Like the anticipation of a soufflé rising in the oven, the B.C. tech community remains cautiously optimistic over federal Liberal campaign promises to invest nearly $1 billion in the nation’s innovation sectors.
But concerns remain that, much like a bungled soufflé, the impact of those pledges could collapse if Justin Trudeau’s party does not handle them with a deft touch.
Liberal campaign promises include spending $200 million annually to support innovation and clean technologies in the natural resources sector, as well as putting another $100 million annually into the hands clean technology producers.
Bill Tam, president of the B.C. Technology Industry Association, said he’s encouraged the Liberal party appears willing to invest more in startups and clean technology companies.
He remains concerned, however, about plans to tax stock options at 100%.
“It’s definitely a challenge I think in relation to making sure the right incentive-drivers are there for startup companies,” Tam said.
Under the Conservative government, stock options are taxed at 50%.
Tom Mulcair’s New Democrats backtracked slightly on an earlier promise to tax stock options at 100% after the national tech community balked at the plan. The party later announced the plan would not apply to startups.
The Liberals, meanwhile, have promised stock options would only be taxed at 100% if the compensation amounted to more than $100,000.
“I would hope that there’s an appetite in the government to continue the dialogue with industry as to what the levels should be and what would be appropriate to set out there,” Tam said.
Vancouver-based angel investor Boris Wertz said it could be more challenging for startups to attract top talent if stock options were taxed at 100%.
“I’d argue they’re one of the great incentives,” the founder of Version One Ventures told Business in Vancouver.
“When it comes to tactics, I’m not 100% sure the best solutions are already on the table.”
Overall, Wertz said the “ambitious agenda” of the Liberals is likely good news for the B.C. tech sector.
“I really appreciate doubling down on the knowledge and technology economy,” he said.
“Relying on natural resources for the rest of our life won’t work out.”
But BuildDirect co-founder and CEO Jeff Booth said in an email to Business in Vancouver he was disappointed by all the parties’ platforms regarding technology.
“They all missed a chance to show real vision because technology is impacting every industry. Technology is where future jobs and growth lies and Canada needs to up its game,” he wrote.
“Unfortunately, when we think of the top technology companies, we think of American companies like Google, Amazon, Facebook, LinkedIn, etc. when in fact, Canada has some technology companies that, if given the right conditions, can become household names and compete on a global scale.”
Highline CEO Marcus Daniels, whose accelerator invests capital in startups and helps them grow through mentorships, networking opportunities and free office space, said he hopes the new government will have a positive impact on the tech sector.
However, he told BIV he’s apprehensive about Trudeau’s pledge of $200 million annually for the next three years on incubators, research facilities and small-business financing.
“The needs of founders have changed and many incubators haven't adapted adequately yet. We don't need more of a quasi-broken model, but instead more high quality investors who are willing to jump in at the pre-seed stage,” he said.
Daniels added he hopes the Liberal majority leverages B.C.’s relatively low overhead and cost of living — that is, compared to the tech hot spots like San Francisco — to attract the world’s best engineers.
“I know that's a complex matter but I think the government needs to recognize this is how we will compete with the biggest and most established startup hubs,” he said.
“Frankly, we have been hewers of wood and drawers of water for far too long. It means the Canadian economy is highly subject to the caprices of global commodity prices. Policies that aim to reduce this dependency and which focus on innovation are the prudent course.”
