The government of the Canadian province of Ontario has cut funding to startups and job development programs, dealing a heavy blow to Toronto’s burgeoning technology hubs.
The move has led some organizations to lay off a few of its employees, with analysts warning that more jobs would face the axe in the months to come.
Hardest hit are regional innovation centers, including organizations such MaRS Discovery District and Communitech, which help tech startups accelerate by providing them with advisory services and other resources.
The government cut the budgetary allocation to the ministry responsible for supporting job creation, innovation, and economic growth in the province by 19%, and the ministry in turn cut the funding to technology hubs.
The funding cut has also affected incubators and organizations managing technology hubs. There are around 17 innovation centers in Ontario, in addition to incubators such as Innovation Guelph, and Tech Alliance in London, Ont.
Communitech has reportedly announced its decision to lay off 15 employees in a bid to restructure its operations in the wake of funding cuts.
Digital services is the fastest growing sector in the Canadian economy, and is larger than the country’s traditional industries such as mining, oil and gas, agriculture and forestry, while Toronto is one of the fastest growing digital technology hubs in North America.
The government says it will make up for the reduction in funding by reducing red tape.
But observers bemoan that young people will now find it more difficult to get jobs, citing the cancelation of Youth Job Link and the Employment Youth Talent Incentive, which provided subsidies to businesses in exchange for hiring young people.