Mississauga MP Navdeep Bains ended a five-year run as federal innovation minister Tuesday, after signalling he wouldn’t run in the next election. His exit prompted a small cabinet shuffle, with former foreign affairs minister François-Philippe Champagne, a former corporate lawyer, taking over the industry portfolio.
Bains has been this government’s only minister for industry and innovation, overseeing those portfolios from the time Prime Minister Justin Trudeau’s Liberals first formed government in late 2015. Innovation-economy executives and former top officials in Ottawa credit him with spearheading a new and more coherent industrial policy that extended beyond the ministry’s traditional auto and aerospace focus to growing sectors like software and cleantech. Champagne takes over from Bains in the midst of crucial regulatory work on data, privacy and competition, and assumes responsibility for a portfolio of expanded business-support programs—on which the government is set to rely for the post-pandemic recovery.
Navdeep Bains, who left cabinet on Tuesday after five years as the Liberal government’s innovation minister, helped establish a new industrial policy for the country and spearheaded programs widely used by innovation-economy firms, former officials and industry executives say. He leaves successor François-Phlippe Champagne with several major legislative and regulatory files to implement.
The Liberals’ 2015 campaign platform did not include many proposals for science, technology or scale-up policy; Bains’s original ministerial mandate letter—lists of cabinet members’ and the government’s major priorities—simply instructed him to “develop an innovation agenda,” citing support for clusters, tax measures and reform of the regional development agencies.
The Liberal government’s review and consolidation of existing programs and launch of new ones, like the Strategic Innovation Fund (SIF), moved Canada from a narrow focus on macroeconomic policy like tax breaks and on traditional sectors like auto manufacturing and aerospace to more direct support for firms, as well as the previously ignored intangibles of data and IP, said a former senior department official. “He was a leader in requesting and setting the elements in place of an industrial policy,” they said. (The Logic agreed not to name some former officials with which it spoke for this story because they were not authorized to speak publicly.)
In an exit interview with The Logic Tuesday, Bains compared the overhaul to predecessor C.D. Howe’s attempt to transform Canada’s agricultural economy into an industrial base in the 1940s and ‘50s. “Based on those experiences, my vision was, ‘How do we take our agricultural, industrial and service base and focus it on innovation?’” he said, citing projects like Ford’s government-backed plan to manufacture battery-powered passenger cars in Oakville, Ont. It’s part of the federal government’s “mines-to-mobility” strategy to encourage electric-vehicle development and production in Canada.
Former officials and advisors say Bains consulted widely before formulating Ottawa’s new industrial policy, and pushed his staff and the department to seek business perspectives before launching programs and policy, which they contrast with the previous Conservative government’s more selective approach. He was “very good at listening to the tech industry and trying to understand the issues,” said Boris Wertz, general partner of Vancouver-based VC firm Version One Ventures, calling him “a cheerleader for the industry.”
During the Liberals’ first mandate, Bains was also responsible for the six regional development agencies (RDAs). The units traditionally fund local businesses and community projects, and have previously been criticized as examples of “pork-barrel politics.” Under Bains, the RDAs were refocused on scale-up support, export promotion and technology adoption—“away from small-town gazebos to doing economic development,” said a source close to the minister.
ISED’s budget more than doubled while Bains was minister, from spending authorities of $1.46 billion in the 2015–2016 fiscal year to $3.15 billion in 2019–20. A longtime Liberal organizer and co-chair of the 2019 campaign, his relationships with Prime Minister Justin Trudeau and other cabinet members “made a huge difference” in securing “political commitment” for the department’s proposals, the former official said. Those ties also helped him push for initiatives that were outside his portfolio, but sought by innovation-economy firms, like the fast-track Global Skills Strategy immigration program widely used by tech companies.
While tech executives have praised Bains’s consultative approach and some of ISED’s expanded offerings like the Industrial Research Assistance Program, some have recently begun expressing concerns about its support for the innovation economy. In October, the Council of Canadian Innovators (CCI), a lobby group of fast-growing firms, called for the Liberal government to move forward with implementing national IP and data strategies and more focused funding. “Under [Bains’s] leadership there was much improved engagement with domestic tech firms as he tried to advocate for them internally, despite the PMO’s overriding objective to turn Canada into cheap labour for Silicon Valley,” said CCI chair Jim Balsillie, the former co-CEO of Research in Motion (now BlackBerry). But he expressed hope that Champagne “will bring in the necessary expertise that can help ISED craft a national prosperity strategy—a coherent set of initiatives to advance Canada’s competitiveness and security in the 21st-century economy driven by data and IP.”
The former department official acknowledged criticism of the speed of its work on such intangibles, but noted that the federal government didn’t have much modern policy in this area prior to Bains’s tenure. Ottawa did launch a national IP strategy in April 2018, including changes to the Patent Act to deter trolls and new advisory services. In November 2020, Bains introduced legislation to implement a new consumer privacy law that gives users the right to move and remove their personal information, and provides businesses more flexibility with how they use data. “Updating our data and digital and privacy laws is an important achievement,” said Bains, noting the rise in online learning, work and shopping during the pandemic has made digital security even more pressing.
It will fall to Champagne to shepherd that bill through Parliament, and to decide on changes to competition and foreign investment rules sought by watchdogs and industry. “Regulatory change, particularly with an independent Senate, was challenging,” said a former senior advisor to Bains, noting that his office did have some legislative achievements including a bill passed in May 2018 requiring publicly traded firms to report on representation among directors and executives; in December 2020, Bains launched a new $33-million corporate-diversity initiative to advance that push. The former advisor said the government needed to first establish its industrial policy before attempting legislative and regulatory change.
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As for Bains and his legacy, in December 2018, he told The Logic he’d consider the Liberals’ innovation agenda a success if it helped create “twenty Shopifys”—a fleet of internationally competitive companies that employ hundreds or thousands. Some executives question whether such firms can scale in Canada, citing higher personal taxes than the U.S. and lagging technology adoption. Reminded of his comments Tuesday, Bains cited the spate of recent tech-sector initial public offerings and the 42 firms on the 2020 Narwhal List of startups judged to be on track for billion-dollar valuations. “That ability to scale up companies that can compete globally, but create opportunities for Canadians here in Canada, [is] one of the major outcomes of our government’s [innovation plan],” he said, citing programs like the SIF and the supercluster initiative. “We’re starting to see that come to fruition.”