by Curtis O’Nyon
On June 14, federal ministers Navdeep Singh Bains (Innovation, Science and Economic Development), Kirsty Duncan (Science) and Bardish Chagger (Small Business and Tourism) unveiled a plan for Canada’s Innovation Agenda at a press conference in Ottawa.
This announcement, like so many others all governments make, was general in nature. It promised consultations and pointed in a direction this government would like to go, including six specific areas of focus. Few details were revealed. However, I assume these will flow from the consultation process and be front and centre in next year’s budget–already dubbed the “Innovation Budget” in government circles.
What the announcement didn’t lack was the call for Canada to become a “world leader” in innovation. In order to reach this lofty goal, the government will need to tear down its current program system and do away with the current “think small” attitude prevalent within the bureaucracy.
Traditionally, the Canadian government has had a number of programs such as Sustainable Development Technology Canada and others that fund startup innovation. It has done a decent job at this level of seed funding. Where Canada has faltered is in assisting these new innovative companies in making the jump to commercialization.
In contrast, even with massive venture capital companies willing to invest in high-risk tech companies, government assistance in countries like the United States is plentiful. For instance, Tesla, the world leader in electric cars, received at least US $465 million in government support through grants and loans. This kind of investment from the private and public sectors does not happen in Canada. While venture capital exists, it is scarce and investors are more risk averse than in the US. As for the government, it has not been particularly forthcoming with fiscal mechanisms designed to assist these companies in making the commercial jump.
What remains to be seen is whether the Canadian government will actually invest in the commercial success of innovative homegrown companies, particularly in the areas of green tech, clean tech and biotech. Such investment could take the form of direct cash infusion (in some cases in return for a stake in the company), direct lending or loan guarantees so these companies can access traditional funding sources. Such commitment will not come cheap, but it is perhaps the only way Canada can grow a successful tech sector that competes with the rest of the world.
Perhaps the answer is a well-funded innovation commercialization bank, with a sole mandate to help qualified companies achieve commercialization in Canada.
Regardless of the mechanism, the time is now to make this commitment. If the government doesn’t, it will just be the same old politics where little bits of money are spread around, politicians talk about being world leaders and they take photo-ops at tech startups. Meanwhile, the best and most innovative companies and the talent that creates them will flee to jurisdictions that will help them reach their potential.
Curtis O’Nyon is Wazuku’s Ottawa-based Senior Associate. He is a well-respected national strategist with experience working with all levels of government across Canada.