Incase you missed it. The inaugural issue of Download North – People & Policy Magazine highlighted CATA’s COVID19 first half year advocacy efforts. The Download North Media Suite, includes a monthly newsletter.
The Fall Issue reviews CATA’s advocacy focus that kicked off with a letter to Prime Minister Trudeau on 3 April. These efforts led to an expedient restart to SR&ED claims following $200,000,000 in stalled returns. Thousands of companies benefitted in the uncertain days of early COVID19.
Hundreds of CATA community members contributed to surveys, letter writing campaigns and meetings that included Cabinet Ministers, MPs and Canada’s Ambassador to the World Trade Organization (WTO). Topics ranged from CATA’s proposal to digital trade and WTO reform.
On the eve of the September 23rd Throne Speech, strategies for the future had taken a twisting and turning path. The Organization for Economic Co-operation and Development (OECD) came out in support of the same approach CATA recommended for small and medium technology companies back in April.
In her 20 September blog, Coronavirus; Living with Uncertainty, OECD Chief Economist, Laurence Boone penned economic outlook recommendations. She provided guidance to world leaders on national economic policy:
‘Support to firms must evolve to let non-viable firms go and encourage viable ones to grow. Equity instruments could be deployed for large firms, with state support, provided competition is preserved and a clear strategy for exit designed. However, it will require more creativity for SMEs, for example in the form of tax credits, with repayments occurring when firms sustainably return to profit’
CATAAlliance submitted a creative Resilience and Rebound Proposal for this very solution in April. 338 members of parliament have received this simple like CERB data solution that uses government audited data to boost liquidity for new market opportunities, GDP, R&D creation and jobs.
We have offered additional solutions to Minister Ng and advised Minister Chrystia Freeland that CATA stands by ready to help.
Dear Prime Minister Trudeau,
I write as a member of team Canada, a mother, a military vet with decades of entrepreneurial experience, and the leader of the Canadian Advanced Technology Alliance (CATAAlliance).
We are gravely concerned for our Canadian way of life that is dependent upon strong national revenues. The opportunity to re-imagine the Canadian Dream is now.
As the new economic strategy is pondered, Canada’s well intended emergency assistance programming is missing the mark. The foundations for strategies to be built upon are crumbling.
In March Germany announced and put into law their crisis and stimulus economic strategy. They committed to defending technological and economic sovereignty. Their approach, and McKinsey & Company’s most recent analysis, lean heavily on “future proof” economies fuelled by technology.
“Spurred by alarm as they struggle against international competition” Germany earmarked $100B euros to invest in technology companies. China recently invested $1.4 trillion to compete on technology. US big tech business stopped investment and pivoted to acquiring vulnerable companies, targeting Canada’s valued talent, leadership and intellectual property via call center campaigns.
Where is Canada’s urgency and strategic focus? As the world races toward an uncertain competitive future, we are gravely concerned that after 100 days into this crisis Canada lacks a comprehensive science and technology emergency assistance plan. This potentially knocks us out of the “future” international play.
What of Canada’s Innovation Strategy, the $36B year over year innovation investments and the related endowment of Canadians? Canada’s largest innovation program sees 760,000 people employed directly by Canada HQ enterprise participants. Over 3,000,000 downstream jobs spin out of these science and technology centric established enterprises.
Canada’s largest innovation program, the Scientific Research and Experimental Development Tax Incentive Program (SR&ED) remains unmentioned in emergency assistance planning.
Companies accessing this program have an average of eight years of successful claims resulting from their own investments in research and science. They have successfully commercialized intellectual property into products, services, profits, jobs for Canada’s most sought after talent and substantial revenues for Canada.
We energetically applaud the appointment of Madame Monique Leroux and her team to the Industry Strategy Council. Wisely her mandate is modelled on Canada’s Economic Strategy Tables. Five of seven of Canada’s strategic economic tables are technology centric.
Setting the Industry Strategy Council up for success requires decisive immediate action. A comprehensive emergency assistance plan to protect a vital technology ecosystem, Canada HQ enterprises, supply chain, and critical infrastructure needed to keep our critical and sought after talent, leadership and intellectual property playing for team Canada.
Emergency assistance needs immediate attention
A recent article in BetaKit indicated the uptake of wage subsidies under CEWS was only 12% with $9.36 of $73B expended. CATA’s survey found that only 18% of companies felt confident announced funding would help them be in business in 9 months time. The Canadian Innovators Council survey reported only 59% of top tech firms qualified for CEWS and 25% did not qualify for any assistance. Fair and inclusive access to desperately needed programs (at pace and scale) is not evident for small, medium and growth science and tech centric firms.
A focus on protecting a future proof economy appears absent.
On 3 April I wrote to you sharing a potential solution, a proposal for an emergency program with CERB execution simplicity and speed. The accountable program, for Canada HQ small and medium science and tech centric enterprises, taps into trusted Canadian Revenue Agency data and relationships through Canada’s largest and internationally recognized innovation program, SR&ED. We have had no response on the proposed Resilience and Rebound Emergency Fund proposal to protect 13,000 science and technology centric enterprises that fuel $35B in payroll, $188B in revenues and growth.
These firms keep our farmers and construction companies efficient and competitive, provide supply chain data and analysis, trial cures for cancer and develop immunity tests for COVID19. They create robotic kitchen ware, help artists thrive, bring clean energy solutions to market, power electric automobiles, help the Internet run, share safety data from mines, create competitive technologies for manufacturing and warehouses, make remote work and financial transactions cyber secure. They provide access to social and mental health support and connect young and underrepresented people to mentors and employers. They are also under immediate threat.
We understand that clear context and business financial literacy is needed to help guide government policy decisions. CATAAlliance has been providing feedback in the form of surveys, constituent meetings with several ministers and bureaucrat discussions since March.
We have yet to be directed to the decision makers in charge of an emergency assistance response for Canada’s largest innovation program, SR&ED. Our formal questions submitted at the Minister level on 8 May also remain unanswered.
We are disappointed that our message is not being heard, by the lack of urgency and by extension, for the 760,000 talented Canadians directly employed in companies in the SR&ED program being left behind.
Broader, informed and inclusive emergency assistance consultations with science and technology business leaders. The system and the country benefit from open communication about Canada’s large investment. The voice of those leveraging their businesses from SR&ED supported Innovations need to be included.
If not a technological and economic sovereignty plan, at minimum a comprehensive accessible technology sector emergency assistance response/playbook at scale, including Canada’s largest innovation program, SR&ED.
CATAAlliance and our colleagues advocating for and part of a strong innovation sector for the future of Canada, and for fairness, be given access to decision makers leading a comprehensive, effective emergency response for the tech sector and Canada’s largest innovation program
While we are gravely concerned that avoidable mistakes with devastating impact are occurring, immediate decisive action can increase the prospects of Canadians, our way of life, our health care and programs, and a better future for our children.
We sincerely wish to contribute and need to be heard,
ANNEX – Snapshot of some voices & consultations
Many major industry spokespeople have come out in favour of CATA’s proposed RRE Fund or similar including:
Sherry Cooper, is Chief Economist, Dominion Lending Centres.
Danny Ladouceur, CPA, partner and national leader at the accounting firm, RSM Canada.
Brian Cookson, CPA, President and Managing Director of RDP Associates.
Bill Hutchison, Founder of CATA in 1978. He helped establish the National Advisory Board for Science and Technology.
Micheál J. Kelly, Dean of the School of Business and Economics at Wilfrid Laurier University. National spokesperson for the Canadian Advanced Technology Alliance.
Bruce Croxon, is an entrepreneur, television personality, and a venture capitalist.
Kayla Isabelle, Executive Director, Startup Canada representing the interests of 250,000 entrepreneurs.
We have had excellent teleconference meetings with a number of your senior Ministers and MPs and their constituents;
Hon. Mona Fortier, MP (Ottawa-Vanier), Minister of Middle Class Prosperity and Associate Minister of Finance
Hon. Marco Mendicino, MP (Eglinton-Lawrence), Minister of Immigration, Refugees and Citizenship
Hon. Carolyn Bennett, MP (Toronto-St.Paul’s), Minister of Crown-Indigenous Relations
James Maloney, MP (Etobicoke–Lakeshore), Chair of the Toronto Caucus
Ali Ehsassi, MP (Willowdale), Parliamentary Secretary to the Minister of Innovation, Science and Industry
We have also had discussions with:
Frances McRae, Assistant Deputy Minister, Small Business and Marketplace Services
Aneil Jaswal, Senior Policy Advisor and Ian Foucher, Special Advisor, Office of the Minister of Finance
John Hearn, Policy Advisor, Office of Middle Class Prosperity and Associate Finance Minister
Despite positive feedback from several of these ministers, departments, economists, accountants, hundreds of business owners and over 2,500 petition signatures, we have yet to receive definitive feedback on our alternative funding proposal or specific inquiries directed to the Finance Ministry (on 8 May). It appears the gravity and urgency of this priority situation is being missed.