A lot can change in a few short years.
After first embracing them, American tech companies have dropped diversity, equity, and inclusion (DEI) initiatives like the political hot potato they have become. The shift has made the US a worse place to build a tech company, according to 2SLGBTQIA+ founders I spoke with, as both investors and customers have soured.
One US-based founder told me she’s found acceptance in Canada, but added, “There’s a world where I might have to go back in the closet if I stay in the US.”
VCs I spoke with said Canada should jump on the opportunity to attract diverse talent northward. The country could benefit from a brain gain: queer founders tend to create more jobs and IP on average, according to data from StartOut Index.
Dax Dasilva, Lightspeed CEO and proud member of the 2SLGBTQIA+ founder community, said DEI has been key to his company since day one. He noted Lightspeed casts a wide hiring net, trains recruiters against biases, and offers robust parental leave policies regardless of gender. An internal report says 87 percent of his employees feel they can be their authentic selves at work.
Lightspeed’s approach stands out in today’s tech world, on both sides of the border. Canadian companies, including public market MVP Shopify, also rolled back DEI-related initiatives earlier this year alongside tech giants like Google, IBM, and Amazon. Tech leaders and workers responded with an open letter calling it the “wrong direction” for Canada.
“It is disappointing to see such a massive retreat, potentially from a swing to the right south of the border—not even in our own country,” Dasilva said.
In a moment when Canada has been forced to redefine its relationship with the US, embracing founders of all stripes looking for a safe place to build could turn America’s loss into our gain.
Madison McLauchlan
Reporter, Montréal
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Proposed SR&ED changes could boost tech companies and national productivity, industry leaders say
Draft changes to the Scientific Research and Experimental Development (SR&ED) tax credit program are being lauded by players in the Canadian tech ecosystem, as some argue they could address Canada’s productivity woes by further de-risking research spending.
The proposed SR&ED reforms address longstanding pain points, commentators told BetaKit, by reintroducing capital expenditures as claimable under SR&ED and making public companies eligible for the preferred tax credit rate. The changes would also increase the total amounts companies can claim, allowing them to stay within the eligibility threshold for longer.
BDC commits another $200 million to startups building tech for legacy industries
The Business Development Bank of Canada (BDC) has dedicated another $200 million CAD to early-stage Canadian startups developing transformative technologies for legacy industries through its second Industrial Innovation Venture Fund—this time with an expanded focus on critical minerals.
“We believe that the technology that we will invest in [through] this fund will be helping industrial enterprises improve efficiency and remain competitive,” DC Capital executive vice-president Geneviève Bouthillier told BetaKit in an interview.
Canadian-led Dayforce to be taken private by Thoma Bravo in $12.3-billion USD deal
Canadian-led human resources management software company Dayforce is set to be acquired and taken private by American private equity giant Thoma Bravo for $12.3 billion USD ($17 billion CAD).
The acquisition is expected to close in early 2026, where the company will continue to operate under the Dayforce name and brand. A Dayforce spokesperson told BetaKit that Toronto-based CEO David Ossip will continue leading the company post-acquisition.
Feds sign new agreement with Cohere to explore AI uses within government services
Toronto-based artificial intelligence (AI) company Cohere has signed a new, non-binding agreement with the Canadian government to help “transform” public sector operations with its technology.
The agreement formalizes the government’s intention to deploy AI tools across the public service “to enhance operations” and to bolster Canada’s “commercial capabilities in using and exporting AI.”
Sovra appoints new CEO Tom Spengler as it sells off “non-core businesses” to focus on government tech
Montréal-based public sector procurement platform Sovra has appointed a new CEO, acquired Calgary-based software startup Ontopical, and sold off six of its “non-core” businesses to strengthen its position in the government tech market.
Formerly MDF Commerce, the company rebranded as Sovra in August 2024 to reflect its public sector focus after it was taken private by New York-based investment firm Kohlberg Kravis Roberts (KKR). The renewed government tech focus will be spearheaded by new CEO Tom Spengler, who replaces Sovra’s CEO of six years, Luc Filiatreault.
General Fusion staves off funding crunch with $30 million CAD to fuel quest for commercial fusion power
Months after shedding staff and scaling back its operations amid fundraising challenges, General Fusion’s public plea for investment has been answered, as it secured $22 million USD ($30 million CAD) through a “pay-to-play” deal with existing investors.
The fresh financing will fuel the company’s LM26 fusion demonstration program and advance its plans for commercially viable fusion power.
“With this financing, the company is now full speed ahead,” General Fusion spokesperson Danielle Johnson told BetaKit.
MaRS and U of T seek new partner as Johnson & Johnson pulls support for JLabs Toronto
Pharmaceutical giant Johnson & Johnson is withdrawing its support for its JLabs innovation laboratory space in Toronto by the end of this year. The move leaves the MaRS Discovery District and the University of Toronto to seek a new partner to help provide mentorship, resources, and commercialization support for early-stage health ventures.
Leah Cowen, University of Toronto’s vice-president of research and innovation, and strategic initiatives, told BetaKit in an email statement that the university will keep the lab space “thriving until a new partner can be found.”
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🇨🇦 Weekly Canadian Deals, Dollars & More
- VAN – Photonic awarded $1M in federal defence tech challenge
- VAN – Databricks opens Vancouver R&D centre ahead of Series K
- AB – Deep Sky boots up inaugural direct air carbon capture facility
- CGY – North Vector lands $4.2M National Defence contract
- SSK – Vendasta launches AI agents for small businesses
- GUE – Friendlier raises $4.5M to “deepen” its infrastructure
- TOR – Caseware tentatively completes C-suite overhaul
- TOR – Xanadu awarded $1M in federal defence tech challenge
- OTT – Ranovus invests $100M to expand Ottawa facility
- TEX – Canadian-led Aalo Atomics raises $100M USD
The BetaKit Podcast – The former Meta employee trying to stop Canada’s AI brain drain
“A win for AXL is that, ten years from now, instead of nine of the top ten biggest and most successful companies in the world being on the West Coast of the United States, half of them are in Toronto.”
Dr. Daniel Wigdor has a lofty goal: help launch 50 AI companies in the next five years and keep them in Canada. Is it enough to stop our country’s AI brain drain? The entrepreneur, computer science professor, and former Meta and Microsoft employee joins to discuss his new venture studio AXL, and why Canada is so bad at commercializing its innovations.
Take The BetaKit Quiz – This week: Vendasta goes agentic, Databricks builds in Vancity, and Google’s late-night host
Think you’re on top of Canadian tech and innovation news? Time to prove it. Test your knowledge of Canadian tech news with The BetaKit Quiz for August 22, 2025.
Join Canada’s largest AI event, September 24–25 in Montreal.
ALL IN brings together the country’s most dynamic AI ecosystem — from visionary companies adopting AI to cutting-edge startups building AI. With over 6,000 participants, including 200+ world-class speakers and 100 of Canada’s top AI startups, this is the place to connect, collaborate, and move ideas forward. With 55% of attendees being AI adopters and 45% being AI providers, ALL IN is a prime opportunity to build powerful business relationships and discover practical solutions to scale AI adoption.
Feature image courtesy Dax Dasilva via LinkedIn.