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BC Expands Innovation Tax Credit Schemes

by Mike Godfrey, Tax-News.com, Washington

26 September 2011


British Columbia's Premier has unveiled plans for a series of tax credit extensions, as part of a broader scheme for the support of small business innovation and entrepreneurship.

Speaking ahead of the launch of the "Canada Starts Here: The B.C. Jobs Plan", Christy Clark said that the government intends to expand access to venture capital tax credits, extend the tax credits available to apprentices and employers, and work with business leaders to cut red tape and streamline administration of provincial taxes.

CAD3m will be set aside to increase the Small Business Venture Capital Tax Credit, targeted to direct investments in new businesses. The programme encourages angel investors to invest their own capital directly into an eligible small business and offer strategic expertise. Eligible investors can receive a 30% tax credit for investing in qualifying small businesses under the programme, which currently supports up to CAD100m (USD97m) annually in total investments. In particular, those sectors currently benefiting from the scheme include businesses creating opportunities in regional community diversification, clean technology innovation, the development of interactive digital media products, prescribed manufacturing and processing, destination tourism, and research and development of proprietary technology.

“Innovation and entrepreneurship create jobs, diversify economic activity and help keep British Columbia globally competitive,” Clark said. “One of the key challenges for small business is access to capital for business start-up and expansion. Through ‘Canada Starts Here’, B.C. will help small business access early-stage venture capital to help commercialize ideas, attract and retain employees, expand operations and bring their ideas to global markets.”

Also included in the government's plans is a three-year extension of its approximately CAD31m annual funding for the B.C. Training Tax Credit programme to help employers and apprentices get the skills and training they need. The apprenticeship training tax credit programme encourages employers and apprentices to participate in and complete apprenticeship programmes offered in British Columbia. It provides employers with refundable tax credits in respect of salary and wages paid by employers to eligible apprentices. Apprentices registered in an eligible programme can also receive a fully refundable personal income tax credit.

The government has also outlined its intention to extend its commitment to no net-increases in regulations to 2015, and pledged the introduction of legislation to ensure that progress on regulatory accountability is reported annually, with a reduction in the regulatory burden on citizens and small businesses seen as key. Finance Minister Kevin Falcon commented: “This government has been a leader in cutting red tape, and we’re committed to further streamlining government so that hard-working British Columbians can focus more time on running their business, and less time on paperwork and bureaucracy. Drawing on this experience, I will ask an expert panel to take a broad look at B.C. taxes to make recommendations that help support business competitiveness, economic growth and jobs for British Columbians, as well as propose common sense administrative improvements to streamline the PST (provincial sales tax).”

In addition, as part of a broader review of the provincial tax system, Falcon will lead a consultation with business leaders and experts to develop recommendations to help support economic competitiveness, job creation and innovation. The resulting proposals would be considered for Budget 2012.

TAGS: individuals | tax | small business | business | fiscal policy | training | entrepreneurs | employees | budget | tax credits | education | manufacturing | venture capital | Canada | regulation | research and development

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