Technology is everywhere these days, from our kitchen table Zoom calls to the peak of the stock markets. COVID has forced the world to shift to virtual communications and fast track medical products and services that rely on complex technologies. Tech IPOs are on fire and the stock price for companies such as Shopify are shooting past blue-chip banks.
Perry Dellelce of Wildeboer Dellelce LLP lived through the tech bubble years of the 1990s and says this time it is different. Most companies being financed now have substantive business plans and operations, Dellelce says.
But there are still big challenges for Canadian tech. There has been less U.S. venture investment in Canada since the pandemic, Jamie Firsten of Goodmans LLP says, because the U.S. venture capitalists can’t travel to meet with founders. The pandemic has also created problems in admitting foreign workers, with the Canada Border Services Agency preventing workers from entering the country even with visas.
Many Canadian tech companies are also finding it difficult to scale to the level of the big tech, which is often due to a lack of intellectual property protection, says Roch Ripley of Gowling WLG. “You look at our GDP per capita and our productivity relative to the Americans, and it’s not trending in the right direction. And I think, to a very large degree, it’s because we don’t do a good job of commercializing intellectual assets, which is really the asset of the 21st century.”
And perhaps most significantly for the long term, Canada has just introduced a radical overhaul of its privacy regime. While part of the impetus for this legislation is for Canadian companies to compete in an increasingly global world, says Laila Paszti of Norton Rose Fulbright LLP, “it will negatively impact companies . . . because they will have to grapple with how this will affect their processing of personal information and how it will require them to retool their data platforms.”
But tech entrepreneurs, and the legal experts who advise them, are accustomed to change. COVID and new legal regimes are just the latest challenges in their ascendency that shows no sign of stopping.
Tim Wilbur, Editor-in-Chief