Discover How Canada’s Latest Budget is Impacting Cleantech Entrepreneurs

Canada Scares Cleantech Entrepreneurs With Latest Budget

“Canadian Budget Raises Concerns for Cleantech Innovation”

The Canadian government recently unveiled its latest budget, sparking concerns among tech leaders and economists. One of the significant changes included in the budget is the increase in the capital gains inclusion rate to two-thirds, up from the previous 50%. This move has raised alarms within the tech ecosystem, as many fear it may hinder innovation in a country already struggling with declining new business formation.

The Impact on Cleantech Innovation:

Tech leaders, economists, and even the former Finance Minister have expressed concerns over the potential impact of the budget on cleantech innovation. The increase in the capital gains inclusion rate may make it more challenging for companies, especially in the cleantech sector, to thrive in Canada. This is particularly worrying as cleantech remains one of the fastest-growing venture categories globally, with countries competing to attract talent and capital through favorable policy changes.

Challenges in Retaining Talent:

One of the primary concerns raised by tech leaders is the difficulty in hiring and retaining talent under the new tax structure. Many critical startup employees in the cleantech sector often opt for lower cash salaries in exchange for equity, which may now be less attractive due to the increased capital gains inclusion rate. This, coupled with the extended timelines for commercializing cleantech projects, poses a significant challenge for companies operating in this sector.


The recent budget changes in Canada have sparked a debate on the impact it may have on cleantech innovation in the country. With concerns about talent retention, attracting investment, and remaining competitive on a global scale, tech leaders are urging the government to reconsider its approach. As the President of Shopify aptly puts it, the budget update may inadvertently act as a “tax on innovation and risk-taking.” It remains to be seen how these changes will shape the future of cleantech innovation in Canada.



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