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Pawlenty may propose tax incentives for biotech
by Laura McCallum, Minnesota Public Radio
September 30, 2003

Quebec premier Jean Charest presents a Montreal Canadiens hockey jersey to Gov. Tim Pawlenty on Monday. The number is that worn by Minnesota Wild coach Jacques Lemaire during his career with the team. (MPR Photo/Laura McCallum)

Gov. Tim Pawlenty says he may seek tax incentives for biotech research and investment in Minnesota. The governor is promoting Minnesota's biosciences and medical industries during his first trade mission in Montreal. The governor says the Canadian government offers much more generous tax breaks to the biotech industry.

Montreal, Quebec — After a full day of learning about Montreal's biotech industry on Monday, the governor said it's clear that there are dramatic tax advantages for biotech companies in Canada. During a tour of Canada's largest biotechnology research facility, the institute's director general, Michel Desrochers, told Pawlenty about one incentive to lure top scientists to Quebec.

"For instance, we have a tax holiday in Quebec of close to five years for scientists coming from outside," he said. "Which is very attractive for scientists coming from everywhere. If a company does collaboration with us, then they have a refundable tax credit from the province and they have a tax credit from the federal also."

	Pawlenty at luncheon

Pawlenty says given Minnesota's budget crunch, the state can't afford to do as much as Quebec is doing for the biotech industry. But he says he may propose some biotech tax breaks that could be implemented over the next three to five years.

"My personal preference would be to, in a targeted way, to try to minimize financial impacts, offer incentives for research and development in the biosciences. I would also be very interested in investment tax credits for individual investors who are willing to invest in the biosciences in early-stage companies," Pawlenty said.

Pawlenty says obtaining capital is one of the biggest challenges for Minnesota's biotech industry. He met privately over lunch with several Canadian venture capital firms to try to increase awareness of Minnesota companies.

Pawlenty says Minnesota is not really on the radar screen of the Montreal venture capital community. He had a list of emerging Minnesota biotech companies as potential investments, and says the luncheon may have led to at least one business connection.

"Medical Alley, which is our medical device and technology association in Minnesota, is interested in starting a venture capital fund, very early stage. One of the gentlemen at the lunch is leaving his firm and starting a very early stage venture capital fund and looking for North American opportunities to invest. And so that was a discussion that I think is going to lead to further discussions and a potential business interest," the governor said.

Some members of the Minnesota business delegation hope the trip will lead to export opportunities. Elizabeth Abraham is CEO of Top Tool Company in Blaine, which makes components and dies for the medical industry. The company has about 30 employees, and currently does business only in the U.S. Abraham says it makes sense for her to sell to Canada, and the trade mission is opening doors for her company.

"With all the help that we're getting right now, I mean, we wouldn't have been able to do this on our own. So if it's a tough market to crack, this is going to make it easier to crack for us," she said.

Abraham says she hopes to expand her business in the next year. The governor also met with Quebec Premier Jean Charest, who says he wants to work more closely with Minnesota. Pawlenty says the two discussed research partnerships between Minnesota and Quebec. But Charest had a more immediate request for the governor.

"I know that you know something about the Montreal Canadians, Minnesota having abducted Jacque Lemaire and holding him hostage is not very nice. One of the messages I want to leave with you today is that we want him back," he said.

Charest presented Pawlenty with a number 25 hockey jersey; the number LeMaire wore when the Minnesota Wild coach played in Montreal. The governor wraps up his first trade mission by touring Montreal's biotech incubator and McGill University and speaking to biotech and medical company representatives. He'll also meet privately with officials at Bombardier Aerospace Company, which is considering building a maintenance facility in Duluth.

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