Thank you, Madam Chair and committee members, for the opportunity to present today.
I'm the chair of the Council of Canadian Innovators, a national business association composed of over 120 chief executives from Canada's fastest-growing technology companies.
In March and April our council advocated for supporting high-growth technology firms that are negatively affected by the crisis. We first asked the federal government to create the Canada emergency wage subsidy for our members, and then to extend it from 10% to 75% of payroll costs. We also successfully advocated for the strategic use of programs such as IRAP, SR and ED, SIF, and RDAs because the 30% decline test did not fit for certain types of high-tech companies. These programs are essential to preserve the employer-employee relationship.
It is critical that our innovators are not just surviving but working overtime during this downturn, because their companies will drive Canada's future prosperity in the changed economy that will emerge from this pandemic. We are grateful for the support measures to date and the efforts of your committee and the dedicated civil servants across the government, but we need help focusing the government's path forward on these additional priorities:
One, create an “innovation corps” that mobilizes thousands of our brightest co-op students who had their Silicon Valley job offers rescinded. CCI has created a tech talent radar portal to help connect thousands of recent graduates with Canadian innovators. The government can use this opportunity to reverse the costs of our enormous brain drain.
Two, implement the overdue IP collective to optimize the value of taxpayer investments into R and D, and help generate and protect new intangible assets created with the recent stimulus funding.
Three, create a national data strategy for our health care sector and other strategic sectors, including agriculture, smart cities, energy and mining.
Four, fast-track the adoption of national standards and regulations for digital identification, data sharing and cybersecurity to match the shifts to online service delivery and remote work.
Five, update the Investment Canada Act to prevent leakage of strategic IP at Canadian universities and research institutions, and data in strategic sectors, including health care, smart cities and agriculture.
Six, address both supply chain and value chain resilience, and maximize economic growth by reinventing procurement approaches that strengthen Canada's innovation ecosystem. Value chains are where Canadian innovative companies compete.
Seven, use domestic fintech firms to help distribute government stimulus loans just as the U.S., U.K. and Australia have done, and resume consultations on open banking so that Canadian fintech firms can play a meaningful role in modernizing our closed banking structure.
Canada's response to this economic crisis must be different from that to the great recession. Twelve years ago, our recovery was driven by high-priced Alberta oil, buttressed by voracious Asian demand. Today, oil prices have collapsed because of a supply and demand imbalance, with part of the demand reduction structurally permanent.
The foundation of economic renewal needs to be built through innovative Canadian companies commercializing their ideas to scale, and expanding their freedom to operate into global value chains for the knowledge-based and data-driven economies. Canada needs to diversify its products, not just its markets.
Using a traditional shovel-ready physical infrastructure lens, whether for roads, bridges or hockey rinks, to stimulate demand and drive productivity has no traction in the 21st century global economy where IP and data are the most valuable economic and national security assets. What Canada needs instead is a digital policy infrastructure that facilitates productivity, prosperity and security via global value chains.
Canada's policy-makers need to jettison the outdated and corrosive neoliberal orthodoxies that left us vulnerable. Policies rooted in 19th and 20th century economic thinking applied to the 21st century knowledge and data-driven economy have resulted in a 25-year slide in our national productivity, record household, corporate and government debt and, according to the IMF, a decade of reduced GDP per capita, while the United States' GDP per capita soared by 35%.
Crises always clarify priorities. The COVID-19 crisis generates an ironic opportunity for Canada, because it induces structural changes normally spread over years into a few months. By harnessing their proven ambition and ingenuity, Canadian innovators can help the Canadian government build an innovative, sustainable, inclusive and resilient national economy, but only if our governments put the wind at their backs and strategically use smart policy measures.