The Case

The case for CSEEF, in five parts.

New to the idea? Watch CSEEF explained in 7 steps first. This page is the detail behind it.

1 · How it works

One tax bill. Two receipts.

The company pays its tax exactly as it does today. The federal tax bill is then used as a measuring stick to set a small number of new shares for the fund.

How the mechanism works A company pays its full tax bill in cash to Ottawa, unchanged. Separately, it issues new non-voting shares worth 25 percent of its federal tax liability into the CSEEF fund. The fund never sells on the market; it sends dividends to Canada every year. THE COMPANY Federal tax liability above $100M about 46 companies a year cash, in full, as today OTTAWA · TAX BILL Paid in full. Rates unchanged. Spent once, like every tax dollar. new non-voting shares 25% of federal tax ÷ (price × 0.95) THE FUND Held forever. No market sale. Capped at 5%. $ / yr CANADA Dividends, every year

  1. Measure

    Take the company's federal tax liability for the year. Only companies above $100M qualify. No tax, no shares.

  2. Issue

    The company issues new non-voting shares worth 25% of that liability, priced 5% below the market. No cash changes hands.

  3. Hold

    The fund keeps the shares permanently and lives on their dividends. Its stake in any company stops at 5%.

2 · Try it on a real company

Fiscal 2024, from the annual reports.

Pick a company. Every figure below comes from its own filings, run through the formula.

The share count formula New shares () =

=

One formula for every qualifying company, set once in law. No negotiation, and no annual renewal.

Federal tax liabilitycompany-specific estimate
Change to the cash tax bill
$0
Value of new shares25% of the liability
Issue priceyear-end price, less 5%
New shares to the fund
Dilution to existing owners
If you own 100 sharesworth at year-end; cost in that year's dividends
First-year dividends to Canadaon the new shares alone
This year's issue, against the 5% cap
0%5% cap
3 · What it builds

Shares are issued once. Dividends arrive every year after.

If the mechanism had started in 2019 at just the ten largest companies, the fund would have received $74.9M in dividends in its first year. By 2024 it would be receiving $809.2M a year, and still climbing.

Over the six years: $2.43B in dividends, with every share still owned.

What the fund takes is academic. What it builds is not.

Dividends received by the fund, per year · ten companies
If issuance had begun in 2019. Fund shares × each company's dividend per share. Workbook b76032f5 · 2026-10-11.
Royal Bank of Canada · 2024
4 · What it costs, honestly

Someone pays. Here is exactly who, and how much.

The cost falls on existing shareholders, as dilution. In 2024, RBC would have issued 2.55M new shares to the fund: 0.18% of the company.

If you own 100 RBC shares, worth $16,839 at the end of 2024, that is about $1.01 of that year's dividends. Companies already dilute owners this way to pay their executives. RBC's share-based pay cost $959M in 2024.

The dilution disappears inside the growth.

5 · What it isn't
Call it what you like. Just don't call it nationalization. It has a cap.

Capitalism doesn't need replacing. It needs a tweak.

  • ✓Non-voting
  • ✓Capped at 5% per company
  • ✓Never sold on the market
  • ✓No new cash tax
  • ✓No tax, no shares