Supporting A Growing Saskatchewan Tech Sector
Today, the government introduced The Saskatchewan Technology Start-up Incentive Amendment Act, 2021. This legislation will extend the Saskatchewan Technology Startup Incentive (STSI) for five years and meet the needs of the province's fast-growing tech sector.
"As the province emerges from the pandemic, the government remains committed to creating a competitive business environment that stimulates investment and growth," Minister Responsible for Innovation Saskatchewan Jeremy Harrison said. "The STSI program is well positioned to do this. By reducing the barriers tech entrepreneurs face in accessing capital, the program has been instrumental in supporting the growth of tech startups that bring new products to market and create jobs in the province."
STSI offers a non-refundable 45 per cent tax credit to individuals, corporations, and venture capital funds that invest in early-stage technology companies. Since launching in 2018, the program has attracted $22 million of investment and supported the creation of 144 new jobs among 62 eligible companies. The incentive has increased the size of the province's investor pool, with 184 investors being approved to raise capital.
One start-up that has benefitted from the incentive is Saskatoon-based SalonScale. Their app allows salon owners to weigh, track, and charge for the amount of hair colour they use in real-time. SalonScale raised more than $1 million in seed funding in 2019, with more than $700,000 coming from STSI investors. The company has created fourteen new positions since receiving investment and is trusted by more than 7,000 hair colourists all over the world.
"Access to the Saskatchewan Technology Startup Incentive for SalonScale and its investors made a win-win scenario," SalonScale CEO and founder Alicia Soulier said. "Our Saskatchewan investors were given an incentive that would lower their risk and increase investment, which has positioned SalonScale for success today. It's great to see the Province of Saskatchewan supporting startups in this way."
In addition to extending the program, the proposed legislation will respond to industry feedback and make the following program enhancements:
- Increase the amount of capital a startup can raise under the program from $1 million to $2 million;
- Set the value of the annual tax credit cap at $2.5 million; and
- Extend the investment holding period from two to three years.
These changes will attract larger investments into the tech sector and create the conditions companies need to thrive. Doing so will support the government's commitment to triple the growth of the technology sector by 2030.