Finance
Innovation, Business and Rural Development
June 2, 2014
Encouraging Economic Diversification
Legislation Allows for Establishment of Venture Capital Tax Credit
Amendments to the Income Tax Act, 2000, which received second reading today, will allow for the implementation of a venture capital tax credit to complement the Venture Newfoundland and Labrador fund. The new fund was announced as part of Budget 2014: Shared Prosperity, Fair Society, Balanced Outlook.
“Our government is excited to allow for the establishment of a venture capital tax credit, the next step in proceeding with our new Venture Newfoundland and Labrador fund. Tax credits help mitigate financial risk to investors and thereby provide an incentive for them to put their money into companies that are in need of startup or expansion funds. While the details of the venture capital tax credit are still being finalized, these legislative amendments will provide the authority for the establishment of the tax credit and regulations to govern it.”
- The Honourable Charlene Johnson, Minister of Finance and President of Treasury Board
As announced in Budget 2014, the Provincial Government will invest in two Venture Capital Funds with $10 million to support Build Ventures, and a commitment to establish a Venture Newfoundland and Labrador fund. The Newfoundland and Labrador fund will focus on developing and providing assistance to Newfoundland and Labrador-based early-stage technology companies, as well as start-up enterprises in emerging and growth sectors.
“Our government wants dynamic entrepreneurs with exciting opportunities to be able to start and establish their businesses here. Venture capital can help them to do just that. Venture capital brings with it leveraged investment as well as strong mentorship to support success. The Venture Newfoundland and Labrador fund will be a partnership among the Government of Newfoundland and Labrador, the Newfoundland and Labrador Angel Network and other institutional and private investors. We are currently in discussions with the proponents of the fund along with other investors and will be rolling out the fund very soon.”
- The Honourable Susan Sullivan, Minister of Innovation, Business and Rural Development
The Newfoundland and Labrador fund is expected to focus on strategic sectors, improve access to larger venture capital pools, and leverage private sector investment. The Venture Newfoundland and Labrador fund will be in partnership with Growthworks Atlantic Limited, the Newfoundland and Labrador Angel Network, and other investors.
QUICK FACTS
- Amendments to the Income Tax Act, 2000 will allow for the implementation of a venture capital tax credit to complement the Venture Newfoundland and Labrador fund.
- Tax credits help mitigate the financial risk to investors and thereby provide an incentive for them to put their money into companies that are in need of startup or expansion funds.
- As announced in Budget 2014, the Provincial Government will invest in two Venture Capital Funds with $10 million to support Build Ventures, and a commitment to establish a Venture Newfoundland and Labrador fund.
- The Newfoundland and Labrador fund is expected to focus on strategic sectors, improve access to larger venture capital pools, and leverage private sector investment.
- The Provincial Government is currently in discussions with the proponents of the Venture Newfoundland and Labrador fund along with other investors and will be rolling out the fund in the coming weeks.
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Media contacts:
| Tansy Mundon Director of Communications Department of Finance 709-729-6830, 693-1865 tansymundon@gov.nl.ca |
Jennifer Tulk Director of Communications Department of Innovation, Business and Rural Development 709-729-4570, 728-4104 jennifertulk@gov.nl.ca |
2014 06 02 3:55 p.m.