2010 Federal Budget

Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Tax, March 2010

While the lead-up to and the media coverage of the federal budget introduced on March 4, 2010 (the Budget) was heavily skewed towards deficit control, there was no shortage of significant tax proposals in the Budget, including the following:

• effective immediately, unless an employer elects to forgo its deduction, employee stock option holders will be disqualified from capital gains rate taxation if their options are cashed out instead of being exercised, and the deferral rules for public company stock options introduced in the 2000 budget will be repealed;
• effective immediately, foreign investors will no longer be subject to potential tax and compliance requirements on sales of Canadian shares that do not constitute a real property interest;