Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Ottawa Unleashes Policy Blitz to Support Economy
Economy | March 24, 2025
Image: Freepik/rawpixel.com
5 Policy Updates Announced by the Canadian Government to Support the Economy
Ottawa has made a flurry of policy announcements in response to growing economic pressure and global trade tensions including a reversal on the planned capital gains tax, a snap federal election, and commitment to aligning with Europe on carbon pricing to support trade, all in just a few days.
See: Trade War Hits! Markets Roil, What Fintechs Need to Know
For Canada's fintech sector, these changes will impact investment, regulation, taxation and international trade and growth. Below are five announcements made since March 20, 2025, and what they mean for fintech:
1. Capital Gains Tax Hike Cancelled
Prime Minister Mark Carney has cancelled the previously proposed increase to the capital gains inclusion rate, which would have raised the taxable portion of gains above $250,000 from 50% to 66.7% (controversial policy). Also, the government will still increase the Lifetime Capital Gains Exemption (LCGE) to $1.25 million from 2025 which means that entrepreneurs can protect (tax-exempt) an additional $233,164 compared to the LCGE in 2024 ($1,016,836).
That's good news for startup founders and investors. It's supportive of innovation because it rewards risk-taking and helps nurture entrepreneurial talent. Investors may be more willing to back early stage ventures if the tax environment remains favourable at exit, encouraging investment in innovative sectors.
2. Snap Federal Election Set for April 28, 2025
Carney has officially called a snap federal election for April 28, saying he needs a new mandate to deal with growing trade tensions with the U.S., a shaky economy, and pressure to stay competitive on climate and carbon policy. The outcome of a federal election can completely change the country's fintech policy agenda from open banking and digital assets to consumer protection and payments modernization. Regulatory clarity will likely be delayed until after the vote.
3. Corporate Tax Deferrals for Tariff Impacted Businesses & Eased Access to Employment Insurance (EI)
Ottawa will tariff impacted businesses delay their corporate tax payments from April 2 to June 30. This support is primarily targeted at companies that export physical goods that are directly affected by new U.S. tariffs. However, fintech companies with U.S. clients or disrupted revenue may also be considered on a case-by-case basis. If your business has been impacted by the trade situation, it’s a good idea to start gathering records now. More details on who qualifies will be released soon by Finance Canada.
See: Carney Shakes Up Leadership and Vows to Protect Canada
In the same release it was also announced that changes are being made to make it easier for workers laid off due to the trade conflict with the U.S. to access employment insurance. Note, fintech platforms offering tools in job search, benefits/support navigation, short term lending, gig economy income smoothing may also see an increased demand due to the potential impact of job losses.
4. Plan to Eliminate Interprovincial Trade Barriers
Prime Minister Carney announced that Canada will table legislation by July 1, 2025 to remove internal trade barriers between provinces to build a stronger and fairer economy. He plans to eliminate all federal barriers to interprovincial trade and labour mobility, and to remove all federal exemptions under the Canada Free Trade Agreement. He met with the premiers to share his plan of building a stronger Canadian economy including items such as mutual recognition of rules, harmonizing licensing, and standardization of goods and services across provinces. Standardized rules across provinces will reduce costs for businesses and consumers, strengthen domestic supply chains, boost productivity (fewer compliance headaches), and unlock new opportunities for Canadian firms.
5. Trade Diversification + Carbon Border Adjustment Commitment
Last week, Prime Minister Carney visited the U.K. and Europe to stress the importance of Canada strengthening trade ties with reliable partners beyond the U.S.. As part of Canada’s plan to diversify trade, the PM saidthat the EU is moving ahead with its carbon border taxes called Carbon Border Adjustment Mechanism (CABM), so Canada would benefit to keep its industrial carbon pricing system to avoid new tariffs on exports to Europe. This sounds reasonable but there's a trade-off. Since the U.S. won't have the same carbon rules, the higher carbon costs in Canada could make our goods less competitive to our biggest export market - the U.S. Per reporting on the Hub, Carney put it bluntly: “Guess what one of the requirements is to diversify trade with the EU? A form of carbon pricing.”
See: The Crisis Canada and Fintech Can’t Afford to Waste
If The impact on fintechs may be twofold. Clean fintechs involved with ESG, carbon credit tracking/management, sustainability analytics etc stand to benefit but legacy exporters, and fintechs serving them, may feel the cost squeeze of stricter environmental standards.
Closing Outlook
These announcements highlight Canada's evolving federal economy strategy. Ottawa is recalibrating its tax approach, trade perspectives, and domestic relief tools in response to Trump's tariff war and global volatility. Fintech leaders should actively track these changes and be ready to adapt as more policies roll out after the election.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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