Alberta Eliminates Several Tax Credit Programs

I’ve been away and not bothering much with this blog. While I was away, the Alberta Budget was introduced. It contains big hits for technology developers.  

The Interactive Digital Media Tax Credit program is being eliminated.  It had barely been enacted. 

The Alberta SRED credit will be eliminated effective beginning next year. In other words, only expenses incurred prior to January 1, 2020 will be eligible for the Alberta SRED program. The Federal SRED program will still be available to Alberta companies, but the change means a significant reduction in benefits to Alberta companies doing SRED. 

The Investor Tax Credit program is terminated now. 

I have long said that the Alberta government has been short-sighted for decades: the season of petro wealth would end, as all seasons do. Alberta has needed to diversify its economy. In my opinion, what is driving the 21^st century economy of the developed world is technology. Alberta needs to be a part of it. Abandoning tax credits that encourage tech development in Alberta seems a step in the wrong direction. Alberta has to compete with BC in the creation of a business and social environment that is friendly to tech developers, particularly when more people prefer the climate and landscapes of BC over those of Alberta than the other way around. 

Maybe Alberta will find other ways to enhance its attractiveness to tech development companies. The current government seems to think that lowering the corporation income tax rate will do the job, but lower income tax rates offer no appeal to companies that have yet to see their first dime of profit, and many tech developers are such companies.