Hannes Weiland and Robert Niven at CarbonCure Technologies in Halifax asked on Twitter last week why no one in the Nova Scotia election is discussing the potential of startups, and asked me to weigh in on the matter.

“I'll bet I'm not alone in voting for the party that credibly addresses the #startupNS economy,” tweeted Niven, the cleantech company’s CEO.

They have a point. If politicians are unveiling policies that would hasten the development of IT, biotech and cleantech companies in Nova Scotia, the message certainly isn’t reaching the voting public. It’s a shame, because startups are probably generating more employment growth, export growth and economic potential than any other economic segment. The shipbuilding contract’s benefits haven’t been felt yet, and I’d bet that over 25 years the impact of startups will be greater on the Nova Scotia economy than the shipbuilding deal.

So what should politicians in this cash-strapped province be saying? I’d like to recommend two simple policies that would accelerate growth in the startup segment. One would cost nothing. The cost of the other is flexible, but I would recommend less than $15 million in additional annual spending.

In the interests of disclosure, I have to say that I chaired a policy committee on immigration and the economy for the Progressive Conservatives. But I’m making these recommendations not as a political partisan but as someone who’s been immersed in the startup world for a few years and sees their clear logic.

Policy #1: Invite the other Atlantic Provinces, Acoa and the private sector to develop a regional startup strategy.  All four provinces are developing strategies to grow innovative industries but doing so independently. The startup community itself is a model of regional cooperation, and would grow more quickly if the four provincial governments (or even the three Maritime governments) simply coordinated their policies. They should work together in attracting talent and immigrants, foreign sales, raising financing, and education. It would cost nothing and would build on the leadership Premier Darrell Dexter showed in launching the regional venture capital fund.

Policy #2: Liberalize the Equity Tax Credit. The Nova Scotia government now grants a tax credit of 35 percent for investments of up to $50,000 in an eligible Nova Scotian business as long as the investor is an individual living in Nova Scotia. Improving this credit would channel more investment into the fastest growing segment of Nova Scotia’s economy, creating jobs, exports and private sector growth.

There are lots of models for ETCs but I think Nova Scotia should base its program on that of Minnesota. The state that produced Bob Dylan and F. Scott Fitzgerald offers an equity tax credit worth 25 percent of the amount invested, up to a maximum of $125,000 per year. What’s tremendous about the program is it offers the credit to people living anywhere, even if they’re investing through a fund.

My suggestion: Nova Scotia – and the other Atlantic Provinces for that matter – offer a credit of 35 percent on investments of up to $250,000 in eligible companies, available to anyone, including those investing through venture capital funds.  (Fact check: the platforms of both the Liberals and PCs call for an increase in the ETC threshold.) The program should be capped each year to ensure it costs the government no more than $20 million. That would set a target of just under $60 million in private funding for high-growth companies each year, which is ambitious not impossible. The existing ETC program cost the provincial government $5.1 million in 2011, so we’re talking about a maximum of $15 million in additional spending, much of which would be reduced by increased employment and business activity. I doubt very much we would reach the maximum for many years to come.

But what would happen, ask the critics, if wealthy foreigners did swoop in and invested in a lot of our young companies?  If that happens, we should hold a parade on Main Street in ever town. It would be fantastic.

It would mean that capital is coming directly into our locally owned high-growth companies. And with the higher investment thresholds, the main beneficiaries would be the more mature startups, the one aiming to raise $2 million to $10 million. These are the companies – and there are plenty of them – that have validated their concepts, found initial sales and now they need capital to grow into bona fide corporations.

A regional strategy and liberalized ETC would be a huge benefit for this blossoming sector. I predict that by the time Nova Scotians go to the polls again (even if that’s next year), party leaders will have to formulate and articulate policies for startups. The community is becoming more organized and it’s also becoming a pillar of the business community. By the next election, there will likely be organized events for the leaders and the startup community, and my friends at CarbonCure will be able to ask them such questions directly.