Science and Research Committee on Oct. 27th, 2025

[The Chair, Liberal, Salma Zahid]

We will now proceed to MP Blanchette-Joncas.

You have six minutes, please.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Thank you, Madam Chair.

I would like to welcome the witnesses who are with us for this new study.

Mr. Williams, the report entitled “Support for the Commercialization of Intellectual Property” by the Standing Committee on Science and Research, published in 2023, as well as the Library of Parliament's briefing note in support of this study, produced in October 2025, make the same observation: Canada is the only G7 country, or one of the only G7 countries, where private investment in research and development is declining.

Why do you think the federal government has still not managed to address this innovation deficit despite the creation of the Canada Innovation Corporation and programs like the strategic innovation fund?

[Ryan Williams]

Thank you very much, Mr. Blanchette-Joncas.

It's nice to be here.

No, you're right; I think the problem we found on that study.... We did complete a study at this committee. It was one of the first studies by this committee that looked at IP commercialization. We specifically looked at public research. We looked at universities, polytechnics and colleges, and we saw the return on that. The statistic that we may not have had in that report, which we've gotten since and now use, is that of all the research that goes into universities, only 5% of those patents get commercialized.

Now, that's a low stat. When we looked at the alternative, one of the recommendations that came out of that report was to look at the colleges and polytechnics, because the colleges and polytechnics were much higher than 5%. The reason they were higher than 5% was that they were engaged with small businesses themselves. They engaged with their IP. They helped them scale and accelerate that IP. Then they gave it back to those businesses. They didn't own the IP. They allowed them to grow.

We have to get back to that. In all of the recommendations I've seen so far—we haven't seen the budget come out yet—that hasn't been a reality in terms of the government changing how it looks at innovation and how it funds our public institutions, including our colleges and polytechnics.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

I want to come back to the 2023 report entitled “Support for the Commercialization of Intellectual Property” by the Standing Committee on Science and Research. In that report, the committee made 14 recommendations to improve the value of Canadian research. Two years later, no updates or follow-ups have been published.

Would you say that the government is suffering more from an innovation deficit or an implementation deficit?

[Ryan Williams]

It's both, certainly. You know, I think we have to get serious on this. When we look at what the reality of innovation means for Canada, it's Canada's fastest-growing export when we look at data and we look at technology. It's now sitting at 10% of our exports. It's grown four times faster than our goods sector. What's leading that is obviously cloud services and computer services. When we look at AI as a whole, there's quantum computing, in which Canada still has quite a bit of the AI.

If we're not serious on that, when we talk about sovereignty, looking at Canada's sovereignty, where and who it's actually benefiting are the Chinese and the Americans. So I think we're going to find in short order—as we are now, looking at slowdowns of the economy and looking at the trade war we have with the Americans—that if we're not serious about owning our sovereignty with IP and with data as a whole, we'll lose all of that. We'll be in a big mess of trouble. We'll be playing catch-up. As a first priority, this government needs to establish our sovereignty and also grow our innovation sectors.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

I'll continue on the topic of sovereignty.

You mentioned that 80% of Canadian digital data is hosted on U.S. servers, which is unacceptable. That's pretty easy to understand.

By letting this dependence take hold, is the government not compromising the digital sovereignty of the country and, by extension, that of Quebec, where the most advanced research in artificial intelligence and cybersecurity is concentrated?

The federal government invested in its economic supercluster, and it identified Montreal as a strategic point in the development of artificial intelligence. However, it's unable to trust its own infrastructure and facilities in which it has invested.

[Ryan Williams]

No. We have to get this right. I don't think many Canadians understand the severity of this. We do not have sovereignty on data, so Quebeckers who have their data stored on a Montreal server are under the jurisdiction of U.S. sovereignty and privacy laws.

When we were studying Bill C-27 in the last Parliament and updating PIPEDA and the Privacy Act, we looked at Quebec as having the best provincial privacy laws in Canada. For Quebeckers to understand that their data is under the jurisdiction of a U.S. law under the U.S. CLOUD Act, that would be very concerning for Quebeckers.

The government has to either update the Foreign Extraterritorial Measures Act or come up with its own sovereignty act that I've identified. That would ensure right away the sovereignty of data which would be put back into the hands of Quebeckers and Canadians and not to the U.S. and U.S. courts and potential lawsuits from U.S. courts.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

If we don't own our patents, data and infrastructure, can we talk about scientific sovereignty or have we simply become a technology subsidiary of the United States?

[Ryan Williams]

It's the U.S.A., but also China and other nations that are investing in Canada and owning the rights to our data.

Again, going back to what's most important, I hope, a recommendation from this report is to establish our digital sovereignty now, not in the next Parliament and not in eight months, but right now. We need to establish and get control of our IP. We need to understand the sieve that Canada has become in letting our ideas and public dollars flow out of the country. We need to ensure that once we do that, we can start building our IP, and start building our wealth and potential here in this country.

[The Chair, Liberal, Salma Zahid]

Thank you.

We'll now proceed with our second round.

We will begin with MP DeRidder for five minutes.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you.

Hi, Ryan, welcome. I'm going to start with you.

In one of your papers and today you referenced Jim Balsillie, who warned that you can't commercialize what you don't own and Canada doesn't own much. That's a reality underscored by your paper's finding that over 87% of Canada's innovation is foreign-owned, driven by Liberal policies, such as high taxes, regulatory burdens and a failure to protect publicly funded IP, leaving Canada, once again, last in the G7 for R and D investment and commercialization.

Global competition, innovation and technologies, especially in Kitchener Centre where I'm from, are critical as they have the largest economic impact. Do you agree that the government's policy failures have severely undermined Canada's ability to compete globally?

What can we do to reverse course?

[Ryan Williams]

I certainly do agree. Canada is not living up to its potential. Certainly, when we're giving away our IP willingly, we're losing jobs, we're losing on GDP and we're losing on wealth for Canadians and Canada as a whole. Let's be honest. This is a great country. We want to have world-class talent here and we do. We have some great companies here in Canada.

Certainly, the reality is there. The numbers that are there point to a different story. They're certainly fixable. The government can change this, and that's by changing our sovereignty.

I'm going to give you one example.

We spent $4.4 billion on AI, of which 75% was foreign-owned, but we also spend a lot of money on battery research. One of those is Tesla. At Dalhousie University the provincial and federal governments gave money for research to that university. Few Canadians understand that in that Tesla example, 100% of that IP at Dalhousie went to Dartmouth, which was a partnership it had, and it went back to Tesla. Therefore, none of that research was held by that university.

I have one other example. We had an Ontario company, and we gave $2 million to Hibar. It was also bought from Tesla and taken out of the country.

Again, back to my recommendation, we have to establish sovereignty. If we have public funds going into IP and research in Canada, we must, first, make the best attempts to hold the IP in Canada; second, make sure it's really hard to remove that IP; and third, when we have that commercialization that goes to Canadian companies, retain a portion of that IP.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you. I agree that we have amazing companies here in Canada, especially in Kitchener Centre, where I'm from. I proudly declare us Canada's innovation capital because of all our innovation and technology coming from there.

I want to quickly mention again the $4.4 billion in AI investment, but 75% of that has now gone abroad to companies not here in Canada, so our public tax dollars are funding, as you said, the futures of someone else.

What specific competition-focused policies could reverse Liberal oversight, incentivize private investment and prevent IP leakage to ensure that our youth who are driving our innovation as well as our next workforce have a bright future here in Canada?

[Ryan Williams]

I appreciate the question, thank you. This is why I included why competition is in IP and data sovereignty. It's because competition in Canada is stopping research and development. When we look at companies in the U.S., at the revenues and what percentage of the revenues they are spending on R and D, it's 2%. In Canada, especially with banking, financial services and digital technology, it's only 0.5%. Why? It's because there's no competition. When companies are under the guise of competition or they have competitors, they're going to spend more to out-compete because they have that pressure. In Canada we don't have it.

The example I've given that I've pushed really hard for here in Parliament is open banking. We have five financial institutions or banks in Canada that control 85% of the banking assets in Canada. If we enact open banking and allow Canadians to have financial freedom, to be able to move from one bank to another, we're going to unleash fintechs, financial technology organizations, in Canada. We're going to allow innovation as a whole. We're going to move that 0.5% to 2% in Canada, which alone is going to transfer a tremendous amount of IP and R and D into Canadian hands, because it's a Canadian institution. Guess what? Because there are 4,000 banks in America and there are only six in Canada, when open banking is enacted in Canada and it's not all the way enacted in the U.S., we're going to be able to attract some of that investment here in Canada as well.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you very much.

Your paper also says that there are barriers to venture capital. I agree that we're very good at educating and incubating, but then venture capitalism is not here in Canada. You'll probably have to write this answer. I'd like to know what policies need to be reversed, specifically tax policies, to drive venture capitalism here in Canada.

[The Chair, Liberal, Salma Zahid]

Your time is up.

Now we will proceed to MP Jaczek for five minutes.

Please go ahead.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you, Madam Chair.

Thank you to all the witnesses. You've certainly, each of you, emphasized the complexity of bringing product to market, to commercialization, and all the various inputs that are necessary.

I'll start with my first question to Ms. Reynolds.

You mentioned BDC in your presentation. What do you see as the role of BDC in terms of potentially insisting that any loans or financing that they offer result in a product remaining in Canada? Is there any way to do that? Is it in any way alluded to in any experience that you've had with BDC?

[Grace Lee Reynolds]

It's not specifically. I won't comment necessarily specifically on BDC, but perhaps on the question about retaining, how we ensure and retain. This was alluded to earlier. It's really hard work for founders and entrepreneurs to bring their business about. I think that, if the idea is to create more sovereignty around this, it has to be easier for them. That means more access to early-stage capital. You may get your first loan from BDC but, if you want that IP and you want your business to stay and grow from Canada, what else is needed? That next source of venture capital needs to also be part of Canada.

I was in a presentation this morning that talked about how, for companies here, it is just so hard to raise that next round of capital. They don't want to go to the U.S., but there is a lot of capital in the U.S. As soon as that comes in, you end up having U.S. leaders on your board. That has to shift from a capital perspective. It's hard to mandate that IP stays in Canada if the money doesn't come from within Canada.

I've probably run out of time, but the flip side of that, too, is what's critical. It's one thing to fund a company, but the company needs customers. That's how companies grow and thrive. What can we do here in Canada to help be that first customer for many of these emerging technologies? We want them to stay in Canada and then be able to seek global customers, of course, but getting that first set of customers, if we want them to stick in Canada, is something I feel that we can do, in particular, by government through procurement.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you.

Mr. Williams, welcome back.

I have a similar question. For Canadian products that are somehow invested in through a Canadian banking system or loan system, how do you actually mandate retaining that ownership and product within Canada?

[Ryan Williams]

I'm going to speak to the two parts. You mentioned BDC. The biggest issue I have with BDC is that it's not mandated to compete against the big banks, so it's not a competitor. It sees itself as complementary. Of course, it does have investment funds, but it is really risk-averse. It doesn't really like to take a lot of risk. The BDC has to be riskier when it's looking at early investment.

The second part goes back to sovereignty. We have to have rules that change that if we have Canadian IP and innovation.... Our advantage in Canada is that we do spend $10 billion a year on research. Half of that goes to—you'll have Mr. Asselin in the next round—the U15 and then half of that goes into some of the AI technology announcements we make, the research granting councils and otherwise. However, we need rules that protect that IP in Canada because investors in Canada will not invest in something they're not going to own or that is going to be bought out. That's exactly what's happening in Canada.

The sovereignty piece is so very important. We have to get sovereignty right. We have to ensure that measures or vessels like BDC are relentlessly competitive and that they compete with the big banks.

The second recommendation I gave is for the government to create a new entity that matches venture capital funding. Again, 0.2% of companies get venture capital in the U.S., but it constitutes 42% of all the R and D in private companies. That is outstanding. It is astounding. We have to mirror some of that in Canada. That means the government is not taking risks itself; it's matching venture capitalists themselves. It's matching private investment.

The government should never, by the way, be picking winners and losers. It should be private investors and we should make it easier for them to do business here in Canada.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

There is something, I believe, within the ministry of industry—a strategic innovation fund.

Is that a potential vehicle for this matching to venture capital? Are you aware of that at all?

[Ryan Williams]

SIF funding—the strategic innovation fund—right now matches.... When the government, for instance, puts $40 billion toward battery plants, SIF is part of that. Part of it goes through SIF and the other goes through the other channels in which we're doing innovation funding.

The problem with SIF a lot of times is that the government is choosing those winners. We saw it in the past with vaccine procurement. With Medicago and Novovax, when we were in Parliament and those initiatives failed, we found that we didn't own any of that IP. The problem was government writing contracts or putting in money or public dollars without having private backing to that.

I think we have to follow markets. Number one is to follow markets. Ensure that the government's role is to follow private financing; we want to encourage more of it. It's also to set the tax rules, so it's more advantageous for those companies to exist and to invest in Canada.

[The Chair, Liberal, Salma Zahid]

Thank you. The time is up.

We will proceed to MP Blanchette-Joncas.

Please go ahead. You have two and a half minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Mr. Williams, you acknowledged that Quebec has the best data protection laws in the country. Under the leadership of the chief innovator, Luc Sirois, this model goes beyond digital and structures our entire innovation ecosystem. So we are different not only in terms of language and values, but also in terms of our research, innovation and commercialization ecosystem.

I need only think of Axelys, which turns university research into actionable intellectual property, and the Synchronex network, which coordinates college centres for technology transfer. These centres directly support our SMEs in applied innovation. Research, technology transfer and regional entrepreneurship are already connected.

In your opinion, wouldn't such a decentralized model, based on a solid and consistent legislative framework, be more effective than a centralized federal approach to retaining intellectual property and stimulating research and development in the private sector?

[Ryan Williams]

Certainly what you're speaking about is provincial versus federal legislation and jurisdiction. For instance, one of the reasons that we have any type of open banking at all is that provincial legislation, through the privacy acts in the provinces, has allowed them to operate in a certain framework. Unfortunately, the federal government for this country still has the jurisdiction over large swathes...over any data sovereignty and any trade agreements as a whole, and certainly over federal budgets. It has to be the federal government that establishes a privacy act as a whole.

We have to get Bill C-27 back in some form. I haven't heard that come out yet, so I have not seen that as a priority of this government, but we have to have privacy legislation that comes into the modern age and includes data sovereignty, which does not exist in any legislation right now.

I will go back to Quebec. Quebec does have some great examples of best practices. It certainly has the best privacy legislation to date. We need to work with Quebec and get that legislation to the floor federally right now in order to protect Quebec and Canada.