Alberta Innovates will have to end, amalgamate some programs, CEO says

Alberta Innovates will back innovation in energy, environment, health, aerospace and associated technologies — but some support programs will end, according to the Crown corporation's newly permanent CEO.

CEO Mike Mahon said the company, which offers funding, services and expertise to boost research and innovation, will have to consolidate and eliminate some of its work, as it faces a 30-per cent provincial funding cut next year and is armed with a review of its programs.

"In the world of innovation, we all recognize that things move rapidly," Mahon told CBC News on Wednesday. "Things that might have been priorities five or seven years ago really are no longer priorities in the same way."

Most organizational changes will come in the next four-to-six months, he said.

But Opposition NDP innovation and technology critic Nathan Ip said now is the worst possible time for the government to reduce funding available to the province's inventors and entrepreneurs.

"There's a sense of uncertainty here," Ip said. "That's ultimately the wrong message to send to the innovation sector at this time."

The Alberta Innovates board announced earlier this week that Mahon, the former president of the University of Lethbridge, will become its permanent CEO as of June 1. Mahon held the role on an interim basis since June 2024, when board members appointed by Technology and Innovation Minister Nate Glubish fired the former CEO, Laura Kilcrease.

Glubish has said he replaced the previous board because it failed to review all the organization's programs to his satisfaction.

Alberta Innovates is facing a $53-million operating funding cut starting in 2026, about one-fifth of its roughly $250-million annual budget.

Mahon said his previous work as a university president prepared him for his current position. While president of the U of L, the institution faced a 25-per cent cut in provincial funding.

Alberta Innovates will look for other sources of funding, including the federal government, private sector and international partners, Mahon said.

"We have to be nimble enough to be able to respond to those [funding] changes," he said.

He wouldn't specify which programs will be phased out, saying the Alberta government is still reviewing the agency's business plan for approval.

Innovators concerned about help for startups

Ip said layoffs are inevitable with such a substantial planned budget reduction.

Job reductions have already begun. Alberta Innovates, an organization of 600 people, earlier confirmed at least eight people at the executive level have left since January.

Alberta Innovates has not provided a target number of full-time equivalent jobs it hopes to reach in restructuring.

There is value in reviewing the organization's programs and focuses, Ip said. But cutting a key support agency for entrepreneurs — when growth in technology and innovation is exploding — is shortsighted.

"It's introduced anxiety amongst folks, and those are the kinds of things that are radioactive to business," he said.

News of the budget cuts concerned some entrepreneurs who attended the Alberta Innovates Inventures conference in Calgary this week.

Meagan Leslie, CEO of NanoTess, which makes a product that accelerates wound healing, is especially worried about how cuts could affect the help available for startups in their infancy. She said Alberta Innovates helped her company get going and secure product approval from Health Canada.

"If there is a lack of funding, there tends to be a lack of opportunity — whether that means programs, or just general amounts of startups that can be supported," Leslie said.

Economic conditions are prompting governments across Canada to pare back funding for innovation, creating another hurdle to which startups will have to adjust, according to William Fraser, contracts and regulatory administrator for tech company ENA Solution.

"It'll be more on the businesses themselves to prove themselves," Fraser said. "I don't want to say, 'trial by fire,' but they have to prove the legitimacy of their product, their service, their industry."

Mahon, the head of Alberta Innovates, said more details about the company's changes are expected once it releases new strategic and business plans, which could be in a couple of months.