2018 budget “misses the mark”: a comprehensive analysis of all its tech initiatives

The 2018 Canadian budget has been unveiled, and while there are plenty of tech-related initiatives, many in the industry are feeling let down.

The government has gone all in on cybersecurity, big data, addressing gender equality, and fixing – and ultimately replacing – the much-maligned Phoenix payroll system.

“With this budget, built by and for all Canadians, we are tackling the challenge of equality head-on—asking tough questions, and beginning to provide solutions,” Minister of Finance Bill Morneau says in the budget. “We will continue to double down on our plan to invest in the middle class and everyone working hard to join it. It’s a plan that puts people first, builds on the hard work of Canadians, and keeps us squarely focused on the future—so that our children have better opportunities to follow their dreams, find good jobs, and give back to their community.”


The most headline-worthy measure announced is the $750 million earmarked for cybersecurity and defenses across government entities. As ITWC cybersecurity reporter Howard Solomon wrote, the Liberals have proposed giving the Communications Security Establishment (CSE) almost $450 million over several years to create a new Canadian Centre for Cyber Security and keep up its ability to capture foreign signals intelligence.

The National Cyber Security Strategy will get a refresher of more $250 million over five years, and the Royal Canadian Mounted Police will receive $116 million over five years to create a National Cybercrime Co-ordination Unit that will act as a hub for cybercrime investigations across Canada and a place for residents and businesses to report cybercrime.

Public Safety Canada will also get $1.4 million in the fiscal year that starts April 1 to continue operations of the Regional Resilience Assessment Program and the Virtual Risk Analysis Cell, which both support assessments of critical infrastructure facilities, such as energy grids, information and communication technology networks and hospitals.

“Investment into strengthening cybersecurity at a government level is essential because the stakes are so high in the world that we live in. Canadians don’t want to see their democratic institutions and processes to be undermined by external adversaries,” Mahesh Tripunitara, an associate professor of the Electrical and Computer Engineering department at the University of Waterloo, tells ITWC. “But looking at the $750 million figure – it’s small. If you look at how much cash some of the multinational high-tech companies like Google or Microsoft have invested into cybersecurity, $750 million is just a drop in the bucket.”

His concern that the amount going towards cybersecurity is not enough is shared by Carl Rodrigues, president and CEO at SOTI Inc., who believes the whole budget missed the mark with its lack of detailed plans on how funding will be spent.

“$750 million is not enough for cybersecurity for sure, and the budget as a whole misses the mark. It’s so vague that no one knows what the government is doing. We need more concrete details on what their plans mean or what they’ll actually do,” he says.

Adam Froman, CEO of Toronto-based data collection and technology scale-up Delvinia and member of the Council of Canadian Innovators (CCI), expands on this.

“If that [$750 million] is going to elevating Canada’s cybersecurity through investments in Canadian cyber companies that are already doing this stuff, I applaud the government, but we don’t know the details of that,” Froman points out. “I wish they would’ve mentioned that we have great cyber companies in Canada, and made it clear that this money will have a dual purpose of supporting Canada’s cyber protection, and will also help our Canadian companies become global leaders in cybersecurity.”

ITAC president Robert Watson is a little more positive, telling ITWC that while “more funding is required, obviously, this is a good start.”

“At least they’re doing this and paying attention to the cybersecurity issues we as a nation are facing. We really should be spending billions on it at this point, but at least we’re spending $750 million now. It’s an excellent foundation,” Watson says.

Big data

There was an emphasis on creating a national big data strategy leading up to the budget that would set up a framework of how all the data being generated by Canadians could be used. While an overarching data framework was not mentioned in the 2018 budget, data as a resource was addressed – albeit, in the context of science, not business.

The government has pledged $572 million over five years to support the federal science ministry in developing a Digital Research Infrastructure Strategy “to deliver more open and equitable access to advanced computing and big data resources for researchers across Canada”, the budget says.

University of Waterloo’s Tripunitara “shrugs” at the big data initiative, saying that he finds it “difficult to see what the impact” of these investments will have when government departments still operate in a silo-type fashion.

Investing in data for researchers instead of business irks SOTI’s Rodrigues, who believes the government should recognize the numerous scale up companies that specialize in big data.

“There are so many scale up companies in Canada that specifically deal with big data, so the smarter strategy would have been to focus on helping them. Those are the companies that would actually create jobs and products, and fire up the Canadian economy,” he adds.

Delvinia’s CEO Froman shares a similar opinion. He says it’s a missed opportunity to have funding go solely to universities instead of encouraging Canadian companies in the data business to lead the industry with new innovations.

“The concern I have is that this the money is going to universities and to creating a more collaborative, open ecosystem around big data – which is great, don’t get me wrong – but it isn’t stimulating the Canadian companies that are doing this already,” he says. “If we can’t commercialize the big data, it just becomes data to do research, and that doesn’t create jobs and long-term economic prosperity, or even intellectual property. Companies like mine that are commercially successful, we’re investing in universities so why not close the loop and make it a more collaborative system as a whole?

ITAC’s Watson is still hopeful that the next step of creating a national data strategy in the country will happen.

“Big data certainly is the future because with emerging tech like artificial intelligence and quantum computing, it all intertwines. The next step is to have a data strategy for Canada; how are we going to insure privacy and the sovereignty of our data while allowing international and national companies to use the worldwide network to develop their business? Also, how is the public going to be protected in the future without putting up big data walls around Canada? We’ve got to have a modern way of doing it,” he highlights.

Shared Services Canada and the Phoenix payroll system

The federal government’s 2018 budget commits $2.1 billion over six years 2018 –plus $349.8 million per year after that — for Shared Services Canada (SSC) to continue its efforts of modernizing the government’s IT services, systems, and infrastructure.

Approximately $431 million of this will go towards addressing problems created by Phoenix, a system that has underpaid, overpaid, or not paid at all, thousands of federal public servants. This adds to the $460 million that’s already been spent on fixing the disastrous system.

However, it looks like the government has finally gotten to the end of its rope, allocating another $16 million to begin the process of replacing the Phoenix system.

“As a taxpayer, you wonder how [the Phoenix payroll system issue] happens. Where is the accountability? If it’s not working from a service provider standpoint, why are we as taxpayers having to continue to pay for something they haven’t delivered on?” Froman questions. “They’re almost at spending a billion dollars on this system, which is a billion dollars that could have been directed towards helping Canadian companies keep jobs in Canada. That would be huge.”

An additional $110 million over six years will go towards SSC’s partner departments and agencies to help them migrate their applications from older data centres into more secure modern data centres or cloud solutions.

Addressing gender disparity in the workforce

Gender equality is easily the biggest theme tackled by the 2018 budget, with the word “gender” mentioned 358 times throughout the document (in comparison, the word appeared only twice in the Liberal’s first budget in 2016).

It proposes pay-equity legislation for employees in the federal government and federal-regulated sectors that will ensure both sexes receive the same pay for equal work. While there is no dollar amount set for this plan, the budget estimates this could reduce the gender wage gap by approximately 2.7 cents on the dollar for the federal government and 2.6 cents for the federal private sector.

The federal document has also set an objective of increasing the participation of women-owned small and medium-sized enterprises (SMEs) in federal procurement so that they constitute “at least 15 per cent of SMEs supplying the Government of Canada.”

This emphasis on gender equality is a welcome move, according to Professor Tripunitara.

“For the gender divide and any sort of equity thing, the government has to lead, and these are good steps. From my experience as a university professor that lectures to groups of young people wanting to go into tech, programming, software, and the like, we have a huge problem. Universities are trying to do something to encourage women to go into STEM [science, technology, engineering, and mathematics] programs, but for the government to step up is fantastic,” he explains.

And although Froman agrees with the sentiment, he adds that would have loved to see more in terms of starting the equity fight earlier when girls are beginning to choose post-secondary programs.

“I think gender equality starts with getting more women into STEM programs because nowadays, that’s where the high-growth jobs are. I would’ve loved to have seen them talk about creating more opportunities, more incentives, and more investment in getting women to go into those programs because there’s a huge shortage. If you’re a tech growth company, for example, and now, suddenly, you’ve got the government legislating that you need to meet gender equality regulations, where are you going to get the people from? They need to go to the root of the problem and help get more women in STEM programs,” he says.

The overall consensus is that while the 2018 budget is a good foundation for future work in the technology industry, there is still much more to be done.

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Mandy Kovacs
Mandy Kovacshttp://www.itwc.ca
Mandy is a lineup editor at CTV News. A former staffer at IT World Canada, she's now contributing as a part-time podcast host on Hashtag Trending. She is a Carleton University journalism graduate with extensive experience in the B2B market. When not writing about tech, you can find her active on Twitter following political news and sports, and preparing for her future as a cat lady.

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