Current Status
Status: Not Started No actions by the Carney government have advanced the introduction of flow-through shares for startups in key innovation sectors.
Background
During the 2025 federal election campaign, Mark Carney positioned himself as a champion of economic transformation, emphasizing the need to bolster Canada's innovation economy amid global competition in fields like artificial intelligence and biotechnology. He pledged to adapt a proven incentive from the mining sector—flow-through shares—to startups, aiming to attract more investment by letting investors deduct research and development costs from their taxes, thereby reducing risks and accelerating capital flows. Fulfilling this would require legislative changes to tax rules, potentially through budget measures or dedicated bills, to extend the mechanism beyond resource extraction to high-tech areas. Under the previous Trudeau government, programs like the Strategic Innovation Fund supported broader innovation efforts starting in 2017, but these did not include flow-through shares for startups and focused on different funding models. Carney's promise sought to address persistent complaints from the tech sector about capital access, building on Canada's strengths in AI and quantum research while countering brain drain to the U.S.
Evidence
As of March 26, 2026, no documented actions by the Carney government have moved forward on introducing flow-through shares for the startup ecosystem. A September 5, 2025, backgrounder from the Prime Minister's Office outlined measures to protect and transform strategic industries, including investments in worker reskilling and responses to U.S. tariffs, but it contained no references to flow-through shares or tax incentives for innovation investments [8]. Earlier sources from the Trudeau era, such as the 2023 Budget Implementation Act, addressed unrelated tax changes like deductions for tools and housing flips, without touching on R&D flow-through mechanisms [6]. Similarly, a 2024 announcement on AI advantages highlighted potential economic benefits but predated Carney's tenure and lacked specifics on startup financing reforms [7]. No subsequent legislation, regulations, or program launches under Carney have targeted the promise's core elements of deductible shares for AI, quantum, biotech, or advanced manufacturing firms.
Assessment
Prime Minister Mark Carney's campaign pledge to introduce flow-through shares remains unaddressed more than a year into his term, with no legislative or policy steps taken to adapt the mining-sector model to Canada's startups. While the government has signaled interest in strategic industries through announcements on workforce training, these fall short of the targeted tax incentive needed to spur investment in high-growth areas like AI and biotech. Without concrete moves to enable investor deductions for R&D expenses, the promise lingers in limbo, leaving entrepreneurs without the promised tools to scale amid intensifying global competition.
This gap underscores broader challenges in translating election rhetoric into action, particularly in an economy where innovation funding has long been a pain point. Sources show no evidence of bills tabled, regulations amended, or programs initiated under Carney to fulfill this commitment, raising questions about priorities in a post-election landscape dominated by trade tensions and recovery efforts. Until the government acts on the specifics of flow-through shares, Canadian startups in key sectors continue to operate without the boosted access to capital that Carney envisioned.