Shopify CEO says feds plan to tax stock options will hurt startups

MONTREAL -- The CEO of one of Canada's up-and-coming tech companies is calling on the federal government to abandon its plan to expand taxation of stock options, saying the move will make it more difficult for startup firms to attract talent.

See Full Article

Tobi Lutke said the Liberal proposal would have it more difficult to launch his Ottawa-based e-commerce company, Shopify.

"I think the Liberals should abandon this because it fosters innovation," the 35-year-old entrepreneur said in an interview Thursday.

"It would have been harder to build Shopfiy with the taxation being the way that it's proposed," he said in an interview.

During last year's federal election campaign, the Liberals promised to cap how much can be claimed through stock option deductions. The party said employees with up to $100,000 in annual gains would be unaffected, a move it said would protect startups.

Finance Minister Bill Morneau recently said he will soon release details about the commitment. The government is expected to release its first budget in mid-March.

Lutke said the government promised during meetings with senior ministers and other officials to grandfather existing options.

He said many people took massive pay cuts to join his company several years ago in exchange for options to purchase equity. While the business is now mature enough to survive the changes, Lutke said it could have a disastrous impact on younger startups.

Lutke also criticized proposed intellectual property clauses in the Trans-Pacific Partnership, joining others in the tech sector including Blackberry founder Jim Balsillie who have said the deal will undermine Canada's autonomy to adopt its own software patent rules.

Despite the government's promise of public consultations, Lutke believes Ottawa has little choice but to ratify the 12-country trade deal it inherited.

"I think it's a lost fight already. The moment the documents were publicly accessible this was on a one-way train towards ratification."

Lutke made his comments as he opened a new office in Montreal aimed at expanding research and development with 150 new positions.

While Shopify continues to grow its revenues, Lutke said it will focus on taking advantage of opportunities to grow before posting profits late next year.

"We think Canada needs a tech company of the size that America produces and that's what we are aiming for," Lutke said.

Shopify provides services to more than 243,000 small- and medium-sized customers in 150 countries. It has more than 1,000 employees working at offices in Montreal, Toronto, Ottawa and Waterloo, Ont.



Advertisements

Latest Economic News

  • Shopify sees big uptick in U.S. job applicants after Trump's election, CEO says

    Economic CTV News
    TORONTO -- Shopify's CEO says it's a great time for Canadian startups to attract talent as the U.S. government is creating an uninviting environment for a lot of people. Tobias Lutke says his company is receiving many more applications from U.S. Source
  • SEC fraud charges filed against Penn West, three former finance execs

    Economic CBC News
    Two days after changing its name and vowing to put its scandal-tainted past behind it, the former Penn West Petroleum is being hit with charges by the U.S. Securities and Exchange Commission. The SEC charges allege the Calgary-based oil and gas firm and three of its former finance executives participated in a "multi-year accounting fraud" where hundreds of millions of dollars were mislabelled to improve the appearance of its operating metrics. Source
  • Toronto stock index up moderately on broad sector gains, loonie strengthens

    Economic CTV News
    TORONTO - Canada's main stock index is showing moderate gains from a broad range of sectors. The Toronto Stock Exchange's S&P/TSX composite index was up 58.20 points to 15,339.42, after 90 minutes of trading. Source
  • Loonie above 76 cents US as Poloz hints rate hike may be coming

    Economic CBC News
    The Canadian dollar gained three-quarters of a cent and hit its highest level in four months on Wednesday after Canada's central bank head hinted in an interview that rate hikes could be coming sooner rather than later. Source
  • Boeing seeks delay in duty ruling on petition against Bombardier CSeries

    Economic CTV News
    MONTREAL - Bombardier may have to wait an extra two months to find out if its CSeries commercial jets will be hit by punishing U.S. duties. Boeing has requested that the U.S. Commerce Department delay its preliminary determination on its petition until Sept. Source
  • Poloz: low interest rates put in place after oil shock have 'done their job'

    Economic CTV News
    OTTAWA -- With the Bank of Canada nearing its next policy decision, governor Stephen Poloz is reiterating his message that his 2015 interest-rate cuts appear to have done their job. Poloz said in an interview broadcast on business news channel CNBC that the Canadian economy enjoyed "surprisingly" strong growth in the first three months of 2017 and he expected the pace to stay above potential. Source
  • Rate hike expectations, C$ rise as Poloz reiterates cuts have done their job

    Economic CTV News
    OTTAWA -- With the Bank of Canada nearing its next policy decision, expectations of an interest-rate hike spread Wednesday after governor Stephen Poloz reiterated that his 2015 cuts appeared to have done their job. Poloz made the comments in an interview broadcast on business news channel CNBC. Source
  • Low interest rates have 'done their job,' says Bank of Canada's Poloz

    Economic CBC News
    ?The governor of the Bank of Canada says it looks like low interest rates put in place in 2015 have "done their job" but he stopped short of predicting the central bank's next move. Stephen Poloz said in an interview broadcast on business news channel CNBC that the Canadian economy has been recovering from the global financial crisis that erupted in 2008 and the sudden decline in oil prices that began in late 2014. Source
  • Another financial crisis 'in our lifetimes' unlikely, Yellen says

    Economic CBC News
    Federal Reserve Chair Janet Yellen said Tuesday that she believes banking regulators have made enough improvements to the financial system that the world will not experience another financial crisis "in our lifetimes." Addressing an audience at the British Academy in London on Tuesday, Yellen said the banking reforms put in place in recent years have made the financial system much safer. Source
  • Empire posts lower Q4 adjusted earnings amid turnaround of Sobeys grocery unit

    Economic CTV News
    STELLARTON, N.S. -- The parent of Sobeys is reporting a decline in adjusted earnings for the first full quarter since it installed a new chief executive with a mandate to revive the national grocery business. Source