A stock savings plan is a Canadian taxation system that offers tax benefits to Canadian residents who purchase the initial public offerings (IPOs) of local companies.
How Does a Stock Savings Plan Work?
Each Canadian province has its own stock savings plan. For example, Canada's Quebec province has the Quebec Stock Savings Plan, which provides tax credits to residents of Quebec who purchase new issues of stock from companies located in Quebec.
Why Does a Stock Savings Plan Matter?
Stock savings plans are an effort by the Canadian government to stimulate regional economic growth. This is accomplished by offering tax incentives to those who provide capital funding to new companies by purchasing the IPOs of local companies.