Ottawa announces new Canada Innovation Corp. aimed at commercializing research - The Globe and Mail

Promising that it “will not be just another funding agency,” the federal government is launching a new Crown corporation to help businesses commercialize their research and protect their intellectual property.

The Canada Innovation Corp. (CIC) is a renamed version of a plan first announced in the 2022 budget, where it was called the Canadian Innovation and Investment Agency. The budget said it would have $1-billion in funding over five years, but on Thursday Ottawa announced it would allocate $2.6-billion to the new corporation over four years and promised annual funding thereafter.

The higher funding level is largely due to the fact that the more than 75-year-old Industrial Research Assistance Program will move from the National Research Council to become part of the new corporation.

The CIC is one of two new government bodies promised in the 2022 budget to encourage Canadian companies to scale up their operations. The other is the Canada Growth Fund, a $15-billion plan focused on commercializing and deploying technologies that reduce greenhouse gas emissions.

With the U.S. government planning to spend hundreds of billions of dollars on new programs aimed at supporting domestic companies and reducing economic reliance on China, Canada is under pressure to respond quickly to the shifting focus of its largest trading partner.

Deputy Prime Minister and Finance Minister Chrystia Freeland and Innovation, Science and Industry Minister François-Philippe Champagne state in a foreword to a blueprint document released Thursday that Canadian businesses do not invest in research and development at the same level as their international counterparts.

“Too often, this means new opportunities for growth move elsewhere, and it has led, for decades, to economic productivity that lags many of our global peers,” the ministers write.

They present the CIC as “a new approach” that will address this challenge.

“The CIC will not be just another funding agency. It will be an outcome-driven organization with a clear and focused mandate to help Canadian businesses across all sectors and regions become more innovative and productive.”

The government plans to have the corporation up and running this year, with a board and CEO in place by the spring. Legislation to formally create the corporation will be introduced later this year.

The CIC is the latest in a long line of attempts by the federal government to spur innovation and boost productivity.

A recent Globe and Mail series reported that federal innovation policies are often seen as too politically driven and bureaucratic.

For instance, the 2017 budget announcement of a “supercluster” strategy targeting key sectors of the economy has fallen short of expectations. That same year, the government created the Canada Infrastructure Bank, which promised to attract major private capital from large institutional investors. The bank struggled with start-up delays and leadership changes in its initial years and has only recently started to deliver results in the form of project approvals.

The CIC will look to international equivalents for guidance, including the Israel Innovation Authority and Business Finland.

The blueprint released Thursday says the CIC will not only focus on high-technology firms; it will design programs and services for businesses operating in established commodity-based and manufacturing industries “to turn inventions into innovations.”

Former BlackBerry co-chief executive Jim Balsillie, who has long urged Ottawa to improve its approach to commercializing and protecting intellectual property (IP), said it appears the new corporation will repeat past mistakes.

“Currently it’s simply more superclusters, which was the most poorly designed funding program to date,” he told The Globe. He said the blueprint needs a major redesign before the corporation is launched.

“Otherwise it’s just another spray-and-pray granting program,” he said. “They keep confusing IP generation and IP protection, and there’s no mention of the data-driven economy.”

Dan Breznitz, co-director of the Innovation Policy Lab at the University of Toronto’s Munk School of Global Affairs and Public Policy, said the corporation can make a positive contribution if it is led by the right people.

“I cannot emphasize enough how important it is that the right CEO and the right chair of the board are selected,” said Dr. Breznitz, who was a visiting economist with the Finance Department for a 15-month period that ended in December.

He said the potential is there for the corporation to make quick funding decisions unlike any other government body. He urged the private sector to petition the government to ensure that leaders with strong business acumen are selected for its leadership positions.

“They have to come from business and they cannot be the usual suspects,” he said, warning that otherwise the government risks creating something that is “dead in the water.”

Council of Canadian Innovators president Benjamin Bergen also said leadership selection will be key in determining whether the new corporation will be a success.

He said the CIC could be an “exciting” new body that helps businesses scale up.

“What the document does lay out is that those who are at the head of it will have a lot of freedom to determine its strategies and its approaches. And that is a bit of a departure from this government,” he said. “If we find the right people, I think it will be a step in the right direction and potentially a success. But if we don’t, then I think it’ll be more of the same.”

Robert Asselin, senior vice-president of the Business Council of Canada, said the plan appears to be a positive attempt to link research and development with industry.

“It’s very preliminary,” he said. “I think it has potential.”

Michele Lajeunesse, senior vice-president of government relations and policy for Technation, which represents Canadian and international technology companies, said creating a new agency is not likely the best approach to supporting innovation.

“Technation questions whether allocating over a billion dollars over four years to yet another new agency or program will yield the desired outcome it is mandated to deliver,” she said in a statement, suggesting the money could be better spent by expanding business access to broadband internet.

With files from Sean Silcoff

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Ottawa announces new Canada Innovation Corp. aimed at commercializing research - The Globe and Mail
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