Atlantic Canada Business Grants

Investor

Nova Scotia Innovation Equity Tax Credit

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Amount:

$ 112,500

Type of Program:

Tax Credit

Description:

The Innovation Equity Tax Credit (Innovation ETC) is a non-refundable personal and corporate income tax credit available to eligible investors who invest in an approved corporation. The credit is meant to encourage investors to make equity capital investments in eligible Nova Scotia small and medium corporations engaged in innovative activities.

Comments on Funding:

The credit is equal to 35% of eligible investments made in approved corporations, up to $ 87,500.

It increases to 45% for eligible investments made in approved corporations in eligible classifications within the oceans technology and life sciences sectors, up to $ 112,500.
The maximum annual investment amount is $250,000.

For corporations, the credit is equal to 15% of the eligible investment. The minimum investment amount is $50,000 and the maximum annual investment amount is $500,000. 

When It Ends:

Ongoing

Deadline:

Rolling deadline

Eligibility:

The applicant must:

  • be a taxable Canadian corporation,
  • carry-on a business in Nova Scotia (and be registered in Nova Scotia),
  • be incorporated less than 10 years ago,
  • have its head office in Nova Scotia,
  • use all or substantially all of its assets in an active business,
  • have less than $15 million in assets (including assets of associated corporations),
  • have fewer than 100 employees (including employees of associated corporations),
  • pay at least 50% of its remuneration to employees or full-time contractors who are residents of Nova Scotia and report to or deal with a permanent establishment of the corporation in Nova Scotia,
  • have authorized capital consisting of at least 1 class of common voting shares,
  • be developing or implementing new technologies or applying existing technologies in a new way to create new products, services or processes.
  • not fall under any of the restrictions below:
  • its principal business includes: construction, developing, leasing or selling real property, hotel ownership or management, retail, including food and beverage services, oil or gas exploration, development and production, film, digital animation, or digital media, membership based recreational activities, financial or insurance services,
  • it is incorporated for a self-regulated professional practice,
  • it is a business for which public financial support would be contrary to public policy,
  • it has been issued a Film Industry Tax Credit, Digital Media Tax Credit, Digital Animation Tax Credit, or Capital Investment Tax Credit,
  • it has been approved for or received a payroll rebate or an innovation rebate from Nova Scotia Business incorporated,
  • it has raised (along with all associated corporations) more than $5 million through previous specified issues.

An eligible investor is an individual who is a resident of Nova Scotia and at least 19 years of age or a taxable Canadian corporation which is registered to carry on business in Nova Scotia, has its head office in Nova Scotia, and is not a qualifying venture capital fund under section 27B of the Income Tax Act (Nova Scotia).

Application Steps:

1

Applicant must apply for a Certificate of Registration before accepting investments from eligible investors by submitting the completed application packages via email to the Innovation ETC Administrator.

2

 Applicant must Issue eligible investments to eligible investors through a specified issue.

3

Applicant must apply for Tax Credit Certificates on behalf of all eligible investors who made eligible investments during the time the corporation was registered under the program. The application for Tax Credit Certificates must be received by the department within 6 months of the expiry date on the corporation's Certificate of Registration.

4

Applicant must submit an annual return to the Innovation ETC administrator for each of the 4 years after the expiry date on the certificate of registration.

Documentation Needed: 

To apply for the Certificate of Registration the applicant must submit:

  • the completed and signed application form,
  • the financial statements for the previous tax year, together with a review engagement report or auditorโ€™s report, for the applicant corporation and for all corporations associated with the applicant corporation,
  • T2 Corporate Income Tax Return for the previous tax year of the applicant corporation and of all corporations associated with the applicant corporation (including all forms and schedules),
  • an up-to-date and notarized shareholderโ€™s register,
  • the corporate chart/structure, if applicable,
  • the shareholder agreements, if any,
  • the debenture agreements, if any,
  • the proposed investor forms completed by all proposed eligible investors,
  • a brief business plan,
  • the Certificate of incorporation, constitution/articles of incorporation and memorandum of association.

To apply for the Tax Credit Certificates the applicant must submit:

  • the completed Application Form,
  • the up-to-date and notarized shareholderโ€™s register,
  • an Investor Data Report in Excel,
  • copy of each share certificate or convertible debenture issued to each eligible investor showing the terms of the share/debenture,
  • a signed statement from an authorized officer of the corporation.
  • signed statements from each eligible investor,
  • proof of payment from each eligible investor displaying the amount invested and date of investment.

Other Things to Note:

It's important to note that the deadline for applying for the Nova Scotia Innovation Equity Tax Credit can vary depending on the specific circumstances of your investment and the corporation you invested in. Therefore, it's recommended that you seek professional advice or consult the official guidelines from the Nova Scotia Department of Finance for more detailed information.

Program Contact:

Nova Scotia Department of Finance - Innovation Equity Tax Credit

Innovation-ETC Guidelines.pdf

Canada.ca - NS Innovation Tax Credit

Equity Investors Incentive

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Amount:

No Fixed Amount

Type of Program:

Rebate

Description:

The Equity Investors Incentive provides new and expanding businesses in Prince Edward Island with a tool to encourage and attract private sector investment. The program provides a non-repayable incentive to investors to encourage investment in an approved Prince Edward Island-based investee business by increasing the return-on investment to investors.  

Comments on Funding:

Funding is in the form of a direct rebate to investors (individuals or companies) and is calculated at up to 20 percent of the purchase price of the equity investment in the investee company. The maximum investorsโ€™ rebate for all eligible investors will not exceed $200,000 per approved investee company.

When It Ends:

Ongoing

Deadline:

Rolling deadline

Eligibility:

An eligible investee company must:

  • be a taxable, private Canadian corporation,
  • be registered to do business in Prince Edward Island,
  • have its head office and its primary business operations in Prince Edward Island,
  • have been in operation in PEI for a minimum of one year,
  • be a provider of exportable goods or services in one of the following strategic sectors: bioscience, aerospace and defense, advanced manufacturing and processing, renewable energy and clean technology
    information and communications technology, creative and cultural industries (first-of-its-kind exportable goods or services in other sectors may be considered),
  • pay at least 75% of its payroll to employees residing in Prince Edward Island and must have ewer than 50 employees,
  • have assets less than $10 million,
  • ensure compliance with securities legislation,
  • have a well-developed business plan and demonstrate appropriate use of funds raised to support expansion and/or ongoing operations in Prince Edward Island,
  • not have any defaulted outstanding debt obligation on file in the Government of Prince Edward Island Central Default Registry.

Eligible investors include: any Canadian person, Canadian-controlled private corporation or other Canadian-controlled company that is at armโ€™s length to the investee company as defined under Section 251 of the Income Tax Act (Government of Canada). 

Application Steps:

Applicants: 

1

must submit the online application form, 

2

must accept the letter of offer forwarded to them which shall create a contract between Innovation PEI and the applicants. 

Documentation Needed:

No specific documentation has been identified.

Other Things to Note:

Equity Investor Incentive Guidelines will be available soon upon approval.  

Program Contact:

Equity Investors Incentive

Small Business Investor Tax Credit Program

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Amount:

$125,000

Type of Program:

Tax Credit

Description:

The New Brunswick Small Business Investor Tax Credit provides a 50% (for investments made after April 1, 2015) non-refundable personal income tax credit of up to $125,000 per year (for investments of up to $250,000 per individual investor) to eligible individual investors who invest in eligible small businesses and/or community economic development corporations (CEDC) or associations (co-op) in the province.

It also enables New Brunswick corporations and trusts to be eligible for a 15% non-refundable corporate income tax credit on eligible investments in small businesses in the province up to $500,000.  

Comments on Funding:

Funding is a 50% non-refundable personal income tax credit of up to $125,000 per year per individual investor.
The tax credit for a corporation and trust investor is 15% of the investment up to the maximum annual tax credit per corporation and/or trust investor of $75,000.

When It Ends:

Ongoing

Deadline:

Rolling Deadline

Eligibility:

The applicant can be a corporation, or an individual investor.

The applicant must be a corporation that:

  • is a private company,
  • is incorporated or registered to carry on business in New Brunswick,
  • has authorized capital consisting of shares without par value,
  • has net tangible assets less than $40 million (including associated corporations),
  • uses all, or substantially all, of its assets and income to generate active business income in New Brunswick,
  • pays, in each of the four years after the date of registration, at least 75% of its wages and salaries to individuals who are residents of New Brunswick unless the corporation exports outside of N.B. more than 50% of their goods and services, then, the requirement is for 50% of its wages and salaries to individuals who are resident of New Brunswick,
  • is not lending money, providing a loan guarantee or any other financial assistance, to a person for the purchase of shares included in a specified issue under the Small Business Investor Tax Credit Program,
  • will issue new shares, fully paid shares of the capital stock of a corporation that is registered under the Small Business Investor Tax Credit Act and will not include a replacement share. The issued shares will not be purchased by investors who have disposed of shares of the corporation after Dec. 10, 2002, and before the proposed share issuance.

The applicant must be an individual investor that:

  • is 19 years of age or older,
  • is a New Brunswick resident.

The total investment by an individual investor shall be not less than $1,000, and by a corporation and trust investor not less than $50,000.

Application Steps:

The applicant must complete a two-stage process:

1

application for a Certificate of Registration. A fee of $100 applies to each application for registration under the program. The Department of Finance will issue a Certificate of Registration.

2

application for a Tax Credit Certificate. A fee of $25 applies to each investor tax credit certificate requested. The Department of Finance will issue a Tax Credit Certificate to eligible investors on approved purchases of shares.

Documentation Needed: 

Corporation applicants must submit:

  • an investment plan,
  • the income tax return from the previous taxation year (including those of associated corporations),
  • a copy of the most recent financial statements of the corporation (including those of associated corporations) which have been reviewed by a person who is a licensed or registered member of an accounting association regulated by the Province or proforma financial statements for any start up corporation,
  • a copy of the corporate share registry and share transfer registry certified by an officer of the company,
  • a copy of the instrument of incorporation certified by an officer of the company,
  • a statement signed by each investor certifying that he or she understands the holding requirements for the shares and has read the investment plan,
  • a separate declaration stipulating that the eligible investor is in compliance with Small Business Investor Tax Credit Act Section 14.1(2) for each corporation and trust investor,
  • a certificate signed by the directors of the corporation to certify that the information contained in the application is complete and accurate.

Other Things to Note:

Tax credit for business shareholders/investors.

Program Contact:

Small Business Investor Tax Credit Program