By Cris Best ( December 8, 2025, 2:30 PM EST) -- In Canada, stock options are taxed at essentially the same rate as capital gains. The similarity to the capital gains rate is achieved through a 50 per cent deduction of the amount of options from a taxpayer’s taxable income. According to para. 110(1)(d) of the Income Tax Act, R.S.C., 1985, c. 1 (5th Supp.) (ITA), if a taxpayer receives stock options, the deduction may apply....