The UCP government will offer fast-track visa processing to U.S. graduates who commit to launching a startup venture in Alberta, part of its attempt to find new ways to support the province’s technology sector after cancelling a suite of tax credits last fall.
In last week’s provincial budget, the Alberta government said it will create a specialized Startup Visa Stream that will offer fast-track processing with a bridge to permanent residency to qualified graduates of top U.S. universities, if they commit to launching a startup enterprise in the province. Similar fast-track opportunities will be offered to foreign nationals who have graduated from Alberta’s post-secondary institutions under a new Foreign Graduate Entrepreneur Program.
The moves are an attempt by the Alberta government to address the shortage of tech-savvy skilled workers that many local companies have identified as an impediment to growth, said Economic Development Minister Tanya Fir in an interview Tuesday.
“We know that a shortage of workers with relevant skills and experience is a barrier to growing Alberta’s tech sector,” Fir said. “There’s hundreds of thousands of brilliant foreign graduates who are unable to access immigration status in the States, and many of these graduates are in science, technology, engineering and mathematics and have well-developed startup concepts.”
In the budget document, the UCP government mentions the province’s technology sector multiple times as an example of an industry with significant economic growth potential — pointing out that since 2009, the number of technology companies in Alberta has increased by 87 per cent. The sector is one of several that the government will prioritize through its $75-million, three-year investment and growth strategy aimed at marketing Alberta as a key market for international and domestic investment.
However, the UCP has come under fire in recent months from tech companies frustrated by its move last fall to eliminate a number of targeted tax credit programs introduced by the NDP. These tax credits — including the Alberta Investor Tax Credit, which provided a 30 per cent tax credit to investors who put money into targeted growth industries such as clean technology and digital animation — were frowned upon by the UCP for being administratively heavy and inefficient, but many entrepreneurs said the programs were necessary to make Alberta competitive with other jurisdictions.
In December, the government announced the establishment of a working group tasked with finding alternatives to the tax credits. The group is made up of tech sector stakeholders as well as business, financial and academic leaders and was originally supposed to report back by the end of February — though Fir confirmed Tuesday that date has now been pushed back to April 3.
The working group’s recommendations will be taken into consideration as the Alberta government develops a broader strategy, expected to be announced late spring or early summer, for boosting the province’s tech sector.
“We haven’t been prescriptive in telling them what to do,” Fir said. “We’ve asked them to come up with more broad-based solutions that aren’t going to focus on one particular industry sector or policy option, but an approach that will grow the entire economy.”
Tom Short — co-founder of Calgary-based software company Kudos and a member of Tech West Collective, a group of local technology companies trying to raise awareness about the burgeoning tech scene — said the government appears to be off to a good start when it comes to supporting the industry.
“Fast-tracking visas is helpful for getting international talent to move here,” Short said. “It’s good, because it is tough to find the right talent here that is ready and experienced for what we and other tech startups need.”
However, Short said more still needs to be done to encourage tech companies to set up shop in Alberta.
“If you want to convince people to start something new or take a leap of faith and pick Calgary as a place to start a high-tech business, you do need incentives,” Short said. “Especially if Toronto, Vancouver and Montreal have more attractive location advantages and incentives.”
In the budget, the government also provided a small amount of funding to the National Angel Capital Organization (NACO) — the industry association for angel investors group in Canada — to help them set up an office in Calgary. NACO board chair Sandi Gilbert — who is also the managing director of Calgary-based InterGen, a private scale-up fund and accelerator — said she’s pleased the government has recognized the importance of growing the angel investor ecosystem in Alberta.
However, Gilbert said her group had lobbied the government to keep the Alberta Investor Tax Credit in place until a new program that can help the tech sector is in place.
“They did not do that, obviously, in the budget, so we were disappointed,” she said. “We need a catalyst to attract innovation companies, and innovation capital to the province. To be on a level playing field with the rest of the country just doesn’t work for us, because we are already behind.”
One idea that has been floated by the government is allowing startup technology companies to issue flow-through shares — a tax-based financing incentive that has been used successfully in the oil and gas and mining sectors — as a way to help attract capital.
Gilbert said the idea has potential, and she is pleased the government is willing to work with the tech sector to explore all possibilities.
“If they’ve got a working group together, my sense is they want to listen,” she said.
On Monday, Finance Minister Travis Toews told the Calgary Chamber of Commerce that he trusts the recommendations that come out of the working group will be “broader than simple tax credits.”
“It’s no secret that I’m not a big fan of the targeted tax credit approach,” Toews said. “There’s limited capital in this business environment. We’re hesitant as a government to direct where capital flows, because if it flows to one sector, that means it’s not flowing to another.”