Thank you, Mr. Chair.
Good afternoon committee members.
My name is Daniel Perry. I'm the director of federal affairs at the Council of Canadian Innovators. I am 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 companies operating across a number of sectors, including artificial intelligence, digital infrastructure, advanced manufacturing and defence.
As we take a look at the conversation today, I want to step back and look at the global economy. It is no longer neutral or rules-based. Leading economies are actively shaping markets and securing control over critical technologies, value chains and standards. They are doing this by leveraging economic policies and industrial strategies. We have seen this recently in the United States' national security strategy, where America is treating technological leadership, control over critical technologies and economic strength as core instruments of geopolitical power.
AI sits at the centre of this shift as a foundational layer of economic growth and national security. Global economies are becoming increasingly driven by intangible assets. This includes data, intellectual property and algorithms, which determine where value is created and captured. These assets alone make up roughly 92% of the S&P 500 and are approaching $100 trillion in value globally.
In an environment like this, firms that define and capture greater returns are those that are leading out of the gate, and it's the same with the countries that are hosting these competitive firms. This is important context for the committee’s work.
Canada helped pioneer modern artificial intelligence, as we heard earlier on the panel today. However, as we outlined in our submission to the minister’s AI strategy task force, we have not translated that leadership into scalable companies or sustainable economic advantages. This pattern is familiar, as we've seen it before.
We generate the ideas here but we fail to commercialize them. Early-stage scaling firms leave this country and are defined by others. With that, they take their IP, data and decision-making power outside Canada. At a time when our peer countries are moving aggressively, the continued delay in releasing Canada’s AI strategy is not neutral. It is actually putting Canadian firms further and further behind in a race where speed, scale and early market positioning determine long-term winners.
As we outlined in our task force submission, we had three points. The first is enabling Canadian firms to scale here. The core barriers are well understood: access to capital, access to customers and access to talent. Without addressing these, Canadian firms will continue to grow inside foreign systems and we will lose control over long-term economic value.
Our second recommendation focused on building sovereign AI infrastructure. This is compute, cloud capabilities and data, which are all fundamental for economic infrastructure of the 21st century. Without domestic capacity, or control for that matter, both our companies and our public institutions are becoming dependent on foreign platforms and foreign legal systems.
Our final recommendation focused on high-value applications within Canada. These are areas where Canada has its natural strengths and an industrial base to perform under. These priorities align with what we're hearing from the government in its forthcoming AI strategy, as well as the details in the spring economic update.
The issue in Canada has never been identifying the priorities; it has been execution. One of the reasons we're struggling is we have key policy instruments that we are simply not using. If we take public procurement for instance, it is one of the most powerful tools that all governments have at their disposal but we're not leveraging it properly. Domestically, procurement makes up 14% of our GDP. This will validate Canadian technology when other governments purchase it, as well as help firms scale here in Canada.
There is also foreign direct investment. Canada’s approach has largely been volume-driven rather than outcome-driven. Our success has been measured by how much capital enters the country, not by what we retain in terms of those intangible assets. Again, that's IP, data and the long-term economic value.
In strategic sectors like AI, it creates a real risk to our economic sovereignty, as well as our national security. If Canada does not reorient its approach, we risk becoming a branch-plant economy and we will miss one of the most important technological transitions of our time. The window is still open. There is time to act. What we need now is a coordinated strategy that aligns economic policy, industrial capability and national security objectives around one common goal, and that is building and scaling Canadian firms that own and control their assets.
This will set up the economy of today, tomorrow and for future generations.
With that, thank you. I look forward to your questions.