What Alberta's tech sector wants to see from the provincial budget
Priorities are retraining programs, investor incentives, preventing 'brain drain' to U.S.
Tech companies in Alberta are enjoying a bumper year in spite of the pandemic, but they say measures are needed from the province to stay competitive with other jurisdictions.
Tech CEOs and conglomerates say retraining programs for workers, providing fiscal incentives to keep companies in Alberta and adjusting tax measures are major areas where the provincial government could make a huge difference for the industry. They're hoping to see some of those steps in Thursday's budget.
"The government needs to re-establish investor incentives that promote interest in investing with Alberta-based tech companies. Alberta needs to be a competitive place to invest because, at the moment, other provinces are doing a better job to support their tech industries and investor interest," said Vince O'Gorman, the CEO of Vog App Developers.
One of the biggest problems facing tech growth in Alberta is talent "brain drain" to other places, like the United States. O'Gorman says those tax and investor incentives would enable companies to attract and retain the skilled workers needed to expand the industry here.
Helcim, a Calgary-based company, wants to see an emphasis on training — and retraining — Albertans to work in tech.
"I hope to see the government continue to find new ways to support working with our post-secondary institutions on creating fast-track training for not just developers but data scientists, quality assurance specialists, financial analysts and more," said Nicolas Beique, CEO of the online payment company.
His CFO echoed that priority.
"We believe the Alberta government needs to create a clear financial path for more mature individuals to access retraining programs while supporting startups to hire more inexperienced talent. Investing in training junior talent brings a huge productive output to our tech industry in Alberta, but that output is delayed during the onboarding and training of new recruits," Marjorie Junio-Read said.
Success needs a boost
The tech sector has been an outlier during the pandemic, with many companies seeing growth in revenues and staffing. Calgary and Edmonton both broke records for venture capital investments in 2020.
"Alberta is coming to play in the tech and innovation space," Minister Doug Schweitzer said shortly after being appointed to the jobs, economy and innovation file. The tech sector has been a personal focus of his in the months since.
However, companies have warned policymakers that the success is precarious and won't be sustainable without the support of effective policy.
The Council of Canadian Innovators has asked the province to consider four key pillars when developing tech sector measures for this budget: Securing access to capital, markets, talent and building a strong framework to retain promising companies in Alberta.
"Any sort of investment or funding really needs to have metrics attached to it and really make sure that any investments are really getting value for the province," said Benjamin Bergen, the executive director of the council.
"That's something that a lot of governments have struggled to do in the past, not just in Alberta, but nationally."
The council has asked the government to use the budget to provide strategic funding to specific companies with proven concepts, along with investing in retraining and upskilling workers.
Companies in Alberta have stated that incubator and accelerator programs, which have traditionally been used, often don't result in cash getting to smaller enterprises.
While each expressed gratitude for the increased spotlight from the government on their industry, the companies said the dollars could be used more efficiently.
Accidental damage to the private sector
Sometimes the provincial government's efforts actually cause damage, according to the Canadian Council of Independent Laboratories.
The council says private labs in Alberta are losing $10 million a year in business to a provincial program called InnoTech — run as a subsidiary of the government's Alberta Innovates program.
"They use their tax favoured position to undercut private sector businesses and basically provide testing that is cheaper than the private sector is right now. So it's basically a case of waste and duplication as well as unfair competition," said Tony Araujo, president of the council.
The council is calling on the government to privatize InnoTech in this budget. Araujo says the 90 labs he represents in Alberta don't want tax cuts or investor incentives, they just want the government to stop competing against them for contracts.
"The fact that InnoTech Alberta is there in the way is actually discouraging innovation from private sector companies."
A 2018 Conference Board of Canada report ranked Alberta as 19 out of 26 in a jurisdictional comparison of innovation.
The Opposition has proposed its own plan for tech growth ahead of the provincial budget, saying an NDP government would create a $200-million venture capital fund for Alberta tech companies.
All of the companies and organizations are keeping a wary eye on talent and innovation slowly draining from Alberta into other provinces and the U.S. They say that will be the biggest consequence of not having adequate incentives and programs introduced soon.