Capital gains tax change draws ire from some Canadian entrepreneurs worried it will worsen brain drain

Benjamin Bergen, president of the Council of Canadian Innovators (CCI), said the capital gains tax has overshadowed parts of the federal budget that the business community would otherwise be excited about.

The government said it was proposing the tax change to make life more affordable for younger generations and fund efforts to boost housing supply — and that it would support productivity growth.

Benjamin Bergen, president of the Council of Canadian Innovators, said the proposed change could have a chilling effect for several reasons, with companies already struggling to access and raise financing in a high interest rate environment.

He said the rejigged tax is also an affront to high-skilled workers from low-innovation sectors who might have taken the risk of joining a startup for the opportunity, even taking a lower wage on the chance that a firm's stock options grow in value.

Finance Minister Chrystia Freeland unveiled the government's 2024 federal budget, with spending targeted at young voters and a plan to raise capital gains taxes for some of the wealthiest Canadians.

But Lindsay Tedds, an associate economics professor at Carleton University, said the tax change is one of the most misunderstood parts of the federal budget — and that its impact on the country's talent has been overstated.