Elena YunusovI agree we need to present united front on this, pinging Benjamin Bergen

Daniel DebowYes, there is a group - CCI that Benjamin Bergen runs.

Ben LucierThis was awesome and well-articulated Aran. Thanks for starting this.

Daniel DebowThere are lots of challenges I've heard about with the tax proposals. The one that I think will long term impact incentives is the removal of the cap gain lifetime benefits for family. Today, by shared ownership in a company (or as beneficiaries of a trust) all family members can claim their lifetime capital gains exemption on exit. It is about $800k. So - for a family of four that has risked it all, dealt with all the stress, etc. - when an exit comes the tax free portion can be $2.4M. This is a huge difference for a family over a long period. My understanding is that the Feds propose to remove this ability - only one person can take advantage. To the extent after tax returns matter to decide to start and build a company - this will, imho, have a meaningful impact on the number of people trying to risk it all to start a biz in Canada.

Chris HamoenCompletely agree with all of this and nice to see some real content in SUN.

Debra ChandaThank you for detail overview. Advocate Jenkins Report - angel/VC tax credits - currently our investors in certain sectors invest in start-ups MN / MA / CA because those states and more provide this incentive even if investor residence is non U.S / OUS.

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Parveen KalerToo complicated/clever for its own good. HST everything. Get rid of all of these deductions, incentives, subsidies that muck up the tax code. The goal should be the simplest tax system reasonable.

Debra ChandaAran Hamilton I like some of your critical thoughts; however, mixing socialism with capitalism ideologies "universal income." I get it b/c other capitalistic incentives are lacking and certain technology plays lack local demand here to invest in the innovation/pilots to fully productize. I do get why you presented this though.

Tobyn SowdenSome great (and seemingly reasonable) asks here, however definitely asking for more than we have now, meanwhile the government is proposing taking away the few benefits we have now.

Debra ChandaMN Angel Tax Credit 101: “Minnesota’s Angel Tax Credit provides a 25-percent credit to investors or investment funds that put money into startup companies focused on high technology, new proprietary technology, or a new proprietary product, process or service in specified fields. The maximum credit is $125,000 per person, per year ($250,000 if filing jointly). The credit is refundable. Residents of other states and 'foreign countries' are eligible” — MN DEED Yuri Navarro just added you to this string, as why are Canadian investors going start up investments OCAD?

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Dan Tsipe50 plus percent of all new business fail. The proposed tax changes will increase this number significantly, decreasing number of good jobs available to all Canadians. How is that helping the middle class when more business start to fail because their founders are squeezed financially and have less incentives to take on financial risks and stress. I think the government is totally blindsided by populist agenda and losing touch with economical reality.

Taylor MannI find myself agreeing with a lot of your points Aran. I would also say I am broadly in favour of the gov’t proposals, and don’t see much daylight between them. I would like to see policy proposals, like the ones above, that support business owners through periods of increased risk (aka maternity leave while you own/run a company, giving up income to start a company, etc). I would genuinely like to learn more about this issue, because I haven’t seen any startup specific policy analysis pieces. The only compelling argument I have seen re: how these changes may affect founder risk analysis is the Cap Gains exemption that Dan mentioned above. Asking for that to be increased is a reasonable idea, even if I am personally of the mind that $800k before any taxes (and then the reduced capital gains rate thereafter) is at least within the ballpark of fair. Lastly, and I have a feeling this may not be a popular view point… but I think it is important to note how many founders (myself included) have benefited gov’t programs, grants, investing funds, SR&ED credits, conferences, etc to build their businesses. This is obviously a personal political view, but I have no problem paying 20-25% of exit dollars (after the $800k exemption) in order to fund those systems (never mind actual infrastructure, eduction, and society more broadly). What we do is risky, and I think the ideas above may be good steps towards recognizing that. But without the programs these tax dollars fund, many people would not be in a position to take those risks in the first place, and I think there’s probably a balance to be found between rewarding/incentivizing risk and not allowing people to use CCPCs as a way to just reduce their overall tax burden without adding significant economic value (aka many outside this group).

Scott BellGood points Aran. #3 and #6 are available via trusts today that you need to setup years before you know if you will need it... And 90% Fail so no need. If fhe govt change sthe rules now,. We need a way to rearrange our startups. We analyzed where to startup and the combined corp/ personal was ok here vs US. If these rules go thru them the answer would be Brain drain. Start-up founders spend a bit of time in these overhead discussions but the govt is encouraging us to spend more time on it and take our startup risk south. We all need a good plan and then focus our displeasure on the local politicians. Trudeau and Morneau have their minds made up.

Jodi EchakowitzI'm not sure whether or not this petition will help, but I just came across it and thought it may be worthwhile to sign it. petitions.ourcommons.ca/en/Petition/Sign/e-1239

Rob HendersonGreat thought starters Aran, thanks for posting!

Jd BeginSeems to me that amongst the top reasons an entrepreneur would start a business, the remote chance that she could benefit from income splitting would probably be #1,000.

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Saul ColtI had a conversation today with someone who is a subject matter expert on all of this. Would anyone want to do an AMA with him here in Startup North? If there is interest I can ask but pretty sure he would be up for it. cc: David Crow

Richard RemillardThe government has opened an absolute Pandora's box by attempting to 'fix' one small part of the tax system without touching other parts. Consequently, it may have inadvertently opened up debate on the proper balance between small business and larger corporate tax levels, personal versus business taxes, taxing individuals or family units(however defined) and income taxes versus sales taxes(HST). Lower income tax levels overall, by increasing reliance on the HST, would reduce the tax incentives for incorporating,and stimulate economic growth via savings, while lower taxes on faster growing companies would promote scale ups versus our current system that favors SME's versus large corporates and, in fact, may even penalize company growth.

Yuri NavarroThanks for looping me in Debra. To be clear, NACO is working on a response, but it would be good to coordinate with others like Benjamin Bergen at CCI. My personal point of view is that this policy was not intended to affect startup entrepreneurs and investors (the potential for harm to investors seems even greater). I am optimistic that if communicated to with clarity and facts, the government will listen.

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Joseph PuopoloLet's not forget how hard it is to apply for SRED now?! Do you remember applying for SRED in the last couple of years vs 5-10 years ago?

Joseph PuopoloHow many entrepreneurs are up right now, thinking or worried about their business? #Sleepless

Joseph PuopoloThese are the many exemptions in labor law that doctors face. Entrepreneurs face most of the same.

Elena YunusovI'm up. It sucks.

Alex De BoldAgreed - solutions are better than complaining. #1: Active Angels: If we want to build a pay it forward ecosystem like SF then we need to clarify what that looks like. #2: Canada's Unicorns like Hootsuite, Shopify, Wealthsimple that are PR stops on the PM's media tour lend their use their voice to the debate. They're incubating the next generation of would be start-up entrepreneurs.

Navid Nathoo+1 on incentives for hiring students. Affordable, high quality, and can work with a timeline of a fast changing startup.