Deconstruction

May 1, 2009

Innovation Voucher Pilot Program

by Stephanie Sparks

In November, Minister, of Advanced Education and Technology Doug Horner announced the fifth step in the Alberta government’s nine-step action plan: the Innovation Voucher Pilot Program. The idea is to help commercialize technology developed by Alberta’s entrepreneurs by offering them additional research and development funding. But as with any coupon scheme, there are strings attached.

1. Expiration Date: Unlike a carton of milk, the money won’t sour but it will disappear. Winners are required to use their prize money within nine months of the issue date.

2. These Locations Only: Like a gift card, the voucher is not free money and can’t be cashed in just anywhere. “Approved Service Providers” (any post-secondary or research organization in agreement with the Advanced Education and Technology ministry) can exchange the voucher for their services.

3. Cash Out: Don’t get greedy – an applicant can win $10,000 in the first round and $50,000 in a subsequent round, but won’t get any more cash than $60,000 over the course of the program.

4. Vouch for Me: The government predicts the two-year pilot program will assist 80 to 140 small businesses and entrepreneurs. Winners of the first round were announced in March, with a second round of applications to be accepted shortly after.

5. Some Restrictions: Businesses had better read the small print and be prepared to invest in 25% of project costs with their own money. Step 1 in the plan, Scientific Research and Experimental Development, has been criticized for offering a 10% tax credit whose actual value typically amounts to between 4% and 6% of eligible expenditures (wages, materials, equipment).