Ontario, Canada's most populous province, is familiar with Israeli technology abilities. Irrigation equipment maker Netafim Ltd. does extensive business there, Shari Arison's water venture MIYA acquired Veritec Consulting Inc., and Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) acquired Novopharm Ltd.
It was no coincidence that, in an interview with "Globes", Ontario Minister of Economic Development and Trade Sandra Pupatello cited these examples.
Ontario is very interested in environmental and life sciences technologies. Pupatello and her deputy came to Israel to examine water, renewable energy, and biomedical technologies, with the objective of collaboration between Israeli and Ontarioan companies, and to foster investment.
Pupatello says that there are similarities between Ontario and Israel, among other things because they both have well-developed high-tech industries. Ontario is seeking water technologies because of the water crisis affecting large areas of the world, and because agriculture is a mainstay of the provincial economy. Ontario also has a well-developed information technology industry, the third largest in North America. The province's life sciences industry is also the third largest on the continent.
"Our largest export is avionics," says Pupatello. "We have 250 avionics companies that develop sophisticated technologies for the world's leading aerospace companies. We produce 70% of the world's landing systems."
Pupatello adds that Ontario's business climate is very inviting for foreign entrepreneurs and investors. "The provincial company tax is highly competitive in North America," she says. The corporate tax is 31.5%, compared with between 32.9% and 39.2% in other Canadian provinces and states in the US.
Pupatello adds, "Ontario offers many incentives for R&D, so long as it is carried out by a local company. In other words, entrepreneurs must establish a company in Ontario to benefit from the terms that the province offers. For example, a return of up to 60% of investment in R&D. MIYA, for example, is already working this way and its R&D already benefits from our academic institutions."
Pupatello mentions the Next Generation of Jobs Fund , which manages $1.15 billion, and which awards grants for up to 50% of the cost of a project that meets two criteria: environmental objective, such as greenhouse gas emissions reduction; and technological innovation.
Ontario generates 40% of Canada's GDP of $580 billion, mostly from manufacturing. "We're heavy energy consumers," says Pupatello, "So we need renewable energy solutions."
Pupatello's renewable energy objective is very ambitious, indeed incredible. "We intend to end reliance on coal-fired power plants by 2014," she says.
Energy conservation is carried out in cooperation with the population. Part of the provincial effort to reduce the use of pollution-causing energy sources involves paying consumers to reduce energy use at peak hours. This mechanism has been successfully applied in the US, and will soon operate in Israel for industry.
The Ontario Ministry of Research and Innovation has launched a $250 million Emerging Technology Fund. The fund will seek match investments for ventures in new technologies from venture capital funds or companies, although it will not be the lead investor.
For this purpose, Pupatello met nine Israeli venture capital funds, including Aguagro Fund LP, Tene Capital Ltd., and Kinarot-Jordan Valley Technology Incubator.
"I'm very excited by what I've learned in Israel," says Pupatello in conclusion. "I'll be delighted to leverage activities already started." The reference is to the Canada Israel Industrial Research and Development Foundation, and the the Joint Ontario and Israel R&D Fund, established in 2005 with $6 million in equal shares.
Published by Globes [online], Israel business news - www.globes-online.com - on August 18, 2009
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