David Mason, partner at Deloitte Canada and leader of Deloitte’s Ontario private company services tax team, believes that Ontario is not as productive as USA competitors in ICT because of the lack of support for innovation. At the moment, Ontario is offering a 10% refundable tax credit on their first $3 million of SR&ED expenditures, and a 4.5% non-refundable tax credit for all companies. Mason suggested that the Ontario SR&ED top-up should be higher to boost the local technology industry, especially since the 4.5% non-refundable tax credit cannot be utilized by many SMEs and start-ups.
Mason also suggested that a tax credit for investors could further help to spur investment in ICT start-ups. Bristish Columbia currently provides the following tax incentives for venture capital:
- Corporations that invest in a registered venture capital corporation (VCC) or a registered eligible business corporation (EBC) may receive a non-refundable tax credit against British Columbia tax equal to 30 per cent of the investment.
- Individuals who take advantage of the program receive refundable tax credits.
