Conservative Leader Pierre Poilievre is criticizing the centrepiece business tax measure in the Carney government's 2026 federal budget: a $15-million capital gains exemption for founders, early employees and investors who sell shares in qualifying Canadian companies. He argues the rules are too narrow and too complicated to help most entrepreneurs, while the government says the Canada Growth Incentive will keep businesses and investment in Canada.

What is the Canada Growth Incentive?

The Canada Growth Incentive (CGI), tabled in the budget on Thursday, would let Canadian-resident founders, early-stage employees and investors exempt from tax up to $15 million in capital gains on the sale of qualifying shares of an eligible Canadian company. The exemption would apply to shares issued on or after budget day and before 2037.

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The budget also proposes expanding the small business rollover, giving investors more time to reinvest proceeds in another Canadian small business. The government estimates the incentive will provide $715 million in tax relief over four years, starting in 2027–28.

According to the budget, a founder with a $15-million capital gain in Ontario would keep nearly 96 per cent of the value after tax when exiting a business, compared with 71 per cent under current rules.

Why does Poilievre call the plan too narrow?

The exemption excludes businesses in several sectors, including agriculture, fishing, forestry, financial services, insurance, utilities, real estate, food and accommodation, and arts, recreation and entertainment. Poilievre said in an interview on Rosemary Barton Live that he cannot figure out who actually qualifies, adding that the measure is "insignificant and irrelevant and adds more complexity to the system." He is calling for a simpler, broader plan that would allow full deferral of capital gains tax for those who reinvest in Canada.

Who supports the incentive?

Some business groups have welcomed the measure. The Council of Canadian Innovators, which represents 175 high-growth companies, said the incentive would create conditions companies need to attract talent and scale. The budget frames the measure as a way to level the playing field with the United States.

FAQ

Which businesses are excluded from the exemption?

The incentive excludes companies in agriculture, fishing, forestry, finance, insurance, utilities, real estate, food and accommodation, and arts, recreation and entertainment.

When would the tax relief begin?

The government expects the incentive to provide $715 million in tax relief over four years, beginning in 2027–28.