Accelerating Innovation in Alberta

U of Alberta 140618-emerald-awards-ualberta-sign-teaserUAlberta partnership with TEC Edmonton, Innovate Calgary receives federal funding to help grow promising startups. By TEC Edmonton Staff on June 24, 2014 (Edmonton)

A partnership of the University of Alberta, TEC Edmonton and Innovate Calgary has been selected by the Canadian Accelerator and Incubator Program to help business accelerators and incubators deliver their services to promising Canadian firms.

TEC Edmonton, Edmonton’s leading business incubator and accelerator, will offer additional business services to health-based startup companies, including new companies spun off from medical research at the U of A. Innovate Calgary, TEC Edmonton’s counterpart in Calgary, will focus its funding on energy-related high-tech startups.

With the U of A, the two business incubator/accelerators will also put the new funding to work by linking investment-ready new companies to existing investor networks focused on new, made-in-Alberta technologies.

U of Alberta 140618-emerald-awards-ualberta-sign-teaser

“This is fantastic news,” said Lorne Babiuk, vice-president (research) at the U of A. “It’s another example of how the University of Alberta continues to transfer its knowledge, discoveries and technologies into the community via commercialization to benefit society, the economy and Canada as a whole. We are delighted to be partnering with Innovate Calgary and TEC Edmonton, which are Alberta’s largest and most successful incubators, and among the best in the country. I thank the Government of Canada for their support and for this valuable program.” “CAIP funding allows us and our partners to enhance and expand our services supporting the innovation community and Alberta’s overall economic prosperity,” said Peter Garrett, president of Innovate Calgary.

“With our shareholders the University of Calgary, the Calgary Chamber and the City of Calgary, Innovate Calgary is committed to accelerating the growth of early-stage companies and entrepreneurs.” “TEC Edmonton is a true community partnership,” said TEC Edmonton CEO Chris Lumb. “We were created by the University of Alberta and the City of Edmonton (through the Edmonton Economic Development Corporation) with strong support from the regional entrepreneurial community, technology investors, the Province of Alberta, the Canadian government and hundreds of volunteers.

With such support, TEC Edmonton has grown into one of Canada’s best tech accelerators. “This new federal funding strengthens TEC Edmonton and Innovate Calgary’s ability to help grow great new companies and to further commercialize research at Alberta’s post-secondary institutions.”

– See more at:

One-Step to Solar-Cell Efficiency?

QDOT images 6Rice University scientists have created a one-step process for producing highly efficient materials that let the maximum amount of sunlight reach a solar cell.
The Rice lab of chemist Andrew Barron found a simple way to etch nanoscale spikes into silicon that allows more than 99 percent of sunlight to reach the cells’ active elements, where it can be turned into electricity.
The research by Barron and Rice graduate student and lead author Yen-Tien Lu appears in the Royal Society of Chemistry’s Journal of Materials Chemistry A (“Anti-reflection layers fabricated by a one-step copper-assisted chemical etching with inverted pyramidal structures intermediate between texturing and nanopore-type black silicon”).

One Step Solar id36136

A cross section shows inverted pyramids etched into silicon by a chemical mixture over eight hours. (Image: Barron Group/Rice University)
The more light absorbed by a solar panel’s active elements, the more power it will produce. But the light has to get there. Coatings in current use that protect the active elements let most light pass but reflect some as well. Various strategies have cut reflectance down to about 6 percent, Barron said, but the anti-reflection is limited to a specific range of light, incident angle and wavelength.
Enter black silicon, so named because it reflects almost no light. Black silicon is simply silicon with a highly textured surface of nanoscale spikes or pores that are smaller than the wavelength of light. The texture allows the efficient collection of light from any angle — from sunrise to sunset.
Barron and Lu have replaced a two-step process that involved metal deposition and electroless chemical etching with a single step that works at room temperature.
The chemical stew that makes it possible is a mix of copper nitrate, phosphorous acid, hydrogen fluoride and water. When applied to a silicon wafer, the phosphorous acid reduces the copper ions to copper nanoparticles. The nanoparticles attract electrons from the silicon wafer’s surface, oxidizing it and allowing hydrogen fluoride to burn inverted pyramid-shaped nanopores into the silicon.
Fine-tuning the process resulted in a black silicon layer with pores as small as 590 nanometers (billionths of a meter) that let through more than 99 percent of light. (By comparison, a clean, un-etched silicon wafer reflects nearly 100 percent of light.)
Barron said the spikes would still require a coating to protect them from the elements, and his lab is working on ways to shorten the eight-hour process needed to perform the etching in the lab. But the ease of creating black silicon in one step makes it far more practical than previous methods, he said.
Source: Rice University

The Secret & Dirty Cost of Obama’s Green Power Push

AP Investigation: Obama’s green energy drive comes with an unadvertised environmental cost

by Dina Cappiello & Matt Apuzzo, Associated Press
To our Blog Readers: You can also “Like Us” on Facebook at:
and “Follow Us” on Twitter!
Biofuel CornCORYDON, Iowa (AP) — The hills of southern Iowa bear the scars of America’s push for green energy: The brown gashes where rain has washed away the soil. The polluted streams that dump fertilizer into the water supply.


Even the cemetery that disappeared like an apparition into a cornfield.

It wasn’t supposed to be this way.

With the Iowa political caucuses on the horizon in 2007, presidential candidate Barack Obama made homegrown corn a centerpiece of his plan to slow global warming. And when President George W. Bush signed a law that year requiring oil companies to add billions of gallons of ethanol to their gasoline each year, Bush predicted it would make the country “stronger, cleaner and more secure.”

But the ethanol era has proven far more damaging to the environment than politicians promised and much worse than the government admits today.

” …

In the first year after the ethanol mandate, more than 2 million acres disappeared.

Since Obama took office, 5 million more acres have vanished.”

” …

When Congress passed the ethanol mandate, it required the EPA to thoroughly study the effects on water and air pollution. In his recent speech to ethanol lobbyists, Vilsack was unequivocal about those effects:

“There is no question air quality, water quality is benefiting from this industry,” he said.

But the administration never actually conducted the required air and water studies to determine whether that’s true.

In an interview with the AP after his speech, Vilsack said he didn’t mean that ethanol production was good for the air and water. He simply meant that gasoline mixed with ethanol is cleaner than gasoline alone.

In the Midwest, meanwhile, scientists and conservationists are sounding alarms.

Nitrogen fertilizer, when it seeps into the water, is toxic. Children are especially susceptible to nitrate poisoning, which causes “blue baby” syndrome and can be deadly.

Between 2005 and 2010, corn farmers increased their use of nitrogen fertilizer by more than one billion pounds. More recent data isn’t available from the Agriculture Department, but because of the huge increase in corn planting, even conservative projections by the AP suggest another billion-pound fertilizer increase on corn farms since then.

Department of Agriculture officials note that the amount of fertilizer used for all crops has remained steady for a decade, suggesting the ethanol mandate hasn’t caused a fertilizer boom across the board.

But in the Midwest, corn is the dominant crop, and officials say the increase in fertilizer use — driven by the increase in corn planting — is having an effect.

The Des Moines Water Works, for instance, has faced high nitrate levels for many years in the Des Moines and Raccoon Rivers, which supply drinking water to 500,000 people. Typically, when pollution is too high in one river, workers draw from the other.

“This year, unfortunately the nitrate levels in both rivers were so high that it created an impossibility for us,” said Bill Stowe, the water service’s general manager.

For three months this summer, workers kept huge machines running around the clock to clean the water. Officials asked customers to use less water so the utility had a chance to keep up.

Part of the problem was that last year’s dry weather meant fertilizer sat atop the soil. This spring’s rains flushed that nitrogen into the water along with the remnants of the fertilizer from the most recent crop.

At the same time the ethanol mandate has encouraged farmers to plant more corn, Stowe said, the government hasn’t done enough to limit fertilizer use or regulate the industrial drainage systems that flush nitrates and water into rivers and streams.

With the Water Works on the brink of capacity, Stowe said he’s considering suing the government to demand a solution.

In neighboring Minnesota, a government report this year found that significantly reducing the high levels of nitrates from the state’s water would require huge changes in farming practices at a cost of roughly $1 billion a year.

“We’re doing more to address water quality, but we are being overwhelmed by the increase in production pressure to plant more crops,” said Steve Morse, executive director of the Minnesota Environmental Partnership.

The nitrates travel down rivers and into the Gulf of Mexico, where they boost the growth of enormous algae fields. When the algae die, the decomposition consumes oxygen, leaving behind a zone where aquatic life cannot survive.

This year, the dead zone covered 5,800 square miles of sea floor, about the size of Connecticut.

Larry McKinney, the executive director of the Harte Institute at Texas A&M University-Corpus Christi, says the ethanol mandate worsened the dead zone.

“On the one hand, the government is mandating ethanol use,” he said, “and it is unfortunately coming at the expense of the Gulf of Mexico.”

The dead zone is one example among many of a peculiar ethanol side effect: As one government program encourages farmers to plant more corn, other programs pay millions to clean up the mess.”

To Read the Full Article GO Here:

Nanotechnology BBC Documentary Nano, the Next Dimension

carbon-nanotubeA BBC documentary on nanotechnology advances in Europe “Nano, The Next Dimension”





A very good video to provide “perspective” on how “All Things Nano” have ALREADY impacted our lives and how … the VAST (but tiny!) arena of “Nanotechnologies” (Nano: objects a billionth of a meter in size) will certainly impact ALL of the Sciences, Manufacturing, Communications and Consumer Materials. Impacts such as:

1.  Our abilities to capture and generate abundant renewable sources of energy, (Solar, Hydrogen Fuel Cells)

2. To create abundant sources of CLEAN WATER through vastly improved FILTRATION and WASTE REMEDIATION processes. (Desalination, Oil and Gas Fields)

3. To deliver LIFE SAVING Drug Therapies and provide vastly improved Diagnostics. (Diabetes, Cancer, Alzheimer’s)

4. To create FLEXIBLE SCREENS and PRINTABLE ELECTRONICS that offer vastly improved performance, user experience, with lower energy consumption and with significantly LOWER COSTS. (Flat Panel TV Screens, Smart Phones, Super-Computers, Super-Capacitors, Long-Lived Super Batteries)

5. Completely water, stain proof clothing. Lighter, Stronger Sports Equipment.

6. Coatings and Paints for Buildings, Windows and Highways that capture solar energy. Inks and Sensors that make our everyday life more Secure.

Through the month of January, we will be posting videos, articles and research summaries that focus on the coming accelerated “wave” of nano-supported technologies “that will change the way we innovate everything!”

“Great Things from Small Things!”


Genesis Nanotechnology:

Twitter:   (@Genesisnanotech)

“Like us on Facebook”


AngelList Tells SEC New Fundraising Rules Will Kill Startups

imagesCAMR5BLR Einstein Judging a FishStartups could face a “death sentence” one year ban from fundraising if they violate awkward new general solicitation fundraising rules, AngelList co-founder Naval Ravikant wrote in a letter to the SEC this week. Ravikant says the Regulation D and Form D changes that go into effect soon are designed for Wall Street, not Silicon Valley, and must change or they’ll harm rather than help startups.

Last month the SEC voted to implement some parts of the JOBS Act, including lifting the ban on General Solicitation. This allows startups and funds to openly advertise that they’re looking for investors, rather than quietly using private communication to solicit money. The theory is that this will make it easier for startups to raise money, build companies, and create jobs.

The problem is that the SEC also decided to add a bunch of red tape to the fundraising process too. This includes notifying the SEC 15 days prior to fundraising, filing all changes to written investor materials to the SEC, and providing verbose disclosures whenever soliciting funding. As TechCrunch contributor and Seattle lawyer William Carleton wrote, ”the SEC’s proposed new Reg D rules and filing requirements, if adopted, will make general solicitation more of a burden than an efficiency.”

Ravikant shares Carleton’s opinion, and delivered to it to the SEC in more forceful terms, hoping the rules can changed.

“We are concerned that the newly proposed Form D filing rules could create disastrous unintended consequences for the startup community…Rules that may be easy for Wall Street are a death sentence for startups…Since young companies are responsible for most of the job growth in the US, we believe this is against the spirit of the JOBS Act” Ravikant writes.

He explains that while Wall Street actors are used to this level of formality and have lawyers to navigate it, they would cause big problems for budding companies. Startups likely can’t afford expensive legal counsel to help them avoid breaking the rules, yet “the very severe penalty for non-compliance (not fundraising for a year) is a death penalty for a not-yet-profitable business.”

sec-sealStartups are often in a constant state of fundraising as they test the waters of investor interest. That makes it tough to know when to file the start-of-fundraising notice, and could force them to turn away spontaneous opportunities. As startups often iterate quickly and evolve the messaging to investors by updating their websites, filing each of these changes with the SEC would be a huge hassle. And it would nearly impossible to fit a proper disclosure into a tweet soliciting investment.

Some of these rules are designed to protect inexperienced investors that would be allowed to fund companies if the equity crowdfunding portion of the JOBS Act is finally implemented. Right now only accredited investors, people with over $1 million in personal wealth, are allowed to invest. They’re generally tougher to dupe into sham investments. But if average Joes can invest, they may need greater protections afforded by tighter regulations.

The hope is that more focused rules that actually guard amateur investors could be put in place alongside true crowdfunding so the frictions described here wouldn’t be necessary.

After breaking down the threats to startups in his letter, Ravikant provided the SEC with a list of remedies:

  1. “Allow third parties to do the filing on issuer’s behalf via API” provided by sites like AngelList
  2. “Allow the company (or a third party like AngelList) to hold the financing materials so the SEC can access them” via a permalink URL to an updated set of materials
  3. “Only require legends and disclosures when terms are communicated” instead of in tweets, public statements, or other time fundraising is more casually mentioned
  4. “Drop the 15-day-in-advance before financing rule entirely” and use the existing file-after-the-fact system
  5. “Don’t impose death penalties for noncompliance. Instead, reduce the costs of compliance” and keep more Form D information confidential so startups don’t have to reveal sensitive information too early
  6. “Don’t be overly broad in the penalty application” by only punishing the violator, not surrounding businesses and funding platforms that support them.

The question now is whether the historically slow-moving SEC will budge on these rules, despite the sound logic behind Naval’s suggestions.

Biz Tips: Renewable Energy Tax Credits

how-nanotechnology-could-change-solar-panels-photovoltaic_66790_600x450Businesses should consider these federal renewable energy tax incentives.

Michael Silvio is a Managing Director with CBIZ MHM, LLC.  He  is the National Federal Credits and Incentives Practice Leader  for the firm where he  focuses on Research & Development (R&D)  Credits, Energy Incentives  and other  federal tax credits.  His office is in Orange County, California.



SEC Lifts Ban On General Solicitation, Allowing Startups To Advertise That They’re Fundraising

Contributors - CrowdFunding Incubator LLC - CFI - Douglas E_ CastleThe SEC has just voted 4 to 1 in favor of implementing section 201(a) of the JOBS Act, which lifts the ban on general solicitation and permits startups, venture capitalists, and hedge funds to openly advertise that they’re raising money in private offerings. While it may pose added risk of investors being misled, it should make it significantly easier for companies to raise capital to start or continue financing a business.

The rule change washes away some limitations on advertising of fundraising that have been in place for 80 years. President Obama signed the Jumpstart Our Business Startups Act in April 2012 but now the removal of the ban on general solicitation is finally going into effect.

Previously, the idea was that companies could go public if they wanted to openly raise money. However, the intense regulation and scrutiny around IPOs has dissuaded some private companies from offering their stock to the public. Poor IPO performance for some fast-growing technology companies and well as improved secondary markets like SecondMarket have pushed startups to stay private for longer. Four times as much money was raised last year through private offerings than IPOs.

Due to the general solicitation ban, hedge funds, VCs, and startups had to quietly raise that money, soliciting by word of mouth and other forms of private communication. Now they could buy ads or openly announce that they’re seeking investors alongside using the traditional quiet method.

Investment is still limited to accredited investors worth more than $1 million liquid net worth, and fundraisers must take reasonable steps to ensure investors are in fact accredited. To help the SEC collect data on how investment will change, fundraisers have to file a Form D with the SEC at least 15 days before they begin general solicitation, and amend that Form D to state that they’re done soliciting within 30 days of finishing.

General solicitation will fuel a new cottage industry of investor matching-making sites that aim to broaden the investment pool to financial whales outside the insular world of Silicon Valley.

“Today, with the ban in place, only the most well-known investors get access to the best deal flow, making it more difficult for accredited investors across the country to invest in top deals,” writes Ryan Caldbeck of crowdfunding website, Circleup, to us in an email. Many sites businesses, like FundersClub, Circleup, Angelist, and Wefunder, help investors find startups to invest in, but have been severely restricted in how they could promote opportunities

“With General Solicitation it will be much easier for investors to find companies they are passionate about supporting,” writes Mike Norman of crowdfunding website, WeFunder, to us in an email. The new rule will hopefully open up the capital-starved startup market to the majority of investors. According to WeFunder’s website, only 3% of the US’s 8 million accredited investors are active in the tech startup space.

“This is creating a large void in the investment community whereby dissatisfied sophisticated investors are clearly looking to alternative investment options for lower fees, more options, etc. Crowdfunding portals will create a way for accredited investors to find additional deal flow,” writes David Loucks of the healthcare investment bank, Healthios.

The SEC is still to rule on the most significant of all provisions: crowdfunding. The Jumpstart Our Business Act (JOBS) of 2013 was supposed to permit everyone from Bill Gates to soccer moms to take an equal stake in hot new startups, not just accredited investors. But the implementation of unaccredited crowdfunding has been delayed by SEC politics and mini-scandals. If crowdfunding is allowed, it could pump even more capital into the startup ecosystem.

Crowdfunding is mostly being stalled by fears that vulnerable elderly couples watching a late night-infomercial will be duped into handing over their nestegg to stupid investments or nefarious actors. While fraud and bankruptcy is a concern, Kiva co-founder, Jessica Jackley, who also founded the now-defunct crowdfunding portal, Profounder, says “I’m less concerned about abuse and more concerned about how well the new crowdfunding platforms will educate new investors — and entrepreneurs — on their investments,” she writes to us in an email.

“No matter how you present an opportunity, investing, especially for equity, is complex. This law requires significant information disclosure and I hope that that info is shared in a way that people can understand and make decisions around.”

For instance, a bill pending in North Carolina mandates that investors be warned in plain English “I acknowledge that I am investing in a high-risk, speculative business venture, that I may lose all of my investment and that I can afford the loss of my investment.”

With general solicitation now allowed, startups may be able to raise money more quickly and from a wider range of investors than before. That could create more companies, further fracturing top engineering and product design talent. It can take a lot of great minds in one room to solve big problems, and some believe more startup capital thereby leads to smaller ideas. Alex Mittal, CEO of FundersClub, says “A lot of noise is about to be introduced to the private markets, and distinguishing signal from noise will become critical for investors, and standing above the crowd will become critical for startups.”

Still, the ability to advertise fundraising could spawn high-impact startups that never would have existed, and they might even spring up in areas where there are no investors within earshot — aka outside of Silicon Valley.

Master Limited Partnerships for Renewables?

Stephen Lacey: June 13, 2013

QDOTS imagesCAKXSY1K 8         MLPs: A Bargain for Renewable Energy?


Aside from the NSA surveillance program and vacations, it’s nearly impossible to find something both parties in Congress can agree on.

But we may just have another such policy: master limited partnerships, or MLPs.

MLPs help energy project developers and investors avoid getting hit with double taxes. They are publicly traded entities that are allowed to act like traditional corporations, but are not required to pay corporate income taxes. Instead, after raising capital for projects through the public markets, MLPs pass income down to shareholders who pay personal income taxes.

Traditionally, MLPs have been limited only to fossil fuel companies, mostly those developing pipelines. But a simple 600-word bill in Congress could soon allow renewable energy companies to create these partnerships.

Lawmakers may not agree on what specific tools should be used to subsidize energy (or even what types of energy to subsidize), but they love to use the tax code to do it. According to the Energy Information Administration, 44 percent of U.S. government spending on energy in 2010 was through the tax code.

MLPs, which are just another tweak to the tax code, are seen by pretty much everyone as a way to give renewables the same tax benefits for project development that oil and gas companies have enjoyed. At a time when lawmakers puff up nearly every issue as controversial, MLPs are a decidedly vanilla-flavored incentive with a real shot at passing through Congress this year.

However, there are still some who are not convinced that MLPs are a magical fix that will level the playing field for renewables.

As we reported last month, there are a lot of private concerns in the wind industry and among renewable energy advocates that MLPs will be used as a bargaining chip for ending the production tax credit or investment tax credits. But those who worry about the tradeoff are still supportive of MLPs generally.

Then there are people like John Farrell of the Institute for Local Self Reliance who want to change the paradigm entirely. Farrell sees MLPs as yet another opportunity for large energy companies to dominate the market and prevent community-owned renewables from flourishing.

“It’s a devil’s bargain. I think it ultimately undermines our opportunity to change the ownership model by simply allowing big companies to avoid paying taxes,” said Farrell, who has been trying to inject his passion for small-scale renewables into the conversation around MLPs.

Farrell’s other concern is one written about by former New York Times journalist David Cay Johnston. In his 2012 book The Fine Print, Johnston explained that the Federal Energy Regulatory Commission had allowed MLPs — again, entities that don’t pay corporate income taxes — to charge users for access to energy infrastructure as if they did pay those taxes. Johnston reported that this increased after-tax profits by as much as 75 percent for some entities.

“This just sets up another trough for the hogs to feed,” said Farrell. “I just think we should be more cautious about what we’re doing. If we are creating tax-advantaged structures for investing in renewable energy, it may help shift from fossil fuels to renewables, but it will likely keep the profits in the hands of the same players who were making the initial investments.”

But others aren’t so sure about that claim.

“It’s just not true that MLPs are only held by large, centralized entities,” said Douglass Sims, a project finance specialist at the Natural Resources Defense Council. “They’re also held by individual investors. Without question, there will be more people who are able to hold a stake in these companies.”

Rather than simply allowing the largest tax equity players to invest in projects through tax credits, individual investors would be able to invest in project portfolios through exchange-traded funds and mutual funds. Opening up these new pools of investment means more liquidity and a lower cost of financing.

“There aren’t that many companies able to take advantage of tax credits. Less competition means a higher cost of capital for projects,” said Sims. “If an MLP can borrow money cheaply through the bond market instead of having to do a project finance deal, that lowers the cost of doing business.”

As a staunch advocate of localized renewables, Farrell worries that MLPs will create “path dependency” toward large, centralized projects.

“There’s a consequence every time you encourage one style of investment over another,” he said. “For example, if you build a transmission line, you’re more likely to build a central power plant. The same goes for policies like this. I think there’s a limit to how much we can do both.”

But Sims doesn’t think it’s an either/or decision.

“I don’t understand this zero-sum game theory,” said Sims. “MLPs won’t displace things like community solar gardens or crowd investing like Solar Mosaic. We’re trying to create a more robust ecosystem around finance, and these structures allow for different kinds of money to come in.”

Indeed, with trillions of dollars needed to realize an 80 percent renewable energy penetration, MLP supporters argue that any source of new capital is welcome. Getting to such a high penetration of renewables can’t be achieved simply through individual or community-based investment, they argue.

The debate around MLPs is new, but the philosophy behind it is quite old. It mirrors a previous debate about whether the U.S. should support feed-in tariffs over tax-based policies or tradable credits to encourage a people-powered renewables transition. On one side are idealists who want to change the system completely and bring the financial benefit of renewables straight to individuals; on the other side are realists who believe that large corporate players have a major role to play in bringing renewables to scale.

According to Sims, MLPs could actually satisfy both camps.

“No one is arguing that there’s going to be a concentration of investment dollars through this structure. It’s quite the opposite,” said Sims. “There will be a lot of different investors, and if you allow people to own these partnerships, they’ll see the benefit personally.”

How Ontario Plans to Become the World’s Top Technology Hub

Large Solar panelsCanadians: humble, mild, polite, with a global reputation for being  non-aggressive.

Except, of course, at a hockey game. And, increasingly, in Ontario, where  startups, government, industry, universities, angels, and venture capitalists  are working aggressively to try to create the world’s leading technology  hub.

Inside Waterloo, Ontario's new $160M center for quantum computing.

Inside Waterloo, Ontario’s new $160M center for  quantum computing.

“We want the world’s next biggest tech company to be built in Ontario,” the  most populous Canadian province’s minister of research and innovation, Reza  Moridi, told a small group of journalists recently in Toronto.

That’s aggression — even if spoken in a kinder, gentler way by an urbane,  mild-mannered politician.

It also might strike some as hubris, given that Ontario’s biggest technology  story to date is that of a dying smartphone manufacturer, BlackBerry (formerly  known as Research In Motion).

But it’s not just words, and it’s not just the government that’s behind this  effort.

Ontario’s reverse brain drain

Ontario is home to about 40 percent of Canada’s population and accounts for  48 percent of Canada’s gross domestic product. It’s the fourth-largest  population center in North America, after Mexico City, New York, and Los  Angeles, and it produces more cars than any other region in North America,  including Michigan. Ontario also has the Americas’ second-biggest financial  services sector, after New York.

More to the point, it’s North America’s second-leading cluster for technology  companies, after California, and has the third-largest concentration of life  sciences companies on the continent.

Google bought local startup BufferBox in late 2012

Google bought local startup BufferBox in late  2012

The government has invested $3.6 billion in those sectors, primarily, over  the last decade, with two-thirds going to research and development, and  one-third focused on building the entrepreneurship ecosystem.

That money has had an impact.

For years, countries like Canada and the U.K. have complained about a brain  drain, with the best talent heading stateside for more options and better pay.  Not anymore. In fact, quite the reverse.

“My co-founder left Silicon Valley to come here,” CEO Kateline  McGregor told me.

She’s starting her company at Communitech, a thriving, almost frenetic  community of startups, accelerators, massive technology companies, students, and  coworkers in Waterloo, Ontario. An hour’s drive up the 401 from Toronto,  Waterloo is a city of 98,000 that saw more than 500 startups take root in 2012.  And the massive burst of innovation has not gone unnoticed.

“Something very interesting is happening here,” Google’s top Canadian  employee, Steve Woods, told me. “This area has a very high proportion of  startups to population. Google loves startups … and we love to hire entrepreneurial people.”


Woods himself is a Silicon Valley refugee, returning home to Canada after  building several companies in the Valley. Google recruited him over the course  of several years to lead its Canadian operations.

He points directly to U.S.  immigration policies that pose a critical problem for both startups and  large, wealthy corporations such as Google. Getting into the U.S. to build a  company or join a startup is notoriously difficult and expensive.

Where Woods works: This  Google office has a real fireman’s pole, slide, cattle walkway, and more  (gallery)

Meanwhile, Canada has just recently taken even more steps — such as the Startup  Visa — to make it simpler, quicker, and cheaper to come to Canada.

“Because of visa situations, Canada has received a disproportionate amount of  the talent that is coming into North America,” Woods said.

All of that translates into a significant competitive advantage for Canadian  startups and tech companies.

More education, more startups

Another competitive advantage, particularly in the Waterloo region, is the  constant stream of high-quality students coming out of engineering, math, and  computer science schools. I heard this ad nauseam from government  representatives I met with, and credible sources in the industry confirmed  it.

University of Waterloo students build startups at Velocity Garage, a for-credit accelerator-like program.

University of Waterloo students build startups at  Velocity Garage, a for-credit accelerator-like program.

Waterloo University produces an amazing kind of talent,” Woods told me. “It  gives students a great grounding in computer science, but also by the time they  graduate they’ve passed through four summers of co-op programs, so they’ve  worked at Facebook, at Google, Microsoft, BlackBerry, or other companies.”

Ontario’s 44 universities produce about 30,000 computer science and  engineering graduates each year, a steady flow of new talent for the province’s  startups as well as established IT, life sciences, and aerospace companies.

By contrast, California — a state with about three times the population of  Ontario — produces only 21,000  STEM graduates per year. The results are clear, at least for Woods.

“People that come into Google from the University of Waterloo do  disproportionately well,” Woods says.

One of the meeting rooms at Communitech, a startup mecca in Waterloo, Ontario. Google also has 200 employees here.

One of the meeting rooms at Communitech, a startup  mecca in Waterloo, Ontario. Google also has an office here.

Rob Crowe, executive-in-residence for Waterloo-based Institute for Quantum  Computing, the second-largest quantum computing research center in the world,  agrees.  And he points out another advantage that translates to more  startups coming out of key Canadian universities.

According to Crowe, a key difference between the U.S. and Canada is that many  Canadian universities have followed the European model of education-funded  research and development. Essentially, professors and researchers at the  University of Waterloo own any intellectual property they develop, not the  institution they work and teach for. That’s an incentive for academics to put  their best foot forward while on faculty, and to kickstart companies when their  ideas result in a viable product or company.

“This is the university that throws off more startups than any other  university in the country,” Crowe told me.

Less tax, more benefits, more investment

All of the above regional traits are excellent for students, researchers, and  startups, but there’s also good news for investors. Moridi’s ministry of  research and innovation has helped reduce corporate tax, while also providing  significant tax credits for companies doing innovative work.

“Ontario has one of the lowest corporate tax rates in North America, at 22  percent,” says John Marshall, president and CEO of the Ontario Capital  Growth Corp., Ontario’s voice in two venture funds totaling about $500 million.  The funds were raised partially by government, which recently announced  intentions to pump in another $50 million, but mostly by venture capitalists and  institutional investors.

Google has invested significantly in Waterloo, Ontario.

Google has invested significantly in Waterloo,  Ontario, hiring 200 engineers for its Canadian engineering  headquarters.

The goal is simple: Invest in potential high-growth venture-stage startups in  Ontario via a fund-of-funds approach that ensures industry participation and  leadership in every specific investment. In other words, Marshall puts money  into funds assembled by local VCs such as Omers, Northleaf Capital Partners, and  Rho Canada. Those VCs in turn drive the actual investments into companies like  Shopify, Desire2Learn (which recently closed an $80 million round), Polar  Mobile, and BlueCat Networks.

“Our overall aim is to build the ecosystem for innovation,” Marshall says. “That includes the demand side, with accelerators and startups, and the supply  side: seed funding, angel investors, and venture capitalists.”

The fund-of-funds strategy appears to be working. Two years ago the average  fund size in Canada was $60 million, compared to $180 million in the U.S., but  now the average Canadian VC fund is $90 million. Other venture entities, such as  Intel Capital and Samsung Venture Investment, are following the money and making  their own investments.

When that money gets into the hands of actual startups, it goes further,  according to the companies I talked to. The reason is Canada’s federal and  provincial research and development credits, which the Ontario government says  are “among the most generous of the OECD countries.”

Ontario had 500 startups in 2012 in Waterloo alone.

Ontario had 500 startups in 2012 in Waterloo  alone.

Taken as a whole, those credits can reduce the after-tax cost of $100 worth  of R&D to just $57 for corporations and just $39 for startups.

Fixmo CEO Rick Segal, an ex-patriate American, says those tax credits are one  of the key reasons he chose Toronto as the location for his latest mobile  security startup. The CEO of online advertising startup Chango, Chris Sukornyk,  told me the same thing.

Marshall says that the credits simply add on to a startup environment that  has long stretched every single dollar as far as it can go.

“Our entrepreneurs have already been so capital efficient by necessity,” he  says, adding that now that Ontario’s entrepreneurs have access to more money,  they’re still using it wisely.

That capital is starting to flow more freely lately, with VC investment up in  Ontario in the past few years. But startups, who benefit most from the R&D  tax credits, also have additional benefits. Almost every startup that graduates  from a major Canadian accelerator such as Hyperdrive and Extreme Startups in  Ontario, FounderFuel in Montréal, and GrowLabs in Vancouver, gets offered a  $500,000 convertible note by the Business Development Bank of Canada.

That’s cheap and none-dilutive money, and provides more runway for startups.  Most of which, realistically, need more than a three-month stint in an  accelerator program to become real companies.

Ambition, meet reality

There’s no doubt that Ontario is taking smart steps with the ultimate goal of  dominating the business of technology. But can it really out-innovate the  innovation capital of the world, Silicon Valley?

Toronto currently ranks eighth on the Startup  Genome’s list of global startup ecosystems, just above another Canadian  technology hub, Vancouver. Tiny Waterloo ranks 16th with its population of just  under 100,000, bringing to mind Tel Aviv, the super-fertile startup ecosystem of  400,000 people that currently holds third place.

Toronto's CN Tower

Toronto’s CN Tower

In addition, Ontario officials quietly let me know that they believe Ottawa  would have won a spot in the top 20 as well, if Startup Genome had analyzed the  data just a bit differently. That would, of course, have given Ontario three  cities in the global top 20.

But even considering the province’s leading contender, there’s still a long  way between eighth and first. And every country in the world, seemingly, wants  to follow the Silicon Valley model to the yellow brick road of employment and  riches.

Few succeed.

VC investment in Canada overall is still just a fraction of that in the U.S., with  about $1.5 billion invested in the entire country over all sectors in 2012,  compared to $8.3 billion invested in the U.S.  in software alone, and  another $6.7 billion just in web-based startups. In Ontario specifically, VC  investment was just $603 million, compared to California’s U.S.-leading $14.1  billion.

And RIM, with revenues of $18 billion in fiscal 2012 dropping to $11.1  billion in fiscal 2013, is still probably the province’s biggest tech  company.

That’s not a good sign.

Turning to BlackBerry for inspiration

Despite the small numbers, startups are increasingly choosing Ontario as  home. Taxation and immigration policies as well as investments from blue-chip  funds like Union Square and Kleiner Perkins are having a massive cumulative  effect.

Even BlackBerry  is feeding the culture of innovation in Ontario, despite being in what are  perhaps its death throes.

Fixmo CEO Segal says BlackBerry has been an amazing influence in Ontario, and  continues to be influential. “There are lots of alumni from RIM, both voluntary  and involuntary,” he says with a wry grin.

Marshall says the growth of BlackBerry from nothing to its heights as the  first key innovator of the smartphone revolution has had its own impact,  regardless of the company’s current situation.

“Now you’ve got kids coming up who saw their parents do it,” he says. “So  they believe they can do it too.”

500 new startups in Waterloo in 2012 alone attest to that fact.

In the against-all-odds world of the startup, belief is the key ingredient of success.


The $1 Trillion Choice

Posted February 22, 2013 By Mark Green

While the White House talks again about raising taxes on oil and natural gas companies, let’s look at a chart that captures the starkly different outcomes – in terms of revenue for government – from two policy paths: higher energy taxes vs. increased energy development:1Trillion_Government_Revenue_Potential_v2_(3)

You read it right: The difference between the two policy choices, in cumulative dollars for government from now until 2030, is more than $1 trillion.

According to a 2011 study by Wood Mackenzie, increased oil and natural gas activity under pro-access policies would generate an additional $800 billion in cumulative revenue for government by 2030. The chart puts into perspective the size of these accumulating revenues – enough to fund entire federal departments at various points along the timeline. By contrast, Wood Mackenize also found that hiking taxes on oil and natural gas companies would, by 2030, result in $223 billion in cumulative lost revenue to government.

Another way to look at it: The chart below shows that the higher-taxes policy path would add about $16 billion in cumulative revenue for government at first, but that sharp revenue losses would follow as increased taxes slow energy development (costing about 22,000 jobs in the process).


The choice is a no-brainer. Yet some in Washington continue to push for the higher taxes path – the less-energy, fewer-jobs, less-revenue-for-government path. White House Press Secretary Jay Carney this week:

“If we have one fundamental goal here in Washington, it should be to work towards growing the economy and increasing job creation, not doing unnecessary, arbitrary things to halt or reverse that process.”

Carney’s right. We need policies that help the economy. Yet, working against the economy and job creation is the likely result from the course the administration keeps pushing: discriminatory tax increases on our industry – one that already contributes an average of $86 million a day to the federal government in income taxes, bonus bids, rental payments, royalties and other fees. API Executive Vice President Marty Durbin, in a recent conference call with reporters:

“When it comes to taxes, singling out our industry for tax increases is bad economic policy, it’s bad tax policy and it punishes one of the few industries that has created jobs and grown our economy throughout the economic downturn. We pay more than our fair share, and despite repeated allegations, we receive no subsidies. We pay federal taxes at an effective rate – 44 percent – that is well above the 29 percent effective rate paid by other S&P Industrials.”

As Durbin noted, higher taxes would impact the significant stimulus our industry provides to the broader economy – $545 billion in 2012. That figure represents jobs, investments in facilities and operations and energy development that generates millions in revenue for government – stimulus that doesn’t require legislation from Congress or a new federal program. Here’s how industry’s investments, measured in capital spending, stacked up from 2006-2011:



“Short-sighted, punitive tax proposals could put at risk those investments, diminishing what we can do for economic growth, sacrificing potential jobs and, paradoxically, sacrificing revenues that could come from new development and new jobs.”

If the goal is more revenue for government from the oil and natural gas industry, there are two paths: One that produces a sizeable net loss over the next two decades – as well as job losses and less energy – or one that, through increased energy development, generates hundreds of billions of additional dollars for government while adding jobs, growing the economy and producing more of the energy our country needs: the $1 trillion choice.