03/22/2016 16:15 EDT | Updated 03/23/2017 01:12 EDT

Federal budget makes no change to stock options tax despite campaign promise

OTTAWA — The federal government is walking away from a campaign promise to change the way stock options are taxed.

Gains on stock options paid to employees are treated more favourably under the income tax rules than salary.

During the election, the Liberals suggested they would look to put a cap of $100,000 a year on how much could be claimed through the deduction that reduces the amount of tax charged on stock option gains.

However, Finance Minister Bill Morneau says he will not be making any changes to the way stock options are taxed.

Many in the technology sector had called on the government to abandon the promise, suggesting it would stifle a vital economic driver.

They suggested stock options, which can yield big windfalls, are a key incentive used by start-up firms to entice staff to leave bigger companies and give up big salaries to join them.

The Canadian Press