The Yukon Liberals say they will expand the small business investment tax credit if elected, to spur investment by Yukoners in local companies.
The Liberals’ plan is to increase the ceiling for the tax credit from $1 million to $5 million, and to allow larger companies to qualify.
Ted Adel, the party’s candidate for Copperbelt North, said the move should help more local businesses attract investment.
“We need to help diversify our economy,” he said. “It needs a bit of a kickstart.”
As it stands, the tax credit allows Yukon investors to claim 25 per cent of an investment in a Yukon company as a credit on their individual income tax returns, to a maximum of $25,000 a year.
A total of $1 million in credits can be issued per year. The Liberals plan to increase that cap to $5 million, hoping it will generate $20 million of annual investment in Yukon companies.
Air North president Joe Sparling said he would welcome the changes. The airline is currently the main beneficiary of the tax credit program in the Yukon.
Sparling estimates that Air North has raised more than $11 million either directly or indirectly because of the tax credit.
“More than one in 15 Yukoners now has an equity stake in the airline,” he said. “That in my mind is an absolutely phenomenal number.”
He said the existing cap has caused the company to “meter out the share offerings,” and an increase to $5 million would allow it to offer more shares at once.
Sparling also said Air North is coming close to the current asset limit for eligibility for the tax credit, which the Liberals are now promising to raise.
“I think both of those changes would be of great interest to us,” he said.
Adel said the proposed changes are designed to spur investment in other businesses, not just to benefit Air North. The current program is not fully subscribed — in fact, the largest amount of credits issued in a single year was $525,000 in 2002. But Adel hopes expanding it will generate more interest in the program.
“The issue is that we need to promote it more within the businesses within the Yukon,” he said.
NDP Leader Liz Hanson has also spoken of wanting to expand the tax credit, but didn’t make any firm commitments this week. She said more evidence is needed before deciding where to set a new ceiling for the credit.
“I’m not setting that amount, and I’m not sure where (the Liberals) got that amount,” she said.
The NDP also unveiled plans to help the local business community this week, with an announcement that government contracts would be required to include training and apprenticeship opportunities for Yukoners under an NDP government.
Those criteria would be included in the tendering process for government capital projects.
The NDP would also adopt a best-bid policy, meaning that bids for government contracts would be evaluated based on more than just price.
“What we’re saying is a best bid may factor in more Yukon content… as opposed to simply saying it’s the lowest bid,” Hanson told the News.
The party also wants to create a funding stream to support community-based apprenticeship programs.
Shelagh Rowles, executive director of the Centre for Northern Innovation in Mining at Yukon College, said she supports any move to support apprentices. The college offers several apprenticeship programs, including carpentry, electrical work and welding.
“Certainly for any of the parties to generate interest and opportunity for apprentices, certainly I would see (that as) beneficial for training and opportunities for employment,” she said.
The NDP also announced this week that it would improve access to venture capital for Yukon small businesses if elected, possibly by working with First Nation development corporations, which have said they have about $500 million in capital that they’re interested in investing in the Yukon.
“First Nation development corporations already play a significant role in our economy… but the potential for repatriating some of their capital that’s currently outside the territory is huge if you create the right circumstances,” Hanson said.
The NDP would also continue to fund the YuWin local job board.
Also this week, the Liberals released their plan to build Yukon’s “knowledge economy,” with a view to reducing the territory’s dependence on the boom-and-bust resource sector.
They committed to building the redundant fibre-optic cable announced by the Yukon Party last year. Construction has yet to start on the project, which would see a line installed along the Dempster Highway to Inuvik, where it would connect with another line being built up the Mackenzie Valley in the Northwest Territories.
The cable would prevent the territory from losing internet access every time the fibre-optic line along the Alaska Highway is cut by construction crews in the summer.
Liberal Leader Sandy Silver has criticized the government for awarding that contract to Northwestel without putting it out to tender.
But Copperbelt South candidate Jocelyn Curteanu said completing the project as planned is “probably the fastest and easiest way to do it at this point in time.”
The Liberals also plan to create a $10-million economic infrastructure investment fund through the Yukon Development Corporation.
“It’s intended to support projects that grow in the sector of innovation, technology and science,” Curteanu said.
She also said the Liberals will improve connectivity in all Yukon communities, and will create an open-data catalogue “so the public can access (government) data freely on a public database.”
Contact Maura Forrest at maura.forrest@yukon-news.com