Silicon Valley North #6 Apr'99

The Way I See It… by Michael Volker

We ought to hold government more accountable…

The way I see it, if B.C. were in the U.S.A., our tech companies would file a class action suit against the Provincial Government for failing to keep its commitments.

Government has a responsibility to foster innovation. Paul Martin recognized this in his recent budget which was good news for science and technology in Canada. However, if you look at all the R&D spending at universities across the land you'll see that not much of it ever gets commercialized. There is a huge funding gap in the innovation chain between the laboratory and the production line. And this is precisely where government needs to provide direct support through Science and Technology programs and indirect support through early stage equity tax incentives - not tax breaks.

In 1990, the B.C. government recognized this and passed the Science and Technology Fund Act which legislated the creation of a fund which was supposed to grow by $25 million per year until it reached an annual base of $125 million. This funding would go into those very valuable programs that permit the creation of new technology ventures by addressing the funding gap that exists at the early, pre-commercialization stages of corporate development.

Organizations like the Science Council of B.C.and the B.C. Advanced Systems Institute which have done so much to fuel technology development in this Province are just two examples of how such infrastructure support benefits high tech in B.C. ISTA, the B.C. Information, Science and Technology Agency's web site points to many wonderful B.C. success stories which were funded by these organizations through programs like Technology B.C. and the Product Development Fund. These agencies have leveraged their resources and have accomplished a lot.

So, what's the status on this $125 million per year fund? Well, the government hasn't even come close. This year the fund stands at just over $18 million. At its peak, it reached just $38 million in 1991/92. And, its gone south every year since then!

The high tech sector, on the other hand, has kept its promises. Employment growth is healthy at double-digit rates. In fact, only a few people have gone, or may go, South. Clearly the technology sector, however it's measured, is a net contributor to the provincial economy and could be an even greater contributor.

Why, then, don't we take the government to task on this issue. The government has clearly reneged on its commitment and, as far as I can see, there hasn't even been any re-negotiation on this matter. If our business partners fail to deliver on their promises, we take action swiftly. When government, with which we also have a business arrangement, fails to perform, we merely whine.

What is really worrisome is that even this paltry sum of $18 million might disappear altogether. Much of the local high tech lobbying effort concerns the high marginal tax rate in B.C., which last year was 54% but this year, post-budget, is now down to 51.8% and will be 49.9% next year as promised by the B.C. Finance Minister. Thinking that these minor personal tax cuts will appease the tech sector, the Province might just use this as an excuse to axe tech funding.

We complain about our tax burden because we see sunnier skies to the South. However, we tell ourselves that higher taxes are part of a better benefits package (e.g. lower crime rates, better healthcare, etc).

The way I see it, living in Canada and building a tech sector in B.C. is a choice we make because we buy the "package" deal concept.  But, let's hold our "partners" accountable to deliver on their part of the deal!

Michael Volker is a high technology entrepreneur and director of Simon Fraser U's University/Industry Liaison Office. He is a former executive director of the BC Advanced Systems Institute and is chair of the Vancouver Enterprise Forum. He may be reached at

Copyright, 1999.