What tech and innovation are getting — and not getting — in Alberta's budget

Alberta's 2021 budget is placing an increased spotlight on the technology and innovation sector, setting it up to be a key player in the province's efforts to stabilize after COVID-19.

Much of the industry is calling the budget a step in the right direction but say the government could have done more to make the sector a winner in 2021.

The Ministry of Jobs, Economy and Innovation will receive $362 million of the $1.5 billion set aside over three years for Alberta's economic recovery.

Part of that funding will be used to launch a technology and innovation strategy, with the budget outlining the goals to secure a talented workforce, lead the country in investment by 2030 and foster a competitive environment for the private sector.

"We have green shoots really starting to emerge across Alberta in a whole bunch of industries that are encouraging signs for the future," Doug Schweitzer, minister of jobs, economy and innovation, told CBC News.

"The tech industry in particular … I believe it's tipped to the point where it's really starting to grow on that exponential growth curve."

What the sector is getting

One of the biggest asks from the sector is being granted through the Alberta Jobs Now program. The initiative will provide grants to eligible employers to upskill or reskill workers for emerging sectors.

"Supporting existing local tech companies in becoming global brands will send a message to the country, and the world, that Alberta is doing amazing things," said Nicolas Beique, CEO of Helcim, a Calgary company that facilitates online payments.

Jobs Now will receive $136 million over three years and is funded, in part, by federal dollars. Many details — including eligibility and the launch date — are still being finalized.

It's currently unclear what amount of funding will be provincial and what will be federal. The budget stipulates that the costing profile of Jobs Now "remains subject to federal approval," as the province is waiting for permission to funnel money not spent during last fiscal into the coming year.

Premier Jason Kenney indicated that underrepresented groups and workers would likely get priority access to the reskilling services.

Schweitzer said retraining programs came up repeatedly in pre-budget conversations with the industry.

"They know that there are really well educated Albertans that just require a little bit of training and they'll be very skilled and be able to contribute to the emerging tech sector that we have in our province. So this is designed to help with that," Schweitzer said.

He didn't offer specific details on the program, but said more information would be available in the coming weeks.

Another $166 million over three years is being poured into the Innovation Employment Grant, which gives small and medium sized firms a repayment of up to 20 per cent of their research and development expenses.

By 2030, the government estimates technology enterprises will have created 20,000 new jobs and be raking in revenues of $5 billion.

Alberta Innovates Corporation, tasked with enhancing accelerator and scale-up supports for entrepreneurs, is getting a $15-million boost this year (a budget increase of about eight per cent) and $10 million each year until 2025. Companies have noted that accelerators and incubators are often inefficient at getting capital to small enterprises.

The ministry could also use a portion of the $500-million contingency fund set aside in the budget for unexpected financial trouble.

"If for some reason we had a new variant that vaccines couldn't handle and all of a sudden we were into another situation where we had to put in more health restrictions, it's there to help make sure that we have the resources to support businesses," Schweitzer said.

What's not in this budget

Many companies and organizations had called for further tax breaks and incentives to be introduced, arguing it would make Alberta more competitive with U.S. states.

The province accelerated its corporate tax cut program, lowering it from 12 to eight per cent last summer, but no additional tax relief was announced in this budget.

The industry asked for improvements to the provincial immigration nominee program to make it easier to bring skilled workers to Alberta. That wasn't included either.

"Without a comprehensive strategy focused on increasing the talent pool in Alberta's tech sector, many companies will fail to take flight," said Benjamin Bergen, executive director of the Canadian Council of Innovators.

While he applauded the new upskilling program under development, he says a more robust strategy is needed.

In September, the government had promised a new intellectual property strategy for Alberta. At the time, Schweitzer said other jurisdictions were looking at changes for 2021 and Alberta wanted to beat them. There was no news on IP in the budget.

"An Alberta intellectual property strategy is long overdue and remains critical to ensuring the success of the province's new innovation strategy and long-term economic recovery," Bergen said.

Businesses still not financially stable

While the ministry's spending plan also received kudos from the Canadian Federation of Independent Business, it was accompanied with a warning.

A recent report from the organization found almost 80 per cent of small businesses have had to take on an average debt of almost $186,0000 during the pandemic. Annie Dormuth, the Alberta provincial affairs director, says supports need to be bolstered now and not wait until the new government program begins accepting applications in April.

The previous relaunch grant provided up to $20,000 for eligible businesses. Applications for that program close at the end of March and will be replaced by a new $10,000 program that is set to open early in April. Businesses originally had to show revenue decreases of 30 per cent; under the new program, that burden is 60 per cent.

Schweitzer acknowledged the dire situation many businesses find themselves in, and said there should be minimal disruption as one program takes over for the other.

"We asked [them] to make sacrifices during this health pandemic and they responded. They did what we asked them to do. So it was incumbent on us to fill the gaps," he said.

That first relaunch grant blew past its expected budget of $500 million as more than 50,000 businesses accessed the fund. Schweitzer said that despite the demand, he's confident the province will be able to keep up with the needs of businesses.