Science and Research Committee on Oct. 27th, 2025

[The Chair, Liberal, Salma Zahid]

Thank you.

With that, we will now go to Mr. Asselin from U15 Canada.

Please go ahead. You will have five minutes.

[Robert Asselin, Chief Executive Officer, U15 Canada]

Thank you, Madam Chair.

Canada's challenge is not that we lack ideas or scientific excellence. It's that we haven't yet built a mechanism to translate our research strength into sustained private sector innovation and industrial growth. The question before this committee of how to promote and grow private sector investment in R and D goes to the heart of Canada's long-standing productivity problem.

Our leading research universities are among the best in the world. They produce world-class discoveries and train the next generation of scientists, engineers and entrepreneurs, but too often, those discoveries are commercialized elsewhere because we lack a core national strategy linking discovery to deployment.

Let me offer a few facts to frame this discussion.

Canada invests just 1.81% of GDP in R and D, well below the OECD average of 2.7%. Business R and D intensity sits at 1.1% of GDP, the second lowest in the G7. Meanwhile, higher education accounts for over one-third of all R and D performed in this country, twice the OECD average, and most of it is financed by the universities themselves. In other words, our innovation economy rests disproportionately on our research universities, without a parallel industrial base to absorb and scale their output.

This imbalance shows up in firm behaviour. Between 2014 and 2022, the number of firms conducting in-house R and D fell by 4%, with deep declines in key sectors like manufacturing, agriculture and energy. Today it is just 0.4% of Canadian firms, those with 500 or more employees, that conduct half of all business R and D, while small firms, which make up 86% of our economy, perform only 10%.

At the same time, foreign-controlled companies now perform 37% of all business R and D in Canada, investing nearly nine times more per firm than Canadian-owned companies. That growing reliance on foreign innovation investment underscores the urgency of building our own domestic innovation capacity.

Between 2020 and 2022, nearly one in five Canadian businesses collaborated with post-secondary education on research. U15 universities conducted three-quarters of all industry-sponsored research in Canada, $880 million annually, involving thousands of industry partners.

Science policy is industrial policy. In the 21st century, economic power will depend on a country's capacity to innovate, adopt and scale new technologies at speed. That requires a single, coherent architecture, one that connects discovery, innovation and deployment.

What should we do?

First, Canada needs a sovereign technologies fund—a focused, mission-driven instrument to deploy public research and development in areas that underpin both our economic and national security.

Second, we must stay focused on talent. Innovation begins with people. Canada ranks 25th among member countries of the Organisation for Economic Co-operation and Development in the share of adults with graduate degrees. We cannot lead in science and technology if we cannot attract and retain the best researchers. Exempting graduate students from the study-permit cap and accelerating visa processing would send a powerful signal that Canada remains open to top global talent.

Third, it is time to put in place a modern science and technology architecture that connects research excellence to national objectives. Defence innovation is a prime example. As Canada rebuilds its defence industrial base, we have a generational opportunity to anchor a new model of mission-oriented research—linking universities, industry, and government in areas such as cybersecurity, artificial intelligence, and advanced materials. Initiatives like BOREALIS—the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science—which would mobilize university research capacity to strengthen Canada’s defence and security ecosystem, illustrate how this can work in practice.

In closing, let me be clear: Our universities are ready to be partners in this national effort. We are the foundation—not the end point—of innovation.

We work with thousands of firms every year, launch hundreds of start-ups and train the highly qualified people who drive innovation across all sectors.

However, to close the gap between discovery and deployment, Canada must now match its research strength with a renewed industrial ambition and an innovation ecosystem that lives up to its aspirations.

Thank you, Madam Chair.

[The Chair, Liberal, Salma Zahid]

Thank you.

Now we will proceed to our round of questioning. We will start our first round of six minutes each with MP Ho.

MP Ho, please go ahead.

[Vincent Ho, Conservative, Richmond Hill South, ON]

Mr. Asselin, Canada is home to some of the leading universities in the world. You're head of the U15, so you see that first-hand. We have some of the best researchers. We have a lot of taxpayer-funded money going into research.

According to a statistic, 50% of all publicly funded intellectual property is ultimately going to be assigned to foreign firms. Do you see an issue with that? Is this a failure of this Liberal government on its industrial policy?

[Robert Asselin]

It's a failure of our innovation ecosystem and what I describe in my remarks as science and technology architecture that is not adapted to the modern world.

Think about innovation as a continuum. You start with talent—people—research and commercialization. At the end, you need someone to buy the services or product, right? We've been good at focusing at the beginning. As you say, we have leading research universities, but we have left the middle and end a bit on their own, hoping that innovation will just happen on its own.

What you see with other countries is that they have been more intentional at focusing public policy in the middle and end points.

[Vincent Ho, Conservative, Richmond Hill South, ON]

We see, after 10 years of this Liberal government, that we have the fastest-shrinking economy of the G7, after adjusting for inflation and adjusted on a per capita basis.

We've see investment fleeing at a record level, a level that we've never seen before, ever since the Prime Minister took office.

Does this concern you from your perspective as it relates to the research ecosystem?

[Robert Asselin]

The trajectory of productivity in Canada has been a long-standing problem, to be honest. It has been stagnant over the last 30 years and certainly since the great financial crisis of 2008. This is why we don't have sustained growth in this country.

Business R and D is at the core of this. If we don't solve this problem, scale our SMEs and have businesses investing capital in the economy—

[Vincent Ho, Conservative, Richmond Hill South, ON]

Why do you think businesses aren't investing capital in the economy?

[Robert Asselin]

There are two main problems, in my view, and I wrote a paper on this before I was at U15, called “Engines of Growth”.

One is that industrial composition that is too tilted vis-à-vis consumption and not enough vis-à-vis production. Our economy relies too much on real estate and not enough on people who are producing things and services.

Second is the lack of scale. Per capita, we have three times fewer large firms in Canada than the U.S. so, by definition, SMEs will have a harder time. It's not their fault; it's just that they're smaller. Invest R and D in the economy.

We need, as a public policy objective, to scale our domestic companies so they can invest their dollars in the economy, in R and D, for example.

[Vincent Ho, Conservative, Richmond Hill South, ON]

Does the tax system or the amount of government red tape play a factor in that?

[Robert Asselin]

I would agree with that.

We have not created an environment that is conducive to capital formation, and the regulatory framework is very heavy right now. I think it has been recognized by a lot of policy-makers. It is not conducive to people investing in the economy. I think it is true for energy projects in general, but it's also true across the board. We're not making it easy for people who want to invest capital in the economy.

[Vincent Ho, Conservative, Richmond Hill South, ON]

If the government got out of the way and the taxes weren't so high, that could help spur innovation.

[Robert Asselin]

Honestly, there are many factors that can steer innovation. Building a more fulsome science and technology architecture, one that translates ideas into economic outcomes, is an important one, but yes, tax incentives and regulatory framework are also important.

[Vincent Ho, Conservative, Richmond Hill South, ON]

You're seeing an absence in the ecosystem of a sort of national framework that coordinates the research, the talent and the capital, correct?

[Robert Asselin]

I want to underscore that this is not easy. The countries that have done this well—the United States, Israel, South Korea, the Netherlands—

[Vincent Ho, Conservative, Richmond Hill South, ON]

Israel and the Netherlands are much smaller than Canada—

[Robert Asselin]

Yes, they're much smaller, but they're much more sophisticated. That would be my point.

[Vincent Ho, Conservative, Richmond Hill South, ON]

—and they have much smaller markets than Canada, but they're still able to do it, so it's possible that we could do it, too, correct?

[Robert Asselin]

We absolutely have all the tools and the possibilities to make this work, but we haven't connected the dots together. We keep treating these things as silos.

I would also argue that our innovation programs—I think there are 192 of them—are not yielding the results they should. We should invest better as opposed to just investing more.

[Vincent Ho, Conservative, Richmond Hill South, ON]

Absolutely, and get some value for taxpayer money. At 192 programs, that seems like a lot of bureaucracy.

Do you think there are any national security risks present in the research ecosystem right now due to foreign threats?

[Robert Asselin]

That's a great question. I'm glad that question was asked.

For the last four years, at the U15 level there is a working group on research security that I co-chair with the Government of Canada officials from ISED. Each of our institutions has research security architecture: in other words, people who are responsible for research security inside our institutions that proactively flag—

[Vincent Ho, Conservative, Richmond Hill South, ON]

Do you think that those vulnerabilities have gotten worse in the last 10 years?

[Robert Asselin]

I would say that to the contrary, from our U15 perspective, the research security architecture has been much more robust and has enabled us to have better outcomes on that.

[The Chair, Liberal, Salma Zahid]

Thank you. The time is up.

We will now proceed to MP McKelvie for six minutes.

Please go ahead.

[Jennifer McKelvie, Liberal, Ajax, ON]

Thank you, Madam Chair.

My first questions are for Dr. Nantel.

I'm more familiar with collaborative R and D with universities. In those cases, the overhead on a research grant provided could be in the 25% to 40% range. It is quite high. It is a big bar to participation.

How does that work in terms of overhead that is delivered to the colleges? Also, can you speak to the advantages you have around IP? I know that in most of the cases in working with universities, we'd always put in that we have non-exclusive rights to use or reproduce the intellectual property, for non-commercial purposes oftentimes, so that we can work with that lower overhead. How does it work with you in IP?