Entity Setup
Entity Setup: What Businesses Should Know About Bill C-30’s Recent Corporate Tax Changes
Bill C-30 brings important updates for corporations, especially in construction, agriculture, and employee-ownership regimes—vital for entrepreneurs setting up new entities.
By NomadicTax Research Team • 6-8 min read • July 30, 2026
## What Is Bill C-30?
Passed on **June 19, 2026**, Bill C-30 implements measures from Canada’s Spring Economic Update to help reduce costs and support business competitiveness. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html?utm_source=openai))
Key entity-related changes include:
- Permanent capital gains exemption of **$10 million** for qualifying business transfers to Employee Ownership Trusts (EOTs) and worker co-ops. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html?utm_source=openai))
- Immediate expensing for **greenhouses** to fuel agricultural production. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html?utm_source=openai))
- Lowering the minimum distance for the Labour Mobility Deduction (from 150 km to 120 km) and increasing the maximum deduction from $4,000 to $10,000/year. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html?utm_source=openai))
## What Entity Forms Are Affected
- **Cooperatives and employee-owned businesses**: The permanent exemption for transfers to EOTs/cop-ops enables smoother succession planning and ownership transition.
- **Agricultural setups with greenhouses**: Immediate expensing enhances cash flow early in operations.
- **Corporations with traveling workers**: Improved mobility deduction helps entities with remote job sites or specialized labour movement.
## Example: Farmer Startup with Greenhouse Model
Sam wants to set up an agricultural operation including a greenhouse for year-round production. Under Bill C-30:
- He can expense greenhouse and associated building costs immediately, lowering taxable income in the early years.
- If eventually transferred to an employee ownership trust, qualifying shares could fall under the $10 million capital gains exemption—useful for planning exit or succession.
## Entity Setup Checklist
- Choose entity form (corporation, cooperative, EOT) with tax treatment in mind.
- Document asset purchases early to ensure eligibility for immediate expensing.
- Maintain records showing distance and travel for labour mobility to claim expanded deductions.
- Work with a tax professional to ensure asset transfers to EOTs or co-ops meet qualifying criteria.
## Potential Challenges and Considerations
- Definitions and eligibility vary; rules for what counts as a qualifying business transfer or employee ownership trust can be technical.
- Provincial tax rules may differ from federal; ensure entity setup aligns both federally and provincially.
- Timing of incorporation or elections matters if claiming capital cost recovery or tax credits.
### Final Thoughts
Bill C-30 introduces meaningful incentives for businesses seeking to optimize entity structure, succession planning, and capital deployment—especially under modern models like worker co-ops and employee ownership. Smart entity setup aligned with these changes can unlock substantial benefits.