congratulations to our LSVCC friends. This is a long time coming and a big win for the Canadian innovation eco-system.
Similar to the US, startups and high-growth companies use stock options to offset expensive salaries in order to attract and retain high-caliber employees. At McRock, we are breathing a huge sigh of relief as a change to the stock option tax treatment would have instantly made Canadian tech companies unable to compete on the global stage.
Another piece of good news from the 2016 budget, was the reinstatement of the 15% federal tax credit for Labour-Sponsored Venture Capital Corporations (LSVCC). This is a u-turn in the previous government's plan to wind down the federal LSVCC tax credit. In provinces like Quebec, which still have an active Federal and Provincial LSVCC tax credit program, this ensures a return of investment capital to the innovation ecosystem. Congratulations to our LSVCC friends. This is a long time coming and a big win for the Canadian innovation eco-system.