How Quebec and New Brunswick's provincial budgets could affect the tech sector

This week, Quebec and New Brunswick presented their budgets for fiscal year 2020. BetaKit has broken down some highlights from provincial budgets and how they could affect the technology and innovation community. .

Qubec is betting on tax insiders, going green

The Coalition Avenir Qubec (CAQ) party presented its 2020-2021 budget Tuesday. The budget marked the province's sixth consecutive balanced budget, ending fiscal year 2019-2020 with a surplus of $ 1.9 billion.

A notable addition to the budget was an investment and innovation tax credit, called C3i.

The CAQ budget proposed more than $ 1 billion over six years to stimulate business investment, innovation, commercialization and accelerate business and export growth. Over the next five years, the province plans to spend $ 556 million specifically to increase productivity through investments in innovation.

An important element of the budget, which was only briefly highlighted, was a $ 100 million pre-seed investment fund to bring public research innovations to the market. The budget also describes several tax initiatives, two tax assistance measures being refocused and some abolished and replaced.

A notable addition to the budget was an investment and innovation tax credit, called C3i. The government has indicated that the tax credit would provide nearly $ 526 million in support over five years to improve the competitiveness of businesses. The C3i is also expected to support 10,000 companies per year and is expected to generate $ 1.3 billion in investment by the time it expires in 2024.

The Quebec government has also proposed a synergy capital tax credit, aimed at encouraging established businesses to invest in the youngest with high growth potential. With this tax credit, artificial intelligence (AI) and life sciences companies that invest in a small qualified business could claim a non-refundable tax credit equivalent to 30% of the value of their investment in eligible shares.

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Government has pledged to spend $ 334 million over six years on research and development, including $ 12 million to encourage the use of AI and $ 97.5 million to improve use accessibility and commercialization of research.

AI is a booming sector in the province. Quebec is home to the federal government's AI supercluster and a number of high-performing AI startups, such as Stradigi AI, which closed a $ 53 million funding round in November, and Element AI, which raised $ 200 million in Series B in the fall.

The provincial government is also betting on the green economy, committing $ 6.7 billion to the idea. The budget promised almost $ 800 million in additional spending on cleaner technologies. Some investments in this framework include $ 14 million in the green hydrogen sector and $ 27 million in the electric vehicle industry.

Innovation zones will also be implemented across the province to increase the commercialization of innovation, exports, local and foreign investment, and business productivity. The government is providing $ 20 million to the initiative. The government is also providing $ 10 million to increase support for the innovation program, which provides direct funding for commercial projects.

The government has proposed $ 25 million to enable small and medium-sized enterprises (SMEs) to implement best business practices and to intensify their collaborative efforts with regional accelerators and incubators.

RELATED: CDPQ Commits $ 50 Million to Seed Funds in Quebec

The budget also included $ 157.5 million by 2024-2025 to stimulate foreign investment and export growth and accelerate the growth of SMEs. In order to recruit and retain foreign talent, the government also plans to set up a tax holiday for foreign researchers. Like many other regions of Canada, Quebec has faced challenges in retaining enough technological talent to fill jobs.

Finally, the province plans to create a one-stop service to help businesses, foreign researchers and experts obtain certificates of eligibility. This initiative should make it possible to recruit around 150 foreign researchers and experts each year.

New Brunswick Seeks To Attract New Business

New Brunswick's Progressive Conservative governments tabled a $ 10.2 billion budget on Tuesday. The budget was balanced, with a proposed surplus of $ 92.4 million for the 2020-2021 fiscal year, which resulted in a reduction of $ 129.3 million in New Brunswick's debt.

Province Cut $ 2 Million In Funding New Brunswick Opportunities, a department that connects local and global businesses in traditional and emerging industries. The objective of the departments is to make the province an entrepreneurial crossroads.

In order to attract international talent and investment, the province has offered to open new offices in Europe and India.

At the same time, the province has allocated $ 4 million in financial assistance through the Northern New Brunswick Economic Development and Innovation Fund, which funds innovative startups. The budget also offers a special service for large projects to help proponents navigate the regulatory and approval process. The government has also committed to normalizing funding for economic development in order to reduce duplication and improve oversight.

The budget committed to adjusting policy and regulations to facilitate the development of emerging technologies. This is in part an initiative to measure and reduce the regulatory burden on New Brunswick businesses with the goal of reducing it by $ 14 million by March 2021.

The province is also partnering with the federal government to increase immigration to the region to 10,000 people a year by 2027. The budget proposes a program to help newcomers gain faster recognition of their credentials and to help them cut red tape when opening a business.

In order to attract international talent and investment, the province has offered to open new offices in Europe and India.

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The province has also introduced several tax breaks for the private sector, including a 50% reduction in "double taxation" over four years. Double taxation levies a provincial tax in addition to the municipal tax for buildings such as rental properties. The reduction is aimed at attracting more people to settle and do business in the province.

Finally, the Government of New Brunswick will provide $ 36 million for investments in climate change initiatives and an additional $ 9 million to ensure the competitiveness of the natural gas distribution network.

Manitoba was the third province scheduled to table its budget this week. However, opposition from the New Democratic Party of Manitoba prevented the Progressive Conservative government from presenting the budget.

The opposition also refused to allow the Minister of Finance to read the budget speech. Participants who read the budget signed agreements to hide the details of the budget before it was tabled.

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