The Québec Minister of Finance Carlos Leitão tabled the government of Québec's 2017 budget (the "2017 Budget") on March 28, 2017. The 2017 Budget proposes various important measures designed to stimulate research and innovation and promote entrepreneurship, and to provide funding for growing businesses.
The key measures in the 2017 Budget include:
- $100M to create an artificial intelligence super-cluster;
- $15M to capitalize the RV Orbite Montréal fund;
- $7.5M to increase the capitalization of the Fonds InnovExport;
- $8M for immediate action to support entrepreneurship; and
- $305M to encourage innovation and the next generation of scientists.
These selected key measures are described in further detail below.
$100M to Create an Artificial Intelligence Super-Cluster
To support growth in the booming artificial intelligence industry, Budget 2017 provides for a $100M investment for the creation of an artificial intelligence super-cluster to make Montreal a world-class centre of excellence in this field.
Five areas have been prioritized in this regard: (i) attracting and retaining talent; (ii) consolidating a critical mass of high-calibre researchers; (iii) creating a business environment that supports the development and marketing of products and solutions resulting from scientific advancements; (iv) business start-ups and access to venture capital in the field of artificial intelligence in Québec; and (v) the acceptability and social impact of artificial intelligence.
The super-cluster will draw from the expertise developed by the Institute for data valorization in order to:
- provide the resources needed for developing artificial intelligence and for the innovation associated with its use;
- form partnerships, in particular between higher education establishments and the private sector, thus ensuring that the activities undertaken will be funded and the work will be successful; and
- examine the issues associated with data science, in particular those relating to confidentiality and ethics.
$15M to Capitalize the RV Orbite Montréal Fund
In the 2017 Budget, the government announced additional investments of $26 million in investment funds that support the start-up of Québec businesses and the growth of small and medium-sized enterprises, one of which is the new RV Orbite Montréal fund.
Through a partnership with the Caisse de dépôt et placement du Québec, the Fonds de solidarité FTQ and Capital régional et coopératif Desjardins, the 2017 Budget provides $15 million to be invested in the RV Orbite Montréal fund, which will have a total capitalization of $30 million.
The creation of this pre-seeding and seeding fund for technology businesses is supported by the Real Ventures team, in order to continue its investment activities in collaboration with Québec incubators and accelerators, in particular the FounderFuel accelerator.
The plan is for the RV Orbite Montréal fund to make more than 20 investments each year, primarily in the form of equity investments.
The sectors targeted by the fund will include information technologies, advanced technologies and technologies associated with artificial intelligence, such as the Internet of Things, big data, robotics, connected cars, virtual reality, digital health, financial technologies, and smart cities.
The details of how this new fund will be put in place will be released shortly by the Minister of Economy, Science and Innovation and the other fund sponsors.
$7.5M to Increase the Capitalization of the Fonds InnovExport
The 2016 Québec budget provided for up to $15 million to be invested in the Fonds InnovExport, a $30 million venture capital fund located in Québec City that is able to invest in all regions of Québec.
The 2017 Budget provides for the government to match up to an additional $7.5 million to increase the capitalization of the Fonds InnovExport. The fund's objective is to provide a funding tool to support the seeding and start-up phases of innovative Québec businesses targeting export markets, that are supported by a Québec incubator or accelerator.
The details of the new capitalization of the Fonds InnovExport will be released shortly by the Minister of Economy, Science and Innovation and the fund's partners.
$8M for Immediate Action to Support Entrepreneurship
The 2017 budget provides for nearly $8 million to support initiatives that will contribute to the new entrepreneurship action plan to be unveiled shortly:
- $4 million to support Inno-centre
This aid will enable Inno-centre to increase the number of hours of consulting it provides and to deploy new business cohorts in order to accelerate investments, in particular in the form of share capital, in a substantial number of innovative small and medium-sized manufacturing businesses;
- $1.2 million to fund start-up projects through the Startup Québec program
This money will be used to fund promising projects, including a number of large projects in the regions. The projects that are supported should lead to the formation of international partnerships and contribute to the creation and growth of start-ups in Québec;
- $2.7 million to support the École des entrepreneurs
This money will enable the École des entrepreneurs to set up four new schools in various regions of Québec.
$305M to Encourage Innovation and the Next Generation of Scientists
To support the research and innovation ecosystem in Québec, the 2017 Budget provides for $305 million in additional aid between now and 2021-2022: $115 million to support research agencies and $190 million to implement new initiatives to encourage innovation and the next generation of scientists.
The $115 million invested to support research agencies will be allocated as follows: (i) $40 million to Génome Québec; (ii) $25 million to the National Optics Institutes; (iii) $25 million to industrial research sectoral groups; and (iv) $25 million to Computer Research Institute of Montréal.
The $190 million invested to encourage innovation and the next generation of scientists will be allocated as follows: (i) $60 million to develop skills, support the next generation and enrich the science and innovation culture; (ii) $70 million to expand Québec's world-class research capacity and support all forms of innovation; and (iii) $60 million to accelerate the transfer and marketing of Québec innovations.
If you have any question about the 2017 Budget and its measures concerning businesses in the technology and innovation sector, please reach out to the authors of this bulletin.