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# Constellation executive sold $102.6 million in stock ahead of
capital gains tax changes
Tech firm's stock has climbed about 220% since the end of 2019
Author of the article:
Bloomberg News
Stephanie Hughes and Geoffrey Morgan
Published Jul 02, 2024 • Last updated 11 hours ago • 2 minute read
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A trader works on the floor of the New York Stock Exchange during
afternoon trading in New York City. Photo by Michael M.
Santiago/Getty Images files
## Article content
Canadian technology firm Constellation Software Inc. saw a surge in
insider selling in June, driven by a senior executive's move to unload
$102.6 million of shares ahead of a hike to the nation's capital-gains
tax.
Mark Miller, chief operating officer of the Toronto-based firm, sold a
combined 27,000 shares in three transactions in the middle of June,
marking his first dispositions of Constellation stock since 2019,
according to data on Canada's System for Electronic Disclosure by
Insiders. He had about 252,000 shares as of June 19, data compiled by
Bloomberg show. Other executives sold as well, but in smaller amounts.
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The business-software company's stock has climbed about 220 per cent
since the end of 2019, compared with a roughly 28 per cent advance for
the S&P/TSX Composite Index. Its 20 per cent gain this year through
last week is around five times that of the nation's equities
benchmark.
Constellation didn't respond to multiple requests for comment.
Article content
Miller's sales came in the days before an increase in Canada's capital
gains tax inclusion rate. As of June 25, individuals must pay income
tax on two-thirds of any gains over $250,000 in a year. Previously,
only half of gains were taxable. The change applies to all gains made
by companies.
Finance Minister Chrystia Freeland announced the measure in her April
budget, giving investors a little more than two months to sell shares
at the lower rate. The government projected the tax boost would
generate $6.9 billion this fiscal year, partly because some investors
and businesses would rush to sell before June 25. Freeland has pledged
to keep the deficit — expected to be $39.8 billion in 2024-25 — under
control while spending billions on housing and social programs.
The tax increase has sparked criticism from the country's growing tech
sector. Shopify Inc. president Harley Finkelstein has been one of most
vocal executives in Canada to oppose the higher levy on social media,
calling it "divisive and political" in a post on X.
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The executive has been active in Shopify's stock since late last year.
SEDI trading records show he sold more than a net 1,000 shares between
public dispositions and sales in an ownership plan since the tax
announcement. He held over 200,000 shares as of June 28, data compiled
by Bloomberg show.
The Canadian e-commerce company didn't respond to multiple requests
for comment.
The tech sector is one of the industries most likely to be impacted by
the tax changes, partly because of its heavy use of share-based
compensation, said Christine Poole, chief executive officer of
Toronto-based GlobeInvest Capital Management Inc.
"Technology is one to point at because they have certainly done quite
well and have a lot of stock options," she said.
Bloomberg.com
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