Despite a deficit of nearly $10 billion this year, the B.C. government has devoted a half billion dollars over three years to an Crown corporation investment fund with a broad range of goals: homegrown technology companies, high-paying jobs, a cleaner environment, promoting diversity and advancing Indigenous reconciliation.
B.C. Jobs Minister Ravi Kahlon calls InBC a “people-planet-profit” investment fund, offering “patient capital” to help startups expand rather than be bought up by international players. The investment fund was promised in Premier John Horgan’s “StrongerBC” economic recovery plan, launched last fall days before a surprise election call.
B.C. Liberal jobs critic Todd Stone, who founded a Kamloops software company before he was elected as an MLA, questioned Kahlon this week about B.C.’s competitiveness for attracting and retaining entrepreneurs and skilled workers, including tax rates on high earners.
“When the facts are that a software developer earns $27,000 less in British Columbia than they do in Ontario to start with, when we’re staring down lower income tax rates next door in Alberta — when we’re staring down no income tax in the state of Washington…. These are all our competitors,” Stone told the B.C. legislature May 18.
B.C. Green MLA Adam Olsen questioned Kahlon on the need for “strategic capital” that isn’t looking for a quick return. Olsen agreed with Stone that the COVID-19 pandemic put investment on hold around the world, and asked if now is the time for “putting $500 million of public money into a space that has billions and billions of dollars of private capital looking to be spent.”
Kahlon said the fund is to assist companies to grow without being taken over and leaving B.C. to expand. “We’ve heard the most amount of excitement from the clean tech sector, which sees an opportunity for them to access capital and stay here in British Columbia,” he said.
When InBC was launched April 27, the ministry said its target was a modest annual return of five per cent on public money invested. A board of directors has since been appointed, chaired by VanCity CEO Christine Bergeron and including former finance minister Carole James, Susan Trottier, vice president of First Nations Bank Trust, and Iglika Ivanova, an economist with the Canadian Centre for Policy Alternatives. Deputy jobs minister Bobbi Plecas and deputy finance minister Heather Wood are also directors, with a chief investment officer to be appointed this fall.
The NDP government created InBC by converting a dormant Crown corporation started by the previous B.C. Liberal administration in 2001, called the B.C. Immigrant Investment Fund. Its purpose was to receive federal money from its immigrant investor program to make low-interest loans for schools, hospitals and other infrastructure, and Ottawa ended that program in 2014.