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Update

Thursday, December 19, 2019

On December 19, 2019, the Department of Finance Canada released an update on the Government of Canada’s proposed changes to the taxation of stock options (the “Update”), discussed in my previous article

Recall that on June 17, 2019, the Government released draft legislation outlining the changes and asked all stakeholders to provide comments, specifically on the types of companies that should be excluded from the application of the new rules. The new rules, which are supposed to apply to stock options granted on or after January 1, 2020, provide for a $200,000 annual limit on stock option grants from certain types of public or foreign controlled companies that can receive preferential tax treatment.   

The Update notes that the Government is reviewing the comments it received on the new rules and that the proposed changes to the tax treatment of employee stock options will not come into force on the previously proposed date of January 1, 2020.

In Budget 2020, the Government will announce details on the changes (and presumably release revised legislation) along with a new coming-into-force date, which will provide individuals and businesses time to review and adjust to the new employee stock option tax rules. 

As if we needed another reason to be excited for Budget 2020! Stay tuned. 

If you have any questions with respect to the matters discussed above, please contact Katy Pitch by email at kpitch@wildlaw.ca or any other member of our Tax practice group.

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.

If you would like further information regarding the issues discussed in this update or if you wish to discuss any aspect of this commentary, please feel free to contact us.