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Today, the Government of Canada released its Spring Economic Update 2026. One key proposal is to make the $10 million capital gains tax exemption for sale to an Employee Ownership Trust permanent.
As covered in our prior writing on the topic, exiting Canadian business owners have an exciting opportunity to sell their business to an Employee Ownership trust (EOT). This model permits the departing owner to receive their first $10 million exempt from tax. It carries other benefits too, such as eliminating the need to find a buyer, reducing transaction costs, and maintaining the culture and legacy of what has been built. The EOT model is designed to permit a transition without requiring employees to pay out of pocket, rather relying on a combination of bank and vendor financing.
We’re pleased and excited that the Spring Economic Update has brought this great news for retiring Canadian business owners.
Additional Resources
- Employee Ownership Trusts (EOTs): What Canadian Business Owners Need to Know
- St. John McCloskey at the 2025 Canadian Employee Ownership Conference
- Clark Wilson Lawyers Support Taproot in Canada’s Largest Employee Ownership Trust
- ICBA Seminar: Employee Ownership Trusts – What You Need to Know
- Clark Wilson Hosts Seminar on Employee Ownership Trusts for Business Owners
- Thinking About Your Business Legacy?
- Employee Ownership Trusts: An Introduction for Business Owners
- Employee Ownership Trusts: A tool for the succession-planning crisis Employee Ownership Trusts
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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