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The federal NDP plans to table a motion today calling on the Trudeau government to make good in the coming budget on its promise to crack down on a controversial tax loophole.

The motion is intended to pin the Liberals down on whether they plan to follow through on that promise, which was made in the last election but remains incomplete despite the Liberals having spent more than two years in power.

The New Democrats also promised in 2015 to act against stock-option deductions. Despite having only arrived on the scene in October, new Leader Jagmeet Singh has wholeheartedly adopted the promise as his own.

Read: Federal Conservatives propose tax credit for parental leave

The Liberals supported a similar motion last March but that didn’t contain a specific timeline for implementing the measure—which also urged the government to clamp down on tax havens.

The stock-option deduction works by taxing only 50% of the earnings that an employee receives when they cash in any stock options received as part of their compensation packages, if certain conditions are met.

Supporters say the deduction, which Finance Canada estimates cost the federal treasury about $840 million last year, is important for attracting talent and encouraging start-ups, particularly in technology sectors.

However, critics say it primarily benefits CEOs and other senior company officials, most of whom are already receiving adequate compensation far above what the average Canadian is earning.

Singh said Tuesday that he wants to specifically target CEOs and the “ultra-rich,” but not scare off potential investors in emerging Canadian industries.

“We’ve made our proposal, our starting proposal very clear: It’s specific to CEOs and those stock options,” he said during a public event hosted by Maclean’s magazine.

“I’m very aware of the future that we need to build in terms of the economy when it comes to entrepreneurs, start-ups, people in the innovative sectors and the tech sectors.”

The NDP leader argued the money saved by closing the loophole could be re-invested back into healthcare and other government services.

Read: What the Liberals will focus on in 2018

Despite campaigning on a plan to cap the deduction and supporting the NDP’s motion last year, the Trudeau government has said little about the stock-option loophole.

But Finance Minister Bill Morneau told The Canadian Press in March 2016 that the reason it was not included in the Liberals’ first budget was because of the feedback from different companies.

“As I was out on pre-budget consultations I heard from many small firms and innovators that they use stock options as a legitimate form of compensation for their employees, so we decided not to put that in the budget,” he said.

Originally published on Advisor.ca
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