The Tax Code as a Talent Magnet: Can Carney's Liberals Stem the Tech Exodus?
AI-generated image · Bay Street Wire
Industry leaders are urging the federal government to implement US-style tax incentives to prevent Canadian entrepreneurs and capital from migrating to more favorable jurisdictions.
As first reported by BetaKit, Canada's frontier technology sector is viewing the struggle for global competitiveness as a structural failure of the tax code. Industry leaders are now calling on the federal government to implement specific reforms to prevent entrepreneurs and capital from migrating to the United States.
Two years ago, the Liberal Party proposed a capital gains tax inclusion rate hike that severely strained its relationship with the tech sector. While that plan was scrapped after Mark Carney replaced Justin Trudeau as party leader, Roadmunk co-founder Latif Nanji told BetaKit last year that the damage had already been done.
Ahead of next month's federal budget, hundreds of investors, CEOs, and business leaders have signed an open letter to Carney’s Liberals requesting a capital gains rollover and a tax incentive modeled after the U.S. Qualified Small Business Stock (QSBS) system. The authors frame these measures as essential for derisking domestic investments and incentivizing the reinvestment of profits within Canada.
While there are signs of a more collaborative atmosphere—with NACO CEO Claudio Rojas noting that government signals align with the industry's desire for Canadian companies to succeed—some argue that tax breaks alone are not enough. CVCA CEO Ben Bergen noted that a single budget or leadership change will not be sufficient for a total transformation, and community builder Jesse Rodgers suggested removing personal guarantees on business loans and leases as another critical step.