Program status: Open as of January 1, 2021
The Innovation Employment Grant encourages economic growth by supporting small and medium-sized businesses that invest in research and development (R&D) with a grant worth up to 20% of qualifying expenditures.
The program promotes investment and diversification by rewarding all R&D spending in Alberta, regardless of the industry, and complementing the Job Creation Tax Cut by focusing on small and medium-sized firms in the earlier stages of operation, when they might not yet be profitable.
Together, the Innovation Employment Grant and the Job Creation Tax Cut support companies of all sizes and at all stages of their business cycles.
The Innovation Employment Grant is delivered through the corporate tax system and does not follow a formal application process. Eligible corporations will be able to claim the grant when they file their annual corporate tax returns. See How to apply and Additional program details for more information.
The grant provides qualified corporations with:
- an 8% payment for eligible R&D spending carried out in Alberta, up to the corporation’s base level of spending.
- an enhanced 20% payment for eligible R&D spending that exceeds the corporation’s base spending level.
- A firm’s base level of spending is determined by calculating the corporation’s average qualifying R&D spending over the previous 2 years.
The grant provides benefits on up to $4 million in annual R&D spending.
- Available to corporations that undertake R&D in Alberta.
- The grant will phase out incrementally for firms with between $10 million and $50 million in taxable capital to ensure the support targets small and medium-sized companies.
- Firms with $50 million or more in taxable capital are not eligible for the grant.
- Eligible expenditures must have been incurred in Alberta after December 31, 2020 and match those that qualify for the federal Scientific Research and Experimental Development Tax Incentive Program.
How to apply
The Innovation Employment Grant is delivered through the corporate tax system.
To claim the Innovation Employment Grant, eligible corporations must complete and file a new Schedule 29 to the Alberta Corporate Income Tax Return (AT1), in addition to the AT1 for the respective taxation year.
As this grant is based on expenditures that also qualify for the federal SR&ED program, payments will not be processed until qualifying expenses have been verified by the Canada Revenue Agency and are confirmed to have been undertaken in Alberta by Tax and Revenue Administration.
Additional information on the Innovation Employment Grant, including an Information Circular, Guide and new AT1 Schedule 29, is available on the Corporate income tax page.
Additional program details
For more information on the Innovation Employment Grant, see:
- Information Circular 1EG-1 –Alberta Innovation Employment Grant – (January 29, 2021)
- Special Notice Vol. 5 No. 61 – Innovation Employment Grant – (December 10, 2020)