Canada

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Canada is the world’s ninth largest economy, and its export-led growth is projected to strengthen in 2014-15. The STI system is well developed, though weaknesses and challenges remain.

Innovation in international development can be defined broadly for Global Affairs Canada to include new business models, policy practices, technologies, behavioural insights, or ways of delivering products and services that benefit and empower the poor in developing countries-- any solution that has the potential to address an important development problem substantially more effectively than existing approaches.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Encouraging innovation in firms and supporting entrepreneurship and SMEs

Canadian BERD decreased steadily from 1.26% of GDP in 2001 to 0.88% in 2012, well below the OECD median (Panel 1d). This occurred despite the generous Scientific Research and Experimental Development (SR&ED) tax incentive, which amounted to USD 2.7 billion (CAD 3.3 billion) in 2012 and to 80% of overall public support for business R&D. New measures have been announced to streamline and improve the predictability and enforcement of the SR&ED tax incentive programme. Owing to the importance of natural resources industries in the economy, large firms account for a smaller share of Canadian BERD than the OECD average (Panel 2) and Canadian firms fall below the OECD median in terms of top 500 corporate R&D investors (Panel 1e). The 2013 federal budget introduced new measures to promote business innovation: USD 325 million (CAD 400 million) to support a Venture Capital Action Plan over the next seven to ten years; USD 98.4 million (CAD 121 million) over two years through the National Research Council to help the growth of innovative businesses; USD 48.8 million (CAD 60 million) over five years to help outstanding, high-potential incubator and accelerator organisations expand their services to entrepreneurs, with an additional USD 32.5 million (CAD 40 million) provided to the Canada Accelerator and Incubator Programme in the 2014 budget; USD 81.3 million (CAD 100 million) through the Business Development Bank of Canada to invest in firms graduating from business accelerators; USD 16 million (CAD 20 million) over three years for the Business Innovation Access Programme (an innovation voucher programme); and USD 15 million (CAD 18 million) over two years to the CanadianYouth Business Foundation to help young entrepreneurs grow their firms.

Strengthening public R&D capacity and infrastructures

Canada has a strong university-centred research system (Panel 4), which performs above the OECD average (Panel 1a, b, c), and has a healthy link to industry funding (Panel 1o). The 2014 budget proposes to create the Canada First Research Excellence Fund with an additional USD 1.2 billion (CAD 1.5 billion) to advance Canada’s global research leadership over the next decade. New and on-going initiatives to support industry-science linkages include: new funding of USD 30 million (CAD 37 million) in 2013-14 and on-going funding through the federal research granting councils for partnered research. The Canada Foundation for Innovation (CFI) received USD 403 million (CAD 500 million) in the 2012 budget to sustain its core investment in modern research infrastructures. A further USD 183 million (CAD 225 million) was allocated to CFI in the 2013 budget to enrich the next Leading Edge/New Initiatives Fund competition, to support cyber-infrastructure, etc. In keeping with global trends on open access, the Natural Sciences and Engineering Research Council and the Social Sciences and Humanities Research Council are considering a policy that would require federally funded peer-reviewed journal publications to be made freely available within one year of publication, as is currently the case for research funded by the Canadian Institutes of Health Research.

Targeting priority areas/sectors

Canada has a strong RTA in the three technological areas covered in Panel 3, but its RTA in environment-related technologies decreased in past years. To support the development and demonstration of new, clean technologies, the government appropriated USD 264 million (CAD 325 million) in its 2013 budget over eight years to Sustainable Development Technology Canada. Also in the 2013 budget, Canada’s manufacturing and processing sector received USD 1.1 billion (CAD 1.4 billion) in tax relief for the 2014-18 period. The government will also provide stable funding of close to USD 813 million (CAD 1 billion) over five years for the permanent Strategic Aerospace and Defence Initiative, some of which is directed to an Aerospace Technology Demonstration Programme, in addition to new funding for the latter. On 7 February 2014, the framework for Canada’s future in space was unveiled and will serve as a guide for Canada’s strategic activities, including R&D, in space. In the 2014 budget, strategic investments in the automotive and forestry sector include: USD 406 million (CAD 500 million) in additional funding for the Automotive Innovation Fund over the next two years and USD 73.5 million (CAD 90.4 million) over four years to renew the Investments in Forest Industry Transformation programme.

Country Charts

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Selected Highlights

STI policy governance

The Canadian government will release an updated STI strategy in 2014. The new strategy draws on the results of a broad public consultation on three policy areas: business innovation; developing innovative and entrepreneurial people; and excellence in public and post-secondary R&D. In May 2013, the National Research Council (NRC) announced that it would become a national research and technology organisation inspired by the German Fraunhofer institutes. It was reorganised into three divisions: engineering, life sciences and emerging technologies and chose areas of strategic importance in which to stimulate business investments in critical R&D. The NRC also put in place a Concierge Service, a single access point for SMEs looking for innovation-related assistance.

New sources of growth

The NRC partnered with the provinces and the private sector to fund several research initiatives in 2013 and stimulate industrial R&D activity in key technologies: printable electronics: USD 33 million (CAD 40 million); industrial biomaterials: USD 44.7 million (CAD 55 million); the Algal Carbon Conversion Pilot Project: USD 15 million (CAD 19 million); and the Canadian Wheat Alliance: USD 79 million (CAD 97 million). A new Advanced Manufacturing Fund of USD 163 million (CAD 200 million) was announced in the 2013 budget.

New challenges

The government addresses the global health challenge through a contribution of USD 183 million (CAD 225 million) to Grand Challenges Canada (GCC) through 2016. USD 12 million (CAD 15 million) a year will support expansion of the Strategy for Patient-Oriented Research, the creation of the Canadian Consortium on Neurodegeneration in Ageing, and other health research priorities.

ICT and Internet infrastructures

In April 2014, the Canadian government released Digital Canada 150, a plan to take full advantage of the digital economy. It includes new investments to help SMEs adopt digital technologies and to provide digital companies with access to venture capital. It also promotes digital technologies and open data. The federal government is a primary funder of a number of organisations that are key stakeholders in the advanced digital research ecosystem: Compute Canada, a national platform of supercomputing resources; CANARIE, Canada’s Advanced Network for Innovation and Research, which provides a “national backbone” high-speed network to meet the needs of researchers working with high volumes of complex data; and Canada’s research granting councils, which fund academic research and research infrastructure and cover data collection, development, analysis (computing), storage and networking aspects of research; and universities across Canada.

Clusters and regional policies

In April 2014, the Canadian government released Digital Canada 150, a plan to take full advantage of the digital economy. It includes new investments to help SMEs adopt digital technologies and to provide digital companies with access to venture capital. It also promotes digital technologies and open data. The federal government is a primary funder of a number of organisations that are key stakeholders in the advanced digital research ecosystem: Compute Canada, a national platform of supercomputing resources; CANARIE, Canada’s Advanced Network for Innovation and Research, which provides a “national backbone” high-speed network to meet the needs of researchers working with high volumes of complex data; and Canada’s research granting councils, which fund academic research and research infrastructure and cover data collection, development, analysis (computing), storage and networking aspects of research; and universities across Canada.

Globalisation

In November 2013, Canada released a Global Markets Action Plan. A key objective is linkages to international business partners, international research, venture capital and entrepreneurial services that help high-potential Canadian businesses maximise access to opportunities. In January 2014, a new International Education Strategy was launched to maintain and enhance Canada’s global position in higher education by attracting more international researchers and deepening research links between Canadian and foreign educational institutions. Several initiatives also facilitate the international mobility of the highly skilled and entrepreneurs.

Skills for innovation

Canada spends the highest share of GDP on higher education in the OECD area, and has a strong skills base in science and innovation (Panel 1s, t, u, v). The government has made strategic investments to strengthen S&E education, including information campaigns about fields of study, funding for internships in high-demand fields via the Career Focus programme, and enhanced support for First Nations and Inuit students.