Alberta Shifts Economic Development Direction, Announces Investor Tax Credit

Alberta’s provincial government has announced a significant shift in its approach to economic development, moving from a program it had created just last fall to provide $5,000 for each new job created to a broader range of initiatives supporting business incubators, investor tax credits, and industrial diversification. In explaining the change in direction, the Economic Development and Trade Minister said, “Quite frankly, businesses and industry provided us feedback to say, ‘You know what, that isn’t quite going to give you the outcomes that you’re looking for,’ ” according to press reports.   

Earlier this month, Alberta announced that it would be cancelling a job creation grant program that it had introduced in last October’s budget after receiving negative feedback from the business community. Under that cancelled program, Alberta planned to spend $178 million over two years by providing businesses and nonprofits up to $5,000 for each new employee with a cap of $500,000 per qualifying employer. In lieu of this plan, the province announced a suite of services that the administration hopes are more responsive to the current economy as part of the 2016 Alberta Jobs Plan.

Faced with rising unemployment as a result of volatility in the oil and gas industry, Alberta’s provincial government made industry diversification a pivotal part of the plan. In an attempt to support its non-traditional industry sectors, the province announced the Alberta Investor Tax Credit. Beginning in January 2017, the program would provide a 30 percent tax credit to investors providing capital to small- and medium-sized Alberta businesses in information technology, clean technology, health technology, interactive digital media and game products, and post-production, visual effects and digital animation. The tax credit program would be funded at $90 million over two years.

The province also announced that they would allocate $10 million in new funding for Alberta Innovates, which operates business incubators that seek to encourage entrepreneurship and job growth. Alberta Innovates was created in the April 2016 budget and is a consolidation of four previously separate agencies: Bio Solutions; Energy and Environment Solutions; Health Solutions; and, Technology Futures agencies.

Other notable programs funded under the 2016 Alberta Jobs plan include:

• $25 million to support apprenticeship and training programs;
• $25 million to the Alberta Enterprise Corporation to spur innovation and job growth in Alberta’s knowledge economy;
• $10 million to support the Agrivalue Processing Business Incubator Program to help grow and scale food processing endeavors; and,
• $10 million for the Regional Economic Development Program, which seeks to encourage collaboration within regions to promote a wide range of industries.