Sell Now! (How The 2016 Budget Will Impact Business Owners' Exit Strategies)

Back in 2014 I wrote an article reviewing the significant impact on business owners of potential changes to the taxation of eligible capital property ("ECP"), as that term is defined in section 54 of the Income Tax Act (Canada) (the "Act"),1 that had been floated in the 2014 federal Budget ("2014 Budget").2 The 2014 Budget papers were somewhat light on details and included a promise to hold consultations about the proposed changes.

Although the consultations never took place and the status quo had continued for the past two years under the former Conservative government, this has all changed as part of the new Liberal government's ambitious 2016 federal Budget ("2016 Budget"). In particular, the 2016 Budget includes in its Notice of Ways and Means Motions ("NWMM") detailed legislative proposals to eliminate the current ECP regime ("Current Regime") by causing ECP to be taxed in essentially the same manner as ordinary depreciable capital property ("New Regime")