Canada Growth Incentive: up to $15 million of tax-free gains
A new capital gains exemption aimed at founders and early investors in growing Canadian companies. It is generous, but the list of excluded businesses is long.
Quick answer: The Canada Growth Incentive would let a Canadian-resident individual exempt up to $15 million of capital gains per qualifying business, on shares issued from 5 November 2026 through 2036. The company must be a Canadian-controlled private corporation with $100 million or less in assets when the shares are issued, the shares must be bought directly from the company for cash or work, and they must be held 36 months.
Businesses that do not qualify
Professional practices (including accountants and lawyers), consulting, real estate, food and accommodation, arts and entertainment, farming, fishing, forestry, mining, financial services, insurance, utilities and franchised businesses are excluded. A technology, manufacturing or product company is the typical fit.
The main conditions
| Condition | Requirement |
|---|---|
| Who | Canadian-resident individual, 18 or older (not a trust) |
| Shares | Issued by the company directly, for cash or employment services |
| Company size | CCPC with $100 million or less in assets at issue |
| Holding period | At least 36 months |
| Limit | $15 million of gains per individual per business |
Example
Nadia invests $200,000 in new shares of a Canadian software company in 2027 and sells them in 2032 for $2.2 million. If the company and shares qualify, the $2 million gain could be exempt. The alternative minimum tax still counts 30% of the gain, so a large exempt gain can trigger some minimum tax.
It cannot be combined with the lifetime capital gains exemption on the same shares.
Whether this applies to you depends on your year-end and structure; ask about your own situation and a CPA replies by email, usually the same business day, free.
Common questions
How much can the Canada Growth Incentive exempt?+
Does my accounting or consulting firm qualify?+
Where this comes from
Budget 2026 was tabled on 5 November 2026. Figures on this page are from:
- Thor — 2026 Federal Budget: key tax measures
- BLG — Federal Budget 2026: tax measures
- RBC Wealth Management — Federal budget 2026 overview
General information, not tax advice. Budget measures are proposals until enacted and can change. Before deciding anything, send an enquiry.