Labour-Sponsored Venture-Capital Tax Credit

• Maximum annual tax credit amount is $2,000 per individual investor.
• The credit is not refundable and cannot be carried forward to future years.

• The company must be a small or medium-sized business or a co-operative based in Nova Scotia.
• The business must seek equity financing by issuing newly issued common voting shares that are non-redeemable, non-convertible, and unrestricted in profit sharing or participation upon dissolution.
• The shares must be issued through a registered labour-sponsored venture capital corporation (LSVCC) sponsored by a trade union.
• The investment must not be eligible for any other tax credit or deduction under the Income Tax Act, except for RRSP deduction or the federal LSVCC tax credit.

Who is eligible?

• Small and medium-sized businesses in Nova Scotia
• Co-operatives in Nova Scotia

Eligible expenses

• Investment in newly issued common voting shares of registered Labour-Sponsored Venture Capital Corporations (LSVCCs) that are non-redeemable, non-convertible, and unrestricted in profit sharing or participation upon dissolution.

Eligible geographic areas

• Nova Scotia

• Investors must retain their shares for a minimum of 8 years to avoid repayment of the tax credit.
• The tax credit is not endorsed or guaranteed by the provincial government; investors assume all associated risks.
• Shares purchased must not be eligible for other tax credits or deductions except for RRSP or federal LSVCC tax credits.
• The tax credit cannot be carried forward or refunded; it can only be used in the year the investment is made if sufficient tax is payable.