INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT (RSA 2000 cI-10.5)

RSA 2000 cI-10.5

Alberta — Consolidated Statutes

© Published by Alberta King’s Printer Alberta King’s Printer Suite 700, Park Plaza 10611 - 98 Avenue Edmonton, AB T5K 2P7 Phone: 780-427-4952 E-mail: kings-printer@gov.ab.ca Shop on-line at kings-printer.alberta.ca Province of Alberta Office Consolidation Statutes of Alberta, 2016

Chapter I-10.5 Current as of December 10, 2024 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT

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Note All persons making use of this consolidation are reminded that it has no legislative sanction, that amendments have been embodied for convenience of reference only. The official Statutes and Regulations should be consulted for all purposes of interpreting and applying the law. Regulations The following is a list of the regulations made under the Investing in a Diversified Alberta Economy Act that are filed as Alberta Regulations under the Regulations Act Alta. Reg.

Amendments Investing in a Diversified Alberta Economy Act Agri-processing Investment Tax Credit ......... 82/2023 ........... 180/2024 Alberta Capital Investment Tax Credits ......... 204/2016 Alberta Investor Tax Credits .......................... 203/2016 ......... 70/2017, 231/2018, 186/2019 Community Economic Development Corporation Tax Credits ........................... 113/2018 ......... 186/2019

1 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT

Chapter I-10.5 Table of Contents 1

Definitions

Part 1 Investor Tax Credits 2

Definitions and

interpretation Division 1 Venture Capital Corporation Tax Credits 3 Registration as venture capital corporation 4 Requirements for registration 5 Certificate o f registration 6 Register of venture capital corporations 7 Permanent establishment 8 Restrictions on business and authorized equity capital 9 Restrictions on purchase o f shares and share certificates 1 0 Minimum capital requirements 1 1 Equity capital issues 1 2 Investment in small business 1 3 Investment for certain purposes prohibited 1 4 Control of small business — prohibitions 1 5 Non-arm’s length investment prohibited 1 6 Aggregate investment by v enture capital corporation 1 7 Action to be taken if investment becomes prohibited 1 8 Changes in eligibility 1 9 Permitted investments and authorized expenses 2 0 Investment protection account 2 1 Tax credit certificates 2 2 Repayment of tax credit amount 2 3 Voluntary reductions in capital 2 4 Voluntary cancellation of registration 2 5 Repayment on revoca tion, dissolution, amalgamation or cancellation

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 2 2 6 Liability of third party 2 7 Revocation or suspension of registration 2 8 Annual reporting Division 2 Community Economic Development Corporation Tax Credits 2 9 Registration as community economic development corporation 3 0 Requirements for registration 3 1 Certificate of registration 32 Application of sections 6 to 28 Division 3 Eligible Business Corporation Investor Tax Credits 3 3

Definitions 34 Registration as eligible business corporation 3 5 Requirements for registration 3 6 Certificate of registration 3 7 Additional equity capital 3 8 Application for tax credit certificates 3 9 Tax credit certificates 39.1 Limitation 4 0 Aggregate investment by eligible investor 4 1 Control of eligible business corporation 4 2 Revocation or suspension of registration 4 3 Consequences of revocation 4 4 Liability of third party 4 5 Voluntary cancellation of registration 4 6 Repayment of tax credit am ount on early redemption, acquisition or cancellation of shares 4 7 Repayment of tax credit amount — other share dispositions 4 8 Prohibited use of funds 4 9 Annual reporting Division 4 General 50 Definition 51 Reconsideration of decision 52 Refusal of further registrations and suspension of approvals 53 Securities Act not affected 54 Use of trust to acqui re shares limited 5 5 Regulations

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 3

Part 2 Capital Investment Tax Credits 56

Definitions and

interpretation 57 Eligible corporation 58 Conditional approval letter 59 Acquisition of eligible qualified property 60 Report to Minister 61 Tax credit certificate 62 Refusal of further applications 63 Calculation of tax credit 64 Revocation of conditional appr oval letter or tax credit certificate 65 Reconsideration by Minister 66 Renunciation of tax credit 67 Repayment on revocation 68 Liability for repayment of tax credit 69 Regulations

Part 2.1 Alberta Agri-processing Investment Tax Credit 69.1

Definitions 69.2 Eligible applicant 69.3 Eligible capital expenditures 69.4 Conditional approval letter 69.5 Report to Minister 69.6 Limit on acceptance of applications 69.7 APITC certificate 69.8 Calculation of tax credit amount 69.9 Modification, cancellation or revocation of conditional approv al letter or APITC certificate 69.91 Reconsideration by Minister 69.92 Renunciation of tax credit 69.93 Regulations

Part 3 General Matters 70

Definitions 7 1 Examination of records, documents and things 7 2 Investigation 7 3 Powers of investigators 7 4 Appointment of experts 7 5 Investigator’s report to Minister

Section 1

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 4 7 6 Extension of time 7 7 Offences 7 8 Limitation on prosecution 79 Collection and sharing of information 80 Debt due to Government

Part 4 Consequential Amendments and Coming into Force 81 - 82 Consequential amendments 83 Coming into force HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Definitions 1 In this Act, (a) “federal Act” means the Income Tax Act (Canada); (b) “Finance Minister” means the Minister determined under

section 16 of the Government Organization Act as the Minister responsible for the Financial Administration Act; (c) “Minister” means the Minist er determined under

section 16 of the Government Organization Act as the Minister responsible for this Act; (d) “prescribed” means pr escribed by regulation.

Part 1 Investor Tax Credits

Definitions and

interpretation 2(1) In this Part, (a) “affiliate”, if used to in dicate a relationship between corporations, means (

i) one is the subsidiary of the other, (ii) both are subsidiaries of the same corporation, (iii) both are controlled by t he same person or the same group of persons, or

Section 2

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 5 (iv) one of them is controlled by one person and the other is controlled by an associate, as defined in clause (c)(

v) or (vi), of that person; (b) “annuitant”, (

i) in relation to a trust governed by a registered retirement savings plan as defined in the federal Act, means an annuitant as defined in subsection 146(1) of that Act, and (ii) in relation to a trust gov erned by a registered retirement income fund as defined in the federal Act, means an annuitant as defined in subsection 146.3(1) of that Act; (c) “associate”, if used to in dicate a relationship with a person, means (

i) a corporation of which the person owns, directly or indirectly, shares carrying 10% or more of the voting rights for the election of the directors of the corporation, (ii) a partner of the person, (iii) a participant in a joint venture with the person, (iv) a trust or estate (

A) in which the person has, in the opinion of the Minister, a substantial beneficial interest, or (

B) for which the person serv es as trustee or in a similar capacity, (

v) a spouse, parent, grandparent, child, grandchild, brother or sister of the person, or (vi) a parent, grandparent, child, grandchild, brother or sist er of the spouse of the person, residing in the same residence as the person; (d) “community economic deve lopment corporation” means a corporation or cooperative registered under Division 2; (e) “cooperative” means a cooper ative incorporated under the Cooperatives Act; (f) “debt obligation” includes a mortgage, bond, debenture, note, loan or similar obligation, whether secured or unsecured;

Section 2

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 6 (g) “eligible business corpor ation” means a small business registered under Division 3; (h) “eligible investment” mean s an investment permitted by

section 12 or a prescribed investment; (i) “employee” includes a person engaged by a small business for a prescribed period calculated in the prescribed manner; (j) “equity capital” means, subject to

section 13(2), the consideration in money received (

i) by a corporation for its iss ued shares before or after its registration under Division 1 as a venture capital corporation, (ii) by a corporation for its iss ued shares before or after its registration under Division 2 as a community economic development corporation, (iii) by a cooperative for its i ssued investment shares before or after its registration under Division 2 as a community economic development corporation, or (iv) by a small business for its issued equity shares; (k) “equity share” means (

i) a share of a class of shares whether or not the share carries voting rights, but does not include a share having prescribed rights and restrictions, (ii) any warrant, option or r ight entitling the holder to purchase or acquire a share referred to in subclause (i), or (iii) any other prescribed security; (l) “major shareholder”, in rel ation to a corporation, means a person whose shares in the corporation, together with the shares, if any, owned by the person’s associates and affiliates, (

i) carry in the aggregate 10% or more of the voting rights, under any circumstances, attached to shares in the corporation, or (ii) carry in the ag gregate less than 10% of the voting rights, under any circumstances, attached to shares in the corporation if the person is a member of a common

Section 2

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 7 interest group whose members own or hold shares that allow the group to control the corporation; (m) “ownership” includes beneficial ownership; (n) “persons engaged by a small business” includes (

i) officers of the small business corporation, (ii) persons who perform work or provide services under a contract with the small business other than (

A) work or services under a contract that relates to the provision of accounting, legal or other professional services on a temporary working or ad hoc consulting basis, or (

B) work or services that are only incidental to the main purpose of a contract for the purchase or hiring of equipment, a n d (iii) persons who per form work or provide services for a small business or at its place of business who were engaged or employed through a temporary help service; (o) “small business” means a co rporation that has no more than 100 employees calculated in the prescribed manner; (p) “spouse” of a person means (

i) the person to whom th e person is married, or (ii) the person’s adult interdependent partner; (q) “subsidiary”, in respect of another corporation, means a corporation that is controlled by that other corporation; (r) “venture capital corporation” means a corporation registered under Division 1.

(2) In a determination under this Part as to whether a corporation is controlled by one or more persons, the relevant facts, including the existence of any option, warrant or right described in subsection (7)(b), must be taken into account.

(3) Without limiting subsection (2), a corporation is controlled by a person or a common interest group if

Section 2

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 8 (

a) shares of the corporation carrying more than 50% of the voting rights for the election of the directors are held by or for the benefit of that person or common interest group, and (

b) the voting rights carried by the shares referred to in clause (

a) are sufficient, if exercised, to elect a majority of the directors of the corporation.

(4) For the purposes of this Part, shares are deemed to be held for the benefit of an individual if they are beneficially owned by a corporation controlled by the individual or by an affiliate of that corporation.

(5) For the purposes of this Part, a corporation is deemed to own shares that are owned by its affiliates.

(6) The annuitant of a trust governed by (

a) a registered retirement savings plan, or (

b) a registered retirement income fund as defined in the federal Act is deemed to have purchased, held or disposed of shares that are purchased, held or disposed of by the trust.

(7) For the purposes of this Part except the definition of “affiliate” in subsection (1)(a), in calculating the total number of shares of a corporation that are owned or controlled, (

a) if a share carries the rig ht to more than one vote, each vote carried by the share is deemed to be a share, and (

b) there must be included in the total number of shares any share that would be issued or transferred following the exercise of (

i) an option, warrant or right, and (ii) a conversion right that is attached to a debt obligation or to a share of the corporation.

(8) For the purposes of this Part, 2 or more persons holding the same shares or holding shares jointly are to be counted as one shareholder.

(9) For the purposes of the holding of an investment referred to in sections 13 to 15, a small business does not cease to be a small business by reason only that, while the investment is held, the

Section 3

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 9 number of employees of the small business and its affiliates is more than 100 employees calculated in the prescribed manner.

(10) A reference in this Part to a series of transactions or events includes any related transactions or events completed in contemplation of the series.

(11) Any calculation or determination under this Part may be based on projections that the Minister considers to be reasonable.

(12) Subject to the regulations, a reference in this

section to a corporation includes a cooperative. Division 1 Venture Capital Corporation Tax Credits Registration as venture capital corporation 3(1) A corporation may apply to the Minister to be registered as a venture capital corporation.

(2) An application must be (

a) in a form approved by the Minister and accompanied with the information required on the form, and (

b) signed by one director and one officer of the corporation.

(3) The Minister shall register the corporation if the Minister is satisfied that the applicant meets the requirements set out in

section 4.

(4) Notwithstanding anything in this Act, the Minister shall not register a corporation as a venture capital corporation on or after October 24, 2019, irrespective of when the corporation applied to be registered. 2016 cI-10.5 s3;2019 c20 s19 Requirements for registration 4 The requirements for registration of a corporation as a venture capital corporation under

section 3 are as follows: (

a) the corporation must be incorporated or continued under th e Business Corporations Act; (

b) the corporation must not have previously carried on business; (

c) the corporation must have e quity capital of at least $25 000;

Section 5

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 10 (

d) the corporation must have a share structure consisting of only either or both of the following: (

i) common shares having no special rights or restrictions; (ii) common shares having speci al rights relating only to the redemption of the shares by the corporation; (

e) the corporation must have ar ticles that restrict the business of the corporation to assisting development of small businesses by (

i) making investments permitted by this Division, and (ii) providing business and managerial expertise to small businesses in which it has made or proposes to make an eligible investment; (

f) the corporation must m eet any other prescribed requirements for registration. Certificate of registration 5 On registration of a venture capital corporation, the Minister must issue a certificate of registration and record on the certificate the date of registration. Register of venture capital corporations 6(1) The Minister must maintain a register of venture capital corporations.

(2) The Minister must publish the register by posting the register on a publicly accessible website.

(3) The register must contain the following information in respect of each venture capital corporation: (

a) the name of the venture capital corporation; (

b) the date it was registered under this Part; (

c) the location of its registered office; (

d) any other prescribed information. Permanent establishment 7(1) In this section, “permanent establishment” has the same meaning as in the federal Act.

Section 8

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 11

(2) A venture capital corporation must establish a permanent establishment in Canada within 30 days after being registered and must afterward maintain a permanent establishment in Canada. Restrictions on business and authorized equity capital 8(1) A venture capital corporation must not carry on any type of activity other than (

a) making investments permitted under

section 19, and (

b) providing business and managerial expertise to small businesses in which it has made or proposes to make an eligible investment.

(2) No act of a venture capital corporation, including the transfer of property by or to it, is invalid merely because the act contravenes subsection (1).

(3) The equity capital of a venture capital corporation, including the equity capital referred to in

section 11, may be limited to prescribed maximum amounts. Restrictions on purchase of shares and share certificates 9(1) All issued shares of a venture capital corporation must be fully paid for in cash and must not be used for security for any loan.

(2) All share certificates of a venture capital corporation must conspicuously state the following on their face: “The value of these shares may be significantly affected by the revocation provisions in

section 21 and the repayment provisions in

section 22 of the Investing in a Diversified Alberta Economy Act.”

(3) Without the written approval of the Minister, a venture capital corporation must not alter (

a) its share structure, or (

b) a provision of its

article s respecting a matter referred to in

section 4(e).

Section 10

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 12 Minimum capital requirements 10(1) By the end of its first year after the date of registration under this Part and afterwards, a venture capital corporation must have equity capital of at least $50 000.

(2) A venture capital corporation must (

a) have a prescribed amount i nvested in eligible investments within the prescribed time limits, and (

b) keep that amount in eligible investments for at least the prescribed period.

(3) A regulation made for the purposes of subsection (2) may prescribe different amounts, time limits and periods for different circumstances. Equity capital issues 11(1) A venture capital corporation must apply to the Minister for approval to raise equity capital and the Minister may grant the approval subject to any conditions that the Minister may impose, including but not limited to (

a) a condition that the share s may only be issued, as the Minister specifies, to corporations and individuals as defined in

section 21(1), (

b) a condition setting the ma ximum consideration for which those shares may be issued to those corporations and individuals, and (

c) a condition that the equity capital be raised only for the purposes of investment in a small business referred to in

section 12(1)(

c) that is engaged in a prescribed business activity that is specified by the Minister in the condition.

(2) Notwithstanding anything in this Act, the Minister shall not grant approval on or after October 24, 2019 to a venture capital corporation to raise equity capital, irrespective of when the venture capital corporation applied for approval. 2016 cI-10.5 s11;2019 c20 s19 Investment in small business 12(1) A venture capital corporation may make an investment in a small business if the following criteria are met: (

a) subject to subsection (2), the small business, together wi th its affiliates, has no more than 100 employees calculated in the prescribed manner;

Section 12

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 13 (

b) at least the pres cribed percentage of the wages and salaries, determined in the prescribed manner, of the small business is or will be paid to employees who regularly report to work at operations located in Alberta; (

c) the small business, if required by a condition of the Minister, is or will be substantially engaged, as determined in the prescribed manner, in Alberta in a prescribed business activity that is specified by the Minister in the condition; (

d) the investment cons ists or will consist of (

i) the direct acquisition from the small business of equity shares issued for the purpose of raising new equity capital, (ii) the acquisition of equity shares issued by the small business in prescribed circumstances under a prospectus, offering memorandum or other disclosure document, (iii) the direct acquisition fr om an affiliate of the small business of equity shares of the affiliate, or (iv) the acquisition of prescribed limited partnership units; (

e) the funds paid by the venture capital corporation (

i) for any equity shares refe rred to in clause (d)(iii) are in turn invested in equity shares of the small business by the affiliate within the time limits provided for in

section 10(2), or (ii) for any limited partnership units referred to in clause (d)(iv) are in turn invested in equity shares in one or more small businesses by the limited partnership within the time limits provided for in

section 10(2); (

f) the investment is not prohib ited under sections 13 to 16. (2) Subsection (1)(

a) does not apply in respect of a small business in which a venture capital corporation previously invested at a time when the small business had fewer than 100 employees calculated in the prescribed manner.

(3) Despite subsection (1)(a), if (

a) a small business and anoth er corporation are affiliates only because one of them is controlled by one person and the other by one or more persons described in

section 2(1)(c)(iv) or (v), and

Section 13

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 14 (

b) the Minister is satisfied t hat the small business and the other corporation do not have any agreement, commitment or understanding to conduct, in concert, any business, then, in calculating the number of employees under subsection (1)(a), the Minister must not count the employees of the affiliate of the small business.

(4) A regulation made for the purposes of subsection (1)(

b) or (

c) may provide differently for different business activities. Investment for certain purposes prohibited 13(1) Subject to subsection (3), a venture capital corporation must not make or hold an investment in a small business if all or part of the proceeds of that investment are directly or indirectly used or intended to be used by the small business for any of the following purposes: (

a) lending; (

b) investment outside Alberta; (

c) investment in land, unless the investment is incidental or ancillary to the business activities, prescribed for the purposes of

section 12(1)(c), of the small business; (

d) acquiring securities, other than the acquisition of equity shares of an affiliate of the small business or units of a prescribed limited partnership that complies with the criteria set out in

section 12(1)(d)(iii) or (iv); (

e) purchasing good s or services from (

i) the venture capital corporation, (ii) a director, officer or shar eholder of the venture capital corporation, or (iii) an associate of a director , officer or shareholder of the venture capital corporation, other than (iv) services of the type descr ibed in

section 4(e)(ii) that are purchased at fair market value by the small business, or (

v) goods or services that are s old at fair market value to the small business in the ordinary course of the seller’s

Section 13

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 15 business as a seller of such goods or services on the open market; (

f) payment of all or part of a debt obligation, unless (

i) the Minister considers that the payment is necessary for the financial viability of the small business, or (ii) the debt obligation was incurred with the prior written approval of the Minister in anticipation of an investment in the small business by the venture capital corporation; (

g) as part of a transaction or series of transactions directl y or indirectly involving any of the following: (

i) the purchase or redemption of previously issued shares of the small business or one of its affiliates; (ii) the retirement of any par t of a liability to a shareholder of the small business or one of its affiliates or of a liability to a shareholder’s associate or affiliate; (iii) the payment of dividends; (iv) except in prescribed circumstances, the funding of all or part of the purchase by the small business of all or a substantial portion of the assets of a proprietorship, partnership, joint venture, trust or corporation; (

v) the funding of all or part of the purchase by the small business of any of the assets of a proprietorship, partnership, joint venture, trust or corporation at a price that is greater than the fair market value of the assets purchased; (vi) other prescribed events; (

h) other prescribed purposes.

(2) If a small business issues equity shares to a venture capital corporation in payment of all or part of a debt obligation that is the subject of an approval under subsection (1)(f)(ii), the original principal amount of all or part, as the case may be, of the debt obligation must, for the purposes of

section 2(1)(j), be treated as if it were money received by the small business. (3) Subsection (1) does not prohibit a venture capital corporation from making or holding an investment in a small business if the funds invested by the venture capital corporation were raised other

Section 14

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 16 than through the issue of equity capital approved by the Minister under

section 11. Control of small business — prohibitions 14(1) Subject to subsection (2), a venture capital corporation must not make or hold an investment in a small business if it and any other venture capital corporation or corporations, either alone or in conjunction with one or more of their (

a) associates or affiliates, (

b) shareholders or their associates or affiliates, (

c) directors or their associates, or (

d) officers or their associates, would own, directly or indirectly, shares carrying 50% or more of the voting rights for the election of directors of the small business or would, in any manner, control the small business.

(2) If the Minister considers that a small business in which a venture capital corporation has made an eligible investment is in financial difficulty, the Minister may by order authorize the venture capital corporation to temporarily control the small business under the circumstances and on the terms and conditions that the Minister determines. Non-arm’s length investment prohibited 15(1) A venture capital corporation must not make or hold an investment in a small business if any of the shares of the venture capital corporation are held by a major shareholder who is, or was at any time during the 2 years immediately preceding the investment, any of the following: (

a) a major shareholder of the small business; (

b) an associate of a major sha reholder of the small business; (

c) a voting trust for which the trustee votes shares of the s mall business; (

d) the small business or an as sociate or affiliate of the small business.

(2) A venture capital corporation must not make or hold an investment in a small business if the small business or an associate, affiliate, director, officer or shareholder of the small business

Section 16

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 17 provides or has provided, directly or indirectly, as part of any transaction or series of transactions, a loan, guarantee or any other financial assistance to any of the following: (

a) the venture capital corporation; (

b) an associate or affiliate o f the venture capital corporation; (

c) a director, officer or shar eholder of the venture capital corporation; (

d) a member of any common interest group in respect of the venture capital corporation; (

e) another person, for the purpose of that person making an investment in the venture capital corporation. Aggregate investment by venture capital corporation 16(1) A venture capital corporation must not make an investment in a small business if, as a result of that investment, the aggregate of all amounts received by that small business and any affiliates of that small business (

a) from the venture capital co rporation, directly or indirectly, would be greater than the prescribed amount, or (

b) from the venture capital corporation and any other venture capital corporation or corporations, directly or indirectly, would be greater than the prescribed amount for the prescribed period.

(2) For the purposes of subsection (1), if the Minister determines that one of the reasons for the separate existence of 2 or more small businesses is to increase the amount received from one or more venture capital corporations, the small businesses are deemed to be one small business.

(3) If the Minister makes a determination under subsection (2), the Minister must give notice of that determination to the venture capital corporations that have invested in the small businesses. Action to be taken if investment becomes prohibited 17(1) If an investment of a venture capital corporation becomes prohibited under sections 13 to 16, the venture capital corporation must dispose of that investment within 6 months after the investment becomes prohibited unless, within the 6-month period, the circumstances that caused the investment to be prohibited

Section 18

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 18 change so that it is no longer prohibited under any of those sections.

(2) If the Minister is satisfied that non-compliance with a provision of sections 13 to 16 by the venture capital corporation occurred even though its officers and directors exercised the degree of care, diligence and skill to ensure compliance with sections 13 to 16 that a reasonably prudent person would have exercised in comparable circumstances, the Minister may by order, with or without conditions, relieve the venture capital corporation from the consequences of the non-compliance for a period the Minister considers appropriate. Changes in eligibility 18(1) If a small business in which a venture capital corporation has made an eligible investment ceases to conform with

section 12(1)(

b) or (c), the venture capital corporation must dispose of the investment within 6 months after the small business ceases to conform with

section 12(1)(

b) or (c). (2) Subsection (1) does not apply if, within the 6-month period referred to in subsection (1), the circumstances that caused the non-conformance with

section 12(1)(

b) or (

c) change so that the small business again conforms with

section 12(1)(

b) or (c).

(3) The Minister may by order (

a) relieve a venture capital co rporation from the requirement under subsection (1) to dispose of the investment to which subsection (1) applies, or (

b) extend the period within which the disposition must be made for an additional period not exceeding 6 months, if the Minister is satisfied that (

c) the prescribed requirements, if any, are met, (

d) the small business’s non-conformance with

section 12(1)(

b) or (

c) was not imminent at the time the venture capital corporation made the investment, and (

e) the small business did not use any of the investment proceeds it received for any purposes set out in

section 13 before ceasing to conform with

section 12(1)(

b) or (c).

Section 19

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 19 Permitted investments and authorized expenses 19(1) A venture capital corporation must not make any investments other than investments in the following: (

a) subject to a condition of the Minister under

section 11(1) (c), eligible investments; (

b) money on deposit in Alber ta at a treasury branch, credit union or member of the Canada Deposit Insurance Corporation or any other prescribed deposit insurance or guarantee plan; (

c) a security, as defined in the Securities Act, of a small business the equity shares of which would qualify as an eligible investment; (

d) the investment protec tion account under

section 20; (

e) any other prescribed investment.

(2) The annual expenses of a venture capital corporation must not be greater than a prescribed amount, determined in the prescribed manner.

(3) The amount prescribed for the purposes of subsection (2) and the manner prescribed for determining it may be different for venture capital corporations with different amounts of issued equity capital. 2016 cI-10.5 s19;2019 c20 s19 Investment protection account 20(1) A venture capital corporation must pay an amount of money equal to 30% of all amounts received by it as equity capital into an investment protection account that meets criteria and complies with conditions established by the Minister. (2) Subsection (1) does not apply if money that would otherwise be required to be paid into the investment protection account will, in the opinion of the Minister, be used to acquire an eligible investment.

(3) If the Minister is satisfied that (

a) a venture capital corporation has made an eligible investment or will use the money immediately to make an eligible investment, and (

b) the sum of

Section 20

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 20 (

i) the amount to be paid out of the investment protection account, (ii) any amounts previously paid out of the investment protection account, and (iii) any money described in s ubsection (2) that has been previously used to acquire an eligible investment is equal to or less than 3 7.5% of the venture capital corporation’s aggregate eligible investments, the Minister must, subject to subsection (8), authorize payment out of the investment protection account to the venture capital corporation in accordance with subsection (4).

(4) The amount to be paid under subsection (3) is the lesser of (a) 37.5% of the purchase price paid or to be paid for the eligible investment, and (

b) the total amount in the account.

(5) If (

a) the Minister determines that money is payable to the Finance Minister under

section 22, and (

b) there is sufficient money in the investment protection account to pay all or part of the amount payable, the venture capital corporation must pay the money to the Finance Minister.

(6) Interest earned on money in the investment protection account is payable to the venture capital corporation.

(7) Despite subsection (6), if (

a) the registration of a venture capital corporation is revoked under

section 27, or (

b) a venture capital corporation fails to comply with

section 10(1) and (2), the venture capital corporation must pay to the Finance Minister all income earned in respect of the investment protection account between the time the account was opened and the time of revocation or the time at which the period referred to in

section 10(2) expires.

Section 21

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 21

(8) The Minister may refuse to authorize a payment under subsection (3) if the Minister considers that the venture capital corporation is contravening or has contravened this Act or the regulations.

(9) If a venture capital corporation acquires one or more of its own shares and the Minister is satisfied that no investor tax credits under

section 25.01 of the Alberta Corporate Tax Act or

section 35.01 of the Alberta Personal Income Tax Act have been or will be claimed in respect of those shares, the Minister may authorize an amount calculated in the prescribed manner to be paid out of the investment protection account to the venture capital corporation. Tax credit certificates 21(1) In this section, (a) “corporation” means a corporation to which

section 5 of th e Alberta Corporate Tax Act applies; (b) “individual” means an individual as defined in

section 35. 01 of the Alberta Personal Income Tax Act.

(2) A venture capital corporation must apply to the Minister on behalf of its shareholders that are corporations, in a form approved by the Minister and within the time provided for in the regulations, for a tax credit certificate entitling each of those shareholders to an investor tax credit under the Alberta Corporate Tax Act equal to 30% of the amount received by the venture capital corporation from each of those shareholders for those shares in the then-current calendar year.

(3) A venture capital corporation must apply to the Minister on behalf of its shareholders who are individuals, in a form approved by the Minister and within the time provided for in the regulations, for a tax credit certificate entitling each of those shareholders to an investor tax credit under the Alberta Personal Income Tax Act equal to 30% of the amount received by the venture capital corporation from each of those shareholders for those shares in the then-current calendar year or, in the case of an individual who makes an election referred to in

section 35.01 of the Alberta Personal Income Tax Act, in the first 60 days after the end of that calendar year.

(4) The Minister must issue a tax credit certificate in the amount referred to in subsection (2) to each of the shareholders referred to in subsection (2) if the Minister is satisfied as to all of the matters referred to in subsection (6).

Section 21

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 22

(5) The Minister must issue a tax credit certificate in the amount referred to in subsection (3) to each of the shareholders referred to in subsection (3) if the Minister is satisfied as to all of the matters referred to in subsection (6).

(6) The following are the matters referred to in subsections (4) and (5): (

a) the venture capital corpora tion is complying with this Act and the regulations; (

b) the venture capital corpora tion has established and fully funded the investment protection account as required under

section 20; (

c) no tax credit certificate under this

section has been previously issued in respect of those shares; (

d) the equity capital that is the subject of the application for the tax credit certificate consists of equity capital of the venture capital corporation the raising of which has been approved in accordance with

section 11; (

e) the shareholder acquired the shares directly from the vent ure capital corporation or its agent acting in that behalf; (

f) the shareholder, if an individual, was resident in Alberta on the date the shareholder subscribed for the shares; (

g) any other prescribed conditions are met.

(7) If the Minister refuses to issue a tax credit certificate under this section, the Minister must give notice within 30 days of that refusal, together with reasons for the refusal, to the venture capital corporation.

(8) The Minister may revoke a tax credit certificate issued under this

section if the Minister determines that, at the time the tax credit certificate was issued or at a subsequent time, the venture capital corporation was in contravention of this Act or the regulations.

(9) If the Minister revokes a tax credit certificate issued under this section, the Minister must promptly give notice of that revocation, together with reasons for the revocation, to the venture capital corporation and to the Finance Minister.

(10) Notwithstanding anything in this section, a tax credit certificate respecting equity capital raised after December 31, 2019 must not be applied for or issued under this section. 2016 cI-10.5 s21;2018 c8 Sched. 2 s2;2019 c20 s19

Section 22

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 23 Repayment of tax credit amount 22(1) If a venture capital corporation directly or indirectly acquires one or more of its own shares, the venture capital corporation must pay to the Finance Minister an amount of money calculated in accordance with subsection (2).

(2) If a venture capital corporation acquires one or more of its own shares for a total consideration that (

a) is equal to or greater than that for which the share or shares were issued, the venture capital corporation must pay to the Finance Minister an amount of money equal to 30% of the consideration paid to the venture capital corporation by the shareholder for the share or shares at the time the share or shares were issued, or (

b) is less than that for which the share or shares were issued, the venture capital corporation must pay to the Finance Minister an amount equal to 30% of the greater of (

i) the consideration paid by the venture capital corporation for the acquisition of the share or shares, and (ii) the amount that the Minis ter considers was the fair market value of the share or shares at the time the share or shares were acquired, but the amount under this subclause must not be greater than the consideration that was paid to the venture capital corporation for the issue of that share or those shares.

(3) If a venture capital corporation (

a) is deemed to have acquired a share under

section 23, or (

b) is deemed under

section 25(

e) to have acquired all of its shares at the time of an event referred to in

section 25(

a) to (d), the venture capital corporation must pay to the Finance Minister an amount equal to 30% of the consideration paid to the venture capital corporation in respect of the issue of that share or those shares.

(4) If the Minister considers that a venture capital corporation has (

a) conducted its bus iness and affairs in a manner consistent with this Act, and (

b) incurred investment losses,

Section 23

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 24 the Minister may by order reduce the amount that would otherwise be payable under subsection (3) in order to take the investment losses into account.

(5) If the Minister considers that a venture capital corporation has conducted its business and affairs in a manner consistent with this Act and has held an eligible investment for at least 3 years, the Minister may by order reduce the amount that would otherwise be payable under subsection (3) by an amount calculated by (

a) multiplying the amount otherw ise payable by the number of days the venture capital corporation held the eligible investment, and (

b) dividing the product obtaine d under clause (

a) by 1825 to determine the amount of the reduction.

(6) If a venture capital corporation has complied with

section 10(2) throughout the period prescribed for the purpose of that section, no amount is payable under this section.

(7) For the purposes of this section, a venture capital corporation is deemed to have acquired one of its own shares at the time the shareholder disposing of the share first received consideration from the venture capital corporation in relation to that disposition.

(8) The amount to be paid to the Finance Minister under this

section must not be greater than the aggregate amount of the tax credit certificates issued in respect of a venture capital corporation’s own shares that are acquired or deemed under this

section to be acquired by it. Voluntary reductions in capital 23(1) For the purposes of

section 22, a venture capital corporation is deemed to have acquired one of its own shares if, pursuant to the Business Corporations Act, it does any of the following: (

a) cancels a share surrender ed to the venture capital corporation by way of gift; (

b) reduces its stated capital; (

c) redeems its shares.

(2) Despite anything to the contrary in the Business Corporations Act, a resolution of a venture capital corporation to reduce its stated capital does not take effect until the venture capital corporation has paid the money payable by it to the Finance Minister under

section 22.

Section 24

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 25 Voluntary cancellation of registration 24(1) If a venture capital corporation does both of the following, the Minister must cancel the venture capital corporation’s registration: (

a) passes a special resolutio n requesting cancellation of its registration; (

b) presents proof satisfactory to the Minister that it has complied with sections 20(5) and (7) and 22.

(2) On cancellation under subsection (1), the corporation may carry on business in accordance with the Business Corporations Act. Repayment on revocation, dissolution, amalgamation or cancellation 25 If a venture capital corporation (

a) has its registration revoked under

section 27, (

b) is dissolved or has been ord ered by a court to dissolve, (

c) without the prior written a pproval of the amalgamation from the Minister, with or without conditions, under

section 9, (

i) enters into an amalgamation agreement, or (ii) passes a resolution to approve an amalgamation, o r (

d) passes a resolution requesting cancellation under

section 24, the venture capital corporation (

e) is deemed, only for the pur poses of

section 22(3), to have acquired all of its shares at the time the event referred to in clauses (

a) to (

d) occurs, and (

f) must make payment to the F inance Minister as required by

section 22(3). Liability of third party 26(1) In this section, “third party” means (

a) a director or officer of (

i) a venture capital corporation, or

Section 27

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 26 (ii) a small business in which an investment under

section 12 was made by a venture capital corporation, (

b) a member of a common interest group that controls (

i) a venture capital corporation, or (ii) a small business descr ibed in clause (a)(ii), o r (

c) a major shareholder of (

i) a venture capital corporation, or (ii) a small business descr ibed in clause (a)(ii).

(2) If a third party authorizes or acquiesces in (

a) a transaction or event, or (

b) a series of transactions or events, that the third party knew or reasonably ought to have known at the time of the authorization or acquiescence would render a venture capital corporation liable to make the payment to the Finance Minister required under

section 22, the third party is jointly and severally liable for the amount of the payment.

(3) If, (

a) on the basis of information supplied by a director, office r or shareholder of a venture capital corporation, a tax credit certificate has been issued under

section 21, (

b) that information is false or misleading, and (

c) the director, officer or shareholder knew, or ought to hav e known, that it was false or misleading, the director, officer or shareholder who supplied the information is liable to pay to the Finance Minister the amount of the tax credit. Revocation or suspension of registration 27(1) The Minister may suspend or revoke the registration of a venture capital corporation if (

a) the Minister considers that the venture capital corporation

Section 28

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 27 (

i) is contravening or has contravened this Act or the regulations or a condition that the Minister imposes, makes or gives under this Act, (ii) has misrepresented any in formation to the Minister, either knowingly or through circumstances amounting to negligence, or (iii) obtained its registration fraudulently or by furnishing false or misleading information or documents, (

b) the venture capital corporation fails to supply informatio n, records or documents when they are required under this Act, (

c) the venture capital corporation supplies information, reco rds or documents referred to in clause (

b) that contain false or misleading information, or (

d) the venture capital corpora tion has no remaining eligible investments as required by

section 10(2).

(2) If the Minister suspends a registration under subsection (1), the Minister may (

a) impose conditions to be complied with by the suspended venture capital corporation during the period of suspension, and (

b) reinstate the registratio n with or without conditions.

(3) Despite subsections (1) and (2), if the Minister considers that a venture capital corporation is conducting its business and affairs in a manner consistent with this Act, the Minister may do either or both of the following: (

a) issue a tax cr edit certificate; (

b) reduce the amount that would otherwise be required to be deposited into the investment protection account referred to in

section 20. Annual reporting 28 Within 6 months after its fiscal year end, a venture capital corporation must prepare and file with the Minister a return setting out prescribed information.

Section 29

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 28 Division 2 Community Economic Development Corporation Tax Credits Registration as community economic development corporation 29(1) A corporation or cooperative may apply to the Minister to be registered as a community economic development corporation.

(2) An application must be (

a) in a form approved by the Minister and accompanied with the information required on the form, including a copy of a community economic development plan containing the prescribed information, and (

b) signed by one director and one officer of the corporation or cooperative.

(3) The Minister may register the corporation or cooperative if the Minister is satisfied that the applicant meets the requirements set out in

section 30.

(4) Notwithstanding anything in this Act, the Minister shall not register a corporation or cooperative as a community economic development corporation on or after October 24, 2019, irrespective of when the corporation or cooperative applied to be registered. 2016 cI-10.5 s29;2019 c20 s19 Requirements for registration 30 The requirements for registration of a corporation or cooperative as a community economic development corporation under

section 29 are as follows: (

a) in the case of a corporation, (

i) the corporation must be incorporated or continued under the Business Corporations Act, and (ii) the corporation must have authorized capital consisting of at least one class of voting equity shares; (

b) the corporation or cooperative must have assets or revenue of less than the prescribed amount, including the assets and revenues of its affiliates; (

c) in the case of a cooperativ e, the cooperative must carry on business or operations in a prescribed activity or must have articles that restrict the cooperative to investing in eligible investments of a cooperative that carries on business or operations in a prescribed activity;

Section 31

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 29 (

d) the corporation or cooperative must meet any other prescri bed requirements for registration. 2016 cI-10.5 s30;2018 c8 Sched. 2 s3 Certificate of registration 31 On registration of a corporation or cooperative as a community economic development corporation, the Minister must issue a certificate of registration and record on the certificate the date of registration. Application of sections 6 to 28 32 Sections 6 to 28 apply, with modifications set out in the regulations, to a community economic development corporation. Division 3 Eligible Business Corporation Investor Tax Credits

Definitions 33 In this Division, (a) “additional equity capital” means additional equity capita l raised by an eligible business corporation under an approval granted to it under

section 37 by the Minister; (b) “eligible investor” means (

i) a corporation to which

section 5 of the Alberta Corporate Tax Act applies, except a venture capital corporation or a community economic development corporation, or (ii) an individual as defined in

section 35.01 of the Alberta Personal Income Tax Act. Registration as eligible business corporation 34(1) A small business may apply to the Minister to be registered as an eligible business corporation.

(2) An application must be (

a) in a form approved by the Minister and accompanied with the information required on the form, and (

b) signed by one director and one officer of the small busine ss.

Section 35

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 30

(3) The Minister shall register the small business if the Minister is satisfied that the applicant meets the requirements set out in

section 35.

(4) Notwithstanding anything in this Act, the Minister shall not register a small business as an eligible business corporation on or after October 24, 2019, irrespective of when the small business applied to be registered. 2016 cI-10.5 s34;2019 c20 s19 Requirements for registration 35(1) The requirements for registration of a small business as an eligible business corporation under

section 34 are as follows: (

a) the small business, togethe r with its affiliates, must have no more than 100 employees calculated in the prescribed manner; (

b) at least the pres cribed percentage of the wages and salaries, determined in the prescribed manner, of the small business is or will be paid to employees who regularly report to work at operations located in Alberta; (

c) the small business, if required by a condition of the Minister, is or will be substantially engaged, as determined in the prescribed manner, in Alberta in a prescribed business activity that is specified by the Minister in the condition; (

d) the small business must have equity capital of at least $25 000; (

e) the small business must meet any other prescribed requirements for registration.

(2) A regulation made for the purposes of subsection (1)(

b) or (

c) may provide differently for different business activities. Certificate of registration 36 On registration of a small business as an eligible business corporation, the Minister must issue a certificate of registration and record on the certificate the date of registration. Additional equity capital 37(1) An eligible business corporation may apply to the Minister for approval to raise additional equity capital and the Minister may grant the approval, subject to subsection (2) and to any conditions that the Minister may impose, if the Minister is satisfied that the capital will consist of equity shares that

Section 38

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 31 (

a) do not carry rights and restrictions attached to the share s that (

i) create a debt between the holder or beneficial owner of the shares and any other person, (ii) entitle the holder or benef icial owner of the shares to reduce the impact of any loss the holder or beneficial owner sustains in holding or disposing of the shares, (iii) provide the holder or beneficial owner of the shares wit h the right to require the eligible business corporation to repurchase the shares before the expiry of 5 years after the date of issue, or (iv) are prohibited by regulation, (

b) do not carry, or have contingent rights to obtain, 50% or more of the voting rights for the election of directors of the eligible business corporation, and (

c) are fully pai d for in cash.

(2) It is a condition of an approval under subsection (1) to raise additional equity capital that the eligible business corporation must not issue any of the shares included in the additional equity capital to a person that, at any time during the 2 years immediately preceding the date of issue, has disposed of a share of any class of shares issued by the eligible business corporation.

(3) The Minister may, under subsection (1), impose a condition that the additional equity capital be raised only for the purposes of investment in a small business that is substantially engaged, determined in the prescribed manner, in Alberta in a prescribed business activity that is specified by the Minister in the condition.

(4) Notwithstanding anything in this Act, the Minister shall not grant approval on or after October 24, 2019 to an eligible business corporation to raise additional equity capital, irrespective of when the eligible business corporation applied for approval. 2016 cI-10.5 s37;2019 c20 s19 Application for tax credit certificates 38(1) An eligible business corporation that in any calendar year has raised additional equity capital must apply to the Minister, in a form approved by the Minister and within the time provided for in the regulations, for a tax credit certificate entitling each eligible investor that is a corporation to an investor tax credit under the Alberta Corporate Tax Act equal to

Section 39

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 32 ( a ) 3 0 % , o r (

b) if the eligible business co rporation meets the requirements prescribed by the regulations of the diversity and inclusion program, 35% of the amount received by the eligible business corporation in that calendar year for the shares that were part of the additional equity capital and issued to the eligible investor.

(2) An eligible business corporation that in any calendar year has raised additional equity capital must apply to the Minister, in a form approved by the Minister and within the time provided for in the regulations, for a tax credit certificate entitling each eligible investor who is an individual to an investor tax credit under the Alberta Personal Income Tax Act equal to ( a ) 3 0 % , o r (

b) if the eligible business co rporation meets the requirements prescribed by the regulations of the diversity and inclusion program, 35% of the amount received by the eligible business corporation in that calendar year or, in the case of an individual who makes an election referred to in

section 35.01 of the Alberta Personal Income Tax Act, within 60 days after the end of that calendar year, for the shares that were part of the additional equity capital and issued to the eligible investor.

(3) Where a small business that becomes an eligible business corporation in 2017 has issued equity shares to a person on or after April 14, 2016 and before January 1, 2017 that meet the requirements of

section 37, the equity shares issued in that period are deemed for purposes of

section 37 to have been additional equity capital raised in 2017. 2016 cI-10.5 s38;2018 c8 Sched. 2 s4 Tax credit certificates 39(1) The Minister must issue a tax credit certificate in the amount referred to in

section 38(1) to each of the eligible investors referred to in

section 38(1) if the Minister is satisfied as to all of the matters referred to in subsection (3).

(2) The Minister must issue a tax credit certificate in the amount referred to in

section 38(2) to each of the eligible investors referred to in

section 38(2) if the Minister is satisfied as to all of the matters referred to in subsection (3).

Section 39

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 33

(3) The following are the matters referred to in subsections (1) and (2): (

a) the eligible business corporation and its eligible investo rs are complying with this Act and the regulations; (

b) no tax credit cer tificate has been previously issued under this

section in respect of those shares; (

c) the equity capital that is the subject of the application for the tax credit consists of equity capital of the eligible business corporation that has been raised pursuant to an approval under

section 37; (

d) the eligible investor acquir ed the shares directly from the eligible business corporation or its agent acting in that behalf; (

e) the eligible investor, if an individual, was resident in A lberta on the date the eligible investor subscribed for the shares; (e.1) if applicable, the eligible business corporation has met the requirements prescribed by the regulations of the diversity and inclusion program; (

f) any other prescrib ed conditions are met.

(4) If the Minister refuses to issue a tax credit certificate under this section, the Minister must give notice within 30 days of that refusal, together with reasons for the refusal, to the eligible business corporation.

(5) The Minister may revoke a tax credit certificate issued under this

section if the Minister determines that, at the time the tax credit certificate was issued or at a subsequent time, the eligible business corporation was in contravention of this Act or the regulations.

(6) If the Minister revokes a tax credit certificate issued under this section, the Minister must promptly give notice of that revocation, together with reasons for the revocation, to the eligible business corporation and to the Finance Minister.

(7) Where, as a result of an event prescribed by the regulations, an eligible business corporation no longer meets the requirements of the diversity and inclusion program, the eligible business corporation must within 30 days after the occurrence of the event so notify the Minister in accordance with the regulations.

Section 39.1

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 34

(8) If at the end of 6 months from the date of the event the Minister determines that the eligible business corporation does not meet the requirements of the diversity and inclusion program, (

a) the corporation is deemed to have been ineligible for the diversity and inclusion program as of the date of the event, (

b) any tax credit certificate i ssued after the date of the event is revoked, and (

c) a new tax credit certificat e shall be issued to the eligible investor by the Minister in the amount referred to in

section 38(1)(

a) or (2)(a), as the case may be, effective on the same date that the tax certificate revoked under clause (

b) was issued.

(9) If the Minister makes a determination under subsection (8) that an eligible business corporation does not meet the requirements of the diversity and inclusion program, the Minister must promptly give notice of that determination to the eligible business corporation and to the Finance Minister.

(10) The notice must include the reasons for the Minister’s determination, information as to which certificates are revoked and any other information provided for by the regulations. 2016 cI-10.5 s39;2018 c8 Sched. 2 s5 Limitation 39.1 Notwithstanding anything in sections 38 and 39, a tax credit certificate respecting equity capital raised after December 31, 2019 must not be applied for or issued under those sections. 2019 c20 s19 Aggregate investment by eligible investor 40(1) An eligible investor must not make or hold an investment in an eligible business corporation if, as a result of that investment, the aggregate of all amounts received by that eligible business corporation from all eligible investors, directly or indirectly, would be greater than the prescribed amount.

(2) For the purposes of subsection (1), if the Minister determines that one of the reasons for the separate existence of 2 or more eligible business corporations is to increase the amount received from one or more eligible investors, the eligible business corporations are deemed to be one eligible business corporation.

(3) If the Minister makes a determination under subsection (2), the Minister must give notice of that determination to the eligible business corporations.

Section 41

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 35 Control of eligible business corporation 41(1) Subject to subsection (2), an eligible investor must not make or hold an investment in an eligible business corporation if the eligible investor, either alone or in conjunction with one or more of the eligible investor’s (

a) associates or affiliates, (

b) shareholders or their associates or affiliates, (

c) directors or their associates, or (

d) officers or their associates, would own, directly or indirectly, shares carrying 50% or more of the voting rights for the election of directors of the eligible business corporation or would, in any manner, control the eligible business corporation.

(2) If the Minister considers that an eligible business corporation in which an eligible investor has invested is in financial difficulty, the Minister may by order authorize the eligible investor to temporarily control the eligible business corporation, under circumstances and on terms and conditions that the Minister determines. Revocation or suspension of registration 42(1) The Minister may suspend or revoke the registration of an eligible business corporation if (

a) the Minister considers that the eligible business corporation (

i) is contravening or has contravened this Act or the regulations or a condition that the Minister imposes, makes or gives under this Act, (ii) has misrepresented any in formation to the Minister, either knowingly or through circumstances amounting to negligence, or (iii) obtained its registration fraudulently or by furnishing false or misleading information or documents, (

b) the eligible business corporation fails to supply informat ion, records or documents when they are required under this Act, (

c) the eligible business corp oration supplies information, records or documents referred to in clause (

b) that contain false or misleading information,

Section 42

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 36 (

d) the eligible business corpor ation has applied any proceeds of additional equity capital for a use prohibited under

section 48, (

e) the eligible business corpor ation, at any time during the 5 years immediately following the date on which the eligible business corporation raises any additional equity capital, does not conform to

section 35(1)(

b) or (c), or (

f) the eligible business co rporation has not raised any additional equity capital within 2 years of the eligible business corporation’s registration under

section 34.

(2) If the Minister suspends a registration under subsection (1), the Minister may (

a) impose conditions to be complied with by the suspended eligible business corporation during the period of suspension, and (

b) reinstate the registratio n with or without conditions.

(3) An eligible business corporation or an associate, affiliate, director, officer or shareholder of an eligible business corporation must not provide, directly or indirectly, as part of any transaction or series of transactions, a loan, loan guarantee or any other financial assistance to any person for the purpose of, or in connection with, a purchase of shares that are part of any additional equity capital.

(4) An eligible business corporation must not redeem a share for which a tax credit certificate has been issued under this Division unless the redemption occurs (

a) more than 5 years after the date of issue of the share, or (

b) in prescribed circumstances.

(5) An eligible business corporation must not register a transfer of a share for which a tax credit certificate has been issued under this Division if the transferor of the share is (

a) the original purchaser of the share, (

b) a trustee of a registered retirement savings plan or regis tered retirement income fund through which an individual or his or her spouse purchased the share, or (

c) a trustee of a tax-free sa vings account through which an individual or his or her spouse purchased the share.

Section 43

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 37 (6) Subsection (5) does not apply to a transfer of a share if the transfer occurs (

a) more than 5 years after the date of issue of the share, or (

b) in prescribed circumstances. Consequences of revocation 43(1) If, under

section 42, the Minister revokes the registration of an eligible business corporation after it has raised additional equity capital, the eligible business corporation must pay to the Finance Minister, subject to subsection (2), an amount equal to the aggregate of all the amounts of tax credit certificates issued under this Division for the additional equity capital.

(2) For the purpose of this section, the Lieutenant Governor in Council may specify an amount less than the amount described in subsection (1), in which case the small business must pay to the Finance Minister that lesser amount.

(3) If, under

section 42, the Minister revokes the registration of an eligible business corporation before the eligible business corporation has raised additional equity capital, the Minister must not issue a tax credit certificate issued under this Division on or after the date of revocation. Liability of third party 44(1) In this section, “third party” means (

a) a director or officer of an eligible business corporation, (

b) a member of a common interest group that controls an eligible business corporation, or (

c) a major shareholder of an eligible business corporation.

(2) If a third party authorizes or acquiesces in (

a) a transaction or event, or (

b) a series of transactions or events that the third party knew or reasonably ought to have known at the time of the authorization or acquiescence would render the eligible business corporation liable to make the payment to the Finance Minister required under

section 43, the third party is jointly and severally liable for the amount of the payment.

Section 45

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 38 Voluntary cancellation of registration 45(1) On the written request of an eligible business corporation, the Minister may cancel the eligible business corporation’s registration if (

a) it pays to the Finance Minister the aggregate of all the amounts of tax credits issued in the immediately preceding 5 years for shares issued by it as part of raising additional equity capital, and (

b) it meets prescribed requirements.

(2) If the Minister considers that an eligible business corporation that makes a request under subsection (1) (

a) has conducted its business and affairs in a manner consistent with this Act, and (

b) for at least 3 years has complied with this Division in relation to all the shares for which tax credit certificates have been issued, the Minister may reduce the amount that would otherwise be payable under subsection (1) by an amount calculated by (

c) multiplying the amount otherw ise payable by the number of days during which the shares referred to in clause (

b) remained outstanding, and (

d) dividing the product obtaine d under clause (

c) by 1825 to determine the amount of the reduction.

(3) If the Minister considers that an eligible business corporation that makes a request under subsection (1) (

a) has conducted its business and affairs in a manner consistent with this Act, and (

b) has incurred investment losses, the Minister may reduce the amount that would otherwise be payable under subsection (1) in order to take the investment losses into account. Repayment of tax credit amount on early redemption, acquisition or cancellation of shares 46(1) Except in prescribed circumstances, if an eligible business corporation, within 5 years after it issues a share for which a tax credit certificate was issued under this Division, redeems, acquires

Section 47

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 39 or cancels the share, the eligible business corporation must pay to the Finance Minister an amount equal to the tax credit certificate.

(2) The Lieutenant Governor in Council may make regulations requiring eligible business corporations who owe money payable to the Finance Minister under subsection (1) to pay interest on the money at a prescribed rate and calculated from a prescribed date.

(3) If the Minister considers that (

a) an eligible business corpor ation referred to in subsection (1) has conducted its business and affairs in a manner consistent with this Act, and (

b) the share issued by it referred to in subsection (1) was n ot redeemed, acquired or cancelled for at least 3 years, the Minister may by order reduce the amount that would otherwise be payable under subsection (1) by an amount calculated by (

c) multiplying the amount otherw ise payable by the number of days during which the share referred to in clause (

b) remained outstanding, and (

d) dividing the product obtaine d under clause (

c) by 1825 to determine the amount of the reduction.

(4) If the Minister considers that an eligible business corporation (

a) has conducted its business and affairs in a manner consistent with this Act, and (

b) has incurred investment losses, the Minister may by order reduce the amount that would otherwise be payable under subsection (1) in order to take the investment losses into account. Repayment of tax credit amount — other share dispositions 47(1) If a person, within 5 years after the date of purchasing a share for which a tax credit certificate has been issued under this Division and in a transaction other than a redemption, acquisition or cancellation referred to in

section 46, disposes of a share for which a tax credit certificate was issued under this Division, the person must pay to the Finance Minister an amount equal to the amount of the tax credit certificate.

Section 48

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 40

(2) The Lieutenant Governor in Council may make regulations requiring persons who owe money payable to the Finance Minister under subsection (1) to pay interest on the money at a prescribed rate and calculated from a prescribed date. Prohibited use of funds 48 An eligible business corporation must not use, directly or indirectly, any funds raised by an issue of shares for which tax credits have been or are entitled to be claimed under tax credit certificates issued under this Division for any of the following purposes: (

a) lending; (

b) investment outside Alberta; (

c) investment in land, unless the investment is incidental or ancillary to the business activities, referred to in

section 35(1)(c), of the eligible business corporation; (

d) acquiring securities, other t han equity shares of an affiliate of the eligible business corporation that conforms to the criteria set out in

section 35(1)(

a) to (c); (

e) purchasing good s or services from (

i) an eligible investor whose investment is in the eligible business corporation, or (ii) an associate of an eligible investor whose investment is in the eligible business corporation other than goods or services that are sold at fair market value to the eligible business corporation in the ordinary course of the seller’s business as a seller of such goods or services on the open market; (

f) payment of all or part of a debt obligation, unless (

i) the Minister considers that the payment is necessary for the financial viability of the eligible business corporation, or (ii) the debt obligation was incurred with the prior written approval of the Minister in anticipation of an investment in the eligible business corporation by an eligible investor;

Section 49

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 41 (

g) as part of a transaction or series of transactions directl y or indirectly involving any of the following: (

i) the purchase or redemption of previously issued shares of the eligible business corporation or one of its affiliates; (ii) the retirement of any par t of a liability to a shareholder of the eligible business corporation or one of its affiliates or of a liability to a shareholder’s associate or affiliate; (iii) the payment of dividends; (iv) except in prescribed circumstances, the funding of all or part of the purchase by the eligible business corporation of all or a substantial portion of the assets of a proprietorship, partnership, joint venture, trust or corporation; (

v) the funding of all or part of the purchase by the eligible business corporation of any of the assets of a proprietorship, partnership, joint venture, trust or corporation at a price that is greater than the fair market value of the assets purchased; (vi) other prescribed transactions; (

h) other prescribed purposes. Annual reporting 49(1) Within 6 months after its fiscal year end, an eligible business corporation must prepare an annual report in a form approved by the Minister and file the report with the Minister accompanied with each of the following: (

a) a copy of the securities regi ster of the eligible business corporation; (

b) a copy of the most recent fi nancial statements of the eligible business corporation that have been reviewed by a chartered professional accountant or other person who is a licensed or registered member of an accounting association; (

c) a copy of the most recent annual return filed with the Registrar of Corporations.

(2) An eligible business corporation must comply with subsection (1) in each of the 5 consecutive fiscal years following the date of its

Section 50

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 42 most recent issue of shares as part of the raising of additional equity capital. Division 4 General Definition 50 In this Division, “corporation” means a venture capital corporation, a community economic development corporation or an eligible business corporation. Reconsideration of decision 51(1) A corporation that has received a notice (

a) under

section 21(7) or 39(4) that the Minister has refused to issue a tax credit certificate, (

b) under

section 21(9) or 39(6) that the Minister has revoked a tax credit certificate, (b.1) under

section 39(9), or (

c) under

section 27 or 42 that the Minister has suspended or revoked the corporation’s registration, may, within 30 days after receiving the notice, request in writing that the Minister reconsider that decision and may, for that purpose, provide the grounds on which the request for reconsideration is made.

(2) On receipt of written representations pursuant to subsection (1), the Minister must reconsider the matter and may rescind, vary or confirm the previous decision.

(3) The Minister must notify the corporation in writing of the Minister’s decision within 30 days after making the decision. 2016 cI-10.5 s51;2017 c22 s29;2018 c8 Sched. 2 s6 Refusal of further registrations and suspension of approvals 52(1) Despite anything to the contrary in this Act, the Minister may for any reason, including budgetary restrictions, refuse to accept the registration of further corporations under this Act for any period.

(2) During the period referred to in subsection (1), the Minister must not approve any further raising of equity capital under

section 11 or the raising of additional equity capital under

section 37.

Section 53

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 43 Securities Act not affected 53 For greater certainty, nothing in this Act affects the operation of the Securities Act in relation to investing in a corporation. Use of trust to acquire shares limited 54(1) If a person or an associate of a person directly or indirectly purchases or otherwise acquires shares in a corporation by use of a trust, other than a testamentary trust, for which a tax credit certificate is issued under

section 21 or 39, the certificate is invalid. (2) Subsection (1) does not apply if (

a) the person is an annuitant, (

b) the shares for which the tax credit certificate was issued were purchased or otherwise acquired by use of a tax-free savings account as described in

section 146.2 of the federal Act, or (

c) the Minister on applicati on by a corporation grants an exemption. Regulations 55(1) The Lieutenant Governor in Council may make regulations (

a) prescribing any matter that is to be prescribed under this Part; (

b) respecting the making of applications under this Part, including the time within which an application must be made; (

c) respecting the form and cont ents of applications under this Part; (

d) prescribing the modifications considered necessary for applying sections 6 to 28 in respect of community economic development corporations; (

e) respecting the rights and restrictions attached to equity shares for the purposes of

section 37; (e.1) respecting the establishment of a diversity and inclusio n program, including prescribing the requirements to be met by an eligible business corporation for the purposes of

section 38;

Section 56

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 44 (e.2) respecting the form and manner of notifying the Minister under

section 39(7); (

f) respecting reconsiderations of matters under

section 51; (

g) requiring any person to supply information or returns respecting any matter required in ensuring compliance with this Part; (

h) establishing periods of tim e to be taken into account in calculations or determinations under this Part; (

i) respecting the collection, u se or disclosure of information, including personal information, for the purposes of this Part; (

j) respecting the provisions for which a reference to a corporation includes a former corporation; (

k) respecting the issuance, r evocation or cancellation of tax credit certificates issued under this Part; (

l) defining any word or expre ssion used but not defined in this Part; (

m) respecting forms for th e purposes of this Part; (

n) respecting the circumstances and manner of giving notices under this Part; (

o) respecting any matter or thing the Lieutenant Governor in Council considers necessary or advisable to effectively carry out the intent and purpose of this Part.

(2) A regulation made under this

section may be made effective with respect to a period occurring before it is made. 2016 cI-10.5 s55;2018 c8 Sched. 2 s7

Part 2 Capital Investment Tax Credits

Definitions and

interpretation 56(1) In this Part, (a) “approved investment plan” means a proposed investment plan, including any modifications made to it by the Minister, in respect of which there is a subsisting conditional approval letter;

Section 56

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 45 (b) “available for use” means av ailable for use as determined under (i) subsection 13(27) of the federal Act, without reference to paragraph (

c) of that subsection, or (ii) subsection 13(28) of the federal Act, without reference to paragraph (

d) of that subsection; (c) “conditional approval lette r” means a conditional approval letter issued by the Minister under

section 58(2); (d) “eligible corporation” means a corporation described in

section 57; (e) “eligible qualified propert y” means property acquired or to be acquired by an eligible corporation after December 31, 2016, to be used and located in Alberta by the corporation primarily for (

i) manufacturing or processing goods for sale or lease that is qualified property as defined in subsections 127(9) and (11) of the federal Act, except that the requirement that the property has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the eligible corporation does not apply, or (ii) providing or operating tourism infrastructure that, subject to the regulations, is property or in a class of property included in

Schedule II of the Income Tax Regulations (Canada), except that any requirement that the property has not been used, or acquired for use, for any purpose whatever before it was acquired by the eligible corporation does not apply; (f) “federal regulation” means a regulation, as amended from time to time, made under the federal Act; (g) “government assistance” me ans government assistance as defined in subsection 127(9) of the federal Act, other than a capital investment tax credit that may be deducted or claimed pursuant to this Part and the Alberta Corporate Tax Act; (h) “manufacturing or processing” means manufacturing or processing within the meaning of subsection 125.1(3) of the federal Act, and includes qualified activities as defined in the federal regulations made for the purposes of the

Section 57

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 46 definition of Canadian manufacturing and processing profits in subsection 125.1(3) of the federal Act; (i) “proposed investment plan” means the list of properties an eligible corporation proposes to acquire for the purposes of this Part, the anticipated capital costs of those properties, and a description of the properties’ proposed use for manufacturing or processing goods for sale or lease, or providing or operating tourism infrastructure; (j) “tourism infrastructure” means property used for the purpose of tourism activities in Alberta as prescribed.

(2) In applying the definition of “qualified property” in subsection 127(9) of the federal Act for the purposes of subsection (1)(e)(i), that definition is to be read as if it did not include paragraph 127(9)(b.1) of the federal Act. Eligible corporation 57 To be an eligible corporation, a corporation (

a) must be incorporated, continued or registered under the Business Corporations Act, (

b) must be involved in the business activities of manufacturi ng or processing goods for sale or lease, or providing or operating tourism infrastructure, and (

c) must satisfy any conditions for eligibility set out in the regulations. Conditional approval letter 58(1) An eligible corporation may apply to the Minister, in the form and manner required by the Minister, accompanied with the corporation’s proposed investment plan, to be issued a conditional approval letter pursuant to subsection (2).

(2) Where the Minister is satisfied that (

a) the corporation that has a pplied for a conditional approval letter pursuant to subsection (1) is an eligible corporation, (

b) each item of property liste d in the corporation’s proposed investment plan in respect of which the application is made pursuant to subsection (1) is eligible qualified property and satisfies any conditions or requirements set out in the regulations,

Section 58

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 47 (

c) the anticipated capital cost of the eligible qualified property in the corporation’s proposed investment plan is equal to or exceeds the minimum amount prescribed under

section 69(1)(j), (

d) the corporation has submitted an economic impact assessment, including the information set out in subsection (3), in the form required by the Minister, (

e) the corporation satisfies any other conditions or requirements that may be prescribed by the regulations, and (

f) it is in the public interes t to issue a conditional approval letter respecting the proposed investment plan, the Minister may issue a conditional approval letter to the corporation approving the proposed investment plan, with or without modifications, specifying, in respect of each piece of eligible qualified property, the maximum amount, calculated in accordance with

section 63, of the corporation’s tax credit pursuant to this Part.

(3) The economic impact assessment referred to in subsection (2)(

d) must describe the potential economic, social and environmental impacts of the proposed investment plan, including the following information: (

a) dollar value of the investment; (

b) timeliness; (

c) employment impacts; (

d) inclusion of under-represented people or groups; (

e) modernization or productivity improvements; (

f) new product or service development; (

g) supply chain impacts; (

h) diversified customer base; (

i) environmental performance; (

j) community impact; (

k) regional impact; (

l) any other prescribed information.

Section 59

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 48

(3.1) Notwithstanding anything in this Act, the Minister shall not issue a conditional approval letter to an eligible corporation on or after October 24, 2019, irrespective of when the eligible corporation applied for the conditional approval letter.

(4) Repealed 2018 c8 Sched. 2 s8. 2016 cI-10.5 s58;2018 c8 Sched. 2 s8;2019 c20 s19 Acquisition of eligible qualified property 59 Subject to

section 76, eligible qualified property set out in an approved investment plan must be acquired within 2 years of the date of issuance of the conditional approval letter. Report to Minister 60(1) In this section, “status of the approved investment plan” includes (

a) the status of the acquis ition of the eligible qualified properties listed in an eligible corporation’s approved investment plan, and (

b) the status of what eligib le qualified properties acquired by an eligible corporation listed in its approved investment plan are available for use.

(2) An eligible corporation that receives a conditional approval letter under

section 58(2) must report to the Minister in the form and manner required by the Minister every 180 days after the date of issuance of the conditional approval letter as to the status of the approved investment plan.

(3) The corporation must report any contravention of this Act by the corporation to the Minister within 30 days of the contravention.

(4) The corporation must report to the Minister any of the following changes respecting the corporation within 30 days of the occurrence of the changes: (

a) an amalgamation as described in subsection 87(1) of the federal Act of corporations described in subsection 87(1.1) or (1.2) of the federal Act; (

b) the dissolution of the corporation; (

c) the winding-up of an eligible corporation that is a subsid iary if the rules in subsection 88(1) of the federal Act applied to the winding-up of the subsidiary; (

d) any other prescribed change respecting the corporation,

Section 61

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 49 and must report on the status of the approved investment plan at the time of the amalgamation, dissolution, winding-up or other prescribed change.

(5) The Minister may assign the conditional approval letter issued to an eligible corporation to another corporation following any of the events in subsection (4)(

a) to (

d) occurring in respect of the eligible corporation.

(6) In addition to reporting as required under subsections (2) to (4), the corporation must report to the Minister at the Minister’s request as to the status of the approved investment plan. Tax credit certificate 61(1) An eligible corporation may apply to the Minister for a tax credit certificate in the form and manner required by the Minister after the eligible qualified property in the approved investment plan has been acquired and is available for use for the activities set out in the approved investment plan.

(2) Where the Minister is satisfied that (

a) a corporation that applies for a tax credit certificate pursuant to subsection (1) is an eligible corporation for the taxation year in respect of which the application is made, (

b) each item of property set out in the approved investment plan in respect of which the application is made pursuant to subsection (1) is eligible qualified property, (

c) the eligible qualified prop erty in the approved investment plan in respect of which the application is made pursuant to subsection (1) was acquired by the corporation within 2 years of the date of issuance of the conditional approval letter under

section 58(2) and is available for use by the corporation for the activities of manufacturing or processing goods for sale or lease, or providing or operating tourism infrastructure, set out in the approved investment plan, and (

d) the corporation satisfies any other conditions or requirements prescribed by the regulations, the Minister must issue a tax credit certificate to the corporation for the taxation year, specifying, in respect of each item of eligible qualified property, the amount, calculated in accordance with

section 63, of the corporation’s tax credit.

Section 62

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 50

(3) If the Minister is not satisfied as to the matters in subsection (2)(

b) to (d), the Minister may refuse to issue a tax credit certificate and must give notice to the corporation of the refusal and provide reasons for the Minister’s decision. Refusal of further applications 62 Despite anything to the contrary in this Part, the Minister may for any reason, including budgetary restrictions, refuse to accept further applications for conditional approval letters or tax credit certificates under this Part for any period. Calculation of tax credit 63(1) Subject to subsections (2) and (3), the maximum amount of a corporation’s tax credit is equal to 10% of the capital cost of each item of eligible qualified property acquired in respect of an approved investment plan.

(2) Subject to subsections (3) and (4), the amount of a tax credit under this Part for an item of eligible qualified property is to be calculated using the following formula: (the lesser of A or

B) multiplied by C where A is 10%, B is 30% minus the percentage of the capital cost of the property received by the corporation as government assistance, and C is the capital cost of the eligible qualified property.

(3) No tax credit certificate shall be issued and no tax credit shall be granted or claimed under this Part where the corporation has received government assistance in respect of the acquisition of the eligible qualified property in the amount of 30% or more of the capital cost of the property.

(4) The Minister may reduce the amount of the tax credit if the Minister considers that the requirements set out in

section 61(2)(

b) to (

d) are only partially satisfied. Revocation of conditional approval letter or tax credit certificate 64(1) The Minister may revoke a conditional approval letter or a tax credit certificate issued under this

Part if any information

Section 65

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 51 provided by the corporation to obtain the conditional approval letter or the tax credit certificate is false or misleading or fails to disclose a material fact.

(2) A conditional approval letter or a tax credit certificate issued under this Part may be revoked by the Minister if the Minister considers that, at the time the conditional approval letter or tax credit certificate was issued or at a subsequent time, the eligible corporation was in contravention of this Act or the regulations or a condition that the Minister imposed or made under this Act.

(3) A conditional approval letter or a tax credit certificate issued under this Part may be revoked by the Minister if items of eligible qualified property listed in the approved investment plan and acquired by an eligible corporation are not retained by the corporation in Alberta for one year after the date of issuance of the conditional approval letter or the tax credit certificate.

(4) A conditional approval letter or tax credit certificate revoked under this

section is deemed never to have been issued. Reconsideration by Minister 65(1) Where (

a) the Minister (

i) gives notice to a corpora tion pursuant to

section 61(3) that the Minister has refused to issue a tax credit certificate, or (ii) revokes a conditional approval letter or a tax credit certificate under

section 64, o r (

b) a corporation disagrees with the amount of a tax credit specified in a tax credit certificate issued under

section 61(2), the corporation may, within 30 days after being notified of the Minister’s decision under clause (

a) or (b), request in writing that the Minister reconsider that decision and may, for that purpose, provide grounds on which the request for reconsideration is made.

(2) On receipt of written representations pursuant to subsection (1), the Minister must reconsider the matter and may rescind, vary or confirm the previous decision.

Section 66

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 52

(3) The Minister must notify the corporation in writing of the Minister’s decision within 30 days after making the decision to rescind, vary or confirm under subsection (2). Renunciation of tax credit 66(1) A corporation may renounce its tax credit that would otherwise be claimable in a taxation year with respect to all eligible qualified property acquired by it in a taxation year by notifying the Minister in the form and manner required by the Minister on or before the earlier of (

a) the date on which the corporation files its return of inco me for that taxation year, and (

b) the date by which the corporation is required to file its return of income for that taxation year pursuant to

section 36 of the Alberta Corporate Tax Act.

(2) Where a tax credit is renounced under subsection (1), the tax credit certificate relating to that tax credit is deemed never to have been issued. Repayment on revocation 67 If (

a) an eligible corporation deducts a tax credit granted under this Part and specified in the tax credit certificate referred to in clause (

b) from its tax payable under

Part 5 of the Alberta Corporate Tax Act, and (

b) the Minister revokes the tax credit certificate relating to that tax credit, the corporation must pay to the Finance Minister the amount of the tax credit. Liability for repayment of tax credit 68(1) If a director or an officer of an eligible corporation authorizes or acquiesces in (

a) a transaction or event, or (

b) a series of transactions or events, that the director or officer knew or reasonably ought to have known at the time of the authorization or acquiescence would render the eligible corporation liable to make the payment to the Finance

Section 69

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 53 Minister required under

section 67, the director or officer is jointly and severally liable for the amount of the payment.

(2) If (

a) on the basis of information supplied by a director or offi cer of an eligible corporation, a tax credit certificate has been issued under

section 61, (

b) that information is false or misleading, (

c) the director or officer knew, or ought to have known, that it was false or misleading, and (

d) the corporation deducts a capital investment tax credit granted under this Part and specified in the tax credit certificate referred to in clause (

a) from its tax payable under

Part 5 of the Alberta Corporate Tax Act, the director or officer who supplied the information is liable to pay to the Finance Minister the amount of the tax credit. Regulations 69(1) The Lieutenant Governor in Council may make regulations (

a) respecting the conditions that must be satisfied for a proposed investment plan to be eligible to be approved as an approved investment plan; (

b) respecting the conditions that must be satisfied for prope rty to be eligible qualified property; (

c) respecting property that is used to provide or operate tourism infrastructure; (

d) respecting the conditions that must be satisfied for a corporation to be an eligible corporation; (

e) respecting the process for applying for a conditional approval letter under this Part; (

f) respecting the evaluation of applications for conditional approval letters; (

g) respecting any matter relating to the selection of a propo sed investment plan to be approved as an approved investment plan;

Section 69

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 54 (

h) respecting the process for applying for a tax credit certificate under this Part; (

i) respecting the issuance, r evocation or cancellation of tax credit certificates issued under this Part; (

j) respecting the minimum amount of the anticipated capital cost of the eligible qualified properties in an approved investment plan for an eligible corporation to be granted a tax credit; (

k) respecting the maximum amount of a tax credit; (

l) requiring a corporation to supply information or documents respecting any matter required in assessing eligibility and compliance with this Part; (

m) respecting the criteria for determining whether eligible qualified property is acquired in respect of an approved investment plan; (

n) respecting any conditions or requirements to be satisfied under

section 58(2)(

e) or 61(2)(d); (

o) respecting information to be provided for the purposes of

section 58(3)(l); (

p) respecting reconsideratio ns of matters under

section 65; (

q) defining any word or expre ssion used but not defined in this Part; (

r) restricting or broadening the

definitions of any word or expression defined in this Part; (

s) respecting the collection, u se or disclosure of information, including personal information, for the purposes of this Part; (

t) respecting the circumstances and manner of giving notices and providing notifications under this Part; (

u) prescribing any matter that is to be prescribed under this Part; (

v) respecting any matter or thing the Lieutenant Governor in Council considers necessary or advisable to effectively carry out the intent and purpose of this Part.

(2) A regulation made under this

section may be made effective with respect to a period occurring before it is made.

Section 69.1

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 55

Part 2.1 Alberta Agri-processing Investment Tax Credit

Definitions 69.1 In this Part, (a) “APITC certificate” means an Alberta agri-processing investment tax credit certificate issued by the Minister under

section 69.7; (b) “approved investment plan” means a proposed investment plan approved by the Minister under

section 69.4(3), including any conditions placed on or modifications made to it by the Minister, in respect of which there is a subsisting conditional approval letter; (c) “conditional approval lette r” means a conditional approval letter issued by the Minister under

section 69.4; (c.1) “corporate member” mean s a corporation that is both incorporated, registered or continued under the Business Corporations Act and a member of a partnership registered under the Partnership Act; (c.2) “eligible applicant” mea ns an applicant that meets the requirements of

section 69.2; (d) “eligible capital expenditure” means an expenditure that meets the requirements of

section 69.3; (

e) repealed 2024 c4 s4; (f) “eligible value-added agricultural activity” means the physical transformation or upgrading of any raw or primary agricultural product or any agricultural by-product or waste into a new or upgraded product; (g) “existing facility” means a facility that is in existence at the time an application is made under

section 69.4(1); (h) “new facility” means a pr oposed facility for which an application is made under

section 69.4(1) that is not an existing facility; (i) “proposed investment plan” means a plan to invest in a new facility or an existing facility for an eligible value-added agricultural activity and includes the requirements referred to in

section 69.4(2). 2023 c3 s13;2024 c4 s4

Section 69.2

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 56 Eligible applicant 69.2 To be an eligible applicant, an applicant must be (

a) a corporation inco rporated, registered or continued under the Business Corporations Act, or (

b) a p a r t n e r s h i p (

i) registered under the Partnership Act, and (ii) consisting of one or more corporate members and satisfy any other prescribed eligibility conditions. 2023 c3 s13;2024 c4 s4 Eligible capital expenditures 69.3 To be an eligible capital expenditure, an expenditure must (

a) be made by an eligible applicant in the prescribed manner, (

b) be made with respect to pres cribed property that is to be used and located in Alberta for an eligible value-added agricultural activity, and (

c) meet any other prescribed requirements and conditions. 2023 c3 s13;2024 c4 s4 Conditional approval letter 69.4(1) An eligible applicant may apply to the Minister for a conditional approval letter by submitting an application in the form and manner required by the Minister, accompanied with the applicant’s proposed investment plan and any other prescribed information.

(2) A proposed investment plan must include the following in respect of a facility: (

a) proposed expenditures, including the anticipated costs of those expenditures; (

b) the eligible value-added agricultural activity that is pro posed for the facility, including details of the activity that the proposed investment is for; (

c) the estimated project start and completion dates; (

d) any other prescribed information.

(3) The Minister may approve an applicant’s proposed investment plan, with or without modifications, and issue a conditional

Section 69.5

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 57 approval letter specifying the estimated amount of the applicant’s tax credit under this Part where the Minister is satisfied that (

a) the applicant is an eligible applicant, (

b) the facility that is the subject of the proposed investmen t plan is intended to be used for an eligible value-added agricultural activity, (

c) some or all of the expenditu res listed in the applicant’s proposed investment plan for which a conditional approval letter is sought are eligible capital expenditures, (

d) the total of the eligible capital expenditures in the prop osed investment plan is equal to or in excess of the prescribed minimum amount, (

e) issuing a conditional approval letter is in the public int erest, and (

f) the applicant satisfies any other prescribed conditions or requirements.

(4) The Minister may modify an applicant’s approved investment plan and issue a modified conditional approval letter to the applicant on receipt of additional information from the applicant. 2023 c3 s13;2024 c4 s4 Report to Minister 69.5(1) An eligible applicant that receives a conditional approval letter must report the status of the approved investment plan to the Minister in the form and manner required by the Minister (

a) every 180 days, and (

b) at any other time re quired by the Minister.

(2) A report on the status of the approved investment plan under this

section must include (

a) the status of the making of the eligible capital expenditures listed in the approved investment plan, (

b) the status of the new fac ility or existing facility that is the subject of the approved investment plan, including whether some or all of the facility is in operation, and (

c) any other information required by the Minister.

Section 69.6

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 58

(3) An eligible applicant under

section 69.2(

a) that receives a conditional approval letter must, on receiving the letter, and until the applicant has claimed, under

section 25.04 of the Alberta Corporate Tax Act, the full tax credit amount specified on an APITC certificate issued to the applicant, immediately report to the Minister any change in circumstance that could affect the applicant’s eligibility for an APITC certificate.

(3.1) An eligible applicant under

section 69.2(

b) that receives a conditional approval letter must, on receiving the letter, and until each corporate member of the applicant or of a member of the applicant has claimed, under

section 25.04 of the Alberta Corporate Tax Act, the full tax credit amount specified on an APITC certificate issued to the corporate member, immediately report to the Minister any change in circumstance that could affect the eligibility for an APITC certificate of any corporate member of the applicant or of any corporate member of a member of the applicant.

(4) An eligible applicant that receives a conditional approval letter must report to the Minister any prescribed change respecting the eligible applicant within 30 days of the occurrence of the change.

(5) An eligible applicant that is required to report under subsection (4) must report to the Minister the status of the approved investment plan at the time of the prescribed change.

(6) The Minister may, following the occurrence of any prescribed change respecting an eligible applicant, assign the conditional approval letter issued to the applicant to another eligible applicant.

(7) An eligible applicant must report any contravention of this Part by the applicant to the Minister within 30 days of becoming aware of the contravention. 2023 c3 s13;2024 c4 s4 Limit on acceptance of applications 69.6(1) Despite anything to the contrary in this Part, (

a) the Minister may for any reason, including budgetary restrictions, refuse to accept further applications for conditional approval letters under this Part for any period, and (

b) the Minister shall not acce pt any applications for conditional approval letters under this Part after 5 years from the coming into force of this Part unless, on a motion of a member of Executive Council, the Legislative Assembly

Section 69.7

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 59 approves a resolution that authorizes a further period of up to 5 years.

(2) A new motion may be made and a new resolution approved under subsection (1)(

b) during the period that a prior resolution is in effect. 2023 c3 s13 APITC certificate 69.7(1) An eligible applicant may apply to the Minister for an APITC certificate by submitting an application in the form and manner required by the Minister, accompanied with any other prescribed information.

(2) An applicant may apply in accordance with subsection (1) only after eligible capital expenditures in the applicant’s approved investment plan have been made and the new facility or existing facility is in operation for the activity or activities set out in the approved investment plan.

(3) Where the Minister receives an application under subsection (1) and is satisfied as to the matters referred to in subsection (3.1), the Minister must issue an APITC certificate to (

a) the applicant, where the applicant is an eligible applican t under

section 69.2(a), or (

b) each corporate member of t he applicant or of a member of the applicant, where the applicant is an eligible applicant under

section 69.2(b).

(3.1) The Minister must issue an APITC certificate in accordance with subsection (3) where the Minister is satisfied that (

a) the applicant is an eligible applicant, (

b) expenditures set out in the approved investment plan are eligible capital expenditures and the expenditures were made by the applicant, (

c) as of the date of application under subsection (1), the fa cility that is the subject of the application is in operation by the applicant for the eligible value-added agriculture activity or activities set out in the approved investment plan, and (

d) the applicant satisfies any other prescribed conditions or requirements.

(4) The effective date of an APITC certificate is

Section 69.8

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 60 (

a) the date an applicant applie s for the APITC certificate under subsection (1), or (

b) a date specified by the Mini ster that falls after the date the application is made under subsection (1) and on or before the date the APITC certificate is issued.

(5) An APITC certificate must specify (

a) the tax credit amount calculated in accordance with (

i) section 69.8(1), where the certificate is issued to an applicant that is an eligible applicant under

section 69.2(a), or (ii)

section 69.8(1.1), where the certificate is issued to a corporate member of an applicant or of a member of an applicant that is an eligible applicant under

section 69.2(b), (

b) any maximum portions referred to in

section 69.8(2), (

c) the effective date of the APITC certificate, and (

d) any conditions or restrictio ns on the APITC certificate.

(6) If the Minister is not satisfied as to the matters referred to in subsection (3.1), the Minister (

a) may modify the conditional approval letter and issue an APITC certificate or may refuse to issue an APITC certificate, and (

b) must give notice of and provide reasons for the modificati on or refusal to the eligible applicant and any affected corporate member. 2023 c3 s13;2024 c4 s4 Calculation of tax credit amount 69.8(1) The tax credit amount to be specified on an APITC certificate issued to an eligible applicant under

section 69.2(

a) is equal to 12% of the eligible capital expenditures made in respect of the applicant’s approved investment plan, subject to any prescribed maximum.

(1.1) The tax credit amount to be specified on an APITC certificate issued to a corporate member of an eligible applicant under

section 69.2(

b) or a corporate member of a member of an eligible applicant under

section 69.2(

b) is the portion of the amount equal to 12% of the eligible capital expenditures made in respect of the applicant’s

Section 69.9

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 61 approved investment plan, subject to any prescribed maximum, apportioned to the corporate member in accordance with the regulations.

(1.2) The amount apportioned under subsection (1.1) to all corporate members of an applicant may, in total, be less than the amount equal to 12% of the eligible capital expenditures made in respect of the applicant’s approved investment plan, subject to any prescribed maximum under subsection (1.1).

(2) The Minister may prescribe the maximum portion of the amount specified on an APITC certificate that may be claimed under

section 25.04 of the Alberta Corporate Tax Act in a particular taxation year and the 2 taxation years immediately following that year. 2023 c3 s13;2024 c4 s4 Modification, cancellation or revocation of conditional approval letter or APITC certificate 69.9(1) The Minister may modify, cancel or revoke a conditional approval letter or an APITC certificate issued under this Part (

a) if any information provided by the applicant to obtain the conditional approval letter or the APITC certificate is false or misleading or fails to disclose a material fact, (

b) if, in the opinion of the Minister, (

i) there has been a change in circumstances relating to the applicant that affects the eligibility of the applicant, a corporate member of the applicant or a corporate member of a member of the applicant for an APITC certificate, or (ii) at the time the conditiona l approval letter or APITC certificate was issued or at a subsequent time, the applicant was not an eligible applicant or the applicant was in contravention of this Part or the regulations, (

c) if an eligible capital expe nditure is made by the applicant in respect of property that is not retained by the applicant in Alberta (

i) before the issuance of an APITC certificate, or (ii) for one year after an A PITC certificate is issued, o r (

d) for any other prescribed reason.

Section 69.91

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 62

(2) The Minister must, in writing, notify the applicant and any affected corporate member of a modification, cancellation or revocation under this section.

(3) Subject to the regulations, where an APITC certificate is (

a) modified under this section, the Minister may specify that (

i) for the purposes of

section 25.04 of the Alberta Corporate Tax Act the APITC certificate is deemed always to have been issued with the modified amount, or (ii) the APITC certificate is mod ified as of the effective day of the modification, (

b) cancelled under this section, the cancellation is effectiv e on the day of cancellation, or (

c) revoked under thi s section, for the purposes of

section 25.04 of the Alberta Corporate Tax Act the APITC certificate is deemed never to have been issued. 2023 c3 s13;2024 c4 s4 Reconsideration by Minister 69.91(1) Where (

a) the Minister (

i) gives notice under

section 69.7(6)(

b) to an applicant or a corporate member that the Minister has modified a conditional approval letter or refused to issue an APITC certificate, or (ii) modifies, cancels or rev okes a conditional approval letter or an APITC certificate under

section 69.9(1), o r (

b) an applicant or a corporate member disagrees with the amount specified in an APITC certificate issued under

section 69.7, the applicant or corporate member, within 30 days after the Minister gives notice to the applicant or corporate member of the Minister’s decision, may request in writing that the Minister reconsider that decision and, for that purpose, must provide grounds on which the request for reconsideration is made.

Section 69.92

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 63

(2) Within 60 days of receipt of a request under subsection (1), the Minister must reconsider the matter and may rescind, vary or confirm the previous decision.

(3) The Minister must, in writing, notify the applicant or corporate member, as applicable, of the Minister’s decision under subsection (2). 2023 c3 s13;2024 c4 s4 Renunciation of tax credit 69.92(1) An applicant, a corporate member of an applicant or a corporate member of a member of an applicant may renounce an entitlement to claim a tax credit specified in an APITC certificate for a taxation year by notifying the Minister in the form and manner required by the Minister on or before the earlier of (

a) the date on which the app licant or corporate member files its return of income for the taxation year, and (

b) the date by which the app licant or corporate member is required to file its return of income for the taxation year under

section 36 of the Alberta Corporate Tax Act.

(2) Where a renunciation is made under subsection (1), the Minister must cancel the APITC certificate. 2023 c3 s13;2024 c4 s4 Regulations 69.93(1) The Minister may make regulations (

a) respecting eligibility conditions for the purposes of sect ion 69.2; (

b) prescribing property for the purposes of

section 69.3(b); (

c) respecting requirements and conditions applicable to eligible capital expenditures; (

d) respecting the process for applying for a conditional approval letter under this Part, including information that must be included with the application; (

e) respecting information to be included in a proposed investment plan; (

f) respecting the minimum amount of eligible capital expenditures for the purposes of

section 69.4(3)(d); (

g) respecting conditions or requirements for the purposes of

section 69.4(3)(f);

Section 69.93

Chapter I-10.5 INVESTING IN A DIVERSIFIED ALBERTA ECONOMY ACT 64 (

h) respecting the evaluation of applications for conditional approval letters; (

i) respecting reporting required under

section 69.5; (

j) respecting changes for the purposes of

section 69.5(4); (

k) respecting the process for applying for an APITC certifica te under this Part, including information that must be included with the application; (

l) respecting the criteria for determining whether eligible qualified expenditures are made in respect of an approved investment plan; (

m) respecting whether a facility is in operation; (

n) respecting other prescribed conditions or requirements for the purposes of

section 69.7(3.1)(d); (

o) respecting any restrictions or conditions that may be imposed for the purposes of

section 69.7(5)(d); (

p) prescribing, for the purpose s of determining a tax credit amount under

section 69.8(1) or (1.1), a maximum amount in eligible capital expenditures made in respect of an applicant’s approved investment plan; (p.1) respecting the apportionm ent of a tax credit amount under

section 69.8(1.1); (

q) respecting the maximum portion for the purposes of

section 69.8(2); (

r) respecting the issuance, modification, cancellation or revocation of conditional approval letters or APITC certificates issued under this Part, including prescribing reasons for the purposes of

section 69.9(1)(d); (

s) respecting the effect of modification, cancellation or revocation of an APITC certificate for the purposes of

section 69.9(3); (

t) respecting the assignment of a conditional approval letter from one eligible applicant to another eligible applicant; (

u) respecting reconsiderations of matters under

section 69.91; (

v) requiring an applicant, a c orporate member of an applicant or a corporate member of a member of an applican

Document details

Collection	Alberta — Consolidated Statutes
Citation	RSA 2000 cI-10.5
Type	statute
Volume / chapter	RSA 2000 cI-10.5
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	8eec3b34c88aaf1920139849261eb14102a717a6

Source file is stored in the law ingest library (pdf).