Saskatchewan Finance Minister Ken Krawetz announced in the 2012 Saskatchewan budget that the Film Employment Tax Credit, which has been in place since 1998, will no longer be offered as of July 1, 2012.  Most Canadian provinces, as well as the Canadian federal government, offer digital media tax credits and to encourage this industry.  This announcement has raised alarm over the future of the film and TV industry in Saskatchewan, and created an immediate outcry from the local Saskatchewan and the Canadian film industry.

The Saskatchewan Film Employment Tax Credit was introduced in 1998 to encourage the film and TV industry to invest in local production.  This tax credit has resulted in business incentives totally $100 million since its introduction, and its elimination is expected to save the government $3 million in 2012, and $8 million annually once it is fully phased out by the end of 2014.

Greg Smith, president of Canada’s Venture Capital and Private Equity Association (CVCA), described the current landscape of Canadian entrepreneurship:

“Canada has an historic opportunity to become an innovation leader by making major investments that enable our best technology businesses to realize optimal growth and compete on a global stage,” he said in a statement. “However, in order to act decisively on this opportunity, we must first overcome challenges to supplying VC funds that, in turn, supply entrepreneurs.”

Without VC initiatives, small companies with big ideas are being caged by cash crunch – running low enough on cash so that it has a significant impact on operations. Exponential growth can also cause a company to be short on working capital. Business growth requires a steady cash flow, enabling the acquisition of equipment and personnel. Lacking VC, companies may be forced to unload assets or sell a part of the business to raise crucial funds.

The cheapest forms of financing are the sources taken for granted:

-Cash in bank account
-Revenue from sales
-Financing from tangible assets (accounts receivable factoring, purchase order factoring).

Aside from borrowing from friends and family, the next funding options come from cost-heavy debt or equity financing. Debt financing directs small businesses to traditional institutions, banks and credit unions, and many small businesses run into trouble meeting financing prerequisites. Equity financing or “share capital” – funding through selling common or preferred stock to individual or institutional investors – is dilutive in nature and requires loss of ownership and possibly control of the business.

In order to get to an operable stage, small businesses can also consider bridge financing and financing from intangible assets. Bridge financing is used to gain immediate cash flow while waiting for an expected inflow of cash. Basically bridge financing provides a forwarded payment for future sales or anticipated inflow of cash. Financing on intangible assets, such as SR&ED (Canada’s Scientific Research and Experimental Development credit program), is not often offered by the traditional institutions but is a non-dilutive form of bridge financing. North Innovation Fund (NIF) is one such source of funding, providing accrual SR&ED financing to support small business and entrepreneurs. NIF released their first Fund this month in response to the increasing demand of funding alternatives for start-up companies in Canada. SR&ED financing will bridge the funding gap for companies with R&D initiatives and new ideas to help make the leap to commercialization.

NIF offers a unique opportunity which includes support in identifying SR&ED activities and a friendly approach to funding. Initiatives like NIF will help push Canada to forefront of growth and innovation.

The Biotechnology Industry Organization (BIO) has recently announced the industrial biotechnology companies that have been selected to showcase their new technologies, accomplishments and business models to leading investors and analysts at the BIO 9^th  annual World Congress on Industrial Biotechnology and Bioprocessing, to be held on April 29- May 2 in Orlando, FL.  

 Company executives from several companies including Virdia, Itaconix, Agrivida, Proterro, CO2 Solutions , Kiverdi , Cellana and Terrabon will make formal 25-minute presentations to spur investment opportunities and business partnerships.

 The BIO congress is a forum for networking and creating partnership opportunities as well as an exhibition of current technological trends and advancements aimed at delivering innovative technological solutions to the global market. Bringing together more than 1,000 innovative minds, this is the world’s largest industrial biotechnology event for business leaders, investors and policy makers in biofuels, biobased products, renewable chemicals, synthetic biology, food ingredients and biomass, with commercialization of advanced biofuels as this year’s prevailing theme.

 This will be the first year presenting an investor discussion panel to examine the biggest investment trends of 2012 and identify  investment opportunities and funding sources for clean tech business. The investor panel will be moderated by John May, of Stern Brothers & Co., and feature industry experts.

 Six breakout session tracks will be additionally featured, providing participants with a smaller group setting to address specific industry topics such as Advanced Biofuel Technologies; Algae and Feedstock Crops; Renewable Chemical Platforms and Biobased Materials; Specialty Chemicals; Synthetic Biology and Metabolic Engineering; and Technical Presentations.

 A strong Canadian presence will be demonstrated at the congress with notable participants such as Ontario Agri-food Technologies, Agriculture & Agri-Food Canada, Ontario Ministry of Agriculture Food and Rural Affairs, Ontario Ministry of Economic Development & Trade, The Chemical Institute of Canada, BIOTECanada, as well as the University of Waterloo and the University of Guelph among many others.

In collaboration with Excellence in Manufacturing Consortium (EMC), NorthBridge Consultants will be holding a SR&ED seminar in Milton, Ontario on April the 26th, 2012.

Date: April 26, 2012

Time: Registration & Breakfast (7:30am – 8:00am); Presentation and Discussion (8:00am – 10:00am)

Location: 605 Santa Maria Blvd, Milton ON  L9T 6J5

Title of Seminar: How to Prepare for a SR&ED Review

Topics Covered:

- What to expect if a SR&ED review is requested by the CRA

- How manufacturers can prepare for a SR&ED review

- Required technical and financial documentation required

- What to expect after a SR&ED review

For more information, or to register, please contact Kevin Lenko at klenko@emccanada.org or 289-442-0871.

In collaboration with Excellence in Manufacturing Consortium (EMC), NorthBridge Consultants will be holding a SR&ED seminar in Hawkesbury, Ontario on April the 20th, 2012.

Date: April 20, 2012

Time: Registration & Breakfast (8:30am – 9:00am); Presentation and Discussion (9:00am – 11:00am)

Location: 519 Main Street East, Hawkesbury, ON

Title of Seminar: How to Prepare for a SR&ED Review

Topics Covered:

- What to expect if a SR&ED review is requested by the CRA

- How manufacturers can prepare for a SR&ED review

- Required technical and financial documentation required

- What to expect after a SR&ED review

For more information, or to register, please contact Suzanne Audet at saudet@emccanada.org or 613-290-1185.