Special Report

Federal Budget 2022: What’s in it for the innovation economy

With their new budget, the federal Liberals pledge to tackle Canada’s “insidious” problem of flagging economic productivity, promising to overhaul innovation spending as last year’s pandemic rebound gives way to worries of slowing GDP growth. 

Canada has a highly educated, growing population and excellent research capacity, but its long-term growth prospects are poor because we aren’t good at turning good ideas into products, services and better business practices, the government believes. We’re short of money to deal with climate change and to invest in our future, and the need to change that quickly underlies much of the budget.

There are some big-ticket spending plans that Liberals hope will right the ship: a $15-billion Canada Growth Fund and new innovation agency; a long-awaited 50 per cent tax credit on heavy industrial carbon-capture projects, a $4-billion “accelerator” to increase housing supply, $6.1 billion over five years to the Department of National Defence and a $5.3-billion program to help dental-care affordability.

Buried further in the 280-plus-page document are also big changes central to the innovation economy, from cleantech and critical minerals, to startups and scientific research.

In all, the $425.4-billion in projected pre-debt expenses aims to “firmly pivot” the country from a COVID-19 response that came at a “significant cost,” hoping the outlay will reassure a nation where business confidence is wavering.

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