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.
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.
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.
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.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
