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Nova Scotia startup companies and small and medium-sized businesses will benefit from more investment, thanks to a new Innovation Equity Tax Credit launched today by Finance and Treasury Board Minister Karen Casey.
The new tax credit applies to investments up to $250,000 in eligible businesses, which is $200,000 more than the current Equity Tax Credit. Nova Scotian investors will receive a tax incentive of 35 per cent, or 45 per cent in priority sectors of oceans technology and life sciences.
“This new tax credit encourages Nova Scotians to invest in our home-grown entrepreneurs and local companies so they can drive growth, be more competitive and succeed,” said Ms. Casey. “It will add to our ongoing efforts to improve the business climate in Nova Scotia for innovation-driven entrepreneurship by doing things differently to support economic growth.”
The revised regulations outline that Nova Scotia businesses less than 10 years old may qualify for funding. Investors often bring expertise, advice, mentoring and networks to the businesses they have invested in.
The province is also exploring options to expand the tax credit through legislation this spring. Those options include making corporations and qualified venture capital funds eligible for the credit.
The new tax credit focuses on innovation-driven entrepreneurship and narrows business eligibility to priority areas. The current equity tax credit, established in 1994, will be phased out as part of the 2019-20 Budget, to enable time for businesses to adjust.
The new tax credit is effective immediately. To view the regulations visit, https://novascotia.ca/just/regulations/rxaa-l.htm#inctax .
FOR BROADCAST USE:
Nova Scotia startups will benefit from a new Innovation Equity Tax Credit that encourages more local investment.
The new tax credit focuses on innovation-driven entrepreneurship and narrows business eligibility to priority areas, including ocean technology and life sciences.
Finance and Treasury Board Minister Karen Casey says new investments in local companies will help to create a stronger Nova Scotia.
This will help build on the flourishing startup community we have in the province.
The new tax credit is effective immediately.
The investment tax credit discussion in Atlantic Canada has been intensifying lately, and now Senator Colin Deacon is taking up the cause. These provincial taxation measures give private investors a tax break if they invest in approved companies. All four Atlantic provinces now offer these credits, as do most Canadian provinces and American states. Players in the startup community have been pushing for improvements for ages – a position I’ve advocated for in this column several times over the years. Those calls are now intensifying. In June, a group headed by Atlantic Canada Opportunities Agency exec James Curry issued a discussion paper recommending these credits be harmonized and be offered to investors outside a company’s home province. And now Deacon, a serial entrepreneur named to the Senate last summer, is pushing for similar changes. “A good startup ecosystem needs a good angel group,” said Deacon in an interview last week. “Equity tax credits are a great way for governments to leverage their investment in startups . . . through private investments.” He argues that equity tax credits (the name of the Nova Scotian program; each province has its own name for them) help to generate recurring waves of new companies year after year. That ensures the startup community keeps growing. The main problem is that each province grants the credit only to taxpayers who live in that province. This means the credits can attract only a small pool of investors – exceptionally small in dollar terms given that there is less wealth in Atlantic Canada than in other parts of the continent. Traditional Businesses are Linking up with Startups, to their Mutual Advantage Curry’s paper – co-written by BioNova head Scott Moffitt, Ogden Pond CEO Sean Sears, and Grant Thornton tax partner Keith MacIntyre – recommends that Atlantic Canada “regionalize” investment tax credits. That means the rules would be uniform across the region. (New Brunswick currently has the most generous tax credit by a long shot.) And it would mean investors in one province could receive a credit for funding a company in another province. Deacon and the paper’s authors even want the credits to reward investors who live outside the region. Some American states such as Arkansas and Minnesota already allow external investors to benefit from their tax credits. The thinking is that it’s more important to get money into growing companies than be concerned about where the investor is based. So far, the talk about enhanced credits is just that – talk. But there is more talk than a few years ago. (BioNova and Grant Thornton will continue the discussion with an information session in Halifax on Wednesday at noon at the Innovacorp Enterprise Centre on Summer Street.) Deacon says the discussion is intensifying because the region’s startup community has proven it can generate wealth, exports and jobs, and policy makers are looking for ways to perpetuate that success. Click here to continue reading
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BioNova, the association for Nova Scotia’s life sciences industry, has released its plan to at least double the biotech sector in the next 12 years, creating 2,700 jobs with average salaries of more than $100,000.
Titled BioFuture 2030, the report outlines a plan to increase the number and size of life sciences companies, with the goal of increasing jobs, investment and research. Penned by BioNova staff with the aid of a 10-member advisory group, the report was released Wednesday at a ceremony in Halifax attended by government and industry leaders.
It stresses that the life science sector now constitutes a $9 trillion industry worldwide, which provides a huge opportunity for Nova Scotia. The province so far has grown its industry strongly and should take concrete steps to ensure that it continues to capitalize on this booming industry, says the report.
“BioFuture 2030 allows us to see what is possible,” said BioNova chair Kevin Sullivan in the introduction of the report. “This strategy sets some ambitious goals that will benefit our sector, our community, and move our economy into a prosperous future.”
The report says Nova Scotia has already established a health and life sciences cluster comprising more than 100 companies with total annual revenues of more than $300 million. These companies directly employ more than 1,500 people, earning an average salary of about $61,000 a year – almost $25,000 more than the provincial average.
With an underlying theme of collaboration among industry, government and academia, the BioFuture 2030 report outlines a series of goals the industry hopes to attain by 2030. It also sets out five projects that will help to reach these goals, which are:
- Double the number of health and life sciences companies to 200.
- Almost triple the number of employees at these companies to 4,200.
- Increase the average annual income to $102,000 per employee.
- And almost quadruple annual sales for the sector to $1.1 billion.
The first project to help reach these goals will be to improve business development tools so companies grow more quickly. The biotech community plans to support and improve the best organizations and programs that help companies to grow. It also aims to identify and alleviate gaps in the programing.
Second, BioNova and its partners hope to attract more talent by improving their network and database of life sciences professionals. They also plan to promote Nova Scotia as a place for these professionals, and institute training programs to develop more talent.
Third, the community plans to develop the ecosystem by enhancing links between research institutions and industry. It is proposing the creation of industry-institution liaison groups, and chief innovation officers at key institutions and within government.
The fourth project involves communications and marketing. The community wants to broadcast the benefits of a strong life sciences industry to Nova Scotians, and use the same messaging to attract talent and capital to the province.
Finally, BioNova plans to establish a hub for life sciences sales and business development. It will create a life sciences-focused sales training program and create an understanding within the industry of what it means to be globally competitive.
“We have the right ingredients, the talent and resources needed to grow our sector, develop products that will change the world, and transform Nova Scotia’s economy,” said BioNova managing director Scott Moffit in a statement. “BioFuture 2030 is the recipe that pulls it all together.”
NEWS RELEASE: October 10, 2018 – Halifax, NOVA SCOTIA – Today BioNova released BioFuture 2030, the first industry-led economic strategy to grow Nova Scotia’s health and life sciences sector. BioFuture 2030 leverages the expertise and resources within the sector to deliver the tools entrepreneurs need to commercialize life-changing research, attract investments, create jobs, access new markets and improve the quality of life of Nova Scotians.
“The comprehensive strategic plan, BioFuture 2030, is a call to action for all Nova Scotian life sciences organizations,” said Andy Fillmore, Parliamentary Secretary to the Minister of Canadian Heritage and Multiculturalism and Member of Parliament for Halifax, on behalf of the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development and Minister responsible for the Atlantic Canada Opportunities Agency (ACOA). “Taking a sector-wide approach and sharing best practices will speed up and spread out the adoption of innovations and leverage new ideas in world-class health products for commercialization, making the sector stronger as a whole.”
The Government of Canada, through ACOA, is providing a $495,000 contribution to BioNova to further the development, growth and support of health and life sciences companies. The non-repayable investment, provided through ACOA’s Business Development Program, builds on the commitments made by the Government of Canada and the four Atlantic Provinces to drive economic growth through the Atlantic Growth Strategy by making strategic investments in initiatives that build on the region’s competitive advantages, such as its strong export potential, growing innovation ecosystem, and skilled workforce.
“Our CEOs see health and life sciences as a driver of economic growth,” said Scott Moffitt, Executive Director of BioNova. “This is our action plan to compete for a piece of the $9 trillion global health and life sciences economy.”
BioFuture 2030 is the result of over 50 in-depth interviews and numerous collaborations between CEOs and industry leaders across Nova Scotia. These sector champions shared their ideas on how making the health and life sciences industry a priority would deliver economic and health benefits to Nova Scotians and Canadians, as well as prepare companies for success on the world stage.
The vision of BioFuture 2030 is to achieve a connected and collaborative Health and Life Sciences community that reaches its full potential. The plan sets out a clear path for implementation and will be led by five action teams that will focus on making connections, recruiting talent, improving public policies, unifying the sector’s value proposition and building a sales culture.
“We have the right ingredients, the talent and resources needed to grow our sector, develop products that will change the world and transform Nova Scotia’s economy. BioFuture 2030 is the recipe that pulls it all together,” continued Mr. Moffitt.
Hosted at the Life Sciences Research Institute, the launch was attended by over 50 health and life science industry leaders. Members of government and Industry leaders were there to present the plan including Andy Fillmore, Member of Parliament for Halifax, Jeffrey Mullen, Director of Enterprise Development, Atlantic Canada Opportunities Agency, Brian Lowe, Vice Chair of BioNova, and Peter Hickey, CEO of Adaptiiv Inc.
Download the full plan at www.BioNova.ca/BioFuture2030
Download a copy of the BioFuture logo and other graphics here
BioNova leads, accelerates, and advocates for Nova Scotia’s growing health and life sciences sector. Since 1993, BioNova has been accelerating the growth of its member companies. By hosting networking and educational events, and providing connections to potential funders and business resources, BioNova helps companies succeed. While these companies commercialize life-changing research to improve healthcare, provide healthier food, and develop sustainable solutions, BioNova advocates on behalf of the sector. BioNova champions the sector’s cluster of world-class research facilities, incubator programs, and companies who, together, bring investment and jobs to Nova Scotia.
For further information, media may contact:
Marketing Manager, BioNova
Read full plan here
By 2025, Canada will double the size of the health and biosciences sector and become a top-three global hub by: leveraging and advancing innovative technologies; attracting and retaining capital, skills and talent; and ensuring a vibrant ecosystem that will unleash the full potential of the sector and lead to improved health outcomes.
Read full issue of LINK magazine here.
Like most provinces in Canada, Nova Scotia spends about 40 per cent of its budget on health care. This year the provincial health department’s budget is $4.37 billion(1) . That’s over $1 million a day.
Yet our health care system is ailing with overcrowded emergency rooms, lengthy wait times, and over 50,000(2). Nova Scotians on a provincial list looking for a family doctor.
As our population ages, health care costs are projected to grow well beyond sustainable levels. So what can be done to improve a situation that has, at times, been called a “crisis” by patients and clinicians?
Nova Scotia’s Health Minister Randy Delorey said recently, in an interview with The Star Halifax, “… better health care is not always defined by throwing more money at it. You need to make sure that where you are investing the money are the right areas that are going to provide results.”
Healthcare Solutions 2020 – Health Care Innovation Project
Rather than attempting to manage an unsustainable health care system by cutting spending, BioNova – Nova Scotia’s health and life sciences association – is proposing a different approach to support the system; one that facilitates the adoption of new medical technologies. Working in partnership with MEDEC, the association of Canadian medical technology companies, BioNova is spearheading Healthcare Solutions 2020, a health care innovation project for Atlantic Canada. The project is led by a committee of Canadian health care innovators from both industry and government.
Paul Bradley is managing the health care innovation project. As a former vice president of strategic affairs at Johnson & Johnson Medical Products and the past chair of MEDEC, he is pleased to have assembled such an accomplished and diverse committee. “Having committee members who are embedded in our health care system and those representing the private sector brings a unique blend of perspectives,” says Bradley.
This committee will map out an approach to empower the region’s health care system to adopt new medical technologies and transform it into an economic driver. “Adopting made-in-Nova-Scotia innovations has the potential to both increase the quality of our health care and manage our costs,” says Scott Moffitt, Managing Director of BioNova.
Potential of Our Health and Life Sciences Sector
As a sector, health is a booming industry world-wide. The Canadian Venture Capital & Private Equity Association recently posted that Nova Scotia’s investment scene is also heating up, attracting $38 million in venture capital in the first quarter of 2018.
Nova Scotia’s world-class research facilities and incubator programs are already galvanizing a cluster of health and life science companies. Unfortunately, as long as the health care system is seen as a cost, and as Paul Bradley, Healthcare Solutions 2020 Project Manager long as administrators fail to be early adopters of home-grown innovation, this region will fail to realize the economic potential of the global health revolution.
Barriers to Adoption of Innovation
There are multiple barriers affecting the adoption of new medical technologies into Canada’s 13 individual provincial and territorial health care systems, from siloed budgets among hospitals and home care services to a procurement process that is price-based.
When it comes to the adoption of new medical technologies, Paul Bradly sees a broader, value-based process as the way forward. He describes a scenario of a company developing a new computer navigation technology for surgery that would enable the surgeon to use minimally invasive incisions. “It may mean spending more of the operating room’s budget, but with fewer days in hospital and a shorter rehab, the savings are significant,” he says. “Yet, because the hospital’s budget is separate from the home care budget, it makes it tough to reconcile the value delivered by the new technology.”
Yet, procurement is only one piece of the puzzle. Private sector innovation often enters the health care system through government funded pilot projects. Unfortunately, once companies emerge from these pilot programs they often face the commercialization valley of death. Even if the pilot has a good outcome, there is no clear process to scale it and bring the new technology to market. This approach is not serving our health care system well.
Moving Towards Value-Based Health Care
To strengthen Nova Scotia’s health and life science sector there needs to be stronger links between the research performed here, the companies that start here, and the public system that provides the majority of health services. “When companies move beyond the pilot stage, not only does it have a positive impact on the economy, but patients gain access to breakthrough technologies that improve their quality of life,” says Bradley.
The Healthcare Solutions 2020 committee envisions a value-based health care system that breaks down the budget silos and improves data collection so product or service performance is tied to patient outcomes. The committee is also reviewing what other jurisdictions have done to support the adoption of health care innovation, including:
̵ creating a single point of entry for companies to pitch their technology,
̵ establishing the position of a Chief Health Innovation Strategist, a role that would facilitate connections between health care buyers and innovative vendors, and
̵ developing policies that support industry taking the lead in developing innovative solutions to defined public health problems.
“Our purpose is to create a roadmap that supports innovation adoption and better recognizes total benefits to health care,” says Bradley.
Health Care Can Be an Economic Driver
Healthcare Solutions 2020 is about economic growth as well. By establishing a system that encourages local innovation adoption, startup companies gain access to clinical users, engage and learn from a first customer and receive international validation when the companies home jurisdiction adopts the technology – all of this is in addition to helping the healthcare system. “It’s going to take all of us working together to build a health system that works and that is sustainable into the future,” says Moffitt.
1 Nova Scotia Department of Health and Wellness budget 2018-2019
2 Nova Scotians on a provincial list looking for a family doctor. http://www.nshealth.ca/need-family-practice-data