It’s increasingly apparent that this tax hike will hit farmers, fishermen, dentists, doctors, entrepreneurs and the highly skilled young workers who propel Canada’s innovation economy
A 30-year veteran of Canada’s tech investment scene, John Ruffolo is the founder of Maverix Private Equity and co-founder of the Council of Canadian Innovators.
Instead, it is increasingly apparent that this tax hike will hit farmers and fishermen, dentists and doctors, entrepreneurs and the highly skilled young workers who propel Canada’s innovation Part of this tech sector angst has to do with the tax hike’s likely impact on employee stock options. When people hear the phrase “stock options,” they often think about Bay Street executives, but that isn’t the whole story. Options are an important tool for startups across Canada to attract the highly skilled and ambitious talent that can help propel a nascent business.
Let me express this idea another way, based on my decades of investing in Canadian innovation: Increasing taxes on capital decreases availability of capital. Period. And that’s whether it is from Canada’s angel investors, venture capitalists, private equity/growth equity fund managers or family offices. Increasing taxes increases the cost of capital thereby also making alternative investments more attractive whether by asset class or geography.
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