As the Liberals have secured a fourth government, remaining continuously in power since 2015, the Canadian tech sector is hoping Prime Minister Mark Carney will heed its calls for change on issues it says are critical to boosting innovation and investment.
Following the results, industry groups are urging a renewed focus on long-standing issues that they say have plagued Canadian tech since well before Carney entered politics: tackling Canada’s flagging productivity, incentivizing investment through tax credit reform, and boosting support for domestic companies amid a trade war with the United States (US).
The Liberals fell short of a majority government. Carney is set to resume Parliament shortly and name a new cabinet. Anita Anand, the current innovation minister, and François-Philippe Champagne, the current finance minister, were both re-elected in their ridings.
Urgency has “rarely been greater”: CVCA
The Canadian Venture Capital & Private Equity Association (CVCA) said the “hard work lies ahead” to boost innovation and investment in the country.
“The urgency for action has rarely been greater amidst ongoing trade threats from our largest market and trading partner,” CVCA CEO Kim Furlong said in a statement.
The CVCA has been clear on what it considers appropriate action. It released a white paper in the lead-up to the election calling for a temporary slash to the capital gains tax inclusion rate and a doubling of the Lifetime Capital Gains Exemption limit from $1.25 million to $2.5 million. It also recommended the creation of a new federal tax credit for investments in Canadian small businesses.
“Campaign promises will only translate into economic prosperity if the Liberal government can buckle down and follow through.”
Benjamin Bergen
CCI
In their platform, the Conservatives had promised a deferral of the capital gains tax altogether, while Prime Minister Carney had already scrapped the controversial capital gains tax increase proposed by Justin Trudeau’s government.
Several tech leaders have conveyed consternation over what they saw as the Liberal government’s failure to enact innovation-friendly policy—a frustration that extended into post-election calls to action.
John Ruffolo, co-founder of Maverix Private Equity, who had previously expressed support on social media for Conservative leader Pierre Poilievre, said in a LinkedIn post that the business community had embraced a move away from the previous government’s focus on “income and wealth redistribution.”
In a LinkedIn post, he said the country should use the current economic crisis as an “opportunity to build a resilient Canadian economy focused on supporting our Canadian businesses” and called for the business community to “put the divisiveness behind us and build together.”
Daniel Debow, former Shopify vice-president and co-founder of tech-backed policy platform Build Canada, called on Carney on X to “quickly enact policies to Build Canada.” Some of the platform’s proposed policies include a new visa to attract top scientists to Canada and reducing the size of the federal workforce.
The Centre for Canadian Innovation and Competitiveness (CCIC), a Canadian think tank affiliated with the Information Technology and Innovation Foundation, applauded the Liberals’ platform for a more resilient economy. Lawrence Zhang, head of policy at CCIC, said it’s “mandatory” that the government uses this moment to attract business investment, scale Canadian firms, and accelerate the commercialization of research.
Some industry groups from around the country echoed this urgent tone, saying the new government must “step up” to catalyze growth and boost productivity.
“Our productivity growth is nearly stagnant, our reliance on the US market is too strong, and our technology companies are not yet taking the lead. They should be a driving force for an economic rebound,” Richard Chénier, CEO of Québec Tech, said in an email to BetaKit.
Doug Robertson, the chair of industry group Startup Atlantic, said the challenge has become to “catalyze and champion the emerging spirit of openness across the country” in a way that “maximizes opportunities for startups.”
AI and open banking
Other startup leaders weighed in on the Liberal victory with perspectives related to their specific verticals.
Alex Vronces
“There are moves we can make in the financial sector to make the system work better for all.”
Fintechs Canada
“Canada has the world-class talent to continue to lead in AI, and Cohere is deeply proud to be a part of it. AI presents a unique opportunity to strengthen Canada’s economy, quality of life, and sovereignty,” Cohere CEO Aidan Gomez posted on X.
Trudeau’s Liberals had pledged more than $2.5 billion over two fiscal years for broadband and data centres, on top of the Canada Sovereign AI Compute Strategy, $240 million of which was earmarked for a Cohere data centre. Meanwhile, the Conservatives said they would slash $2.28 billion from AI initiatives.
The Conservatives’ election promises also diverged from the Liberals’ on open banking, an issue central to the FinTech sector. The Conservatives pledged to implement an open banking framework in their platform, while the Liberals made no mention of one. However, the previous Liberal government had been taking steps toward rolling out a consumer-driven banking framework, though progress has been slow.
Alex Vronces, executive director of industry group Fintechs Canada, said the organization is looking forward to working with the Carney government to improve banking in Canada—especially considering the Prime Minister’s experience running both the Bank of Canada and the Bank of England. Vronces added that Carney has discussed the benefits of competition in banking.
However, Vronces said that some FinTech leaders may find themselves frustrated if the Carney government “embodies his prudent, technocratic disposition,” at odds with the industry’s “move fast and break things” mentality.
“There are moves we can make in the financial sector to make the system work better for all,” Vronces said, including finishing open banking, modernizing what he called outdated federal regulation, and launching a real-time rail.
Supporting domestic startups
The Council of Canadian Innovators (CCI), which represents the interests of Canadian scale-ups, has urged the government to adopt policies to build a stronger domestic economy less reliant on the US. CCI President Benjamin Bergen said in a statement that though the Liberals “took inspiration” from its policy suggestions, the “real test will be in delivery.”
The organization’s policy proposals include a “Buy Canadian Tech” procurement policy and a patent-box regime to protect Canadian intellectual property (IP). Both were included as Liberal platform promises.
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“Campaign promises will only translate into economic prosperity if the Liberal government can buckle down and follow through with the hard work of governing,” Bergen said.
Toronto-based innovation hub MaRS CEO Grace Lee Reynolds echoed calls to reform existing government procurement systems to prioritize Canadian companies. MaRS and Communitech recently released a survey noting that 46 percent of startup leaders were concerned about accessing customers amid the trade war.
“We know that scaling Canadian ventures requires more than capital—it requires customers,” Reynolds said in a statement. “We’re ready to help government turn this policy commitment into action that drives commercialization, job creation, and global competitiveness for Canada’s innovators.”
Feature image courtesy Mark Carney via Facebook.