The government’s attempt to reestablish itself was evident in the announcement made in the spring of 2024. Speaking in front of cameras at engagements from Ottawa to Saskatoon, Justin Trudeau discussed “unlocking opportunity for younger generations,” a phrase that was used so frequently in the Budget 2024 materials that it almost lost its meaning. However, beneath the words were actual data linked to actual initiatives, and the specifics were worth examining for young Canadians attempting to determine whether any of it had an impact on them.
The Canadian Entrepreneurs’ Incentive was the most talked-about new instrument. The CEI would have lowered the capital gains inclusion rate to one-third on up to two million dollars of eligible lifetime gains, phasing in by $400,000 annually from 2025 until it was fully implemented in 2029. It was intended for founding investors who owned at least ten percent of shares in a company and had been actively involved for at least five years.
The math made sense to a young software startup or manufacturing entrepreneur who would eventually sell their company. The total exemption available at the time of a business sale might have reached $3.25 million or more when combined with the current Lifetime Capital Gains Exemption, which was concurrently increased from slightly over one million dollars to $1.25 million. That is a significant comfort in a nation where business owners seldom have pensions and must rely on the proceeds of their ventures to finance their later years.
Important Information
| Field | Details |
|---|---|
| Prime Minister at time of Budget 2024 | Justin Trudeau — announced April 16, 2024; resigned January 2025 after losing confidence of the Liberal caucus; Mark Carney became Liberal leader and won the April 2025 federal election, delivering Budget 2025 on November 4, 2025 |
| Canadian Entrepreneurs’ Incentive (CEI) | Introduced in Budget 2024 — reduced capital gains inclusion rate to 33.3% on a lifetime maximum of $2 million in eligible gains for qualifying founding entrepreneurs; phased in at $400,000/year from 2025 to reach $2M by 2029 — cancelled by Budget 2025 as a byproduct of dropping the capital gains inclusion rate hike |
| Lifetime Capital Gains Exemption (LCGE) | Increased from $1,016,836 to $1.25 million effective June 25, 2024 — this measure survived and is now indexed to inflation beginning 2026; applies to sale of qualifying small business shares and farming/fishing property |
| Capital Gains Inclusion Rate | Budget 2024 proposed raising the rate from 50% to 66.7% for corporations and for individuals on gains over $250,000 — this generated significant business community backlash and was cancelled by Carney’s government in early 2025 |
| Tax-Free Savings Account (TFSA) | Annual contribution limit $7,000 for 2025 and 2026; total lifetime contribution room $102,000+ for Canadians who have been eligible since 2009; available to any Canadian resident age 18+; investment growth and withdrawals completely tax-free |
| First Home Savings Account (FHSA) | Launched 2023; available to first-time home buyers aged 18–71; $8,000/year contribution limit; $40,000 lifetime maximum; contributions are tax-deductible (like RRSP); qualifying withdrawals for home purchase are tax-free (like TFSA); unused room carries forward one year |
| Youth Employment Budget 2025 | Over $1.5 billion invested — $635.2M for Student Work Placement Program; $594.7M for Canada Summer Jobs (targeting 100,000 positions in 2026); $307.9M for Youth Employment and Skills Strategy; $40M for Youth Climate Corps |
| Venture Capital Catalyst Initiative | $200 million over two years announced in Budget 2024 to increase venture capital access for equity-deserving entrepreneurs and underserved communities |
| Futurpreneur Canada | $60 million renewed in Budget 2024 — provides young adults (18–39) with loans up to $25,000, mentorship, and resources to start businesses |
Looking at Budget 2024 today, it seems as though the capital gains adjustments were actually attempting to thread a needle that was hard to hold. On the one hand, the government increased the inclusion rate for corporations and high-earning individuals from 50% to 66.7%. This move was heavily criticized by doctors, small business owners, and a large portion of the technology sector, who claimed it would deter investment and drive talent across the border. Conversely, the LCGE rise and the CEI were intended to lessen the impact on founders in particular. Conceptually, the architecture made sense. There was no cooperation from the political backlash.
Early in 2025, Mark Carney assumed the Liberal leadership, won the April election, and presented his own budget the following November after Trudeau quit. One of his first economic actions as prime minister was to completely reverse the capital gains inclusion rate hike, maintaining the rate at fifty percent while doing away with the CEI, which had been created expressly to counteract the increase. At $1.25 million, the LCGE made it through. In essence, Budget 2024’s youth entrepreneurship framework’s most fundamentally innovative component was removed before the majority of qualified founders had an opportunity to utilize it.
What’s left for young Canadians who want to use the tax system to accumulate wealth is an older, more subdued, and far more practical toolkit than anything included in a single budget declaration. The foundational tool is the TFSA, which has been accessible since 2009, with a $7,000 yearly cap in 2026 and over $102,000 in total lifetime capacity for individuals who have been eligible since its beginning.
Growth within it is not subject to taxes. There is no tax on withdrawals. There is no qualifying period, no sector restriction, and no income threshold. According to most estimates, a twenty-two-year-old who creates one this year and makes regular contributions for thirty years will amass significant tax-sheltered wealth without any special government incentives beyond the account’s fundamental structure.
The most recent addition and maybe the best-designed product the federal government has offered to young Canadians in ten years is the FHSA, which was implemented in 2023. With contributions lowering taxable income immediately and qualifying withdrawals for a first home purchase being tax-free, it is essentially a hybrid of an RRSP and a TFSA applied exclusively to home ownership.
A first-time buyer can accumulate a significant down payment contribution over the course of five years by saving $8,000 annually and $40,000 lifetime. They can also receive a tax benefit for each year they save. The FHSA is not a whole solution in places like Toronto and Vancouver, where an entry-level property can require a down payment of more than $150,000. However, it is a genuine one.
It is difficult to avoid feeling that young Canadians received a more complicated inheritance than the initial announcement suggested when one considers the entire arc of this, including the ambitious framework of Budget 2024, the political backlash, the change of governments, and the partial survival and partial cancellation of important measures.
The tools that have survived are useful. The ones that were canceled would have been as well. The system that remains is one that encourages perseverance and steady saving, which is arguably the most truthful aspect of any investing strategy.
