The ongoing case for innovation

BUDGETARY THEME

genomics, quantum computing, mobile payments, the sharing economy … These ideas are changing our world for the better, just like the innovations that have preceded them.”

The tricky part for Morneau in this, his second budget, is trying to figure out where the federal government fits in this innovative future, how it can make this future come to pass — and how much it will cost.

The answers, in reverse order: it won’t cost much. For 2017-18, Ottawa will spend just over $1 billion on its innovation agenda, a relative drop in the bucket considering the overall expenditures of the federal government next year will total $330 billion. “It’s peanuts,” said Craig Alexander, the chief economist at the Conference Board of Canada. skills training programs.

Ottawa will spend just under $100 million in 2017-18 on skills and job training programs for Canada’s indigenous peoples. The government will also channel what it describes as investments — some might call them subsidies — into six different areas: advanced manufacturing; agrifood; clean technology; digital industries; health/bio-sciences; and clean resources. And Morneau set aside $125 million to launch a Pan-Canadian Artificial Intelligence Strategy with the expectation that this strategy will spur innovation.

But even at $1 billion a year, what will Canada get for its money? How will a voter, getting set to head to the polls in the fall of 2019, look back at the Trudeau government’s first four years in office and assess whether or not the country has, in fact, become more innovative?

The budget has only partial answers on that front.

First, exports should be growing. The budget’s target is to have exports grow by 30 per cent by 2025. That would mean an average of just under 3.5-per-cent growth per year — which would mean exports would be growing at almost twice the rate of the rest of the economy.

Second, the program laid out in the budget has the goal of doubling the number of highgrowth companies from 14,000 today to 28,000 by 2025. A highgrowth company, for this purpose, is one in which revenues have been growing at an annual rate of 20 per cent for at least three years.

But after that, the benchmarks become a little more hazy. In a section titled “What Success Will Look Like,” Morneau aspires to a workforce that will be the “most skilled, talented, creative and diverse” working for companies “that will be strong, growing, and globally competitive.” How do you measure “strong” or “most talented”? The budget is silent on that front.

Other measures of innovation mentioned in the budget have not yet been invented.

For example, the budget argues Canada will have become move innovative if the share of economic activity generated by the clean technology sector increases.

But the government cannot say what share of GDP is currently generated by clean tech; it cannot say how big the share of GDP owned by clean tech will be in a few years; and it cannot even provide a definition of clean tech.

Statistics Canada is expected to work all that out in time for the 2019 election.