Shopify CEO keeping an eye on NDP tax plan

WATERLOO, ONT.— Shopify Inc. chief executive Tobias Lutke is keeping a close watch on an NDP election pledge that could change the way stock options are taxed, despite reassurances from Thomas Mulcair that technology startups wouldn’t be impacted by the new rules.

Lutke said Thursday that he wants to ensure Canada’s burgeoning startup community doesn’t get sideswiped by new taxation on stock options, described by Mulcair as a “loophole” used by the wealthiest Canadians, which he has pledged to close if NDP wins power in the Oct.19 federal election.

The co-founder of the Ottawabased e-commerce start-up said stock options were one of the crucial ways Shopify was able to attract employees when it was first getting off the ground and money was tight.

Stock options were “a reason why many amazing people ended up joining Shopify, and that made a big difference for the success of the business,” Lutke said.

“Will less companies succeed because (fewer) great people join early stage startups? Absolutely, and I think that’s regrettable.”

A potential clash between Mulcair and tech entrepreneurs was quickly extinguished last week. The party leader sent a personal letter to Lutke and fellow Canadian startup founder Ryan Holmes of HootSuite saying that “early stage companies” would be excluded from his taxation plan.

Lutke said the response gave him more confidence in the NDP plan.

The NDP has also proposed to raise corporate taxes, which Lutke considers less of an issue.

“Canada has really low taxes for companies to begin with, so (taxes) going up doesn’t make a lot of difference,” he said. “Everyone should pay their fair share,”

Lutke said he’s encouraged by the growing awareness of Canada’s young startups and the fact that politicians are discussing the future of the industry.