The chief executives behind three of Ottawa’s fastest growing firms made a rare march to Parliament Hill this week, hoping to convince the federal government that there are better ways of helping Canadian companies become global leaders.
Ross Video’s David Ross, You.i TV’s Jason Flick and Macadamian’s Fred Boulanger joined fellow executives from companies such as eBay and IBM for Hill Day, a chance for industry representatives to rub elbows with Canadian ministers and policy advisers.
The three CEO amigos know each other well, as they’re all members of The Executive Committee, an organization that has connected chief executives for the past 60 years.
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Reflecting on the day, Ross says that it’s sometimes tough to tell if government officials took his message to heart, but he was nonetheless pleased by the excitement and positive reactions to his ideas.
“They didn’t look bored, that’s for sure,” he says.
Boulanger, who’s also the chairman of the Information Technology Association of Canada, says he has been pleased by the government’s receptiveness to advocacy in recent years.
“We are very fortunate to have a government that is open to innovation and listening to what the industry has to say,” he says
Ross says he was convinced to get into the advocacy game by ITAC. The organization solicited him to flush out many of the ideas that he highlighted in his CEO of the Year speech last year, in which he bemoaned the trend of Ottawa-grown companies being acquired by U.S. firms and relegated to R&D outposts.
Speaking to Techopia, he says the government’s innovation priorities may be well-intentioned, but they’re misplaced and may even hinder the growth of small and medium companies.
“The big thing that I was talking to them about was that they had been stuck on innovation, and not as much on the commercialization of innovation, which I think is the real problem.”
The government is great, he says, at giving startups an initial boost through programs such as IRAP and SR&ED credits. Yet when companies just start finding traction in international markets, the government weans them off support, instead of doubling down on a market-validated product.
One solution, Ross suggests, is to tie parts of SR&ED to international exports. If a company is successfully attracting foreign dollars, it makes sense for a government to reinvest in that firm instead of casting a wide net with many startups and hoping for the best.
On the other end, he also finds fault with the government’s supercluster approach, highlighted in the latest budget. The idea – to fund one sector in a region and build up a localized expertise – still tries to pick winners, rather than letting the market decide who will generate economic success.
The idea that successful companies no longer need government support is flawed and counter-intuitive, Boulanger says. When a company is bringing money into the country and building the international brand of Canada through its exports, the government needs to be backing that horse through the next hurdles of scaling up.
“As a company grows, the challenges do not become smaller,” he says.
Part of Boulanger’s message to the Hill denizens in attendance was the need to double-down on its venture capital investments. The $400 million over three years allocated for the Business Development Bank of Canada in the last budget is a good first step, he says, but startups will need even more to compete with our southern neighbours backed by notoriously aggressive American VCs.
As he’s in the midst of scaling You.i TV up to a large-sized business, Flick understands well the issues facing many Canadian startups.
“Canada does have a problem right now. There are not enough companies getting to over $100 million in revenue,” he says.
Part of the problem, Flick says, is that the government makes immense investments in companies such as Cisco and OpenText, money that could instead be the break a startup needs to enter the market.
He says Canadian tech companies aren’t heard enough, and though he believes You.i TV will be beyond the scale-up phase by the time the policies he’s advocating for will come into effect, he believes it’s his job to “blaze a trail” for the next generation.
