Nova Scotia Tax Credit Incentive for the most important new business start-up tool in the world.
New Nova Scotia proposal suggests film industry type labour-based refundable corporate tax credit system for a wide variety of start-up, creative, cultural and social businesses.
Crowdfunding has quickly moved from trendy buzzword to a mainstream fundraising model. In less than ten years, Kickstarter has attracted more than ten million contributors pledging over $2 billion, funding more than 100,000 individual projects. Rival fundraising platform Indiegogo can boast of a campaign that single-handedly generated $12 million in pledges. Numbers like these make crowdfunding an attractive option for first-time entrepreneurs and established businesses alike.
But even with tools like this available to creators; business starters and job creators in Nova Scotia are still at a deep disadvantage. Our communities have been drained of capital. Networking opportunities to connect with people who have knowledge, experiences, connections, assets and capital are rare because there is simply very few of those people and things within a thousand miles of Nova Scotia. Worse, supply lines, scenes, mentors, talent and all the things that inspire business success are almost as rare as debt and equity financing. Almost. Nova Scotia, like all rural regions has been nearly sucked dry of our natural resource created wealth. Our productivity, a measure of how well capital is employed in an economy, is less than 75% of the Canadian average, which in turn is only 75% of US productivity.
We are at a deep geopolitical and productivity disadvantage. Even as the US exchange rate tips the scales heavily in favour of Canadian business, it does not make up for the more than 40% productivity disadvantage and the geopolitical disadvantages. When US money does come to Canada it's coming to Toronto, Vancouver or Montreal and we have no currency advantage over those competitors.
But there is a way! A proven strategy that is egalitarian, accessible, easy to administrate, accountable and effective. It can improve capital investment and start-ups by an order of magnitude within one year and double that within ten. It's a strategy created right here in Nova Scotia, proven to work in creative industries and copied Federally, by other provinces and states, and countries the world over. We are experts at administrating it.
Labour-based Refundable Corporate Tax Credits.
Applying the Tax Credit strategy, the unlikely Nova Scotia-made economic development success story of the last 20 years, that created and grew the film and TV industry in Nova Scotia can be used to attract and grow Kickstarter-based business start-ups in, and to, Nova Scotia. If we act quickly we can become the Kickstarter capital of Canada within two years. The goal in the first year would simply be to 'punch our weight' in the Canadian start-up market place. To do that we'd have to increase our business ten fold. An attainable, measurable goal.
The idea is simply this: Successful Kickstarter campaigns, meaning projects that have successfully raised their financing, produced their product, whatever it is, and reported their business results as an incorporated Nova Scotia company with intellectual property rights owned majority by Nova Scotians (defined as people who pay taxes in Nova Scotia), are eligible to receive a labour-based tax credit up to 50% of their Nova Scotia labour expenditure or 25% of their total Kickstarter financing, whichever is less.
The Tax Credit system has many favourable features and advantages over poor performing and ill-defined economic development strategies.
Kickstarter by the numbers https://www.kickstarter.com/year/2014/data?ref=yir2014
Writing about life, citizenship, and Nova Scotia.