Flow-through shares for technology companies
As part of our ongoing series examining the ecosystem necessary to bring technology to market, we asked the dean of Ottawa’s technology sector, Denzil Doyle, to weigh in on some of the critical issues facing technology companies. This is the first of Denzil’s commentaries and we welcome your comments.
By Denzil Doyle
During the past three or four decades, Canadian policy makers at both the federal and provincial levels have tried just about every trick in the book to finance technology companies, particularly those that are at an early stage in their development. In the early 1980s, we had the Scientific Research Tax Credits (SRTCs) that allowed technology companies that were not yet profitable to predict in advance what their R&D expenditures were going to be during a certain year and then effectively sell those expenditures to taxable corporations and individuals for use as tax write-offs. The troubles came about when the companies were asked to verify their expenditure to the tax authorities. Many CEOs and CFOs ended up in jail or spent years dealing with aggressive tax auditors.
