Tank Talks By Ripple Ventures

Reward the Risk Takers who Build Canada

Jul 17, 2025
Jay Lee collaborates with Matt Cohen at Ripple Ventures and recently worked on the Build Canada Group memo. They discuss Canada’s outdated capital gains policies that discourage entrepreneurship compared to the U.S. Improving tax reforms could close the small business gap and create jobs. They emphasize the importance of a thriving private sector for economic growth and the need for better incentives for risk-takers. Lee advocates for attracting talent and investment to ensure a prosperous future for Canadian innovators.
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INSIGHT

Canada's Entrepreneurial Gap

  • Canada has only 33 small businesses per 1,000 adults compared to 124 in the U.S., showing a massive entrepreneurial gap.
  • Outdated capital gains policies are a key factor driving entrepreneurs and investors out of Canada.
INSIGHT

U.S. QSBS Policy Upgrades

  • The U.S. QSBS policy exempts up to $15 million in capital gains taxes with a reduced holding period.
  • Recent changes make the policy more attractive by lowering the holding period from five years to starting benefits at year three.
INSIGHT

Canada's Capital Gains Limits

  • Canada's Lifetime Capital Gains Exemption (LCGE) caps at $1.25 million and excludes investors unlike the U.S. QSBS policy's $15 million per issuer exemption.
  • This makes early-stage venture capital in Canada less rewarding, harming funding availability and entrepreneur retention.
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