Science and Research Committee on Nov. 17th, 2025

[The Chair, Liberal, Salma Zahid]

Good morning, everybody. I call this meeting to order.

Welcome to meeting number 15 of the Standing Committee on Science and Research. The committee is meeting to study private sector investment in research and development in Canada.

I would like to make a few comments for the benefit of all witnesses and members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your microphone, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: floor, English or French. I will remind you that all comments should be addressed through the chair.

For today's first panel, I would like to welcome our witnesses.

Thanks a lot to all three witnesses for appearing before the committee today.

We are joined by Mr. Timothy Hannigan, associate professor, strategy and organization, appearing as an individual; Mr. Ken Doyle, executive director, Tech-Access Canada; and, by video conference, Dr. Edward McCauley, president and vice-chancellor, University of Calgary.

Welcome to all our witnesses and thank you. All of you will have five minutes for your opening remarks, and then we will go into our rounds of questioning.

We will begin with Professor Hannigan.

Please go ahead. You have five minutes for your opening remarks.

[Timothy Hannigan, Associate Professor, Telfer School of Management, University of Ottawa, As an Individual]

Thank you, Chair and members of the committee.

I'm an associate professor and I hold the Thivierge chair in Canadian business at the Telfer School of Management at the University of Ottawa. I was previously at the Alberta School of Business.

Let me start with an important definition: An entrepreneurial ecosystem is a set of interdependent actors and factors coordinated to enable productive entrepreneurship within a particular territory.

To my central point here today, the federal government needs to take high-growth entrepreneurship as seriously as it takes innovation policy. Canada excels at research but struggles to build ecosystems that capture the value we create. This isn't a university failure; our researchers are doing exceptional work. The gap worth addressing here at the federal level is in ecosystem infrastructure and coordination.

Why does this matter for private sector R and D? Companies locate R and D facilities where they see thriving ecosystems—access to talent, acquisition targets and collaborative partners. When our ecosystems weaken, we don't just lose start-ups; we lose the corporate R and D investment that sustains long-term innovation capacity.

I have three core recommendations.

First, create federal oversight of entrepreneurial ecosystem health across regions. Right now, regional ecosystems boom and bust with little federal visibility. Just as the Bank of Canada monitors financial system stability, the federal government should track venture capital flows, start-up survival rates, talent retention and collaborative research between academics and other ecosystem actors. When ecosystems show stress, as we saw in our research in Alberta, coordinate a response before collapse. This isn't top-down management; it's early warning and coordination.

Second, embrace what HIBAR research calls the integration of basic and responsive research, which is investing in research excellence and entrepreneurial ecosystems as mutually reinforcing activities. This means that when we fund AI research, we simultaneously fund the partnerships between university and industry, venture capital capacity and anchor customers. We've seen success with initiatives such as the Creative Destruction Lab, which has expanded from the University of Toronto to Vancouver, Calgary, Montreal and Halifax. A $25-million federal investment in 2018 has generated billions of dollars in equity value. We need far more parallel-path investments like this.

Third, create a federal scale-up procurement fund. Provide $500,000 to $5-million contracts over 18 to 24 months, deployed strategically to regions showing ecosystem stress to address the customer gap that often imperils many promising start-ups.

Let me illustrate these issues with a brief discussion of Alberta's AI ecosystem, which I studied with colleagues.

Canadian AI research has been world leading. Richard Sutton from the University of Alberta won a Turing award. Leading AI researchers chose Canada for its support of research excellence and collaborative university culture. CIFAR and Canada's pan-Canadian AI strategy have been successful policy initiatives.

Around 2017, Alberta appeared to have all the ingredients for success. A 30% investor tax credit attracted capital. The University of Alberta graduates were building and launching AI start-ups. Google's DeepMind chose Edmonton for a research lab. The Alberta Machine Intelligence Institute connected these elements. On paper, this looked like a thriving AI ecosystem.

However, by 2023, this ecosystem was bruised. Google folded the DeepMind lab. The province rescinded the tax credit. While start-ups like AltaML, DrugBank and Granify showed some traction, there were no clear scale-ups like Shopify. Local initiatives like Startup TNT briefly thrived, becoming one of Canada's largest pre-seed investors by 2023, but without sustained federal support, investment activity has fallen dramatically. Alberta's access to venture capital was severely limited by Canada's small VC sector and geographic concentration in Toronto and Vancouver.

What happened? Human capital proved necessary but was not sufficient. Shifting provincial policy undermined foundations. The critical failure was the lack of local customers. Alberta businesses wouldn't take risks on local AI start-ups and limited venture capital meant companies couldn't bridge to larger markets.

This ecosystem weakness directly deterred corporate R and D investment. When Google's DeepMind closed its Edmonton lab, there was a loss of private sector R and D spending. Established companies locate R and D facilities where they see thriving ecosystems. By letting ecosystems collapse, we signal to the private sector that R and D investment in Canada carries too much risk. There is a pattern of technological strength not taking root and scaling as it could. This is what my three recommendations aim to address.

In closing, Canada's pattern of technological strength failing to scale is not inevitable. With federal oversight of ecosystem health, parallel investment in research and commercialization infrastructure and strategic procurement that creates anchor customers, we can build the conditions for sustained private sector R and D investment. The question isn't whether Canada can produce world-class research; we do. The question is whether we'll build what HIBAR research calls integrative structures—ecosystems enabling academia and industry to pursue knowledge creation and societal impact simultaneously.

Thank you.

[The Chair, Liberal, Salma Zahid]

Thank you, Professor Hannigan.

Now, we will proceed to Mr. Doyle.

Please go ahead. You will have five minutes for your opening remarks.

[Ken Doyle, Executive Director, Tech-Access Canada]

Thank you, Madam Chair, and thank you to the members of the committee for inviting me to appear.

Throughout this study, you've heard a lot about the journey from invention to innovation, but I'd like to gently suggest that the journey doesn't end there. The real challenge and the real opportunity is transforming innovations into commercially viable products, processes and services. One way I like to frame it is that people innovate and companies commercialize. People in labs, shops, garages and classrooms create new ideas, but the small and medium-sized enterprises that make up 99% of Canadian businesses are the ones that turn those ideas into something a customer will pay for. That final step is where Canada has struggled for a long time, and that's where we come in.

I serve as executive director of Tech-Access Canada, the national network of 70 technology access centres, or TACs, located at colleges and CEGEPs across the country. Each of these business innovation and commercialization support centres was selected through a rigorous merit-based process. They are the best of the best in Canada, embedded in local communities and trusted by industry.

Collectively, TACs help 6,000 Canadian companies every year adopt new technologies, solve technical problems and accelerate commercialization. If there's a French word I wish I had a clean English equivalent for, it would be accompagnement. That's what the TACs do: We walk with companies and we guide, de-risk and accelerate their commercialization journey, whether that's developing a prototype, validating a process, integrating automation or AI, or figuring out how to scale for production.

I want to highlight something SMEs tell us over and over: Canada doesn't lack ideas; it lacks capacity. Most companies don't have in-house R and D teams. When they innovate, they're trying to solve a problem, fix something, improve something, test something or adopt something. They don't think in terms of doing R and D. They think in terms of getting something done, and there's a message we hear from companies everywhere we go: The process is too complex. When an entrepreneur has to decide between working on their business or spending hours trying to understand a federally funded R and D support program, it's pretty clear what they'll choose. One company told us they spent more time trying to understand the federal program than it took to solve the original technical problem. I don't think that's the kind of R and D the committee had in mind.

This is why TACs resonate so strongly. We provide a single door, local expertise and fast turnaround. That's why our hallmark interactive visits program, a simple, low-bureaucracy 20-hour business innovation engagement, has consistently been oversubscribed for half a decade. Companies line up because it's simple, it meets them at their level and it delivers results.

That brings me to a scene from an unexpected place—the movie 8 Mile. There's a line where Eminem's character asks a friend, “Do you ever wonder at what point you just got to say [forget] it, man? Like when you gotta stop living up here, and start living down here?” Canada has big, ambitious ideas about innovation, and those matter, but if those big ideas don't reach the companies trying to commercialize them, that brilliance stays up here. We need programs and support mechanisms that live down here, close to the ground where companies actually operate.

Finally, let me offer an analogy regarding Canada's position in areas such as artificial intelligence and quantum. I often think about the Yukon gold rush from the 1890s. Canada's already investing billions in what we hope will be the big winners—the prospectors, the claims, the mines—and that's important, but when the gold rush settled, there were only a few big winners and an awful lot of losers. Do you know who made the most money during the gold rush? It was the companies that sold shovels, pickaxes, railway tracks and services.

Today, in the AI gold rush, TACs are helping exactly those firms—the Canadian companies building the tools, components and services that everyone relies on—and they're not just in tech. They're in forestry, fishing, livestock production and agriculture—the sectors that have been analog for a long time that are now seeing huge gains from adopting innovation. They may not be flashy, but they create real, durable economic value. The problem is that there are very few reliable programs designed for them.

Whether AI turns out to be transformational or something closer to the dot-com bubble, I think we can all agree that, as Canadians and taxpayers, we don't want to snatch defeat from the jaws of victory again.

Let me close with three simple ideas that would make a real difference.

One, treat the pre-existing pan-Canadian network of technology access centres as innovation infrastructure. Stable, scaled funding will enable us to meet demand and support many more Canadian firms.

Two, create simple SME-focused pull mechanisms. Our interactive visits model works. Companies want it, and it directly increases private sector R and D. The program was designed to be modular and scalable.

Three, support the shovel sellers. To achieve widespread economic impact from AI, quantum, clean tech and advanced manufacturing, we must support the enabling companies that will make that value a reality.

Canada is rich in ideas, but we need to make it easier for small companies to turn those ideas into commercial success.

Thank you. I look forward to your questions.

[The Chair, Liberal, Salma Zahid]

Thank you. You are exactly on time.

We will now proceed to Dr. McCauley.

Please go ahead. You have five minutes for your opening remarks.

[Edward McCauley, President and Vice-Chancellor, University of Calgary]

Good morning.

I want to thank the committee for inviting me here today.

The topic of your study, how to best promote and grow private sector investment in R and D, is fundamental to who we are at the University of Calgary. We believe that advancing the commercialization of innovation emerging from Canadian universities is a critical driver for building a stronger, more innovative economy for Canada. We are here today not just to agree on the importance of this goal but also to offer our experiences and recommendations from a proven model for achieving it.

The University of Calgary is one of Canada's top entrepreneurial universities. We are now a top five research institution in Canada. Our innovation ecosystem has created more new companies than any other university in the nation over the past six years. This combination of a research-intensive and entrepreneurial university is a powerful combination. We create new knowledge every day, and we mobilize it for the benefit of society as quickly as possible.

To give you a tangible sense of what this model looks like in practice and the scale of the impact, I'd like to share a few brief highlights.

The first is SAGD, or steam-assisted gravity drainage. This technology, developed in partnership between industry and the University of Calgary, is an innovation that has unlocked trillions of dollars, literally, in economic benefit for Canada. Our research has also led to new geothermal energy technologies through our spinoff Borealis GeoPower. We developed the globally adopted concussion assessment tool SCAT, which is now the standard of care for athletes worldwide. We created the neuroArm, the world's first robot capable of performing precise surgery inside an MRI.

Our researchers democratized nuclear magnetic resonance analysis by creating a commercially viable and affordable tool that is now the foundation of the successful public company Nanalysis Corp. We recently attracted Mphasis, one of the world's largest tech companies, to establish a Canadian headquarters, creating 1,000 jobs and partnering with our university on developing quantum applications. Just this past year, we launched the QAI Ventures accelerator, which supports early-stage quantum technology start-ups.

Supporting and accelerating this R and D, our innovation ecosystem also includes the Hunter Hub for Entrepreneurial Thinking, which supports thousands of students and researchers annually; UCeed, one of Canada's most active university-based pre-seed funds with a one-dollar to 30-dollar leverage ratio on investment; and CDL-Rockies, which has helped ventures raise billions in capital. CDL-Rockies alumni companies have created more than 2,500 jobs and raised $2.9 billion in capital. Then there's Innovate Calgary, our business incubator and lead for innovation hubs in aerospace and so on.

These successes were not accidents. They are the result of a deliberate culture and specific support systems—our commitment to innovation, our researcher-first IP policy and our robust commercialization pipeline. These are systems that we believe can be replicated across the country with the right federal incentives, which I look forward to discussing with you today. Like you, we believe Canada must increase private R and D spending to raise productivity, move up the global value chain and create and retain high-skilled jobs. It's also essential for attracting global investment, enhancing economic resilience and maximizing the return on public research investments.

The federal government's commitment in budget 2025, including talent attraction investments, the exemption of graduate students from study permit caps, the continuation of the elevate IP program and proposed changes to SR and ED policy, are important steps forward. However, more can be done to catalyze private R and D investment and strengthen Canada's innovation capacity.

I offer the following recommendations.

Provide matching funds to incentivize deeper government-university-industry partnerships. These public-private partnerships are essential for scaling innovation and translating research and impact.

Require industry recipients of federal funding to reinvest a portion into university research partnerships. A streamlined model similar to the industrial and technological benefits policy could help align industry incentives with national research goals.

Create dedicated funding for university innovation offices, which are critical for supporting commercialization, IP management and industry engagement.

Directly support university seed funds, such as UCeed, that have demonstrated strong returns and play a vital role in nurturing early-stage ventures.

Include university-based research capacity in the development of BOREALIS and fund it at a meaningful level. Canada has the opportunity to build a model that leverages academic expertise to drive breakthrough innovation.

Canada's universities are ready to lead. We train the next generation of innovators, produce world-class research and increasingly translate that research into solutions that benefit society and the economy, but we need the right policy tools and sustained investment to fully realize this potential.

At the University of Calgary, we are proud of our entrepreneurial culture, our strong industry partnerships and our commitment to impact. We look forward to working with government and industry to build a more innovative and prosperous Canada.

Once again, thank you for the opportunity to address you today.

I look forward to your questions.

[The Chair, Liberal, Salma Zahid]

Thank you to all the witnesses for your opening remarks.

We will start our first round of questioning, and we will begin 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 our witnesses for being with us this morning.

Mr. Doyle, I'm going to begin with you.

On Friday morning, I had the pleasure of being in Niagara-on-the-Lake while Niagara College did a ribbon-cutting ceremony for their fifth innovation centre, the horticultural and environmental sciences innovation centre greenhouse. It's a $12-million facility. It is one of the five centres that respond to the growing demand from local businesses on the ground to bring forward ideas and consider how we can innovate to provide solutions for those businesses.

You and several other witnesses who have come previously have talked about CEGEPs and colleges punching above their weight in terms of getting results from the government funding that's been provided. Only about 4% of tri-agency funding was provided to colleges and CEGEPs.

Is there a recommendation that you would suggest to the government? You've put three ideas forward, but what is the most critical thing that the government could do to support the tech innovation centres? You say that there are over 70 now. There are five affiliated with Niagara College. How can we work to support them? I would suggest that they're providing more results and quicker results on the ground.

[Ken Doyle]

They absolutely punch well above their weight, and I've found that the percentage debate—4% versus 96%—can sometimes come across as a bit simplistic or entitled.

I'm more interested in the quantum, where there's probably a right number the sector could absorb to keep on doing what they're doing, and I think the easiest vehicle to get that activity started on the ground would be the college and community innovation program administered by NSERC on behalf of the tri-council. Today that's a $123-million program that supports centres like the five centres at Niagara and then another 119 eligible colleges across the country.

On April 1, 2026, that program's funding gets cut by 45%, and that'll have a tremendous impact on the colleges, absolutely, but what worries me, frankly, is the students who will be missing out on experiential learning opportunities and the thousands of companies that will not get that support from objective innovation intermediaries like the technology access centres in the wider college sector.

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

That goes to my second question. Earlier on, we had both Michael McDonald and Mark Nantel come forward, and they discussed the work that the colleges are doing and the response that they've had to how they're retaining talent and responding to the needs of the business community on the ground.

However, funding was an issue, and they put forward two recommendations to the government prior to the budget. One touched upon the funding that you just mentioned. They talked about looking for baseline funding to 2030 of $215 million and then working again with the tri-agencies to open up, I guess, a greater share of the envelope.

I was wondering, based on what you saw in the budget, if any of those recommendations were responded to.

[Ken Doyle]

From my read of the budget, I'd say, no. There was support for the granting councils and the tri-council, but nothing was earmarked for the college sector, which is what raised some flags for us coming towards April 1, when the funding for that program will get cut, effectively, in half, sort of penalizing those small innovative companies that want to scale and make use of some of the other really interesting investments in the federal budget.

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

That's interesting.

Again—I mentioned this earlier—as we were preparing for committee, we were looking for background material, and there was a study that was released by Statistics Canada in August 2025. It was the survey on research activities and commercialization of intellectual property in higher education. It was from 2023. In its findings, it stated that colleges and CEGEPs were more likely to provide support to small and medium-sized enterprises. They had one in 10 research partnerships, and, in contracts, 10% were held with colleges and CEGEPs, yet only 4% of the funding was from the tri-councils.

Somehow that was modified by Statistics Canada on October 14, and that study was removed from the website. They were lauding colleges for what they're doing, and then all of a sudden the report disappeared. Would you have any idea why the government pulled that Statistics Canada report?

[Ken Doyle]

Again, thank you. That's a very nuanced question but it's quite interesting.

I actually feel bad for my colleagues at Industry Canada, ISED, who worked so hard on this product over the last couple of years. It was released with great fanfare and then it disappeared. Luckily the Internet never forgets, so I was able to get a copy.

You're absolutely right. The colleges show quite well in this document. They're really leaning into the core DNA of what they do, supporting small and medium-sized enterprises to the tune of 9,000 compared with 6,500 for the universities. It articulated our role in the innovation ecosystem really well. It was confusing as to why it just disappeared one day off the Internet.

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

Yes, just Niagara College, for example, in 2024, was able to bring in $9 million of funding to support the work that it's doing in support of the community and what the community is bringing forward. It's a model that I think works on the ground, and it's something I think we should be working to foster, encourage and replicate.

Thank you.

[The Chair, Liberal, Salma Zahid]

We will now proceed to MP Rana for six minutes.

Please go ahead.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you, Madam Chair.

Thank you very much to all the witnesses for spending your time with us on Monday morning.

My question is for Dr. Edward McCauley.

You mentioned earlier during your testimony that the University of Calgary has become one of Canada's top research institutions and a leader in translating research into successful start-ups.

What approaches have worked best to help researchers turn their ideas into businesses, and how can federal programs better support the transition?

[Edward McCauley]

Thank you.

As I mentioned, we've developed a support system at the University of Calgary involving the Hunter Hub for Entrepreneurial Thinking, CDL-Rockies, Innovate Calgary and so on. These are support systems for our students, faculty and staff who want to take that journey of mobilizing their knowledge for the benefit of society.

In that process, we want to ensure that the various avenues that are open to them can be explained clearly and can actually be operated on, for example, creating a small or medium-sized enterprise or creating a new company, or it might be better to license that technology and work with industry to obtain revenue that way. Those are some of the support systems we put in place.

What's really also very important is the collaboration with industry. The University of Calgary, in essence, receives about 25% to 30% of its funding from collaboration with industry and not-for-profits. These collaborations are really important because we're producing the talent to support those industrial sectors, but we're also working hand in hand with industry to, in essence, pull the technologies and the great ideas out and mobilize that for the benefit of society.

[Aslam Rana, Liberal, Hamilton Centre, ON]

How do programs like co-ops or partnerships with companies help students get ready to work in research and innovation?

[Edward McCauley]

Obviously, they provide essential opportunities for our students. They gauge ideas for their career opportunities as to what it's like to work either in an SME or in a larger corporation. Programs like Mitacs, I think, have been very beneficial in terms of helping to support that.

Again, the more things we can do to show industry and the rest of Canada the talent we have at our post-secondary systems across the country and how important the ideas those individuals have in terms of promoting Canada are, the more beneficial it would be.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you very much.

My question is for you, Mr. Hannigan.

How can Canada better align its innovation policy with the actual social and organizational processes that shape commercialization outcomes?

[Timothy Hannigan]

I think it's important to distinguish between organizations establishing business models, proof of their business models, versus their operating models, which they can scale up. I think a lot of efforts in entrepreneurship are in the former and not the latter. When I speak about an ecosystem and the degree to which we can provide supports for scale-ups, I'm really focusing on the latter.

Scaling up is moving beyond just proving it. It's building markets. It's leaning into strategy so that we can have strategic strengths at the industrial level.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you.

Your recent work examines a few of the risks associated with generative AI. What considerations should Canada keep in mind when promoting private investment in AI-related research commercialization?

[Timothy Hannigan]

I'm not going to mention the word we've coined, but in my recent research—I've had a few papers out recently—we're pointing to the risks of embracing the outputs of generative AI uncritically. This is not to say that generative AI is not a transformative technology. I actually think that it is. However, just thinking about the technology and not thinking about the practices within organizations, I think, can lead to hazards, and those hazards can be quite problematic.

To the extent to which we can attend to those hazards, we can position the technology around issues that we've known about in strategic management for a long time, like capacity, competitive advantage and routines. This is where we can unlock value in generative AI. However, if we just think about this technology as magic, that's problematic.

[Aslam Rana, Liberal, Hamilton Centre, ON]

What role does institutional support play in enabling commercialization, especially in early-stage innovation ecosystems?

[Timothy Hannigan]

It can play several. Some of the comments we've heard today so far are helpful in this regard.

However, I'll come back to my framing that we need to think about, first, proving business models and, second, scaling operating models. It's one thing to have institutional supports to get the minimum viable product to prove that a customer might want to actually pay money for the value proposition that is being created by the organization. However, it's a whole other thing to scale that up into a market that is repeatable so that the company can survive over time.

I think the institutional supports for that are more on the ecosystem side. We do have some support systems in place, but in my comments, I pointed to the gap that we have, which is that we have no oversight looking across ecosystems in Canada. To the extent that they collapse, no one's really looking after that, and that's very much a local problem.