March 20, 2012
Dear Minister Liepert and Premier Redford,
Thank you for your letter of response dated March 15, 2012 to our original letter.
We recognize and appreciate the efforts of the Government of Alberta in supporting innovation and technology in our province. However, as the government embarks on a review of the fiscal framework for the province it is important to understand and recognize the need for and benefits of a technology investment tax credit in Alberta.
In the briefing document presented to Calgary Caucus on January 26, 2012 and to Premier Redford via courier on February 6, 2012, various initiatives undertaken through The Government of Alberta Action Plan: Bringing Technology to Market were identified. SR&ED, Alberta Innovation Vouchers, Alberta Enterprise Corporation, AVAC, Tecterra, and Clinexus are initiatives established to address particular needs.
“Canada is among the most generous countries in the world in its financial support of R&D for its emerging technology companies. But Canada is facing a dire shortage of the highly-specializedfinancing sources, angel and venture capital, dedicated to commercializing that R&D”
A Primer on Economic Diversification in Alberta,
By the Western Centre for Economic Research
While those initiatives each work within a certain set of parameters, the fact remains that none of them has been effective at delivering private or retail equity investment in Alberta technology companies – a proven approach to achieving company growth and sector sustainability.
“No major Canadian city puts less money into venture capital than Calgary, home to some of the country’s highest disposable incomes. Of a dozen global cities ranked by the Toronto Board of Trade, Calgary is last in Canada, with just $808 in venture capital spent per $1 million of municipal GDP.”
Globe and Mail March 2011
The impact of this particular gap in Alberta capital markets is such that we are gaining a reputation as one of the best incubators for U.S. technology companies. As Albertans, this is not a reputation we want to retain. It will be far more beneficial for the province to retain our innovators, their companies, and their legacy in providing a foundation for a thriving technology sector in Alberta.
“The obvious concern from an economic development perspective is that once struggling Alberta companies achieve a significant degree of success, they must be externally acquired or leave the province in order to continue growing.”
Task Force on Value-Added and
Jurisdictions around the world are enjoying the benefits of technology tax credit policies. A tax credit for technology investment provides a highly cost-effective free market mechanism that precludes the government from having to attempt to choose winners in highly dynamic, complex markets and provides Albertans with opportunities to participate directly in the new economy.
As the Government of Alberta proceeds to examine its fiscal framework, we encourage you to finally take action and create a technology investment tax credit in Alberta. The Alberta technology community is available to support and assist, providing you and your colleagues with the insights of many Albertans: technology entrepreneurs, investors, investment bankers, business leaders, financial experts, taxpayers, and citizens that share a vision for the future of Alberta.
We look forward to continuing to work with you on this important initiative.
Pam Boytinck Trent Johnsen