Thank you, Honourable Chair and members of the committee on science and research. Thank you for inviting me to speak today. The work that you're doing is of tremendous importance to Canada's sovereignty and economic prosperity.
I'm the CEO of Own Innovation, where I'm an intellectual property lawyer, a patent agent and a trademark agent. I'm also a senior fellow at the Centre for International Governance Innovation and a fellow at the BSIA, and I'm an assistant professor at Western University in the faculties of engineering and law. I'm appearing before the committee today as an individual.
Today's economy is more than 90% driven by intangible assets, including intellectual property, data, algorithms and code, and the intangibles economy has economic impacts. You cannot commercialize what you do not own and control, and there are sovereignty impacts. You cannot govern what you don't own and control. Intellectual property allows you to own and control digital technologies.
Where does Canada stand in AI ownership and control? AI patenting is a leading indicator of AI ownership. Since 2005, more than 2,734,000 AI patents have been granted globally, with more than 350,000 patents now being granted annually for artificial intelligence. Patenting is not an afterthought for AI; it's a major activity.
Canada has been doing a very poor job of owning AI. Since the so-called pan-Canadian AI strategy in 2017, Canada's share of AI patent ownership has dropped from 0.81% to 0.54%. Canada went from being a have-not country to a have-none country, and it's not that we don't invent some great AI technology. It's that we don't own it, and because we don't own it, we can't make money from it. For every 2.5 AI patents Canada invents, it owns only one. In comparison, for every one AI patent that South Korea invents, it owns three.
While important, patenting isn't everything. AI is also protected and commercialized with proprietary algorithms kept as trade secrets, copyrighted code and data, and data is protected as trade secrets and confidential information. Canada does not have a data asset strategy. Canadian companies can't compete in AI if they don't have access to the same quality and quantity of critical data as their global peers.
Sovereign compute capacity is another precondition to digital sovereignty and economic prosperity. Digital sovereignty is a legal construct, not an emotional one. The legal construct says that to be sovereign means to be a Canadian company with Canadian ownership and control that is out of reach of foreign laws such as the U.S. CLOUD Act. A U.S. company that holds our data and algorithms on Canadian soil is subject to U.S. law, and Canadian justice does not apply.
Digital sovereignty is not about physical location. Digital sovereignty is not about corporate assurances. Nokia Canada cannot be sovereign AI. CoreWeave, a U.S. company, cannot be sovereign AI. Foreign hyperscalers such as Amazon, Google and Microsoft cannot be sovereign AI. Even Canada's large telcos may not assure digital sovereignty because of their U.S. presence. Digital sovereignty requires exclusive jurisdiction by Canada's legal systems.
I make the following recommendations to the committee.
Canada needs to have an actual AI strategy, one that puts economic prosperity and national security at its core.
We need to stop all funding of talent and research that gets owned by foreign companies.
We need to build truly sovereign compute infrastructure that is 100% out of reach of foreign control.
We need to spur an IP economy that allows Canada to own and commercialize critical technologies at home and at scale globally. Specifically, we need to have Canadian firms be global leaders in AI, IP and patent ownership. Finally, we need to create and scale Canadian firms that generate, retain and commercialize data assets.
Canada's economic trajectory is currently negative. We are projected to be the worst-performing advanced economy for the next decade and the three decades after. That negative trajectory is continuing to this day with things like subsidies for EV manufacturing and adoption and funding of Canadian-based researchers without control over who gets the benefits of that research.
In today's economy, it is not productive to create technology for somebody else, manufacture someone else's technology or buy someone else's technology. Canada needs to prioritize economically productive activities by owning and commercializing intangible assets and controlling and monetizing data. Canada's current path is one of a developing nation. If we keep it up, we're going to become the developing nation that we're positioning ourselves to be.
Thank you.