These are the top promises for the tech sector in new federal budget

New $15b growth fund tops list of tech sector commitments from feds

B.C. Tech Summit | File photo: Chung Chow, BIV

The federal Liberals unveiled the country’s latest budget Thursday in Ottawa. Here are the top highlights for the country’s tech sector:

  • $15 billion for Canada Growth Fund: A newly established growth fund to attract private investment in new technologies as well as low-carbon industries. The $15-billion commitment – a mix of debt, equity and guarantees – will be spread over five years with the goal that for every dollar invested by the fund, at least $3 in private capital will come back.
  • $1 billion for Canadian Innovation and Investment Agency: Details are fairly slim on the new organization, which is meant to operate independently from the federal government. But the budget earmarks $1 billion over five years to help the agency work with industries and businesses to make investments. The budget documents compare it with the Israel Innovation Authority, which aims to spur investment in research and development.
  • $750 million for supercluster program: The national program, which received a five-year, $950-million commitment from the Liberals in the 2017 budget, sees its initial term expire in one year. The government is lowering its commitment to $750 million over six years, beginning in the 2022-23 fiscal year. Vancouver is home to the country’s Digital Technology Supercluster, a consortium featuring a mix of startups, big B.C. companies like Telus Corp. (TSX:T) and Canfor Corp. (TSX:CFP), and global giants such as Microsoft Corp. (Nasdaq:MSFT) and Boeing Co. (NYSE:BA). The program is aimed at creating public-private partnerships in regions with extensive business activity that would allow for collaboration in innovation between different companies and post-secondary institutions.
  • $2.6 billion for carbon capture tax credit: B.C. is home to companies such as Carbon Engineering Ltd., backed by investors like Bill Gates, specializing in pulling carbon dioxide from the atmosphere so it can either be sequestered or used for low-carbon fuel. The tax credit is aimed at businesses that take on eligible carbon capture expenses as well as for projects that permanently store CO2. The investment tax credit rates range from 37.5-60 per cent, depending what the investments go towards (i.e. transportation, storage, direct air capture and use).
  • $472 million to streamline immigration: New funding – $386 million over five years plus $87 million in ongoing support – will go towards various agencies to bring in a growing number of workers, visitors and students. This comes amid a global labour shortage that has the tech sector pining for more local tech workers.
  • $900 million for ZEV infrastructure: The budget promises to tap $500 million from the Canada Infrastructure bank to develop “large-scale urban and commercial” infrastructure for zero-emissions vehicles (ZEV), such as charging and refuelling stations. Another $400 million over five years will go to Natural Resources Canada to fund ZEV charging infrastructure in suburban and remote communities. Ottawa had previously mandated all new light-duty vehicles sold in Canada must be ZEVs by 2035.
  • $875 million for cybersecurity: Much of the funding is aimed at the Communications Security Establishment, Canada’s main spy agency for cyber monitoring. The CSE will get $264 million over five years to bolster its ability to launch cyber operations that would “prevent and defend” against cyberattacks. Citing advances in quantum computing, the budget also promises the CSE would get $18 million to study “cutting-edge technologies” relevant to its operations. B.C. is home to one of the world’s most prominent quantum computing companies, D-Wave Systems Inc., which recently announced plans to go public in a deal that would value it at more than US$1 billion. 
  • SR&ED review: The Scientific Research and Experimental Development (SR&ED) program, which has proven popular with tech companies in Canada, will undergo a “review,” according to the budget documents. The program offers tax incentives to encourage research and development. The federal government says it wishes to ensure it is effective at encouraging “R&D that benefits Canada.” The review also seeks to modernize and simplify the program, and determine if changes to eligibility is needed.