Province unveils third tax credit aimed at boosting local economy

The Alberta government has unveiled a new tax credit aimed at spurring investment in the local economy, this one targeted toward businesses that are doing social good or that are located in rural communities.

The Community Economic Development Corporation (CEDC) tax credit program, announced in Calgary on Wednesday, will offer a 30 per cent tax credit to Albertans who invest in registered CEDCs — investment corporations or cooperatives that provide capital to locally-based entrepreneurs. In turn, the CEDCs will provide capital to Alberta small businesses that focus on social improvement or rural economic development.

“Business leaders told us that CEDC support has been missing in Alberta for too long,” said Minister of Economic Development and Trade Minister Deron Bilous, adding $9 million in tax credits will be available over the three-year life of the program.

Bilous said examples of businesses the tax credit could support include an agriculture business or tourism operator developing new products in a rural community, a business offering affordable food products to lower-income families, or a business owner offering training to employees to help them overcome employment barriers.

Bilous added that while the program is the first of its kind in Alberta, Manitoba and Nova Scotia have similar programs. In Nova Scotia, where the program has been in place since the 1990s, businesses that have benefited include co-operative coffee roasters, community farmers’ markets, wind farms and other renewable energy projects.

There are currently 11 CEDCs across the province in the process of getting registered so their investors can take advantage of the tax credit. One of those companies, Local Investing YYC, has already been approved. Co-founder Barb Davies said the tax credit program will accelerate the work of her investment co-operative, which provides capital to Calgary-based entrepreneurs generating social, environmental and financial returns.

“We could not be more excited,” Davies said. “Investors that are looking to diversify their portfolio into the local economy now have a means to do so.”

The Community Economic Development Corporation tax credit program is the third in a series of tax credits the NDP government has introduced in an effort to boost entrepreneurship and stimulate the Alberta economy.

The Capital Investment Tax Credit — which helps Alberta businesses take on new capital projects by returning up to 10 per cent of the costs of new machinery, equipment or buildings — has awarded $99 million in credits since 2016, with companies investing more than $2 billion.

The Alberta Investor Tax Credit — which offers a 30-per-cent tax credit to private investors who put money into companies doing work in non-traditional sectors such as information technology, clean technology, health technology, interactive digital media and game products, and digital animation — has awarded $30 million so far of a total $90 million available through the three-year program.