Ontario government cuts funding for incubators and enterprise centres

The government of the Canadian province of Ontario has cut funding to startups and innovation programmes, dealing a heavy blow to Toronto’s burgeoning technology hubs.

Ontario’s Progressive Conservative provincial government cut the budgetary allocation to the ministry responsible for supporting job creation, innovation, and economic growth in the province by almost 20 percent, according to the Globe and Mail. This includes plans to cut funding, by as much as half, to the Ontario Centres of Excellence, which helps innovative companies secure funding,

Canada, and Ontario in particular, has tried to position itself as a global hub for innovation. These latest cuts will be a harsh blow to that reputation, threatening jobs and causing a hit to Toronto’s leading artificial intelligence research.

The government, led by Premier Doug Ford, has axed funding for two institutes credited with positioning Ontario and Canada at the forefront of AI research. A whopping CA$20 million (US$15 million) has been cut from the Vector Institute for Artificial Intelligence and CA$4 million (US$3million) annually from the Canadian Institute for Advanced Research (CIFAR), which supports a hub of AI-focused computer scientists.

Hardest hit are regional innovation centres, including organisations such as MaRS Discovery District and Communitech, which help tech startups accelerate by providing them with advisory services and other resources.

Incubators, such as Innovation Guelph and Tech Alliance, are also expected to be hit by the funding cut.

The move has baffled some as technology is the fastest growing sector in the Canadian economy, and is larger than the country’s traditional industries, such as mining, oil and gas, agriculture and forestry.

Ontario’s capital Toronto is especially important, becoming one of the fastest growing digital technology hubs in North America, overtaking San Francisco when it comes to the creation of tech jobs.

It owes this title, in part, to the early investment in basic research, something the provincial government is now curtailing.

The cuts are already starting to have an impact with Communitech announcing earlier this month they would be laying off 15 of their 105 staff to cope with the 30 percent cut they are being subjected to.

The government says it will make up for the reduction in funding by reducing red tape.

This follows a change in the university funding model introduced by Ford last month. The amount of money assigned to an institution will now be linked to performance. In the past, only 1.4 percent of funding was linked to performance, but Ford plans to expand this to 60 percent by 2025.

With cuts to higher education and the enterprise and tech centres they work with, there is concern Ontario could fast lose its reputation for innovation.