Tax credits to boost investment, create jobs
Bill 30, the Investing in a Diversified Alberta Economy Act, was introduced today to allow government to establish two tax credits that would drive innovation, diversification and job creation.
The Capital Investment Tax Credit (CITC) would help ensure that Alberta is attractive and competitive for large capital investments, while the Alberta Investor Tax Credit (AITC), announced earlier this fall, would bring Alberta investors and small businesses together.
The CITC would encourage large-scale capital investments, supporting thousands of direct and indirect jobs and encouraging up to $700 million of new investment in Alberta.
“Since the mid-90s, capital investment has been the largest contributor to Alberta’s economic growth, with capital investment in our province totalling $75 billion last year alone. Introducing a tax credit now when businesses are facing challenges will help them move forward on investments at a time when Albertans need it most.”
The CITC would offer a 10 per cent, non-refundable tax credit of up to $5 million to Alberta companies involved in manufacturing, processing and tourism infrastructure. It would have a budget of $70 million over two years and be provided on a competitive basis to companies making eligible capital investments of $1 million or more. The remaining $5 million from the original $75 million CITC budget would be allocated to Culture and Tourism to develop supports for Alberta’s cultural industries.
The AITC would have a budget of $90 million over three years and would be available for investments in companies that are engaged substantially in proprietary technology research, development or commercialization, interactive digital media development, video post-production, digital animation or tourism.
"Technology companies in Edmonton and across the province are growing - building products and solving complex problems. There is great opportunity for further growth and the Alberta Investor Tax Credit opens the door for more companies to secure local investment, filling an important funding gap. Companies such as Localize, Drivewyze, Poppy Barley, Jobber, SAM and Granify are a testament to our province’s strong path toward economic diversification."
Tax credits such as the CITC and AITC already exist in many other Canadian provinces and have been strongly endorsed by local business leaders, chambers of commerce and multinational corporations.
Criteria for both tax credits were developed through extensive consultation with business and investment leaders across Alberta and are designed to encourage economic diversification.
The application process for the CITC and AITC will be announced pending the passage of legislation this fall, with the first intake expected to begin in January 2017. The AITC will apply retroactively for investments made as of April 14, 2016.