The Ontario government released its Budget 2018 yesterday, which included several investments dedicated to boosting the tech sector.
In its budget, the Ontario government said that it is investing over $350 million in industries like artificial intelligence, 5G wireless communications, autonomous vehicles, advanced computing, and quantum technologies.
In its budget, the government reiterated its support for the AI-focused Vector Institute, including a pledge to invest $30 million in the Institute to create new grads in the industry.
NextAI, Next Canada’s accelerator dedicated to supporting AI-based startups, will be receiving $15 million over the next three years from the government.
“These additional resources will allow us to do more to support the growth of new AI ventures in Ontario,” said NEXT Canada CEO Sheldon Levy. “Ontario’s public and private sectors have been working closely together to make this province an emerging leader in the field of artificial intelligence, this announcement strengthens Ontario’s position.”
Developing a data and IP strategy
While the government did not provide details on how much the process would cost, the budget said that the government is exploring a data strategy that leverages publicly funded data to create new public services, while protecting the public interest. “The government will consult with key stakeholders to inform a data strategy so that Ontarians benefit from data generated in Ontario while leveraging the potential that data holds to enhance economic activity and grow Ontario businesses,” the budget reads.
“A provincial intellectual property strategy is long overdue and is critical to ensuring the success of the Ontario’s innovation agenda,” said Ben Bergen, executive director of the Council of Canadian Innovators. “Canadian innovators welcome the government’s commitment to developing a strategy that supports the generation of IP and creates the freedom-to-operate for domestic innovators, as well as educates Ontario firms to become savvy owners of intangible assets. Budget 2018 recognizes that once publicly-funded IP is owned by a foreign company the economic value of that IP does not benefit Ontario’s economy.”
The budget also mentions that it will explore an IP strategy, which includes:
“Ontario already has a strong foundation in research, innovation and entrepreneurship, but many Ontario innovators lack critical IP knowledge to commercialize their ideas and fully protect and strategically manage their IP for growth,” the budget reads.
Building up FinTech
The government shared its plan to open a FinTech Accelerator Office to support FinTech businesses, and inform government policies on creating more growth in the FinTech sector. The Office’s function will offer support with:
The government is also working on a regulatory ‘Super Sandbox’ with the Ontario Securities Commission and Financial Services Regulatory Authority of Ontario to ensure that the sandbox would be operational alongside the FSRA.
Funding for agriculture and life sciences
While the government called out the Ontario Venture Capital Fund, the Northleaf Venture Catalyst Fund, and the ScaleUP Ventures Fund for receiving provincial investment in the past, this budget included a focus on investing in life sciences.
The government is committing up to $50 million in venture capital funds focused on life sciences, and plans to leverage additional capital from private-sector partners such as corporations, pension funds, and banks. The province also signed a Memorandum of Understanding to work with Quebec on the development of a joint Life Sciences Venture Capital Fund.
Ontario also renewed a 10-year agreement with the University of Guelph, investing over $700 million in agri-food education, research, and innovation.
For Ontario businesses in all sectors, the government said that it would renew and extend its Jobs and Prosperity Fund (JPF) with an increase of $900 million over the next 10 years, leading to a total of $3.2 billion in support since 2014 to 2015. The government is leveraging over $9 billion in private-sector investments in this fund, and through its nine programs, the JPF will provide financial support like loans and grants.
Investing in cybersecurity
The Ontario government is investing $64 million over three years to attract cybersecurity talent to the region, using new recruitment methods that include partnerships with postsecondary institutions. Ontario will also commit to enhancing the cybersecurity of the province’s private financial institutions.
To support large businesses investing in research and development, the government proposes enhancing the Ontario Research and Development Tax Credit (ORDTC).
The ORDTC is a 3.5 percent non-refundable tax credit on eligible R&D expenditures; companies that qualify for the ORDTC would be eligible for an enhanced rate of 5.5 percent on expenditures over $1 million in a taxation year. The $1 million threshold would be prorated for short taxation years.
The Ontario Innovation Tax Credit is an eight percent refundable tax credit for small to medium-sized companies on eligible R&D expenditures. For eligible R&D expenditures incurred on or after March 28, 2018, if a company qualifies for the OITC and has a ratio of R&D expenditures to gross revenues that is:
Photo by Chris Young / Canadian Press