CCI’s Address to the Standing Committee on Science and Research in Ottawa

This week, CCI President Benjamin Bergen presented to the House of Commons Standing Committee on Science and Research. The committee is studying ways that the Government of Canada can increase rates of business investment in research and development. Benjamin shared the perspective of CCI members, who are among the fastest-growing and most innoavative companies in Canada.

Watch Benjamin's prepared remarks here:

Good afternoon, Madam Chair and members of the committee. Thank you for the invitation. I’m grateful for the opportunity to discuss business R&D investment in Canada with you here today.

My name is Benjamin Bergen. I’m here today as the President of the Council of Canadian Innovators. We’re a national business council representing more than 175 of Canada’s leading technology companies. All of CCI’s members are headquartered here in Canada, with more than 52,000 employees across the country and growing. They are market leaders in sectors as diverse as health, financial technologies, agriculture and AI.

CCI was founded 10 years ago on the idea that Canadian prosperity must be driven by Canadian-headquartered companies: An unapologetically Canadian economic policy as a cornerstone of our national sovereignty. 

In the past year, it feels like the national conversation has finally caught up with us.

It was good to hear Prime Minister Carney recently say, quote: “The scale and speed of these developments are not a smooth transition, they’re a rupture. They mean our economic strategy needs to change dramatically. And that your future will not be the same as my past.”

Against this backdrop, the committee’s study here today is valuable work. Canada has been a laggard in terms of productivity growth, and corporate R&D investment. 

Why is that?

It is not that we lack subsidies. The government spends around $4 billion annually on the scientific research and experimental development tax credit — support that technology leaders across the country very much appreciate.

The root of the problem is that Canadian companies look at their balance sheets, and every day they decide it’s not worth it for them to invest. The CEOs I know are sharp and highly competitive individuals. If they’re not spending on R&D, we should assume that they have their reasons. 

Moving the needle on business R&D means making investment worthwhile for firms. To do this, the government has to create the conditions that enable firms to scale, and reap the profits from that R&D. Fundamentally, that means that Canadian companies need to own and commercialize the ideas that they generate through research and development activities.

In short: Canadian companies need to own and defend their intellectual property, and the federal government has an important role to play in achieving that goal.

Too much of our economic policy is rooted in outdated ideas about how value is created — ideas that don’t reflect today’s reality. In a globalized, intangible economy driven by software and technology services, productivity gains are derived from generating and owning valuable IP – patents, trade secrets, copyrights, data.

What’s worse, so much of the economic value created from $7 billion in annual existing federal R&D support is left undefended, because we don’t prioritize the intellectual property protections and strategies for owning Canada’s intangible assets.

This approach is out of step with today’s economy, where 90% of the value of S&P 500 companies comes from intangible assets.

Owning IP also gives firms “Freedom-to-Operate”: the ability to grow and compete without infringing on someone else’s rights or paying steep licensing fees. Without ownership, there is no freedom to operate. And without that freedom, companies can’t earn a return on innovation, so they don’t invest.

As the rate of return on intangible assets appears to only be accelerating over time and markets are increasingly dominated by winner-take-most dynamics, Canadian firms need a savvy government that can lead with clear IP and freedom to operate strategies.

We have heard rhetoric from Prime Minister Carney and his ministers that suggests that they understand the seriousness of this moment. And action has followed that rhetoric. 

We have been pleased that the reforms which CCI called for on SR&ED are moving forward. 

The government’s “Buy Canadian” directive is a watershed moment for federal procurement — and long overdue. This kind of support through government purchasing can be a huge accelerant for the growth of innovative Canadian companies.

But the missing piece in all of this is the intellectual property and other intangible assets. Sharp IP strategy should be suffused in our innovation funding programs. It should be a facet of federal government procurement. Intellectual property should be a lens for every aspect of government economic policy in the 21st century, because these intangible assets are the life-blood of the innovation economy.

CCI has been proposing that Canada should establish an Innovation Asset Bank — a public institution with a mandate to generate, assert and defend Canadian IP to catch up with countries where IP has been a cornerstone of their economic strategy for decades.

Driving business R&D and innovation isn’t about spending more money, it's about creating the conditions for firms to invest. When companies can own and profit from their ideas, they invest. When they can’t they don’t. If we want to see more business R&D in Canada, we have to make it make sense for businesses to do so.  

Thank you for this opportunity, and I will be pleased to answer any questions.

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About the Council of Canadian Innovators \ Conseil Canadien des Innovateurs

Le Conseil des innovateurs canadiens est une organisation nationale basée sur ses membres qui remodèle la façon dont les gouvernements à travers le Canada pensent à la politique d'innovation, et qui soutient les entreprises d'envergure nationale pour stimuler la prospérité. Fondé en 2015, le CCI représente et travaille avec plus de 150 entreprises technologiques canadiennes à la croissance la plus rapide. Nos membres sont les chefs de la direction, les fondateurs et les cadres supérieurs qui sont à l'origine de certaines des entreprises à grande échelle les plus prospères du Canada. Tous nos membres sont des créateurs d'emplois et de richesses, des investisseurs, des philanthropes et des experts dans leurs domaines de la technologie de la santé, des technologies propres, de la fintech, de la cybersécurité, de l'IA et de la transformation numérique. Les entreprises de notre portefeuille sont leaders sur leur marché vertical, commercialisent leurs technologies dans plus de 190 pays et génèrent entre 10 et 750 millions de dollars de revenus annuels récurrents. Nous plaidons en leur nom pour des stratégies gouvernementales qui augmentent leur accès aux talents qualifiés, au capital stratégique et aux nouveaux clients, ainsi qu'à une liberté d'exploitation élargie pour leurs poursuites d'échelle à l'échelle mondiale.