RE:RE:Exercise of options For stock options granted after June 1 2021 in Canada, there is an annual vesting limit of $200,000 which gets the preferential tax treatment of a 50% deduction on any gains from the difference between fair market value of shares minus the exercise price. Anything above this amount gets treated as ordinary income for that tax year and therefore no tax advantage for the shareholder. When these shares subsequently get sold no matter the $ value, a capital gain or loss is recognized on the difference between the share price sold and the fair market value of the security at the time the exercise of options took place.
The company has to have annual revenue that exceeds $500m. Also, grant of options must be issued with an exercise price above the fair market value on the date of grant for the preferred tax treatment. It cannot be deductible by both employer and employee and must be specified by employer whether or not it's a qualified or non qualified investment below the $200,000 vesting limit. If it's a non qualified stock option then the employer gets the preferred tax treatment and can deduct on their end.