a lot more is said than done about economic diversification in Alberta.
As the axiom goes, “if you keep you doing what you’re doing, you’ll keep getting what you’re getting” and in spite of decades of talk and good intentions (you know “the road to hell reference on that”) the Alberta economy continues to resemble a company mining town.
From 2005 through 2008, energy as a percentage of Alberta’s provincial GDP grew from 28.3% to 30.8%. (source: Government of Alberta: Finance and Enterprise)
Now there’s no sense complaining about the energy industry thriving, BUT, continuing to rely on energy to directly provide over 30% of the economic output of the province is dangerously shortsighted.
The citizens of Alberta and our government have not been effective at delivering meaningful economic diversification.
There is effective work being done in other Canadian jurisdictions; certainly British Columbia and Ontario. The detail below from federal MP Marc Garneau’s website outlines the use of an “innovation and productivity tax credit” to encourage the kind of investment that would contribute to meaningful diversification. Note that Alberta is conspicuously absent from the list of organizations that support the introduction of Flow-Through Shares or an IPTC to boost investment in emerging sectors.
Marc Garneau; Liberal critic for Industry, Science and Technology on:
Create new jobs by introducing additional tax incentives for Canadians who invest in Canadian entrepreneurs and start-up companies in emerging sectors. such as clean energy and life sciences.
Venture capital is the heart of private sector investment in new start-up companies in emerging technologies, such as clean energy, telecommunications, and life-sciences.
Venture capital and overall private sector investment in research and development in Canada lags the world. To create jobs today and strengthen our economy for the future, the Liberal Party believes we must invest more in Canada’s entrepreneurs and Canadian ingenuity.
The Liberal Party proposes the federal government introduce a new tax benefit to Canadians who invest in new start-up companies such as extending “Flow-Through Shares” tax incentives to other emerging sectors or introducing an “Innovation and Productivity Tax Credit” (IPTC)
Flow-Through Shares allow start-up companies who have little or no revenue to pass on tax deductions to investors, boosting the incentives to invest in Canadian entrepreneurs.
Flow-Through Shares are currently applied to the mining sector for exploration, and have been credited for making Canada the world’s top destination for exploration investment. Exploration expenditures in Canada rose from approximately $300 million in the late 1990s to an estimated $1.722 billion in 2006.
An IPTC would grant Canadian investors an income tax credit for investments in eligible companies that meet certain criteria.
The Liberal Party would recommend these measures be considered in partnership with the provinces and to complement existing policies that support investment in Canadian entrepreneurs.
Flow-Through Shares or an IPTC could be used to help Canadian entrepreneurs bridge the “valley of death” – the gap between research and commercialization, and create an innovation boom for start-ups in areas such as life-sciences, clean energy and information technology.
Organizations that support the introduction of Flow-Through Shares or an IPTC to boost investment in emerging sectors include:
• Information Technology Association of Canada
• National Angel Capital Organization
• Canadian Advanced Technology Alliance
• Friends of the Canadian Institutes of Health Research
• Conference Board of Canada
• Canadian Federation of Independent Business (CFIB)
• MaRS Discovery District for Medical & Related Sciences
• Ottawa Centre for Research and Innovation (OCRI)
• BC Technology Industries Association (BC TIA)
• Brightspark Capital Partners
• Canadian Task Force on Early Stage Funding
• Foragen Technology Ventures Inc.
• Garage Technology Ventures Canada
• Petroleum Technology Alliance Canada
• Saskatchewan’s Minister’s Advisory Council on
• Information Technology
• Saskatchewan Advanced Technology Association (SATA)
• Springboard West Innovations Inc.
• Sustainable Development Technology Canada (SDTC)
• Trillium Medical Technology Association