The recent report that Ottawa is moving ahead with pandemic-style relief package in response to tariffs from a second Trump administration signals a good news / bad news situation.

It is good we want to support Canadian people and companies hit by the tariff impacts. The bad news is that it’s an old and unsustainable playbook: relying on deficit spending and government aid to prop up businesses and workers. And let’s hope lessons learned from the pandemic aid that we don’t was billions on fraudulent claims.

Why can’t we be creative? Provide support yes, but at the same time the federal government should use this crisis as an opportunity to strengthen Canada’s long-term economic resilience by extending Flow-Through Shares (FTS) to startups and emerging businesses in the tech and innovation space.

This forward-thinking change to the federal tax laws would harness private sector investment to fuel innovation, job creation, and economic growth—ensuring Canada builds a more self-sufficient economy that thrives regardless of external shocks. This is Canada looking after Canada. The tech sector already generates as of 2023 C$125.5 Billion towards the GDP, has close to one million direct jobs and a similar number in spin off jobs. That is almost equal to the mining and oil and gas extraction industries combined. Pretty impressive for an industry made up mostly of small to medium sized firms.

Flow-Through Shares: A Proven Model for Growth

Speaking of mining, Flow-Through Shares are a well-established investment vehicle first established 71 years ago to power Canada’s mining sector and since then FTS expanded to oil and gas exploration and then in 1996 to help raise funds to cover many of the major costs for the renewable energy sector. FTS allows companies to pass tax deductions on to investors, making it easier to raise capital for exploration and development. In 2024 FTS activity reached a five year high and generated C$1 Billion just for mining companies through the TSX. Extending this to technology, manufacturing, life sciences, clean tech, and other high-growth industries would create a series of benefits:

1. Attract Private Capital – Instead of waiting for government to decide on possible funding , startups could raise funds from Canadian investors eager to support domestic innovation. This would reduce dependence on foreign investment and prevent capital flight. In 2024 Venture Capital money into Canada was half of what it was at the peak in 2021. We would ease our dependence on US capital.

2. Encourage Economic Diversification – The trade uncertainty highlights the risks of over-reliance on any single market. By directing investment into emerging industries, Canada can reduce its vulnerability to external economic threats and make our companies better competitors on the world stage. This at a time when the world is becoming a knowledge-based economy not t resource-based.

3. Create High-Value Jobs – Unlike temporary government assistance, investing in startups increases the chances for permanent, high-paying jobs in knowledge-based industries, positioning Canada as a leader in global markets. Currently tech jobs pay 54% more than the average Canadian salary and the sector has for years  regularly out-performed the overall Canadian economy. It is a valuable and growing industrial sector with a 2025 analysis’s report predicting a nine percent CAGR in the 2023-2028 period.

4. Reduce Public Debt Burden – Instead of relying on deficit spending that will weigh on future generations, FTS leverages private investment to stimulate growth, keeping government resources available for essential services.

The Alternative? More Debt, More Dependence

The government’s proposed pandemic-style relief package may help in the short term, but it does nothing to strengthen Canada’s economic fundamentals. More subsidies, wage supports, and tax deferrals will only delay the inevitable: a need for structural change in how Canada that supports business resilience. Instead of preparing Canadians for prolonged dependency, the government should equip them with the tools to innovate, compete, and win in a global economy.

A Call to Action for Policy Makers

If Ottawa truly wants to safeguard the economy, it must think beyond reactionary bailouts and introduce proactive, investment-driven policies. Expanding Flow-Through Shares to startups is a  high-impact solution that would: