Ottawa is delaying changes to the way employee stock options are taxed that were announced in the spring budget.
The federal government says it is still reviewing input received during consultations earlier this year and as a result the proposed changes will not come into force on the previously proposed date of Jan. 1, 2020.
Under the current rules, employee stock option benefits are taxed at half the normal rate of personal income – the same rate as capital gains.
The plan in the spring budget put a $200,000 annual cap on the stock-option grants that get the preferential treatment, but only for employees of large firms.
Startups and rapidly growing businesses, which typically can’t pay big salaries, were to be excluded from the cap so they could continue to attract and reward employees.
The government says it will announce details on how it intends to move forward with its plan in the 2020 budget.
“We will carefully consider the views of stakeholders as we move forward to ensure that Canada’s tax system is being used to support jobs and growth, rather than creating unfair tax advantages that disproportionately benefit the wealthy,” Finance Minister Bill Morneau said in a statement.
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