The 2017 Canadian federal budget will be officially introduced in the House of Commons on Mar. 22, and it is expected to include a special focus on innovation and technology.
From attracting and keeping talent, progressing Canada as an entrepreneurial state, and increasing investment across the board, the tech industry has lofty goals for 2017. We spoke with several experts and industry insiders to see what they expect to see in the budget on Wednesday.
Talent is key
One of the most-cited skills gaps in Canada is in the IT field, with the Information and Communications Technology Council releasing a report in 2015 saying Canada needed 182,000 workers to fill positions such as systems analysts, consultants, computer and network operators, web technicians, and software engineers by 2019.
Addressing this will undoubtedly be a top priority for the 2017 budget, and the Liberal government has already made moves in this regard. Minister of Innovation, Science and Economic Development Navdeep Bains and Minister of Employment, Workforce Development and Labour Patty Hajdu announced a new Global Skills Strategy (GSS) on Mar. 9, which will launch this summer and focus on attracting high-skill talent for fast-growing Canadian companies.
Albert De Luca, a partner and national leader of the global research and development (R&D)/government incentives group at Deloitte, expects more action following the unveiling of the GSS.
“We need to update our immigration system so we can attract top IT talent to Canada, and whether that involves a program announcement in this budget or not, it’s pretty clear that it’s at the top of the priorities list going forward,” explains De Luca. “We already have insufficient talent in IT right now, and its critical to the point where we are losing projects to many other countries because of our insufficient talent pool, so we have no choice but to emphasize it.”
Echoing this thought is Ben Bergen, executive director of the Council of Canadian Innovators (CCI), a lobby group meant to advocate on behalf of Canada’s technology sector.
“It takes between 10 to 12 months right now to be able to bring in the talent from a foreign country, but we think that that the Global Skills Strategy is a good first step [to addressing the skills gap],” he tells ITBusiness.ca. “That will help create a two-week turnaround to bring in highly skilled talent. We think that strategy – properly funded by the federal government, which we’re hoping to see in the budget – will help the innovation sector and help it compete globally.”
Putting Canada first
This is the first budget since Donald Trump became president in November 2016, and as Canada’s southern neighbour prepares to adopt more “USA first” business policies, John Reid, president and CEO of the Canadian Advanced Technology Alliance (CATA Alliance), says Canada should respond with something similar.
“It’s obvious that the US will move towards reducing regulatory overheads as well as corporate and personal tax rates, so we have to be prepared for that and introduce a Canada-first plan,” he tells ITBusiness.ca. “The rules of the game are going to change and we may need to take significant steps to adjust or respond to the pressure of keeping capital in Canada.”
Mark Stevenson, vice president of finance at Kitchener, Ont.-based Igloo Software, stresses that the government needs to move on making Canadian job destinations more attractive than those in the US. He adds that under Donald Trump’s controversial presidency, this may actually become feasible.
“We need a wider and deeper pool of talent – not deeper in terms of ability, but deeper in terms of number of skilled workers available,” he says. “Canada has to compete against the big tech companies in the US, like Google and Facebook and the rest of Silicon Valley, and they make it incredibly tough to bring talent here or keep it here. But the less attractive they look, the better it is for Canada, and the situation in the US right now is making us a more favourable destination.”
He continues to say that a more streamlined visa and immigration process will be beneficial to this goal, as well as easing restrictions on bringing in talent.
Deloitte’s De Luca adds that reevaluating the federal foreign investment regulations could also help, and expects to see an agency created to deal with this.
“I think there will be a lot of focus on foreign direct investment and the government will inevitably create some sort of agency based on what exists already in certain provinces,” he explains. “Provinces are very capable of attracting investments, and many regions in Canada have been very successful, like Kitchener-Waterloo, for example. Canada needs to do the same thing.”
However, CCI’s Bergen points out that the instability south of the border may cause the Canadian government to step back and wait for things to clear before making a move.
“The federal government is being careful with what’s happening in the US right now, and as a result, this budget might be a little less ambitious than originally thought to be,” he explains. “I think there may be some more interesting or groundbreaking stuff in the next fall economic statement in terms of granular details or more full ideas. But in this budget, I don’t anticipate any real shockers.”
Investment for high growth companies and R&D
Another key policy likely to be seen in the 2017 budget is increased investment in high-growth Canadian companies that are in the process of scaling up, Igloo’s Stevenson says. He tells ITBusiness.ca that while investing in university research programs is important for developing talent, many graduates are foreign students that end up leaving Canada, further perpetuating the talent gap.
“Incubator programs, too, fill a very important role in the ecosystem, but they only take companies so far, so what I’d really like to see is some of this innovation fund money being directed more toward companies scaling up,” Stevenson continues. “These are the companies that have the ability to turn $800 million into $8 billion, but need help getting out of the scale-up vacuum. That’s where growth in the economy will come from, and that’s how the tech sector will grow faster in Canada.”
However, CATA Alliance’s Reid expresses concern over the reduction in R&D support in Canada’s tech industry.
“There’s been significant reduction in R&D support to the industry across the board; we’ve documented that something like $1 billion has been withdrawn over the years, so if we if we don’t see this addressed in the budget, that would be a significant gap,” he concludes.
Overall, all experts agreed that the budget needs to address the needs of the Canadian tech and IT industry before it’s too late.
