This week, the federal government released the 2017 budget while the Canadian tech community eagerly watched. Making big bets on innovation, the budget called for a national AI and IP strategy, a plan to spend $1.4 billion on cleantech companies through funding initiatives, and a focus on improving the digital literacy of young students.
BetaKit reached out to Canada’s tech community and gathered its reaction to #Budget2017.
Canada’s venture capital plan
“I think this budget is a really good start. They’ve clearly listened to the priorities of the tech sector – talent, capital and procurement chief among them – and have started to put programs in place to deal with them. They recognize that there isn’t one ‘silver bullet’ for innovation, but there will be a number of programs that can help companies to grow.
“I’m also really intrigued by the $1.26 billion Strategic Initiative Fund, which could be end up being one of the most important aspects of the budget. Instead of money being made available only to very specific sectors (aerospace and automotive), it looks like it will be available to the most promising high-growth companies more broadly, which should include tech and clean-tech companies.”
– Iain Klugman, CEO of Communitech
— Mark McQueen (@markrmcqueen) March 22, 2017
We have a little work ahead of us through review for VCCI, but $400M to $1.5B to 'catalyze venture capital' is great news. #budget2017
— Mike Woollatt (@mikewoollatt) March 22, 2017
“Anything labeled VCAP was never going to happen. VCCI is, as far as I can tell, the re-labelled VCAP.”
– Christian Lassonde
“Anything labeled VCAP was never going to happen. Recall ‘Action Plan” was the go-to term for the Conservative government. So VCCI is, as far as I can tell, the re-labelled VCAP. I’m generally not in support of government dollars in venture, and certainly not dollars that come with investment requirements. Those requirements (like X number of companies in BC and U number of dollars invested in clean tech) just lower returns. Which in turns kills investment dollars. Which in turn kills startups.
“So, VCAP came with strings (We never took any VCAP money), but they weren’t too bad. Putting BDC in charge seems like a step backwards into yet more strings and lower returns. I’m supportive of limited government involvement because the vast majority of Canadian funds rely on them. Without them we have no co-investors in our deals. That’s why I support some form of VCAP or CVVI.”
– Christian Lassonde, founder of Impression Ventures
Canada’s bet on ‘Superclusters’
Some clarification on "clusters" – Ontario's Quantum Valley is named as one 'supercluster' receiving support. pic.twitter.com/bbknmvCpZ3
— Richard Forbes (@Richardjforbes) March 22, 2017
Trying to figure out where our superclusters are… and who we’ll leave off that special list….
— matt roberts (@mattroberts) March 22, 2017
“In a country the size of Canada we need to make big bets in a few categories.
“Betting on superclusters is a super strategy.”
– Mike Serbinis
“Betting on superclusters is a super strategy. Our future prosperity will depend largely on how well we can set ourselves up for success. Establishing a national AI strategy that can amplify our world class talent and put us on the forefront of new computing technology — that’s bold.
“I’ve always believed that we needed more shots on net throughout seed and series A to get a critical mass of later stage tech companies. Today we have that, but we also need capital. $400 million that can catalyze $1.5 billion is strong. It will move the needle.”
– Michael Serbinis, CEO of LEAGUE
“It’s great to see the government putting money where its mouth is in this budget when it comes to innovation. The $300 million for smart cities funding is critically important because it will fundamentally change how people experience their cities. This funding could help cities become more livable, more efficient and more responsive. The $125 million dedicated to AI also is significant because it helps ensure that Canada will be a global leader in this important area of innovation.”
– Kurtis McBride, CEO and co-founder of Miovision
“Through my participation with Communitech, I’ve spent time in Ottawa. The one clear takeaway is that there is more communication and a strategic focus around tech companies and a supercluster initiative (Toronto-Waterloo Corridor). The $1.26B Strategic Innovation Fund has now been extended to include various aspects of the technology sector, so it feels like a step in the right direction as it relates to tech in Canada as a whole.
However, the amount of funding available overall isn’t that much in the grand scheme of things, and in some cases it’s many orders of magnitude less than the jurisdictions where we compete. So we need to focus on the winning sectors, the winning strategies, and the winning companies to see how these superclusters will be allocated outside of the Pan-Canadian AI Strategy (Montreal, Toronto-Waterloo and Edmonton). I’m interested to see how this plays out. This is Canada’s opportunity to focus on the winners and in essence, “own the podium.”
– Michael Litt, Vidyard CEO and co-founder
Our team applauds the government and Minister Bains’ ‘Innovation Budget’, it demonstrates their genuine dedication to investing in Canada’s future. The budget’s specific focus on investing hundreds of millions of dollars in AI clusters also signals an understanding of what it truly takes to accelerate economic growth and secure our shared future. Everyone at Element AI is committed to working hand-in-hand with all of the parties involved towards our shared vision of creating jobs, opportunities and breakthrough technologies that will change the world.
– Jean-François Gagné, CEO of Element AI
#Budget2017’s gender-based analysis
My hope is that the people @JustinTrudeau's team selects is diverse in every sense of the word, and impatient for systemic change.
— Saadia Muzaffarسعدية (@ThisTechGirl) March 23, 2017
That @PattyHajdu's initiative to reassess implicit bias in funding criteria will get adopted at every federal ministry that lends/grants $$$
— Saadia Muzaffarسعدية (@ThisTechGirl) March 23, 2017
#Budget2017 on education
“We’re pleased with the direction of this year’s budget and its focus on innovation in Canada. There is a role government can play to develop and support homegrown talent as well as Canadian companies. We believe this budget was a step in the right direction.
“The $7.8 million in dedicated funding for the Global Skills Strategy is a signal that the government is taking this program seriously. By bringing in one great person it will enable us to hire hundreds of Canadians and expand the workforce.
“The investments in computer literacy and STEM education is exactly what we need to be doing in 2017. If we want to be known as an “innovative nation” we need to be developing and investing in homegrown talent.”
– Alexandra Clark, Director of Policy and Government Affairs at Shopify
“I’m particularly pleased to see a commitment of $11.2 billion earmarked for housing nationally, plus maintaining operating agreements for co-ops, a magnitude of investment that is sorely needed. These federal dollars and support need to flow urgently to bring relief to the tremendous pressure facing residents across Vancouver who struggle to access housing.”
– Mayor Greg Robertson, City of Vancouver
Glad to see that work integrated learning placements is a priority in #Budget2017. My experiences through 2 internships were so critical.
— JP Rains (@jp_rains) March 22, 2017
— Ladies Learning Code (@learningcode) March 22, 2017
“I was excited to see the focus on funding that promotes STEM learning, especially among young women and girls.”
– Stephen Lake
“I believe the resources outlined in the budget are only part of the solution. From here, rather than ‘spreading the peanut butter,’ we must double down on our strengths to create scale in areas where we can be world leaders. The budget’s focus on funding artificial intelligence programs was a step towards that. Unlike Silicon Valley, we don’t have the resources to pursue everything and anything. We should think about how we place large bets on these areas where we truly have a chance to succeed at a global scale.
“On a more personal note, I was excited to see the focus on funding that promotes STEM learning, especially among young women and girls. By making coding part of our education curriculum, more students from a wider variety of backgrounds will be inspired to pursue careers in technology, helping to solve the skills gap facing Canada.”
– Stephen Lake, CEO of Thalmic
#Budget2017 on transportation (and Uber)
Why are public transit users being punished in #Budget2017? I can't afford to live in Toronto. Now you're taking away my commuter tax break?
— Rowena (@rowwisezmo) March 22, 2017
“This new tax on innovation would hurt over a million Canadians who use ridesharing to earn income and get around their cities.
“At a time when Canadians spend far too much time stuck in traffic — and people should be encouraged to leave their cars at home, take public transit, and share rides — we should be supporting policies that make sustainable transportation more affordable, not more expensive.
“Federal tax laws already offers small business owners a break on collecting sales tax, but unfairly exclude taxi drivers. The best way to support taxi drivers and level the playing field is to extend the same exemption to them.
“Considering how many Canadians this tax will directly impact, we ask for meaningful consultation on this proposal and hope to work with the Government on smart solutions that support innovation.”
– Ian Black, Uber Canada GM
But seriously. WHY DO WE HAVE TO PUT AN ADDED TAX ON UBER AND BEER THOUGH? Can't I enjoy a Friday night without #budget2017 looming over me?
— michaela glasgo (@michaelaglasgo) March 22, 2017
General reactions to #Budget2017
“Beyond encouraging innovation, we also need to create conditions that allow Canadian small and mid-sized businesses to readily access global markets. There is a tremendous opportunity for the government to partner with the private sector and simplify the process, allowing Canadian businesses to better navigate the complexities of international trade.
“Globally, cross-border e-commerce is expected to more than double over the next five years to US $424 billion. This represents a huge opportunity for Canadian businesses but today they account for a disproportionately low share of global cross-border trade. As leaders, we need to throw aside a “go-it-alone” mentality and collaborate.”
– Paul Parisi, President of PayPal Canada
“As we build this innovation economy, however, we need to ensure all Canadians are part of its development and benefit from its solutions.”
– Victoria Lennox
“Over the last few months, I have stressed that when it comes to transit, housing, and infrastructure, we need the federal and provincial governments to step forward with much-needed funding. By also investing in innovation skills development, childcare and combatting violence against women, the federal government has taken important steps to ensure the competitiveness, productivity and safety of Toronto residents.”
– Mayor John Tory, City of Toronto
“I’m glad to see the federal budget recognizing the importance of investing in people, ideas and employable skills to build a more prosperous Canada. The federal budget proves that the Canadian government understands the importance of focusing on our strengths in order to become a global leader in innovation.”
– Abdullah Snobar, executive director of the DMZ
“What we saw in Budget 2017 was a strong understanding from the federal government of what needs to happen if they wish to see their innovation agenda move from paper to policy to positive outcomes for Canada’s bottom line.
“The policies outlined in the budget take the smart first steps towards addressing the challenges scaling companies face in their pursuit for better talent, increased capital and new customers.”
– Benjamin Bergen, executive director of the Canadian Council of Innovators
“The 2017 federal budget stands out as one with a long-term objective to build Canada into an innovation nation. Priorities led by Minister Bains, Minister Chagger, and their colleagues around procurement, women in business, superclusters and venture capital are good news for Canada’s entrepreneurship community.
“As we build this innovation economy, however, we need to ensure all Canadians, including those who have been displaced from traditional industries, and those in rural and remote communities, for example, are part of its development and benefit from its solutions. Startup Canada looks forward to working with the Government of Canada to ensure every entrepreneur is empowered in a strong, growing innovation economy.”
– Victoria Lennox, CEO of Startup Canada
“I would say that I’m optimistic. A few takeaways:
1. The amendment to the Immigration and Refugee Protection Act to be more responsive to talent coming into Canada is a signal that the government is listening.
2. I’ve been a vocal proponent of ways for the government to improve their capacity for procuring new technology. I’m happy to see they’ve responded to our frustrations in this budget. But, it still remains to be seen if these investments will increase procurement.
3. We’ve just recently completed a CanExport project that was hugely valuable because it gave us the financial support we needed to expand into the US market.
“And, we’ve leveraged BDC and other grants so I’m hopeful we can lean on other funding projects too. If anyone is questioning whether we need these programs, let me reinforce that we do. Without significant venture capital injections going into Canadian startups, the government is a key part of our success.
“I also want to see how the investment in female-led startups will be deployed, but it’s another signal that the government is trying to broaden their investment portfolio. As we continue to demonstrate that these investments are worthwhile, and we can share those narratives, we’ll start to see a shift in the VC community as well.”