OBIO is in regular contact with government officials advocating for urgent support for the health science industry.
On March 31, OBIO sent a letter to Hon. Mary Ng, Minister for Small Business, Export Promotion and International Trade with recommendations to expand the federal government’s announced wage subsidy to include innovative health science companies that are pre-revenue as they develop their technologies, in addition to recommending that the federal government address the drying up of private equity investment.
The Honourable Mary Ng, P.C., M.P.
Minister for Small Business, Export Promotion and International Trade
125 Sussex Drive
Ottawa, Ontario
K1A 0G2 Canada
Mary.Ng@parl.gc.ca
VIA EMAIL
March 31, 2020
Dear Minister Ng, As we all navigate these challenging and uncertain times, I am writing to you as the CEO of Ontario Bioscience Innovation Organization (OBIO) to provide recommendations based on the needs of Canada’s innovative health science industry due to the impact of COVID-19.
OBIO works closely with hundreds of health science companies developing healthcare solutions for the future. OBIO has engaged our membership to both understand the challenges they are facing and to inform them of available government supports.
I would like to draw your attention to two issues facing the health science industry as we all work to limit the impact of COVID-19:
1) The announced Canada Emergency Wage Subsidy program, which will provide a 75% wage subsidy for employees of companies that experience a 30% reduction in revenue, excludes innovative health science companies that are pre-revenue while they develop technologies.
2) The investment dollars that many early-stage companies rely on to build their companies are drying up, as private equity investors face their own liquidity challenges and retreat.
Last Friday, OBIO was pleased to hear the government’s announcement of a 75% wage subsidy for companies that would allow them to continue work on their innovative technologies and avoid staff layoffs. As I am sure you are aware, these companies – much like every other sector of the economy – have been deeply impacted by COVID-19.
However, after yesterday’s announcement providing details on the Canada Emergency Wage Subsidy program, I am writing to share a major concern with the criteria for companies to qualify for the subsidy. The requirement that companies must demonstrate 30% reduction in revenue excludes innovative health science companies that are pre-revenue while they develop technologies.
Unless the criteria related to revenue can be modified to allow these companies developing innovative health technologies access to this valuable and necessary program, they will be forced to lay off scientists, engineers, business people and other highly qualified professionals that keep our innovation economy going. In fact, many of these companies are working hard right now to help resolve the COVID-19 crisis while others are working on solutions to a myriad of healthcare challenges that many of us will face over our lifetimes.
OBIO has heard from health science companies that have shut down in compliance with public health guidelines, closing labs and other facilities, and working remotely as much as is possible. We have also been in communication with companies that are doing their best to provide COVID-19 solutions with their technologies.
It has never been more apparent how vitally important innovative healthcare solutions are to our economy and to our health system. I hope that the criteria for the ‘life saving’ Canada Emergency Wage Subsidy can be modified so that it can also save the lives of the health science companies that all of us will rely on for our future healthcare and prosperity.
Last week, OBIO hosted an online panel discussion, Guiding Your Company Through the Unexpected, in which experienced CEOs and a venture capitalist discussed available capital for deals drying up and both foreign and domestic investors retreating.
Since then, OBIO has heard from health science companies about the sudden impact that the current economic climate is having on their access to the investment they need to continue running their businesses. We have heard from companies that are putting financing rounds on hold, and companies forced to rework their business plans and delay their research in order to give themselves enough financial runway to survive.
The Canadian Venture Capital Association (CVCA) recently sent a letter to you outlining steps that should be taken to support innovative companies and private equity investors to ensure that this industry is able to continue to function during the COVID-19 pandemic. Immediate steps need be taken to support health science companies by moving on those recommendations.
OBIO is already engaged and working with the federal government on supporting companies with COVID-19 technology solutions. We stand ready to work with you, your ministry and the federal government more broadly to take the necessary steps to support innovative health science companies with wage subsidies for their employees and continued access to private equity investment.
On behalf of the Ontario health science industry, we appreciate everything that you and your Team are doing to support individuals and businesses affected so deeply by this crisis. I appreciate your time and your attention to these matters.
Sincerely,
Gail Garland President and CEO
Ontario Bioscience Innovation Organization (OBIO)
Cc:
The Honourable Navdeep Bains, P.C., M.P.
The Honourable Bill Morneau, P.C., M.P.
Mr. Simon Kennedy, Deputy Minister, Innovation, Science and Economic Development Canada