A Conversation on Innovation With Navdeep Bains
Innovation Minister Navdeep Bains sat down with Policy Editor L. Ian MacDonald on April 23 for a wide-ranging Q&A touching on the Trudeau government’s five designated superclusters, advancing women in business, online privacy and other issues.
Policy: Minister, thank you for doing this. We want to talk off the top about the superclusters and the progress that’s been made to date. Is it fair to say you’re still in the starting gate but, you know, ready to go?
Navdeep Bains: Absolutely, it was a very competitive process. This is a key part of our government’s Innovation and Skills Plan. Superclusters are very important. We used our power to convene, to bring industry, academia and civil society together. Essentially, the key outcome is really about jobs and growth and we’re really excited about the opportunity going forward. We
had over 50 different applications or submissions to the superclusters initiative. We ultimately decided on five. We wanted to avoid giving a little bit of money to many different projects and instead, focus on the most ambitious, bold initiatives so we selected five.
Policy: One per region?
Navdeep Bains: Well, it worked out that way but as you know innovation happens everywhere across the country and if you look at the five selected superclusters as well, it really reflects two key dimensions. One is the influence of ecosystems and platforms and also playing to our strengths. The ocean or agriculture, for example. Our country is blessed with natural resources, so the question is how do we leverage these strengths and how do we make sure that these sectors of our economy are also part of our future economic growth.
Policy: What about the role of the private sector in this and the matching funds, $950 million from the private sector, $950 million from the government and you talked about it in your statement in February at the launch of $50 billion of economic activity being generated over ten years. Are you comfortable with that number?
Navdeep Bains: This is business led. This is what makes this initiative different. It’s not about government prescribing the sectors or the technologies or the industries. This is about businesses determining where the growth is and going out there and building partnerships and they did that in a meaningful way. We had 450 total businesses participate. Over 300 small businesses were part of this initiative as well 60 academic institutions. Clearly, one of the aspects of this initiative was to make sure that, at minimum, the private sector match dollar for dollar the investment that we are making, and they exceeded that amount and I think when it is business led and they are contributing more than they expected that demonstrates, initially the success of this initiative. Policy: Can we talk about the five regional superclusters? First of all, the Atlantic, we have a piece from Matt Hebb, who has quite a striking statistic that only one percent of Canada’s economy is linked to ocean activity. Here we have the largest Arctic space in the world, the largest ocean space in the world and only one percent of our economy is linked to the oceans.
Navdeep Bains: Enormous potential and that’s why we think that if you create a platform, an ecosystem that can benefit shipbuilding, oil and gas, renewable energy, aquaculture. There’s just so much potential with the ocean supercluster. What was also very interesting to see is that all four Atlantic provinces came together. Rather than making individual bids they determined that if they came together as a region to really leverage the ocean and the potential that existed there, they would have a stronger application, and they did.
What is also really exciting is that a lot of small businesses are involved. As I mentioned, a total of 450 businesses are involved in the superclusters initiative but 300 of them are small businesses. The success of a lot of these initiatives, including the ocean supercluster, is about strengthening that supply chain. It’s about how can large, big firms help small firms scale and grow. How can they help them with research and development? How can they help them with technology adoption? How can they make their processes more seamless?
And, again, how can they connect to global supply chains? That is a key part because as part of our Innovation and Skills Plan we are focusing on skills, talent and people, training, retraining and life long learning. Technology adoption’s another key aspect but both of those are really driven towards helping companies scale and grow. That’s one of the key outcomes from the supercluster initiative.
Policy: Quebec and the AI, artificial intelligence hub in Montreal, which is already quite impressive and the alliance between the University of Montreal and McGill is quite something. Navdeep Bains: And Waterloo as well. I was there at the University of Waterloo when they introduced their Waterloo AI Institute. It’s important to note that we have over 500 companies in artificial intelligence in Canada. If you look at the potential, according to PwC, AI will actually represent over $157 trillion of economic growth and opportunities or part of our economy by 2030. So, it’s all about how can we reduce inventory, enhance the customer experience, help integrate our supply chains. Those are some of the key aspects we looked at throughout the selection process. Not only did they have ambition but they saw a real growth area and they demonstrated meaningful technology deployment through artificial intelligence as a cross platform that would impact so many different aspects of our economy. For instance, retail, manufacturing, agriculture, etc.
Policy: And Ontario and the TorontoWaterloo corridor.
Navdeep Bains: So advanced manufacturing really stepped up in a big way. Additive manufacturing, particularly 3D printing for example, was a big play. I think it’s a demonstration that these technologies are coming and they are impacting so many different industries. When confronted with this reality, we must ask ourselves how do we compete? How do we add value? How do we compete with other jurisdictions that are also betting on innovation and similar technologies? What was really interesting about the advanced manufacturing supercluster initiative is their focus on training and skills. Because as you know, in our budget, we focused on innovation and skills training. You can’t have innovation if you don’t have skills, if you don’t have the people, the technology, the know how, the creativity. With the advanced manufacturing initiative, they really stepped up in a big way on knowledge transfer, on training and retraining because as robotics are invested, as they invest in 3D printing, they need to re-skill, they need to redeploy resources to make sure the
We’ve done really well when it comes to venture capital in Canada. We had a record number last year—$3.2 billion in VC funding—but we need to make sure that we also create opportunities for women, so there was a special carve-out of $50 million for womenled businesses and other businesses that, in the past, traditionally got overlooked.
skills and labour force reflect the new opportunities that will emerge.
Policy: And the Prairie corridor?
Navdeep Bains: That one is really looking at how to add value to proteins through canola and pulses. Again, playing to our strengths. People recognize that China and India are growing economies, with vibrant growing middle classes.
Policy: Huge customers.
Navdeep Bains: Huge customers, especially when it comes to their daily diet. They want to consume more and more protein. So again, the question is how can we add value? How can we make sure that we are able to take advantage of these emerging economies where there is enormous economic opportunity and market access. Using genomics as well as IT to really add value to provide opportunities. Again, this demonstrates innovation isn’t about the latest iPhone, it’s not about the latest technology. It’s about industries like agriculture, for instance, that are very innovative and they, again, demonstrate a great deal of ambition which positions Canada well in the global economy.
Policy: And finally, B.C. and the tech corridor?
Navdeep Bains: So, this is a big data play. The applicants looked at data analytics and focused on quantum technology as well through D-Wave for instance, and that’s a very important company initiative as well. They looked at how they can use data and big data and data analytics to innovate, in the natural resource sectors, so of course forestry is an example of that, but also in precision health. Again, what’s interesting about these superclusters is they go beyond one sector or one industry. It’s about these platforms that provide opportunities for co-development. If you look at all the superclusters, there are some common themes and one of the areas that we as a government focused on was intellectual property. The latest budget further demonstrates our commitment to science and research.
We do well in providing additional resource to our academic institutions. Though we need to do a better job of taking that research and commercializing it. And when we do commercialize and generate the IP we have to make sure Canadians benefit from that IP. For the first time in the history of Canada, we now have a national IP strategy. As these superclusters grow, as these technologies emerge, as these ecosystems strengthen, the IP that is generated will benefit Canadians. The IP strategy we just announced will help Canadian companies address some of the key recurrent issues IP experts and industry stakeholders have been facing over the last decades. In the knowledge economy, IP is more important than ever before. If you look at the S&P 500, 84 per cent of their companies are linked to IP. Their assets. 84 per cent of their assets are linked to IP. If you look at the top 50 TSX companies only 40 per cent of their assets are linked to IP. Clearly, when you look at our U.S. peers, for instance, we need to a better job in this new knowledge economy.
Policy: One of the things that is quite striking is the emphasis on female entrepreneurs in the budget and for example $1.65 billion to women business leaders or start ups over three years through the BDC and EDC. Can you discuss that?
Navdeep Bains: I’m an accountant so numbers matter and we had, as you may recall, when we formed government, we had our mandate letters made public and from those mandate letters we also came forward with metrics. Key targets that we wanted to achieve. One of the targets was that we wanted to double the number of majority woman-owned businesses to 340,000 businesses by 2025. One of the key areas that we looked at where there was a gap in our ability to achieve that target was financing for woman entrepreneurs. So, investing $1.65 billion would deal with that gap around financing. Specifically tailored and targeted to women owned businesses to help us achieve that target. This complements another program called the Venture Capital Catalyst Initiative. We’ve done really well when it comes to venture capital in Canada. We had a record number last year—$3.2 billion in VC funding—but we need to make sure that we also create opportunities for women, so there was a special carve-out of $50 million for women-led businesses and other businesses that, in the past, traditionally got overlooked. This isn’t only about businesses in traditional urban centres, but also in our rural remote communities as well. So, again, we are being very clear: innovation has to benefit the many, not just the few.
Policy: There’s also $105 million over five years to redress barriers to women start-ups.
Navdeep Bains: Correct. If you look at the start-up culture in Canada, we do really well at starting up businesses and again if you look at the data there are many opportunities not presented to women entrepreneurs and there are a range of systemic barriers that exist. We want to make sure we provide the additional resources to help the startups in Canada because it is not only
the start-ups that we’re focused on but how do we help them scale up and become global champions That’s really been the focus of our government. If you look at our Innovations and Skills plan, we consulted Canadians, we specifically consulted businesses across the country and we came to the determination that this is going to be a multi-year effort. One of the key outcomes is our ability to become a scaleup nation, rather than just a start-up nation. We will continue to support the start-ups, specifically women, but overall, we want to make sure we help companies scale up. We’ve presented, for instance, a procurement program, Innovation Solutions Canada. The idea is that using government as a marquee customer Canadian start-ups will be able to validate their products and services so when they go abroad they can say they have done business with the Government of Canada and that opens up more opportunities for them to scale up and grow in new markets. We’ve also provided opportunities for rural and remote communities. Our Connect to Innovate program is a very good example of that. In this day and age, high speed internet is no longer a luxury, it’s essential. High speed internet and broadband connectivity in rural and remote communities is essential for businesses. Not only to start but scale up as well and get access to global markets. As I mentioned, innovation happens everywhere, so if we want our businesses to succeed and grow, wherever they are based in Canada, we need to ensure that all Canadians can access the basic technological tools they need in the 21st century economy. And then, of course, on skills I think it is really essential to note that we’ve brought forward the Can Code Initiative. This is about coding for one million kids and teachers over the next two years, again a focus on young girls and Indigenous people.
Policy: Also, that 15 per cent of small and medium-sized businesses doing business with the government would be led by women.
Navdeep Bains: We believe that number can definitely increase. We believe that government as a marquee customer can really create opportunities for these businesses to become more export oriented, become more innovative and that’s what we’ve done with the Innovations Solutions Canada program. We would help with the proof of concept, we’d help with the prototype, we’d help them with overall procurement and it’s good for government as well because it injects innovative ideas and solutions to help us address challenges and issues that we’re facing within government. It makes us more nimble, better positioned to serve our constituents, at the same time it allows us to use government resources to strategically invest in Canadian start-ups and Canadian businesses, women led businesses, for them to be able to succeed not only within Canada but globally as well.
Policy: In terms of gender equity in businesses, is it helpful, and I think it obviously it is, that you’ve named Janice Fukakusa of Royal Bank as the Chair of the Infrastructure Bank.
Navdeep Bains: I think if you look at the governance structure for the superclusters we’ve actually been very clear about prescribing two areas. One is they need to have a very clear gender strategy. The Prime Minister led by example when he created the first gender balanced cabinet and we want to see leadership through the governance structure with the superclusters with a gender equality and diversity strategy. Not only at the board level but at the employment and deployed funds levels as well. These two are consistent with the legislation that just passed on Thursday, Bill C-25. This Bill C-25 is about promoting diversity on corporate boards. Corporate boards must now have a diversity policy and if they don’t it is a comply or explain model, they must to explain to shareholders why they don’t have a diversity policy or why they didn’t reach the objectives outlined in their strategy. If you look at the UK example or if you look at the Australia example, this will actually increase the number of women on boards significantly. Right now, in Canada, only fourteen percent of board members are women and that must change. We can do better.
Policy: There’s $4 billion over five years in the budget on R&D and Science. That’s in your department.
Navdeep Bains: Innovation, Science and Economic Development. As an activist government we’ve been very clear: they’re all linked. Science is about the long term. We need to make sure we make significant investments in science.
If you look at Canada’s success in artificial intelligence. It’s attributed to successive governments and here I give credit to the previous government as well, about making investments in that specific area. If we want to see Canada compete globally, and we are in a global innovation race, we’re competing with China that’s focused on mass innovation. We’re competing with India that’s focused on digital cities, for instance, then we need to be strategic about focusing on research where we can be the leader in breakthrough technology where we can develop areas of expertise. This complements the overall brand of Canada as well. The fact that we not only value diversity but we are genuinely open to people. The global skills strategy is the best example of that. This is also part of our Innovation and Skills Plan. This particular program allows Canadian academic institutions and Canadian businesses to bring someone with high in demand skills to Canada in a matter of two weeks. This is really a game changer. We introduced this program last June and thousands of companies and academic institutions have applied and we’ve issued many, many visas. This clearly has helped Canada, again, reap the benefits of those investments that we are making in science. It helps us translate that science and commercialize that into good IP and it allows those IP companies to succeed because, going back to IP very quickly, IP-intensive firms on average pay 16 per cent more than their counterparts when it comes to wages, they
are more export oriented and they create more jobs. At the core of that is really our investment in issues like coding but global skills as well and science is really critical to that. That’s why that $4 billion investment was important and of that $4 billion investment in science $1.2 billion was for the granting councils. That provides predictable funding over the next five years for us to play a leadership role on cutting-edge research.
In light of what has happened in the U.S., in light of what has happened with Brexit, for instance, that’s really demonstrated that Canada is in a unique position. We value people.
Policy: There was a piece recently from MaRS in Toronto—a survey of tech firms. Fifty-three per cent saw an increase in international job applications since 2017 over 2016 because of the Trump administration’s policies on immigration. The top choices for relocation outside the U.S. were: Canada 32 per cent; the UK six per cent; France five per cent. This seems like a huge opportunity for us.
Navdeep Bains: Enormous opportunity. We were mindful of this before the U.S. elections and we sent a clear signal when the portfolio was changed from Industry Canada to Innovation, Science and Economic Development. Our Prime Minister was very clear about his commitment to diversity and making sure that we promote better opportunities for women in entrepreneurship. If you look at our Innovation and Skills Plan, it really sets in motion the fact that Canada was genuinely open for trade, investment and people. In light of what has happened in the U.S., in light of what has happened with Brexit, for instance, that’s really demonstrated that Canada is in a unique position. We value people. We understand that we don’t have a monopoly on good ideas. For our companies to succeed and grow and be globally competitive we need to genuinely be open. We obviously are making significant investments in our domestic pipeline through skills and training and coding and retraining and education and lifelong learning. Making big bets on science, focussing on innovation and that’s really helped strengthening Canada’s value proposition and that’s why you are seeing many people that want to come and study here and work here and ultimately stay here and raise their families, which is really important to us because we are a country of 35 million people and we need immigration if we want to maintain and enhance our quality of life. Not to mention that in a globalized economy, our businesses directly benefit from having a diversity of cultures, languages and perspectives around the table.
Policy: What’s your feeling, as the innovation minister, of this Facebook story? Are you worried about it? Eighty-eight million people had their identities compromised.
Navdeep Bains: We have to be very vigilant. We have to recognize that in the new knowledge economies, especially in the new digital economy, data is a really important raw material and the protection and privacy of data, individuals’ data is critical. That is why we brought forward changes to PIPEDA, the Personal Information Protection and Electronic Documents Act, in terms of making sure that if anyone’s personal data that was either stolen or lost must be immediately notified by the business or the business entity. If companies fail to do so and fail to tell the privacy commissioner, they will be subjected to a $100,000 fine per infraction. So, we’re taking concrete steps to further protect Canadians’ right to privacy. We’re also working on a data strategy. As I mentioned, when we think of our Innovation and Skills Plan and we look at all the different policies and programs, some of the foundational pieces are intellectual property and our upcoming data strategy and we’re working on both of these initiatives. Both in terms of the economic opportunities it unlocks and to help understand the importance of data and how we can be more competitive but also understanding the privacy and ethical concerns must be taken very seriously. To answer your question, as innovation minister, I’m very mindful of the challenges and opportunities and some of the responsibilities we have around data and data protection, but at the same time we have two choices; either we defend the status quo or we recognize that, if we look at artificial intelligence for example, data is so essential, how do we get ahead of the curve and set the rules and put in place policies that allow us to compete and grow and succeed in this global innovation race and at the same time not compromise people’s personal data and information. We can either resist the technological changes we are facing or we can embarrass them. As the Minister of Innovation. I’m positive that Canadians have what it takes to meet the challenges and seize the opportunities associated with what some refer to as the fourth industrial revolution.
Policy: I must say on a personal note as a journalist I worry about Facebook being an aggregator and a distributor rather than a news desk.
Navdeep Bains: Well, they said they are a platform and this is something they have to recognize. They have a responsibility and they are much more than a platform. So, they have a responsibility with regards to issues around fake news. They have responsibilities around protection of people’s data and they need to step up in a big way.
Innovation Minister Navdeep Bains in conversation with Policy Editor L. Ian MacDonald at his Centre Block office on April 23.