Fintech startups may be high up in the receiving line for stimulus spending under the new Liberal government
One of the main industries to benefit from Justin Trudeau's governmental victory is Canada's burgeoning technology sector, for which during the election campaign the Liberals unveiled a three-year plan to allocate $900m under a new innovation agenda.
Part of this investment pot is a $200m-per-year fund for technology incubators, research facilities and some direct small-business funding, but for a market that has seen the rise, and fall, of such giants as Nortel Networks and BlackBerry, there is understandable consternation about how this money should be spent.
In an op-ed for the Globe and Mail, Marcus Daniels, chairman of Canadian Acceleration & Business Incubation Association (CABI) warned that this campaign promise was made without the benefit of a transparent dialogue with actors in the Canadian start-up ecosystem who have demonstrated an ability to have real impact.
“As the chairman of the CABI association, I can confidently say that we need real change in our national innovation strategy or we are going to continue to celebrate mediocre results at home and lose the war to lead globally,” he said.
This call had already been made by John Ruffolo of OMERS Ventures, a technology investment firm, who alongside ex-BlackBerry chief Jim Balsillie is overseeing the foundation of a new lobby group for Canadian technology interests.
In a blog post Ruffalo wrote: “The real question in my mind is "Has the startup community actually told the Government what we do and do not want?" ... The problem is - they really do not know what the startup community wants in order to achieve the Innovation economy vision. Why is that? There does not seem to be a single voice of the startup community clearly articulating the few things that they really need in order to make their plants grow and thrive. Or, there could be too many voices asking for too many things that might seem to contradict one another.”
Ruffalo said that while it is nice to get some tax relief as a new venture, what is needed is policies to truly support material growth on the revenue line of startups, while the SRED tax credit regimes, stock option taxation frameworks, and other similar policies position Canada very well globally to assist the seedlings into growing into plants.
While Ruffalo and Balsillie are expected to meet with Trudeau over the coming weeks to try and influence the new innovation agenda and maximise incentives, what is clear is that strong voices in the Canadian startup community are needed immediately to encourage the notoriously risk averse Canadian investors to move on technology.
Part of this investment pot is a $200m-per-year fund for technology incubators, research facilities and some direct small-business funding, but for a market that has seen the rise, and fall, of such giants as Nortel Networks and BlackBerry, there is understandable consternation about how this money should be spent.
In an op-ed for the Globe and Mail, Marcus Daniels, chairman of Canadian Acceleration & Business Incubation Association (CABI) warned that this campaign promise was made without the benefit of a transparent dialogue with actors in the Canadian start-up ecosystem who have demonstrated an ability to have real impact.
“As the chairman of the CABI association, I can confidently say that we need real change in our national innovation strategy or we are going to continue to celebrate mediocre results at home and lose the war to lead globally,” he said.
This call had already been made by John Ruffolo of OMERS Ventures, a technology investment firm, who alongside ex-BlackBerry chief Jim Balsillie is overseeing the foundation of a new lobby group for Canadian technology interests.
In a blog post Ruffalo wrote: “The real question in my mind is "Has the startup community actually told the Government what we do and do not want?" ... The problem is - they really do not know what the startup community wants in order to achieve the Innovation economy vision. Why is that? There does not seem to be a single voice of the startup community clearly articulating the few things that they really need in order to make their plants grow and thrive. Or, there could be too many voices asking for too many things that might seem to contradict one another.”
Ruffalo said that while it is nice to get some tax relief as a new venture, what is needed is policies to truly support material growth on the revenue line of startups, while the SRED tax credit regimes, stock option taxation frameworks, and other similar policies position Canada very well globally to assist the seedlings into growing into plants.
While Ruffalo and Balsillie are expected to meet with Trudeau over the coming weeks to try and influence the new innovation agenda and maximise incentives, what is clear is that strong voices in the Canadian startup community are needed immediately to encourage the notoriously risk averse Canadian investors to move on technology.
