The Alberta government should expedite grants to high-potential startups, provide stipends to company founders in incubator programs, and consider reinstating a tax credit for tech companies, say the Alberta Innovation Corridor’s co-chairs.
The province also should ensure human resources support for companies struggling during the COVID-19 crisis, provide liquidity through zero-interest debt financing, and accelerate the long-term plan announced in Budget 2020 to attract early-stage investment, Cheryll Watson and Terry Rock argue in a public letter posted on Alberta Innovation Corridor’s website.
Watson is vice-president of Innovate Edmonton; Rock is CEO of Platform Calgary. The Alberta Innovation Corridor is a partnership between the two cities’ innovation ecosystems to coordinate programs and advance joint marking pursuits and policy recommendations.
Watson and Rock also recommend the provincial government move quickly to implement recommendations of the Innovation Capital Working Group, a seven-person committee representing key areas of Alberta’s tech, business, academic and financial communities. The group is developing options on how to attract new investment in Alberta’s early-stage tech companies.
Meanwhile, the Alberta Innovation Corridor created a brief questionnaire that within 15 hours elicited more than 160 responses, mostly from new and small (eight employees or fewer) companies, many in the seed funding stage. Based on the results, Alberta’s startups are worried about several immediate impacts from the COVID-19 crisis:
- uncertainty resulting in deferral or withdrawal of investors and venture capitalists;
- pilot projects being cancelled;
- reduced revenue from clients cancelling or deferring contracts;
- reduced access to vendors and suppliers;
- challenges or inability of employees to work from home through lack of tools and/or infrastructure; and
- increased prices for those with U.S. dollar-based supply chains.
“These immediate impacts are resulting in employee layoffs or reduced staff salaries as startups work to preserve cash,” Watson and Rock say. “Many startups are in tight cash situations where their runway for survival is being shortened. They require immediate assistance to make it through the global crisis created by Covid-19.”