Vancouver Sun

Bains takes parting shot at risk-averse businesses

- KEVIN CARMICHAEL

Navdeep Bains earlier this spring spoke to me about his tenure as industry minister, which inevitably led to questions about Canada's eroding competitiv­eness.

He said that he thought he'd done a pretty good job of creating the conditions for a more innovative economy. But the corporate elite? Not so much.

“The ball is back in business's court,” Bains said. “Frankly, if businesses don't do this, I think in the long run they will struggle. They have to start changing their behaviour significan­tly.” How's that for a parting shot? Bains wasn't the first Canadian policy-maker to get frustrated by Corporate Canada's aversion to risky bets on research and cutting-edge technology. But it's been a long time since anyone in Ottawa tried to coax them to keep up with the times by dangling big sacks of cash in their faces. All they had to do was demonstrat­e some ambition and be willing to complement the federal government's contributi­on with an investment of their own.

With Prime Minister Justin Trudeau's next budget set for release on April 19, it might be a good time for a quick review of Bains's tenure.

Finance Minister Chrystia Freeland last fall said she was prepared to spend as much as $100 billion on accelerati­ng Canada's shift to an economy whose contours are shaped by digital technology and climate change.

Those bags of cash that Bains originally dangled in front of our captains of industry are about to get bigger. It's difficult to ascertain who deserves credit for what gets done in Trudeau's Ottawa, a place so tightly controlled by the Prime Minister's Office that many cabinet ministers are as invisible as the lowly backbenche­rs. Still, Bains's tenure marked the return of industrial policy, so he at least oversaw a monumental shift away from the decades-old assumption that the best way to stoke investment was through strategic tax cuts.

The laissez-faire era that started in the 1980s aligned with some decent economic growth, but investment in innovation was mostly disappoint­ing.

The countries that were at the forefront of the digital economy were those where government and politician­s had few hangups about their ability to pick winners and losers. In the United States, the Barack Obama administra­tion backed some duds, but it also bailed out an ambitious electric-vehicle maker called Tesla Inc. in 2009.

Tesla is now worth as much as all the big automobile makers combined, calling into question the notion that government­s can't pick winners. Trudeau and his advisers weren't expecting to win the election in 2015, so their thinking on innovation was incomplete when they took office in November. One of the first things they did was change the name of the department to Innovation, Science and Economic Developmen­t.

“The new title spoke to the ambition and it spoke to the new global reality of how countries were embracing industrial policy through the innovation lens,” Bains said. “It has to be a partnershi­p model. It wasn't exclusivel­y government that was going to drive growth and create jobs. It was my job to create the conditions for growth and job creation.”

At some point over the past Christmas holiday, Bains decided he'd rather spend more time with family than commit to another term as the member of Parliament for the Toronto-area riding of Mississaug­a—malton.

“He was a great cheerleade­r,” said Mike Wessinger, chief executive of Pointclick­care Technologi­es Inc., a Mississaug­a-based developer of software that helps long-term care homes manage data. “He would always proactivel­y reach out. It was great that he cared.”

It's easy to dismiss the importance of cheerleadi­ng. Canada's digitally native companies were struggling to be taken seriously in Ottawa a decade ago. Former prime minister Stephen Harper pitched in with the Obama administra­tion to save General Motors Co. and Chrysler Group LLC in 2009, but he let Nortel Networks Corp. fail. The technology industry needed a champion, and it found one in Bains. The question is whether Bains will be remembered for anything more than surviving Trudeau's propensity for mini-cabinet shuffles.

The answer is complicate­d. Bains's legacy is undetermin­ed because he left before the job was finished. He oversaw the creation of the Strategic Innovation Fund and the superclust­er program, bold initiative­s that might not be bold enough. Quarterly business investment in intellectu­al property averaged 1.8 per cent of gross domestic product during his tenure, compared with two per cent over the previous five years.

Critics of Trudeau's industrial policy are on solid ground when they ask: What was the point?

“A `B,' I guess,” Steven Denney, a postdoctor­al fellow at the University of Toronto's Innovation Policy Lab, said when asked to assign Bains a grade. “There's nothing really to assess.”

Bains's most successful policy probably cost taxpayers the least. Software companies rave about the Global Skills Strategy, which allowed them to get visas for engineers and other high-skilled talent in weeks rather than months. The effectiven­ess of the big programs remains unclear.

Bains argued that his programs deserve more time. Industrial policy was still derided when he took over the industry department. It's now mainstream. For now, that's his legacy. It's up to his former colleagues to write the final chapter.

 ?? ?? Navdeep Bains
Navdeep Bains

Newspapers in English

Newspapers from Canada