Finance Committee on May 28th, 2026

[Daniel Perry, Director, Federal Affairs, Council of Canadian Innovators]

Good morning, Madam Chair and committee members. Thank you for the opportunity to appear today.

My name is Daniel Perry. I'm the director of federal affairs at the Council of Canadian Innovators. I’m joined by my colleague, Laurent Carbonneau, our vice-president of policy and advocacy.

The Council of Canadian Innovators is Canada’s 21st-century business council. We represent over 175 Canadian-headquartered, high-growth technology firms operating in a number of sectors, including artificial intelligence, digital infrastructure, advanced manufacturing, defence and other dual-use technologies.

Our members are building businesses right here in Canada, selling into global markets and competing every day for customers, capital and talent. They are exactly the types of firms that Canada needs more of if we're looking to grow our economy and have higher wages and an increased tax base.

Canada is operating in a global environment where policy, industrial strategy and national security are becoming increasingly connected. Leading economies are no longer treating innovation policy as a narrow research file. They're using procurement, capital, trade policy, immigration, standards and national security as tools to shape markets and build domestic capacity. We do not have to look far to see this in action.

As outlined most recently in the U.S. national security strategy, America is treating technological leadership, control over critical technologies, and economic strength as core geopolitical powers. At the same time, the global economy is changing. It is becoming increasingly driven by intangible assets. Think data, intellectual property, algorithms and know-how. This is how it is creating value, and those who are capturing it are leading. These assets make up roughly 92% of the S&P 500, and they are approaching $100 trillion in global value.

Canada needs to respond to this new reality. We have world-class researchers, strong entrepreneurs and companies with global potential. The challenge is that too many of these firms are struggling to scale and grow here in Canada. The barriers are well known: access to customers, access to capital and access to talent. When these barriers are not addressed, Canadian companies are often scaling inside systems defined by others. The result is that intellectual property is leaving Canada. It's the same with our data and decision-making. Long-term economic value has also moved outside the country.

To address this, our pre-budget submission has made four key recommendations.

First, Canada should use public procurement as a strategic economic policy tool. Government is one of the largest buyers in our economy, but we do not use purchasing power effectively to validate Canadian technology, create early customers and help our firms compete globally. Buying Canadian should mean just that. It should mean economically Canadian. Procurement should account for intellectual property, data, domestic economic activity and Canadian control.

Second, Canada should build a sovereign AI and defence industrial base. Compute, cloud, data, software and AI systems are fundamental parts of infrastructure in the modern economy. In defence and other sensitive sectors, Canada cannot afford to be dependent on foreign-controlled systems that it cannot maintain, upgrade or even operate independently.

Third, Canada must strengthen its innovation capital stack. This gap is most acute at the later stage of growth, when Canadian firms are becoming more and more dependent on foreign capital. With foreign capital come the risks of relocation, acquisition and the loss of Canadian IP. Budget 2026 should create and focus government-backed capital on series B and later rounds, and it should introduce a Canadian qualified small business stock-style incentive that will help Canadians stay Canadian as well as raise capital here.

Fourth, Canada should modernize how it is attracting high-potential founders. A more reliable start-up visa that is tied to business performance, job creation and IP retention would help ensure that entrepreneurs have the talent they need in order to build their companies here. We have to be mindful as we move through this, as CUSMA is in the background of this discussion. The upcoming review will help shape rules around data, digital trade, standards and market access. Canada needs to ensure that firms building towards the 21st-century economy are represented in this conversation.

Budget 2026 is an opportunity to move beyond the fragmented measures we have seen to date and to align Canada’s economic, industrial, trade and national security tools around one common objective: helping Canadian firms build, scale and, ultimately, stay here in Canada.

With that, thank you very much. I look forward to your questions.

[The Chair, Liberal, Karina Gould]

Thank you very much, Mr. Perry.

We will conclude the opening statements with Ms. Vega from Fintechs Canada.

[Adriana Vega, Executive Director, Fintechs Canada]

Thank you very much.

Good morning. My name is Adriana. I am the executive director of Fintechs Canada.

Thank you for the invitation to appear today to discuss our industry's recommendations as part of the committee's study on the pre-budget consultations for the 2026 federal budget.

Fintechs Canada is the leading voice for Canada's financial technology sector, including providers of enabling technologies and fintechs in lending, payments, crypto assets and more. Collectively, our more than 50 members serve millions of Canadians from coast to coast.

We commend the government for the important progress introduced in both budget 2025 and the 2026 spring economic update, which included meaningful financial sector reform that will make the financial sector work better and harder for Canadians and our small businesses. Moreover, the ongoing work toward a national anti-fraud strategy is a welcome step toward making our financial sector more secure.

We are at an inflection point in global finance, and more work remains. In view of this, we encourage the government to build on this progress. Fintechs Canada has provided details in our pre-budget submission to the committee, and I will take this opportunity to highlight just a few key measures.

First, on competition, the government should build on this important momentum to increase competition in financial services by focusing on implementation. That means delivering timely and balanced frameworks for consumer-driven banking—or open banking—and stablecoins through regulation that preserves competition and encourages innovation.

We also need to make it easier for Canadians to switch providers, through eliminating fees, which is an ongoing effort, but also by reducing unnecessary friction that limits consumer choice. Greater competition also means a sustained focus on Canada's real-time payments infrastructure, ensuring a balanced access for fintechs, challengers and incumbents alike. For the real-time rail, for example, to deliver on its full potential, broad participation and adoption are essential. Similarly, fair and non-discriminatory access to essential payment technologies, such as near field communication, is essential to promoting consumer choice.

Second, our SME financing market remains highly concentrated. It limits options, and it drives up borrowing costs for small businesses. Government-backed programs, such as the Canada small business financing program, or CSBFP, are designed to share risks with lenders to fill this gap. However, the existing eligibility criteria are primarily designed for prudentially regulated deposit-taking lenders and are not really aligned with new innovative business models that fintechs can bring to the table. Eligibility for this program should therefore be reformed and expanded to allow more capital to flow into small Canadian businesses.

Third and last, Canada has a major opportunity to strengthen both innovation and our monetary sovereignty through a competitive stablecoin framework that supports competition and enables Canadian dollar-backed stablecoins to scale and compete internationally. To do so, these products should be allowed to offer features such as yields or rewards that incentivize consumer adoption and foster viable business models here in Canada. A competitive ecosystem for Canadian stablecoins would support more efficient payments, reduce transaction costs and reinforce the role of the Canadian dollar in emerging digital markets today.

Fintechs Canada will continue to work collaboratively with government to support policies that foster innovation in financial services, enhance competition and deliver better outcomes for Canadians.

I thank you again for your invitation. I look forward to your questions. Thank you.

[The Chair, Liberal, Karina Gould]

Thank you very much, Ms. Vega.

We will begin with Ms. Cobena for six minutes, please.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you, Chair.

Thank you to all the witnesses for your recommendations. I'm a strong believer in the close collaboration between industry and government, and your recommendations are important.

I want to direct my questions to Mr. Perry, if I may.

I loved your opening statement, because you talked about how your members compete on capital, on customers and on talent. Having been in the market sector for close to 15 years, I saw that on a daily basis. I also saw what you mentioned next, which is that we have strong entrepreneurs here in Canada, but they are struggling to scale. Could you expand on that? Why do you think that is?

[Daniel Perry]

Thank you very much for the question.

One of the biggest challenges we see from our membership is access to customers.

We recently released a survey that we do annually, asking our CEOs what challenges they are facing. About 40% said that the biggest challenge to growing their business here in Canada is access to customers.

When we take a step back and see who the biggest customers are here in Canada, they are the governments, whether that's the federal government, the provincial governments or the municipal governments. They make up roughly 12% to 15% of GDP in spending each year. When we take a look at that, we're seeing where they're procuring from, and the reality is that a lot of these scaling firms we represent do not have access to that.

The recent buy Canadian legislation that was introduced by the government over the winter was a good step forward, but there is still more that needs to be done, whether that is looking at how we're allowing our companies to compete in these procurement processes or, as well, looking at what is a Canadian company.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

What is your customers' experience with this procurement process? Just so Canadians can understand, can you describe what that looks like?

[Daniel Perry]

It's a challenge. It really depends. Often, what happens is that a problem is identified, and they go through the proper channels. They go through the process, and they are very successful in that. However, once the procurement vehicle ends, there's no opportunity for them to continue working with the government. If other departments are interested in working with them, they often do not have the ability to go through that procurement process. It just stops, fundamentally.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

That's interesting.

A question comes up in my discussions with a number of business owners: “Well, you have to be close to the government to actually have a chance. If you're not friends with the government, you essentially have no chance.”

Do you see that on your end?

[Daniel Perry]

There is definitely an incumbent advantage. We see a lot of multinationals, foreign nationals and hyperscalers come to the government because it has a legacy bias. That is a big challenge. We have a lot of really good Canadian talent and great ideas here.

For instance, I like to point to the announcement on the over-the-horizon radar system. The government championed not procuring from the U.S. We found a counterpart in Australia to lead on the defence procurement for that. After the announcement was made, we had four Canada-headquartered companies call us. They weren't members at the time. They said, “We deliver the same technology, have better specs and could likely beat them on price, and DND is currently funding us.”

That led to our mapping out the ecosystem for the government. Last summer, our homework was putting out a mapping survey to get a sense of what Canadian companies are doing in the dual-use space. We had over 450 respondents. We went through it, filtered it and provided it to the government so it could understand what Canadian companies are working on, where they are and how they can best support the government in procurement processes. This is especially...as defence becomes a priority. We're seeing a lot of spending there, so we really want to make sure Canadian companies are well positioned to engage with the government.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you for that.

There was a recent report from the CFIB talking about the “entrepreneurial drought” in Canada. We've seen six consecutive quarters with more businesses shutting down than opening up.

In your line of work, I'm sure you have entrepreneurs as well as bigger companies. I'm thinking about the entrepreneurs, specifically. Could you speak to this trend?

[Daniel Perry]

Among our membership, what we find more often is this: As they're scaling, they're looking for capital. When they look for capital, they look outside Canada, because the reality is that it's easier to get a deal done in San Francisco than it is here. Then, as they are getting their deals and funding, their funders—which are mostly from outside Canada—ask them to relocate and move out. That's how we lose a lot of our talent and great companies. Think of Ozempic, for instance. It was a U of T idea that now funds the Danish economy.

We see that leakage quite often. It is one of the biggest challenges. That's why one of our recommendations is to focus on series B and above funding when it comes to venture capital, because that is where we are seeing the biggest opportunity. Canada's biggest weakness is in losing a lot of really good companies because they're finding capital elsewhere. They're being pulled out of Canada.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

Thank you for that.

We also hear a lot about the government's failure to properly protect intellectual property from predators in capital-rich and investment-friendly environments, mostly down south.

Are you seeing a lot of Canadian innovators fleeing to the U.S.?

[Daniel Perry]

We see the U.S. as an attractive market for that reason. It's because we're seeing the capital there.

You are very right to address the IP challenge. That is something we struggle to capture here in Canada. Again, we're really good at coming up with ideas, but when it comes to patenting and protecting them, with the regimes we currently have in place.... There is room for improvement on that. We are very eager to work with you and others inside the government to better ensure that our innovators have the opportunity and the right tools at their disposal to continue to build here in Canada.

[Sandra Cobena, Conservative, Newmarket—Aurora, ON]

That's great.

My last question—

[The Chair, Liberal, Karina Gould]

I'm sorry, Ms. Cobena. That concludes your time. Thank you very much.

Mr. Lavoie, you now have the floor for six minutes.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you, Madam Chair.

Thank you to the witnesses for being with us today. Their testimony and briefs are very important and really very interesting.

Ms. Hayes, everything related to artificial intelligence is very interesting, particularly the integration of artificial intelligence in small and medium-sized businesses, or SMEs. I'm just about finished reading a book called Nexus, which is about that. I find it intriguing at times, and sometimes even frightening when it comes to certain passages on artificial intelligence.

When I was president of the Chambre de commerce et d'industrie de Québec, we conducted a survey on the integration of artificial intelligence in SMEs. My interpretation was that those who use artificial intelligence in businesses and SMEs are using it more and faster, even exponentially faster. Conversely, some don't use it at all. We said that, in the coming years, there would be major gaps between those who use it and those who don't.

First of all, do you somewhat agree with that statement?

Second, how can the government encourage this digital transition?

[Helen Alexandra Hayes]

I think this really boils down to a question about trust and engagement in conversations about AI. We're seeing right now a widening, to your point, of people who champion AI systems, who are eager to see their rollout across sectors, and then others who are frightened by them, who don't understand them, and who might be concerned about their effects on major parts of their lives, like their job, like their education, like their social relations.

Part of my advocacy work over the last few years has been to try to narrow that gap between the champions and those who are more skeptical through policies and processes like citizens' deliberations. I started with this idea of trust, because I don't think that the Canadian populace can actually gain trust in AI systems if they're not being included in conversations about their rollout. I don't think that adoption across sectors will actually work in the way that the government hopes it will if we don't have wide-scale engagement about what it means for AI systems to be integrated across those sectors.

To answer your question, I think there is that binary, but that it can, in part, be addressed by engaging people on the question of AI in their work, in their social life and in their education, through citizens' assembly processes.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

Thank you for that.

Ms. Bak, when I was at the Chambre de commerce et d'industrie de Québec, we did a lot of surveys. All my life, I have believed not only in economic development, but also in the environment. I've always defended those two points, and people who know me are a little tired of hearing about it. I've always preferred “and” over “or”. I also say that here in Ottawa, in Parliament. We can have economic development and take care of the environment. We can integrate that into our policies and our economic development. I've seen so many companies do it.

My question is quite simple.

Do you have a hard time getting that vision across when you talk about it? The vision is that Canada is capable of doing both and talking about both at the same time in the same sentence.

[Céline Bak]

That's a very good question. Thank you for that.

As you may know, for over 10 years, I was involved in the annual release of a report on Canada's clean-tech companies. It was a report on innovation for the environment. While we were doing the annual research, the credit issue was ubiquitous.

I'm going to build on the comments that were made by the other witnesses.

One of the reasons that private lending is important is that it will allow businesses and entrepreneurs to retain ownership of their company and make decisions about how to engage with their capacity, their priorities and their values as business owners.

Credit is a way of ensuring the sustainability of businesses. It's a way of ensuring economic sovereignty for our businesses. With sovereignty comes the ability to make the necessary choices about our capacity or the demands we make on the planet, as well as about what we are going to leave to our grandchildren.

[Steeve Lavoie, Liberal, Beauport—Limoilou, QC]

The clock is ticking.

Ms. Vega, I read your general message about the financial system being too complicated, too concentrated, too slow and too competitive. Despite all that, our financial system is recognized as one of the best in the world. As we can see, when there are economic crises, it supports businesses.

How do you see the balance between accelerating change and keeping that structure strong in Canada?

[The Chair, Liberal, Karina Gould]

You have 20 seconds, please.

[Adriana Vega]

There's no question that Canada is known globally as one of the safest and most robust markets, but our sector believes that we have had a tendency or a bias for, perhaps, overcorrection, an incentive to eliminate all risk from the equation. I think over time—

[The Chair, Liberal, Karina Gould]

I'm sorry, but I'm going to have to cut you off there. Maybe someone else will ask you a follow-up question.

[Adriana Vega]

I will try again.