Less than 24 hours after Finance Minister Bill Morneau had unveiled his second federal budget, Kurtis McBride was already taking and making calls to help position Waterloo Region as a beneficiary of one of its key initiatives — the Smart Cities Challenge.

McBride is the CEO of Miovision, a traffic data and infrastructure company that helps cities improve their traffic management. He’s also one of the driving forces behind Catalyst137, a former tire and footwear warehouse in Kitchener that is being repurposed into a 475,000-square-foot facility to house the manufacturing of smart devices connected to the Internet of Things.

McBride believes the Smart Cities Challenge, a $300-million program — a contest, in effect — designed to spur municipalities to implement a smart-cities strategy, is tailor-made for a region like Waterloo, and has begun the process of contacting and assembling various local stakeholders to build an application designed to do one thing: Win.

“I would love to see the region, the municipalities, the [economic development] groups, incubators and a lot of the smart-city companies – Alert Labs, Miovision, FleetCarma and others – I’d love to see a proposal go in that basically says: ‘We’re going to turn [this] region into a world-class, world-leading example of a smart city, in terms of live-streaming data from as much city infrastructure as we can possibly connect.

“I can’t imagine that there’s a tighter-knit community, with all the assets we have, that could put in as compelling an application [as Waterloo Region].”

Morneau’s budget, tabled in the House of Commons Wednesday, was chock full of initiatives designed to spur innovation, including $950 million for supercluster growth, the launch of a national strategy for artificial intelligence, a venture capital initiative and a skills program, to name just a few.

“For me, it really is a transformative budget that is really looking to give Canada and its cities [new] foundations for the next 50 years,” said Kitchener Mayor Berry Vrbanovic.

One of the more intriguing elements from the budget was the Smart Cities Challenge. It’s conceived as an 11-year program, administered by Industry Canada and focused on IoT, the aim being to “encourage cities to adopt new and innovative approaches to city-building.”

Smart Cities Challenge is modelled after a similar program in the United States. Last year, the U.S. version of the challenge was won by Columbus, Ohio, which received US$50 million to build a smart transportation service using self-driving and connected vehicles.

Wednesday’s budget was unclear about just how big the Canadian prize would be, but speculation Thursday was that CDN$50 million wasn’t out of the question.

“I think a project like that can go an incredibly long way to piloting a bunch of new technology that could be revolutionary across Canada for all municipalities,” said Waterloo Mayor Dave Jaworsky.

“I think that’s what the federal government is getting at. [These are] the kinds of things that won’t be evolutionary, but revolutionary. It could very well be [that for the] companies of Waterloo Region [which are] inventing that technology, [this contest] could be the catalyst for them to go further.

“Every city aspires to be a smart city, whereby we help our citizens without putting more burden on the taxpayer. So, Smart Cities Challenge will encourage all cities to think deeply about how they might engineer some of their business processes, how they work with citizens more effectively.”

Communitech is slated to open a data hub in the City of Waterloo in May. Both mayors were thinking the various tech assets throughout the region, including the data hub and Catalyst137, not to mention the startup ecosystem itself and the companies it has spawned, would position it to make a strong bid.

McBride, who was among several players in the region who took part in advising the government during the budget’s consultancy phase, was thinking down the same path.

He said his company is already in the process of designing a broad, smart-city plan for “a major city in the U.S. northeast,” and envisioned using that plan as a rough template that would turn Waterloo Region “into a giant IoT playground for application developers.

“I think we talk to the stakeholders, the users, the buyers, and try to piece together an architecture that minimized the cost of the initial hardware that has to be deployed and then maximized its utility.”

Another Waterloo Region company playing a role in making cities smarter is Alert Labs. It is working on a pilot project with the City of Guelph to provide residents with smart water meters to help reduce water use and provide real-time monitoring.

Asked for his post-budget impression, CEO George Tsintzouras said: “We’re thrilled to see the Canadian government providing significant funding to enable new technology deployment on a large scale.

“Alert Labs believes there are three criteria crucial to successful smart-city deployment: An easy-to-install technology solution that can retrofit existing infrastructure, progressive municipalities that are motivated to engage in new ways to bring benefits to their residents, and government funding to support execution of these programs.”

Former Communitech board member Katherine Barr, a Canadian who is a founding partner at Wildcat Venture Partners, a Silicon Valley VC firm, was among those particularly enthused by the budget’s tech focus.

“A common theme we’ve heard from the Canadian tech ecosystem is a need for increased funding, increased talent in certain key areas to help companies scale, as well as the government being more open minded to procurement and becoming a customer of our tech ecosystem. I think all three of those points were hit in a material way.”

Barr was a member of Canadian government’s Advisory Council on Economic Growth, and many of the council’s recommendations vis-à-vis technology found their way into Morneau’s budget document. In particular Barr’s recommendations focused on skills and talent. Specifically with respect to skills, the budget announced:

  • The creation of a new skills agency ($225M over five years, $75M ongoing), aiming to provide training for Canadians.
  • $221M to triple the number of co-op placements that Mitacs – a not-for-profit research and training organization – can offer, bringing the number to 10,000.
  • $50M to help teach children from K-12 to code.

“With automation kicking into gear, Canadian companies are going to need people who are highly resilient, flexible, technically competent and creative problem solvers in an applied way,” said Barr. “We’ve got to build that base now. That’s why we suggested support for new and innovate ways to create these critical skills and the government moved on it, which I am really happy to see.”

Barr also gave thumbs up to the money — $400 million — that the government is injecting into the Venture Capital Catalyst Initiative, money that will be directed to the Business Development Bank of Canada. She thinks that as the limited partners which invest in venture firms see money flowing into companies, they’ll be more likely to support the Canadian venture and tech ecosystems, as well.

“When the government steps up and says we really believe in the Canadian venture ecosystem, and the Canadian technology ecosystem, that’s important for the continued growth of skilled venture firms and meaningful technology startups in Canada,” she said. “This support, in combination with strong returns from the funds and the companies they invest in, will help to attract limited partner dollars from inside and outside of Canada to invest in Canadian venture funds.”

Skills training resonated as well for Thalmic Labs CEO Stephen Lake. Thalmic, the makers of the Myo gesture-control armband, is scaling and needs talent.

“I was excited to see the focus on funding that promotes STEM learning, especially among young women and girls,” said Lake. “By making coding part of our education curriculum, more students from a wider variety of backgrounds will be inspired to pursue careers in technology, helping to solve the skills gap facing Canada.”

Lake also liked the budget’s push to foster more development in artificial intelligence, an area in which Canada has had early success, and to focus on key areas instead of trying to be all things to all people.

“Rather than ‘spreading the peanut butter,’ we must double down on our strengths to create scale in areas where we can be world leaders,” said Lake. “The budget’s focus on funding artificial intelligence programs was a step towards that. Unlike Silicon Valley, we don’t have the resources to pursue everything and anything. We should think about how we place large bets on these areas where we truly have a chance to succeed at a global scale.”