The federal government is partnering with Shopify Inc. to help small Canadian retailers set up online stores for 90-day trials, as the governing Liberals deepen their ties to Canada’s most valuable publicly traded company during the pandemic.
The program, called Go Digital Canada, aims to help entrepreneurs sell their wares online while physical retail store sales remain slow owing to COVID-19 precautions. Canadian entrepreneurs who’ve never used the Shopify platform before, and who sign up before Oct. 1, will get free access to the platform to run an online store for three months, with additional support and resources available to all entrepreneurs.
This marks the third pandemic-related partnership between the federal government and Shopify since sweeping economic shutdowns began draining small businesses’ revenues in March.
Small Business Minister Mary Ng announced the partnership with Harley Finkelstein, Shopify’s chief operating officer, Wednesday afternoon, with hopes that thousands of businesses will sign up. While Ottawa is not a financial partner, it will guide the program to ensure it meets Canadian entrepreneurs’ needs and encourage other corporate partners to participate.
Shopify is also part of the $58-million Digital Main Street program announced last month by the Federal Economic Development Agency for Southern Ontario and the provincial government to help businesses in Ontario build and market websites. Ottawa has additionally thrown support behind a contact-tracing app that was developed by a group of Shopify volunteers. And behind the scenes, the company’s chief executive officer, Tobi Lutke, has been regularly advising members of the government on digital affairs, including contact-tracing technology.
All this has happened as Shopify surged past Royal Bank of Canada in recent months to become the country’s most valuable company by market capitalization. The company is now worth $154.6-billion – thanks to a 151-per-cent rise in its share price since the start of 2020 – as retailers worldwide have turned to its growing suite of services during the pandemic.
“This has been in the works since the pandemic hit,” said general manager Sylvia Ng, one of Shopify’s key leaders overseeing the Go Digital Canada program, which she hopes other companies will support as well. Shopify and the federal government, she said, “have a shared mutual interest and commitment to Shopify supporting the digitization of small businesses.” (Shopify’s Ms. Ng and Minister Ng are not related.)
While it is typical for leading tech companies to forge relationships with governments – Amazon, Facebook and Google parent Alphabet are among the top lobbyists in the U.S. – Shopify has escalated its communications with Ottawa since the pandemic began.
The federal lobbyist registry shows that Shopify has lobbied the federal government 27 times since 2017, with 22 of the instances in the past six months.
Shopify’s head of government relations, Clark Rabbior, said the company wanted to share its expertise with government once it realized the pandemic would have a dire effect on the tech sector.
“Since the outbreak of COVID-19, we quickly realized ... we’re at the forefront of this kind of shift to a new digital economy,” Mr. Rabbior said. “We realized that we needed to provide this feedback and this context to the government as they were rolling out support measures.”
Prior to this, Mr. Rabbior said, Shopify’s communications with governments centred on how to help other tech companies scale. Few have reached Shopify’s size and influence in Canada since BlackBerry shifted away from handsets last decade, but now federal ministers regularly discuss promoting policies that would emulate Shopify’s success.
Shopify representatives met with both Prime Minister Justin Trudeau and Minister Ng in early May, records show. They have also had separate meetings with chiefs of staff for Mr. Trudeau and Ms. Ng since the pandemic began.
Mr. Lutke chaired the government’s economic strategy table on digital industries in 2017, and the company was set to participate in new high-level roundtable discussions with government before the arrival of COVID-19. Shopify has hosted Mr. Trudeau, Ms. Ng and Innovation Minister Navdeep Bains at its offices for various events in recent years, and Mr. Trudeau spoke with Mr. Lutke onstage at the company’s annual Unite conference in 2018.
Ryan Nearing, a spokesperson for Minister Ng, said in an e-mail that the government recognized Shopify’s ability to help entrepreneurs and sees its partnership with the company as a chance to accelerate Canada’s pandemic recovery. “This builds our relationship with industry – working collaboratively with the private sector on initiatives that will help Canadian entrepreneurs succeed,” he said.
A survey of 500 entrepreneurs last month by the domain-name registration company GoDaddy found that only about half of Canadian small businesses had a website before the pandemic.
Go Digital Canada will include a central hub with resources to help entrepreneurs expand the digital side of their business. The company also said it would offer other free services to merchants who participate, including free point-of-sale card readers for some eligible retailers while Shopify’s supplies last.
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