How much funding can be received?

Funds up to 45% of admissible expenses, capped at $5000000 per project.

What is the deadline to apply?

The deadline to apply is not specified.

Who are the financial supporters of the Nova Scotia innovation equity tax credit?

Nova Scotia innovation equity tax credit is funded by Government of Nova Scotia

What are Nova Scotia innovation equity tax credit's eligibility criterias?

Canadian Controlled Private Corporation operating in Nova Scotia Less than $15 million in assets and fewer than 100 employees Incorporated less than 10 years ago

Nova Scotia innovation equity tax credit

Last Update: April 27, 2025

NS, Canada

Tax incentive encouraging investment in innovative Nova Scotia businesses

Nova Scotia innovation equity tax credit at a glance

Eligible Funding

From 1,000 to 5,000,000
Up to 45% of project cost

Timeline

Continuous Intakes

Financing Type

Tax Credits

Eligible Industries

Manufacturing
Professional, scientific and technical services
Health care and social assistance

Grant Providers

Government of Nova Scotia

Status

Open

Overview of the Nova Scotia innovation equity tax credit program

The Nova Scotia Innovation Equity Tax Credit provides a non-refundable income tax credit to encourage investments in eligible Nova Scotia small and medium-sized corporations engaged in innovative activities. Investors may receive tax credits on eligible investments, supporting up to $5 million per corporation, for activities related to research, development, or commercialization of new technologies, products, or processes.

Financing terms and conditions

Individual investors may receive a non-refundable income tax credit of 35% or 45% of their eligible investment, depending on the business sector, with a maximum annual eligible investment of $250,000 and a corresponding maximum annual tax credit of $87,500 (35%) or $112,500 (45%).
Corporate investors may receive a non-refundable income tax credit of 15% on eligible investments, with a maximum annual eligible investment of $500,000 and a corresponding maximum annual tax credit of $75,000.
Each eligible investment must be a minimum of $1,000 for individuals and $50,000 for corporate investors.
The tax credit is non-refundable; unused portions may be carried forward for up to 7 years or carried back for 3 years (specific to tax year start dates).
Funds raised by an approved corporation through all specified issues must not exceed a total of $5 million.

Eligible projects & activities

Development or implementation of new technologies within a business.
Research and development projects aimed at commercialization of new products, services, or processes.
Application of existing technologies in new ways to create innovative products, services, or processes.

Examples of admissible projects:

$ 50,000

Launching an adaptive technology program for youth with disabilities

$ 45,000

Implementing energy-efficient refrigeration in a community grocery store

$ 35,000

Piloting a compost collection program for local restaurants

$ 40,000

Developing a bilingual digital arts workshop for newcomers

$ 64,000

Automating small-scale bakery production with dough handling machinery

$ 74,000

Modernizing a textile cooperative’s cutting and sewing facility

Eligibility criteria of the Nova Scotia innovation equity tax credit program

The applicant must be a Canadian Controlled Private Corporation carrying on business in Nova Scotia and registered in Nova Scotia.
The company must have been incorporated less than 10 years ago and have its head office in Nova Scotia.
The company must have fewer than 100 employees and less than $15 million in assets (including associated corporations).
The company must be developing or implementing new technologies, or applying existing technologies in a new way to create new products, services, or processes.
At least 50% of the company’s remuneration must be paid to employees or full-time contractors who are residents of Nova Scotia and report to or deal with a permanent establishment in Nova Scotia.

Who is eligible?

Small and medium-sized corporations engaged in innovative activities
Companies developing or implementing new technologies
Businesses applying existing technologies in new ways to create new products, services, or processes
Enterprises in the oceans technology sector
Enterprises in the life sciences sector

Who is not eligible

Companies whose main activities are construction, real estate development, leasing or selling property, or hotel ownership and management.
Businesses primarily engaged in retail (including food and beverage services).
Firms involved in oil or gas exploration, development, or production.
Companies active in the film industry or those receiving Film Industry, Digital Media, Digital Animation, or Capital Investment Tax Credits.
Professional practices such as accountants, lawyers, dentists, doctors, veterinarians, and chiropractors, incorporated for self-regulated activities.

Eligible expenses

Business activities of the approved corporation in Nova Scotia.
Hiring expertise or purchasing materials and equipment that cannot be sourced in Nova Scotia (if necessary to obtain outside the province).
Purchase of land required for the corporation's active business.

Eligible geographic areas

Companies carrying on business in Nova Scotia and registered in Nova Scotia.
Companies with their head office in Nova Scotia.

How to apply to the Nova Scotia innovation equity tax credit program

Step 1: Application for Approval (Certificate of Registration)Download and complete the application form from the Nova Scotia Department of Finance and Treasury Board website.
Obtain signatures from an authorized officer of the applicant corporation (electronic signatures are accepted).
Prepare and attach the following documents:Financial statements (for the previous tax year), with review engagement report or auditor’s report for the applicant corporation and all associated corporations (not required if recently incorporated).
T2 Corporate Income Tax Returns for the applicant corporation and all associated corporations (not required if recently incorporated or in first tax year).
Up-to-date and notarized shareholder register with complete share transaction history.
Corporate chart/structure (if applicable).
Shareholder agreements (if any).
Debenture agreements (if any).
Proposed investor forms for all eligible investors (available on the Department’s website).
A brief business plan (2-3 pages max), including business activities, technology development/application, funding use plan and timeline, directors’ list, and total amount raised to date.
Certificate of incorporation, constitution/articles of incorporation, and memorandum of association (unless previously submitted and unchanged).
Submit the complete application package by email to the IETC administrator (paper copies are not accepted).
Step 2: Issuance of Eligible InvestmentsUpon approval, receive a certificate of registration specifying the eligible period for raising funds.
Issue eligible investments (common voting shares, eligible preferred shares, or eligible convertible debentures) to eligible investors within the certificate’s timeframe.
Step 3: Application for Tax Credit CertificatesAfter the specified issue is complete, compile required documents:
Signed statement from an authorized officer (form available on Department’s website).
Updated and notarized shareholder register.
Investor Data Report (Excel format, available on Department’s website), listing all eligible investors and investments made during the certificate period.
Copies of each share certificate or convertible debenture issued to eligible investors, showing terms.
Signed statements from each eligible investor (form available on Department’s website).
Proof of payment from each eligible investor (amount and date of investment).
Send the application for tax credit certificates by email to the IETC administrator (no paper copies accepted), as soon as possible and within 6 months after the expiry date on the certificate of registration.
Step 4: Submission of Annual ReturnsFor each of the 4 years after expiry of the certificate of registration, submit an annual return within 6 months of the approved corporation’s tax year end.
Annual return should include:
Annual Report (signed by an authorized officer; form available on Department’s website).
Up-to-date and notarized shareholder register.
Financial statements for the previous tax year, with review engagement report or auditor’s report.
T2 Corporate Income Tax Return for the previous tax year (with forms and schedules).
Send the annual return via email to the IETC administrator (paper copies not accepted).

Additional information

Investors must hold their eligible investment for a minimum of 4 years to avoid tax credit repayment, with specific exceptions such as investor death or amalgamation.
Funds raised through the IETC cannot be used for prohibited purposes such as lending, acquiring securities, or paying dividends, among others.
If a corporation’s approval is cancelled, penalties can be imposed up to the total tax credits issued to all eligible investors across all specified issues.
All application documents must be submitted via email; paper copies are not accepted.