Good morning to the chair, vice-chairs and members of the Standing Committee on Finance. Thank you for the opportunity to present the recommendations of the Council of Canadian Innovators in advance of the 2024 budget.

My name is Nick Schiavo. I'm appearing today as the director of federal affairs on behalf of CCI. I'm joined by my colleague Laurent Carbonneau, our director of policy and research.

CCI is a national business council representing 150 of Canada's leading technology companies. We are dedicated to advocating for policies that promote innovation, economic growth and long-term prosperity for all Canadians. Our member companies are headquartered here in Canada. They employ north of 52,000 employees across Canada and are market leaders in the sectors of health, clean and financial technologies, cybersecurity, AI and more.

Last week these 150 CEOs were in Ottawa for Canada's CEO Summit to share the successes and challenges that face their businesses, their priorities and how the Government of Canada can support them in their global pursuit of scale. I look forward to sharing some of these discussions with you today.

As we approach budget 2024, CCI recognizes that Canada's economy faces real challenges. Despite our strengths, slowing productivity growth is a threat to Canadian prosperity and our standard of living. Likewise, shifting geopolitical tensions underscore the need to take security and the digital world much more seriously. There has never been a greater need for a strong, stable domestic technology industry that can create long-term economic growth.

Our nation possesses a wealth of talent, creativity and innovation potential, but Canada must develop and implement a smart industrial strategy that builds wealth and resilience in coordination with the provinces and territories. A smart industrial strategy begins with recognizing that in a globalized knowledge- and data-driven economy, companies compete on realizing the value of intangible assets like intellectual property rather than raw materials. Canada must ensure that our most innovative companies can scale and compete, catalyzing a flywheel of reinvestment and business know-how that will build wealth and serve as a solid foundation for a more competitive Canadian economy.

Acknowledging this, CCI developed our budget 2024 recommendations around three key themes—unleashing economic growth by enhancing marketplace frameworks, increasing the global competitiveness of Canadian businesses by expanding access to customers, and increasing return on investment by streamlining access to government capital.

Let's delve deeper into some of the recommendations from our pre-budget submission, starting with artificial intelligence. Despite the pan-Canadian artificial intelligence strategy launch in 2017, the Canadian government's efforts have not adequately bolstered domestic firms in the commercialization of intellectual property. This oversight has resulted in a regrettable exodus of talent and patents to other jurisdictions, severely compromising the competitiveness of the Canadian AI industry. To remedy this, we propose the development of a dedicated AI commercialization and IP strategy with a focus on scaling our domestic AI technology firms. I encourage you to review “A Roadmap for Responsible AI Leadership in Canada”, our recent road map that provides comprehensive insights into this crucial endeavour and understanding the innovation economy driven by IP, data and other intangible assets.

Staying on this topic, in the intangible economy, foreign direct investment, or FDI, requires careful analysis to understand both the positive and negative impacts to domestic technology firms. Unlike in the tangible, production-based economy, where most foreign investments result in positive economic spillovers, the innovation economy often sees FDI take the form of a business in one country gaining ownership of a foreign branch plant in another, leading to negative spillovers. We strongly advocate for a comprehensive examination of the adverse consequences of FDI in the technology sector, particularly with regard to talent acquisition.

Moreover, in the upcoming budget we hope to see a commitment for a comprehensive review of innovation programs to eliminate duplication and establish “freedom to operate” structures, or FTOs. FTO is indispensable for encouraging increased business expenditure on R and D, thereby fortifying our economy's productivity. Likewise, the imminent launch of the Canada innovation corporation should prioritize addressing FTO issues, which have hindered increased business expenditure on R and D by Canadian companies.

I've included a copy of our recent economic newsletter, Mooseworks, which focuses specifically on the freedom to operate challenges of high-growth companies. I was informed by the clerk that my email didn't go through, so my apologies to members of the committee. I will follow up on that.

Complementing the review of innovation programs should be a comprehensive review of all capital programs designed to support innovators, encompassing the scientific research and experimental development tax credit, or SR and ED; the Business Development Bank of Canada; the strategic innovation fund; and the development agencies.

Our members believe the government should prioritize grants over loans, augment funding thresholds where it makes sense, and mandate the formulation of strategic IP plans to yield sustained economic dividends for Canada.

In conclusion, these recommendations are more than mere policy proposals. They serve as a strategic blueprint to revitalize Canada's innovation ecosystem, foster economic growth and secure our nation's prosperity. Our members want to collaborate with the government and this esteemed committee to implement these pivotal measures, all of which are designed for the benefit of all Canadians.

Thank you for your time today. We look forward to addressing your questions and engaging in further discussion regarding these recommendations.

Transcript

Discussions (0)