OTTAWA — The federal government is promising targeted support to some of the country’s most prominent scale-ups, under a program designed to create global commercial juggernauts and anchor them in the Canadian economy.

The eight companies enrolled in the new Global Hypergrowth Project (GHP) will receive assistance to hire, increase exports, bid for public contracts and meet regulatory requirements. “We want to build more legacy Canadian companies that are very comfortable being anchored here, but also have a global presence,” said Small Business Minister Mary Ng, who announced the pilot program’s first cohort of firms in Toronto on Monday. 

Blainville, Que.-based Duchesnay Pharmaceutical Group, one of the selected firms, is feeling the significant demand for its pregnancy anti-nausea drug. “It’s really booming worldwide,” said president Éric Gervais, who is looking to the GHP for help to manage and maintain that growth. 

Ottawa isn’t directly giving money to the companies enrolled in the program. “I’m not giving them funding,” said Ng. “I am using these companies to help me rewire our internal government processes so we can be better partners creating better conditions for Canadian private sector-growth.”

The companies are assigned an account executive—an experienced professional who has worked in both the private and public sectors. Duchesnay’s has already guided the firm on how to approach lenders and structure financing. The company currently sells in about 50 countries the gynecological, obstetric and rare-disease drugs it develops and manufactures, but it’s seeking more markets. Gervais hopes Canadian embassies can facilitate introductions to potential local partners in regions like Africa, where the firm lacks its own network.

Toronto-based Ada, another GHP enrollee, already has customers in 80 countries for its AI customer-service platform, with a third of revenues earned outside North America, said CEO Mike Murchison. It’s looking for Ottawa’s help to enter more challenging markets like Japan. “There’s such an opportunity for Canada’s AI brand to really flourish internationally now,” he said, noting the government can play a key promotional role.

Ada is also seeking GHP assistance with a market closer to home: the Canadian public sector. The firm’s AI tools could help departments reduce wait times and personalize service for citizens, according to Murchison. But “it’s tough to sell to the government,” he said, citing slow and cumbersome contracting systems that can favour foreign incumbents. Startups have long raised such concerns. 

While companies and their account executives are still working out the specifics, Murchison is expecting a more streamlined procurement process. If Ottawa successfully integrates the firm’s technology, “we can in turn take that to other governments around the world,” he said.

In addition to Ada, the program has enrolled two other software scale-ups that have each raised hundreds of millions in venture capital. Montreal-based AlayaCare and Burnaby, B.C.-based Clio make software for home health providers and law practices, respectively. 

The GHP’s other health-care-focused participants are Montreal’s CellCarta Biosciences, a contract research lab, and Vancouver’s Clarius Mobile Health, a medical-device firm. Mississauga, Ont.-headquartered Vive Crop Protection, meanwhile, develops and sells novel fertilizers and pesticides. Montreal-headquartered Lightspeed Commerce—a New York Stock Exchange-traded firm that sells its point-of-sale technology in more than 100 countries—rounds out the group.

While GHP enrollment doesn’t come with a cheque, account executives will help enrolled firms access and navigate other federal financing programs. “This is already a maze for me,” said Gervais, noting his 120-person firm is unfamiliar with all the support offerings that may be available to it. 

To help with staffing, the advisors will connect companies to other departments that manage immigration and training programs, and help them navigate regulatory requirements.

Senior officials at Innovation, Science & Economic Development Canada (ISED) are working with counterparts across the government to ensure buy-in for the program, Ng said.

Ottawa hopes to turn Duchesnay into a mainstay of the economy, but the country almost lost the firm. At the start of COVID-19 pandemic, sales plummeted, and Duchesnay’s controlling family put it up for sale. Companies from India and other countries with lower pharma production costs showed interest, but those buyers would have moved R&D and manufacturing out of Canada, said Gervais. Instead, he led a management buyout in November 2021 funded by the federal Business Development Bank of Canada. “The bigger we become, and the more wealth [and] jobs we create, the greater the chance that this will become an anchor company and it will stay in Canada,” said Gervais

Monday’s announcement caps a long incubation for the GHP. Innovation-economy executives and the Liberal government’s own advisors have long urged policymakers to do more to prevent promising startups from exiting early, with some recommending targeted support for Canadian scale-ups.

Ng unveiled the GHP last August, appointing a panel of nine founders and financiers to review applications and pick companies to participate. To be eligible, firms needed to have made $30 million in revenue over the previous 12 months, and grown at a compound annual rate of 30 per cent over three years.

They also must be headquartered in and have at least three-fifths of their workforce in the country. “All of the selected companies have indicated they intend to maintain and grow their presence in Canada, including creating jobs and intellectual property,” said Shanti Cosentino, Ng’s press secretary, noting they’ve also committed to EDIA and ESG strategies. But the program does not include penalties or clawbacks if firms lay off workers or sell to a foreign buyer.

Program staff met with 102 firms and received 86 applications over the five-week intake window, according to a deck prepared for Ng’s office in October 2022 by ISED officials, which The Logic obtained via access-to-information request. Almost all the companies that applied cited help accessing government programs as a key need, while international expansion and talent acquisition also featured frequently; more than half listed navigating regulations and procurement.

Cosentino said the government estimates the GHP could run up to two years, though there’s no fixed end date when participating firms will stop receiving services. Ottawa will evaluate the results for the first cohort before deciding whether to enroll a second. “If it works well, like this could be a template for the government [and] a competitive advantage for Canadian companies,” said Murchison.

This story has been updated with comment from Small Business Minister Mary Ng and Ada CEO Mike Murchison.