C$10 Million Capital Gains Exemption Made Permanent for Employee Ownership Trusts

In the April 28, 2026 Spring Economic Update, the federal government announced its intention to make permanent the C$10 million capital gains exemption available on certain sales of businesses to employee ownership trusts (EOTs) and worker cooperatives, which exemption was previously set to expire at the end of 2026. This amendment has now passed into law as part of Bill C-30, which received Royal Assent on June 18, 2026.

This is great news for Canadian business owners, employees and communities, as the C$10 million capital gains exemption offers meaningful tax savings for vendors and should boost the uptake of EOTs, allowing more employees to share in the success of the Canadian businesses they help build.

Beyond the C$10 million capital gains exemption, EOTs are a flexible and socially aligned succession planning tool. For many business owners facing retirement or transition, EOTs offer a way to preserve the legacy of their business, maintain continuity for employees and keep ownership rooted in Canadian communities. With EOT structures, employees gain a meaningful stake in the long-term success of the business they work in, which can support retention, engagement, and stability during periods of change. 

Learn More about EOTs

Bennett Jones has extensive experience advising on EOTs and has assisted with two of Canada's first successfully implemented EOT transactions (see Grantbook and Terra Remote Sensing). Explore our insights Bennett Jones Leading the Way in Employee Ownership Trusts, Employee Ownership Trusts—A Useful Tool for Employee Business Ownership? and Employee Ownership Trusts—Improved Tax Incentives Announced. 

Please reach out to any of the members of the Bennett Jones Tax department to discuss EOTs, including the C$10 million capital gains exemption and whether exploring an EOT transaction makes sense for you or your client.