Canadian government delays capital gains inclusion rate increase

Founders Call for Policy Action to Support Canada’s Innovation Ecosystem

The federal government’s decision to delay the implementation of capital gains tax acknowledges the concerns raised by Canada’s innovation ecosystem. In a 2024 ScaleUp Ontario survey which included our community of founders, investors, and scale-up leaders revealed deep concerns about the potential negative impact of these changes on Canada’s ability to attract investment, retain talent, and scale globally.

Our survey revealed a strong desire for policies that truly support the growth of Canadian innovation. Key priorities include enhancing government procurement practices to act as an early and enthusiastic adopter of innovative technologies, modernizing R&D grants and tax credits, and streamlining the application processes to reduce barriers for emerging companies.

Founders also emphasized the need for greater support in boosting early-stage capital and tackling challenges that deter promising young Canadians from pursuing careers in tech, such as housing affordability and the rising cost of living. Government policies must foster an environment where high-growth companies can thrive in Canada rather than seeking opportunities abroad.

We encourage the government to engage closely with startup leaders and investors during this period to develop policies that empower Canada’s innovation ecosystem. Addressing these concerns will ensure that our country remains a global leader in sectors like AI, clean technology, and health innovation.”