Canada’s technologists are having a moment — let’s hope our governments don’t wreck it

Angry politics must not impede judgment of policy-makers, Kevin Carmichael writes.

A quick wrap of the week in political economy news: Brexit finally broke Theresa May; Xi Jinping compared China’s trade war with the U.S. to the Long March, the gruelling, yearlong retreat by the Communist party that ultimately led to Mao Zedong’s ascent to power; and Donald Trump released US$16 billion from the federal treasury to aid farmers suffering from the retaliatory tariffs that he provoked.

What a world.

Thankfully, here in Central Canada, we’ve had the technologists to distract us from all of this nonsense.

Tens of thousands of them converged in Toronto at the Collision conference (Seth Rogen, headliner) and in Montreal at C2 (Spike Lee, headliner), the annual assembly of artists, entrepreneurs, and world-changers created seven years ago by the leaders of Cirque du Soleil and Sid Lee, the global marketing agency.

And these days, where you find technologists, you find money.

On May 23, Navdeep Bains, the innovation minister, attended C2 and then drove across town to give $49 million to a Montreal-based outfit called Imagia, which is fronting a group that intends to use artificial intelligence (AI) to process health data and keep many of us alive longer.

Bains was bouncing around this Liberal stronghold in red sneakers, but he still was upstaged: will.i.am, the co-founder of the Black Eyed Peas, used C2 as a backdrop to announce that his technology company, i.am+, had invested an undisclosed sum in Montreal-based Stradigi AI.

“I don’t want to be singing

‘I’ve Got a Feeling’ when I’m 70,” will.i.am said at a press conference.

He said he was so impressed by C2 that he intended to text Jimmy Iovine, the music producer and co-founder of Beats Electronics, to tell him that they should team up with Dr. Dre, the other Beats co-founder, to create something similar. Basil Bouraropoulos, Stradigi’s chief executive, said almost in passing that his goal is to build one of the world’s biggest AI companies. You don’t hear a Canadian executive express that kind of ambition every day. (Stradigi currently has about 80 job openings in case you want to try to get on board now.)

So: The Canadian tech scene is having a moment. Thanks to generous, few-strings-attached public funding of basic research, universities in Alberta, Ontario and Quebec became homes to researchers now seen as the godfathers of AI. Their offspring have started some 700 companies in Canada to date, according to Elissa Strome, executive director of the pan-canadian AI strategy at the Canadian Institute for Advanced Research (CIFAR). Those startups are processing digital data in ways that will eventually make every major industry more productive. Believe the hype.

“There is an opportunity on the table,” Jacomo Corbo, co-founder and chief scientist at Quantumblack, the London-based AI firm that Mckinsey & Co. purchased in 2015, told me in an interview at C2.

We could screw it up, though. Doug Ford, the premier of Ontario, did his part this week by cutting $24 million in funding for CIFAR and the Vector Institute for Artificial Intelligence.

Ontario needs to reduce its debt, but the province’s angry politics appears to be impeding the judgment of policy-makers. The money the government erased from the budget funds work done in places that want nothing to do with Ford Nation, and Ford Nation made it clear in the election that it wants nothing to do with them.

Robert Asselin, a former adviser to Justin Trudeau, and Sean Speer, who advised the current prime minister’s Conservative predecessor, worry that the absence of a multi-partisan consensus on the right policies for the innovation economy will wreck whatever comparative advantage we currently have.

Ford’s latest spending cuts are an example of what they are talking about.

There surely were a few tens of billions of less-import dollars in the budget that survived at the expense of AI research. Even if there weren’t, the funding should have been left alone, as whatever tiny bit of interest the Government of Ontario might pay on $30 million of debt would be more than offset by the future gains from commercializing ideas.

Or the premier could raise revenue. Asselin and Speer advise scrapping preferential tax rates for smaller companies, which create incentives to stay small and devote resources to tax planning instead of productivity-enhancing things such as research and development and finding new customers.

Governments could use the money to lower overall tax rates — or reduce the deficit and the debt. There is an eight-percentage-point gap between Ontario’s small-business rate and its corporate rate. (Just putting it out there.)

“I’m concerned for Canada,” Angelique Mohring, chief executive of Gainx, an AI firm with offices in Waterloo, Ont., and London, England told me in an interview.

She’s frustrated by being whipsawed by government policy. Ford’s dismantling of the supports that previous governments put in place for companies like hers is one example. Another is the disconnect between Trudeau’s promises of help for tech firms and the work involved in freeing that money from the clutches of overly cautious bureaucrats. It’s so much easier to get things done in the United Kingdom that she’s thinking of making Gainx a British company and running it from the London office.

Mohring is one executive. But if an ambitious AI company led by a woman in Justin Trudeau’s Canada sees a better opportunity elsewhere, we probably still have some work to do.