CCI’s 2025 Federal Pre-Budget Recommendations

By: ‍Daniel Perry, CCI Director of Federal Affairs

Canada’s productivity has flatlined, our economic complexity ranking has fallen from 22nd to 41st in the world, and the OECD projects Canada will be the slowest-growing advanced economy through 2060. Per capita GDP is shrinking, and decades of outdated policy have left Canada without a modern strategy to compete in the knowledge-based economy.

Canada’s economy is not facing a short-term slowdown; it is in a structural competitiveness crisis.

Budget 2025 must be the turning point.
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Innovation as the Operating Framework of a Modern Economy

Innovation is not an isolated policy file. It is the operating framework of a modern economy. It underpins our ability to grow wages, create jobs, deliver better health care, meet defence obligations, and maintain economic sovereignty.

Other countries are moving fast. The U.S., South Korea, the EU, and China are reshoring industries, embedding innovation into defence and procurement, and aggressively competing for talent and capital. Canada has no comparable national innovation strategy.

CCI’s 2025 pre-budget submission provides a roadmap for the government to shift resources toward productivity-enhancing investments, scale high-potential Canadian firms, embed sovereign digital and industrial capacity, and modernize federal systems to align with the realities of the 21st century economy.
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Key Recommendations

1. Establish BOREALIS to Drive Canadian Technological Sovereignty

The Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS) is a promising start, but must be paired with clear commercialization requirements and value-added strategies to ensure Canadian taxpayers see economic returns. CCI recommends BOREALIS be governed with private sector leadership, empowered to co-develop technologies with Canadian firms, and mandated to deliver economic and security spillovers for Canada and not foreign multinationals.

2. Modernize SR&ED and Launch an Innovation Box

Canada spends $4 billion annually on SR&ED but delivers weak commercialization outcomes. Budget 2025 must finalize the long-promised SR&ED reform and introduce an “Innovation Box” tax regime to encourage the retention, licensing, and commercialization of Canadian-developed IP.

3. Streamline Crown Capital Deployment (BDC and EDC)

BDC and EDC must better coordinate and increase their risk tolerance to support early-stage, high-growth firms. CCI recommends aligning mandates with market needs, increasing fund flexibility, and eliminating counterproductive requirements such as personal guarantees.

4. Build Sovereign AI & Cloud Infrastructure

Canada needs a digital sovereignty strategy that prioritizes Canadian-owned secure compute, sovereign cloud, and AI infrastructure. Budget 2025 should establish procurement preferences for trusted domestic providers, embed sovereignty protections in trade agreements, and invest in domestic supercomputing capacity.

5. Align NATO Defence Spending with Domestic Industrial Capacity

Canada’s NATO spending commitments create a major opportunity to grow our dual-use technology base. CCI recommends prioritizing Canadian firms in defence procurement, setting clear targets for domestic participation, and embedding dual-use technology mandates in defence R&D programs.

6. Update the Investment Canada Act

Canada must modernize its FDI review regime to protect control over IP, data, and supply chains. CCI recommends embedding innovation-specific criteria into reviews, mandating assessments of research partnerships, and establishing an independent body to conduct risk-based evaluations.

7. Reform Public Procurement to Buy Innovation

Public procurement remains one of the largest untapped tools for innovation. CCI recommends a government-wide innovation procurement strategy that sets SME participation targets, pilots new contracting authorities, and empowers departments to co-develop solutions with Canadian innovators.

8. Advance Open Finance and Stablecoins

Canada continues to lag on open banking implementation and stablecoin regulation. Budget 2025 must enact a Consumer-Directed Finance Framework, ensure equitable treatment of non-bank players, and create tailored rules for stablecoins that balance innovation, consumer protection, and monetary stability.

9. Renew and Expand the Mandate of the Innovation Asset Collective

With over 1.4 million AI patents filed worldwide, Budget 2025 should make the Innovation Asset Collective permanent, expand its sectoral scope, and strengthen its capacity to support Canadian firms in the global IP race.
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A Break-Glass Moment for Competitiveness

Innovation is the foundation for a prosperous Canada. Budget 2025 is a critical opportunity to move beyond fragmented programs and outdated frameworks toward a coordinated strategy that builds sovereign capacity, supports high-potential Canadian firms, and restores our global competitiveness.

CCI’s 2025 Federal Pre-Budget Submission can be viewed here. To learn more about CCI’s work in Ottawa, contact Daniel Perry at daniel.perry@canadianinnovators.org.

About the Council of Canadian Innovators

The Council of Canadian Innovators is a national member-based organization reshaping how governments across Canada think about innovation policy, and supporting homegrown scale-ups to drive prosperity. Established in 2015, CCI represents and works with over 150 of Canada’s fastest-growing technology companies. Our members are the CEOs, founders, and top senior executives behind some of Canada’s most successful ‘scale-up’ companies. All our members are job and wealth creators, investors, philanthropists, and experts in their fields of health tech, cleantech, fintech, cybersecurity, AI and digital transformation. Companies in our portfolio are market leaders in their verticals, commercialize their technologies in over 190 countries, and generate between $10M-$750M in annual recurring revenue. We advocate on their behalf for government strategies that increase their access to skilled talent, strategic capital, and new customers, as well as expanded freedom to operate for their global pursuits of scale.