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How Ottawa can lead the country into economic recovery

Finding signs of optimism in times of unease and change

Image of the Canadian parliament

Over the last year, we’ve been using this column to have a conversation about the positive opportunities that exist in Ottawa and Eastern Ontario to change and grow our organizations as we emerge from the pandemic.

Still, while we’re learning to live with the health-related risks of COVID, the economic hangover of the past few years – from supply chain disruptions, to labour shortages, to pressures caused by inflation – continues to fuel a sense of disruption.

Perhaps I’m an optimist, but I’d like to make the case that we’re prepared to handle these storm clouds in Canada, and even better positioned here in Ottawa.

There are three areas where I believe Ottawa and the National Capital Region have an opportunity to lead in ways that will drive long-term growth for our community.

1. Digital government

It is impossible to overlook the impactful and stabilizing force government has on our local economy. It is also reasonable to recognize federal spending and hiring in the decade ahead will not match what we’ve seen over the past 10 years, and through the pandemic.

What is encouraging however, is the leadership and focus we are seeing in shifting the way government works, and how it delivers services by harnessing technology.

It’s a shift that aligns nicely with where Ottawa leads outside of government, in our technology sector.

Last month, Treasury Board president Mona Fortier, and chief information officer Catherine Luelo released a forward-looking document called “Canada’s Digital Ambition 2022”.

It’s a visionary re-think of government service delivery and operations with digital transformation and adoption placed squarely in front.

I’m keen on the contents of this plan as it seeks to address some of the “red-tape” roadblocks that have long been identified as holding back private sector growth and innovation.

As our BDO team advises our clients on everything from taxes to technology transformation, this “digital-first” vision for government reflects what Canadian businesses need to be both efficient and competitive.

It’s a bold vision and welcome undertaking that stands to help make both government, and Canadian enterprise, more efficient, agile and innovative.

2. Leadership in data, analytics and business optimization

We’re also encouraged that the downstream impact of this digital ambition plan will dovetail with leadership we’re already seeing from Ottawa-based technology organizations in areas as diverse as supply chain management and clean energy technology.

This practical know-how and capacity will help serve as a foundation for government and industry to align on common economic objectives where technology and innovation are key drivers.

Climate change and clean energy are great examples where government priorities – including the need to measure, report and regulate outputs and outcomes – will rely on technology solutions to achieve business goals. Concurrently, large enterprise, including natural resources and energy firms, are focused on practices that optimize operations to reduce environmental impacts.

It’s a win for government and industry when innovative solutions can be applied that meet mutual objectives, while serving as critical tools for the government as they seek to achieve ambitious and complex industrial policy objectives in areas such as battery construction for electric vehicles.

Kanata-based Kinaxis is a fantastic example of a firm harnessing data to manage complex organizational supply chain challenges. By extension, this local leadership is helping to incubate knowledge around data, analytics and business optimization.

We’re also proud of the work our BDO Lixar team has been doing with clients in the renewable energy sector to optimize operations, including the use of weather and climate data, to support planning and investment decision-making.

Where we saw government play a formative role in Ottawa’s telecommunications industry 65 years ago, an ambitious digital agenda has the potential to stimulate our regional technology sector in the same way.

3. Wealth transfer and private equity

There’s one other trend we’re seeing that will help to benefit our local technology sector.   It’s the resurgence and growth of Private Equity (PE) and Venture Capital (VC) investment.

The trendlines are encouraging. In 2021, there were 771 private equity deals worth $18B completed in Canada in 2021 (Source: CVCA). Every indication suggests we’re on track to surpass this number in 2022.

Despite inflationary challenges, we continue to see investment in Canada from PE sources domestically as well as from the United States and overseas. It’s a vote of confidence in the direction Canada is headed.

More importantly, with many of these investments aimed at technology firms, it’s recognition of the capability and expertise of what we have to offer in Ottawa’s technology sector.

This access to PE and VC funding is further helping to drive and commercialize innovation. Combined with accumulated knowledge locally, this capital is supporting a platform from which local technology leaders can pursue an idea or vision.

As I started off the column, we’re hardly at ease.

But (and perhaps it’s the resurgence of our Ottawa Senators that has me feeling upbeat) I’m encouraged by the direction we’re headed in the city.

We’re seeing positive signs of alignment with government and our technology sector. At the same time, local technology enterprises and entrepreneurs have the ability to access capital to pursue new ideas that can feed into this collective digital transformation.

It’s this converging path that will help us through the bumps in the road we may encounter in the days ahead.

Mike Abbott is the Ottawa and Eastern Ontario managing partner for BDO Canada.