posted on 06-06-2019

Stock Savings Plan

Updated October 1, 2019

What is a Stock Savings Plan?

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.


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Related Definitions

Tax Benefit
A tax benefit is any tax advantage given by the IRS to a taxpayer that reduces his or her tax burden. It's also the name of an IRS rule requiring companies... See More
Public Offering
A public offering is a process of issuing new securities for sale to the public.   See More
Tax Credit
A tax credit is permission to reduce the amount of income that is subject to tax. A tax credit is not the same as a tax deduction.   See More
New Issue
A new issue is a never-before-offered security. See More
Stock
Stock, also known as equity, represents ownership interests in corporations. Whether you own one, 100 or 100 million shares of stock in a company, you're... See More
Offering
An offering is the process of issuing new securities for sale to the public. See More
Capital
Capital is anything a business uses to generate income. In simple terms, capital is the potential for any item to create wealth. See More

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