After eliminating a suite of business tax credit programs in this fall’s provincial budget, the UCP government is now considering allowing startup technology companies to issue flow-through shares as way to help attract capital investment to the rapidly growing sector.
The government has established a working group to explore ways of boosting the tech sector and helping startups attract much-needed investment capital. The group — made up of tech sector stakeholders as well as people with business, financial and academic expertise — has the mandate to look at all options, but the government has already identified the idea of a flow-through share program as one possibility.
Adam Legge, co-chair of the government’s working group and president of the Business Council of Alberta, acknowledged that every jurisdiction in North America is competing for capital to invest in their local tech sectors.
“These are beginning to be table stakes, these kinds of financial tools for jurisdictions to be able to compete,” Legge said.
However, Legge said he’s not convinced that Wattpad’s decision was largely the result of the elimination of the tax credits.
“There’s speculation it could be talent pipeline reasons, which is another reason we didn’t make the Amazon shortlist as well,” Legge said.
Legge, who had advocated for the creation of an Investor Tax Credit when he was president of the Calgary Chamber of Commerce, said the program as implemented by the NDP had many weaknesses — including being too bureaucratic.
“It was not perfect, and I think what they (the UCP) have done is pulled that back and put in place this working group to come up with solutions that could be more effective in the long term,” he said. “Alberta does need to have some kind of innovation tool in its tool box to attract capital and investment and companies to the province . . . We may not just recommend one thing, but perhaps a suite of options.”