Post Election Take: Growth & Innovation
Shot in the Arm Could “Flow” Post Election

With the Liberal Party elected or leading on 168 seats at the time of the report publishing, the Liberal party forming a minority government is likely. While only a few of the companies in our coverage universe have revenue from Canada as a percentage of total revenue in the double digits, we provide a few points to think about the implications of a new government for G&I investors. The most interesting possible implications are policies friendly to capital investment, especially the extension of flow-through share structures to the tech industry. Given the uncertainty around progress that a minority government can make, we are cautious on the likelihood these policies will be enacted.
Highlights:
Nice Flow
The office of the Parliamentary Budget Officer, estimates that the utilization of flow-through shares, proposed by the Liberals, would cost $406mm in 2025/26 and $2.7bn over five years. Flow-through shares has been an effective way to stimulate investment in other industries for years, in particular the traditional junior-mining industry. The platform is calling for an extension of flow-through shares to the artificial intelligence, quantum computing, biotechnology, and manufacturing industries. While our confidence in the enactment of this aspect of the Liberal plan is relatively low, we believe, if enacted, the tech industry would aggressively utilise the structure.
What’s In the Box
The Liberals are proposing a “patent box regime”, something that was introduced in the UK in 2013. The regime would reduce the corporate income tax rate on profits generated from research and development (R&D) developed and patented in Canada, effective July 1, 2025. In the UK, £6bn in total relief was claimed from 2013 to 2019.
Tax Relief:
The Liberals have reversed the proposed capital gains tax increase, and the changes to stock options, that mirrored the capital gains increase. The Lifetime Capital Gains Exemption (LCGE) for small businesses and the Canadian Entrepreneurs’ Incentive (CEI), are proposals that would reduce the tax impact for small businesses upon exit.
Housing
A number of proposals by both parties aim to speed up home building, which would benefit Real Matters’ Canadian business.
Read the Full Report