Canada Growth Incentive Is Transformative for Angel Investment in Canadian Entrepreneurs, Says NACO

TORONTO, Nov. 06, 2026 -- The National Angel Capital Organization (NACO) welcomes the Canada Growth Incentive, a new tax measure proposed in Budget 2026 that incentivizes investment in Canadian companies from the very first cheque.

Announced in the November 5 budget, the Canada Growth Incentive pairs a tax exemption on up to $15 million in capital gains with an expanded small business rollover. The budget calls the Canada Growth Incentive “one of the most significant incentives to attract and retain builders here in Canada.”

“The National Angel Capital Organization welcomes the pro-entrepreneurial ambition of Budget 2026. The new Canada Growth Incentive, a $15 million capital gains exemption and small business reinvestment rollover, is the strongest signal in a decade that risk-takers and builders at the earliest stages of growth are a national priority,” said Claudio Rojas, CEO of the National Angel Capital Organization.

Caption: Claudio Rojas, CEO of the National Angel Capital Organization (NACO), at NACO Summit in Ottawa.

“This incentive is transformative for angel investors who want to support Canadian entrepreneurs,” said Rojas. “Angel investors write the first cheques into new companies. Those first rounds are when entrepreneurs need the most support to get liftoff. The Canada Growth Incentive, together with Canada’s venture capital strategy now starting at pre-seed, changes the math for founders, early employees and the angels who back them.”

“With angel investment comes mentorship, access to networks, and commercialization expertise from people who have built and scaled companies themselves,” Rojas added. “With greater access to capital from angel investors, we expect to see more founders building here, scaling here, and growing globally from Canada.”

How the measures work

Caption: Budget 2026, Masters of our Destiny, tabled on November 5, 2026.

The measures proposed in Budget 2026 include the following. Eligibility conditions apply.

• Capital gains exemption: Up to $15 million in capital gains per eligible individual, per business, on qualifying shares held for at least 36 months. A $100 million asset limit would include related corporations and apply immediately before and after issuance. Qualifying shares would need to be issued on or after November 5, 2026, and before 2037. Sector exclusions and other conditions apply.
• Funds and limited partners: Eligible individuals could also benefit through partnerships, including qualifying investments by pre-seed and seed venture funds.
• Small business rollover: For qualifying sales from January 1, 2027, investors would have the sale year and three following calendar years to acquire replacement shares. Qualifying agreements for future equity, including SAFEs, could allow up to two additional years, subject to conditions.
• Impact: The budget’s Ontario illustration shows a founder retaining approximately 96 per cent of a $15 million capital gain, compared with 71 per cent previously.

Why it matters now

NACO’s annual data show why the timing matters: in 2025, only 4 per cent of the 7,717 companies that approached reporting angel organizations were funded.

NACO’s Evidence-Based Advocacy Delivers Results

NACO develops its advocacy with its national network of more than 100 angel networks and early-stage investment organizations. Working backwards from a vision of shared prosperity for all Canadians, its policy recommendations are informed by evidence and designed for broad-based benefits across communities and regions.

The Canada Growth Incentive delivers on recommendations NACO made in its pre-budget submissions for Budgets 2025 and 2026, in its Unified Capital Strategy report and in testimony before the Standing Senate Committee on Banking, Commerce and the Economy. In October, Canada’s venture capital strategy started at pre-seed for the first time, with a $75 million Pre-seed and Seed Investment Stream.

“Every great Canadian company starts as an acorn. In the right conditions, it grows into an oak that spreads acorns of its own,” said Rojas. “The rollover will help Canadian success fuel new successes. Budget 2026 is an ambitious step forward in creating those conditions.”

The work ahead

NACO welcomes the government’s recognition of the role founders and angel investors play in building Canada’s next generation of companies. The success of these measures will depend on reaching promising entrepreneurs across communities and backgrounds, including those who lack established investor connections. Expanding access to angel networks and pre-seed funds, alongside investor education, will help mobilize private capital and support informed risk-taking so more high-potential companies can grow into local anchors and global champions.

Through NACO Academy™, NACO supports investor education, while Canada’s Top Moonshot Ventures™ helps connect high-potential companies with investors. Building on these programs, NACO will work with its members and partners on further initiatives that open pathways to angel capital for entrepreneurs across Canada and help translate these measures into investment, company growth and shared prosperity.

National briefing on November 10

NACO will walk through the measures at its national briefing, Starting at Pre-Seed: What the Venture Capital Strategy and Budget 2026 Mean for Risk Capital in Canada, online on Tuesday, November 10, from 12:00 to 1:30 p.m. ET. Speakers include:

• Ryan Turnbull, Parliamentary Secretary to the Minister of Finance and National Revenue
• Claudio Rojas, CEO, National Angel Capital Organization, who will lead the briefing
• Amanda Hall, founder and CEO, Summit Lithium Technologies, a Calgary company developing sustainable lithium extraction technology
• Eliot Pence, founder and CEO, Dominion Dynamics, an Ottawa defence technology company building sovereign capability in aerospace, autonomy and command-and-control

Additional speakers will be announced.

Register for the online briefing at us06web.zoom.us/webinar/register/WN_fM_hbE_rQsqfEk-bEL_-Og.

Background

• Canadian startups have historically raised about 40 per cent less at seed than comparable U.S. firms and take more than five months longer to close their rounds.
• In 2025, reported angel investment in Canada fell 22 per cent to $113.79 million, a five-year low.
• In October, NACO joined more than 500 signatories in an open letter to the Honourable François-Philippe Champagne, Minister of Finance and National Revenue, calling for these reforms.

About NACO

Established in 2002, the National Angel Capital Organization represents more than 4,000 angel investors and over 100 angel networks and early-stage investment organizations across Canada. NACO members have collectively invested more than $1.92 billion in over 3,000 Canadian ventures, supporting the founders building Canada’s next generation of companies.

NACO’s Budget 2026 statement and analysis are available at nacocanada.com/budget-2026.

Claudio Rojas is available for interviews on what the Canada Growth Incentive means for angel investors and early-stage founders.

Photos accompanying this announcement are available at

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