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Innovation Canada: A Call to Action

Annex B — The Advice of Other Panels

In recent years, the federal government has struck panels that have touched upon issues of relevance to the Review of Federal Support to Research and Development. In particular, the Competition Policy Review Panel and the Expert Panel on Commercialization both explored topics that warrant attention in the context of this review.

Competition Policy Review Panel (2008)

The formation of the Competition Policy Review Panel was announced jointly by the ministers of Industry and Finance in July 2007. The panel was mandated to review Canada's competition and foreign investment policies, and to provide related recommendations on how to improve Canada's productivity and competitiveness. In its final report, Compete to Win, released in June 2008, the panel recommended the establishment of an independent Canadian Competitiveness Council under the Minister of Industry. Staffed by a chief executive officer and a small core staff overseen by a board of directors, the proposed council's mandate would be "to examine and report on, advocate for measures to improve, and to ensure sustained progress on, Canadian competitiveness" (p. 133). It would not enforce laws and regulations but would have a public voice, including the power to publish and advocate for its findings. The Competition Policy Review Panel also put forward a range of other recommendations grouped under various rubrics, two of which stand out as particularly pertinent to this review.

Innovation and Intellectual Property

The report made the following recommendations (2008, p. 133).

  • "The federal government should monitor the scientific research and experimental development tax credit program annually in order to ensure that business investment in research and development and innovation in Canada is effectively encouraged.
  • As a matter of priority, the federal government should ensure that new copyright legislation will both sufficiently reward creators while stimulating competition and innovation in the Internet age. Any prospective changes to Canada's patent law regime should also reflect this balance. The federal government should assess and modernize the Canadian patent and copyright system to support the international efforts of Canadian participants in the global economy in a timely and effective manner.
  • Before December 2009, the federal government should strengthen counterfeit and piracy laws to ensure that intellectual property rights are effectively protected.
  • Canada's post-secondary education institutions should expedite the transfer of intellectual property rights and the commercialization of university generated intellectual property. One possible method to achieve this would be to move to an 'innovator ownership' model to speed commercialization."

Attracting and Developing Talent

The report made the following recommendations (2008, pp. 128–129).

  • "Governments should continue to invest in education in order to enhance quality and improve educational outcomes while gradually liberalizing provincial tuition policies offset by more student assistance based on income and merit.
  • Post-secondary education institutions should pursue global excellence through greater specialization, focusing on strategies to cultivate and attract top international talent, especially in the fields of math, science and business.
  • Governments should use all the mechanisms at their disposal to encourage post-secondary education institutions to collaborate more closely with the business community, cultivating partnerships and exchanges in order to enhance institutional governance, curriculum development and community engagement.
  • Federal and provincial governments should encourage the creation of additional post-secondary education co-op programs and internship opportunities in appropriate fields, to ensure that more Canadians are equipped to meet future labour market needs and that students gain experiences that help them make the transition into the workforce.
  • Governments should provide incentives and undertake measures to both attract more international students to Canada's post-secondary institutions and send more Canadian students on international study exchanges.
  • Governments should strive to increase Canada's global share of foreign students, and set a goal of doubling Canada's number of international students within a decade.
  • Governments, post-secondary education institutions and national post-secondary education associations should undertake regular evaluations, measure progress and report publicly on improvements in business– academic collaboration, participation in co-op programs, and the attraction and retention of international talent.
  • Reforms to Canada's immigration system should place emphasis on immigration as an economic tool to meet our labour market needs, becoming more selective and responsive in addressing labour shortages across the skills spectrum.
  • Canada's immigration system should develop service standards related to applications for student visas and temporary foreign workers, and should be more responsive to private employers and student needs by fast-tracking processing and providing greater certainty regarding the length of time required to process applications.
  • In order to ensure that Canada is able to attract and retain top international talent, and respond more effectively to private employers, Canada's immigration system should fast-track processing of applications for permanent residency under the new Canadian Experience Class for skilled temporary foreign workers and foreign students with Canadian credentials and work experience."

Expert Panel on Commercialization (2006)

The Minister of Industry struck the Expert Panel on Commercialization in May 2005, asking it to identify how the federal government could help ensure continuous improvements to Canada's commercialization performance. The panel's final report, People and Excellence: The Heart of Successful Commercialization, was released in April 2006.

The report called for the creation of a Commercialization Partnership Board reporting to the Minister of Industry as his or her lead advisory body on commercialization. Among other activities, it was suggested that the board could: serve in an oversight role for federal commercialization policies, initiatives and investments; provide an annual public report evaluating their effectiveness, integration and impacts; and call on the Minister of Industry to respond publicly to the report. In addition, the report made a series of recommendations organized in relation to three "themes for action."

Talent

  • Increase business demand for talent through the development of a new Canada Commercialization Fellowships Program. The program would "support businesses in all sectors that are building or renewing a commitment to commercialization by supporting exchanges with post-secondary institutions" (2006a, p. 12). These fellowships would (i) encompass the broad range of disciplines that support commercialization and (ii) occur at all stages of a research career — that is, from undergraduate studies through to the workforce.
  • Spur employer hiring of highly qualified personnel with commercialization talents. This would be achieved by: "expanding the existing Canadian Institutes of Health Research (CIHR) programs that focus on industry–university partnerships; expanding the existing Natural Sciences and Engineering Research Council of Canada (NSERC) programs that provide research experience in industrial settings; creating a new Social Sciences and Humanities Research Council of Canada (SSHRC) commercialization and innovation fellowship program emphasizing disciplines such as business, design and human behaviour; and providing funds to these organizations based on a competition overseen by the new Commercialization Partnership Board" (2006a, p. 13).
  • Encourage and celebrate young Canadians who aim for success in business, science and technology. This would be achieved by providing "substantial, guaranteed and long-term support for initiatives that promote and celebrate excellence in science, technology and business by young people" (2006a, p. 14).
  • Develop and retain talent for success in the global marketplace. This would be achieved by: creating prestigious scholarships on par with the Rhodes and Fulbrights; enabling foreign research and teaching collaborators to serve as distinguished visiting chairs; providing matching grants for collaborative research projects with researchers in centres of excellence in other countries; supporting short-term exchanges of researchers between Canadian and foreign universities; and significantly increasing the number of Canadian students conducting studies and research at foreign universities (2006a, p. 15).

Research

  • Create a Commercialization Superfund to address key commercialization challenges. This fund would support large-scale, private–public sector research and training partnerships in targeted sectors, while expanding existing programs and initiating new ones to train highly qualified personnel (2006a, p. 18).
  • Expand federal programs that support seed and start-up firms in proving their business ideas. This would be achieved as a first step by (i) increasing funding to programs such as NSERC's Idea to Innovation program, CIHR's Proof of Principle program and the Industrial Research Assistance Program and (ii) providing funds for SSHRC to establish a program similar to these three in order to encourage, where applicable, the commercialization of the research it funds. As a second step, funding would grow, based on evidence of success (2006a, p. 19).
  • Increase the commercialization involvement of small and medium-sized enterprises (SMEs), through a Canadian SME Partnerships Initiative. The objective of this initiative would be to make SMEs more globally competitive through two channels:
    1. Partnerships Initiative — Research Funding, through which federal science-based departments and agencies would compete for five-year funding for research above and beyond their existing budgets and
    2. Canadian SME Partnerships Initiative — Program Support, which would include efforts such as support for technology acquisition and R&D partnerships with firms and research bodies in other countries (2006a, p. 21).

Capital

  • Improve access to early-stage angel financing and expertise. This would be achieved through two initiatives: (i) Funding Excellence in Building Angel Investor Networks, which would develop angel investor networks and enhance the support they provide to early-stage firms through a competitive process to fund non-governmental organizations that mobilize the resources within communities and (ii) a New Angel Investor Co-Investment Fund Program that would establish community based funds, capitalized by the federal government, which would invest alongside angel investors in seed and start-up companies (2006a, p. 24).
  • Review the expansion-stage venture capital market in Canada. This would be accomplished by launching a comprehensive review, potentially with the involvement of the provinces and territories, "of policies, programs and other factors influencing the role of the venture capital markets on companies during their expansion stage. This review would involve the venture capital community and include assessing current initiatives and capital supply and demand considerations, including factors for firms seeking financing" (2006a, p. 26).
  • Remove barriers to foreign venture capital investment. This would be achieved through the following measures: "eliminate the withholding tax on capital gains made by foreign investors in the equity of private Canadian companies; cover limited liability corporations that are venture capital funds or private investment funds under Canada's income tax treaties and exclude them from withholding tax; extend rollover provisions to cross-border mergers, allowing companies to get access to strategic partnerships with foreign companies without triggering taxation; and eliminate the requirement for non-Canadian investors to file a Canadian income tax return" (2006a, p. 27).