Matthews’ lobbying a much-needed lifeline for high-tech

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Canadian high-tech has always struck me as politically naïve and immature.

(Photo illustration)

By Paul Slaby

This is partly due to the nature of the work: The qualities that make a successful businessperson – a focus on hard data and a spirit of independence – don’t easily transfer over to government advocacy. But this makes the industry short-sighted if not isolationist when it comes to realizing that it makes sense to pay greater attention to advocating, advancing, and protecting its interests.

That’s just one of the reasons why the industry should feel lucky that it has a Terry Matthews – the chairman of Wesley Clover International – to lobby on its behalf.

Whatever the reasons, the fact is that the tech community and its workers do not have a formidable political lobby in Canada the way other sectors do. Arguably, organizations such as the Canadian Advanced Technology Alliance or the Information Technology Association of Canada are supposed to provide the industry representation and advocacy. But my sense is that they are only partially effective.  As a result, the country’s knowledge economy, competitiveness, and productivity is not advancing as fast and reaching as high on the world scene as it should. It also means that when trouble comes – as it inevitably does – even the flagship companies like Nortel and BlackBerry are left without government support.

Nortel’s fiasco often provokes heated debates. Without going into the complex details of the underlying decisions that led to Nortel’s collapse, it’s clear that the political inexperience and naivete of the company’s management played a key role. Here we had a Canadian-headquartered flagship tech organization which routinely imported CEOs and executive management primarily from the United States. The result was that it had little or no loyalty and connections to the country. Even worse, the corporate culture appeared to be so blinded by its contempt for politicians and government bureaucracy that it failed to realize the value of cultivating those relationships. Is it any wonder that no one in the government was willing to throw out a lifeline when it got into trouble?

Having attended a recent Tech Tuesday meeting run by Wesley Clover in Kanata, I am happy to report that we are finally seeing some serious effort to mount a broad, grassroots political lobby for the high-tech industry. The crowd of about 50 to 80 high-tech folks did a little networking by the bar then listened to a serious discussion and a debriefing on efforts to bring the tech industry’s needs to the attention of the federal government.

Here are the highlights of what’s been achieved so far:

-After a couple of years of efforts, the infamous double-taxation of US investors in Canada was abandoned.

-Most of the senior government officials at the minister and deputy minister level were briefed about the tech industry issues. Many expressed a willingness to taking action given industry input.

-The recent speech from the throne included a remark that “the government will release an updated Science, Technology and Innovation Strategy,” which apparently is an important first step for further specific action.

It was really heart warming to see eager involvement and initiative of Mr. Matthews, who was instrumental in most of those efforts. This is exactly the kind of leadership that Ottawa high-tech needs.

However there is still more that needs to be done. Some of the specific issues and initiatives brought up in the discussion included:

-Getting the federal government to devote more resources to purchasing Canadian tech companies’ products.

-Developing an angel investment tax credit modeled on similar provincial programs.

-The need to make IRAP grants non-deductible from claims under the scientific research and experimental development tax incentive program.

Overall this is a great initiative. Mr. Matthews should be commended for spearheading it and providing some needed leadership. The only problem was that he was pitching to the converted; most of the audience was a high-tech crowd. Nobody thought about inviting local members of Parliament to let them hear directly what their voters need and would like to see happen. And that’s the brutal truth in the world of politics: only votes count!

Paul Slaby is an Ottawa-based technology entrepreneur who has founded and run several high-tech ventures. A version of this column originally appeared on his blog, The Art of Growing High-Tech Ventures.

Organizations: Nortel, Canadian Advanced Technology Alliance, Information Technology Association of Canada

Geographic location: Canada, United States, Ottawa Kanata

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Recent comments

  • Marco Janeczek
    January 21, 2014 - 19:24

    Paul, I would add to your article the need for additional initiatives such as: - the OSC approving a regulated crowd funding for equity model, which would create significant pre-angel opportunities, creating fundable opportunities, - additional participation from governments and pension plans in later stage funds and funds-to-funds, - angel matched funding - but most importantly creating a real tax incentive for medium and large Canadian companies to have the opportunity to issue strategic money for entrepreneurs, via establishing strong corporate venture arms, leading to innovation, with real customer feedback to startups.

  • Ex-Nortel
    December 06, 2013 - 10:47

    As an ex-Nortel who saw his career and pension vanish in the meltdown, I still don't believe a government bailout would have been the answer. Each of Nortel's sold-off business units were viable and have proven to be revenue-generating assets for their respective buyers. What we need from government is not handouts or corporate welfare, but actual laws to prevent executives from misreporting finances or abusing weak bankruptcy laws for personal gain, and hold them criminally responsible when they do.

    • Paul Slaby
      January 20, 2014 - 15:32

      Even though I am not a proponent of government handouts and support the nobility of standing on you own feet, I think that not being prepared for a rainy day, building powerful alliances that could be put to use when the trouble comes (as it inevitably does) is politically naive and a loosing proposition in the realities of today's global economy.