Administered by Government of Canada · Last verified: July 2026
A business owner who sells the shares of their company to a qualifying worker co-operative can exempt up to $10 million of capital gains from tax. The sale must meet a strict definition of a qualifying co-operative conversion, including arm's-length dealing and the buyer being a newly formed worker co-op. A capital gains reserve of up to 10 years is also available so the seller can spread the gain while the co-op funds the purchase. Originally set to expire at the end of 2026, the measure was made permanent in the spring 2026 federal economic update.
You claim this on your tax return, so the money comes back as a lower tax bill or a refund after you file. If you missed it in a past year, you can often still recover it by adjusting a prior return.
Take the 3-minute quiz to find out, and see every other Canadian program you qualify for at the same time.
Check my eligibilityWorker Co-operative Capital Gains Exemption is generally open to incorporated businesses, in any province or territory. Confirm the full criteria on the official program page before applying.
The estimated value is Up to $10,000,000 in capital gains exempted from tax. The actual amount depends on your eligible costs, the program's budget, and approval.
Claimed on a return, so a missed year can usually be recovered by amending. How far back depends on whether you file personally or as a corporation; confirm the eligible years with your accountant.
1. Confirm the buyer qualifies as a worker co-operative under the Income Tax Act 2. Structure the sale to meet the qualifying co-operative conversion rules 3. File the joint election with CRA by the filing deadline 4. Track the 10-year reserve and avoid disqualifying events post-sale
Ongoing (made permanent in spring 2026 economic update).