Six Canadian business and investor groups, backed by more than 150 investors and tech leaders, are asking the federal government to adopt a U.S.-style capital gains break for startup shareholders and let investors defer tax when they reinvest in Canadian companies, BetaKit reported Oct. 6.
The open letter, part of a campaign called Bet on Canada, was addressed to the finance minister. Its signatories include the Council of Canadian Innovators, the Canadian Venture Capital and Private Equity Association (CVCA), the National Angel Capital Organization, C100, CPA Ontario and the Chartered Business Valuators Institute, according to BetaKit.
The first request is a tax incentive modelled on the U.S. Qualified Small Business Stock (QSBS) regime, which lets early shareholders exclude capital gains from tax. The groups want a threshold of $15 million per transaction and say eligibility should cover founders, early employees and investors, not only founders.
BetaKit described the current federal proposal as a 33.3 per cent inclusion rate on a $2-million lifetime maximum. That proposal stems from the Canadian Entrepreneurs’ Incentive, first announced in 2024 alongside a capital gains inclusion rate increase that the tech sector strongly opposed.
The second request is a rollover. Investors would be able to defer capital gains when they put proceeds from the sale of one Canadian business into another. The groups said the reinvestment would have to go into Canadian-owned corporations, not foreign subsidiaries.
CVCA chief executive Benjamin Bergen said the aim is to keep successful founders and their money in the country. “What we want is for those people who have been successful … to have a big exit to keep playing and put their money back into building another company,” Bergen said, according to BetaKit.
The groups said the measures should apply beyond technology, including to advanced manufacturing and mining.
The letter lands as Ottawa weighs its next federal budget. BetaKit noted that Prime Minister Mark Carney’s government has made several business-friendly moves, including a Productivity Mega-Deduction meant to encourage investment, and raised the question of whether that direction will continue.
The ask is not new. In October 2025, the CVCA and the angel investors’ association wrote to Finance Minister François-Philippe Champagne seeking a unified capital strategy, which included a Canadian equivalent to QSBS and a capital gains reinvestment deferral, BetaKit reported at the time. The latest letter narrows the request to specific figures and adds a broader coalition.
For Canadian founders, the gap is practical. Under the proposal as described, the lifetime cap would be $2 million, while the groups are asking for $15 million per transaction. How far the government moves toward that figure, and whether it extends relief to employees and angel investors, would shape how much of an exit stays in Canada.
The Department of Finance has not publicly responded to the letter, based on the coverage reviewed. This story is developing and rests largely on a single published report. Details of the letter have not been independently confirmed.
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Sources: BetaKit (Oct. 6, 2026; Oct. 21, 2025); The Logic.
