Saskatchewan Technology Start-up Incentive Regulations, S-33.1 Reg 1

1 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 The Saskatchewan Technology Start-up Incentive Regulations being Chapter S-33.1 Reg 1 (effective November 2, 2018) as amended by Saskatchewan Regulations 94/2019, 59/2021, 17/2022, 27/2024 and 20/2026. NOTE: This consolidation is not official. Amendments have been incorporated for convenience of reference and the original statutes and regulations should be consulted for all purposes of interpretation and application of the law. In order to preserve the integrity of the original statutes and regulations, errors that may have appeared are reproduced in this consolidation. 2000-1 2 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE Table of Contents 1 Title 14 Exceptions to requirement to repay tax credit, payment of interest re section 17 of the Act 2 Definitions and Interpretation 15 Annual return 2.1 Adoption of guidelines 15.1 Annual return – limited partnerships 2.2 Eligible sectors 15.2 Power to require information or material - limited 2.3 Application deadline partnerships 3 Registration requirements – eligible start-up business 16 Requirements for registration of a venture 4 Register of eligible start-up businesses capital corporation 5 Ineligible investments re section 6 of the Act 17 Register of venture capital corporations 6 Limits on equity capital 18 Requirements for venture capital corporations 7 Related persons re section 8 of the Act 19 Investment in an eligible start-up business by a venture capital corporation 7.1 Control of eligible start-up business re limited partnership 20 Investment for certain purposes prohibited 7.2 Maximum annual investment re limited partnership 21 Prohibitions re control of eligible start-up businesses by venture capital corporations 8 Issuance of tax credit certificates – conditions to be met 22 Prohibitions re non-arm’s length investments 8.1 Tax credit certificate not to be issued to 23 Tax credit certificates general partner 24 Interest on repayment of tax credit amounts – 8.2 Money foregone by tax credit venture capital corporations 9 Prohibited use of funds 25 Liability to repay tax credits 10 Revocation or suspension of registration 26 Revocation or suspension of registration of a venture capital corporation 11 Permitted transfer of equity shares 27 Annual return 12 Revocation of registration – payment of interest 27.1 Release of information, etc. 13 Payment of lesser amount re subsection 14(2) of the Act 27.2 Provision of records 13.1 Repayment of tax credit – limited partnerships 28 Coming into force 3 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 CHAPTER S-33.1 REG 1 The Saskatchewan Technology Start-up Incentive Act Title 1 These regulations may be cited as The Saskatchewan Technology Start-up Incentive Regulations. Definitions and Interpretation 2(1) In these regulations: “Act” means The Saskatchewan Technology Start-up Incentive Act; “applicant” means a technology-based start-up business that applies to the minister pursuant to section 4 of the Act; “associate”, if used to indicate a relationship with a person, means: (a) a corporation of which the person owns, directly or indirectly, shares carrying 10% or more of the voting rights for the election of the directors of the corporation; (b) a partner of the person; (c) a participant in a joint venture with the person; (d) a trust or estate: (i) in which the person has, in the opinion of the minister, a substantial beneficial interest; or (ii) for which the person serves as trustee or in a similar capacity; (e) a spouse, parent, grandparent, child, grandchild, brother or sister of the person; or (f) a parent, grandparent, child, grandchild, brother or sister of the spouse of the person, residing in the same residence as the person; “clean technology” means innovations that do one or more of the following: (a) increase energy efficiency and conservation; (b) reduce greenhouse gas emissions; (c) reduce the net environmental impacts of existing industrial processes; but does not include: (d) agricultural processing for the purpose of human or animal consumption; (e) food and beverage development or manufacturing; or (f) power generation; 4 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE “digital technology” means innovative solutions based on the use of electronics, software, computers, artificial intelligence and other similar information or data systems; “eligible sector” means an eligible sector as described in section 2.2; “guidelines” means the Saskatchewan Technology Startup Incentive (STSI) Program Guide, which sets out the administrative process for the program described in the Act and these regulations, adopted pursuant to section 2.1; “life sciences technology” means the development and application of innovative solutions in human and animal health and agricultural biotechnology, and includes the following: (a) therapeutics, diagnostics and pharmaceuticals; (b) medical devices; (c) biofertilizers, biopesticides and genomics; but does not include: (d) agricultural processing for the purpose of human or animal consumption; (e) food and beverage development or manufacturing; or (f) power generation; “number of employees” means the total of: (a) the number of full-time employees of the applicant, as evidenced by the applicant to the satisfaction of the minister; and (b) the number of full-time equivalent employees of the applicant, as calculated pursuant to subsection (3). (2) For the purposes of the Act and these regulations, a person is an eligible investor if: (a) the person is an accredited investor within the meaning of National Instrument 45-106, as adopted pursuant to The Securities Commission (Adoption of National Instruments) Regulations; and (b) in the case of: (i) an individual, subsection 6(1) of The Income Tax Act, 2000 applies to the person; (ii) a corporation, subsection 54(1) of The Income Tax Act, 2000 applies to the corporation; (iii) a limited partnership, subsections (2.1) and (2.2) and sections 7.1, 7.2 and 13.1 apply to the limited partnership, its limited partners and general partner, as the case may be. 5 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 (2.1) Subject to subsection (2.2), in the case of an eligible investment made by a limited partnership: (a) the amount of each limited partner’s eligible investment is to be calculated as the amount that would reasonably be considered as that limited partner’s proportionate share in the eligible investment, as determined in a manner acceptable to the minister, by the general partner of the limited partnership; and (b) each limited partner mentioned in clause (a) must have been, at the time the investment was made, an eligible investor in its own right, capable of making the investment directly. (2.2) For the purposes of clause 6(1)(b) of the Act, in the case of the purchase of equity shares by a limited partnership, each of the limited partners or the general partner, as the case may be, is deemed to be the eligible investor for the amount calculated in accordance with clause (2.1)(a). (3) For the purposes of determining the number of employees as that term is defined in subsection (1): (a) the minister shall convert to the full-time equivalent for the purposes of that definition, in any manner the minister considers appropriate, based on evidence that is: (i) provided by an applicant with respect to permanent, part-time employees; and (ii) otherwise satisfactory to the minister; (b) if the minister determines that the applicant has arranged to have persons performing work or services for the applicant under any arrangement that is not a contract of employment for the purposes of meeting the requirements of subclause 4(2)(a)(i) of the Act, the minister may deem those persons to be employees; and (c) if the minister makes a determination pursuant to clause (b), the minister shall: (i) give notice of that determination to the applicant to which that determination applies; and (ii) provide the applicant with an opportunity to make representations respecting the minister’s determination. 5 Oct 2018 c.S-33.1 Reg 1 s2; 13 Dec 2019 SR 94/2019 s3; 10 Apr 2026 SR 20/2026 s3. Adoption of guidelines 2.1(1) The Saskatchewan Technology Startup Incentive (STSI) Program Guide, dated October 1, 2018, published by Innovation Saskatchewan, is adopted, as amended from time to time, for the purposes of these regulations. (2) The minister may cause the guidelines to be posted on Innovation Saskatchewan’s website and to be made known to the public in any other manner that the minister considers appropriate. 10 Apr 2026 SR 20/2026 s4. 6 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE Eligible sectors 2.2 For the purposes of clause 4(2)(a) of the Act, an applicant must carry on business in one or more of the following sectors: (a) clean technology; (b) digital technology; (c) life sciences technology. 10 Apr 2026 SR 20/2026 s4. Application deadline 2.3(1) For the purposes of subsection 4(1) of the Act, a technology-based start-up business may apply on or before March 31, 2029 to be registered as an eligible start-up business. (2) For the purposes of subsection 19(1) of the Act, a corporation may apply on or before March 31, 2029 to be registered as a venture capital corporation. 10 Apr 2026 SR 20/2026 s4. Registration requirements – eligible start-up business 3(1) For the purposes of the minister’s determination regarding whether the applicant is to be registered as an eligible start-up business in accordance with section 4 of the Act, the applicant must provide: (a) its business plan, if available, or other documentation that describes the applicant’s business strategy in sufficient detail to allow the minister to assess the applicant’s eligibility; (b) a copy of its most recent: (i) annual financial statements, if any; and (ii) financial forecast, if any; (c) a description of the new product, service or process that the applicant intends to create as a result of the development of a novel technology or the use or combining of technology in a novel way; (d) evidence that the applicant is permanently established in Saskatchewan; (e) if available, a copy of its most recent income tax return and the notice of assessment issued by the Canada Revenue Agency for the taxation year for which that return was filed; (f) a statement of the amount of equity capital to be raised by the applicant by issuing equity shares; (g) a description of its proposed use of the equity capital raised; (h) a statement certifying that the applicant is an eligible small business according to the requirements set out in subclauses 4(2)(a)(i) to (iv) of the Act; 7 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 (i) a statement, signed by an officer of the applicant, attesting to the completeness and accuracy of the information provided in the application and the accompanying documents; and (j) any additional information, undertakings or documents that the minister considers necessary to determine or verify the applicant’s eligibility to issue shares as eligible investments. (2) In addition to the requirements for registration set out in subsection (1) and in subclauses 4(2)(a)(i) to (iv) of the Act, the applicant must provide evidence satisfactory to the minister that, at the time of the application, the applicant’s product or product concept is accepted by the market for which it is intended and that the market is willing to purchase the product. (3) The minister shall reject an application if the minister is satisfied that the applicant has failed to comply with any of the requirements of subsections (1) and (2). (4) For the purposes of assessing whether the technology that is the subject of an application qualifies as appropriate as described in clause 4(2)(b) of the Act, the minister shall have regard to: (a) the extent to which the technology or its use or combination is novel; (b) the manner by which the applicant plans to market the technology; (c) whether there is a plan to increase the scale of the new company through increased sales and market penetration beyond Saskatchewan; and (d) any other circumstances that the minister considers relevant. (5) The minister, in completing the assessment mentioned in subsection (4), may engage the services of or retain any technical, professional or other advisors that the minister considers necessary. (6) A certificate of registration that is issued by the minister pursuant to subsection 4(3) of the Act is to contain the following: (a) the name of the corporation being issued the certificate; (b) the number assigned to the corporation by the Director of Corporations pursuant to The Business Corporations Act; (c) the date on which the certificate is issued. 5 Oct 2018 c.S-33.1 Reg 1 s3. Register of eligible start-up businesses 4 The register mentioned in section 5 of the Act must contain the following information with respect to each eligible start-up business: (a) the corporate name of the eligible start-up business; (b) the address and contact information of the eligible start-up business; 8 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE (c) a description, in summary form, of the information provided by the eligible start-up business pursuant to clause 3(1)(a); (d) the amount of equity capital that the eligible start-up business intends to raise; (e) the current number of employees and the percentage of those employees employed in Saskatchewan; (f) the names of and contact information for the incorporators and officers of the eligible start-up business. 5 Oct 2018 c.S-33.1 Reg 1 s4. Ineligible investments re section 6 of the Act 5(1) For the purposes of clause 6(1)(c) of the Act, an investment is an eligible investment if the equity shares issued do not: (a) create a debt between the holder or beneficial owner of the equity shares and any person; (b) reduce the impact of any loss the holder or beneficial owner sustains in holding or disposing of the equity shares; or (c) require the eligible start-up business to repurchase the shares before the expiry of 3 years after the date of the investment. (2) For the purposes of clause (1)(a), an investment is deemed to have created a debt if any person is required: (a) to repurchase the equity shares before the expiry of 3 years after the date of the investment; or (b) to repay the amount of the investment, including any interest, penalty, fee or other charge with respect to that amount, before the expiry of 3 years after the date of the investment. (3) For the purposes of clause (1)(b), an investment is deemed to have reduced the impact of any loss the holder or beneficial owner sustains in holding the equity shares if any person is required to repurchase the shares or pay any interest, penalty, fee or other charge with respect to the amount of the investment before the expiry of 3 years after the date of the investment. 21 May 2021 SR 59/2021 s3. Limits on equity capital 6 For the purposes of subsection 7(1) of the Act, an eligible start-up business must not raise equity capital in excess of $2,000,000. 5 Oct 2018 c.S-33.1 Reg 1 s6; 21 May 2021 SR 59/2021 s4. 9 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 Related persons re section 8 of the Act 7 For the purposes of subsection 8(1) of the Act, an eligible investor must not make or hold an investment in an eligible start-up business in conjunction with any related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act (Canada). 5 Oct 2018 c.S-33.1 Reg 1 s7. Control of eligible start-up business re limited partnership 7.1 For the purposes of subsection 8(1) of the Act, in the case of an eligible investment made by a limited partnership, the extent of ownership of shares carrying voting rights for the election of directors, or other manner of control, of the eligible start-up business is to be determined according to the total amount of the eligible investment made by the limited partnership. 13 Dec 2019 SR 94/2019 s4. Maximum annual investment re limited partnership 7.2(1) For the purposes of subsection 9(2) of the Act, in the case of an eligible investment made by a limited partnership, the maximum annual investment set out in that subsection for which a tax credit certificate may be issued is to be applied with respect to each limited partner. (2) Notwithstanding any other provision of these regulations, the maximum annual investment mentioned in subsection 9(2) of the Act is to be calculated without regard to the form in which the eligible investor made the investment in any eligible start-up business. 13 Dec 2019 SR 94/2019 s4. Issuance of tax credit certificates – conditions to be met 8(1) Before issuing a tax credit certificate to eligible investors pursuant to subsection 10(1) of the Act, the minister must be satisfied that the following conditions with respect to the eligible start-up business in which the eligible investors have invested have been met: (a) the eligible start-up business has been registered in accordance with section 4 of the Act; (b) the eligible start-up business’ equity capital has been raised in accordance with section 6 of the Act and does not exceed the limit set out in section 6 of these regulations; (c) each of the eligible investors in the eligible start-up business acquired the equity shares on or before December 31, 2028 in accordance with section 7 of the Act; (d) no tax credit certificate has previously been issued with respect to the equity shares mentioned in clause (c); (d.1) the equity capital that is the subject of the application for the tax credit certificate: (i) is not an eligible investment as defined in The Labour-sponsored Venture Capital Corporations Act with respect to which a tax credit has been allowed pursuant to that Act; and 10 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE (ii) is not an eligible investment as defined in The Small and Medium Enterprise (SME) Investment Tax Credit Act with respect to which a tax credit certificate has been issued or applied for pursuant to that Act (e) the eligible start-up business and eligible investors have otherwise complied with the Act and these regulations; (f) any other reasonable conditions that the minister considers appropriate with respect to the issuing of, and amounts on, the tax credit certificates. (2) The minister may cause the conditions mentioned in clause (1)(f) to be posted on the ministry’s website and to be made known to the public in any other manner that the minister considers appropriate. (3) In the case of an eligible investment made by a limited partnership, notwithstanding that the conditions mentioned in subsection (1) have been satisfied, the minister may issue a tax credit certificate pursuant to subsection 10(1) of the Act only after the limited partnership provides to the minister, in a manner acceptable to the minister: (a) the names of the general partner and each limited partner in the limited partnership; (b) a declaration of limited partnership, including the capital contributions and ownership interests of all of the limited partners; (c) a declaration stating that the limited partners who have made eligible investments are accredited investors as described in clause 2(2)(a); (d) a copy of the executed limited partnership agreement; and (e) the amount of each limited partner’s eligible investment calculated in accordance with clause 2(2.1)(a). (4) Any tax credit certificate issued to an eligible investor by the minister in the circumstances set out in subsection (3) is to be sent to the general partner. (5) A limited partnership must not alter its declaration of limited partnership or its limited partnership agreement with respect to the interests of the partners in the limited partnership without the prior written approval of the minister and, if the minister so approves, the limited partnership must provide to the minister an amended declaration of limited partnership as soon as is practicable. (6) No application shall be submitted or accepted pursuant to section 9 or 29 of the Act after March 31, 2030. 5 Oct 2018 c.S-33.1 Reg 1 s8; 13 Dec 2019 SR 94/2019 s5; 10 Apr 2026 SR 20/2026 s5. Tax credit certificate not to be issued to general partner 8.1 Notwithstanding any other provision of these regulations, in the case of an eligible investment made by a limited partnership, no tax credit certificate shall be issued for the benefit of the general partner. 13 Dec 2019 SR 94/2019 s6. 11 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 Money foregone by tax credit 8.2(1) In this section, “fiscal year” means the period commencing on April 1 in one year and ending on March 31 in the following year. (2) For the purposes of section 10.1 of the Act, the maximum amount of money that may be forgone by tax credit is: (a) $2,500,000 for the 2021-22 fiscal year; (b) $3,500,000 for the 2022-23 and 2023-24 fiscal years; (c) $7,000,000 for the 2024-25 and through 2028-29 fiscal years. 21 May 2021 SR 59/2021 s5; 8 Apr 2022 SR 17/2022 s2; 26 Apr 2024 SR 27/2024 s2; 10 Apr 2026 SR 20/2026 s6. Prohibited use of funds 9(1) For the purposes of section 11 of the Act, an eligible start-up business must not use equity capital for any of the following purposes: (a) lending; (b) purchasing real property, unless the purchase is ancillary to the business activities of the eligible start-up business; (c) depositing in a high interest savings account; (d) acquiring Guaranteed Investment Certificates; (e) acquiring or trading in securities not otherwise permitted by the Act or these regulations; (f) purchasing goods or services from the eligible start-up business’ eligible investors, affiliates or other related persons, other than goods or services purchased at fair market value; (g) paying a debt obligation, unless that payment is considered necessary by the minister for the financial viability of the eligible start-up business; (h) subject to subsection 14(1), purchasing or redeeming previously-issued shares of the eligible start-up business or its affiliates within 3 years after the date of issue of the equity shares; (i) paying dividends; (j) retiring any part of a liability to a shareholder of the eligible start-up business or one of its affiliates, or a liability to a shareholder’s associate or affiliate; (k) funding all or part of the purchase by the eligible start-up business of any of the assets of a proprietorship, partnership, joint venture, trust or corporation at a price that is greater than the fair market value of the assets purchased. (2) In the case of equity capital raised by an eligible start-up business as a result of an eligible investment made by a limited partnership, the prohibition set out in clause (1)(f) applies with respect to the purchase of goods or services from the limited partnership and any of its limited partners. 5 Oct 2018 c.S-33.1 Reg 1 s9; 13 Dec 2019 SR 94/2019 s7; 21 May 2021 SR 59/2021 s6. 12 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE Revocation or suspension of registration 10 For the purposes of subsection 12(1) of the Act, the minister may suspend or revoke the registration of an eligible start-up business if the minister determines that the eligible start-up business: (a) is contravening or has contravened the Act or these regulations or a condition that the minister imposes pursuant to the Act or these regulations; (b) has misrepresented any information provided to the minister, either knowingly or through circumstances amounting to negligence; (c) has obtained its registration fraudulently or by providing false or misleading information or documents; (d) has failed to provide information, records or documents when they are required pursuant to the Act; (e) has provided information, records or documents mentioned in clause (d) that contain false or misleading information; (f) has applied any equity capital raised for a use prohibited pursuant to section 9; (g) at any time during the 3 years following the date on which the eligible start-up business raises any equity capital, does not comply with subclauses 4(2) (a) (ii) and (iv) and clause 4(2)(b) of the Act; or (h) has not raised any equity capital within 2 years after the eligible start-up business’ registration pursuant to subsection 4(3) of the Act. 5 Oct 2018 c.S-33.1 Reg 1 s10; 21 May 2021 SR 59/2021 s7. Permitted transfer of equity shares 11(1) In this section: (a) “registered retirement income fund” means a registered retirement income fund as defined in section 146.3 of the Income Tax Act (Canada); (b) “registered retirement savings plan” means a registered retirement savings plan as defined in section 146 of the Income Tax Act (Canada); (c) “tax-free savings account” means a tax-free savings account within the meaning of section 146.2 of the Income Tax Act (Canada). (2) For the purposes of subsection 13(1) of the Act, an eligible start-up business may transfer an equity share mentioned in that subsection within 3 years after the date of issue in any of the following circumstances: (a) the shareholder is insolvent; (b) the shareholder transfers the equity share to the shareholder’s: (i) tax-free savings account or registered retirement savings plan, but only if the equity share is a qualified investment with respect to the tax- free savings account or registered retirement savings plan; or 13 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 (ii) registered retirement income fund, but only if: (A) the equity share is a qualified investment with respect to the registered retirement income fund; and (B) the shareholder is no longer eligible to contribute to a registered retirement savings plan; (c) the shareholder directs a transfer of the equity share to a spousal registered retirement savings plan; (d) the shareholder is deceased and the personal representative of the shareholder’s estate requests a transfer of the equity share to the estate or a named beneficiary; (e) the eligible start-up business initiates a share exchange, share right or share reorganization as a result of an acquisition or amalgamation that keeps the substantive operations of the eligible start-up business in Saskatchewan. 5 Oct 2018 c.S-33.1 Reg 1 s11; 21 May 2021 SR 59/2021 s8. Revocation of registration – payment of interest 12(1) For the purposes of subsection 14(1) of the Act, the rate of interest per annum with respect to the payment by an eligible start-up business of an amount equal to the aggregate of all the amounts of tax credit certificates previously issued to the business is the rate equal to the sum of: (a) the prime lending rate of the bank holding the general revenue fund as determined and adjusted in accordance with this section; and (b) 3%. (2) The interest rate set out in this section is to be determined on June 15 and December 15 in each year and: (a) the interest rate as determined on June 15 applies to interest on the aggregate amount mentioned in subsection (1) accruing from July 1; and (b) the interest rate as determined on December 15 applies to interest on the aggregate amount mentioned in subsection (1) accruing from January 1 of the following year. (3) Interest payable pursuant to subsection (1) is payable for the period commencing on the day that is 21 days after the day on which the minister revoked the registration of the eligible start-up business pursuant to section 12 of the Act and ending on the day on which the amount owing pursuant to that subsection is received by the minister responsible for the administration of The Income Tax Act, 2000. 5 Oct 2018 c.S-33.1 Reg 1 s12. Payment of lesser amount re subsection 14(2) of the Act 13 For the purposes of subsection 14(2) of the Act, the circumstances in which the minister responsible for the administration of The Income Tax Act, 2000 may specify an amount to be paid by an eligible start-up business that is less than the amount determined in accordance with subsection 14(1) of the Act are as follows: 14 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE (a) the eligible start-up business has conducted its business and affairs in a manner consistent with the Act; (b) the equity share issued by the eligible start-up business was not redeemed, acquired or cancelled for at least 12 months. 5 Oct 2018 c.S-33.1 Reg 1 s13. Repayment of tax credit – limited partnerships 13.1(1) For the purposes of subsection 17(2) of the Act, in the case of an eligible investment made by a limited partnership, “equity share” includes an interest in that limited partnership with respect to which the person is an eligible investor as of the date on which that eligible investment was made. (2) For the purposes of subsection 17(2) of the Act, in the case of an eligible investment made by a limited partnership, the eligible investor is: (a) if the limited partnership disposes of the equity share in the eligible start-up business, each limited partner to the extent of that limited partner’s proportionate share in the eligible investment, as calculated in accordance with clause 2(2.1)(a); or (b) if a limited partner disposes of an interest in the limited partnership with respect to which the person is an eligible investor, that limited partner. 13 Dec 2019 SR 94/2019 s8. Exceptions to requirement to repay tax credit, payment of interest re section 17 of the Act 14(1) An eligible start-up business may redeem, acquire or cancel an equity share issued pursuant to the Act within 3 years after the date of issue of the equity share without being required to pay the minister responsible for the administration of The Income Tax Act, 2000 as required by subsection 17(1) of the Act, if: (a) the shareholder is insolvent; or (b) the shareholder is deceased and the personal representative of the shareholder’s estate consents to the redemption, acquisition or cancellation by the eligible start-up business of the equity share, as the case may be, as a reasonable method of carrying out the personal representative’s responsibilities with respect to the winding-up of the estate. (2) For the purposes of subsection 17(3) of the Act, the interest payable on any amounts that must be paid to the minister responsible for the administration of The Income Tax Act, 2000 is to be calculated in accordance with subsection 67.2(12) of that Act. 5 Oct 2018 c.S-33.1 Reg 1 s14; 21 May 2021 SR 59/2021 s9. Annual return 15(1) For the purposes of subsection 18(1) of the Act, an eligible start-up business’ annual return must be accompanied by all of the following: (a) a copy of the securities register of the eligible start-up business; 15 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 (b) a copy of the most recent financial statements of the eligible start-up business, prepared in accordance with subsection (2); (c) a copy of the most recent annual return of the eligible start-up business filed with the Director of Corporations pursuant to section 273 of The Business Corporations Act. (2) The financial statements mentioned in clause (1)(b) must be: (a) prepared in accordance with generally accepted accounting principles published by Chartered Professional Accountants of Canada, as amended from time to time; and (b) reviewed by a member in good standing of a recognized accounting profession that is regulated by an Act. 5 Oct 2018 c.S-33.1 Reg 1 s15. Annual return – limited partnerships 15.1(1) Within 6 months after its fiscal year end, a limited partnership must prepare an annual return in a form approved by the minister and file the return with the minister, accompanied by the following information: (a) the amount of capital raised by the limited partnership; (b) the aggregate value, at cost, of investments in eligible start-up businesses made by the limited partnership and the names of those eligible start-up businesses; (c) whether any fees or remuneration were paid to the general partner or limited partners of the limited partnership or to any associate or affiliate of any of them by an eligible start-up business in which the limited partnership made an eligible investment; (d) whether the declaration of limited partnership was amended in a manner that changed the structure of the limited partnership or altered any rights or restrictions attached to any interests of the limited partnership; (e) the amount of all dividends received by the limited partnership or limited partners with respect to an eligible investment made by the limited partnership in an eligible start-up business; (f) whether the limited partnership sold or disposed of equity shares in an eligible start-up business in which it made an eligible investment; (g) whether the selling or disposal of shares mentioned in clause (f) was reported to the minister; (h) in relation to the selling or disposal of shares mentioned in clause (f) that was not reported to the minister: (i) the name of each eligible start-up business whose shares were sold or disposed of; and (ii) the date of the sale or disposal; (i) whether a limited partner disposed of its interest in the limited partnership; 16 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE (j) whether the disposal of an interest mentioned in clause (i) was reported to the minister; (k) in relation to the disposal of an interest mentioned in clause (i) that was not reported to the minister: (i) the name of each limited partner who disposed of an interest; and (ii) the date of each disposal. (2) A limited partnership’s annual return must be accompanied by an updated declaration of limited partnership, including the capital contributions made by, and ownership interests of, each of the limited partners in the relevant fiscal year. (3) A limited partnership must comply with subsections (1) and (2) in each of the 2 consecutive calendar years following the date of its most recent investment in an eligible start-up business to which these regulations apply. 13 Dec 2019 SR 94/2019 s9. Power to require information or material - limited partnerships 15.2(1) At any time, the minister may require a limited partnership to provide the minister with any information or material the minister reasonably requires for the purposes of the Act or these regulations. (2) A limited partnership shall comply with the direction of the minister within the period and in the manner that the minister may require as set out in the direction. 13 Dec 2019 SR 94/2019 s9. Requirements for registration of a venture capital corporation 16(1) For the purposes of subsection 19(2) of the Act, a venture capital corporation must meet the following requirements: (a) it must have mechanisms in place satisfactory to the minister to track eligible investor contributions to invested eligible start-up businesses for the purposes of tax credit issuance; (b) it must have equity capital of at least $25,000; (c) it must have a share structure consisting of one or both of the following: (i) common shares having no special rights or restrictions; (ii) common shares having special rights relating only to the redemption of the shares by the corporation. (2) If an existing corporation intends to be registered as a venture capital corporation, and for that purpose establishes a separate fund for the purposes of raising funds to invest in eligible start-up businesses, the corporation must have articles that restrict the business of the separate fund to assisting the development of eligible start-up businesses by providing business and managerial expertise to eligible start-up businesses in which the corporation has made or proposes to make an eligible investment. 5 Oct 2018 c.S-33.1 Reg 1 s16. 17 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 Register of venture capital corporations 17 For purposes of subsection 20(3) of the Act, the register of venture capital corporations must contain the following information with respect to each venture capital corporation on the register: (a) its legal name; (b) the date on which it was registered pursuant to Part 3 of the Act; (c) the physical address of its registered office, consisting of one of the following: (i) the street address of the registered office, if any; (ii) if there is no street address, a legal land description of the land on which the registered office is located, including the rural municipality name and number; (d) the mailing address of its office, if different from the physical address; (e) its principal place of business; (f) its email address; (g) the name, title of office held and contact information for each of the venture capital corporation’s officers. 5 Oct 2018 c.S-33.1 Reg 1 s17. Requirements for venture capital corporations 18(1) For the purposes of subsection 22(1) of the Act, a venture capital corporation: (a) must maintain its share structure in accordance with clause 16(1)(c); and (b) must not, in a given year, apply to the minister pursuant to section 29 of the Act for tax certificates representing more than 33% of the total funds available for tax credits pursuant to the Act. (2) For the purposes of subsection 22(2) of the Act, a share certificate issued by a venture capital corporation must state the following information: (a) the percentage of the venture capital corporation’s equity represented by the share, based on the total number of shares issued by the venture capital corporation; (b) that the equity shares that are the subject of the share certificate have been issued pursuant to, and the venture capital corporation issuing the share certificate is subject to, the Act. 5 Oct 2018 c.S-33.1 Reg 1 s18. Investment in an eligible start-up business by a venture capital corporation 19(1) Subject to subsection (2), for the purposes of section 23 of the Act, a venture capital corporation may make an investment in an eligible start-up business if all of the following criteria are met: (a) the eligible start-up business has a valid certificate of registration pursuant to section 4 of the Act; 18 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE (b) the investment consists or will consist of: (i) the direct acquisition from the eligible start-up business of equity shares issued for raising new equity capital; (ii) the acquisition of equity shares that are issued by the eligible start- up business under a prospectus, offering memorandum or other disclosure document that is acceptable to the minister; or (iii) the direct acquisition from an affiliate of the eligible start-up business of equity shares of the affiliate; (c) the funds paid by the venture capital corporation for any equity shares mentioned in subclause (b)(iii) are in turn invested in equity shares of the eligible start-up business by the affiliate within 30 days after investment approval. (2) Any investment made by a venture capital corporation pursuant to subsection (1) requires the written approval of the minister before a tax credit certificate may be issued. 5 Oct 2018 c.S-33.1 Reg 1 s19. Investment for certain purposes prohibited 20 For the purposes of subsection 24(1) of the Act, a venture capital corporation must not make or hold an investment in an eligible start-up business if all or part of the proceeds of that investment are directly or indirectly used or intended to be used by the eligible start-up business for any of the following: (a) lending; (b) purchasing real property, unless the purchase is ancillary to the business activities of the eligible start-up business; (c) depositing in a high interest savings account; (d) acquiring Guaranteed Investment Certificates; (e) acquiring or trading in securities not otherwise permitted by the Act or these regulations; (f) purchasing goods and services from the venture capital corporation, other than goods or services purchased at fair market value; (g) paying a debt obligation, unless that payment is considered necessary by the minister for the financial viability of the eligible start-up business; (h) subject to subsection 14(1), purchasing or redeeming previously issued shares of the eligible start-up business or its affiliates within 3 years after the date of issue of the equity shares; (i) retiring any part of a liability to a shareholder of the eligible start-up business or one of its affiliates or a liability to a shareholder’s associate or affiliate; (j) paying dividends; (k) funding all or part of the purchase by the eligible start-up business of any of the assets of a proprietorship, partnership, joint venture, trust or corporation at a price that is greater than the fair market value of the assets purchased. 5 Oct 2018 c.S-33.1 Reg 1 s20; 21 May 2021 SR 59/2021 s10. 19 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 Prohibitions re control of eligible start-up businesses by venture capital corporations 21 For the purposes of subsection 25(1) of the Act, the prohibition with respect to investments in eligible start-up businesses applies to related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act (Canada). 5 Oct 2018 c.S-33.1 Reg 1 s21. Prohibitions re non-arm’s length investments 22(1) For the purposes of subsection 26(1) of the Act, a venture capital corporation must not make or hold an investment in an eligible start-up business if any of the shares of the venture capital corporation are held by: (a) a major shareholder of the eligible start-up business; (b) an associate of a major shareholder of the eligible start-up business; (c) a voting trust for which the trustee votes shares of the eligible start-up business; (d) the eligible start-up business or an associate or affiliate of the eligible start-up business. (2) For the purposes of subsection 26(2) of the Act, a related person is a related person within the meaning of subsections 251(2) to (6) of the Income Tax Act (Canada). 5 Oct 2018 c.S-33.1 Reg 1 s22. Tax credit certificates 23 For the purposes of subsection 29(3) of the Act, the minister shall issue a tax credit certificate if the minister is satisfied that all of the following requirements have been met: (a) the venture capital corporation is complying with the Act and these regulations; (b) no tax credit certificate pursuant to that subsection has been previously issued with respect to the shares of the shareholders of the venture capital corporation; (c) the equity capital that is the subject of the application for the tax credit certificate: (i) is not an eligible investment as defined in The Labour-sponsored Venture Capital Corporations Act with respect to which a tax credit has been allowed pursuant to that Act; and (ii) is not an eligible investment as defined in The Small and Medium Enterprise (SME) Investment Tax Credit Act with respect to which a tax credit certificate has been issued or applied for pursuant to that Act; 20 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE (d) the shareholder mentioned in that subsection acquired the shares on or before December 31, 2028 directly from the venture capital corporation or its agent acting on its behalf; (e) the shareholder mentioned in that subsection, if an individual, was resident in Saskatchewan on the date on which the shareholder subscribed for the shares. 5 Oct 2018 c.S-33.1 Reg 1 s23; 10 Apr 2026 SR 20/2026 s7. Interest on repayment of tax credit amounts – venture capital corporations 24 For the purposes of subsection 30(3) of the Act, section 12 of these regulations applies, with any necessary modification. 5 Oct 2018 c.S-33.1 Reg 1 s24. Liability to repay tax credits 25 A venture capital corporation is liable to pay the minister responsible for the administration of The Income Tax Act, 2000 pursuant to section 32 of the Act if it fails to notify the minister within 30 days after: (a) it ceases to maintain a permanent establishment, as defined in The Income Tax Act, 2000; (b) it changes its registered office pursuant to The Business Corporations Act; (c) it acquires a different or additional place of business or permanent establishment, as defined in The Income Tax Act, 2000, in Saskatchewan or elsewhere; (d) it changes its fiscal year end; (e) it directly or indirectly acquires, redeems or cancels one of its own shares; or (f) it fails to comply with section 22, 23, 24, 25 or 26 of the Act. 5 Oct 2018 c.S-33.1 Reg 1 s25. Revocation or suspension of registration of a venture capital corporation 26 In addition to the circumstances set out in clauses 33(1)(a) to (d) of the Act, the minister may suspend or revoke the certificate of registration of a venture capital corporation if: (a) the venture capital corporation has been ordered by a court of competent jurisdiction to dissolve or otherwise wind up its business and affairs; (b) the venture capital corporation is insolvent; or (c) the shareholders of the venture capital corporation pass a resolution to dissolve or otherwise wind up its business and affairs. 5 Oct 2018 c.S-33.1 Reg 1 s26. 21 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 Annual return 27 For the purposes of section 34 of the Act, a venture capital corporation’s annual return with respect to the preceding fiscal year must be accompanied by a statement respecting all of the following, pertaining to the venture capital corporation’s activities pursuant to the Act and these regulations: (a) the amount of equity capital raised by the venture capital corporation; (b) the aggregate value at cost of investments made by the venture capital corporation, the name of each eligible start-up business the shares of which the venture capital corporation sold and the value at cost of those shares; (c) the aggregate amount of expenses incurred by the venture capital corporation and the amount paid as management fees; (d) whether any fees or remuneration were paid to the shareholders, officers or directors of the venture capital corporation or to any associate or affiliate of any of them by an eligible start-up business in which the venture capital corporation made an eligible investment; (e) whether the articles of the venture capital corporation were amended in a manner that changed the share structure of the venture capital corporation or altered any rights or restrictions attached to any share of the venture capital corporation; (f) the amount of all dividends received by the venture capital corporation with respect to an eligible investment made by it in an eligible start-up business; (g) whether the venture capital corporation redeemed any of its shares; (h) whether a share redemption mentioned in clause (g) was reported to the minister; (i) in relation to a share redemption mentioned in clause (g) that was not reported to the minister: (i) the name of each investor whose shares were redeemed; (ii) the date of each redemption; (iii) the number of shares redeemed in each redemption; (iv) the investor’s cost of each share redeemed in each redemption; and (v) the consideration paid by the venture capital corporation with respect to the redemption; (j) whether the venture capital corporation paid any expenses to any person or group of persons who, on the date on which the payment was made, directly or indirectly controlled the venture capital corporation. 5 Oct 2018 c.S-33.1 Reg 1 s27. 22 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE Release of information, etc. 27.1(1) For the purposes of subclause 48(1)(ll) of the Act, the minister may disclose returns, records or information submitted by an eligible investor, an eligible start-up business or a venture capital corporation to another government institution: (a) for the purposes of determining the eligibility of an applicant as an eligible start-up business; (b) for the purposes of verifying the accuracy of business information of the applicant as an eligible start-up business; (c) for the purposes of calculating or varying the amount to be included on a tax credit certificate issued to an eligible investor;

(d) for the purposes of collecting a debt or assisting in the collection of a debt, including interest, owing to the Crown in right of Saskatchewan or a government institution; (e) for the purposes of protecting against, or for the prevention, detection or suppression of, fraud, market manipulation or unfair trading practices; (f) for the purposes of investigating any amalgamation of corporations; (g) for the purposes of investigating any parent-subsidiary corporate structure; (h) for the purposes of determining whether an applicant as an eligible start-up business is carrying on business in an eligible sector and, if so, meets the requirements of subsection 4(2) of the Act and subsection 2(3) of these regulations with respect to the number of employees; (i) for a use consistent with the purposes of the Act; and (j) for the purposes of planning, evaluating and facilitating the incentive program as authorized by the Act and these regulations. (2) Without limiting the generality of subsection (1) but subject to subsection (3), the minister may disclose to and receive from all or any of the following information necessary to confirm that there is no duplication in tax credits for which an eligible investor may be entitled: (a) the minister responsible for the administration of sections 67.2 and 67.3 of The Income Tax Act, 2000; (b) the minister responsible for the administration of The Small and Medium Enterprise (SME) Investment Tax Credit Act. (3) For the purposes of subsection (2), information that may be disclosed or received does not include the information mentioned in clauses 67.2(3)(a) and (b) and 67.3(3)(a) and (b) of The Income Tax Act, 2000. 10 Apr 2026 SR 20/2026 s8. 23 SASKATCHEWAN TECHNOLOGY START-UP INCENTIVE S-33.1 REG 1 Provision of records 27.2(1) If the minister receives a request from any person for a copy of any of the following information respecting any business, investor, venture capital corporation or any other person who has an interest affected by the Act or these regulations and if the minister considers it appropriate and in the public interest to do so, the minister may, on any terms that the minister considers appropriate, provide that information to that person: (a) the number of tax credit certificates issued; (b) the minimum and maximum amounts contained in the tax credit certificates mentioned in clause (a); (c) the average amount contained in the tax credit certificates mentioned in clause (a). (2) Subject to section 4, in providing information pursuant to subsection (1), the minister shall not disclose the name of any person associated with a tax credit certificate. 10 Apr 2026 SR 20/2026 s8. Coming into force 28(1) Subject to subsection (2), these regulations come into force on the day on which section 1 of The Saskatchewan Technology Start-up Incentive Act comes into force. (2) If these regulations are filed with the Registrar of Regulations after the day on which section 1 of The Saskatchewan Technology Start-up Incentive Act comes into force, these regulations come into force on the day on which they are filed with the Registrar of Regulations. 5 Oct 2018 c.S-33.1 Reg 1 s28. 24 SASKATCHEWAN TECHNOLOGY S-33.1 REG 1 START-UP INCENTIVE REGINA, SASKATCHEWAN Printed by the authority of THE KING’S PRINTER Copyright©2026