Stock Savings Plan

DEFINITION of 'Stock Savings Plan'

In Canada, a plan wherein certain provinces (such as Alberta, Ontario and Quebec) provide tax credits for provincial income taxes to residents who purchase certain investments, in particular the initial public offerings (IPOs) of local companies. Stock savings plans provide tax benefits to Canadian residents and are intended to encourage residents to invest in the provincial economy. Each Canadian province has its own unique stock savings plan.

BREAKING DOWN 'Stock Savings Plan'

The Quebec Stock Savings Plan, for example, is the plan for the Canadian province of Quebec. This particular plan provides tax benefits to Quebec residents who buy new issues of stock from local Quebec companies. In March 2012, stocks of Nemaska Lithium, an exploration and development company in Quebec's James Bay Region, were listed as "valid shares" and qualified for the province's stock savings plan.

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RELATED FAQS
  1. How are Registered Retirement Saving Plans (RRSPs) taxed?

    Learn about registered retirement saving plans, and find out how the Government of Canada provides tax benefits for those ... Read Answer >>
  2. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Answer >>
  3. How are capital gains and dividends taxed differently?

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