Startups in the technology and oil and gas sectors have called on the federal Liberal government to abandon a campaign promise to increase taxes on stock option gains. Now, British Columbia Premier Christy Clark has added her voice to their cause.
The Premier was on hand Monday at the start of a government-supported tech conference in Vancouver to unveil the province’s new tech strategy, including the introduction of coding to the provincial education system. After her speech, The Globe and Mail asked the Premier at a press conference if she had a message to the federal government about its proposed stock option tax increase. She was blunt with her response.
“Don’t do it,” Ms. Clark said. “That’s my advice. I think it would be terrible for the tech community in Canada. …Good on them if they abandon the idea, because it’s a terrible one.”
That’s a message the new Liberal government has been hearing a lot, and will undoubtedly spark much debate during consultations in advance of Finance Minister Bill Morneau’s first budget this year.
A new lobby organization representing Canada’s leading tech startups, the Council of Canadian Innovators, met with three Liberal cabinet ministers – Navdeep Bains (Innovation, Science and Economic Development), Chrystia Freeland (International Trade) and Bardish Chagger (Small Business and Tourism) – in December, asking that the government reconsider the plan.
The Liberals promised to target wealthy executives punitively as part of their middle-class-focused election campaign platform. But for startups, options represent something different from a tool to enrich well-compensated blue-chip executives. Stock options carry the promise of a future windfall should capital-starved startups defy the odds and succeed, to compensate for lower salaries and higher employment risks.
Startups say that without a competitive options package, they won’t be able to attract the kind of talent needed to grow their business into significant economic contributors. The tech startup community is asking for other changes, including a streamlined immigration process and policies that make it easier for them to sell their services to government, which they say will help the country to build a flourishing tech sector, offsetting the dampening effect on the economy of low prices for oil and other natural resources.
Several Canadian tech startups have complained that it can take well over a year to hire highly coveted foreign executives under current federal immigration rules, increasing the likelihood that their intended hires find other opportunities instead. Ms. Clark repeated a familiar refrain Monday on that subject: All provinces should have much more control over immigration than is currently the case, with the exception of Quebec. “It’s a real problem, and I have said for five years now it should be something the provinces have a lot more control over,” she said.Report Typo/Error