Small businesses look at capital gains from two perspectives. Primarily our members—small and medium-sized companies—look at the capital gains treatment when they sell their businesses. Most small business owners count on the sale price of their businesses to fund their own retirement. They don't have pension plans as other Canadians might.
On that front, it is very good news that the lifetime capital gains exemption will rise from $1 million to $1.25 million. We are also encouraged by the new Canadian entrepreneurs' incentive, which will provide, over a 10-year period, up to $2 million at a lower capital gains treatment than there was before. We think those two measures are positive.
There are a bunch of exceptions to this. I have to tell you that the Canadian entrepreneurs' incentive is going to be an incredibly divisive policy, because we estimate that about half of Canada's small businesses, given what the government has proposed, would be ineligible for that additional $2 million. We are quite worried about that.
The other capital gains treatment, though, involves capital gains within the corporation itself, and all of that will now be taxed at 67%. We're hearing from small and medium-sized businesses about their significant worries over the increase in capital gains and where it comes in. There's no keeping $250,000 at 50% for corporations. That's all going to be taxed at 67% now, and that is a big worry for a lot of small businesses, particularly start-ups and technology firms.