The federal government lacks a comprehensive plan for Canada’s innovation economy, according to executives at some of the country’s most prominent technology, cleantech, fintech and digital health companies.
“Unless we support the homegrown companies within the country, wealth will always be leaving our borders,” said Cory Janssen, CEO of Edmonton-based AI startup AltaML. He’s one of the signatories of an open letter to Prime Minister Justin Trudeau organized by the Council of Canadian Innovators (CCI), calling for more focused funding and programs for high-growth firms and strategies to help domestic companies commercialize data and IP.
As Ottawa spends billions on COVID-19 relief measures and post-pandemic recovery efforts, innovation-economy executives say it needs a clear, ambitious plan to replace the current “patchwork” of policies and programs. An open letter from the Council of Canadian Innovators to Prime Minister Justin Trudeau calls for the Liberal government to move forward with implementing national IP and data strategies, and to encourage commercialization domestically.
Since being elected in October 2015, the Liberal government has allocated billions to innovation programming, including its expanded flagship Strategic Innovation Fund (SIF) for commercialization and growth projects, and its supercluster initiative. It has also promised new policies and protections for data and patents. But the letter argues it hasn’t laid out a unified plan, calling the Liberal efforts a “patchwork” of “pilot programs and furtive policies.”
Released Tuesday by the CCI—a lobby group composed of CEOs from some of Canada’s fastest-growing tech firms and chaired by Jim Balsillie, former co-CEO of Research in Motion (now BlackBerry)— the letter is signed by 133 executives from companies including Wattpad, Coveo and ApplyBoard. Some signatories, like Imagia and Odaia, aren’t CCI members.
It calls for a post-pandemic plan that includes a strategy for increasing domestic prosperity with digital policy and programs that support innovative firms. “If you want to reap the benefits of spending on [COVID-19 measures and economic recovery], Canadian companies are going have to own that IP [and] data in order to seek rents to get that money back,” said CCI executive director Benjamin Bergen, noting that “intangible” assets like brand, data and IP are increasingly valuable. An April 2019 Public Policy Forum report estimated that such holdings accounted for 70 per cent of the value of the Toronto Stock Exchange compared to 91 per cent of the value of the S&P 500, up from 16 per cent in 1976.
The federal government launched a national IP strategy in April 2018, and has since made changes to the Patent Act to deter trolls and created a team of advisors to help firms set up their own IP plans. In August 2019, it selected the non-profit Innovation Asset Collective to launch a patent-collective pilot project, although it has not yet formally launched its programming. But Bergen said the government hasn’t linked the IP strategy to its spending through programs like the superclusters and the SIF.
In an op-ed earlier this month, the CEOs of the five superclusters said the initiative has had “clear IP principles in place from Day 1.” The SIF contribution agreements also contain IP requirements.
Ottawa has not fully or properly rolled out other policies it’s announced or on which it’s sought industry input, according to the letter. The CCI has been calling for a national data strategy for at least two years. In May 2019, Innovation Minister Navdeep Bains announced the digital charter, a set of high-level principles to inform future data rules. His mandate for this term includes implementing new online rights and creating a new regulator to oversee digital competition and consumer protection, but he has yet to introduce legislation.
Bergen also cited the recommendations of the Economic Strategy Tables, sector-specific groups of executives brought together to advise Bains, who delivered their reports in September 2018. While that year’s Fall Economic Statement addressed some regulatory, funding and tax suggestions, members have told The Logic that progress has since stalled. “They are behind the curve,” said Mike Andrade, CEO of Toronto-based Morgan Solar, a strategy table member who signed the CCI letter.
For example, Andrade’s cleantech table called for the government to focus business support programs on “high-potential” domestic firms in fields and technologies where Canada had existing strength. “There has been lots of Sturm und Drang about [doing] big things,” he said. “But the money ends up going to the oil and gas industry” or to other energy sources like nuclear. In October, Bains announced the SIF would give $100 million to the emission reduction-focused Clean Resource Innovation Network and $20 million to Terrestrial Energy for its small modular reactor.
Janssen also pointed to one of the program’s awards as an example of the federal government’s misplaced priorities. In January, the government gave Mastercard a $49-million subsidy from the SIF for a new $510-million Vancouver cybersecurity hub. That facility will compete with local firms for in-demand talent, Janssen said. “We’re actually supporting foreign companies, instead of betting on the incumbents within the country.” The government has argued the investments create jobs.
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The CCI letter similarly asks Trudeau to back Canadian “market-proven businesses,” and has previously called for federal pandemic business-support programs to focus on firms with a “track-record of R&D expenditure and IP generation.”
Janssen recalled the optimism in the early days of the Liberal government at its willingness to listen to industry, but said Ottawa’s follow-though has been lacking. Andrade similarly acknowledged that the government has been rhetorically supportive of the innovation economy, but said other countries like the U.S. and China have been faster to roll out policies and programs for their tech sectors. “The talk is good, but the actual execution in terms of dollars and cents really hasn’t been at the scale or at the pace needed,” he said.
Correction: An earlier version of this story misidentified some companies’ membership in the Council of Canadian Innovators. The story has been updated.