To build on its Recovery Plan, Alberta’s government is moving ahead with strategic programs to create jobs and attract investment to Alberta’s tech sector.
Effective Jan. 1, 2021, Alberta’s government is introducing the Innovation Employment Grant (IEG). This program will promote economic growth and job creation by supporting small and medium-sized businesses that invest in research and development (R&D).
“The Innovation Employment Grant will create good jobs in the critical technology and innovation sectors. Together with Alberta’s Job Creation Tax Cut, this will make Alberta the best place in Canada to start a tech firm. More venture capital will also be available through the Alberta Enterprise Corporation. And, our Skills for Jobs Agenda, together with the start-up visa we are creating through the Alberta Immigration Program, will make our province a magnet for new tech start-ups.” Jason Kenney, Premier
The IEG rewards businesses that make investments in technology and innovation by providing a grant of up to 20 per cent of R&D spending. It is significantly more generous than similar tax credits offered in British Columbia and Ontario.
“The Innovation Employment Grant provides an efficient and explicit incentive for growth and job creation in Alberta's tech and innovation sector. The incremental approach will be unique within Canada and will help attract start-ups and high-growth firms. Companies in pre-income and scale-up phases will benefit from the IEG, and as they become more profitable graduate to the Job Creation Tax Cut. These two initiatives will work together to support the growth of businesses of all sizes.” Travis Toews, President of Treasury Board and Minister of Finance
With the IEG and a low general business tax rate, Alberta job creators will have a competitive advantage at each stage in their development. The two programs are a major part of government’s plan to make Alberta a top destination for a wide range of businesses.
“Technology is the fastest-growing area of the global economy. Our government is creating an environment where tech sector businesses can flourish and hire folks into the industries of the future. With this added support, we are once again signalling that Alberta is open for business and is one of the best places in the world to invest and do business.” Tanya Fir, Minister of Economic Development, Trade and Tourism
To provide immediate support to the sector, Alberta’s government will help create up to 4,000 jobs by investing an additional $175 million over three years to Alberta Enterprise Corporation. Alberta Enterprise will use this money to support Alberta’s tech entrepreneurs with the access to capital, operational expertise and industry networks they need to grow their businesses. The Skills for Jobs Agenda will also empower more Albertans to develop the necessary skills and training to find new jobs in the growing technology and innovation sector.
“We’re excited about the renewed support from the Government of Alberta. With this investment we will continue growing the venture capital industry in Alberta, attracting the best venture capital funds to the province, and most importantly, bring the support to help Alberta entrepreneurs create globally successful companies based here.” Kristina Williams, president and CEO, Alberta Enterprise Corporation
Government will examine all of the recommendations outlined in the Innovation Capital Working Group’s report as it builds a formal technology and innovation sector strategy. The report has 14 recommendations, including re-funding Alberta Enterprise Corporation and implementing a tax credit for scientific research.
“Competing globally requires that we attract and retain the very best people who can drive our innovation and entrepreneurship activities. The working group's recommendations focus on people, capital and networks of activities that will support private-sector initiatives and create value. I applaud the government's actions in creating the Innovation Employment Grant as it will have an important impact in this sector.” Joseph Doucet, co-chair, Innovation Capital Working Group
Alberta is also supporting the critical technology and innovation sector through the Alberta Immigration Program. There are hundreds of thousands of brilliant foreign graduates unable to access immigration status in the United States. Most of these graduates are in the science, technology, engineering and mathematics fields. Alberta’s government will be creating the start-up visa which will allow our province to attract some of the best and brightest new talent to create jobs and opportunities right here in Alberta. This program will offer fast-track processing for qualified grads from top universities if they commit to launch a start-up enterprise in Alberta. This program will offer a bridge to permanent residency through the Alberta Immigrant Nominees Program.
“I applaud the Government of Alberta for its increased technology focus which will help to position Alberta not only for recovery, but increased competitiveness as a location for innovative companies and entrepreneurs. The creation of an R&D incentive like the Innovation Employment Grant and the re-capitalization of Alberta Enterprise Corporation were two key recommendations made in the Innovation Capital Working Group report. I want to thank the Premier and cabinet for accepting these recommendations. I look forward to the forthcoming tech and innovation strategy in the fall as I am confident it will continue to build on the announcements today and ensure Alberta grows as a place of innovation and diverse economic activity.” Adam Legge, co-chair, Innovation Capital Working Group
A full strategy for the province’s innovation and tech sector is expected to be released in fall 2020.
Alberta’s Recovery Plan is a bold, ambitious long-term strategy to build, diversify, and create tens of thousands of jobs now. By building schools, roads and other core infrastructure, we are benefiting our communities. By diversifying our economy and attracting investment with Canada’s most competitive tax environment, we are putting Alberta on a path for a generation of growth. Alberta came together to save lives by flattening the curve and now we must do the same to save livelihoods, grow and thrive.
The Innovation Employment Grant will be worth up to 20 per cent of qualifying R&D expenditures. Details include:
An eight per cent payment on a corporation’s base level of R&D spending, providing stable support for all small and medium-sized firms undertaking R&D.
A 20 per cent incremental payment on increasing R&D spending – an approach that is unique within Canada.
Alberta Enterprise is a Crown corporation with a mission to foster a thriving venture capital industry in Alberta.
It does not invest directly in Alberta companies – it invests in proven venture capital funds that have a record of success.
The venture capital funds invest in knowledge-based industries, including information technology, industrial technology and life sciences.
It has received a total of $175 million from the government since 2008.
The corporation has generated $4 of investment back into Alberta companies for every $1 it has invested
The Innovation Capital Working Group was established to provide government with advice on how to incentivize capital investment in the province’s tech and innovation ecosystems.
The committee included representatives from key areas of Alberta’s tech, business, academic and financial communities.
Joseph Doucet and Adam Legge co-chaired the committee.
The group’s final report can be found online at alberta.ca.
Provincial Press Release July 2, 2020 @ 12:10 pm