The Chief Executive Officer of Shopify (TSX: SHOP) is calling on Canada’s federal government to help technology companies scale up.
Shopify CEO Tobi Lutke delivered that message to federal Innovation Minister Navdeep Bains at the Elevate technology conference in Toronto on Tuesday. Lutke’s remarks coincided with the release of a government report based on the work of a committee of technology leaders that was chaired by Mr. Lutke.
The report found that Canada has a rich start up ecosystem but that only 0.2% of Canadian technology companies are large. The Digital Industries report calls for doubling the number of technology companies that have more than $1 billion in revenue to 26 by 2025.
"These companies are like freight trains," said Lutke. "One of the recommendations is that we let those companies be freight trains."
Lutke said that to achieve the kind of double-digit growth Shopify has enjoyed, companies need to focus on their business affairs, and spend less time on paperwork that comes with federal government assistance programs. To that end, the Digital Industries report calls on Ottawa to create a "hypergrowth passport" for big technology companies.
"The Hypergrowth Passport would be an accredited designation for digital firms headquartered in Canada with more than 40% year-over-year revenue growth (past $1 million in one year)" the document says. "The Canada Revenue Agency (CRA) should automatically determine if companies meet these criteria as part of its tax assessment, similar to how it detects individual benefit eligibility automatically."
Companies that meet the criteria, as part of a pilot project, would get special help from Ottawa in navigating government programs, set-aside access to some services, and get a powerful seal of approval from government that the business is on track for success.
