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Business sector takes cautiously optimistic view of budget

Michael Litt, co-founder and CEO of Vidyard.

Tim Fraser/The Globe and Mail

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Many businesses hoping to build Canada's digital future and physical infrastructure are pleased with Wednesday's federal budget, while firms in other sectors are reserving their praise until more specifics arise.

Technology companies stand to gain from numerous funding and policy directives, including the three-year, $400-million Venture Capital Catalyst Initiative to boost late-stage capital availability, as well as $7.8-million in additional funding over two years for the Global Skills Strategy to attract outside talent. Advanced manufacturers will benefit from business-and-education "supercluster" network funding, topped up to $950-million. Construction and engineering firms hoping to take advantage of long-promised infrastructure investments, meanwhile, are happy to see plans forming – but are waiting on concrete timelines to raise their hands for new projects.

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The air of cautious optimism follows a budget that is forced to grapple with "uncertainty around key elements of U.S. economic, fiscal and trade policy" that has been roiling the global economy since the inauguration of President Donald Trump. But the Liberals' budget contains measures that innovation-focused companies hope will make Canada more competitive on the world stage.

Federal budget highlights: 10 things you need to know

"This is not a moment to replicate Silicon Valley – this is a moment to create something completely our own," said Alexandra Clark, director of policy and government affairs at Shopify Inc. For every skilled worker hired from abroad through new funding and visa changes, she said, spinoff jobs could be created for "hundreds of Canadians."

Regarding the $400-million venture-funding initiative, Ms. Clark said, "to inject that into the ecosystem is an incredibly powerful message" that Canada sees entrepreneurs as a crucial part of Canada's future.

She also praised the budget's targeted skills and accessibility proposals, which would help more Canadians have a hand in the economy. Among them are $50-million in investment for aboriginal skills training, $50-million to teach children how to code, a $29.5-million digital-literacy program and $22.3-million to enhance Canadians' access to assistive technologies such as alternative keyboards and refreshable braille displays.

Michael Litt, co-founder and chief executive of the streaming-video company Vidyard in Kitchener, Ont., said he's thrilled about the five-year, $221-million funding proposal for Mitacs – the not-for-profit that connects schools with industry – which could more than double Canada's co-op work placements to 10,000 positions.

Too many bright minds move to Silicon Valley, Mr. Litt said, and robust co-op programs could keep them in Canada. "The co-op program is a key part of our future hiring strategy," he said.

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The budget also adds $150-million to the previous $800-million pledge toward innovation "superclusters," which Precision ADM chief executive Martin Petrak said will allow advanced manufacturers such as himself to scale up and compete on an international level.

"Investing in your own superclusters will cause a trickle effect that will cause other countries to invest further into yours," said Mr. Petrak, whose Winnipeg company harnesses 3-D printing among other digital-manufacturing methods. These networks would be funded on a competitive basis across industries including agri-food, clean technology, digital technology, biosciences, infrastructure and transportation.

Construction firms are happy with some of the budget's promises, but are holding off celebration until more details arise, particularly when it comes to the long-discussed infrastructure bank.

"We think it's a good thing that the government is investing in infra, because there is a need," said Isabelle Adjahi, vice-president of investor relations with Montreal engineering consultant WSP Global Inc. Some public-transit promises, including $20.1-billion in investment in public transit and an additional $5-billion from the infrastructure bank, would benefit companies such as WSP. "That's an expertise we have – and we have to be patient, probably," Ms. Adjahi said.

SNC-Lavalin Group Inc. believes the "Smart Cities Challenge" announced in connection with the budget will help firms such as itself invest in projects to make Canadian cities more innovative, such as cost-efficient water-network management and transit technology. Marc Blanchet, its vice-president of infrastructure, says that when more details finally emerge, SNC-Lavalin would gladly jump aboard.

As an example, he envisions a system that would make public-transit travel more efficient through a connected data system. "If a bus is late, and you know it's late, are you going to turn the traffic signal red, or hold the green for a few seconds so the bus can go through?" Mr. Blanchet asks. "It's not something that's space age."

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Neither is ride-sharing, though the budget's tax changes for services such as Uber might hinder the tech darling's Canadian wing. It proposes that ride-sharing businesses face the same GST and HST fees as taxis.

"Federal tax laws already [offer] small-business owners a break on collecting sales tax, but unfairly exclude taxi drivers," Uber Canada general manager Ian Black said in a statement. "The best way to support taxi drivers and level the playing field is to extend the same exemption to them."

A more democratizing measure in the budget is in its promises for affordable housing, which include $11.2-billion in funding over 11 years. Developers such as Vancouver's Concert Properties Ltd. see it as an opportunity to build more rental stock – in fact, Concert would like the funding to come even faster. "I think the situation is so critical that I hope the money they've earmarked over 11 years could be advanced quicker," Concert chief executive David Podmore said.

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About the Author

Josh O’Kane is a reporter with The Globe and Mail's Report on Business. Since joining the paper in 2011, he has told stories from New Brunswick to Nairobi. More


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