Science and Research Committee on Oct. 29th, 2025

[Benjamin Bergen]

Yes. Thank you.

Driving business R and D and innovation isn't about spending more money. It's about creating the conditions for investment. When companies can own and profit from the ideas, they invest. When they can't, they don't. If we want to see more business R and D in Canada, we have to make it make sense for businesses to do so.

Thank you for the opportunity to be here today. I'm happy to answer your questions.

[The Chair, Liberal, Salma Zahid]

Thank you to both of the witnesses for their opening remarks.

Now we will start our first round of questioning with MP Baldinelli for six minutes.

Please go ahead.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Thank you, Madam Chair.

Thank you to the witnesses for being with us this afternoon.

Mr. Bergen, thank you for being here. You did an interview with Digital Journal this past June. The article says, “Canada is struggling across core economic indicators, Bergen explains, including declining GDP per capita and a shrinking number of global headquarters.”

In your opening statement, you mentioned that the CCI was founded 10 years ago on the idea that Canadian prosperity must be driven by “Canadian-headquartered companies” and an “unapologetically” Canadian economic policy as a cornerstone of our national sovereignty.

I want to ask you this question first. We talked earlier and mentioned some other things. Would you say that the Brookfield headquarters move from Toronto to New York last year fits into what you are identifying as a problem that we face here in Canada?

[Benjamin Bergen]

That specific example is obviously housed in business dynamics for that firm. I don't know if it fits into the exact rubric of what we're describing.

Where I would say we're really struggling as a country is with the public policies required to help firms scale and grow. We're really good in this country at what I call the invention of R and D. Where we really lack is on the innovation side. When we're looking at public policies to advance the actual investments into R and D, we have to figure out why they're struggling to commercialize.

For the example you're giving, I don't know all the details about it. That's really more of the framing that I would bring forward.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

This is what was raised yesterday in the media, for example: Brookfield, which owns Westinghouse, along with Cameco—two Canadian companies—doing a nuclear announcement in the United States. Here, what we find is OPG working on an SMR, but again, it's based on GE Hitachi technologies.

You mentioned earlier that we're great at inventing, yet terrible at innovation. I'm wondering if you could elaborate a little bit on that.

[Benjamin Bergen]

I can, for sure. Where are there opportunities for us to help scale domestic firms here in Canada? One of the big levers that we look at is obviously around things like procurement. The government's buying of domestic solutions leads to the establishment of firms and adds strength and opportunity. They can do that and go out and get investments from those purchase orders.

When we look at how we're spending, let's say, our procurement dollars, are we actually procuring domestic solutions that are IP-generated and owned?

An example I'll very quickly give you, which is pretty analogous to this, is the Over the Horizon system that we committed to purchasing from Australia. Roughly $4 billion or $6 billion is where it all ends up. However, it turns out that there are two firms here in Ottawa that have been funded to the tune of $30 million in R and D that weren't even brought into that process and that actually solved that exact problem.

Here is a situation where we have the Canadian government funding the R and D and support of a firm headquartered here, but then turning around with the other hand to buy technology and solutions that end up supporting Australia or an Australian company.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

That Digital Journal interview also says, “Bergen links innovation and household prosperity, warning that Canada's economic position is slipping relative to peers.” You are quoted as saying, “You might not think this impacts you, but it impacts you.... You're getting poorer because we're not figuring out how to do things more efficiently and more effectively.”

The Financial Post reported today that the Governor of the Bank of Canada “warned that Canada must work to boost its productivity in the face of this weaker growth or face harsh economic consequences.” He said, “Unless we change some other things, our standard of living as a country, Canadians, is going to be lower than it otherwise would have been”.

You pointed out Canada's ongoing talent exodus, citing taxes, limited access to capital, and policy uncertainty—like the Liberal capital gains tax proposals. Can you please elaborate on how some of the current policies are hurting Canadian innovation and pushing companies, entrepreneurs and skilled workers elsewhere?

[Benjamin Bergen]

Yes. One of the things that I think are important in terms of some of the framing on this is that we have to understand that wealth and prosperity, as I mentioned in my opening remarks, are now captured in the ownership of IP and data-rich companies. That's no longer captured in traditional forms of things like labour. The overwhelming majority of it is now in who owns the ideas that are then able to power solutions.

Over the last 30 years, the economy has shifted, but our public policy hasn't matched. There's no silver bullet in this discourse. It is really about a system change, where we think more fundamentally about how an innovation economy is fundamentally different from, let's say, a jobs economy.

Let's take an example like the EV battery plant investments that were made. We warned the government that this is potentially a job strategy where you're supporting the building of R and D of foreign branch plants in southwestern Ontario. That will create some good jobs. We would never want to besmirch that, but at the end of the day, where the actual value is being captured isn't in Canada. We're merely a part of the supply chain. We're not part of the value chain.

Fundamentally, for us to get out of this economic malaise or decline, we actually have to put ourselves at the centre of the value chain and use the innovation and technology that are coming out of our fantastic academic institutions to the advantage of actually creating prosperity for Canadians.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Thank you so much.

[The Chair, Liberal, Salma Zahid]

Thank you, Mr. Bergen.

Now we will go to MP McKelvie for six minutes.

Please go ahead.

[Jennifer McKelvie, Liberal, Ajax, ON]

Thank you, Madam Chair.

My question is for Mr. Sirois.

In Quebec, there are many fantastic research institutes, such as the Institut quantique at the Université de Sherbrooke.

What more can we do to help Quebec universities move from research to market?

[Luc Sirois]

That is a great question. Solving that problem is really essential.

In Quebec, a new development and transfer company called Axelys has been created. We are in the process of devising a new strategy to accelerate development. In partnership with all Quebec universities, we counted the number of technological transfers to companies as well as the number of spin-offs that create value from research. For the moment, the efforts made on the ground are bearing fruit at a rate of 15% per year, but we still have a lot of work to do just to catch up with the North American and Canadian provinces averages.

We have to change the incentives we provide by way of support, particularly the incentives that reward research professors for their publications and the funding they obtain for their research work. A third leg would be providing support depending on how much their work is worth once transferred to entrepreneurs, something that is not valued enough today and is even somewhat penalized. Incentives must be created so that the criteria for granting research scholarships are based on success. We need carrots, so to speak, that encourage more collaboration and transfers to businesses, and we need to be able to register and patent the results of research when they are relevant.

It is very important to remember that basic research must not be overlooked. Research driven by curiosity is essential to the prosperity of nations. On the industry side, such mechanisms must be put in place that will structurally create incentives to increase value and transfers.

[Jennifer McKelvie, Liberal, Ajax, ON]

You mentioned the research and innovation credit. Is it something new that you've implemented? Can you outline how it works and what some of the early successes have been?

[Luc Sirois]

Quebec has proposed to evolve the research and experimental development tax credit, first to make a broader range of business expenses related to development, experimentation, testing and validation eligible. The idea is to include expenses related to activities that are further downstream in terms of technological readiness, in other words, that are closer to the creation, approval and export of products than mere discoveries. Then there will be more depth. Some equipment-related expenses will now be eligible. So eligible expenses will be expanded to further encourage marketing and pre-marketing expenditures.

Since this new measure came into effect this year, there are no early success cases yet. It took courage to make such an effort, since it is an innovative approach that has not been tried very much in other countries. The Department of Finance is waiting for the results to make adjustments. Any innovative approach needs to be tried to see what works, and adjustments are then made to stay the course.

[Jennifer McKelvie, Liberal, Ajax, ON]

I recognize that I might not have that much time.

[The Chair, Liberal, Salma Zahid]

You have one minute.

[Jennifer McKelvie, Liberal, Ajax, ON]

Okay. I have a question for the other speaker.

Could you send us, in writing, what that new innovation credit is and how it's working? I would love to have more details on it as it rolls out and you get those examples of early success. It would be great if you could share that with us.

[Luc Sirois]

Absolutely, it would be a pleasure.

Thank you.

[Jennifer McKelvie, Liberal, Ajax, ON]

Thank you.

I'll squeeze in a quick question here.

Mr. Bergen, I was wondering if you could provide some recommendations or ideas you may have on removing barriers that are present for businesses as they try to scale up the commercialization they have in their R and D departments.

[Benjamin Bergen]

Fundamentally, some of the big ones are tech transfer offices with universities, similar to some of the items Luc Sirois mentioned regarding the success of Axelys.

One way we can really help SMEs get intellectual property and the freedom to operate that they require is by looking at how our universities interact with domestic scaling technology firms. Currently, it's often quite difficult for smaller firms to engage with the various offices that exist. Fundamentally, it's often large foreign multinationals that end up benefiting from the complexity and challenges, and—

[The Chair, Liberal, Salma Zahid]

I'm sorry for interrupting, but time is up for MP McKelvie. Maybe you can send in a written reply.

We will now proceed to Mr. Blanchette-Joncas for six minutes.

Please go ahead.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

Thank you, Madam Chair.

Thank you to the witnesses for being here.

My first question is for Mr. Sirois.

Quebec is the only place in Canada where we have a chief innovator, and that is you. You and the chief scientist of Quebec, who has been in office for several years, coordinate the 2022–2027 Quebec strategy to support research and investment in innovation, a clear five-year plan with measurable outcomes.

In your opinion, does this cohesion in Quebec demonstrate that our model is already quite typical of a sovereign scientific state?

[Luc Sirois]

Of course, here, we are very dynamic and we have a particularly keen spirit of development. The national research strategies have evolved to include components that support innovation, investment and technological and scientific entrepreneurship. We have come up with a full cycle that includes support for creation and growth, the growth of start-ups and scale-ups. In Quebec, we think we can generate wealth that can then be harvested to fuel basic research, among other things. There has recently been a focus on businesses to have a detailed understanding of their practices, their impediments and the reasons why they limit their investments in research and development. Having data allows us to better understand where to invest and to better see the results of the various measures or programs. It helps us adjust. These are new measures.

As you said, the creation of the position of chief innovation officer makes it possible to demonstrate the importance of paying attention to the development of innovation, of knowing how to transform the results of research into tangible products that will be sold on the market, of creating wealth or of promoting discoveries in social innovation that can be implemented in society to solve major social challenges. We know about the challenges in terms of health, education, homelessness, rent costs, coexistence of various groups and transportation. However, different innovations are needed to meet social challenges. That is also the focus of attention. In Quebec, there is a kind of fundamental desire to have a positive impact on society. I think that is a desire that all Canadians share.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Mitis—Matapédia—Les Basques, QC]

The 2022–2027 Quebec strategy to support research and investment in innovation is a serious endeavour. This strategy proposes investments of $7.5 billion over five years. It is a patient capital strategy that includes levers such as Investissement Québec and the Fonds de solidarité FTQ.

I am relying in particular on the report published in April 2024 by the Conseil de l'innovation du Québec. You said we had to stop sprinkling money. Meanwhile, Ottawa is scattering resources in dozens of isolated programs. There is no measurable performance plan. In your opinion, does this piecemeal approach by the federal government weaken the overall performance of Canadian innovation?

[Luc Sirois]

Based on the comments gathered from the members of the Conseil de l'innovation du Québec and during our consultations, I can say that there is a consensus against this kind of approach in Quebec. I assume that it would be the same across the country. We need to focus even more on businesses, on the strengths and sectors in which we have the capacity to be world-class players. My colleague from the Council of Canadian Innovators clearly illustrated the importance of supporting technological champions, innovative champions, who are capable of creating an enormous amount of wealth. That said, for the Chief Innovation Officer of Quebec, there still needs to be a component supporting exploration. We can never guess or predict which sectors will be the most strategic or suddenly start to grow exponentially. Sometimes, what creates tomorrow's wealth can be surprising. We need to reserve capacity and resources to explore and support other businesses, particularly in regions where they can develop wealth that will be reinvested locally.