What does the new B.C. budget mean for the tech industry?
There’s a lot in the B.C. budget that will be popular with Metro Vancouver voters. MSP premiums are still on course to be eliminated by 2020, the Broadway subway will be part of a $20 billion capital infrastructure investment, and the province is allocating $902 million over the next three years to implement a CleanBC climate plan—an effort that aims to reduce pollution in the region.
Those in the tech industry, too, have plenty to celebrate.
More than 98 percent of British Columbia’s companies are small businesses (organizations with less than 100 employees), and they generate the bulk of the province’s revenue. The B.C. budget is recognizing that contribution by reducing the small business tax rate by 20 percent, dropping the number to just two percent from 2019 onwards. The reduction will help local startups keep more money in their pockets, and reinvest into their own growth. The move will benefit Metro Vancouver-based companies in particular, which ranks as the number one startup ecosystem in Canada, and the 15th in the world.
One of the biggest gripes among local tech companies is a lack of investment. Input from angel investors (an individual who puts their own money into a business in exchange for equity) has been declining since hitting a five-year high of $118 million in 2015. In 2017—the last year for which figures are available—that number had more than halved to $45 million. The new budget aims to counter that by boosting the angel tax credit program, and will double the tax credit limit for individuals to $120,000. The maximum funding available for eligible businesses will also rise to $10 million.
A more pressing issue, however, is the lack of qualified talent to fill positions at B.C. tech companies. The sector is one of the province’s fastest growing industries, and individuals with technical know-how are in high demand. To close that gap, the budget is introducing a number of new measures.
A selection of scholarships will be set up in 2019 to attract and retain the best graduate students, as well as support and encourage women to participate in science and tech-based professions. In addition, $10.5 million has been apportioned for co-op opportunities and entrepreneurial training to give post-secondary students hands-on experience. To make sure that B.C. picks up the best talent from abroad as well as at home, the budget also includes funding for an enhanced Provincial Nominee Program tech pilot—extended from 2018—to make it easier for companies to recruit top international talent.
Setting students on the path to success is a prominent line item in the finance minister’s new document. Currently, the typical undergraduate student finishes university with $11,200 in B.C. student loan debt—and $28,000 when combined with federal student loan debt. The budget reveals that the provincial government will eliminate interest from all B.C. student loans, with those borrowings no longer accruing interest after February 19, 2019. By lowering the cost of education and training, the government hopes, more individuals will be able to enter skilled positions in the tech industry—a move supported by the budget’s funding of 2,900 new tech seats across the province.
Tech infrastructure is also a chief focus of the finance minister’s document. From 2019 onwards, the B.C. government will invest $50 million in high speed internet to remote communities. Through projects currently underway, nearly 43,000 households will gain internet access in 417 rural locations, and with the new investment, that will expand to 200 more communities. Connectivity is essential to allow people from across the province to benefit from the tech and innovation economy.
It’s not all good news for the industry, however.
B.C. has long been a hotbed of videogame and interactive digital media. Home of over 200 independent gaming studios and a similar number of virtual and augmented reality (VR/AR) companies, the province boasts some of the most innovative interactive technology emerging from Canada. Despite that, the budget has not accounted for any increase to the Interactive Digital Media Tax Credit (IDMTC). Currently offering the lowest tax incentive rate of all provinces at 17.5 percent, the budget has those in the industry worried that the province will become less competitive in the sector. Advocates suggest that the lack of incentive will encourage studios to move to locations that are actively investing in intereactive digital media, such as Alberta and Quebec.
Kate Wilson is the Technology Editor at the Georgia Straight. Follow her on Twitter @KateWilsonSays
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