Article content continued
The announcement received little attention at the time, as it was crowded out by bigger spending commitments, nor was it obvious that the money had a specific purpose. But in fact, the commitment was a recognition by the government that the post-COVID merger-and-acquisition scene will be wild, and that Canada could come out a net loser if unprepared.
Bains called the $250 million a “down payment,” suggesting more money is coming. The initial pledge was intended to give him additional flexibility to invest in “IP-rich” companies that might otherwise be claimed by international investors. The additional contribution is too small to allow Bains to become a player in negotiations involving bigger companies such as Verafin, but it might be enough to protect startups that have developed promising innovations, but are still too small to resist takeover.
“We’re focusing a lot of developing IP,” Bains said. “We want to see economic benefits here. That’s why we put money forward in the fall economic statement.”
Bains’s plans will irritate many in Canada’s policy establishment, which tends to disapprove of politicians inserting themselves into conversations between willing buyers and sellers. Balsillie has long accused the Ottawa establishment of putting intellectual purity ahead of recognizing how the world actually works.
The former group, which includes veteran bureaucrats and think-tankers that dictated the federal government’s approach to investment for three decades, appears to be losing the argument. Canada and other countries are getting increasingly comfortable with the idea that the state has a key role to play in the development of the digital economy.
“We were turning the corner,” Bains said, reflecting on how the technology industry has become a driver of investment and economic growth ahead of the pandemic. “We were able to do that because we had a strong industrial policy and innovation and skills plan.”
• Email: [email protected] | Twitter: carmichaelkevin
