Alberta wants to kickstart investment with tax credits
'We're very rich in energy, but we're also rich in other sectors. Those sectors have been looking for support'
With no end to Alberta's economic slump in sight, the NDP government wants to create the province's first investor tax credit program, which it says will kickstart investment outside traditional oil and gas sectors.
Minister of Economic Development and Trade Deron Bilous introduced legislation on Tuesday to create two tax credits worth a total of $165-million over three years.
"This is about ensuring Alberta remains competitive," said Bilous, prior to Bill 30, the Investing in a Diversified Alberta Economy Act, being introduced in the legislature.
"We're leveling the playing field and encouraging investment that will lead to growth for small and medium-sized Alberta businesses."
British Columbia has had a similar investor tax credit since 1985, Bilous said. Alberta businesses have long asked for a comparable program to stay competitive, he added.
Both the Capital Investment Tax Credit and the Alberta Investor Tax Credit are aimed at businesses outside of oil and gas exploration.
Bilous said that sector already has targeted programs, such as the revised royalty framework.
"We're very rich in energy, but we're also rich in other sectors and those sectors have been looking for supports for some time," he said.
Small business with tech, tourism focus
The Alberta Investor Tax Credit, or AITC, will offer a 30-per-cent tax credit to people who invest in businesses with fewer than 100 employees.
Those businesses however must be working to launch a new product or be working in the area of digital media, post-production services, or tourism.
Individual investors will get credit on up to $200,000 in investment and the credit would be retroactive to April 2016 when the program was first announced.
The program is budgeted for $90-million over three years.
The Capital Investment Tax Credit, or CITC, will offer a 10-per-cent non-refundable tax credit for corporate investments into capital such as machinery, equipment, building, and tourism infrastructure.
The minimum investment eligible for the tax credit is $1 million and companies would apply for conditional approval before making the investment.
The program would start in January 2017 and is budgeted for $75 million.
Bilous said the AITC would encourage venture capital investments and angel investors to give small businesses a boost.
The CITC will encourage large-scale capital investment, which has been the largest contributor to Alberta's economic growth since the 1990s, Bilous said.