You are correct in that capital gains are only triggered at the time of sale. But that has little to do with the OP's problem which is the taxable benefit he gets when buying the shares.
As an employee, if I buy shares of a company at a discount then that discount is taxable income -- not capital gains. Buying the shares as they vest is a way to minimize this tax. The adjusted cost base of the stock is changed to become the fair market value (on which the tax has already been paid) so that when they're eventually sold, the difference between ACB and sale price is a capital gain which only pays half the tax.
In his case he could end up paying taxes at full marginal rate on an inflated amount, and if the company goes under, gets a capital loss that a) doesn't offset the taxes paid earlier and b) is not usable until he gets capital gains elsewhere.
As an employee, if I buy shares of a company at a discount then that discount is taxable income -- not capital gains. Buying the shares as they vest is a way to minimize this tax. The adjusted cost base of the stock is changed to become the fair market value (on which the tax has already been paid) so that when they're eventually sold, the difference between ACB and sale price is a capital gain which only pays half the tax.
In his case he could end up paying taxes at full marginal rate on an inflated amount, and if the company goes under, gets a capital loss that a) doesn't offset the taxes paid earlier and b) is not usable until he gets capital gains elsewhere.
The CRA lets you carry the taxable benefit forward until you sell the stocks. I'd suggest talking to an accountant, not a lawyer. Also see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/...