The Ontario government’s 2022 budget was long on innovation promises, but many of them were previously announced initiatives from the government rather than new commitments.
And all those promises on the innovation economy appear to be exactly that: campaign promises as the province goes to the polls on June 2. The government won’t pass the budget before breaking for the general election. The Toronto Star was reporting April 29 that Finance Minister Peter Bethlenfalvy refuses to commit to reintroducing the pre-election budget if the Ontario PC Party is re-elected.
The budget included plans to rebrand the Ontario Capital Growth Corporation to Venture Ontario, and increase the venture capital funding from $100 million to $300 million. Ontario revealed the new Venture Ontario Fund June, 2021.
The government pointed to a potential second Venture Ontario Fund that would enable the agency to make an additional $200 million in investments. Venture Ontario Fund II would focus on building Ontario’s competitive advantages in key sectors, including life sciences, clean technology, information technology and artificial intelligence, according to the budget. The additional funding is expected to leverage an additional $1.8 billion to Ontario-based and Ontario-focused venture capital fund managers.
The other significant announcement was the promise of a strategic investment of $15 million over three years in a new Life Sciences Innovation Program to develop and scale-up the commercial potential of therapeutics, and medical and digital technologies.
The province reiterated its support for the creation of Intellectual Property Ontario, which was first announced in March 2022, attaching some numbers to its previous announcement with a promised investment of about $58 million over three years.
The budget proposes the government invest an additional $2 million in 2022-2023 for the already existing Futurpreneur Canada program. Futurpreneur Canada provides mentorship services and collateral-free loan capital to young entrepreneurs.
The province said it expects an additional 18,000 businesses will receive support from the 2020 Digital Main Street Program designed to aid businesses with the costs of digital adoption. However, no new funds were announced for the program.
In general, the innovation portion of the budget continued to re-announce previous programs, often with no new details. They included the Agri-Food Innovation and Technology Strategy; and the attraction of 100 international entrepreneurs to start or grow businesses in regions outside of the Greater Toronto Area (GTA) through the Entrepreneur Stream of the Ontario Immigrant Nominee Program.
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The province reiterated previous announcements about its low-carbon hydrogen strategy, released in April 2022; its work to deploy Canada’s first grid-scale small modular reactor as early as 2028; and its work in attracting nearly $11 million in investments in hybrid and electric vehicle production, and battery manufacturing.
The budget also mentioned the investment of $10 million over 2022 to 2024 to create a new Digitization Competence Centre, first announced in the fall of 2021. Its purpose is to provide small businesses with the training and support to use new equipment and processes, helping them understand and adopt digital technologies.
The PC Party said it would also modernize the school science and technology curriculum to better reflect innovations in both fields.
Other commitments included $23.9 million in the Digital Dealership Registration program to allow eligible car dealerships to register new vehicles online and issue stock, including permits and licence plates.
The budget also called for an investment of $2 million in 2022–23 and $3 million in 2023–24 to create a Critical Minerals Innovation Fund to support the mining industry, academia, startups and research and development firms to find innovative solutions for extraction and processing of critical minerals.
Technation, a national group representing members of the ICT industry, commended the province on a number of its promises. Though it called upon the government to make priority investments in digital health in order to develop and put in place the provincial health data and digital strategies that are meant to improve efficiencies in Ontario’s health system transformation and digital health innovation.
As well, the association asked for funding to be spent on further investments in innovative and technology-based areas such as cyber, machine learning, and artificial intelligence.
For its part, the Canadian Council of Innovators (CCI) said that it was pleased to see the province’s continued commitment to digital policy infrastructure and effort to drive growth in the innovation economy. The CCI cited in particular multi-year funding for Intellectual Property Ontario.
Alanna Sokic, CCI’s Ontario manager of government affairs, said “We encourage the government to take an ambitious approach to talent going forward. The skilled talent shortage in Ontario’s tech sector is at a crisis point, and urgent action is needed.”
Overall, the province said it had made significant progress recovering from the pandemic. Ontario’s real gross domestic product (GDP) increased 4.3 percent in 2021, and employment rose by 344,800 net jobs in 2021 or 4.9 percent, the strongest annual pace of job growth on record.
Under the government’s planning projection, Ontario is projected to return to a surplus position by 2027–28, two years earlier than forecast in the 2021 budget. Over the medium term, the government is projecting steadily declining deficits of $19.9 billion in 2022–23; $12.3 billion in 2023–24; and $7.6 billion in 2024–25. Uncertainty still remains about the future pace of economic growth, which may impact these projections further.