Overview of current ISED portfolio activities in support of the economy - Ministerial transition book – October 2021

From: Innovation, Science and Economic Development Canada

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The ISED and portfolio storyFootnote 1

The Department has a long-standing history of supporting the Canadian economy through its evolving mandate and ongoing mission to meet the shifting needs of industry.

  • The Department of Trade and Commerce (1892) primarily focused on the creation and expansion of national and regional transportation systems, export of natural resources, and growing the processing capacity of the manufacturing sector. The Department's focus shifted to mobilizing Canada's industrial capacity for war in 1939.
  • The Department of Industry (1963) shifted the primary focus to industry and innovation. The Department's 10 sector-focused branches aimed to increase Canadian productivity and large-scale production. Regional economic development was also first recognized as a key component of industry policy in this era via the creation of the Area Development Agency.
  • The Department of Industry, Trade and Commerce (1969) brought together trade and industrial policy. The Department's primary focus was to promote the establishment and growth of the manufacturing, processing, and tourism industries, improve the productivity of Canadian industry, and foster the expansion of Canadian trade. 
  • The Department of Regional and Industrial Expansion (1982) merged industry policy and regional economic development. Trade functions were removed and the Department's programming efforts focused on supporting large-scale industrial development.
  • The Department of Industry, Science and Technology Canada (1987) was created in response to the growing prominence of science and technology as a key component of economic policy. Some shifts in the era included a more prominent role in encouraging technology transfer and basic and applied R&D, and ensuring the availability of a highly skilled labour force.
  • Industry Canada (1993), essentially a merger of 4 existing departments (Industry, Science and Technology Canada; Consumer and Corporate Affairs; Department of Communications; and Investment Canada), was established in response to the unfavourable economic and financial climate in the early to mid-1990s. The role of the Department shifted toward micro-economic policy, with a raison d'être to promote productivity and innovation and create the conditions for a more competitive business climate.
  • Innovation, Science and Economic Development Canada (2015) reinforced the centrality of innovation to industrial policy and economic development across all sectors and regions of the country. The ISED Portfolio has shifted toward being a more active and direct partner with businesses, innovators, entrepreneurs, the higher education sector, and civil society. This era has also coincided with a renewed emphasis on working collectively across departments and central agencies to generate whole-of-government solutions to growing the economy for all Canadians.

Overview of current ISED and portfolio activitiesFootnote 1

Responding to the COVID 19 pandemicFootnote 1

The COVID-19 pandemic resulted in an unprecedented economic shock impacting all sectors of the Canadian and global economies, business operations and consumer preferences. ISED and the Portfolio have and continue to work to position Canada to thrive economically by supporting the unique needs of the sectors that make up our economy and by helping them adapt to the impacts of the pandemic.

As part of their contribution to the Government of Canada's response to the COVID-19 pandemic, ISED and the Portfolio built upon their long-standing partnerships with industry to mobilize forces to respond to the public health crisis.

Together with Canadian firms, a number of important elements in Canada's response to the COVID-19 pandemic were developed to mobilize industry response, support hard-hit businesses, build resilience, and support longer-term recovery.

1. Supporting hard-hit Canadians and Canadian businesses:

  • Building on emergency support programs to fill key gaps by supporting Canadian firms through funding and providing access to capital for firms in the hardest hit sectors (e.g., Highly Affected Sectors Credit Availability Program and Business Development Bank of Canada, the Large Employer Emergency Financing Facility).
  • Providing additional support to hard hit sectors through the Regional Relief and Recovery FundFootnote 6, the Tourism Relief Fund, the Aerospace Regional Recovery Initiative, and the Canadian Seafood Stabilization Fund, administered by the Regional Development Agencies, which are now led by separate Ministers.
  • Providing $741M in temporary support to students, researchers, and trainees in the academic research community to help preserve Canada's research base and its talent.
  • Launching a new Business Benefits Finder and ExploreIP, both with new COVID-related categories, and working with firms to identify and use measures that respond to their needs.
  • Helping rural Canadians adapt to working from home and improving access to high-speed Internet for Indigenous peoples and vulnerable Canadians (Universal Broadband Fund).

2. Mobilizing industry response:

  • Issuing the Made-In-Canada Call to Action: partnering with industry to secure domestic production of key personal protective equipment and medical supplies for front-line workers.
  • Supporting digital responses to COVID-19 in tandem with industry through the COVID Alert App Framework; and sharing regular COVID-19 updates via the Canada Business App. 

3. Building Canada's resilience and supporting longer-term recovery:

  • Investing $1.2B through the Strategic Innovation Fund to support over a dozen Canadian companies to develop vaccines, treatments, and facilities in Canada for the fight against COVID-19 and for pandemic preparedness.
  • Working with partners and industry to develop the Biomanufacturing and Life Sciences Strategy; securing new funding for life sciences research and biotechnology, national strategies on artificial intelligence, quantum and genomics.
  • Launching calls through Innovative Solutions Canada for prototypes and awarding $35M to 55 innovations to develop solutions to combat COVID-19 and similar threats.
  • Funding leading-edge innovations to keep Canadians safe and help the economy recover with more than 80 projects worth over $220M through the Innovation Superclusters Initiative.

Marketplace frameworks and Consumer confidenceFootnote 2Footnote 3Footnote 5

  • ISED and the Portfolio are responsible for a set of laws, regulations, and policies in key areas that establish a framework for business activity in Canada, including to:
    • Support innovation through investment attraction, competition, research, and commercialization;
    • Build trust by taking into account diverse public policy interests, such as privacy, consumer protection, and fairness; and,
    • Encourage Canadian firms to leverage marketplace tools, services, and programs.
  • ISED and the Portfolio are currently responsible for the development and coordination of policy and legislative frameworks of general application within the marketplace, including:
    • Corporate governance, bankruptcy and insolvency;
    • Competition;
    • Labelling (textiles, packaged goods, and precious metals);
    • Copyright, trademark, patent, and industrial design;
    • Privacy, personal information, and data governance; and,
    • Anti-spam and e-commerce protection.
  • ISED and the Portfolio work to ensure Canada's marketplace frameworks are effective in promoting competitive markets and instilling confidence and trust through a variety of functions.

Law and policyFootnote 1

  • ISED regularly assesses and advises on marketplace policies and laws to ensure that they remain fit for purpose and are effective, and leads the development of legislative, policy, and some regulatory proposals.
  • ISED participates in international fora and negotiations of importance to the Portfolio, including issues related to governance of a data-driven economy.
  • The Portfolio has a role in protecting Canadians and empowering consumers through: federal policy, legal, and regulatory levers; research, education, and awareness efforts; enforcement actions; and, coordination with the provinces and territories.
  • To remain proactive, the Portfolio monitors domestic and international developments to leverage best practices and maintain interoperability where necessary (e.g. European Union's General Data Protection Regulation).

Regulation and implementationFootnote 1

  • The Canadian Intellectual Property Office, a special operating agency of ISED, administers Canada's system of intellectual property rights, including patents, trademarks, copyrights, industrial designs, and geographical indications.
  • The Competition Bureau is an independent federal law enforcement agency with competition law and consumer welfare responsibilities to ensure trust and innovation in markets, including combatting cartels and deceptive marketing practices, reviewing mergers, and preventing abuse by dominant firms.
  • The Office of the Superintendent of Bankruptcy ensures the proper functioning of the insolvency system in support of creditor and investor confidence in the Canadian economy. It also helps protect consumers through compliance promotion, monitoring and enforcement, and providing tools and information to help debtors find the right solution for their serious financial challenges.
  • Corporations Canada helps Canadians incorporate businesses, not-for-profit corporations, and other corporate entities according to Canada's laws and regulations and provides a regulatory climate that maintains order and fairness in the corporate law arena.
  • The Copyright Board of Canada establishes the royalties to be paid for the use of some copyrighted works when entrusted to a copyright collective society, setting royalties which are fair and equitable to both copyright owners and users of copyrighted works.
  • The National Research Council Canada is Canada's international metrology and measurement authority, and produces the model Canadian Building Code for the provinces and territories.
  • The Standards Council of Canada is a federal Crown corporation responsible for promoting efficient and effective standardization to strengthen Canada's competitiveness while protecting consumers and protecting the health, safety, and welfare of Canadians.
  • Statistics Canada provides data and analysis that form the foundation of important macroeconomic measures, such as the consumer price index, gross domestic product, trade and other measures on innovation, productivity, and digital. Through the Census of Population, it collects and disseminates information on important demographic trends and insights that inform both domestic and international business decisions.
  • Measurement Canada maintains domestic and worldwide confidence in the accuracy of goods and services bought and sold on the basis of measurement to advance economic growth and a fair and competitive marketplace.
  • The Office of Consumer Affairs acts as a focal point for consumers seeking access to information to make informed decisions in the marketplace or seek redress when they encounter an issue. It also facilitates collaboration across all levels of government with respect to consumer protection and awareness, and supports consumer organizations in Canada to advance research and policy analysis on emerging issues.

Enabling digital infrastructureFootnote 2Footnote 3Footnote 5

  • Canadian businesses rely on digital infrastructure to connect to a larger market and grow globally. Canadians, particularly in remote areas, rely on digital infrastructure, such as broadband Internet access and wireless service provided through spectrum, to connect to vital services, educational resources, and economic opportunities.
  • ISED and Portfolio partners have a role to play in enabling digital infrastructure, alongside other government departments, by: 
    • Administering funding programs that work to improve the availability of telecommunications services in unserved and underserved areas, including rural and Northern communities (e.g. Universal Broadband Fund);
    • Seeking to remain proactive and forward-looking on evolving digital infrastructure needs, including looking at the implications of next-generation networks, such as 5G; and
    • Advancing the security and resilience of digital infrastructure, working with partners across the Government of Canada.
  • ISED is responsible for the Telecommunications Act and leads telecommunications policy for the government to promote sector competition, investment, affordability, and access to high-quality services.
  • ISED is responsible under the Radiocommunication Act to govern the use of spectrum in Canada, a public resource that is essential for the country's wide range of wireless services. This includes authorizing its use, setting standards, certifying equipment, and holding auctions.
  • The Canadian Radio-television and Telecommunications Commission (CRTC) is an independent tribunal that regulates telecommunications and broadcasting in the public interest. The CRTC currently reports to Parliament via the Minister of Canadian Heritage and works to implement the policy objectives in the Telecommunications Act and Canada's Anti-Spam Legislation (currently the responsibility of the Minister of Innovation, Science and Industry) and the Broadcasting Act (currently the responsibility of the Minister of Heritage).
  • This includes implementing measures to encourage greater competition in telecommunications services, enable digital infrastructure, and promote compliance with and enforcement of regulations that advance consumer interests.

Supporting Canadian sectorsFootnote 1

Key sectors where ISED takes a lead role

  • ISED leads the Government's work with key industrial sectors to improve conditions for investment, enhance innovation performance, increase our share of global trade, and build a fair, efficient, and competitive marketplace.
  • ISED brings together the expertise, programs, and services of the Government to meet priorities and support businesses in reaching their potential.
  • ISED works directly with businesses to gain insights, respond to challenges, and develop solutions to drive economic growth by focusing on opportunities and building on Canada's strengths.
  • Key Sectors where ISED takes a lead role:
    • Aerospace
    • Automotive
    • Clean Tech
    • Critical Minerals and Energy
    • Digital Technology
    • Food Processing
    • Life Sciences and Biomanufacturing
    • Manufacturing
    • Steel and Aluminum
    • Tourism
  • Together these sectors represent:
    • 57% of R&D spending;
    • 40% of good exports; and,
    • 18% of GDP.

Pandemic response and readiness:

  • Fostering recovery by strengthening and rebuilding biomanufacturing capabilities and supporting Made-in-Canada technologies, including personal protective equipment.

Innovation and R&D:

  • Supporting the Canadian economy through strategic actions and investments to build Canada's innovation advantage in growing technology and promote digital adoption across all industries.

Sustainability and emissions reduction:

  • Supporting the decarbonization of Canadian industries and the economy to accelerate the transition to sustainability and net-zero through expertise in clean technology capabilities and research to support new policies and programs enabling clean technologies.

Supply chain resiliency and trade:

  • Supporting efforts to shape a more resilient and inclusive economy reinvesting in domestic manufacturing expertise and capacity, stabilizing global supply chains, and expanding trade relationships.

Skills and talent:

  • Delivering skills programming focused on driving innovation and helping ensure that Canada's workforce meets industry needs by inspiring youth toward future careers and supporting work-integrated learning and training in high-growth sectors.

Program supports

ISED and the Portfolio's 4 flagship innovation support programs each target support at a different critical stage of firm growth:

Four flagship programs at Innovation Canada
Text version

For Projects in the $1 to $10 million range, NRC IRAP and the RDAs provides funding and advisory support; above $10 million, SIF provides funding and advisory support; TCS provides tailored advice to exporting firms. In partnership with all programs, the BDC and EDC provide as needed financial advice depending on the nature of the project. More specifically:

  • The Industrial Research Assistant Program is at the applied research and commercialization stage.
  • Regional Development Agencies are at the scale-up, new market and tech adoption stage.
  • The Strategic Innovation Fund is in the growth and expansion, attract investments and R and D collaboration stage. 
  • The Trade Commissioner Service is in the exporting stage.
  • All of these programs are available through the Innovation Canada digital single window
  • Taken together, this suite of business innovation programs result in:
    • Aligned access and demand driven
    • Single point of access
    • Save firms time and money
    • Developing a pipeline
    • Scale up

Program data and key figures

NRC-IRAP (Data as of 2020-21)

  • 9,349 firms assisted
  • 2,510 new projects funded
  • 2,086 firms funded
  • 892 youth jobs supported, with 90% youth employed or self-employed post-internship
  • 12,146 jobs supported
  • $319.7M invested through grants and contributions

Strategic Innovation Fund (SIF) (Launched July 2017; Data as of August 31, 2021)

  • 96 announced projects
  • $4.8B in SIF contributions
  • $51.8B in total investment leveraged
  • $15.2B secured in R&D investment
  • 22.5K commitments for co-op and training opportunities

Regional Development Agencies (RDAs)Footnote 7 (Data as of August 2021)

  • 7 RDAs working with 268 local Community Futures Organizations
  • 148,722 jobs and 24,872 businesses and organizations supported or preserved during the pandemic through the Regional Relief and Recovery Fund
  • $730M+ for core grants and contributions for 2021-22
  • $2.2B in new, targeted support through Budget 2021

Program supports

ISED supports industry sectors by providing a 1-stop shop for financing and expert advice and by driving new collaborations to help businesses innovate, create jobs, and grow Canada's economy.

  • The Strategic Innovation Fund invests in innovative businesses and collaborative projects to support scale-up and research, develop and commercialize cutting-edge ideas, and collaborate in new ways (e.g. Net-Zero Accelerator to support clean technology development and adoption by Canadian businesses and ecosystems). 
  • The Innovation Superclusters Initiative brings together entrepreneurs, researchers, accelerators, small and medium-size enterprises, and global firms to consolidate Canada's technology strengths in areas of global advantage. The 5 superclusters are regionally anchored and have national reach (Digital Technology, Protein Industries, Advanced Manufacturing, Scale AI, and Ocean).
  • Innovative Solutions Canada is helping Canadian innovators who want to start, grow, and get to market by funding R&D and testing prototypes in real-life settings.
  • Canada Digital Adoption Program's Stream 2 will help SMEs with access to programs and services to digitize their businesses toward resilience and growth.
  • The Accelerated Growth Service, BizPaL, and Business Benefits Finder aim to help Canadian businesses grow from start-up to scale-up to global brand.
  • ExploreIP, Canada's IP Marketplace, and associated online tools help Canadian businesses access valuable publicly owned IP to licence, collaborate, and commercialize.

Portfolio partners

  • ISED works with other departments on investment attraction to encourage foreign firms to invest in Canada to bring new jobs, adopt advanced technologies, and boost our economy. ISED is responsible for ensuring foreign investment benefits the Canadian economy via the administration of the Investment Canada Act.
  • The Portfolio delivers a broad suite of industry-focused programs to support business needs—from helping businesses access skilled talent to grow and innovate, through building innovation ecosystems, to exporting and scaling up globally. For example:
    • The National Research Council Canada labs and the Industrial Research Assistance Program work directly with individual businesses across the country on their research and commercialization needs.
    • The Canadian Space Agency supports the growth of the space industry and encourages the transfer and commercialization of space technology throughout Canadian industry.
    • Destination Canada promotes Canada as a tourism destination by uniting tourism leaders and providing a platform for businesses to connect with global customers.
    • Regional Development Agencies, now formally outside the Portfolio and led by separate ministers, work to address key economic challenges by providing regionally tailored programs, services, knowledge, and expertise, including delivering direct project funding for local enterprises, regional ecosystems, and community economic development and diversification, and implementing national programs such as the Women Entrepreneurship Fund.

Helping Small Businesses Adapt, Thrive, and ScaleFootnote 1

Total number of employer businesses by business size, 2019
Text version

Total number of employer businesses by business size, 2019. Small businesses hold 97.9% of the total businesses while medium businesses make up 1.9% and large businesses make up the remaining 0.2%.Footnote 3

  • Small businesses make up nearly 98% of businesses in Canada and are important to Canada's economy, employing 64% of workers. While Canada generally excels at creating new businesses, maximizing export potential and creating high-growth and large anchor firms remains a challenge.
  • A current function of the Portfolio is to support small businesses through access to financing. This includes direct funding through grants and loans, as well as support in raising capital. Many of the Portfolio financing programs include mentorship and capacity building, offering knowledge sharing, resources, and expert advice direct to entrepreneurs and small-business owners.
  • The Portfolio works to encourage market diversification and global market access by promoting key trade and investment agreements, advancing negotiations on new agreements, and helping entrepreneurs expand globally.
  • The Portfolio also supports the small-business ecosystem more broadly through its role in supporting effective regulation and access to talent pipelines, and through direct business-facing services, such as the Canada Business App, to help small businesses better access government services and programs.
  • Existing programs support a wide range of entrepreneurs (Women Entrepreneurship Strategy, Black Entrepreneurship Program, Futurpreneur, and the Small Business and Entrepreneurship Development Program) to start a business, and small and medium-sized enterprises to grow in Canada and globally.
  • The Canada Digital Adoption Program's Stream 1 is intended to help SMEs take advantage of e‑commerce opportunities, while Stream 2 helps businesses with the development and implementation of digital adoption strategies.
  • The Canada Small Business Financing Program enhances access to capital by working with Canadian financial institutions to risk share small business loans.
  • ISED further complements these SME supports through its business innovation programming:
    • The Strategic Innovation Fund supports innovation networks that facilitate collaborative innovation projects, often involving smaller companies.
    • 47% of Supercluster project partners are SMEs, linking innovative SMEs with larger firms and research institutes to leverage the industry network.
    • Innovative Solutions Canada leverages procurement to enable the Government to act as a first customer and support innovative Canadian SMEs.
    • The Innovation Advisors within the Accelerated Growth Service help high-growth SMEs find government support—from financing to technical advice to foreign market expertise.

Portfolio partners

  • The Business Development Bank of Canada provides financing, advisory services, and capital investments for SMEs, intended to supplement or complete services available from commercial financial institutions.
  • The Business Development Bank of Canada also delivers programs on behalf of government, such as the Venture Capital Catalyst Initiative, which leverages private sector funds to increase the availability of funding targeting high-potential start-ups, and supports the Canada Digital Adoption Program by providing 0% interest loans to finance the implementation of business' technology adoption plans.
  • The National Research Council Canada delivers the Industrial Research Assistance Program, which provides technical advice to over 8,000 SMEs and funding to over 3,500 SMEs each year.
  • Regional Development Agencies, now formally outside the Portfolio and led by separate ministers, address key economic challenges by providing regionally tailored programs, services, knowledge, and expertise, including delivering direct project funding for SMEs, regional ecosystems, community economic development and diversification, marketing and destination development in support of tourism, and by implementing national programs such as the Regional Relief and Recovery Fund, which provides assistance to businesses and communities that require additional support to cope with and recover from the pandemic.

Science and ResearchFootnote 2Footnote 3Footnote 5

  • The Portfolio works to support fundamental research by ensuring researchers have the resources they need to continue asking bold questions and training new generations of students. It also supports Canada's science ecosystem by facilitating connections between post-secondary institutions and industry, and promoting science to the public through third-party organizations, science promotion programs, and agenda-setting.
  • Applied R&D as well as strong partnerships between businesses and research institutions are also critical elements in transforming fundamental research into commercial products and services to drive the economy and improve the well-being of all Canadians.
  • The Portfolio also works with global partners to strengthen best practices and contribute to large-scale discovery projects. The Canadian Space Agency works collaboratively with members of the global space community, including NASA and the European Space Agency. In this role, Canada has contributed to a number of scientific missions, delivering critical technology and scientific expertise.
  • Canada has a history of strong scientific performance on the world stage. For example, years of investment in artificial intelligence-related research has led to Canadian leadership in this area. Other areas of strength include quantum, genomics, and research and training investments that support the biomanufacturing sector.
  • Direct funding is currently used to support fundamental science, delivered through various mechanisms, including the 2 granting agencies under the ISED Portfolio. The Natural Sciences and Engineering Research Council of Canada and the Social Sciences and Humanities Research Council of Canada both provide funding to support students, promote and support discovery research, and encourage greater collaboration between industry and academia. (The Canadian Institutes of Health Research, the third granting council, is under the purview of the Minister of Health.)
  • The Strategic Science Fund aims to mobilize the expertise and resources of independent, third-party science and research organizations to enhance Canada's science, technology, and innovation excellence.
  • Other funding initiatives within the Portfolio focus on building skills through the promotion of science, technology, engineering, and mathematics (STEM); on strengthening Canada's research infrastructure; on enhancing areas of strength; and on supporting business in the development and deployment of research.
  • The National Research Council Canada is Canada's largest federal R&D organization, which partners with industry to help bring research and new advanced technologies to market, and invests in strategic R&D programming to apply to economic and societal challenges.

Regional DevelopmentFootnote 1

The ISED Portfolio engages regionally via 2 principal avenues:

  1. ISED's 5 regional offices, reporting through the Strategy and Innovation Policy Sector—Pacific, Prairie and Northern, Ontario, Quebec, Atlantic:
    • Gather and report regional intelligence, provide support to ministerial and VIP outreach, and support implementation of certain key departmental files; and
    • Play a key role in enhancing the Department's understanding of the economic benefits and potential of Canada's economy with knowledge of local issues and networks with stakeholders.
  2. Federal, Provincial and Territorial (FPT) Table for Innovation and Economic Development:
    • Supports FPT ministers and deputy ministers in sustaining and enhancing collaboration on innovation and economic development;
    • Was created in 2016 and is currently co-chaired by ISED and the Government of Ontario; and
    • Includes an assistant deputy minister-level FPT table, which began meeting regularly to advance deputy ministers' priorities following the outbreak of the pandemic.

On tourismFootnote 4

With respect to tourism, ISED also engages regionally through the Canadian Council of Tourism Ministers:

  • Forum for FPT ministers and deputy ministers to collaborate to grow the tourism  sector and create opportunities for community economic growth;
  • Currently co-chaired by the federal Minister of Tourism and the Minister of Tourism of Quebec, supported by a deputy minister table.

Additional InformationFootnote 3Footnote 4Footnote 5

Additionally, outside the ISED portfolio is a network of 7 Regional Development Agencies, now under separate ministers—CanNor, PacifiCan, PrairiesCan, FedNor, FedDev Ontario, CED, ACOA:

  • Consists of federal organizations responsible for fostering long-term economic growth in the regions they serve, each led by a regionally based president;
  • Provides a key federal presence in the regions via long-standing relationships with local stakeholders and businesses, allowing them to provide "on-the-ground" knowledge and expertise for the federal government; and
  • Delivers direct project funding for SMEs, regional ecosystems, and community economic development and diversification projects, including key COVID supports and economic recovery initiatives (e.g. Regional Relief and Recovery Fund, Tourism Relief Fund) and national initiatives (e.g. Women Entrepreneurship Fund).
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