British Columbia is expanding its aggressive tax breaks for high-tech companies, a bid to attract and retain firms working on virtual reality and other futuristic tools.
Premier Christy Clark kicked off the second annual BCTech conference Tuesday with a pledge to broaden a tax credit targeting companies working on virtual and augmented reality.
“We can’t just be a great place to live; we need to be a great place to do business,” Clark said. Technology, she added, should be “the center of our economy.”
British Columbia has long been home to major natural-resources firms, as well as smaller clusters in telecommunications and finance, and a growing technology startup scene. But the area lacks the giant, cutting-edge technology anchors on the scale of Boeing, Microsoft and Amazon.com in the Seattle area.
British Columbia Premier Christy Clark kicks off the second annual BCTech conference on Tuesday. (Province of British Columbia)
Washington state has its own history of using state aid to support homegrown industries, from a multibillion-dollar tax break awarded to Boeing to convince the company to build a new airplane in the state, to sales-tax exemptions and research and development credits used by Microsoft. In 2015, however, the state let lapse a research and development tax-credit program for high-tech companies.
Vancouver and province officials have ramped up their own support for industry in recent years, an effort to raise the profile of a technology center that has long been in the shadow of Silicon Valley and Seattle on the West Coast.
The province has cut small-business taxes and extended a major scientific research and development tax credit, plus a new government-sponsored $100 million startup fund recently made its first investments.
B.C. government officials also put together the regional technology conference taking place over two days here on Vancouver’s waterfront.
The province’s 2017 budget had previously expanded a tax credit targeting digital media companies to include firms working on virtual-reality entertainment.
Now, that program, which offers a tax credit equal to 17.5 percent of the cost of wages of workers in the field, will be expanded to include all commercial applications for virtual reality, Clark said at the conference.
The combination makes the Vancouver area “probably the best” in North America in terms of government support for tech startups, said Derek Chen, co-founder of virtual-reality software startup Archiact.
His company, which started as two people working in a windowless basement in Vancouver in 2013, now employs 61 people on a floor of a downtown office tower, and another 10 in a Shanghai office.
The firm has built software powering virtual-reality arcades in China and is working on VR games as well as software for business uses in robotics and architecture.
Archiact, along with another local firm and Microsoft, formed a B.C. virtual-reality trade group and lobbied for the new tax cut, Chen said.
The cut could benefit Microsoft, which does some of the work on its HoloLens augmented-reality headset from its downtown Vancouver outpost, which is home to about 500 full-time employees and 50 interns working on a wide range of the company’s products. Microsoft spokespeople didn’t immediately say whether the company planned to take advantage of the new credit.
Microsoft Corporate Vice President Julia White, who spoke about the company’s broad technology aims after Clark’s conference address, said on stage that the tax incentives and other government programs were “terrific.”
“I give a lot of credit to the local government” for the region’s rising profile in technology circles, White said in an interview on the sidelines of the conference.
Also on Tuesday, Clark said she would work to deepen ties with Seattle and Silicon Valley to draw more workers, companies and investors to the province, and reiterated a commitment made at a Microsoft-sponsored event last year to work on cross-border issues with Washington state officials.
In her comments at the conference, Clark repeated a refrain that sounded more like the pro-business tones of U.S. politicians on the campaign trail rather than of a high-ranking leader in a country with significant commitments to a social-safety net and a state role in the economy.
Government, the premier said, “cannot spend your money better than you can.”