ABCtech #65 09MAY16 Survey – Alberta Investment Tax Credit Programs

ABCtech #65 09MAY16 Survey – Alberta Investment Tax Credit Programs

The Alberta Government continues to introduce measures for increasing the creation of jobs and diversifying Alberta’s economy. Granting investor’s tax credits is the latest for increasing the availability of capital for small and medium enterprise (SME) technology firms.

BioAlberta has prepared an analysis of the Alberta government’s existing science research and development investment tax credit program HERE. British Columbia and several other provinces have demonstrated the merit of applying tax credits for stiring the investment in small technology businesses – summarized by the Calgary Chamber of Commerce HERE.

Many are impressed!  How about you?  The following SURVEY has been designed to learn your views of Alberta’s existing Scientific Research & Experimental Development (SR&ED) investment tax credit and the proposed Alberta Investor Tax Credit (AITC) programs.  The results will be made public as we continue to report on the status of Alberta’s economic resilience and specifically the plight of it’s technology SMEs.

SURVEY HERE

The Alberta Investor Tax Credit (AITC) by Prashant Sreekumar, Sreekumar Professional Corporation

Are you a small tech firm? If you are a small/medium sized (SME) tech company, the biggest challenge that you face is probably the need for equity (Infusion of Cash).

Banks won’t lend you the capital you need without a proven track record and/or tangible asset for security. Family and friends can only loan you so much. Without market investments, growth stalls, momentum slows, retention of skilled employees costs money and so, lost are the opportunities to develop and market your product or service.

The recent budget from Alberta Government aims to do several things in one shot:

• Create Jobs. Check
• Diversification from oil and gas. Check
• Investing in Infrastructure. Check
• Invest in a small technology firm. What?

It’s called Alberta Investor Tax Credit. As per the 2016 Budget, one of the initiatives that aims to improve the diversification of the economy and create jobs is to invest in the technology industry by giving tax breaks. It says:

“The Alberta Investor Tax Credit, worth $90 million over two years, will benefit investors who invest in eligible small and medium‑sized enterprises in Alberta” ^[1]

The aim is to encourage investments by giving tax breaks to Venture Capitalists (Alberta investors, 30%, over 2 years), who will invest in key sectors such as: Information technology, clean technology, health technology, interactive digital media and game products, and post-production, visual effects and digital animation sectors ^[2]

The application will be accepted (first come first served) starting:January 2017.  Additional details such as what body(s) will administer the program are yet to be announced.

While the government engages the stakeholder groups and finalizes the program’s design (eligibility, retroactivity), it’s time to freshen up your  business ventures.

References

[1] http://finance.alberta.ca/publications/budget/budget2016/fiscal-plan-tax-plan.pdf
[2] http://www.alberta.ca/documents/Factsheet_AITCAnnouncement_2016018.pdf