Canada’s planned capital gains tax hike may choke mining startups, dealmakers say – by Divya Rajagopal (Reuters – April 22, 2024)

TORONTO, April 22 (Reuters) – Canada’s capital gains tax hike for wealthy individuals and corporations in last week’s federal budget risks turning away investments from mineral exploration by reducing incentives, the country’s leading stock exchange operator and dealmakers told Reuters.

Prime Minister Justin Trudeau’s Liberal government proposed increasing the share of capital gains subject to taxation to two-thirds for individuals with annual investment profits greater than C$250,000 ($181,752), companies and trusts, as it seeks to raise revenue to fund public programs.

The measure will be effective on June 25. The government could consider amendments. Mining, oil and gas exploration companies listed on the TSX Venture Exchange have raised funds by issuing flow-through shares, at a premium to the trading price, that allow high net-worth buyers to take tax deductions renounced by issuers.

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