The CCI Newsletter: June 2024

This edition of The CCI Newsletter was originally shared with CCI’s subscriber community on June 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,

Structure over culture.

One of my biggest frustrations is hearing politicians blame Canada’s lackluster economic productivity on culture. For some reason, Canadians are led to believe that our national character condemns us to perpetual also-ran status. This is simply not true.

Every week, I speak with remarkable entrepreneurs who tirelessly build thriving companies, creating innovative services driven by Canadian ingenuity. These entrepreneurs are eager to do even more.

The problem isn’t Canada’s culture. The entrepreneurs are here. I’ve met them. They are determined to succeed for the benefit of the Canadian economy, to create good jobs, and to generate the tax revenue that funds the social services we all value.

The real challenge is our structure. The policies, institutions, and incentives necessary to position Canadian innovators for success are lacking.

Canadian governments struggle to support our own tech, even when it's world-class. Instead, they prefer to spend billions luring foreign multinationals to set up branch plants rather than championing our homegrown leaders. Moreover, they opt to tax capital gains instead of incentivizing further investment.

We need to talk about Canada's flagging productivity, our rising emigration rates, our poor per capita GDP. And sometimes these conversations will get tense.

It's time we challenge the notion that Canadian culture isn’t competitive enough. Let’s fix the structure and watch what happens.

Keep growing,

Benjamin

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

May was a huge month of important policy discussions. We've seen the Canadian tech sector come together for meaningful conversations spurred by the federal government's shock tax hike on capital gains. To give innovators a forum to discuss, we hosted a Canadian Tech Sector Pulse Check and a policy-oriented event — Mooseworks Live: A Conversation About Productivity, Prosperity & Growth In Canada.

The federal government launched a public consultation on the use of AI in the public service, with Treasury Board President Anita Anand saying that she wants to see public sector workers using AI tools more, but at the same time the government needs to safeguard confidential data.  

At Queen's Park, the Ontario provincial government introduced new legislation governing cybersecurity, AI, privacy and child protection in public sector data systems. CCI's Ontario Affairs Director Skaidra Puodziunas explains here why this is worth paying attention to.

Last week, CCI also submitted a policy brief for the federal government's second-phase consultation on the Scientific Research and Experimental Development tax credit.

This spring we've also seen a drumbeat of disappointing economic news, and there is a consensus forming around the idea that our innovation economy just isn't working. Here are a few key indicators:

• Innovation ecosystem lacks sound architecture, workforce strategy and science-savvy policy makers
• To Boost Productivity, Canada Must Revamp Its Economic Frameworks
• How does Canada’s economy stack up globally? Not great.
• Major skills shortage looming in cybersecurity, AI  

Now is an important time for innovators to come together and talk about the policies and strategies we need to drive greater success and meaningful growth for the Canadian economy.

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THE BIG READ

As one of Canada's leading innovators, Allen Lau grew Wattpad from an idea into an entertainment powerhouse worth more than $750 million. This month, he took to the pages of The Globe and Mail to reflect on his experience, and what he sees as operating partner of Two Small Fish Ventures.

First, Allen wrote about the capital gains tax hike, and the daunting outlook for an entrepreneur who wants to call Canada home: For entrepreneurs, staying in Canada comes at a cost

Then, Allen flipped the story and offered some cause for optimism. He sees encouraging signs for deep tech investment, and long-term technology development, even though the capital markets may appear to be in the doldrums: The depressing numbers of the venture-capital slump don’t tell the full story.

Allen also appeared on BNN Bloomberg and gave a must-watch interview.

What we admire about Allen is how serious he takes his role as a mentor, visionary, and leader in Canada's tech sector, especially in this new stage of his career post-Wattpad. At CCI, we firmly believe that governments need to hear more from expert founders like Allen and operators, like those in our membership, about the economic strategies and support they need to succeed.

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THE BIG DEAL

Christian Weedbrook has big ambitions to make Canada into a quantum computing powerhouse, and he lays out the ambition in this interview on the Betakit podcast, including that he is raising another $200 million to build a quantum data centre.

Weedbrook does an excellent job of articulating the ambition, positivity, and innovation that can drive great outcomes in Canada. In particular, Weedbrook also talks about the ways that the government has worked to support Xanadu, and how that collaborative effort has created the opportunity for real global leadership in an emerging field.

xanadu.ai

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SCALE-UPS TO WATCH

CCI’s membership continues to grow! We believe that the true driver of Canada’s economy lies in our homegrown scale-up companies, which is why we are advocating for better policy to empower Canadian growth. Every month, we highlight some outstanding leaders who are doing great work around the country.

In May, we welcomed new members to our national network of leading innovators.

• SMART Technologies in Calgary, led by CEO Nicholas Svensson, is a pioneer of touch display technology and the inventor of the SMART Board, used by over 60 million teachers, students, and companies around the world.
  
  
• MOLLI Surgical in Toronto, led by CEO Ananth Ravi, is a medical technology company working to create patient-centered care and surgical options that improve the treatment process. The MOLLI Surgical team also develops devices and software that support precision surgery and treatments.
  
  
• League Data in Halifax, led by CEO Carrie Forbes, provides financial technology and support solutions for over 35 credit unions and their members across Atlantic Canada. League Data's mission is to help smaller financial institutions give exemplary service to their members.
  
  
• TerraSense Analytics in Kelowna, B.C., led by CEO Mike McGinty, specializes in artificial intelligence and edge computing to provide intelligence, surveillance, and reconnaissance solutions for government and private sector firms.  
  
  
• Solace Power in Mount Pearl, N.L., led by CEO Neil Chaulk, is based in Mount Pearl, NL. Solace makes wireless power technology used by leading players in the automotive, aerospace, telecommunication and industrial sectors.
  
  
• Uvaro in Waterloo, Ont., led by CEO Joseph Fung, offers a platform that enables organizations and partners to develop upskilling and career development services.

In May, CCI President Benjamin Bergen also connected with Ecopia Co-Founder and President Jon Lipinski for a Five Questions interview about government procurement, and the wide-ranging opportunities of AI's uses within geospatial monitoring.

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

• Miovision solutions give priority to emergency vehicles in transit
• Klick Health finds a way to determine how real audio clips are
• Lightspeed Commerce CEO  creates Black Hole Experience as a portal to connection
• Sanctuary AI CEO: Scalability in the real world will determine who wins the AI race
• Cloud DX CEO announces "critical milestone" contract with province
• Clarius Mobile Health partners with Swiss drug giant Novartis
• AltaML Co-CEO Nicole Janssen talked about making an impact with AI
• Bonsai Founder Saad Siddiqui Transitioned into Board Chair, and Andrew Ladouceur became Global CEO of Inspiration Commerce Group
• Plum and NuEnergy.AI CEOs talked about how Canadian companies’ AI policies aim to balance risk with rewards
• Four Eyes Financial CEO Lori Weir wins Atlantic Business Magazine’s Top 50 CEO Award

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DISPATCHES

Since CCI was founded, we have been talking about the Scientific Research and Experimental Development tax credit. SR&ED is by far the biggest government incentive for innovation in Canada, and it is arguably the biggest source of consternation for Canadian entrepreneurs who have to navigate the complexity and seemingly arbitrary qualification rules.

CCI engaged with the first round of consultations launched earlier this year on modernizing SR&ED, and this week we submitted a policy brief for the second round of SR&ED consultations launched after the federal budget.

CCI Director of Federal Affairs Nick Schiavo breaks down the issues here, and talks about what we want to see next from Ottawa.

Happy reading!