The committee studied how to promote and grow private sector investment in research and development. Appearing were Timothy Hannigan, an associate professor at the University of Ottawa; Ken Doyle, executive director of Tech-Access Canada; Edward McCauley, president and vice-chancellor of the University of Calgary; Cam Linke, chief executive officer of the Alberta Machine Intelligence Institute; and Kevin Outterson, founding executive director of CARB-X.
Timothy Hannigan argued that Canada excels at research but lacks the ecosystem infrastructure to capture value, and recommended three federal actions: create oversight of entrepreneurial ecosystem health across regions, invest in research excellence and commercialization infrastructure as mutually reinforcing activities, and establish a scale-up procurement fund of $500,000 to $5-million contracts to address the customer gap that imperils start-ups. He illustrated his points with the case of Alberta's AI ecosystem, where provincial policy shifts and a lack of local customers led to ecosystem stress and the loss of corporate R&D investment.
Ken Doyle said the real challenge is turning innovations into commercially viable products, and that small and medium-sized enterprises lack capacity, not ideas. He recommended treating the pan-Canadian network of technology access centres as innovation infrastructure with stable, scaled funding; creating simple SME-focused pull mechanisms like the interactive visits model; and supporting the enabling companies that will make value from AI, quantum and clean tech a reality. He noted that the college and community innovation program faces a 45% funding cut on April 1, 2026, and that Quebec's technology access centres receive only $100,000 per year compared to $350,000 elsewhere, a structural inequality he said should be corrected.
Edward McCauley highlighted the University of Calgary's success in creating more new companies than any other Canadian university over six years, citing examples such as steam-assisted gravity drainage technology and the CDL-Rockies accelerator. He recommended providing matching funds for government-university-industry partnerships, requiring industry recipients of federal funding to reinvest a portion into university research, creating dedicated funding for university innovation offices, directly supporting university seed funds like UCeed, and including university-based research capacity in the development of BOREALIS.
Cam Linke identified three structural barriers limiting private sector R&D in Canada: an economy dominated by large protected firms and many SMEs lacking capital, a funding architecture heavy on grants but light on risk capital, and the absence of foundational research infrastructure like computing resources. He highlighted three successes at AMII: early-stage support that de-risks projects for SMEs, availability of computing infrastructure through programs like the pan-Canadian AI compute environment, and hiring "bilingual" researchers who speak both a domain language and AI. He said the biggest challenge is still capital, and that making it easier for talent to stay and increasing AI literacy would help.
Kevin Outterson explained that the market for antibiotics is broken because new products are used sparingly, and recommended a complementary mix of push incentives like CARB-X grants and pull incentives such as a revenue guarantee pilot for Canada. He noted that Canada's current contribution to CARB-X is about $6 million per year, compared to $55 million from the U.S., and that out of 87 trainees from a leading McMaster lab, only seven still work in antimicrobial resistance. He said the "Overcoming Resistance" report recommends both push and pull incentives to restore the pipeline and improve Canadian access to new antibiotics, where Canada currently ranks last among G7 countries.
The committee also heard questions about the budget's impact on colleges and young researchers. Ken Doyle said the budget did not earmark new funding for the college sector and that the college and community innovation program faces a funding cut. Timothy Hannigan acknowledged that young researchers are being left behind financially and that Canada cannot leave them behind while attracting foreign talent. Cam Linke said he did not see a contradiction in attracting foreign researchers, as it grows overall research capacity, but agreed that continued investment in existing excellence is needed.
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