On March 22, 2016, the Liberal Government delivered its first
budget which focuses on the growth of the middle class. As outlined
in our
previous post, the Liberals, as part of their election
platform, promised to change the taxation of stock options.
Currently, if the required conditions are met, when an executive
exercises a stock option, a one-half deduction is available to
allow for capital gains-like tax treatment on exercise. The Liberal
platform promised to introduce a cap of $100,000 on the amount that
can be claimed through this stock option deduction. The Liberals
also stated that stock options are a useful tool for start-up
companies. Finance Minister Bill Morneau offered some reassurance
when he stated in November 2015 that stock options issued under the
old regime would continue to be taxed under the old tax regime.
