Science and Research Committee on Nov. 3rd, 2025

[John Hepburn]

First of all, I agree with Mr. Balsillie that we need to do a much better job of IP protection in Canada. A lot of the problem with the post-secondary system is that the handling of IP is very fragmented. I listened in on the previous panel, and Jesse talked about that.

Universities all have different IP policies. They are all responsible for developing and protecting IP, but they often have little expertise and there's no financial support. They do it off the sides of their desks, and that is typically how multinationals come in to take the IP, because they're willing to pay the cost of developing the IP.

I would absolutely agree with having better coordination and the better policies and laws that Mr. Balsillie referred to. We need to take seriously that universities are great at generating IP and talent. There's no question about that. However, it's the follow-on of protecting IP that we fail at. A lot of that is about the scale of most of the generators of IP, the lack of expertise and the lack of support. We need better central support and coordination of IP protection.

[Jennifer McKelvie, Liberal, Ajax, ON]

How do we strike the right balance between discovery and innovation and commercialization in our funding? You've worked at both CIFAR and Mitacs. I'm wondering if you could comment more on Mitacs, for example. How do we strike the balance properly as we go forward with looking at our funding programs?

[John Hepburn]

I don't think the balance is that bad. NSERC, for example, does a good job of supporting both. Supporting more training programs, such as the work-integrated learning programs that Mitacs specializes in, would be good because IP is also transferred through talent.

[The Chair, Liberal, Salma Zahid]

Thank you.

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

Please go ahead.

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

My first question is for Mr. Balsillie.

During our study on support for the commercialization of IP, you told the Standing Committee on Science and Research that we couldn't commercialize what we didn't own. Two years later, Canada is still spending more than $7 billion a year on public research, with no clear strategy to capture the value of patents, data or innovation.

What do you think of that?

[Jim Balsillie]

I'm having an issue with interpretation.

[The Chair, Liberal, Salma Zahid]

We'll stop the clock. You have to click at the bottom of your screen for interpretation and select the language of your choice.

[Jim Balsillie]

Thank you. Please go ahead. I apologize.

[The Chair, Liberal, Salma Zahid]

MP Blanchette-Joncas, please start from the top.

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

I'll start over.

Is the interpretation coming through, Mr. Balsillie?

[Jim Balsillie]

Yes, it is.

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

Thank you, Mr. Balsillie.

In 2023, the committee did a study on support for the commercialization of IP, and you told the Standing Committee on Science and Research that we couldn't commercialize what we didn't own. Two years later, Canada is still spending more than $7 billion annually on public research, with no real strategy for capturing the value of the resulting patents, data or innovation.

What do you think of that?

[Jim Balsillie]

Well, I don't want to be polemic, but it's a foundational public policy failure. When you keep doing that, your GDP per capita goes down, your costs go up and people get hurt. Canada is in the hole it's in because of a policy failure that no other country in the world has.

I keep imploring that we have to do better for the younger people in this country who want a better, sovereign and more prosperous future. There's no excuse for this inattention. It has to be dealt with institutionally, and it should have been done 30 years ago.

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

In 2023, in its report on support for the commercialization of IP, the committee laid out 14 specific recommendations for developing IP and commercializing research. Two years later, not one of those recommendations has been implemented.

Would you say that the real problem in Canada is actually an implementation deficit, not an innovation deficit?

[Jim Balsillie]

It's a deficit of policy thinking. The speaker before me hit it right: You gave the most important job, which is capturing the benefits, to the universities, with their fragmented, non-scale and non-core aspects. Other nations around the world create centralized agencies, institutions or Crown corporations to manage this strategically. Until we do that, the failure will continue. It needs to be done at a proper scale, with proper expertise and focus, and it needs to be delineated ex ante upstream from the source of the funds, which is the federal government.

There's been absolutely no attention paid to this in a proper manner over the past 35 years. We've been last place in the OECD in productivity because of it. It will keep going that way until we stop approaching it with inattention.

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

We know that large multinationals can use their high profile and money to snap up our researchers, but at the same time, our local institutions—colleges, CEGEPs and regional research hubs—are managing to innovate in concrete ways by partnering with small businesses here.

How can we get the government to support more of that co-operation, instead of letting foreign giants scoop up our talent and ideas?

[Jim Balsillie]

The problem is that there's an asymmetry where our companies and researchers are [Technical difficulty—Editor] absent some form of centralized resources and centralized policies and an orientation to growing Canadian companies.

The reason Canadian companies are small is that we don't orient to growing them. We orient to helping foreign firms, whether it's through our research policies or SIF funding. It goes on and on. You need to deal with this through a centralized agency that's highly expert in it, whether it's for [Technical difficulty—Editor] and so on and so forth.

Every country in the world does it except Canada.

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

A previous witness stressed the fact that we lose our innovations to foreign players, mainly Chinese and American, as a result of universities, researchers and research hubs partnering with foreign private companies such as Huawei or Tesla. At the end of the day, is Canada funding research here to benefit foreign economies?

How do we prioritize our small and medium-sized businesses in those partnerships, so we can keep and commercialize our innovations?

[Jim Balsillie]

Yes, 100%, Canada's research and innovation strategy is global philanthropy. It's how we give to foreign countries. The problem is that we don't have a policy where the individual researcher or university has to make decisions that benefit Canada economically where the economy is at hand. That's not to say all research is about commercialization. It naturally flows to the more high-profile or sophisticated partner. Thus, Canada continues to lose its scale.

Again, the answer is some kind of expert centralized agency or Crown corporation that does this. Think of the Fraunhofer institute. It has 80 research institutes around Germany, 30,000 employees and one centralized expert tech transfer centre that manages this for everybody. I chaired a panel in Ontario on intellectual property. Ontario alone—a small fraction of the size of Fraunhofer's research—has over 30 tech transfer offices. It's fragmented, non-coordinated, non-expert and non-scale.

It's a structural problem of inattention.

[The Chair, Liberal, Salma Zahid]

Thank you.

We will now start our second round with MP DeRidder for five minutes.

Please go ahead.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you.

Mr. Balsillie, as the MP for Kitchener Centre—Canada's innovation capital—I consistently see how the current government is crushing our innovations' economic potential. Something you said really struck me today.

You appeared here at this committee in March 2023 and recommended building capacity for a knowledge-based, data-driven economy. Since then, almost three years later, not one policy has been created to meet the needs of a strategic orientation.

On top of that, your warning of $100 billion lost annually from unowned IP really hits home. It hits home because Kitchener start-ups are directly impacted by red tape, high taxes, no IP strategy and a lack of policy, which is preventing investment.

Where is this failure coming from? What can be done to fully unleash Kitchener's innovation engine and reverse the damage of this lost decade?

[Jim Balsillie]

The failure comes from the stewards of public money. They give the money away. They require that, for instance, you keep accounting so that you don't pay for a trip with it, of course, yet there isn't an approach that manages this in a way that captures the benefits to Canada. It's a policy inattention that is inexplicable, and we're paying a very sorry price for it.

My only question is, how low does it have to go before people realize that this is where the prosperity is, where the good jobs are and where the tax base comes from? This is where the future philanthropists and venture capitalists come from. If we don't address the upstream as a condition of funding from an institutional and policy point of view, rather than taking a downstream fragmented approach, it's just Einstein's definition of insanity, which is doing the same thing over and over again and expecting a different outcome.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

I absolutely agree that it's a philanthropic world. That being said, you have added tremendous value to our community. You founded the Centre for International Governance Innovation. You also have the Balsillie School of International Affairs, which is a collaboration between our universities and your foundation to develop policy. You also gave $10 million to our Perimeter Institute, which helped it open. It is literally one of our driving forces of local innovation and tech in Kitchener. On top of that, you've supported our cancer centre at Grand River Hospital and our Waterloo Regional Children's Museum.

You are the example of success when the IP stays in Canada. You can innovate, monetize and scale in the communities where this innovation is developed. What has changed or has not been done in the national landscape that causes companies to no longer be able to monetize and scale here, and what causes them to head south instead?

[Jim Balsillie]

We became much more fixated on foreign companies and giving Silicon Valley all they need, or other international companies—you name it—around the world. When we were emerging with RIM, the orientation was to help grow Canadian companies. We felt it in Ottawa and felt it in Queen's Park, whereas the last era has been much more about giving the keys to foreign companies, and somehow some crumbs will fall off the table that benefit us. When you do that, you lose all the wealth effects. You lose all the security effects, and you're easy, vulnerable prey to strategic behaviour, which is what we're experiencing now.

I don't know what happened that we lost the plot about growing our own companies, growing our own country and growing our own economy. It's very tragic because it's avoidable, and it's fixable, but the most vulnerable and the young are the ones who are paying the highest price.

The nature of economic policies that we're dealing with now is not the same as it was 30 years ago. It's such a shame because Canada has tremendous potential, but the policy approaches have failed all the citizens, entrepreneurs and business people with that potential.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

I see that failure happening in my home riding, for sure. I think when we can effect good policy that supports our innovation, we can only succeed. It's really unfortunate to hear that today we're using taxpayer dollars to buy our innovation back. That's not a path to sovereignty at all.

Can you expand further on what you're seeing happening with regard to our taxpayer dollars buying our own innovation back from other countries?