On Thursday, The Government of Alberta tabled its budget for 2020, with its commitments staying much the same for the provinces’ tech sector when compared to the previous budget.
This marked the second budget for Alberta’s United Conservative Party, led by Premier Jason Kenney, which took leadership of the province in April. The provincial government’s Budget 2019 left much to be desired for the region’s tech and innovation sector, dolling out cuts to major organizations and tax credit programs that many hailed as key to building Alberta’s burgeoning tech sector.
Budget 2020 struck a similar cord, offering much the same commitments as the previous budget. The fiscal documents highlighted the $200 million the government had already promised in the previous budget for investments in “research, innovation and commercialization to develop talent, grow sectors, leverage funding from partners and private sector, and help drive global investment.”
The Alberta government noted that it is “supporting and accelerating” innovation and entrepreneurship through post-secondary institutions, Alberta Innovates, Alberta Enterprise Corporation (AEC), and Economic Development, Trade and Tourism, the ministry behind the tech and innovation sector.
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Notably, however, Alberta Innovates, the provincially funded research and development organization focused on research, innovation, and entrepreneurship, saw an almost $11 million cut in its budget for 2020-2021. Budget 2020 cut $10.75 million from the agency, which in Budget 2019 saw an operating budget of $141 million, now down to $131 million.
The move may have significant impacts on the province’s tech sector as Alberta Innovates is Alberta’s largest research and innovation agency, with the mandate to support and accelerate research, innovation, and entrepreneurship in the province. It is responsible for providing various programs, funding, and insights into the province’s tech industry. After cuts from last year’s budget, Alberta Innovates was forced to lay off around 125 employees in November, a move that also affected InnoTech Alberta, a subsidiary of Alberta Innovates that commercializes research within the province’s tech sector.
The Budget did highlight that, through Alberta Innovates, the Alberta government is looking to make investments in artificial intelligence, quantum computing, digital health, and agricultural innovation. It also hinted at potential tech investments in the energy sector (through Alberta Innovates), including for natural gas and clean energy, as well as “Alberta oil,” to look at potential opportunities through alternate bitumen transport technologies, bitumen beyond combustion, and automation in the sector. This may coincide with the government’s Technology Innovation and Emissions Reduction (TIER) system, a dedicated fund to develop and implement technologies that reduce greenhouse gas emissions over time.
Funding for Economic Development, Trade and Tourism stayed steady in this latest budget, with a slight increase in its operating budget to $288 million. Alberta Enterprise Corporation (AEC) is set to see a $1.85 million investment to help it foster the province’s venture capital market. The AEC manages a fund that invests in tech and innovation companies. Budget 2020 also highlighted that it is looking to develop “an active and sustainable” angel capital ecosystem in the province, noting the National Angel Capital Organization (NACO), which recently opened a regional headquarters in Calgary. The provincial government did not offer any capital commitments for angel investing, however.
Despite the budget’s notes on driving investment in Alberta, no changes were made in regards to the tax credits and incentives that had been cut in 2019, a move many in the province say has had a major impact on attracting investment to the tech sector. Budget 2019 included the elimination of five tax credits, including the Alberta Investor Tax Credit (AITC) and the Capital Investment Tax Credit.
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One positive note for the Alberta tech sector on that front, though, may include the establishment of a new investment attraction agency, which was granted $6 million in the budget for 2020. Little information was shared on what that agency might look like, however.
The government is also looking to create a Startup Visa Stream, housed within its new Alberta Advantage Immigration Strategy. The startup visa is meant to offer fast track processing for qualified graduates of top universities if they commit to launching a startup in Alberta. While it is unclear at this time how the visa program will roll out, the commitment comes at a time when Alberta’s tech sector is in need of new talent to fill a growing number of jobs in the sector. The program will offer a bridge to permanent residency through the Alberta Immigrant Nominee Program and initially target graduates from the United States.
Even as the Government of Alberta tabled its 2020 budget on Thursday, it is still awaiting a full report from an expert panel that was formed in December to advise the government on how to draw capital to the province’s tech sector. This group was formed after heavy criticism amid the government’s elimination of the AITC. The group is comprised of seven committee members from Alberta’s business, tech, academic, and financial associations. The panel was expected to deliver a report by Friday, the day after the provincial budget dropped, but last month Economic Development Minister Tanya Fir said she was open to extending the deadline for the panel’s report.
NDP opposition called out the creation of the panel at the time, stating that it showed the government acknowledges its actions are putting the tech sector in jeopardy and that action to correct its decisions is needed.