Canada’s Innovation Blueprint: A Smart Report That Calls for Even Bigger Thinking
Reports are hard for the average person to read but if you want to see things get better, take some time to read the report.
Note to subscribers: I am dusting off an old substack interest. It’s an outlet to explore policy where I want to keep it generally positive and point more people towards policy stuff. Feedback is welcome.
The Federal Programs for Business Innovation report is the shot in the arm Canada’s innovation ecosystem has been waiting for. Finally, we have a thorough, data-backed breakdown of where we’re missing the mark, how our billions in funding aren’t giving us the returns we need, and a smart analysis of the role government should play in supporting—not hindering—our entrepreneurs. Led by Senator Colin Deacon’s office, this report is one of the best calls to action for Canadian innovation we’ve seen in years.
But if we’re going to move from a thoughtful critique to tangible results, we need to take its recommendations and scale up. This isn’t about incremental adjustments; it’s about asking the hard questions: Are we thinking big enough? And if we aren’t, what’s holding us back?
The Spending Paradox: Dollars Are Not Enough
The report exposes the billion-dollar paradox at the heart of Canada’s innovation strategy. Programs like the Scientific Research and Experimental Development (SR&ED) Tax Credit and the Venture Capital Catalyst Initiative (VCCI) hand out billions, yet Canada’s innovation output is unimpressive. The report calls for smarter spending—linking dollars to meaningful outcomes that matter to business success.
But as crucial as this accountability is, we should also be asking where Canada can—and should—go beyond just “spending smarter.” We need a blueprint that includes game-changing projects and ambitious investments in sectors where we can be global leaders. A standard response might say that we should bet big on emerging fields like AI, clean tech, and quantum computing, not just build systems to measure incremental improvements.
However, we must also consider what those bets would require. It’s not enough to just bet on emerging tech. It won’t work if there isn’t enough electricity. For example. That means the big bet on AI or even clean tech also involves a big bet on power generation. Nuclear power.
Government’s Role: Support, Don’t Control
The report gets it right in arguing that the government’s job isn’t to control innovation but to enable it. Right now, too many government programs are weighed down by heavy criteria, slow processes, and application systems that discourage startups from even applying. The report recommends streamlining these processes and giving entrepreneurs a simpler path to government support.
This is a good start, but why not aim even higher? The government shouldn’t just make the process easier—it should become a silent partner. Programs like the Strategic Innovation Fund (SIF) should prioritize high-risk, high-reward projects driven by Canadian companies. Entrepreneurs don’t need a nanny-state approach; they need government support without government hand-holding. That means trusting the private sector to lead and innovate, even if it means taking risks that won’t all pay off.
Procurement: The Untapped Power Play
One of the report’s smartest recommendations involves public procurement. The government spends billions annually, yet it often plays it safe by awarding contracts to the lowest bidder. This report argues that procurement is one of our best tools to kickstart innovation, and it’s spot-on. Using federal contracts to validate new technologies gives Canadian startups the lifeline of early revenue and market credibility, which are critical for scaling.
This recommendation deserves to be supercharged. Imagine if Canada mandated that 10-15% of all government contracts go to innovative Canadian companies. This wouldn’t just create new revenue streams for startups; it would position the government as a real driver of innovation. We can look to models like Finland’s KEINO Competence Centre for Sustainable and Innovative Public Procurement as proof that this kind of bold procurement strategy works. Canada can and should do the same.
Intellectual Property: A Strategic Asset for Canada
The report raises an essential point about intellectual property—publicly funded IP often ends up benefiting foreign entities, costing Canada both economic value and competitive advantage. The report’s recommendation for introducing clawbacks when IP generated with public funds is exported abroad is a solid first step, but we can take this further with a more strategic, incentive-based approach.
Canada should prioritize policies that ensure publicly funded IP benefits Canadians, encouraging its commercialization here at home. This means creating incentives, resources, and the right infrastructure to help Canadian companies scale and keep their innovations in Canada, without heavy restrictions. By fostering an environment where IP developed here can reach its full potential, we support the growth of Canadian giants that contribute directly to our economy, while respecting innovators’ freedom to determine their path.
We Need Bigger Ambitions
The Federal Programs for Business Innovation report is a great foundation, and its analysis is one of the strongest we’ve seen on Canada’s innovation landscape. But we need to layer on a bigger vision that moves beyond a “better system” to a transformative one. Canada has the resources, the talent, and the entrepreneurial spirit to lead in fields that matter globally. What we need now is a bold, ambitious approach to harness it all.
Programs like the Strategic Innovation Fund and Venture Capital Catalyst Initiative have potential, but they need to be laser-focused on scaling projects with real national impact. Let’s think beyond just improving processes and aim to build globally dominant companies here in Canada, with Canadian talent and Canadian IP.
A Challenge for Canada’s Innovation Ecosystem
The Federal Programs for Business Innovation report is a strong start, providing the insights and direction to fix what isn’t working. But Canada’s place on the global innovation stage demands that we go even further. Let’s take the smart, strategic recommendations in this report and turn them into an even bigger vision that defines Canadian innovation for decades to come. If we can make bold bets, support without control, and retain the best of what we build, Canada won’t just participate in the global innovation race—we’ll lead it.
My concern about the procurement piece is that start-ups will bend over backwards to land one of these government contracts and miss the opportunity to land real commercial contracts.