The loophole involves executives taking remuneration in stock options rather than cash. If the price of the stock is lower than the market the difference is taken as remuneration. An executive can claim a 50 percent tax deduction. when selling the stock.
|The decision to not plug the loophole was made after pressure on Finance Minister Bill Morneau by bigwigs from the financial elite. Liberal campaign literature from the 1915 election proposed that as many as 8,000 people were claiming an average of $400,000 a year through the loophole. In the campaign the party platform called the loophole a disproportionate benefit for the wealthy and promised to cap the benefit at $50,000.|