The Atlantic Investment Bubble
Growing Our Regional Economy
Accelerating Investment and Growth
Too many companies in Atlantic Canada – in technology, manufacturing, food and drink production and many other sectors – struggle to find capital during both their start-up and scale-up phases.
Atlantic Canada collectively has a smaller population than many cities, and well-intentioned provincial programs often fail to recognize the increasingly regional nature of our business community. This hampers job creation and investment in our entrepreneurs as well as negatively impacting tax revenues. A group of Atlantic Canadian entrepreneurs and investors have come together to develop a solution.
Introducing the Atlantic Investment Bubble
The “Atlantic Investment Bubble” is a concept for a regional equity tax credit (ETC) that allows Atlantic Canadians to invest in a company outside their home province but within the region and receive a tax credit.
Today, the four Atlantic provinces each have their own ETC program with varying degrees of tax credit available and, in some cases, limitations on the sectors available under the program. These are set on a provincial basis, meaning you only receive the tax credit if you invest in a company from your home province. The reality, however, is that Atlantic Canada’s business community, particularly high growth companies, operate regionally, driven by the need to tap into larger markets as well as accessing a larger pool of skilled labour, mentors and investors.
Introducing the Atlantic Investment Bubble
The “Atlantic Investment Bubble” is a concept for a regional equity tax credit (ETC) that allows Atlantic Canadians to invest in a company outside their home province but within the region and receive a tax credit.
Today, the four Atlantic provinces each have their own ETC program with varying degrees of tax credit available and, in some cases, limitations on the sectors available under the program. These are set on a provincial basis, meaning you only receive the tax credit if you invest in a company from your home province. The reality, however, is that Atlantic Canada’s business community, particularly high growth companies, operate regionally, driven by the need to tap into larger markets as well as accessing a larger pool of skilled labour, mentors and investors.
To help accelerate investment and growth, we propose the development of common regional equity tax credit, the Atlantic Investment Bubble, for investment from an Atlantic Canadian resident outside of their home province. The program would have the following parameters:
- 35 percent tax credit for individuals
- 15 percent tax credit for corporations
- Overlay existing provincial programs to minimize legislative and regulatory changes
- Managed by provincial governments
- Initially financed by the Government of Canada so there is no cost to provincial governments
- Four-year pilot project to validate the concept
- Start-date of April 1, 2022
Creating a strong and innovative private sector in Atlantic Canada requires a supportive investment ecosystem. We believe identifying specific sectors covered under a regional equity tax credit makes good sense, and propose inclusion of the following:
- Advanced manufacturing and processing
- Aerospace and defence
- Bioscience
- Cultural industries
- Exports
- Food and beverage
- Information and communications technology
- Renewable energy and clean technology
- Tourism
Driving Regional Economic Growth
This new regional equity tax credit be carefully measured to ensure it is achieving its goals. We are confident this analysis will demonstrate that the program is self-sustaining by driving increased labour spending and taxation revenue. That means it will not require long-term support from the federal government.
With the Atlantic Investment Bubble, we will create a common market for investment in Atlantic Canada. Small and medium-sized companies throughout the region will have access to greater levels of the region’s capital and advisors, fuelling their growth and creating new jobs, opportunities and tax revenues.
During the height of the pandemic, the Atlantic provinces worked together closely and effectively to protect their citizens. Let’s bring that spirit of cooperation to growing our regional economy.
To help accelerate investment and growth, we propose the development of common regional equity tax credit, the Atlantic Investment Bubble, for investment from an Atlantic Canadian resident outside of their home province. The program would have the following parameters:
- 35 percent tax credit for individuals
- 15 percent tax credit for corporations
- Overlay existing provincial programs to minimize legislative and regulatory changes
- Managed by provincial governments
- Initially financed by the Government of Canada so there is no cost to provincial governments
- Four-year pilot project to validate the concept
- Start-date of April 1, 2022
Creating a strong and innovative private sector in Atlantic Canada requires a supportive investment ecosystem. We believe identifying specific sectors covered under a regional equity tax credit makes good sense, and propose inclusion of the following:
- Advanced manufacturing and processing
- Aerospace and defence
- Bioscience
- Cultural industries
- Exports
- Food and beverage
- Information and communications technology
- Renewable energy and clean technology
- Tourism
Driving Regional Economic Growth
This new regional equity tax credit be carefully measured to ensure it is achieving its goals. We are confident this analysis will demonstrate that the program is self-sustaining by driving increased labour spending and taxation revenue. That means it will not require long-term support from the federal government.
With the Atlantic Investment Bubble, we will create a common market for investment in Atlantic Canada. Small and medium-sized companies throughout the region will have access to greater levels of the region’s capital and advisors, fuelling their growth and creating new jobs, opportunities and tax revenues.
During the height of the pandemic, the Atlantic provinces worked together closely and effectively to protect their citizens. Let’s bring that spirit of cooperation to growing our regional economy.