A new suite of tax measures could affect how Canadian businesses plan for succession, capital investment and operating costs.
Bill C-30, which received royal assent on June 19, 2026, implements several measures from the federal government’s spring economic update.
These changes present new planning opportunities and compliance considerations for Canadian businesses. Consulting with the appropriate advisors can help navigate important decisions in the following areas:
- Succession planning: Business owners considering a sale to an employee ownership trust (EOT) or worker co-operative, as well as purchasing employees, should assess how the capital gains exemption and extended reserve period may affect transaction structure, timing and financing.
- Lower costs for businesses: Bill C-30 may create savings opportunities through lower payroll and fuel costs. Employers should confirm their payroll systems reflect the lower Canada Pension Plan contribution rate that will begin in 2027.
- Investment opportunity for food production businesses: Immediate expensing for eligible greenhouse buildings may affect the timing of infrastructure investments.
Capital gains exemptions for EOTs and worker co-operatives
EOTs and worker co-operatives are business structures that allow a business to be owned for the benefit of its employees rather than held by external owners or investors. Employees may own the business directly through a co-operative or through an EOT—which uses a trust to hold shares of a corporation for their benefit.
Both structures can support succession planning by facilitating a transition of ownership to the workforce. To incentivize and facilitate these ownership structures, the government introduced beneficial capital gains measures.
Subject to certain eligibility criteria, business owners who sell a business to either an EOT or worker co-operative are exempt from tax on the first $10 million in capital gains realized on the sale of shares.
This exemption was originally scheduled to expire at the end of 2026; Bill C-30 removes the expiry, allowing this exemption to apply indefinitely.
Transfers to EOTs and worker co-operatives also qualify for an extended capital gains reserve period. When shares are sold—and payment is due in tranches rather than for an upfront amount—taxpayers can generally defer reporting a portion of the gain by claiming a reserve for up to five years.
The reserve period for qualifying sales to an EOT or worker co-operative was extended to 10 years, which makes it easier for the purchase to be funded over time.
Immediate expensing for greenhouse buildings
The federal government recently introduced several immediate and accelerated expensing measures to help offset infrastructure costs and encourage investment in targeted sectors.
Bill C-30 builds on these measures by allowing businesses to fully write off eligible greenhouse buildings acquired on or after Nov. 4, 2025 and that become available for use before 2030.
This measure was announced in a broader government release on initiatives intended to address rising food costs.
Repayment grace period under the Home Buyers’ Plan
The Home Buyers’ Plan allows individuals to withdraw amounts from their registered retirement savings plan (RRSP) to buy or build a first home—or to acquire a home for a qualifying disabled person.
Historically, the withdrawn amount had to be repaid starting in the second year after withdrawal. The 2024 federal budget introduced a temporary exception to this rule, which allowed individuals to begin repaying the withdrawn amount five years after withdrawal.
Bill C-30 extends the applicability period for this five-year grace period so that it applies to first withdrawals made before the end of 2028. This extension aligns with the federal government’s stated goal of supporting housing affordability.
Canada Pension Plan
Bill C-30 amends the Canada Pension Plan (CPP) to reduce the base CPP contribution rate for employees, employers and self-employed individuals effective Jan. 1, 2027.
The rate will decrease by 0.4 per cent for self-employed individuals, with a corresponding 0.2 percent reduction to each of the employee and employer contribution rates.
This measure could create savings for employees and businesses
Fuel tax break
To offset rising fuel costs, Bill C-30 removes the excise tax on gasoline and aviation gasoline as well as diesel and aviation fuel until Labour Day of this year.
