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Ontario reveals investment agency in 2020 budget, as economic development ministry sees second year of cuts – BetaKit

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Ontario’s Progressive Conservative government delivered its 2020-2021 budget on Thursday, the second budget of Premier Doug Ford’s administration. The fiscal outlook includes approximately $187 billion in total spending this year with a record deficit of $38.5 billion.

The budget placed a heavy emphasis on the COVID-19 pandemic and economic recovery efforts, with some notable spending for the business and tech sector. Here is a breakdown of what Ontario’s budget 2020 means for the province’s innovation sector.

The budget includes $719.2 million in spending for the ministry of economic development, job creation and trade, which oversees tech and innovation in the province.

Among the province’s initiatives is a new investment attraction agency aimed to be a “one-stop-shop” for new businesses and investors. The agency, which will be called Invest Ontario, will initially focus on three sectors: technology, advanced manufacturing, and life sciences. The new agency has yet to officially launch.

The budget, which was initially set to be released in March but was postponed due to the pandemic, includes $719.2 million in spending for the ministry of economic development, job creation and trade, which oversees tech and innovation in the province.

The allocated funding represents a decline from the $782 million budgeted for the ministry in 2019-2020. Notably, however, it is an increase from the $582 million spent in the 2019-2020 fiscal year, according to the budget.

Ben Bergen, executive director of the Canadian Council of Innovators (CCI), expressed the organization is encouraged to see measures in Budget 2020 it says will help innovative, high-growth companies.

He added, however, “we continue to call on the government to invest into strategic programs to increase access to talent, capital, and customers for Ontario’s biggest job and wealth creators: its homegrown companies.”

In the budget, the province said approximately 94 percent of businesses in Ontario will see a reduction in their property taxes, by standardizing the Business Education Tax and offering a permanent exemption from paying the Employer Health Tax.

The budget also included $3.75 million over two years to support work by the Ontario Centres of Excellence (OCE) and the Toronto Business Development Centre to attract more international startups to Ontario. The organizations are tasked with initially focusing on attracting emerging companies in India to expand their operations to Ontario.

While the provincial budget shows some promising signs in spending for the innovation sector, it is unclear what a second year of budget cuts for the ministry of economic development, job creation and trade means for the tech sector.

RELATED: In lieu of 2020 budget, Ontario puts forth fiscal update of $17 billion to fight COVID-19

Ontario’s 2019 budget was considered by many in the province’s tech community a disappointment due to its unfettered cuts to innovation organizations and programs.

The Ford government’s sweeping cuts axed a number of programs, such as the Campus-Linked Accelerator program and all provincial funding to Angel Investors Ontario and Futurpreneur.

Prominent tech hubs were also affected by budget cuts last year. Communitech, MaRS Discovery District, and the OCE all experienced provincial funding cuts, causing them to lay off employees and re-evaluate programming.

Two months after the release of the 2019 budget, Minister of Finance Vic Fedeli was “demoted” to the role of minister of economic development, job creation and trade, after Fedeli reportedly lost face with Premier Ford over the unpopular cuts in the 2019 budget.

With a heavy emphasis on the COVID-19 pandemic and economic recovery efforts, this year’s budget was focused on three pillars: protect, support, and recover. The budget highlighted its actions in ensuring access to virtual healthcare and digital-first tools, noting how it created temporary fee schedule codes that insured physician phone and video patient visits under the Ontario Health Insurance Plan.

The budget highlighted the government’s actions in ensuring access to virtual healthcare and digital-first tools.

Prior to the release of the budget, Technation, a tech industry association, recommended the government’s budget make virtual healthcare “the norm,” even post-COVID-19, arguing such a move would improve patient access to healthcare, decrease wait-times, and save the system money. Technation also pushed for the government to work closely with industry to identify gaps in Ontario’s workforce.

In the budget, the government also highlighted its previously-announced $680 million investment to expand and improve broadband internet and cellular access. Technation president and CEO Angela Mondou told BetaKit that investment is critical not only for citizens but also for accelerating the digital transformation of small-to-medium-sized businesses.

Additionally, the budget reveals new investments from the province in a series of research initiatives aimed to help stimulate the economy and support COVID-19 recovery efforts.

The government is investing $2 million for the Ontario Health Data Platform, which it says will explore opportunities to integrate datasets and support research projects related to COVID-19. The Canada Foundation for Innovation will receive an investment of $3.5 million to support the operations and maintenance related to Advanced Research Computing in Ontario. The province is also investing up to $2 million in funding to enhance collaboration across Ontario’s research sector.

Under its “recover” pillar, the government is investing $37 million in employment and training services to help more than 15,000 upgrade their skills to fit the needs of Ontario’s economy. That investment will specifically support 86 projects and provide training in high-demand skills like information technology and advanced manufacturing.

Both the CCI and Technation urged the government to up its procurement efforts to aid the province’s pandemic recovery efforts. CCI said not only should the government procure physical products, but also modern digital offerings like digital health services, online education services, and cybersecurity tools to strengthen Ontario’s supply chain resiliency.

RELATED: CEOs say lack of targeted support will shutter Ontario tech companies in open letter to Premier

According to the budget, the Ontario government is investing $1.5 million towards the Special Implementation Team on Intellectual Property (IP) that was established to support the government’s IP action plan, released over the summer.

Bergen told BetaKit he hoped the government would continue to focus on the generation and commercialization of IP. The government’s IP action plan would see the province work with post-secondary and research organizations to revise the mandates of provincial commercialization entities, such as startup hubs and accelerators.

The province is also proposing to extend reporting deadlines for the Ontario Research and Development Tax Credit to give corporations more time to file a claim. The credit offers a non-refundable tax credit to businesses on eligible scientific research and experimental development expenditures.

The government is also investing $500 million over four years in a new Ontario Onwards Acceleration Fund, including $60 million for 2020-20201, which it says will pilot new technologies that improve how people and businesses experience government services in Ontario.

Image source Pixabay.

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Without investment, universities and colleges heading for a crisis – Toronto Star

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Universities and colleges employ hundreds of thousands of people, educate and train over two million students annually and drive research that improves the lives of all Canadians. In cities and communities across the country, they are regional economic drivers and social and cultural centres. Our world-class post-secondary education system is critical to our prosperity, underpins our democracy and finds solutions to key challenges, be it COVID or climate change.

All of this is in peril — and not just because of the COVID-19 pandemic.

Public funding for post-secondary education has been stagnant for more than a decade. COVID-19 has brought the system closer to the edge. Strategic investments in universities and colleges must be made now to ensure a strong economic recovery and a more resilient future for Canadians.

COVID-19 has strained resources and reduced revenues, especially from international student fees. For decades, in the absence of sustainable government funding, students and their families have been asked to pay more. Private sources of funding now make up over half of university revenues, up from just 20 per cent when the parents of students may have once been on campus.

Since the last recession in 2008, provincial government spending in the sector has decreased by one per cent in real terms. Meanwhile, student enrolment has grown by more than 20 per cent over the same time, and income from tuition by nearly 70 per cent. With more than half of all university students already taking on an average of $28,000 of debt to get an education, reliance on student fees to solve the funding crisis simply isn’t sustainable.

There are three areas that need immediate action from the federal government to put post-secondary education on stable footing and improve quality, affordability and accessibility.

First, we need a national strategy for post-secondary education with goals to tackle education inequality, enhance affordability and strengthen research capacity. The last time the federal government increased the base funding to the provinces and territories for post-secondary education was in 2008 under Stephen Harper and this came with no plan of action to address key challenges.

Secondly, we need to accelerate research through enhanced investments in fundamental research. The government’s own advisory panel recommended funding levels 40 per cent higher than what we are investing today to keep Canada competitive.

The pandemic has also put much research on hold. In a survey of Canadian Association of University Teachers (CAUT) members, two out of three have seen their research stop or stall as a result of the pandemic. This hiatus in research will have a significant downstream impact on the innovation and knowledge that supports Canada’s economy.

Finally, we need to secure opportunities for youth and the unemployed by decreasing upfront costs and moving to a free tuition model for working- and middle-class Canadians. The government’s temporary doubling of the Canada Student Grant this year will help students cover costs this term, however it is still less than the average tuition.

It is also an unsustainable approach.

While we have seen increases in student financial assistance, we have also seen increases in tuition. As some provincial officials half-joke, the best way to leverage federal funding for post-secondary education is to raise tuition, as this will increase demands for federally funded student financial assistance.

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Some of the necessary changes to the funding model for post-secondary education could be met by redirecting the $900 million in unused federal funding from the failed Canada Student Service Grant program. The government could also repurpose the Canada Training Benefit to ensure that Canadians have more meaningful and timely access to educational opportunities.

There are many public services and sectors that need strengthening to get us out of the current crisis and be better for it. Post-secondary education is an essential foundation for social cohesion, science, innovation and economic success in Canada, and must not be taken for granted. We cannot let it languish now, when it is so critical to the well-being of our country.

Brenda Austin-Smith is a film studies professor and head of the English, theatre, film and media department at the University of Manitoba. She is also president of the Canadian Association of University Teachers, which represents 72,000 academic staff at universities and colleges across the country.

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Glimmer of hope for investment in Europe: EY survey – The Journal Pioneer

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By Mark John

LONDON (Reuters) – Global executives see a smaller hit to their investment plans for Europe than they did earlier this year and are somewhat more upbeat about the continent’s future appeal, a questionnaire by professional services group EY found.

The survey, conducted in October before a series of COVID-19 vaccine trial breakthroughs, showed that 42% of executives now expect a decrease in their 2020 investment plans and 31% plan to delay them to 2021.

That compared with 66% who expected decreases and 23% who saw delays when asked the same question back in April. This time around, a small number – 10% – even saw an increase to their 2020 investments, something no one did in April.

While that still means a big overall hit to foreign direct investment after 2019’s record year, EY noted that 21% of those surveyed believed Europe would be more attractive for investment post-Covid compared to just 8% in April.

“It is promising that investors believe that over the next three years, Europe will become a much more attractive destination for investments than before pandemic,” EY Area Managing Partner Julie Teigland said.

The findings were based on interviews with 109 global executives across 14 industries in October.

Upbeat news from vaccine trials are starting to support economic sentiment. The monthly eurozone Purchase Managers Index (PMI) for November saw a rise in its “future output” component in November to its highest level since February.

Among the other takeaways from the EY survey, 63% expected faster roll-out of digital customer access to surveys in the next three years (versus 55% in April) but only 37% now saw a reversal of globalisation (versus 56%).

(Reporting by Mark John, editing by Ed Osmond)

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Glimmer of hope for investment in Europe: EY survey – TheChronicleHerald.ca

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By Mark John

LONDON (Reuters) – Global executives see a smaller hit to their investment plans for Europe than they did earlier this year and are somewhat more upbeat about the continent’s future appeal, a questionnaire by professional services group EY found.

The survey, conducted in October before a series of COVID-19 vaccine trial breakthroughs, showed that 42% of executives now expect a decrease in their 2020 investment plans and 31% plan to delay them to 2021.

That compared with 66% who expected decreases and 23% who saw delays when asked the same question back in April. This time around, a small number – 10% – even saw an increase to their 2020 investments, something no one did in April.

While that still means a big overall hit to foreign direct investment after 2019’s record year, EY noted that 21% of those surveyed believed Europe would be more attractive for investment post-Covid compared to just 8% in April.

“It is promising that investors believe that over the next three years, Europe will become a much more attractive destination for investments than before pandemic,” EY Area Managing Partner Julie Teigland said.

The findings were based on interviews with 109 global executives across 14 industries in October.

Upbeat news from vaccine trials are starting to support economic sentiment. The monthly eurozone Purchase Managers Index (PMI) for November saw a rise in its “future output” component in November to its highest level since February.

Among the other takeaways from the EY survey, 63% expected faster roll-out of digital customer access to surveys in the next three years (versus 55% in April) but only 37% now saw a reversal of globalisation (versus 56%).

(Reporting by Mark John, editing by Ed Osmond)

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