This edition of The CCI Newsletter was originally shared with CCI’s subscriber community on August 1, 2024. To receive our monthly briefing on the scale-ups shaping Canada’s future, the policies that matter, and insights you won’t find anywhere else—subscribe here.

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Dear Innovator,

As the world turns its attention to the Paris Olympics, I'm reminded of the dedication and support required to achieve global success. Our athletes’ pursuit of excellence on the world stage mirrors the journey of Canadian entrepreneurs striving to lead in the global marketplace.

Jim Balsillie, our chair, highlighted the critical gaps in our innovation ecosystem in a 2015 Globe and Mail piece, “Canadians can innovate, but we’re not equipped to win,” emphasizing the need for robust support to ensure our businesses can compete and win globally. Jim specifically identified the Own the Podium program as proof that “Canada can set a goal, then do what it takes to achieve it.”

Just as our athletes benefit from targeted programs like Own the Podium, Canadian innovators require strategic investments and policies that foster growth and commercialization.

Olympic success is a result of coordinated efforts across all sectors. Canada's innovation landscape demands a unified approach from public institutions, private enterprises, academia, and policymakers. Only by working together we can create a cohesive ecosystem that propels our innovators to new heights.

But a country’s performance at the Olympics is more than a showcase of athletic prowess; it's also a demonstration cultural and entrepreneurial soft power.

During the opening ceremonies, Canadian athletes proudly floated along the Seine wearing uniforms designed by Canada’s own Lululemon, while Céline Dion gave a powerful performance from the top of the Eiffel Tower to close out the event.

These moments enhance our country’s brand, attracting international admiration and influence. Similarly, a strong tech sector serves as a modern form of soft power, drawing in talent, capital, and prestige. By fostering a robust innovation ecosystem, we can enhance Canada’s global standing and economic strength.

We celebrate our Olympic athletes’ victories, using their achievements to inspire future generations. Similarly, we must highlight and learn from the successes of Canadian businesses that have scaled globally. Showcasing these achievements can provide valuable insights and motivation for other entrepreneurs. This is something we do every year at Canada's CEO Summit, which is taking place this year in another Olympic city: Montréal.

Let’s all be Team Canada not just during the Olympics in Paris, but in the ways we support our innovators. Together we can ensure that Canadian innovators not only compete but win globally.

Keep growing,

Benjamin Bergen

Benjamin Bergen is the President of the Council of Canadian Innovators, a national member-based organization reshaping how governments across Canada think about innovation policy, and supporting homegrown scale-ups to drive prosperity. If you are interested in learning more about the Council or joining our cause, get in touch.

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INNOVATION UPDATES

Defence Procurement: While visiting Washington D.C. in early July, Prime Minister Justin Trudeau said that the government is on track to meet our NATO commitment to spend 2% of GDP on defence by 2032.  Nobody knows better than the United States that defence spending can be an enormous economic driver, and if Canada is going to significantly ramp up our own spending, we should be looking for similar benefits. Shoring up Canada's military should involve more than just buying jets and subs. We're hoping to see the government invest significantly in dual-use technologies like artificial intelligence, and domestic cybersecurity capacity as part of this push to increase defence spending. At CCI our core belief is that innovation thrives where private sector leaders work in close collaboration with governments seeking to support and enable growth.

Domestic Procurement: On that note, would you believe that we're already thinking about the 2025 federal budget? Throughout the fall, Canadian governments weigh policy proposals and begin to assemble their budgets for the year ahead. Procurement will be a key priority for us, and not just around the NATO target. As we outlined in Buying Ideas: Procuring Public Sector Innovation in Canada, government technology procurement represents a huge opportunity to drive greater efficiency in service delivery while also driving economic growth. Stay tuned for more on this topic in September!

Semiconductors: In July, the federal government announced a $120 million to boost Canada’s semiconductor industry. The funding from ISED's Strategic Innovation Fund will support the FABrIC program, a five-year initiative to enhance chip businesses and train students. This initiative is led by the not-for-profit organization CMC Microsystems, who is also a partner in of the SILICAN initiative. We think it is good the government is investing in the necessary capacity to position Canada as a leader in the semiconductor industry, especially in light of the CHIPS Act in the U.S. Canada should be deliberate and strategic in developing the capabilities needed to be competitive in the high-value niches that will define the industry's future.

Capital Gains: In the year ahead, we will be looking to governments to create the conditions for success in the innovation economy — and frankly, they'll be fighting an uphill battle. CCI's Tech Sector Pulse Check survey on the capital gains tax found that 90% of innovators surveyed believe that the capital gains tax hike will negatively impact the Canadian innovation economy.  You can read the full survey result here along with coverage from The Canadian Press, but the bottom line is that the federal government's capital gains policy is going to make it harder to grow, according to founders, CEOs and investors.

Federal Research Support Modernization: In July, the federal government was consulting on a new capstone research support agency announced in the 2024 budget. Our message to the government is that Canadian research funding should be focused on tangible outcomes for the public good, and publicly-funded research should lead to Canadian IP and commercialization. Read more about or policy submission here.

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THE BIG READ

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Photo credit: Charles William Pelletier, Special Collaboration, La Presse

When Prime Minister Justin Trudeau said that Canada intends to meet our NATO defence spending target, smart people took notice, including Frank Baylis, executive chairman of Baylis Medical Technologies.

An accomplished entrepreneur and former Member of Parliament in the Montréal area, Frank wrote in the National Post this month about how "increasing defence spending is a strategic imperative." We agree, and issued a similar statement.

According to Frank, "intelligent procurement can generate revenue while creating excellent jobs in industry, academia and the military itself." CCI has long connected the dots between a strong, secure and prosperous Canada and a strong, resilient and growing domestic cybersecurity industry.

This month, we encourage you to read Frank's full argument here. The opportunity is potentially huge, but we need to be strategic.

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THE BIG DEAL

For much of the past year, we've been hearing about tight capital markets and a challenging environment for founders looking to raise. So a pair of headlines this week from CCI members really stood out:

• Clio breaks Canadian tech financing record, raising US$900-million to give it US$3-billion valuation
  
  
• Tech CEO Claudette McGowan raises $10 million for Protexxa, a new record in Canada
  

These are huge accomplishments, and they create runway for both Clio, led by CEO Jack Newton, and Protexxa, led by CEO Claudette McGowan, to drive future growth.

In Canada we don't do enough to celebrate our successes, especially in the realm of business. We have incredible innovation champions, and we're rooting for them to achieve their full potential.

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SCALE-UPS TO WATCH

We've been thrilled to welcome so many new members to the Council of Canadian Innovators:

• Vive Crop Protection, led CEO Darren Anderson and headquartered in Mississauga, Ontario, leverages nanotechnology to enhance agricultural chemical delivery for sustainable farming.
  
  
• Credivera, led by CEO Dan Giurescu and based in Calgary, Alberta, provides secure digital identity verification and credential management solutions to enhance trust across industries.
  
  
• Nuenergy.ai, headed by CEO Niraj Bhargava with headquarters in Ottawa, Ontario, develops AI and machine learning solutions to improve organizational efficiency and data-driven decision-making.
  
  
• DealMaker, led by CEO Rebecca Kacaba and headquartered in Toronto, Ontario, revolutionizes the capital raising process with an innovative online platform for streamlined and compliant transactions.
  
  
• Response Biomedical, led by CEO Barb Kinnard and based in Vancouver, British Columbia, develops rapid on-site diagnostic tests to improve patient care for infectious diseases and cardiovascular conditions.
  
  
• Bits In Glass, with CEO David Hauser at the helm and headquartered in Edmonton, Alberta, delivers custom software development, system integration, and automation solutions to enhance operational efficiency.
  
  
• TIERONE OSS, led by CEO Paul Vedam and based in Mississauga, Ontario, provides robust operations support systems for telecommunications and network service providers to optimize network performance.

Our innovation ecosystem is at its strongest when we're all working together, and pulling in the same direction.

Here are a few other highlights from the Canadian tech sector in April:

• The Education of D2L's John Baker - The Logic
• Waterloo's VueReal is doubling its manufacturing space - Semiconductor Today
• Meet Connect&Go, the Montreal tech company supplying intelligent wristbands to Team Canada - TSN.ca
• MOLLI Surgical and Osler collaborate to revolutionize breast cancer surgeries - William Osler Hospital
• Xanadu CEO Christian Weedbrook says that quantum computing is the solution to AI's compute problem - The Globe and Mail

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DISPATCHES

Across Canada, our national field team of government affairs associates are working to create the conditions for homegrown success. This month, we visit Québec and Alberta for innovative perspectives from our regional leaders.  

How should the Québec government incentivize more R&D spending by homegrown companies? That's what CCI's Québec Affairs Director Jean-François Harvey explores his dispatch from la belle province. Canadian governments can look to small countries that have successfully foster strong innovation ecosystems like Finland and Israel. With careful study and clever policy, we can recreate their success. Read his piece here!

Two timezones westward, CCI Prairie Affairs Director Jess Sinclair has been looking at how the Alberta government can support domestic technology companies through strategic procurement reform. Across all levels of government, strategic procurement is a project worth tackling, and it will be a little bit different in each region. Read Jess's analysis of Alberta procurement here!

Happy reading!