Tax Incentives to Boost Clean Growth

Equity investments, through venture capital (VC) and other means, are an important source of financing for cleantech firms; however, while Canada has a growing pool of investment capital, the amount available is significantly lower than in the US, relative to the size of the two economies.5 A study by Cycle Capital Top Challenges to Cleantech and Sustainable 3 Development Growth Technology Canada [...] An evaluation of the program found it generated more tax revenue than it expended and contributed to positive outcomes “We have real in job creation and revenue growth.9 strengths in the As part of its Jobs Plan, the Government of Alberta allocated $90 million over three years for the Alberta Investor Tax Credit to encourage investment in target sectors early stages of with strong growth potential [...] It is estimated that the program will support up to 4,400 new jobs and but we’re not contribute up to $500 million to GDP.10 doing enough In the US, more than 25 states have implemented some form of tax incentive for angel investors, ranging from a credit of 10% in Vermont to 100% in Hawaii.11 Early to scale and empirical evidence from a US state-level study shows that the introduction of an angel [...] While the firm loses the ability to claim the eligible expense in the future, that may be of low net-present value to a firm that is looking for financing to grow. [...] For instance, shares issued between 2007 and 2012 earned a premium in the range of 18-26%.16 Flow-through shares gives firms the option to pass-along the tax advantages if they are unable to use them.