Deloitte Canadian tax alert: Stock option amendments – prospectivity promised

Published on: Dec 03, 2015

Following the recent federal election, the anticipated changes to employee stock option taxation have created significant concern. On November 20, 2015, Finance Minister Bill Morneau released the Update of 2015 Economic and Fiscal Projections. In response to a question after the presentation, he indicated that the stock option amendments will not be enacted retroactively and that the current tax provisions will continue to apply to options issued prior to the date on which the details of the changes are released. Mr. Morneau noted that aspects of the amendments have yet to be finalized.

In the interim, as we await details of the changes, employers should consider accelerating the granting of options that would otherwise have been issued to key employees at a later date. Of course, the financial reporting implications of the increased option grant and stakeholder concerns should be addressed.

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