C HAPTER 10: T HE I NNOVATION AND P RODUCTIVITY T AX C REDIT – A R ECOMMENDATION FOR C ANADA
Investments in seed and start-up companies have a huge multiplier effect (8 to 10 times) for the Canadian economy, attract later stage follow on investments (4 to 5 times) and are virtually self- financing for the government portion of the funding (within a two-year period). Labour Sponsored Investment Funds (LSIF) tax credits have been very successful in attracting large pools of capital for private equity investment. The LSIF (and British Columbia) tax credit needs to be extended to angel investments. The NAO is seeking a tax credit program for qualified investments that recognizes the potential value and prosperity these activities can create. The NAO recommends public policy planners make it an overarching objective for governments to seek out and leverage the strategic value of angels’ funds in our national innovation chain. This should be a motherhood priority.
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