The federal budget demonstrated that this government is making a serious attempt to overhaul the way it supports Canada’s growth companies. However, it remains to be seen whether the proposed changes will benefit Canadian technology scale-ups in realizing their growth potential by addressing Canada’s skilled talent shortage.
A recent study has said that by 2020, as many as 220,000 jobs will sit vacant in Canada’s tech sector. Canadian tech leaders face a shortage every day, with several job postings unfilled, despite increased graduation levels in the science, technology, engineering and math (STEM) programs at our universities.
By not having a national talent retention strategy, the federal government is putting the success of these firms at risk. If Canadian innovators cannot access the talent they need to scale, CEOs are left to decide whether it is more desirable to move their company to where the talent is or sell their company entirely. This is not what growing a business in Canada should look like.
While the federal government’s Global Skills Strategy has helped high-growth companies attract in-demand foreign talent to Canada through an expedited visa process, the government has not constructively addressed the criticality of Canada’s brain drain to the United States. Every year, university graduates from Canada’s top computer science and engineering faculties are recruited to work for large U.S. companies, most often in California, Boston or New York. If these graduates stay in Canada, these large companies often scoop up the talent for their Canadian branch plants, offering starting salaries and benefits that scaling, domestic technology firms cannot easily compete with.
A key pillar of the government’s economic plan is encouraging large, foreign technology companies to expand their operations in Canada. If the government focused as much energy on supporting domestic scale-ups as they do attracting foreign companies here, we would have a stronger, larger and more attractive domestic technology sector.
As a tech entrepreneur, I believe it is critical that the government works with Canadian technology scale-ups to address the talent crunch and help keep the best talent in Canada, working for Canadian companies. Our universities got a sizable boost in this year’s budget, with $3.8 billion in funding for science and technology research. Our post-secondary institutions should play a role in both developing our talent but also helping our government benefit from the talent they are creating. A national talent retention strategy should be a key pillar in Canada’s economic prosperity agenda.
On the plus side, the budget recognized that research and development programs such as the National Research Council’s Industrial Research Adjustment Program (IRAP) have been a significant part of helping technology scale-ups commercialize their innovation.
To ensure the greatest return on investment for the government, this $700 million in new funding for IRAP needs to support companies that are investing in their growth, even if they have received IRAP funding in the past, and not be directed solely to new projects.
It’s also positive that the government announced $85 million for a national intellectual property strategy. This is a strong start to ensure the value of publicly funded research stays within Canada and benefits the national economy, as well as to create freedom to operate for domestic firms.
Another of the budget highlights is the modernization of government procurement, with more than $196 million being spent over five years for the creation of a new electronic procurement platform to support SME access to government contracts. Consolidation of the legacy Build in Canada Innovation Program into the new Innovative Solutions Canada will allow for a more streamlined procurement access.
As the CEO of a technology scale-up, my hope is that this new program is agile enough to provide opportunities for different sub-segments of the technology ecosystem, so government can become a procurer of Canadian-made solutions that can then be sold around the world.
But for all these measures to support the growth of Canadian firms, we need to ensure that the firms have access to highly skilled talent. In 20 years as CEO of Delvinia, I have never heard so many fellow CEOs lament about the challenges they face in retaining talent in Canada. Never have U.S. giants had such a presence in our tech ecosystem, nor has a government’s economic approach to foreign-direct investment had such an adverse impact on access to talent for domestic innovators.
Delvinia is a company that has benefitted from government support programs to help it grow. I know these programs and strategies can help firms scale and become global giants. If the government wants to see more mature, high-growth technology companies headquartered here, Canada needs to create a level playing field for domestic scale-ups to compete globally. That starts with making sure we have a plan for both training and retaining our highly prized talent.
• Adam Froman is CEO of Delvinia, a Toronto-based data collection company, and a member of the board of directors for the Council of Canadian Innovators.