Entity Setup
Corporate Structure Decisions Before Bill C-30 Changes: Permanent Capital Gains Exemption & Employee Ownership Trusts
Under newly adopted Bill C-30, gains from selling a business to an employee trust or cooperative can escape capital gains taxes—this article shows when that makes sense and how to use it properly.
By NomadicTax Research Team • 5-8 min read • July 6, 2026
## What Bill C-30 enacts for business owners
On **June 19, 2026**, Canada adopted **Bill C-30**, which implements several measures from the Spring Economic Update. Of particular interest to small and medium business owners are:
- **Permanent $10 million capital gains exemption** for **employee ownership transfers** (e.g. sales to worker cooperatives or employee trusts), helping in transition and preserving local businesses.
- Expansion of **immediate expensing for greenhouses**, enabling agricultural businesses to deduct capital costs quicker. ([canada.ca](https://www.canada.ca/fr/ministere-finances/nouvelles/2026/06/adoption-dun-projet-de-loi-visant-a-mettre-en-uvre-des-mesures-de-la-mise-a-jour-economique-du-printemps-de-2026.html?utm_source=openai))
These changes affect planning around succession, business sales, and investment in agriculture.
## When to use these new exemptions and structures
| Situation | How this helps | Key Limits or Considerations |
|---|---|---|
| Owner planning retirement, wishing to sell business to employee trust/co-op | The \$10 million exemption allows you to transfer ownership without incurring capital gains up to the threshold, deferring tax and keeping control in local hands | Must satisfy the definition of “eligible trust or cooperative,” and document that buyer is indeed employee-owned; legal form matters. |
| Investing in greenhouse infrastructure | With immediate expensing, capital costs are deductible fully in year incurred rather than capitalized over many years, improving cash flow | Works best if income in that year is sufficiently high; may affect prior-year filing strategies; review provincial matching rules. |
## How to structure the transition to reap benefits
1. **Assess whether trust/co-op qualifies** under federal legislation — there are rules around share ownership, control, and operations.
2. **Value your business** — get a proper valuation so that the portion under \$10 million qualifies and is properly documented.
3. **Plan timing** — the Bill C-30 is now in force, so sales after June 19, 2026 follow new rules.
4. **Get legal and tax advice** — structures like employee ownership trusts have specific requirements to ensure you’re not accidentally violating corporate-governance or tax laws.
## Practical example
- Jane owns a manufacturing company valued at \$9 million. She sells it to an employee trust set up under the new rules. The \$9 million gain is **exempt** from capital gains tax, allowing her wish to retire while keeping business in worker hands.
- A greenhouse operator spends \$200,000 on new facilities. Under earlier rules, only part of that could be deducted; now, with immediate expensing, she deducts it all in year one, improving after-tax cash flow.
## Oversight and compliance tips
- Ensure all sales documents, contracts, and shareholder records clearly reflect employee-ownership structure.
- Track the use of exemptions and deductions; CRA may scrutinize timing and eligibility.
- Confirm whether provincial tax regimes impose additional taxes or limit such exemptions.
With Bill C-30, business owners have powerful tools—but best used with planning, proper legal form, and clear record keeping.