Canada: Alberta Introduces Two New Tax Credits For Industry-Specific Investment And Job Creation

Last Updated: February 24 2017
Article by John A. MacDonald and Darian Khan

 As part of its Alberta Jobs Plan, the Government of Alberta ("Government") recently introduced two new tax credits—the Alberta Investor Tax Credit ("AITC") and the Capital Investment Tax Credit ("CITC"). These tax credits, which came into force on January 1, 2017 under the Investing in a Diversified Alberta Economy Act1("Act"), aim to incentivize economic growth and create jobs outside of the energy sector in Alberta.

This article highlights key criteria and benefits of the AITC and CITC and how to apply for these credits.


Overview and Purpose

The AITC is a three-year, $90 million program that provides a 30% tax credit to eligible investors who provide capital to small businesses operating in certain "non-traditional" sectors of the Alberta economy: research, development or commercialization of new technology, new products or new processes, interactive digital media development, video post-production, digital animation or tourism.

Eligible Investors

Individuals and corporations paying tax in Alberta qualify for the AITC. In either case, the investor must be an "eligible investor". For individuals, this means being an Alberta resident or having business income in the province. For corporations, this means having a permanent establishment in Alberta.

In order to qualify as eligible investors, individuals must also own less than 50% of the equity in corporations in which they invest.

Eligible Investments

The AITC applies to the purchase of shares of "eligible business corporations" ("EBCs"), which are generally small businesses that:

  • are registered under the Alberta Business Corporation Act;
  • employ no more than 100 employees, including affiliates;
  • have more than 80% of their assets in Alberta and at least $25,000 in equity capital;
  • pay at least 75% of wages to employees in Alberta, if non-exporting (50% if exporting); and
  • have 50% or more of their business activities in the designated non-traditional sectors.

Investors may invest in an EBC directly by purchasing its shares or indirectly by purchasing shares of a venture capital corporation ("VCC"). The requirements for VCCs are:

  • incorporation under the Alberta Business Corporations Act;
  • no previous business carried on;
  • equity capital of at least $25,000;
  • limited special rights and restrictions on shares; and
  • articles of incorporation restricting the business to that of assisting the development of small businesses.

Publicly-traded corporations may also qualify as EBCs or VCCs, but eligible share purchases in public companies may only occur on the primary market.

How to Apply

EBCs and VCCs seeking to use the AITC to attract investors must register online with the Government. Registration for the AITC opened on January 16, 2017, but investments made as of April 14, 2016 may be retroactively eligible for the AITC. The AITC is available on a first-come, first-served basis until the $30 million annual funds are fully deployed.

Receipt of the AITC and Conditions

Upon receiving equity from eligible investors, registered EBCs and VCCs apply for tax credit certificates on behalf of their investors. The EBCs and VCCs then distribute these certificates to their investors who may claim the AITC.

Individuals are eligible for a maximum tax credit of $60,000 per year (on a $200,000 investment). There is no yearly maximum for corporations, but the maximum eligible investment in a single corporation is $5 million per tax year and $10 million in total under the program. The AITC is refundable for individual investors and non-refundable for corporations. For both individual and corporate investors, the AITC may be carried forward for up to four years. Investments in EBCs or VCCs must be for at least five years—otherwise, the Government may revoke the AITC.

Additionally, EBCs and VCCs must satisfy a number of reporting requirements throughout the period of investment.


Overview and Purpose

The CITC is a two-year, $70 million program that provides a 10% non-refundable tax credit on a corporation's eligible capital expenditures. The CITC targets the manufacturing, processing and tourism industries to "encourage companies to make timely capital investments by returning a percentage of the company's costs, including the purchase of machinery, equipment and buildings."2

Eligible Corporations

The CITC is available to corporations who meet the requirements in the Act and its regulations. Eligible corporations must generally be registered under the Alberta Business Corporations Act and involved in one of the specified industries.

Eligible Investments

The CITC applies to purchases of "Eligible Qualified Property"—such as machinery, equipment and buildings—to be used for manufacturing or processing goods, or providing or operating tourism infrastructure. The eligible costs for these purchases align closely with the Capital Cost Allowance rules in the federal Income Tax Act.

The minimum amount of an eligible CITC investment is $1 million, and the maximum total tax credit a company may obtain from the program is $5 million (on a $50 million investment).

How to Apply

To participate in the CITC program, corporations must apply online and go through a competitive selection process. The first of three intake periods runs from January 16 to February 15, 2017. As part of its application, a corporation must submit an economic impact assessment, including:

  • the dollar value of the investment and its timeline;
  • the employment impact and inclusion of under-represented people or groups;
  • any novel product or service development;
  • modernization or productivity improvements, including supply chain impacts; and
  • the community and regional impact, including environmental performance.

If satisfied that a corporation is eligible and its proposed investment is in the public interest, the Government may issue a conditional approval letter to the corporation.

Receipt of the CITC and Conditions

After receiving conditional approval of its CITC investment proposal, a corporation has two years to acquire the eligible capital property. The corporation then applies to the Government for a tax credit certificate in respect of the acquired property. The tax credit is non-refundable but may be carried forward for 10 years.

The CITC program also requires participants to self-report the status of their investment plan to the Government every 180 days, as well as any contravention of the Act or specified corporate change, such as an amalgamation or dissolution.


1 SA 2016, c I-10.5.

2 Government of Alberta Press Release, "Alberta Jobs Plan supports businesses and encourages investment to create jobs", (April 21, 2016) online:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.