Canada has proposed expanded immediate expensing and priority tax rulings to attract large-scale corporate investment and reduce tax uncertainty.

Discover major SR&ED tax credit enhancements in Canada’s 2025 budget — higher limits, expanded eligibility, and streamlined claims for R&D incentives.

The Liberal Government had the chance to deliver a transformational tax overhaul, but the federal budget it released on November 4 stops short of bold reforms that could reshape Canada’s innovation landscape. 

In a historic election, given the backdrop of rising tensions between Canada and the US, Canadians elected Mark Carney and his Liberal party on April 28, 2025. Although the platform released by the Liberals (the Liberal Platform) was light on personal and corporate tax proposals, it did contain several tax policies that focus on innovation and emerging industries.

With the Canadian federal election just under two weeks away, the two major parties leading the current polls, the Liberals (led by Mark Carney) and the Conservatives (led by Pierre Poilievre), have yet to formally release their platforms. However, both have previewed elements of their proposed tax policies.

In this alert, we discuss changes to the scientific R&D tax incentive program proposed to come into force this month and the implications for Canadian innovators. 

Draft legislation released on June 10, 2024, which concerns the implementation of Canada’s 2024 federal budget, does not extend capital gains tax relief to corporations, and it subjects private and public stock options to a higher tax rate.

Canada’s 2024 federal budget, which takes effect on June 25, includes a capital gains inclusion rate increase that will also significantly affect the taxation of stock options. Option holders will get a 50% deduction for the first $250,000 in stock option employment gains and then 33 1/3% after — instead of a 50% deduction across the board.

Canada’s 2024 federal budget, which was released on April 16, includes a capital gains inclusion rate increase, changes to the lifetime capital gains exemption, and the Canadian Entrepreneurs’ Initiative proposal, which recommends a tax carve-out on some capital gains when founders of certain types of businesses sell shares of their company.

The Canadian Government released its Fall Economic Statement (“FES 2023”) on November 21, 2023 outlining the government’s fiscal update. FES 2023 focuses on housing, affordability, and fighting climate change. However, buried in the middle of the 131-page document is a paragraph highlighting a proposed tax change regarding the recent tax rules implementing Employee Ownership Trusts (“EOTs”).