Canadian tech and investor groups call for tax incentives, capital gains rollover

By October 6, 2026
Canada's Minister of Finance François-Philippe Champagne.
CVCA, CCI, and others ask for QSBS-style tax incentive meant to retain business value.

Canadian investment and tech industry associations are calling on the federal government to use tax reforms to try and retain more founders, talent, and capital in Canada.

The news: Under the campaign name “Bet on Canada,” the Council of Canadian Innovators (CCI), Canadian Venture Capital and Private Equity Association (CVCA), the National Angel Capital Organization (NACO), C100, CPA Ontario, and the Chartered Business Valuators Institute published an open letter today signed by more than 150 investors and tech leaders to Canada’s finance minister. The letter calls for two tax changes meant to keep business value in Canada. 

The first is a tax incentive similar to the US Qualified Small Business Stock regime, which allows early stockholders to exclude up to 100 percent of federal capital gains when a company sells. The other proposal is to allow investors to defer capital gains when proceeds from one Canadian business investment are reinvested in another domestic company. 

From the source: “How do you incentivize founders to stay, talent to stay, the dollars to get that to flow through the economy?” CVCA CEO Benjamin Bergen said in an interview. “What we want is for those people who have been successful 
 to have a big exit to keep playing and put their money back into building another company.”

The context: The federal government first proposed a Canadian Entrepreneurs’ Incentive in 2024, which would reduce the inclusion rate to 33.3 percent on a lifetime maximum of $2 million in eligible capital gains. The investor groups want to make the maximum $15 million per transaction—similar to the US tax incentive—and to broaden eligibility, to make this exemption not just for founders, but for early stock-holding employees and investors. In addition, Bergen said, the capital gains reinvestment would have to be in another Canadian-owned corporation, Bergen added, rather than a subsidiary of a foreign company.

The groups are framing this change and the capital gains rollover as a way to both de-risk the initial investment in Canadian companies and to make it easier for the eventual profit to be reinvested into other domestic ventures. The open letter states these policies should not be limited to the tech sector, but also encompass industries like advanced manufacturing and mining.

Final thought: The Canadian tech industry butted heads with the federal government, then led by Prime Minister Justin Trudeau, over a controversial capital-gains inclusion rate increase. But Prime Minister Mark Carney’s administration has made more business-friendly moves, including the Productivity Mega-Deduction, to spur business investment in Canada—which raises the question of whether that trend will continue in this upcoming federal budget. 

Feature image courtesy François Philippe-Champagne via LinkedIn. 

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