The Canadian government proposed increasing the lifetime capital gains exemption (LCGE) on the sale of small business shares and farming and fishing property to $1.25 million, up from $1,016,836. Ottawa also proposed introducing the new Canadian Entrepreneurs’ Incentive (CEI), which gives certain business owners access to a one-third capital gains inclusion rate on the next $2 million in capital gains.
The budget proposed that the hike to the LCGE amount becomes effective June 25, 2024, while the CEI becomes effective January 1, 2025. However, the House of Commons rose for the holiday break on Tuesday without enacting either measure. Parliament also The House doesn’t sit again until January 27, 2025. The lack of progress on the package of capital gains measures creates confusion for business owners negotiating a sale of their business.