The committee met to study how to promote and grow private sector investment in research and development in Canada. Witnesses included Jesse Vincent-Herscovici (Chief Executive Officer, Axelys), Gay Yuyitung (Executive Director, McMaster Industry Liaison Office, McMaster University), Sarah Watts-Rynard (Chief Executive Officer, Polytechnics Canada), John Hepburn (Dean Emeritus, University of British Columbia, as an individual), Jim Balsillie (Founder and Chair, Centre for International Governance Innovation), and Julie Konzuk (Senior Principal, Geosyntec Consultants, Inc.).
Jesse Vincent-Herscovici described Axelys as Quebec's integrated model to transform public research into market innovations, noting that Canada produces 3% of global scientific publications but only one patent per thousand publications, compared to 2.5 in the U.S. and four in South Korea. He recommended that the federal government implement an IP action plan aligned with provincial programs, fund technological maturation, boost domestic private investment through tax incentives, and create incentives for researchers to unlock research value, arguing that structural fragmentation is the core issue.
Gay Yuyitung highlighted McMaster's success in commercialization, including over 500 partnered projects annually and start-ups creating over 1,000 jobs, but identified three gaps: a lack of experienced executives to scale ventures, limited risk capital forcing start-ups abroad, and underfunded partnership and tech transfer offices. She recommended a federal attraction strategy for executives, a non-dilutive funding program similar to the U.S. SBIR, and dedicated federal funding for commercialization infrastructure tied to performance metrics.
Sarah Watts-Rynard emphasized that polytechnics serve as innovation intermediaries, with business partners contributing $72 for every $100 in federal research investment, compared to less than $4 at elite universities. She argued that Canada undervalues applied research, investing less than 3% of federal resources in polytechnics and colleges, and recommended enriching programs that enable private sector R and D, noting that 19,000 SMEs sought post-secondary support in 2023.
John Hepburn attributed Canada's poor industrial innovation to the structure of its economy, dominated by small and medium-sized enterprises that struggle to scale, and to the fragmentation of IP management across universities. He recommended better systems for IP protection, support for companies to scale rather than just start, and matching programs to create venture capital, noting that biotech firms often sell IP to foreign multinationals to afford clinical trials.
Jim Balsillie argued that Canada missed the shift to a knowledge-based economy where intangible assets constitute over 90% of S&P 500 value, and that the federal government's $7.5 billion annual research spending lacks a framework to own and commercialize IP. He recommended embedding domestic value-capture provisions into granting councils, establishing a sovereign innovation asset bank, and building institutional capacity, disagreeing with the Quebec model's 59 tech transfer offices as too fragmented.
Julie Konzuk described Geosyntec's reliance on client or government funding for R and D, noting that NSERC alliance grants are useful for early-stage work but not for scaling, and that U.S. Department of Defense programs have been effective but are now harder to access. She recommended allocating increased defence spending to support innovation, expanding NSERC to fund commercialization-focused research consortiums, and reducing interprovincial barriers to commercialization through streamlined permitting and federal approval mechanisms.
The committee debated and adopted a motion to undertake a study of no fewer than four meetings on the federal government's approach to artificial intelligence, inviting the Minister of Artificial Intelligence and Digital Innovation, federal officials, and industry representatives and experts, with an amendment to include the relationship between AI and innovation and scientific research.
AI-generated summary — may contain errors; verify against the official evidence.