Statements from Alberta innovation minister cast doubt on return of investor tax credit

Alberta Minister of Technology and Innovation, Nate Glubish.
Glubish: “the AITC was not working to create long-term sustainable tech companies.”

That Alberta’s government cares deeply about the success of the province’s tech sector is a message that Minister of Technology and Innovation Nate Glubish wants you to hear loud and clear.

Having recently taken on the portfolio in October, Glubish said he is focused on helping address pain points, like government procurement for startups and tech talent. But his talent file may prove difficult given fears that the recently passed “sovereignty act” could undermine any plans to attract talent into the province.

In a recent interview with BetaKit, the minister spoke about his goals for the new role, noting areas he plans to focus on and others he does not: such as the Alberta Investor Tax Credit (AITC).

While the Alberta government is actively recruiting skilled workers from Vancouver and Toronto, some have questioned whether politics toying with separation rhetoric will make such pitches unpalatable.

Speaking with BetaKit (prior to the passing of the sovereignty act), Glubish pushed away concerns that attracting much-needed tech talent to the province could be hindered by Bill 1, the Alberta Sovereignty Within a United Canada Act.

“What we are seeing in Alberta is a maturation of our tech ecosystem and the AITC wasn’t necessary for that.”

Glubish argued that the growth in Alberta’s tech sector, rather than the act, should be the focus of people’s attention. He was also adamant that the act is not about separation. “Alberta has no interest in seceding,” he said. “The Alberta government is not looking at separation.”

The minister emphasized instead the advantages of Alberta and the opportunities available provincially as the tech ecosystem matures. His goal, he said, is to have innovators from outside the province see what Alberta tech has become in recent years. Still, that typically anodyne message currently comes with political tensions.

“That’s my message to folks who would consider Alberta because of the technology excitement that we’re seeing and the opportunity we’re seeing, but may have had hesitation because of political elements,” Glubish added. “My hope is that they would take a minute to put their feet in our shoes and realize Alberta has benefited the rest of the country enormously over the last 50 years — and we’re proud of that, we’re proud of being Canadians — but in the last seven years, we have seen the rest of Canada tie her hands behind her back while still saying ‘we still want you to support the rest of the country financially.’ That’s not a fair deal. We’re just asking for some fair treatment.”

Glubish’s “fair treatment” argument is unlikely to assuage fears outside of the province, but recent venture capital investment reports support the notion that Alberta’s tech sector has matured in the last few years.

Much like the rest of Canadian tech, Alberta has begun to feel the downward effects of the economy. However, the province bucked that trend earlier this year with record quarters of venture capital investment.

Between 2019 and 2021, venture capital investment in Alberta increased by 147 percent, with a reported $227 million across 39 deals in 2019 and $561 million invested in 87 deals last year. To date in 2022, $509 million has been invested across 75 deals, according to the CVCA.

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Speaking to how the province plans to support that growth, Glubish talked again about talent, such as expanding immigration programs, and support for post-secondary institutions. Another area of focus for Glubish, which comes from his former role as minister of Service Alberta, is improving government procurement. In his current role as innovation minister, Glubish continues to hold responsibility for improving digital government services, and spoke to his hopes to make it easier for startups to get government contracts.

One area Glubish seems unlikely to tackle is investor tax credits. While the minister did not explicitly state that Premier Danielle Smith’s government won’t reinstate an investor tax credit like the AITC, he was forthright about his belief that such credits aren’t beneficial.

“What we are seeing in Alberta is a maturation of our tech ecosystem and the AITC wasn’t necessary for that,” Glubish said, referencing the credit that was cut in 2019 alongside the Digital Media Tax Credit and the Scientific Research and Experimental Development Tax Credit.

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At the time, the suspension of the tax credits was sharply criticized by some members of the tech community in Alberta.

However, current thoughts on the benefits and need for such investor tax credits in the province are mixed. Multiple investors that BetaKit spoke with in recent weeks have either been adamantly for or adamantly against AITC’s reinstatement.

For his part, Glubish was clear regarding which side he falls. “In my view as a venture capital investor, the AITC was not working to create long-term sustainable tech companies and meet the access to capital need in this province,” he said, referring to his time as an investment manager at Yaletown Partners before the start of his political career.

“I looked at the old Albert Investor Tax Credit, with my venture capital investor hat on, and I looked at a lot of the companies that received that. I knew many of those companies. I had looked at them as a fund manager, and I passed on them. [That] didn’t mean that I didn’t think they have potential … it meant that based on our criteria as an investment fund, they weren’t ready for our dollars.”

“So I worry about government intervening in and putting taxpayer dollars at risk as risk capital into companies that aren’t ready for risk capital,” Glubish added.”

Asked whether the government might consider an investor tax credit different from the AITC, Glubish argued that things like partnerships with sector support programs like Platform Calgary and Edmonton Unlimited would be more beneficial for the sector’s advancement.

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“The worst thing we can do for tech investment for the long term is to make it easier for people to invest in tech without helping them to make good decisions about what tech they invest in.”

The Alberta New Democratic Party (NDP), which created the credit, published its own tech sector strategy last year that, in part, proposed reinstating the AITC and Digital Media Tax Credit. Earlier this year, the NDP also introduced legislation (that was later killed) to create a provincial venture capital fund.

Similar tax credits to the AITC exist in a number of other provinces in Canada, including British Columbia, Manitoba, and Saskatchewan.

Tax credit or no, Glubish is bullish on continued government investment in the tech sector. “The fact that we’ve created a ministry of technology and innovation is a signal to Alberta but also to the rest of the world that we’re doubling down on tech, we know how critically important tech is for the future of this province,” he said.

“I think that the rate at which we’re maturing is so exciting that Alberta is soon going to be the dominant player in tech in Canada and will be unmistakably visible around the world.”

Meagan Simpson

Meagan Simpson

Meagan is the Senior Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.

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