Canada Faces Mass Exodus of Small Business Owners:
Challenges caused by the Covid-19 pandemic have affected owners’ exit timelines:
Canada Faces Mass Exodus of Small Business Owners — Will Bill C-208 hinder the sale to children?
In 2021, the federal government passed Bill C-208, which allowed business owners selling shares of their business to their child to take advantage of the lifetime capital gains exemption on the proceeds of the sale. Before the change in law, the proceeds of disposition on a sale of a business to a child were taxed as a dividend.
However, C-208 was a private member’s bill that didn’t have the Liberal government’s endorsement. In the 2022 federal budget, the government said it would look at modifying the rules “to protect the integrity of the tax system while continuing to facilitate genuine intergenerational business transfers.”
In the report, the CFIB called on the government to “honour the spirit” of Bill C-208 in any amendments it proposes. It also said the government should simplify the LCGE and increase the amount to $1.2 million.