Like many organizations across the country, the Council of Canadian Innovators (CCI) had a particular wish list when it came to last week’s Federal Budget 2023.
Founded in 2015, the national business association, which represents more than 150 of the fastest-growing tech firms, said it closely tracks the budget process and engages in pre-budget consultations for several reasons, including the ability to put “our priorities on the record.”
What they were looking for and what was announced did not mesh, the findings of a CCI Budget Season Debrief, held on Friday, revealed.
Key among the unmet requirements were the prioritization of intellectual property (IP) and data in any Canadian economic strategy, and new approaches and strategies for high-growth sectors such as health and sciences, fintech, and cybersecurity.
Nick Schiavo, CCI’s director of federal affairs, told his audience that the “focus of our advocacy over the last year has really been on tangible regulatory changes, updates to previously announced innovation programming, and new frameworks that can start to address some of the ongoing issues that impact many of you – things like procurement, things like talent, and IP.
“In short, we put forward recommendations to support as many companies and lift as many boats in our ecosystem as possible. Unfortunately, we’ve seen little progress on that.”
In terms of what was announced by Finance Minister Chrystia Freeland in the House of Commons last Wednesday, he said, “first things first, this was not an innovation budget. This was a budget about three key priorities for the government, the first being the clean tech and a clean economy, the second being healthcare spending, as well as dental care, and the third around cost-of-living supports for Canadians.
It was, he said, a direct response to “two key themes going on in the world right now, one of them being the cost-of-living crisis, affordability, and rising inflation, and so the government wanted to make sure that there was some targeted support for Canadians. But they also wanted to make sure that this budget didn’t actually make the situation worse, by pouring a lot of new spending into the ecosystem, so it is a little bit more restrained.
“The second is a direct response to the U.S. Inflation Reduction Act in the United States. This is legislation that was signed in 2022 by President Biden, and the goal was to offer up hundreds of billions of dollars of subsidies and credits to encourage clean tech, critical minerals extraction, and other sources of revenue for the government.”
Of note, said Schiavo, is that after several years of “very big spend budgets, this is actually a budget of restraint for the Liberals.
“Even though they have committed to $60 billion of new spending over five years, if you compare that to 2021, they spent $100 billion over three years. This is actually then a paring back.”
The CCI was also critical about the lack of incentives revolving around talent – “there are not that many new initiatives to be excited about,” said Schiavo – as well as growth capital.
“This wasn’t really a budget that was focused on capital. And I say that acknowledging that this budget does provide billions of dollars for clean tech subsidies, including significant funds for more extra funds for the Strategic Innovation Fund. But this budget, as a whole, wasn’t about injecting a lot of capital into the tech ecosystem.”
In fact, Benjamin Bergen, president of the CCI, issued the following statement soon after the budget was tabled in the House of Commons: “The only way to sustainably pay for the social programs and services that all Canadians value is by driving economic growth and prosperity, and that should start with innovative, 21st century Canadian companies.
“We are in a difficult and uncertain economic environment for the tech sector, and today’s budget did little to support Canada’s most promising businesses through a challenging time.”
Bergen went on to say that while “we appreciate the government’s commitment to Canada’s clean technology sector, the fact remains Canada’s innovation policy still lacks a focus on the key ownership and intellectual property tools that build real, lasting national wealth.
“A cleantech strategy without a real plan in place to protect these assets will just keep subsidizing other countries’ success. We need to see a strong signal that Canada won’t be subsidizing other countries’ prosperity with a status-quo approach to intellectual property (IP) and data.”
Meanwhile, when it came to new cybersecurity initiatives, they also appeared to be few and far between. “This wasn’t a cyber budget,” said Schiavo. “Last year, in Budget 2022, we saw close to a billion dollars worth of new investments in cybersecurity. I think it’s quite clear that the government scaled back in this budget.”