Ottawa·BUDGET 2017

Government offers incentives for innovation

The federal government is following through on some of its commitments to innovation in Budget 2017, with clean tech investments, venture capital funds and new procurement opportunities for smaller vendors looking for government contracts.

Clean tech investments, venture capital funds, procurement opportunities for small vendors among budget items

Minister of Finance Bill Morneau said the government is following through with some of its innovation commitments in the 2017 budget. (Sean Kilpatrick/Canadian Press)

The federal government is following through on some of its commitments to innovation in the 2017 budget, declaring, "Canada must do more to encourage innovation. The future success of all Canadians relies on it."

Here are some of the highlights for innovators and entrepreneurs:

Selling to Government 

There are many small, emerging technology firms that would like to more easily be able to sell their products and services to the federal government, which makes $23 billion in purchases every year. 

Chris Perram, CEO of the data analytics firm Filefacets, said his Ottawa company has actually given up on trying to make the government a customer. The government said it has heard the complaints.

Budget 2017 proposes: 

  • $50 million to launch a new procurement program called Innovative Solutions Canada, modelled on a small business innovation research program in the United States. 
  • setting aside departmental money for early-stage research and development, late-stage prototypes from Canadian entrepreneurs. 
  • encouraging procurement from companies led by women and other underrepresented groups. 
Technology leaders met at an event in Ottawa on March 9 to hear Minister Judy Foote talk about the government's commitment to buy more Canadian tech services. (CBC)

Immigrant talent 

Allan Wille, CEO of Klipfolio, was waiting to see if the government was listening to what he needs to help his company grow. 

Wille said he's in desperate need of highly skilled talent that he can't always find in Ottawa or Canada. But he said the current immigration process is at odds with today's innovation agenda. 

The previously announced Global Skills Strategy to help expedite the immigration process for highly skilled workers now has some numbers attached in Budget 2017: 

  • an additional $7.8 million over two years to implement a new Global Talent Stream.
  • an amendment to the Immigration and Refugee Protection Act to ensure the express entry system is responsive to labour market needs.

Clean technology investments

Ottawa has a growing clean technology sector. It's an industry the government is looking to encourage through a variety of federal departments, agencies and investment vehicles. 

Budget 2017 proposes: 

  • $14.5 million over four years to develop Clean Technology Data Strategy.
  • $12 million over four years for government departments to establish a Clean Growth Hub.
  • $200 million over four years for the Natural Resources, Agriculture, Fisheries and Oceans departments to invest in various stage clean technologies being developed by industry, academia and federal labs. 
  • $400 million over five years to recapitalize the SD Tech Fund (Sustainable Development) to support clean tech projects across Canada.  
  • $380 million over three years for Business Development Bank and the Economic Development Corporation to support equity financing to support clean tech firms looking to grow.
  • An additional $570 million over three years in working capital to support clean tech firms. 

Investment, future tech entrepreneurs, innovation clusters

The government proposes to establish Innovation Canada, a new platform to co-ordinate and simplify support available to Canadian entrepreneurs. 

Benjamin Bergen, executive director of the Council of Canadian Innovators, said the budget included the right things.

"Canadian innovators and tech leaders who have been engaging with Ottawa are cautiously optimistic that the measures announced in Budget 2017 will help Canadian tech firms grow, scale and reach new markets. Many details of the budget still require further consultation with industry, and Canadian tech CEOs and innovators look forward to being part of this dialogue with the federal government."

The government plans to encourage the development of so-called super clusters: tech business hubs that will attract anchor companies from around the world.

Budget 2017 proposes:

  • $950 million over five years (provided through competition) to support the super clusters. 
  • $400 million over three years to be made available through the Business Development Bank, a new Venture Capital Catalyst Initiative to increase last-stage venture capital available to Canadian entrepreneurs who submit proposals.
  • $14 million over two years for Futurpreneur Canada — a non-profit organization — to match investments with funding from departments and private sector.