Two years ago, Canada’s then-governing Liberal Party proposed a capital gains tax inclusion rate hike, and much of the country’s tech sector freaked out. While this plan was scrapped after Mark Carney replaced Justin Trudeau as party leader, the surprise decision and the message it conveyed had severely hurt the Liberals’ relationship with Canadian tech. As Roadmunk co-founder Latif Nanji told me last year, “The damage [was] done.”
Today, many of the same industry leaders have penned an open letter asking Carney’s Liberals for a capital gains rollover and a US QSBS-style tax incentive in the upcoming federal budget to better retain Canada’s entrepreneurs, talent, and capital. The key difference this time around is that both parties seem more receptive to working together.
As NACO CEO Claudio Rojas told BetaKit, “We want to see Canadian companies succeed, we want to control our own destiny, and that aligns quite well with the signals that we’re seeing from this government that they’re willing to take action.”
Hundreds of Canadian CEOs, investors, and other business leaders have signed the open letter. Its authors frame these measures as a means of derisking investments in domestic firms and incentivizing the reinvestment of associated profits in Canada.
As CVCA CEO Ben Bergen noted, it will take more than a single investment summit, budget, or prime minister swap to transform Canada. Others say it will also require more than just tax reform. Community builder Jesse Rodgers singled out removing personal guarantees on business loans and leases as another logical step.
These calls to do more signal how much has changed since 2024, when a large portion of Canadian tech was ready to run the Liberals out of town. Now, instead of regime change, Canadian tech feels emboldened to ask the new(ish) Liberals for sizeable tax breaks. With Canada’s latest budget expected to drop next month, BetaKit will be watching to see whether Carney heeds them.
Josh Scott,
Reporter
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“I think that we will look back on prediction markets the same way we look back on altcoins and … NFTs.”
In a wide-ranging interview, Koho CEO Daniel Eberhard discussed becoming Canada’s newest unicorn, (potentially) becoming Canada’s newest bank, the possibilities of launching a telecom, and why Koho won’t touch prediction markets. Watch and listen now ›
Contributors: Josh Scott (reporter), Madison McLauchlan (Montréal reporter), Douglas Soltys (editor in chief), Sarah Rieger (managing editor), Trevor Nichols (web editor).
Feature image courtesy Mark Carney via X