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Latest Alberta, BC budgets target talent shortage with otherwise minimal new tech investment

Industry stakeholders had hoped to see more for technology and SMEs.

Although recent British Columbia (BC) and Alberta budgets provide some funding for each province’s innovation sector, promises for technology have been minimal and industry stakeholders had hoped to see more for the sector and small to medium-sized enterprises (SMEs).

The provincial governments of Alberta and BC last night unveiled their latest budgets, each outlining significant investment in infrastructure and affordability, but little in terms of new technology funding beyond addressing skill shortages.

Although both budgets provide part of the funding for technology, stakeholders had hoped for more support for innovation and SMEs.

In the 2023 budget, Alberta’s United Conservative Party (UCP) prioritized healthcare, affordability and public safety, among other non-technology priorities, and forecast a CA$2.3 billion surplus, driven in part by strong oil and gas revenues.

BC’s New Democratic Party (NDP) has also opted to focus spending on addressing the affordability crisis and funding infrastructure projects in its 2023 budget, leaving the province with a CA$4.2 billion deficit.

Regarding the innovation sector, recent Alberta and BC budgets have focused on addressing the skills shortages faced by many Canadian companies. Despite a looming recession and all the recent tech layoffs, many Canadian companies in both tech and other industries are still struggling to find the talent they need in a record-breaking job market.

While some business and technology stakeholders have commended each budget for investing in filling this workforce gap, they have also expressed disappointment with their rather limited focus on technology, innovation and SMEs beyond.

Dana O’Born, vice president of strategy and advocacy for the Council of Canadian Innovators (CCI), hailed Alberta and BC’s funding for skilled talent as positive news for Western Canada’s tech sector, but noted that both provinces place more emphasis on innovation can .

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Referring to Alberta’s budget, Thin Air Labs partner James Lochrie viewed investment in technology as the provincial government maintaining “the status quo” given the growth that the province’s technology sector has seen in recent years.

RELATED: BC’s budget is heavily biased toward cleantech; Alberta is positioning itself as a major technology hub

Lochrie described Alberta’s recent budget to BetaKit as “a return to social and infrastructure spending as a result of the return to surplus.” Acknowledging the lack of engineering investment in the budget, Lochrie said: “This seems like a position where if it ain’t broke it doesn’t need fixing.”

“Alberta grew it [venture capital] Investments up 30% in 2022 while the rest of Canada saw a 30% drop,” Lochrie said, adding, “I’m very supportive of maintaining the status quo while we see the community continue to grow.”

Alberta’s 2023 Budget provides an additional $24.5 million in 2023-2024 for Alberta’s Technology and Innovation Strategy, in addition to the $73 million earmarked for the initiative over three years in the 2022 Budget became. It also sponsors the province’s Alberta at Work initiative with an additional $176 million in 2025–2026 to help Albertans build skills and find jobs with employers in existing and emerging sectors.

In a statement released in response to Alberta’s recent budget, O’Born said that CCI “is pleased to see significant additional funding” for the Alberta at Work program, noting that the initiative is helping helps to address the skills shortage experienced by many CCI members.

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At the same time, O’Born said that given the size of Alberta’s surplus, CCI would have liked to see the government allocate additional capital to high-growth local companies “to ensure they can maintain their momentum at a time when global capital is dying.” Markets are challenging tech companies, and many are being forced to make cuts.”

Meanwhile, the Canadian Federation of Independent Business (CFIB) was pleased that Alberta’s latest budget did not impose any new costs on small businesses. However, in a statement, the CFIB also expressed regret that the tax rate was not reduced for small businesses – many of which are still in debt as a result of the pandemic and sales have not yet fully recovered.

Alberta’s recent budget follows a more technology-focused 2022 budget. Since then, Alberta has seen political leadership changes, such as the appointment of a new innovation minister in Nate Glubish in October 2022.

Items not included in Alberta’s 2023 budget included the reintroduction of the Alberta investor tax credit. This is something some stakeholders in the province have hoped to see return. In an interview with BetaKit late last year, Glubish expressed doubts about the yield on the Alberta Investor Tax Credit, which was cut in 2019 along with the Interactive Digital Media Tax Credit and others.

RELATED: New BC Minister of Innovation Brenda Bailey lays out how she plans to support the province’s technology and innovation

BC’s latest spending plan follows a 2022 budget that puts the province on cleantech and came after it announced a $500 million direct and indirect investment fund.

For its part, BC recently appointed a new Minister of Innovation in Brenda Bailey, who also spoke to BetaKit last year about how she plans to encourage innovation in the province.

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Commenting on BC’s recent budget, O’Born argued that to fund the social programs BC funds, “government needs to put more emphasis on economic growth.” She added that the province’s tech sector is “ready to drive that prosperity.”

CFIB described BC’s recent budget as “a missed opportunity” to help small businesses.

The BC budget has earmarked $480 million for training and education as part of its new Future Ready plan, which the province plans to announce more about later this year. “We were pleased to see the British Columbia government hear our members’ concerns about skills shortages,” said O’Born.

CFIB described BC’s recent budget as “a missed opportunity” to help small businesses navigate tough economic conditions. “Small businesses in BC are struggling with inflation, lower consumer spending, higher interest rates and ongoing labor shortages,” Jairo Yunis, CFIB economist for western Canada, said in a statement. “Despite the severity of the situation, the government has unfortunately decided to sidestep small businesses from its spending priorities.”

The BC Chamber of Commerce appeared to agree with CFIB. In a statement, BC Chamber of Commerce President and CEO Fiona Famulak said the province’s recent budget “provides little support for companies struggling with the costs of doing business.”

At the same time, Famulak expressed optimism that BC’s Future Ready Plan will help SMEs address “critical workforce challenges,” while noting that details of the new program and how associated funds will be used “remain unclear.”

Feature image courtesy of Wikimedia Commons.

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