How will Navdeep Bains know if he’s done a good job as federal minister of innovation, science, and economic development? “Ten Shopifys wouldn’t be so bad,” Bains tells an audience of tech executives in an Ottawa hotel ballroom in October.
It would be no small feat. Shopify, just across the Rideau Canal from that stage, is the rare Canadian innovation breakout success, a globally-competitive, publicly-traded company with hundreds of millions in revenue and a 10-figure market cap.
The Liberals didn’t get elected on a promise to create 10 Shopifys. In fact, their platform had relatively little to say about technology and innovation. But since taking office, a growing number of entrepreneurs, executives and experts have been vying for the government to help with all manner of challenges—including improving access to capital and talent, making it easier to do business and yes, supporting scaling companies in the pursuit of more Shopifys. And it’s Bains they look to as the agent of change.
Industry leaders say that over the last three years, this government has listened to their concerns about money, skills and policy barriers, and made innovation a priority. Bains has been at the forefront of that change. “He’s become just a huge champion of tech and Canadian companies,” says Iain Klugman, CEO of Kitchener, Ont.-based Communitech, which houses startups and innovation labs for big firms.
The Logic spoke with more than two dozen entrepreneurs, business executives, experts, friends and colleagues to get a sense of how Canada’s innovation minister is faring after three years on the job. What they reveal is a man with a sense of mission and purpose, but constrained by a government that simply can’t change fast enough. Even if the minister does everything in his power to support Canada’s innovation economy, it may not be enough for Canadian companies to truly compete in the global innovation race.
Innovation Minister Navdeep Bains has a big goal: more billion-dollar companies. Conversations with more than two dozen industry leaders and colleagues reveal he’s left his mark on innovation policy by focusing on scale-ups and helping businesses collaborate. But, Bains’s influence on crucial issues like taxes, regulation and trade is limited because of the scope of his department. And, in an election year, he’ll need to sell moonshots like superclusters, which could take a decade to show results—if they ever do—to a skeptical public.
It’s a chilly Tuesday in mid-December, and it’s a good day: Navdeep Bains got to drop off his two daughters at school. With the House of Commons having risen for the winter break, the member of Parliament for Mississauga–Malton is back in his riding.
Bains’s father, Balwinder Singh Bains, arrived in Canada from a small village in the Indian state of Rajasthan in 1972. A chance meeting with some Italian Canadians at a public event landed him a job at a local cabinet shop, where he found a career. “My dad, I think, picked up more Italian than English in the first few years here in Canada,” says the minister during a wide-ranging phone conversation. Balwinder also picked up the nicknames “Vince” and “Vincenzo.” Bains says his father was “very supportive” of then-prime minister Pierre Elliott Trudeau and worked on Liberal Party campaigns. Navdeep Singh Bains, born in 1977, would help out, handing out flyers and putting up signs.
Liberal MP Ruby Sahota’s family and Bains’s have been friendly since soon after they both arrived in Canada, but she first really got to know him in high school, at a Sikh leadership summer camp in northern Ontario. Bains, who was in university, was one of the mentors. He was “somebody that all the rest of the parents would say, ‘Look at so-and-so’s son. He’s so great,’” says Sahota, who says Bains was known to be a good student, but also for his love of music and great sense of humour.
An undergraduate business degree and an MBA got Bains a job at automaker Ford. In 2004, just 26 years old, he ran for the Liberal nomination in the newly created riding of Mississauga–Brampton South and won. His victory, over three more experienced contenders, was covered as an upset. “He played low expectations,” recalls John Delacourt, vice-president at Ottawa government relations firm Ensight, and a former Liberal staffer. “He listened to folks from the community who had strong political organizational skills.”
The youngest member of the Liberal caucus, he was also the first of a new generation of South Asian MPs born in Canada in the era of Pierre Trudeau’s official embrace of multiculturalism. In what was still largely “a world of old white men,” Bains was “one of the trailblazers,” says Sahota.
The new MP soon became known as a formidable organizer in his own right. The government of Prime Minister Paul Martin—to whom Bains served as parliamentary secretary—fell in 2006. Bains played a key role in the three Liberal leadership races that followed, and led the change from a delegated convention process to a member vote. “Nobody works the ground harder,” says Rob Silver, whom Bains first met on Gerard Kennedy’s leadership campaign in 2006, along with Trudeau and Katie Telford, the prime minister’s chief-of-staff and Silver’s wife. Silver says the young MP was extremely organized, working to find a riding captain in each constituency and then getting that person to recruit others in turn.
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In the 2011 election, Bains lost his seat, part of a rout of the Liberals that left them in third place in the House. “He was pretty devastated immediately afterwards,” says Silver, recalling that in a phone call the week before the vote, the incumbent had seemed positive about his chances. “He was not expecting it. This was his career, being an MP.” Still, Silver says, there was no “lying on his couch all day bitter at the world.”
Instead, Bains taught MBA classes at Ryerson University’s Ted Rogers School of Management. “He just threw himself into the project,” says John Isbister, then-interim provost, noting that Bains brought in a series of guest speakers for his students, including his former boss, Martin.
Bains also had another project on the go. He was among a small group that gathered in Mont Tremblant, Que. in July 2012 to discuss the future of the Liberal Party, and whether Justin Trudeau should run for the leadership.
When Trudeau launched his bid in Montreal on Oct. 2, 2012, Bains was by his side, and two days later the former local MP assembled a crowd of a thousand-plus to welcome the future prime minister in Mississauga, the first Ontario stop of the campaign. Ian Davey, who was chief-of-staff to Michael Ignatieff in his first year leading the Liberals, says Bains’s ability to organize party members and his good reputation among riding associations makes him one of the first MPs a leadership campaign team wants backing their candidate.
Trudeau’s election win in 2015 included a Liberal sweep in Brampton and Mississauga, returning the former MP to the House from the new riding of Mississauga–Malton. It was a sharp reversal of fortunes in the area. In the half-decade before, younger members of the Sikh community had been leaning towards the NDP, and saw “Justin as their parents’ or their grandparents’ candidate,” according to Delacourt. But the Liberal leader’s efforts on the campaign trail and Bains’s organization “turned the tide on what was an emerging demographic rift.”
Sahota became the new MP for Brampton North; that summer camp she and Bains attended also counts among its alumni Jagmeet Singh, leader of the federal NDP, and his brother Gurratan Singh, an Ontario MPP, as well as a number of key organizers for various parties.
Some of the new MPs had worked on Bains’s earlier campaigns, including Raj Grewal, who left the Liberal caucus in December 2018 after reports he had accumulated substantial gambling debts and the RCMP was investigating him. Asked about Grewal, the minister says, “I’m obviously sad and shocked to hear what’s happened, and I hope he gets the treatment that he needs.”
Back in Ottawa, Bains was on most lists of likely cabinet ministers, as a key organizer in both Trudeau’s leadership win and the election victory. On Nov. 4, 2015, he was given charge of the freshly-renamed Innovation, Science and Economic Development Canada (ISED), the former Industry Canada. Silver thinks the returning MP’s approachability and ability to quickly understand issues are among the reasons he got the job, which requires keeping many people happy. “From the CEO of Bell Canada, to the CEO of a startup, to the regional caucus, it’s a very stakeholder-driven portfolio.”
Trudeau and his innovation minister aren’t “best friends, but they have a good relationship,” according to Silver. Delacourt sees “a strong working rapport” between the two, built over over a decade of conversations on community engagement. In both cases, “there’s a really sophisticated political intelligence there,” he says.
The Liberals’ 2015 platform had relatively little to say about tech and innovation. There was a promise of $200 million annually for incubators and accelerators, an extra $100 million a year for the Industrial Research Assistance Program and $300 million annually for clean technology. In the early days of the government, media reports focused on a potentially term-defining decision the innovation minister might soon have to make: whether or not to bail out Bombardier, the Quebec aerospace and rail manufacturer that was facing ballooning development costs for its C-Series line of aircraft.
But Bains and his office still made time for tech.
Chris Plunkett, Communitech’s vice-president of external relations, went up to Ottawa with CEO Klugman to meet with Elder Marques, then the minister’s chief-of-staff, soon after the election. “At the end of the half-hour he said, ‘I’m really sorry—I’ve gotta keep this to a half-hour, because we’ve got to go talk about Bombardier,'” says Plunkett, who recalls being pleasantly surprised that the minister’s office had made the effort at all.
Despite his time at business school, industry leaders say Bains had some learning to do about the challenges facing Canadian startups and scale-ups. But they praise his willingness to engage with the ecosystem—especially compared to the previous government. During the nine years Stephen Harper’s Conservatives held power, “the access to influence was stunningly low, frustratingly low,” says John Ruffolo, former CEO of OMERS Ventures and co-chair of the Council of Canadian Innovators (CCI), an industry group. This government “really started to open the doors, to welcome communication and interaction.”
In recounting those early consultations, Bains says innovation leaders urged the government to adopt an “ambitious agenda.” Staying on message, he explains that the Liberals’ “new smart industrial policy,” which was laid out in the 2017 budget, reflects a need for government to “play an active role” in innovation, like those in rival countries have done, such as the United Kingdom, United States, China, Israel and South Korea. “There’s an urgency to compete,” he says. “We recognize that we’re in a global innovation race.”
Innovation may not have been a key plank of the Liberals’ election platform, but it’s become a major talking point for their government. “I think a lot of the focus has been since [taking office] on ISED,” says Greg Fergus, MP for Hull–Aylmer and parliamentary secretary to Bains from December 2015 to January 2017.
Under Bains, headcount in the department has grown eight and a half per cent, and the minister has been given charge of the regional development agencies, which distribute key funding to politically important and economically troubled parts of the country.
Critics argue that companies need customers, not just grants. In a report for the independent think tank Institute for Research on Public Policy, Peter Nicholson, a former top civil servant and corporate executive, argued that the federal government needed to focus more on buying from innovative Canadian companies, writing regulations that promote more competition between businesses and creating incentives for industry and consumers to use new technology.
Sam Sebastian, then-managing director of Google Canada and now CEO of Pelmorex, says he was involved in “probably 10 roundtables and consultations” with Bains, Trudeau or then-minister of Canadian Heritage Mélanie Joly over the first year and a half of the government. Topics of conversation included immigration, public transit between Toronto and Kitchener-Waterloo, Ont. and some early discussion of artificial intelligence. “After the third or fourth one, I got a little tired,” says Sebastian, although he adds that they did show progress in their understanding of the issues. “I then wanted just to see some action.”
The government did take swift action on at least one important file: immigration. Tech firms had long complained about the length and complexity of the process in hiring foreign workers. The CCI, in particular, had been pushing the issue. In November 2016, the government announced the Global Skills Strategy (GSS), which promised fast processing for applications, and a new pilot project focused on filling pressing tech skills gaps.
Immigration is not in the innovation minister’s portfolio, but tech leaders say he championed the changes with a sense of real urgency. A member of his staff worked closely with colleagues in the immigration and labour ministers’ offices to convey what industry was saying and to ensure progress was being made. Bains says the sell to his ministerial counterparts was that the program is “sound economic policy. This is really leveraging our brand and really leveraging our policy to create more meaningful opportunities for Canadians.”
Bains frequently mentions the GSS in his public appearances, often dropping the statistic that every visa issued creates 10 Canadian jobs (companies have indeed committed to adding more than 10 jobs for every worker they bring in under the pilot program, but the actual number of positions created is unknown). But the tech-focused pilot program under the GSS is also an example of how innovation-focused policy changes take a long time to create real impact. The government can speed up the process to bring skilled foreign workers to Canada, but companies “still have to adapt our processes to be able to do so,” says Sachin Aggarwal, CEO of Think Research, a Toronto-based healthcare applications firm. For example, resumes, skills testing and other hiring tools vary between countries. As of Oct. 31, 2018, 800 employers have received approval for 3,100 positions using the pilot program, according to Employment and Social Development Canada—a small but promising start.
The minister is also keen to talk up the talent that’s already here, rhyming off Canada’s ranking on education indexes—fifth in the OECD on reading, science and math among 15-year-olds and top by percentage of the population with a post-secondary degree—and on highlighting the co-op programs and internships his department has funded. And, he says the government is planning long-term “by investing in issues like coding, for example.” The CanCode program committed $50 million to 21 organizations—mostly non-profits—to provide technology and science education to students. “One million kids will learn how to code by next year,” says Bains. The initiative is particularly special to him because of his two daughters, who are 11 and eight years old.
Becoming a father changed the young MP, says Matthew Rowe, who ran his office on the Hill between 2007 and 2011. “In the beginning, you’re just full-tilt; you want to be giving every spare moment to the job.” But once his daughters were born, balance became more important. “When he was in Ottawa, he was on-on,” recalls Rowe, now head of external relations at the Prince’s Charities Canada. But weekends were carved out for home. “Rarely, when he was in his family time—unless it was very urgent—would you hear from him.”
Mario Silva, a former Liberal MP also first elected in 2004 and defeated in 2011, recalls that his former colleague frequently made time to call his parents, or his wife Brahamjot, who works for the Ontario provincial government. In those days, Silva, Bains, Mark Holland and Omar Alghabra “came as a pack,” all living at the Lac-Leamy hotel in Gatineau, Que., across the Ottawa River, eating breakfast and going to the gym together. Bains is “a very good, astute observer,” says Silva, and “a very, very good listener.”
Business leaders say the minister has done a lot of listening in the last three years. During the recent National Data and Digital Consultations, the Business Council of Canada, which represents the CEOs of some of the country’s biggest companies, proposed a meeting between the minister and executives from member firms. “We had so many senior officials who wanted to come, I thought we might have to beat them away with a stick so we weren’t outnumbered,” jokes Cam Vidler, the Business Council’s vice-president for industry and innovation.
Those who’ve dealt with the minister describe him as very personable and down-to-earth, many referring to him as “Nav.” Greg MacEachern, senior vice-president of government relations at Proof Strategies, says that when Bains spoke at eBay’s Entrepreneur of the Year Awards, the assembled merchants “walked away with a sense of a cabinet minister that was very interested in what they did,” and how the government could better help them.
There’s a dinner or reception for MPs to go to almost every night in Ottawa, but Bains—who doesn’t drink—is usually at the gym, instead, Silver says. His lunch most days comes from the healthy wrap joint Freshii, according to staff—an on-brand choice, given the Canadian chain’s ambitious global expansion plans.
The minister and his department are the most lobbied in Ottawa—2,346 monthly communication reports have been filed with the Office of the Lobbying Commissioner detailing contact with ISED officials in 2018 alone, almost twice the number of Global Affairs Canada, the next most-contacted department.
One area where tech has sought government help is access to capital. The severe cash crunch that Canadian startups faced in the last decade had improved considerably by the time the Liberals took office. At the industry’s urging, Bains shifted focus to scale-up funding, according to Ruffolo. “That, in my view, would be his biggest legacy,” he says.
The 2017 federal budget overhauled the government’s long-standing industrial support programs, combining existing aerospace and auto schemes and adding $100 million in new money to create the $1.26-billion Strategic Innovation Fund (SIF). This year’s Fall Economic Statement added another $800 million. However, the SIF has been slow to roll out, according to two industry executives, who spoke on background. Vancouver’s Stemcell Technologies was the first non-auto, non-aerospace firm to receive funding, getting $22.5 million in April, while Kitchener-based wearables firm North got $24 million in November.
Programs like the SIF and the Venture Capital Catalyst Initiative—a $400 million pool that will be distributed between venture capital funds and funds-of-funds, and a follow-up to a similar program under the Conservatives—take time to deliver returns. “The benefits aren’t seen in year one,” says Aggarwal, but in “year five, 10 or 25.”
That may be true for many of the policies, programs and strategies that ISED has rolled out under Bains. And the long-term focus of the work is one reason why he may still be in the same job, one of only 14 cabinet members who have yet to be shuffled. Silver says if the prime minister leaves a minister in a portfolio for a full four-year term, it’s a sign of good performance, the need to maintain continuity in the file, or both. The deputy minister at ISED, John Knubley, is one of only four deputy ministers running a department who has also remained in his role throughout this government’s time in office.
Ruffolo, for one, wants the minister to stick around. “The innovation sector’s pretty happy with him,” he says. “And I hope to hell he doesn’t change a file, because getting somebody up to speed would be brutal.”
While he’s a fan of his hometown Toronto Raptors, Bains’s other rooting interests include basketball icon LeBron James and New England Patriots quarterback Tom Brady, two athletes who’ve amassed very full trophy cabinets. “I joke about him being a bit of a front-runner sports fan,” says Silver. But outside the arena, the minister insists the government’s not in the habit of picking winners. “It’s not government determining which industries or sectors will succeed,” he says. Instead, he says the government is “promoting collaboration [and] breaking down silos.”
Take the superclusters, one of the most high-profile initiatives of the minister’s tenure. On Feb. 15, 2018, Bains announced the five successful bids for the program, which are splitting $950 million in federal funding: digital technology, proteins, advanced manufacturing, artificial intelligence and oceans.
The groups of big business, startups and academia behind the superclusters must raise matching money, and are supposed to help each other grow and innovate. Bains says industry sorted out for itself “where the growth opportunities are, which sectors wanted to get involved, which companies wanted to play an active role.”
Skeptics note how politically convenient it is that the five winners chosen from among 50 entrants are geographically distributed across Canada’s major regions. Bains made the announcement the week after Trudeau had visited Silicon Valley, meeting with the CEOs of Amazon and Salesforce, both of which have since announced significant expansions of their Canadian operations. Scheduling a foreign investment-courting trip and a big domestic innovation funding announcement back-to-back sends a message that “this is something that they’re trying to do in tandem,” says MacEachern.
If some of the innovation minister’s efforts will take years to pay off, others risk being undercut by decisions made by other parts of the government.
Tech leaders say the intellectual property (IP) provisions of the United States-Mexico-Canada Agreement (USMCA) and the Comprehensive and Progressive Trans-Pacific Partnership allow large patent-holding countries to stifle Canadian companies as they try to innovate and expand abroad. The USMCA will entrench the American IP advantage and hurt “Canada’s plans to build a 21st-century economy,” said Jim Balsillie, the other co-chair of the CCI and former co-CEO of Research in Motion (now BlackBerry), when the deal was announced.
Bains says the government recognizes that the country’s IP vault “is lagging” compared to the U.S. and other countries. “How do we get ahead?” he asks. “We put forward meaningful policies and programs and work with industry to generate more IP, so then we benefit from these trade agreements that we’ve signed.”
He points to the country’s first national Intellectual Property Strategy, which encourages small businesses to come up with their own policies and clamps down on patent trolls, as an example of such policy. And he says the contribution agreements between the government and the superclusters also encourage the generation and sharing of IP in Canada.
Industry sources say Bains did conduct outreach to innovation leaders during the USMCA talks, to gauge the consequences IP provisions might have. But the innovation minister does not negotiate trade deals.
Bains also doesn’t control regulation or taxation, both of which ranked higher than government support programs in a 2017 survey about the factors that CEOs consider when making decisions conducted by the BCC. The minister “has been a real champion of innovation and a real champion of business, too,” says Vidler, and Bains has raised industry’s concerns with other departments and ministers. “But ultimately, if the government’s not able to align its tax [and] regulatory policy with this innovation agenda, we’re just not going to get there.”
On regulatory and ease-of-doing-business questions, “what we can do is lead by example and continue to work with other departments,” says Bains, citing the Innovate Canada website, a portal on which companies can access information about support schemes.
None of the industry leaders blame the innovation minister for the things he can’t control. But fast-growing startups still struggle with the slow pace of change in government. “On intention—especially compared to what’s happening elsewhere in the world—I give it a 10 out of 10,” says Michael Litt, CEO of Vidyard, a Kitchener-based enterprise video platform, and a member of the government’s Digital Industries Economic Strategy Table. “On actual execution over the period, somewhere between zero and 10, depending on the day.”
It was only November 26, but General Motors still managed to ruin Christmas. The multinational giant announced its Oshawa, Ont. plant would cease operations the following year, one of a series of closures as the company shifts its focus to electric and autonomous vehicles. The pivot to the cars of the future will cost 2,500 Canadian auto workers their jobs.
According to the Neptis Foundation, a think tank, the stretch of Ontario between Niagara and Peterborough lost about 130,000 manufacturing jobs between 2006 and 2016. About the same number of new ones were created in knowledge-economy sectors like finance, business services, software and higher education. It’s unlikely that many of those people were ones who moved from the first type of work to the second.
Bains may have a new title, but he’s still minister of industry, and the public can more easily understand Bombardier bailouts and General Motors plant closures than an artificial intelligence scale-up. While unemployment is at record lows and GDP growth is among the fastest among peer countries, “Canadians are actually quite anxious, even pessimistic, about economic performance in the next year,” says Shachi Kurl, executive director of the Angus Reid Institute. In a year where trade, China, pipelines and the border all dominated the headlines, innovation is not something “that Canadians leap out of bed thinking about in the morning.”
When the Liberals go door-knocking, the thing that comes up most often is the Canada Child Benefit, Telford told Maclean’s Paul Wells earlier this year. It’s Politics 101—a pocketbook tax rebate for families. Superclusters, it is suggested to Bains during his interview with The Logic, probably come up less often. He laughs, then insists voters do indeed talk about initiatives like CanCode, and the high-speed internet his department is funding in rural and remote communities. People “get the fact that our government is focusing on the jobs of today and the jobs of tomorrow,” he says. “And they’re less fussed about the name of the program.”
That theory will soon be tested. The 2019 federal election is already unofficially underway. And, unlike last time, the Liberals now have a lot of big-money innovation decisions to explain.
Bains was the first Liberal candidate nominated back in June. He stood on stage with Trudeau, both with their sleeves rolled up—the prime minister in a red tie, the innovation minister in a red turban. In his speech, Bains promised that the economy would be the party’s top priority. He practices for these kinds of occasions. Before big speeches or important question periods, Rowe says, Bains’s team would “psyche him up,” and go over the lines, practicing where to pause and what to emphasize. “When you’re up there and the lights are all on, it can be a very high-pressure setting,” Rowe says. “He was always at his best when he’d really worked on not just the content, but the delivery.”
Ministers stay closer to home in an election year. Fortunately for the MP from Mississauga–Malton, his constituents are always just a flight away—Pearson International Airport makes up a big chunk of the riding. But once he’s there, Bains will have to figure out how to sell a bunch of moonshot projects and jargon-filled strategies to voters far more concerned about the cost of housing, groceries and gas.
For now, the man some in industry call Canada’s “champion of innovation” is focused on turning more Canadian companies into global innovation champions. “What does success look like?” he asks again during the mid-December interview. The answer, this time, is “twenty Shopifys.”