Albertans to receive tax credit for investing in small tech firms:
The Alberta government will introduce a $90-million tax credit program next year to encourage investment in small- and medium-sized tech firms, Economic Development Minister Deron Bilous said Monday.
"Among the best things we can do to set the province on the path to recovery is encouraging knowledgeable investors to fund Alberta-based startups," he told a news conference at Jobber, 10520 Jasper Ave., a small Edmonton company that handles customer paperwork and office management.
The scheme will give a 30-per-cent credit to Alberta venture capitalists who invest in local firms in five key sectors including information technology, clean technology, health technology, interactive digital media and game products, and post-production, visual effects and digital animation.
Most Alberta companies in these fields have less than 100 workers and often have trouble getting money from banks when they're new, Bilous said.
The Alberta Investor Tax Credit, which starts next January and lasts until the end of 2018, will help these operations hire staff, rent office space and buy equipment.
"Energy will always be a key strength in our economy, but we all know that Alberta must take action on diversifying our economy."
Most other provinces already have similar programs.
A new survey from ATB Financial indicates staffing is the biggest issue aside from sales keeping the owners of small- and medium-sized Alberta businesses awake at night.
About 18 per cent of respondents mentioned concerns about being able to keep everyone on the job and busy, pending layoffs and meeting payroll.
Wildrose Party jobs critic Grant Hunter said the tax credit is better than offering grants, which would allow the government to pick winners and losers.
But he's concerned Alberta's projected $10.4-billion deficit and the carbon tax make it less likely companies will expand.
The free market should decide how the economy grows, he said.
"The government has a noble goal, to diversify the economy, but I don't know if I have seen a precedent where it worked," Hunter said.
"The economy in Alberta has been diversifying quite well … If you have a robust economy, business owners take a look at where they can invest their money, then you see diversification as society and purchasers see fit."
The investor tax credit is part of a $250-million jobs, investment and diversification package outlined in last week's provincial budget.
But Bilous couldn't say how much investment the tax credit is expected to attract, how many jobs exist in the five sectors being targeted or how many more positions he expects to create.
"It's based on how many dollars get invested into companies, but a company like Jobber is hiring almost daily and weekly … A lot of businesses, they need access to capital to grow, to create jobs."
The government will do consultations over the summer and fall to establish details of the plan, including the maximum amount individuals and companies can invest.
Jobber co-founder Forrest Zeisler said the program would have helped them when the business was starting six years ago.
"Every dollar matters when you're just getting going … (It) would be really valuable bringing on that extra staff or dealing with marketing challenges," said Zeisler, whose company has 54 employees.
"Who knows where we would have been now."