The motion, as amended, read as follows:
That the federal government urgently address the undue financial hardship of employees who have acquired stock from their employer through either a stock option plan (ESO) or a stock purchase plan (ESPP), have been assessed a tax benefit based on unrealized gain at the time of acquisition where that tax liability greatly exceeds any eventual realized gain, their means to pay and, in some cases, their personal net worth, by:
• studying the financial impact on Canadian taxpayers of the 2001 technology collapse in specific regard to employees assessed taxable benefits on unrealized gains at the time of acquisition when these assessed benefits far exceed the eventual actual gains
• reporting to the Minister and Parliament the number of taxpayers placed in undue hardship through the treatment of the unrealized gain at time of acquisition as an employment benefit while the losses on the eventual disposition as a capital loss, not offsetting the employment benefit; and
That the Committee request that the Department of Finance immediately study the effectiveness of the following amendments to the Income Tax Act and report those findings to the Committee by August 31, 2009.
- allowing, on an elective basis, the use of current or future capital loss balances to reduce the calculated taxable benefit, as determined in Section 7 and without regard for Section 110, in the year of inclusion of the benefit. This application is limited to the lesser of the taxable benefit or the capital loss attributable to the sale of the stock from which the taxable benefit has arisen. Any reduction in tax calculated therein is refundable; and
- making provision to annul any penalty or interest assessed on the amount of excess tax payable before the application of the above provision in the year of inclusion of the benefit, or in any subsequent years, and where such interest and penalty have been remitted to make such amounts refundable”.