Cheatsheet: Top 30 highlights for innovators in #Budget2021

"An ambitious plan that positions Canada’s leaders in science and technology as core to Canada’s economic future."

Today the federal government released Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience. With a focus on conquering COVID, economic growth and stimulating innovation, among many points, the government put forward multiple tech-focused proposals spanning life sciences, small businesses, artificial intelligence, quantum computing and climate solutions.

Join our Clubhouse show on Wednesday, April 21 at 7 pm PST where local tech leaders will debrief on the federal and BC budgets and what they mean for innovation in BC.

The Liberals say this budget is their multi-year program to “finish the fight against COVID-19—and ensure a resilient economic recovery that creates jobs and growth for Canadians.” It’s an ambitious plan that positions Canada’s leaders in science and technology as core to Canada’s economic future. And at 724 pages, it’s also very long.

Lucky for you, we at the Vancouver Tech Journal have read the document in full, so you don’t have to. Find below what we believe are the plain-language details anyone working in the digital economy will want to know first, starting with proposals for our country’s current sub-sector of the moment: life sciences.


Life sciences

The Government proposes…

— $2.2 billion over seven years towards growing the life sciences sector, including:

  • $500 million over four years for the Canada Foundation for Innovation to support the bio-science capital and infrastructure needs of post-secondary institutions and research hospitals.

  • $250 million over four years for the federal research granting councils to create a new tri-council biomedical research fund.

  • $92 million over four years for adMare to support company creation, scale-up, and training activities in the life sciences sector.

  • $59.2 million over three years for the Vaccine and Infectious Disease Organization to support the development of its vaccine candidates and expand its facility in Saskatoon.

  • $45 million over three years, starting in 2022-23, to the Stem Cell Network to support stem cell and regenerative medicine research.

— In addition:

  • $1 billion on a cash basis over seven years of support through the Strategic Innovation Fund would be targeted toward promising domestic life sciences and bio-manufacturing firms.

  • $250 million over three years to increase clinical research capacity through a new Canadian Institutes of Health Research Clinical Trials Fund.

  • $50 million on a cash basis over five years to create a life sciences stream in the Venture Capital Catalyst Initiative


Skills training

— $250 million over three years to Innovation, Science and Economic Development Canada for an initiative to scale-up proven industry-led, third-party delivered approaches to upskill and redeploy workers to meet the needs of growing industries. 

  • An initiative that would help approximately 15,500 Canadians connect with new work opportunities.


Coding

— $80 million over three years to Innovation, Science and Economic Development Canada, to help CanCode reach 3 million more students—with a focus on underrepresented groups—and 120,000 more teachers.

  • The CanCode program helps young people gain coding and digital skills, and provides training support for teachers, and has a special focus on reaching young people who are traditionally underrepresented in science, technology, engineering and mathematics, such as girls and Indigenous youth.


Work-integrated learning

— $708 million over five years, starting in 2021-22, to Mitacs to create at least 85,000 work-integrated learning placements that provide on-the-job learning and provide businesses with support to develop talent and grow.

  • Mitacs is a not-for-profit organization that connects young workers with innovative businesses for research and training opportunities.


Digital adoption

— The launch of the Canada Digital Adoption Program to create thousands of jobs for young Canadians and help as many as 160,000 small and medium-sized businesses adopt new digital technologies.

— $1.4 billion over four years to Innovation, Science and Economic Development Canada, to:

  • Work with organizations across Canada to provide access to skills, training, and advisory services for all businesses accessing this program. 

  • Provide microgrants to smaller, main street businesses to support costs associated with technology adoption.

  • Create training and work opportunities for as many as 28,000 young people to help small and medium-sized businesses across Canada adopt new technology. 

  • Budget 2021 proposes to provide $2.6 billion on a cash basis over four years, starting in 2021-22, to the Business Development Bank of Canada to help small and medium-sized businesses finance technology adoption.

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Business and research collaborations

— $46.9 million over two years to support additional research partnerships between colleges, CEGEPs, polytechnics, and businesses through the Natural Sciences and Engineering Research Council’s College and Community Innovation Program.

— $5.7 million over two years to provide more businesses with access to the National Research Council’s Industrial Research Assistance Program’s Interactive Visits, where firms can access equipment, facilities, and expertise at college-affiliated Technology Access Centres.

  • The program design will ensure that businesses owned by underrepresented groups that may face barriers to entering Canada’s innovation pipeline have greater access to this support.


Small business financing

— Improvements to the Canada Small Business Financing Program through amendments to the Canada Small Business Financing Act and its regulations.

  • These proposed amendments are projected to increase annual financing by $560 million, supporting approximately 2,900 additional small businesses and include:

  • Expanding loan class eligibility to include lending against intellectual property and start-up assets and expenses.

  • Increasing the maximum loan amount from $350,000 to $500,000 and extending the loan coverage period from 10 to 15 years for equipment and leasehold improvements.

  • Expanding borrower eligibility to include non-profit and charitable social enterprises.

  • Introducing a new line of credit product to help with liquidity and cover short-term working capital needs. 


Aerospace innovation

— $250 million over three years, on a cash basis, for the regional development agencies to deliver an Aerospace Regional Recovery Initiative, which would support small and medium-sized firms in improving productivity, strengthening commercialization, and greening their operations and products.

  • This is in addition to the $1.75 billion in the Strategic Innovation Fund, outlined in section 4.6, providing combined support of $2 billion.


BC growth

— $553.1 million over five years, starting in 2021-22, and $110.6 million ongoing, to create a new regional development agency for British Columbia.


Equity entrepreneurship development

— Launch the Small Business and Entrepreneurship Development Program to help simplify and streamline the government’s support programs, and to help equity deserving entrepreneurs access funding and capital, mentorship, financial planning services, and business training.

— $101.4 million over five years to Innovation, Science and Economic Development Canada for the Small Business and Entrepreneurship Development Program.


Women entrepreneurship

— $146.9 million over four years, starting in 2021-22, to strengthen the Women Entrepreneurship Strategy.

  • Funding would also further support the Women Entrepreneurship Ecosystem Fund and the Women Entrepreneurship Knowledge Hub.


Black entrepreneurship

— $51.7 million over four years to Innovation, Science and Economic Development Canada and the regional development agencies for the Black Entrepreneurship Program.

  • Added to the initial $221 million announced for the program in September 2020.

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Expanding IRAP

— $500 million over five years, starting in 2021-22, and $100 million per year ongoing, to expand the Industrial Research Assistance Program to support up to 2,500 additional innovative small and medium-sized firms.


Venture capital

— Up to $450 million on a cash basis over five years for a renewed Venture Capital Catalyst Initiative that would increase venture capital available to entrepreneurs.

  • $50 million of this amount would be dedicated to supporting venture capital investments in life science technologies.

  • $50 million of this amount would support a new Inclusive Growth Stream to increase access to venture capital for underrepresented groups, such as women and racialized communities.


Cleantech exports

— $21.3 million over five years and $4.3 million per year ongoing, to Global Affairs Canada for the continuation of the International Business Development Strategy for Clean Technology.


Research and innovation

— Provide the Strategic Innovation Fund with an incremental $7.2 billion over seven years on a cash basis, starting in 2021-22, and $511.4 million ongoing. Funding will be directed as follows:

  • $2.2 billion over seven years, and $511.4 million ongoing to support innovative projects across the economy—including in the life sciences, automotive, aerospace, and agriculture sectors.

  • $5 billion over seven years to increase funding for the Strategic Innovation Fund’s Net Zero Accelerator, as detailed in Chapter 5 of the budget.

  • $1.75 billion in support over seven years would be targeted toward aerospace in recognition of the longer-lasting impacts to this sector following COVID-19. This is in addition to the $250 million Aerospace Regional Recovery Initiative, outlined in section 4.2, providing combined support of $2 billion to help this innovative sector recover and grow out of the crisis.

  • $1 billion of support over seven years would be targeted toward growing Canada’s life sciences and bio-manufacturing sector, restoring capabilities that have been lost and supporting the innovative Canadian firms and jobs in this sector.


National AI strategy

— $443.8 million over ten years, starting in 2021-22, in support of the Pan-Canadian Artificial Intelligence Strategy, including:

  • $185 million over five years, starting in 2021-22, to support the commercialization of artificial intelligence innovations and research in Canada.

  • $162.2 million over ten years, starting in 2021-22, to help retain and attract top academic talent across Canada—including in Alberta, British Columbia, Ontario, and Quebec. This programming will be delivered by the Canadian Institute for Advanced Research.

  • $48 million over five years, starting in 2021-22, for the Canadian Institute for Advanced Research to renew and enhance its research, training, and knowledge mobilization programs.

  • $40 million over five years, starting in 2022-23, to provide dedicated computing capacity for researchers at the national artificial intelligence institutes in Edmonton, Toronto, and Montréal. 

  • $8.6 million over five years, starting in 2021-22, to advance the development and adoption of standards related to artificial intelligence.


National quantum strategy

— $360 million over seven years to launch a National Quantum Strategy.

  • The strategy is meant to amplify Canada’s strength in quantum research; grow quantum-ready technologies, companies, and talent; and solidify Canada’s global leadership in this area.

  • This funding will also establish a secretariat at the Department of Innovation, Science and Economic Development to coordinate this work.


Photonics strategy

— $90 million over five years on a cash basis to the National Research Council to retool and modernize the Canadian Photonics Fabrication Centre


Genomics strategy

— $400 million over six years in support of a Pan-Canadian Genomics Strategy.

  • This funding would provide $136.7 million over five years, starting in 2022-23, for programming delivered by Genome Canada to start the new Strategy and complement the government’s existing genomics research and innovation programming.


Superclusters

— $60 million over two years to the Innovation Superclusters Initiative.

  • The funding is to help ensure those superclusters that made emergency investments to support Canada’s COVID-19 response and can continue supporting Canadian projects.


Canadian IP

— $90 million, over two years, starting in 2022-23, to create ElevateIP, a program to help accelerators and incubators provide start-ups with access to expert intellectual property services.

— $75 million over three years, starting in 2021-22, for the National Research Council’s Industrial Research Assistance Program to provide high-growth client firms with access to expert intellectual property services.

— Launch of a Strategic Intellectual Property Program Review.

  • Intended as a broad assessment of intellectual property provisions in Canada’s innovation and science programming, from basic research to near-commercial projects.


Space innovation

— $80.2 million over eleven years with $14.9 million in remaining amortization and $6.2 million per year ongoing, to Natural Resources Canada and Environment and Climate Change Canada to replace and expand critical but aging ground-based infrastructure to receive satellite data.

— $9.9 million over two years to the Canadian Space Agency to plan for the next generation of Earth observation satellites.


Israeli connection

— $10 million over five years, starting in 2021-2022, and $2 million per year ongoing, to expand opportunities for Canadian SMEs to engage in research and development partnerships with Israeli SMEs as part of the Canadian International Innovation Program.

  • Sourced from existing Global Affairs Canada resources. 


Digital infrastructure and data security

— $1 billion over six years to the Universal Broadband Fund to support a more rapid rollout of broadband projects in collaboration with provinces and territories and other partners.

  • In total, including proposed Budget 2021 funding, $2.75 billion will be made available through the Universal Broadband Fund to support Canadians in rural and remote communities. 

— $17.6 million over five years, starting in 2021-22, and $3.4 million per year ongoing, to create a Data Commissioner.

  • The Data Commissioner would inform government and business approaches to data-driven issues to help protect people’s personal data and to encourage innovation in the digital marketplace.

— $8.4 million over five years, starting in 2021-22, and $2.3 million ongoing, to the Standards Council of Canada to continue its work to advance industry-wide data governance standards.


Cleantech and climate solutions

— $5 billion over seven years (cash basis) to the Net Zero Accelerator.

  • Funding would allow the government to provide up to $8 billion of support for projects that will help reduce domestic greenhouse gas emissions across the Canadian economy.

— $1 billion available on a cash basis, over five years, starting in 2021-22, to help draw in private sector investment for large-scale cleantech projects.

— Reduce—by 50 per cent—the general corporate and small business income tax rates for businesses that manufacture zero-emission technologies.

  • The reductions would go into effect on January 1, 2022, and would be gradually phased out starting January 1, 2029 and eliminated by January 1, 2032. 

— $56.1 million over five years with $16.3 million in remaining amortization and $13 million per year ongoing, to Measurement Canada to develop and implement, in coordination with international partners such as the United States, a set of codes and standards for retail ZEV charging and fueling stations.

— Introduction of an investment tax credit for capital invested in Carbon Capture, Utilization, and Storage projects with the goal of reducing emissions by at least 15 megatonnes of CO2 annually.

  • This measure will come into effect in 2022. The government will move quickly with a 90-day consultation period with stakeholders on the design of the investment tax credit, after which it will announce more details—including the rate of the incentive.

— $319 million over seven years with $1.5 million in remaining amortization, to Natural Resources Canada to support research, development, and demonstrations that would improve the commercial viability of carbon capture, utilization, and storage technologies.

  • Proposed measures related to CCUS are meant to help Canada achieve net-zero emissions by 2050, and position Canada as a leader in supplying cleaner energy and innovative new technologies.

— In partnership with the Government of British Columbia, provide up to $35 million to help establish the Centre for Innovation and Clean Energy to advance the scale-up and commercialization of clean technologies in B.C. and across Canada.

— $40.4 million over three years to support feasibility and planning of hydroelectricity and grid interconnection projects in the North.

— $36 million over three years through the Strategic Partnerships Initiative, to build capacity for local, economically sustainable clean energy projects in First Nations, Inuit, and Métis communities and support economic development opportunities.


Indigenous entrepreneurs

— $42 million over three years to expand the Aboriginal Entrepreneurship Program.

  • Program will support Indigenous-led businesses and help Indigenous communities by improving access to capital and business opportunities. 

— $22 million over three years to support the National Aboriginal Capital Corporations Association’s (NACCA) Indigenous Women’s Entrepreneurship Initiative by providing tools, services, and resources to increase the number of Indigenous women entrepreneurs.

  • This funding would support NACCA in achieving its target of increasing the number of Indigenous women entrepreneurs who access financing through Aboriginal Financial Institutions by 50 percent.


Investment incentives

— The ability to expense up to $1.5 million of eligible investments by Canadian-controlled private corporations made on or after Budget Day and before 2024.

  • Eligible investments will cover over 60 percent of capital investments typically made by Canadian-controlled private corporations.

  • The incentive is meant to target short- and medium-term capital investments that can accelerate recovery, including a broad range of assets helping to further incentivize businesses to transition to a more productive, knowledge-intensive economy and will include digital assets and intellectual property. 


Taxes

— Implement a Digital Services Tax at a rate of 3 percent on revenue from digital services that rely on data and content contributions from Canadian users.

  • The tax would apply to large businesses with gross revenue of 750 million euros or more. It would apply as of January 1, 2022, until an acceptable multilateral approach comes into effect.


Digital services

— $88 million over four years, starting in 2022-23, and $25.8 million ongoing, to the Treasury Board of Canada Secretariat to renew and expand the capacity of the Canadian Digital Service and further improve how the government delivers digital services to Canadians.


Travel identity

— $105.3 million over five years, starting in 2021-22 for Transport Canada to collaborate with international partners to further advance the Known Traveller Digital Identity pilot project, which will test advanced technologies to facilitate touchless and secure air travel.


Join our Clubhouse show on Wednesday, April 21 at 7 pm PST where local tech leaders will debrief on the federal and BC budgets and what they mean for innovation in BC.

Read the full budget document online: Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience. Subscribe to receive updates like this directly in your inbox.