Firms need look no farther than Cape Breton Island for a variety of valuable business incentives. R&D tax incentives and financing are available through Federal and Provincial governments as well as Community Business Development Corporations and other traditional banking sources.
FEDERAL FINANCING AND INCENTIVES
Atlantic Canada Opportunities Agency (ACOA) Programs: ACOA provides financing for the development/expansion or modernization of eligible small and medium sized businesses. Financing can also be provided for the development of new markets, improved efficiency, innovation and human resource initiatives. ACOA Cape Breton delivers programs on behalf of the Atlantic Canada Opportunities Agency such as the Business Development Program and the Atlantic Innovation Fund.
Atlantic Innovation Fund (AIF): The AIF provides financing to encourage R&D partnerships among private sector firms, universities and colleges, and other research institutions for the development of new or improved products and services.
The Business Development Program (BDP): The BDP can assist with financing for the development/expansion or modernization of a business. Financing can also be provided for the development or enhanced competitiveness of innovative ideas. This program focuses on small and medium size enterprises and provides interest-free, unsecured loans.
Business Development Bank of Canada (BDC): The BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to entrepreneurs.
Export Development Canada (EDC): EDC has developed a number of innovative ways to support foreign buyers of Canadian goods and/or services through loans, guarantees and lines of credit. EDC also now provides financing support for inbound foreign investment projects.
Canadian Commercial Corporation (CCC): The CCC offers two principal services: prime contractor service, and procurement service. With its prime contractor service CCC acts as a prime contractor, signing a contract with a foreign government and, in turn, entering into a contract with a Canadian supplier. When providing its procurement services CCC help a foreign government identify appropriate Canadian vendors and awards a contract that will satisfy foreign government requirements.
Federal Tax Credit (FTC): The FTC permits non Canadian-controlled private corporations to earn an Investment Tax Credit (ITC) of 10% of qualified expenditures for capital investment made in new manufacturing and processing assets in Canada.
Scientific Research and Experimental Development Tax Credits (SR & ED): The SR&ED Tax Credit permits non Canadian-controlled private corporations to earn an ITC of 20% of qualified expenditures for SR&ED carried out in Canada.
Sustainable Development Technology Canada Initiative (SDTC) :The $590M SD Tech Fund is aimed at supporting the late-stage development and pre-commercial demonstration of clean technology solutions: products and processes that contribute to clean air, clean water and clean land that address climate change and improve the productivity and the global competitiveness of the Canadian industry. SDTC does not require any repayments of the financial contributions it provides to funded projects through the SD Tech Fund.
Accelerated Capital Cost Allowance for Efficient and Renewable Energy Generation Equipment (Class 43.1): The Accelerated Capital Cost Allowance allows taxpayers an accelerated write-off of capital cost of certain equipment that is designed to produce energy in a more efficient way or to produce energy from alternative renewable sources.
Industrial Research Assistance Program(IRAP): The IRAP program can provide funding for 80% of internal salaries and 50% of contract/consultant labour up to a max $50,000.
Next Gen BioFuels Fund: The $500M NextGen BioFuels Fund supports the establishment of first-of-kind commercial scale demonstrations facilities for the production of next-generation renewable fuels and co-products. The Repayment Period will be for ten years after the conclusion of the Project Period.
PROVINCIAL FINANCING AND INCENTIVES
Investment Tax Credit (ITC): The ITC can provide an addition to the 10% Federal tax credit. Corporations making qualified capital investments in Nova Scotia are eligible for an additional 5% investment tax credit.
Scientific Research and Experimental Development (SR&ED): Under the SR&ED corporations, in addition to the 20% Federal tax credit, can earn an additional SR&ED of 15% of qualified expenditures for SR&ED carried out in Nova Scotia.
Payroll Rebate: Nova Scotia Business Inc’s payroll rebate is a performance-based incentive offered to eligible companies expanding in or locating to Nova Scotia. The rebate is a return (usually between 5%-10%) on your eligible gross payroll and is generally paid out annually over a term not exceeding five years.
Industrial Expansion Fund: The Industrial Expansion Fund is the most flexible financial assistance tool available to the provincial government. Assistance can be non-repayable.
Research and Development Tax Credit: The R&D Tax credit offers tax relief to Nova Scotia corporations that incur qualified scientific research and experimental development (SR&ED) expenditures made in Nova Scotia, as defined by the federal Income Tax Act. The credit is administered by Canada Revenue Agency (CRA) and is claimed in conjunction with with Federal SR&ED tax credits. A 15% rate is applied to all corporations that incur SR&ED expenditures in Nova Scotia, regardless of size.
Nova Scotia Energy Tax Credit: The Nova Scotia Tax Credit is a non-refundable tax credit equal to 25% of eligible capital investments in Nova Scotia on renewable energy sources or energy efficient investments made by a corporation in a given year. The credit can be used to reduce up to a maximum of 50% of the Nova Scotia tax on large corporations payable in a tax year. Any unused credit can be carried forward seven tax years.
Community Feed-in Tariff (COMFIT) Program: The Nova Scotia Community Feed-in Tariff (COMFIT) Program encourages community-based, local renewable energy projects by guaranteeing a rate per kilowatt-hour for the energy the project feeds into the province’s distribution electrical grid.
Nova Scotia First Fund: The R&D Tax credit offers tax relief to Nova Scotia corporations that incur qualified scientific research and experimental development (SR&ED) expenditures made in Nova Scotia, as defined by the federal Income Tax Act. The credit is administered by Canada Revenue Agency (CRA) and is claimed in conjunction with with Federal SR&ED tax credits. A 15% rate is applied to all corporations that incur SR&ED expenditures in Nova Scotia, regardless of size.
Clean Technology Fund: Innovacorp venture capital invests in early stage, clean technology companies in Nova Scotia that have a high growth potential and attractive risk-return prospects. Investments range from $100,000 to $3 million over the lifecycle of the investment.
Digital Media Tax Credit: The Digital Media Tax Credit is a refundable tax credit for costs directly related to the development of interactive digital media products in Nova Scotia. As of January 1, 2008 the credit rates were increased. Tax credit amounts will now be equal to the lesser of:
- 50 percent of eligible Nova Scotia labour expenditures; or
- 25 percent of total expenditures made in Nova Scotia
- A 10 percent geographic area bonus on labour expenditures (5 percent bonus on total expenditures) is available for products developed outside the Halifax Regional Municipality.
Film Tax Credit: The Film Tax Credit is a refundable tax credit for costs directly related to the production of films in Nova Scotia. As of September 1, 2007 the credit rates are increased. Tax credit amounts will now be equal to the lesser of:
- 25 percent of total expenditures
- 50 percent of eligible Nova Scotia labour expenditures; or
- A 10 percent geographic area bonus on labour expenditures (5 percent bonus on total expenditures) is available for films shot outside of the Halifax Regional Municipality. As well, a 5 percent frequent filming bonus is available to companies who have produced 3 films in a 24 month period.
Nova Scotia Co-operative Council: The Nova Scotia Co-operative Council offers the small business loan guarantee program and the immigrant small business loan program.
Innovacorp: Innovacorp has more than $60 million in capital commitments available for high growth technology companies from its Nova Scotia First and Clean Technology funds.
For a list of additional information on Nova Scotia incentives please visit the Nova Scotia Department of Finance website.
Community Business Development Corporation Financing
Depending upon the location of the business development or expansion, companies seeking financing and business counseling can choose from one of three local Community Business Development Corporations (CBDCs) located on Cape Breton Island. The CBDCs are:
Programs delivered at the island’s CBDCs include, the Self-Employment Benefit Program, Loans, and the Youth Loan Program.
MUNICIPAL FINANCING & INCENTIVES
Cape Breton Regional Municipality Tax Incentive for Downtowns and Business Parks: The Cape Breton Regional Municipality (CBRM) has a commercial tax incentive to promote downtown revitalization and business park development.
The following development or renovations to commercial property are available:
- Tax assessment increases of $100,000 or more are eligible for up to ten years of tax reductions.
- Tax assessment increases of less than $100,000 are eligible for up to five years of tax reductions.
- Total tax reduction of up to 50% over the phase-in period are possible.
TRADITIONAL BANK FINANCING
Cape Breton has a local presence for each of Canada’s major financial institutions. Listed below is a complete list of Cape Breton banks and credit unions. Nova Scotia’s credit unions in partnership with Nova Scotia Cooperative Council and the Government of Nova Scotia, offer support and promotes co-ops and credit unions by providing education, marketing and representation to government and industry.
BMO Bank of Montreal
TD Canada Trust
CIBC
Scotia Bank
Nova Scotia Credit Unions
For additional information on business financing please click on one of the following links:
Canada Business Nova Scotia Financial Information Guide
BizPal
Canadian Business Service Centre