Tobias Lütke, the chief executive officer of Canadian e-commerce giant Shopify, has launched a sharp critique against the federal Liberal government's practice of subsidizing foreign technology companies with taxpayer money, calling the approach "toxic" to Canada's domestic tech ecosystem.
The Controversial Nokia Subsidy
The Shopify CEO's comments came in response to Industry Minister Mélanie Joly's social media post celebrating Nokia's new Ottawa campus, which is receiving substantial government funding. Lütke argued that these subsidies create an uneven playing field by allowing foreign corporations to operate in Canada at lower costs than homegrown competitors.
The community note added to Joly's post revealed that Nokia's Ottawa project receives $72 million in public money for approximately 340 jobs, translating to a subsidy of about $200,000 per position. Lütke characterized this arrangement as effectively bribing foreign companies to create jobs in Canada while the "fruits of the subsidized labour will accrue to the wealth of other countries."
Canada's Actual Standing in Global Tech Race
Minister Joly's assertion that "Canada is leading the global tech race" faces significant challenges when examined against international metrics. According to the World Intellectual Property Organization's annual ranking of innovative economies, Canada places 17th among 139 economies studied, with particularly concerning performance in innovation outputs where it ranks 20th globally.
The data reveals deeper issues within Canada's innovation landscape. Between 2013 and 2023, research and development investments increased by only 2.5 percent, while international patent filings from Canadians actually decreased by 2.5 percent from 2014 to 2024.
Broader Implications for Canadian Tech
Venture capital trends further complicate the optimistic picture painted by government officials. Between 2020 and 2024, venture capital deals in Canadian tech decreased by 3.1 percent, with a dramatic 9.3 percent drop occurring between 2023 and 2024 alone.
The INSEAD business school's 2025 global talent competitiveness rankings place Canada 14th overall, but the country fails to earn top marks for retaining talent. This suggests Canada isn't creating sufficiently attractive conditions for both companies and skilled workers to stay long-term.
Notably, none of the world's ten largest innovation hubs identified by WIPO are located in Canada, with these centers concentrated in the United States, China, Japan, South Korea, and the United Kingdom instead.
The debate highlights growing tensions between the government's industrial strategy and the concerns of domestic tech leaders who argue that subsidizing foreign competitors ultimately harms Canadian innovation and economic sovereignty.
