May 29th, 2024

Tech industry warns budget’s capital gains proposals could cause ‘irreparable harm’

By The Canadian Press on April 17, 2024.

Deputy Prime Minister and Minister of Finance Chrystia Freeland arrives to a caucus meeting on Parliament Hill in Ottawa on Wednesday, April 17, 2024. THE CANADIAN PRESS/Sean Kilpatrick

TORONTO – The federal budget has not won support from Canada’s tech industry.

The sector is disappointed in the Liberals’ proposal to increase the proportion of capital gain earnings businesses pay income tax on to two-thirds from one half.

The government is also proposing the increase be applied to individuals for capital gains earnings exceeding $250,000.

Benjamin Bergen feels the increase will cause “irreparable harm” because it could encourage entrepreneurs to open businesses elsewhere.

The president of the Council of Canadian Innovators also worries the moves will deter talent from remaining in the country because the stock options tech companies often dole out will cost them later when they are treated as capital gains.

Kim Furlong of the Canadian Venture Capital and Private Equity Association called the budget proposals “counterproductive” on LinkedIn, where she argued they will significantly dampen Canada’s entrepreneurial spirit and stifle economic growth.

This report by The Canadian Press was first published April 17, 2024.

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