Appearance before the Standing Committee on Industry and Technology (INDU) by the Minister of Innovation, Science and Industry

March 4^th 2022

Biomanufacturing and Life Science Strategy

Key Messages:

The Government of Canada’s top priority is protecting the health and safety of Canadians.
That is why the government is helping Canadian researchers and companies produce safe and effective vaccines and therapies that will respond to COVID‑19, future pandemics and other health priorities.
Budget 2021 provided a total of $2.2 billion over seven years to grow a strong, competitive domestic life sciences sector, with cutting-edge biomanufacturing capabilities
These investments, guided by Canada’s Life Sciences Strategy, will help build Canada’s talent pipeline and research systems, and support the growth of Canadian life sciences firms.

Supplementary Messages:

The Government of Canada will continue to work with provinces, territories and other partners to deliver real results for the health and safety of Canadians.
Since the onset of the pandemic, the government has made significant investments of more than $1.3 billion to advance industrial research and development in vaccines and therapeutics, as well as to expand biomanufacturing capacity in Canada.
Canada’s Biomanufacturing and Life Sciences Strategy consists of five pillars to support the sector from training, to research, to testing, to commercialization and production of life-saving vaccines and medicines.
Projects are being advanced through the Strategic Innovation Fund, Next Generation Manufacturing Canada Supercluster, the National Research Council, Regional Development Agencies, the Canada Foundation for Innovation and other government partners.

Background:

Budget 2021 funding breakdown

Budget 2021 provides investments to help build Canada’s talent pipeline and research systems, and support the growth of Canadian life sciences firms, including:
$500 million over four years, starting in 2021-22, for the Canada Foundation for Innovation to support the bio-science capital and infrastructure needs of post-secondary institutions and research hospitals.
$250 million over four years, starting in 2021-22, for the federal research granting councils to create the new Canada Biomedical Research Fund, launched on October 5, 2021.
$92 million over four years, starting in 2021-22, for adMare to support company creation, scale up, and training activities in the life sciences sector.
$59.2 million over three years, starting in 2021-22, for the Vaccine and Infectious Disease Organization to support the development of its vaccine candidates and expand its facility in Saskatoon.
$45 million over three years, starting in 2022-23, to the Stem Cell Network to support stem cell and regenerative medicine research.
$1 billion over seven years, starting in 2021-22, of support through the Strategic Innovation Fund targeted toward promising domestic life sciences and bio-manufacturing firms.
$250 million over three years, starting in 2021-22, to increase clinical research capacity through a new Canadian Institutes of Health Research Clinical Trials Fund.
$50 million over five years, starting in 2021-22, to create a life sciences stream in the Venture Capital Catalyst Initiative, as part of a larger venture capital investment proposed.

New Canadian biomanufacturing capacity since 2020

The government has announced a number of investments to bolster domestic production capacity through the Strategic Innovation Fund, Next Generation Manufacturing Canada Supercluster, the National Research Council, Regional Development Agencies, and other government partners, including:

the National Research Council (NRC) (Montréal, QC) - $126 million to establish the new Biologics Manufacturing Centre;
Medicago (Quebec City, QC) - $173 million to develop a plant-based virus-like-particle vaccine and for the construction of a Good Manufacturing Practice facility, alongside an asset purchase agreement for eventual delivery of its vaccines;
Sanofi Pasteur (Toronto campus) – up to $415 million support towards building an end-to-end influenza vaccine manufacturing facility;
Resilience Biotechnologies (Mississauga, ON) - $199 million to increase manufacturing and fill/finish capacity for a number of vaccines and therapeutics including mRNA technologies; and,
BioVectra (Charlottetown, PEI) - $39.8 million to support BioVectra in manufacturing mRNA and plasmid DNA, a key input used to manufacture mRNA vaccines. The funding will also add fill and finish capabilities, allowing BioVectra to provide an end-to-end manufacturing solution for its clients.
The Government also announced a Memorandum of Understanding with Moderna in August 2021 that outlines the company’s objective of establishing an mRNA manufacturing facility in Canada.

Canadian COVID-19 vaccine development

The NRC has provided more than $80 million in funding and advisory support for vaccines and therapies through the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) to support research and development of seven vaccine candidates and seven therapeutics candidates for COVID-19.

Vaccines- Biomanufacturing capacity general

Key Messages:

The Government of Canada’s number one priority is protecting the health and safety of Canadians.
The government has completed the construction of the National Research Council’s (NRC) new Biologics Manufacturing Centre in Montreal, on budget and ahead of schedule. This facility will produce vaccines here in Canada.
The timing for vaccine production is dependant upon approvals from Health Canada, and the completion of other processes. No risks will be taken when it comes to ensuring these products are safe for Canadians.
The NRC is currently working with Novavax on the technology transfer, in preparation for vaccine production at the facility.

Supplementary Messages:

On approvals

For a vaccine to be produced in Canada, Health Canada approvals are required for the vaccine, the production facility, and the specific vaccine to be produced in the specific facility.
The NRC is focused on completing the commissioning, Good Manufacturing Practices qualification and validation processes, and all related documentation.
Subsequently, the NRC will seek a drug establishment licence from Health Canada for the facility.

On timeliness and capacity

The timing for the release and distribution of the vaccine is dependent on the successful completion of the technology transfer. These are the quality assurance processes that ensure vaccines produced in Canada are consistently safe and effective for human use, and Novavax receiving regulatory approval of its vaccine candidate.
Once Good Manufacturing Process-certified, the Biologics Manufacturing Centre will have a production capacity of approximately 4,000 litres per month. Based on 500 doses/L, this would translate into approximately two million doses of a vaccine per month. The number of doses will vary widely depending on the type of vaccine, and its manufacturing yield.
The facility can accommodate the production of two different vaccine products simultaneously. One line is earmarked to produce the COVID-19 vaccine being developed by Novavax, once it is approved for use in Canada. The government is actively engaging with other companies to maximize use of the facility for Canadians.

On Novavax’s manufacturing processes

In clinical trials to date, the Novavax COVID-19 vaccine has proven highly effective.
In all cases, including with respect to Novavax, Health Canada undertakes a thorough, independent review of vaccines to ensure they are effective and safe for use in Canada.
The Government continues to monitor information and developments with respect to the Novavax vaccine, as it does with all vaccines of interest in this pandemic.

Timing/delays of production of Novavax at the BMC

Ongoing delays in obtaining consumables because of global supply chain issues may continue to affect the timelines for production at the Biologics Manufacturing Centre. In vaccine production, simply replacing one material with another is not an option.
The NRC has been working diligently to mitigate the pandemic-related supply chain challenges. The NRC has successfully secured the majority of materials required for the commissioning, qualification and validation process, the technology transfer, and the initial vaccine production. Plans are in place to procure the remaining materials.
The NRC has been and will continue to meticulously follow the extensive quality assurance protocols and stringent approval requirements related to the production of vaccines in Canada. These requirements ensure that vaccines produced in Canada are consistently safe and effective for human use.

Background:

On February 2, 2021, Prime Minister Justin Trudeau announced that the Government of Canada signed a memorandum of understanding with Novavax to pursue options to produce its COVID-19 vaccine at the Biologics Manufacturing Centre (BMC) once both the vaccine candidate and the facility receive the required Health Canada approvals.

On March 2021, the NRC and Novavax signed a collaboration agreement to enable the technology transfer of the Novavax COVID-19 vaccine to begin.

Novavax is a good fit because its vaccine candidate is compatible with the facility, it is in the right stage of development and Novavax has a need to manufacture their vaccine in Canada.

The commissioning, qualification and validation (CQV) of the BMC as a brand new facility with more than 250 pieces of critical equipment is a very complex, time consuming and rigorous process. The results of the CQV, along with the development of all the quality management and quality control documentation, are critical for the GMP certification and granting of the drug establishment licence by Health Canada.

Production of Novavax’s COVID-19 initial quality and stability batches can begin once the tech transfer is completed, the drug establishment licence for the facility is granted and Novavax has received vaccine regulatory approval from Health Canada.

As of January 16, 2022, the Novavax COVID-19 vaccine has been approved for use by the World Health Organization (for COVAX), European Commission, South Korea, India, the Philippines, Australia and Indonesia.

The BMC will be capable of large-quantity, end-to-end manufacturing (production, purification, fill and finish and secondary packaging) of biopharmaceuticals (including vaccines) from cell based biologics production (i.e., viral vector, protein subunit, virus-like particle base).

Along with the collaboration with Novavax for production of their vaccine candidate at the BMC, the NRC continues to explore options with potential collaborators for technology transfer of vaccines that can be manufactured at the facility. All production will be subject to the technology transfer process described above. Consistent with standard policy, agreements will be announced once they are finalized.

Mobilizing industry to fight COVID-19

Key Messages:

Throughout the COVID-19 pandemic, the Government of Canada has worked to ensure that Canadians have access to the resources needed to keep themselves healthy.
The government has worked with companies and industries to supply personal protective equipment (PPE) and medical devices. More than 6,500 individuals and businesses have offered to help, and many pivoted to producing PPE items needed by frontline healthcare workers and the general public.
There is now significant domestic PPE supply and a National Emergency Strategic Stockpile of medical items to meet the emergency needs of provinces and territories.

Supplementary Messages:

Over the course of its industry call to action, the government deployed all resources at its disposal to quickly establish reliable domestic supply chains, including through significant federal contracts, innovation programming, and business supports.
While the government has returned to competitive procurement processes, industry programming continues to be leveraged to support the development of next-generation healthcare commodities that can put Canada at the forefront of future healthcare needs.
The government will continue to support Canadians in ensuring they have access to the resources they need to safely navigate the pandemic.

Background:

On March 20, 2020, the Prime Minister issued a call to Canadian businesses and announced the creation of a plan to mobilize and support Canada’s domestic manufacturing capacity to supply vital made-in-Canada protective gear and other medical equipment and devices needed to respond to COVID-19. Over 6,500 businesses and individuals responded to the call, offering their expertise and capacity. Each proposal was assessed on how it could support the urgent needs of Canadians and frontline healthcare workers. In addition, Canada’s Innovation Superclusters tapped into their networks of more than 2,400 member companies to help develop and manufacture face shields, masks, and testing kits.

The government has also deployed industry and innovation programming, such as the National Research Council’s (NRC) Industrial Research Program (IRAP), the Strategic Innovation Fund (SIF), Superclusters, and Innovative Solutions Canada (ISC), to support companies in rapidly scaling up their production capacity in Canada. This includes developing technologies that are environmentally sustainable and encouraging more inclusive products. For example, in 2021 the NRC and ISC launched new challenges to develop compostable materials for medical gloves and to manufacture transparent medical-grade masks. As of 2021, the federal government invested over $79 million in PPE innovation projects across multiple programs.

Canada now has ample domestic manufacturing capacity for a number of critical PPE products to help meet the needs of the public healthcare sector, with additional capacity available for the general market. The National Emergency Strategic Stockpile (NESS) has sufficient quantities of PPE to continue supporting provinces/territories with emergency needs on request.

Under Canada’s procurement agreements with Canadian industrial suppliers of medical equipment to secure further PPE for healthcare workers, there are a number of notable success stories:

As of August 2020, Medicom officially opened its new manufacturing facility in Montreal, and began the production and delivery of domestically-produced surgical masks and, subsequently, respirators.
In April 2021, General Motors delivered their 10 millionth mask to the Government of Canada, going on to donate still more to local organizations across Canada.
The new 3M factory in Brockville, Ontario began the production and delivery of N95 respirators as of April 2021.
Tens of thousands of ventilators were developed and produced from scratch, providing Canada with secure access to a highly complex medical device that was in short supply.
Through competitive procurement in 2021, the government continued to support domestic manufacturers of surgical masks and medical gowns.

Clean technology

Key Messages:

The Government of Canada is laying the foundation for a more resilient, sustainable and competitive economy by focusing on innovation and good, green jobs and investing in clean technology.
Cleantech offers significant benefits to Canadians by helping to meet our climate goals and protecting our planet for future generations, while driving economic prosperity and creating more than 211,000 well-paying jobs across Canada.
Budget 2021 provides $17.6 billion toward a green recovery that will create middle-class jobs, build a clean economy and help protect against climate change.

Supplementary Messages:

These new investments will be a cornerstone of the government’s plan to rebuild the economy, help Canadians make their homes greener and invest in world-leading technologies that make industry cleaner and reduce pollution.
Clean technologies contributed more than $28.8 billion to the Canadian economy in 2019, including the export of approximately $7.05 billion worth of clean technology goods and services.
Employees in cleantech are better paid than the average Canadian worker, and women account for 41 per cent of all jobs employed in the cleantech sector. Women and Indigenous peoples in cleantech are also better compensated on average than in the general workforce. Moreover, Indigenous peoples are better represented in cleantech compared to the overall economy.

Background:

Budget 2021

Specific cleantech budget measures identified for Innovation, Science and Economic Development Canada include:

$24 million over three years to renew the:
- Clean Technology Data Strategy to continue to measure the cleantech sector’s contribution to Canada’s economy; and
- Clean Growth Hub to continue to help clean technology companies navigate federal resources and supports.
$5 billion over seven years to increase funding to the Net Zero Accelerator. This additional support builds on the $3 billion over five years announced in the strengthened climate plan in December 2020. This funding will allow the government to provide up to $8 billion of support for projects that will help reduce domestic greenhouse gas emissions across the Canadian economy.
$1 billion over five years to leverage private investments toward large transformative clean technology projects. This initiative will eliminate risk from decarbonization projects for traditional lenders, bringing down the cost of capital, and making many of these large-scale projects more economically feasible, decarbonizing the Canadian economy and creating new jobs.

Strengthened climate plan

In December 2020, the Government announced a strengthened climate plan designed to make Canada’s economy stronger and more competitive in the emerging clean global marketplace. This plan is a cornerstone of the Government’s commitment in the 2020 Speech from the Throne to create more than 1 million jobs and restore employment to pre-pandemic levels. It includes 64 new measures and $15 billion in investments to build a stronger, cleaner, more resilient and inclusive economy.

Growing Canada’s industrial advantage and the jobs that come from it will depend on the speed and success of decarbonization efforts. To achieve Canada’s full potential, ISED is proud to support Canadian companies as they seek to meet the demands of domestic and global consumers for low-carbon goods and services, making investments that can drive the growth of Canada’s low-carbon economy.

These measures include:

Strengthening support for Sustainable Development Technology Canada (SDTC) with an additional $750 million over five years, representing the single largest investment made by the Government in SDTC since its inception in 2001.
Making investments to support decarbonization and drive the immediate creation of well-paying, resilient jobs through an $8 billion investment over five years in the Strategic Innovation Fund’s Net-Zero Accelerator Fund.

Speech from the Throne

The Speech from the Throne to Open the First Session of the 44th Parliament of Canada – Building a Resilient Economy: A Cleaner & Healthier Future for Our Kids – stresses that the government is taking real action to fight climate change, moving to cap and cut oil and gas sector emissions, while accelerating our path to a net-zero electricity future.

Investing in public transit and mandating the sale of zero emissions vehicles will support climate action. Increasing the price on pollution while putting more money back in Canadians’ pockets will deliver a cleaner environment and a stronger economy.

Supporting Sustainable Development Technology Canada

SDTC is an arm’s-length, not-for-profit organization created by the government to support the development of clean technologies. As of October 2021, SDTC-supported companies have generated $2.8 billion in annual revenues, created 16,930 jobs and brought 177 new technologies to market. These companies have reduced greenhouse gas emissions by an estimated 22.4 megatonnes annually, equivalent to taking almost 7 million cars off the road every year.

Zero-Emission vehicles and batteries

Key Messages:

The Government of Canada is taking real action to fight climate change. It is accelerating its efforts on the path to a 100 per cent net-zero future.
The government is investing to retool traditional manufacturing facilities, produce low- and zero-emission vehicles and battery packaging, provide consumer incentives (iZEV), and build out more charging and refuelling infrastructure.
The objective is for Canada to be a global leader in the production of batteries and other clean and digital technologies, and to develop a sustainable battery ecosystem in Canada, including manufacturing, recycling and reuse.

Supplementary Messages:

Climate change is an issue that has an impact on Canadians’ health, their way of life and the planet. That is why the government has announced a plan to exceed Canada’s 2030 climate goal and reach its goal of net-zero emissions by 2050
The government has adopted measures to make Canada the most competitive jurisdiction in the world for clean technology companies. This includes reducing general corporate and small business income tax rates by 50 per cent for manufacturers of zero-emission technologies, expanding eligible equipment, updating eligibility criteria to exclude some fossil-fuelled equipment by 2024, and providing tax incentives for carbon capture, utilization, and storage.
As part of this commitment, the government is working to develop and launch a Canadian Critical Minerals Strategy to position Canada at the forefront of critical mineral exploration, extraction, processing and manufacturing.
The Government of Canada’s actions and investments will help Canadians breathe cleaner air, and pivot the industry towards a zero-emission future.

Background:

The Government has set a target of achieving 100 per cent ZEV sales by 2035, which aligns with many leading jurisdictions. Accelerating the ZEV target will support Canada’s commitment to reach net zero emissions by 2050 and its pledge at the United Nation’s 2019 Climate Action Summit.

The International Energy Agency (IEA) reports that in 2020 the global supply of ZEV cars reached 10 million, a 43 per cent increase over 2019, which represented 1 per cent of stock share. The IEA forecasts that production of electric vehicles could reach 43 million units per year by 2030, with production valued at more than US$567 billion. By 2040, the international market for energy storage will attract US$662 billion in investments. The lithium-ion battery is at the heart of this evolution.

Canadian ZEV production

Canada currently produces a single EV, the Stellantis Pacifica plug-in hybrid electric vehicle, which is produced at its Windsor Assembly Plant. By mid-decade, the Canadian production mix is expected to pivot significantly towards electrified vehicles. The manufacturing of ZEVs in Canada will have positive effects on the Canadian supply chain for parts suppliers of ZEV components, including battery manufacturing and mining of critical minerals. The following companies have made commitments:

Ford - $1.95 billion to transform Oakville to battery electric vehicle production (up to five vehicles), securing 3,000 jobs by 2027.
GM - $1.94 billion in the company’s Oshawa and St. Catharines facilities and $1.42 billion in the CAMI Facility in Ingersoll, Ontario to transition to assembly of battery electric commercial vans under GM’s BrightDrop brand.
Stellantis - $1.43-$1.58 billion to retool the Windsor facility for multi-energy vehicle architecture, including plug-in hybrid elective and battery-electric vehicles.
Lion Electric - $185 million project to establish a battery-pack assembly plant to better control battery design and make the company more competitive in the heavy-duty electric vehicle market, by growing production.

Critical Minerals/Batteries

Critical minerals and batteries are becoming powerful currencies of the future green economy. Driven by rapidly increasing demand and potential shortages as early as 2025, governments around the world are actively investing in the battery supply chain through industrial policy measures, from acquiring access to critical minerals, providing incentives to attract manufacturing companies and through research and development support.

In March 2021, the Government announced Canada’s critical minerals list which includes 31 minerals, including lithium, considered critical for the sustainable economic success of Canada and its allies.

Canada has rich reserves of the critical minerals needed for batteries, and to support clean and digital technologies. Canada is the only nation in the Western hemisphere with resources for all battery minerals (nickel, cobalt, graphite & lithium).

Budget 2021 announced over $57 million to enhance Canada’s supply of critical minerals, to develop and launch a Canadian Critical Minerals Strategy.

Investment Canada Act-Critical minerals

Key Messages:

The Government of Canada is committed to developing and protecting Canada’s critical minerals and ensuring a resilient critical mineral supply chain.
Foreign investments in critical minerals are systematically and thoroughly scrutinized in collaboration with Canada’s security and intelligence community and other responsible departments.
The government has not hesitated and will not hesitate to take action to block transactions that would be injurious to Canada’s national security, and will continue to be vigilant in protecting Canadian access to and development of critical mineral supplies.

Supplementary Messages on Lithium:

All foreign investments are subject to review for national security concerns under the Investment Canada Act, and certain types of investment – such as those in critical minerals – receive special scrutiny in accordance with current policy.
All potential threats to Canada’s national security are taken very seriously. Any investments that raise national security concerns proceed through review to ensure all appropriate due diligence is complete.
While the Investment Canada Act confidentiality requirements limit what can be said about specific transactions, the government can say that every investment is reviewed on its merits.
When an investment involves critical minerals, considerations can include such factors as the nature of the mineral deposits involved and its role in critical Canadian supply chains, as well as the nature of the Canadian business and the actual location of mining deposits.
In March 2021, the government published the Critical Minerals List, consisting of 31 minerals considered critical for the sustainable economic success of Canada and its allies.
Lithium requires refining and processing to be used in batteries for various applications, including for electric vehicles. Not all of the forms of lithium mined worldwide are of strategic value to the Canadian electric vehicle (EV) supply chain.
The government’s decisions are based on facts and evidence, and the advice of critical minerals subject matter experts, Canada’s security and intelligence agencies and other government industry experts.
The confidentiality provisions of the Act prevent the disclosure of further details with respect to specific investments.

Background:

The Investment Canada Act (ICA or “the Act”) provides for the national security review of all foreign investments. This process is undertaken in consultation with the Minister of Public Safety and Canada’s national security and intelligence agencies. If each stage of the process is engaged, a national security review can last 200 days, or longer with the consent of the Minister and the investor. In fiscal year 2019-20, all 1,032 investment filings, as well as additional investments in Canada by non-Canadians, were reviewed by for their potential to harm Canada’s national security. Seven investments resulted in a section 25.3 order for national security review by the Governor in Council. Of these seven reviews, one required no further action, three proposed investments were withdrawn by the foreign investor, and three resulted in a final section 25.4 Governor in Council order to divest.

The Minister of ISI has published guidelines relating to national security reviews, including a non-exhaustive list of factors that are considered in assessing the national security risks of a transaction and information on how to engage the regulatory process. The guidelines were updated in March 2021 to identify sensitive technology areas, sensitive personal data, and critical minerals as additional factors for consideration.

Mines to mobility

Key Messages:

The Government of Canada is developing a battery ecosystem to respond to the transformation of the transportation sector, automotive, bus and aerospace, to adopt electrification and decrease emissions.
Canada has everything it needs to be a global leader in battery manufacturing: land, green energy, all the critical minerals such as nickel, cobalt, graphite and lithium and a focus on innovation, reuse and recycling.
Canada’s goal to support a sustainable battery ecosystem will create jobs across the country, contribute to Canada’s climate change objectives and ensure secure supply chains in North America.

Supplementary Messages:

It is my role to support the Mines to Mobility Strategy by attracting anchor investments in key areas like mineral processing, cell manufacturing and zero-emission vehicle parts and manufacturing. In doing so, I will use all tools, including the Investment Canada Act, to ensure the protection and development of Canada’s critical minerals and investments are beneficial.
This includes working with the Minister of Natural Resources to develop and launch a Canadian Critical Minerals Strategy to position Canada at the forefront of critical mineral exploration, extraction, processing and manufacturing.
The Government of Canada is committed to advance a whole-of-government approach that outlined support for achieving development of critical mineral and battery value chains in Canada, as a means to decarbonize transportation, promote electric vehicle production, and position Canada to reach its net-zero goals.
The government has been making complementary investments to retool facilities to produce low and zero-emission vehicles, battery packaging, and build out more charging and refueling infrastructure.
The Government of Canada is taking real action to fight climate change. We are accelerating our efforts on the path to a 100 percent net-zero future. These investments will help Canadians breathe cleaner air and pivot the industry towards a zero-emission future.

Background:

Critical Minerals/Batteries

Critical minerals and batteries are becoming powerful currencies of the future green economy. Driven by rapidly increasing demand primarily by electric vehicle targets and potential shortages as early as 2025, governments around the world are actively investing in the battery supply chain through industrial policy measures, from acquiring access to critical minerals, providing incentives to attract manufacturing companies and through research and development support.

The strategy to build up Canada’s battery ecosystem is founded on leveraging strategic advantages in natural resources and critical minerals and connecting that advantage to our advanced manufacturing base.

Strategic Innovation Fund

The Net Zero Accelerator (NZA) initiative supports Canada's net zero goals to help transform the economy for clean and long term growth. This initiative will provide up to $8 billion in support of projects that will enable Canada to reduce its domestic greenhouse gas emissions, including to establish a battery ecosystem.

Investment Canada Act

Key Messages:

Foreign investments and trade encourage innovation and help businesses to succeed and grow, creating well-paying jobs and enabling economic growth that benefits all Canadians.
The Investment Canada Act provides for the review of the most significant investments by non-Canadians to ensure their likely net benefit to the Canadian economy. It also provides for the review of foreign investments of any size for national security concerns.
The government has not hesitated and will not hesitate to take action to block transactions that would be injurious to Canada’s national security. The government never has and never will compromise Canada’s national security.

Supplementary Messages:

On national security

In March 2021, the Government of Canada updated the Investment Canada Act national security guidelines to address concerns related to investments involving sensitive technology areas, sensitive personal data and critical minerals, as well as investments by state-owned and state-influenced investors.
The government's actions are based on facts and evidence, and the advice of Canada’s security and intelligence agencies and responsible government departments.

On critical minerals

While the confidentiality requirements of the Investment Canada Act limit what can be said about specific transactions, the government can say that every investment is reviewed on its merits.
When an investment involves critical minerals, factors for consideration can include the nature of the mineral deposits involved and their role in critical Canadian supply chains, as well as the nature of the Canadian business and whether it has operations in Canada.

Background:

The Investment Canada Act (ICA or “the Act”) provides for the net benefit review of significant foreign acquisitions of control of non-cultural businesses by the Minister of Innovation, Science and Industry (ISI), as determined by a monetary threshold based on the value of the Canadian business. In 2022, the thresholds are: $1.141 billion in enterprise value (EV) for private-sector World Trade Organization (WTO) investors; $1.711 billion in EV for trade agreement investors (i.e., Australia, Chile, Colombia, the European Union, Honduras, Japan, Mexico, New Zealand, Panama, Peru, Singapore, South Korea, the United States, the United Kingdom and Vietnam); and $454 million in asset value for WTO state-owned enterprise investors. Proposals are assessed according to the net benefit factors listed in section 20 of the Act. The net benefit review process can last 75 days, or longer with the consent of the Minister and the investor. Nine applications for net benefit review were approved in fiscal year 2019-20. Another 1,023 notifications, which are not subject to net benefit review, were certified during the fiscal year. The Minister of Canadian Heritage is responsible for net benefit reviews of cultural businesses, which are reported on separately and subject to different net benefit review thresholds.

The Act also provides for the national security review of all foreign investments. This process is undertaken in consultation with the Minister of Public Safety and Canada’s national security and intelligence agencies. If each stage of the process is engaged, a national security review can last 200 days, or longer with the consent of the Minister and the investor. In fiscal year 2019-20, all 1,032 investment filings, as well as additional investments in Canada by non-Canadians, were reviewed for their potential to harm Canada’s national security. Seven investments resulted in a section 25.3 order for national security review by the Governor in Council. Of these seven reviews, one required no further action, three proposed investments were withdrawn by the foreign investor and three resulted in a final section 25.4 Governor in Council order to divest.

The update follows the April 2020 Covid-19 Policy Statement on the enhanced scrutiny of certain investments, which will remain in place until the economy recovers from the effects of the COVID-19 pandemic. The updated guidelines indicate that the enhanced scrutiny for all investments by state-owned enterprises and private investors assessed as being closely tied to or subject to direction from foreign governments, originally announced in the Covid-19 Policy Statement, will continue.

The Net-Zero emission and retrofit code mandate letter commitment

Key Messages:

The Canadian Commission on Building and Fire Codes, which is responsible for leading the code development process, is working with stakeholders to advance code priorities. This includes work with the provinces and territories related to climate change, such as expanded objectives related to greenhouse gas (GHG) emissions reductions.
The Government of Canada is committed to working with the Commision to introduce new model codes to address GHG emissions for new construction and continuing efforts related to energency performance rquirements for alterations to existing buildings.
Natural Resources Canada and the National Research Council are supporting the codes process by conducting research, analysis, and participating on various committees and task groups, including the Canadian Commission on Building and Fire Codes.

Background:

National model codes are prepared under the direction of the independent CCBFC, and are usually published on a five-year cycle (2020, 2025, 2030, and so on). Adoption and enforcement of the codes are within the purview of the provincial and territorial authorities that have jurisdiction. Municipal governments, which follow and enforce the codes, can also set their own additional bylaws.

The CCBFC is made up of building experts from across Canada, and receives policy advice from PTPACC. The CCBFC oversees the work of several committees and task groups, and formally approves all model code documents and technical revisions prior to publication by the NRC, under Codes Canada.

NRC acts as secretariat for the code process, and provides technical support and expertise alongside its partners. NRCan plays an indirect role as a non-voting member of various committees, including the CCBFC, and supports the codes development process by providing funding for research, development, and demonstration, tools and resources, as well as technical expertise and building energy data.

The NRC is working on an update to the governance of the code development system, which is transitioning towards a federal/PT governed system (agreed to by jurisdictions in the Construction Code Reconciliation Agreement), with a view to harmonizing construction codes in Canada.

Accelerating timelines or introducing new code requirements can be a challenge. Buy-in from select, more cautious stakeholders across the buildings and construction sector can be difficult. There is also pressure from other stakeholders to move faster on code adoption, to develop more ambitious codes, and to modify the process altogether to be in line with federal priorities.

Rural and remote broadband

Key Messages:

Now more than ever, Canadians rely on Internet connections to work, learn, and stay in touch, and the Government of Canada wants to ensure that all Canadians have access to fast and reliable Internet.
The Universal Broadband Fund will provide $2.75 billion to bring high-speed Internet to underserved areas.
This is part of a range of actions that include making more spectrum available in rural areas and investments in Telesat’s Low Earth Orbit satellite constellation.
The government’s goal is to connect 98 per cent of Canadians across the country to high-speed Internet by 2026, and all Canadians by 2030.

Supplementary Messages:

Affordable, high-quality Internet access is a necessity for rural Canadians. Under the Universal Broadband Fund (UBF), applicants that offer lower retail pricing are assessed more favourably and their proposed retail plans must remain in place for five years.
The government has announced 131 Rapid Response projects – which are rolling out across the country right now, providing $111 million to connect 75,000 households.
The government has announced significant agreements with Quebec and Ontario, cost-sharing $2.12 billion in total investments to connect 446,000 households, a partnership with Alberta, and support for cell coverage along B.C.'s Highway of Tears.
The UBF also includes $50 million to improve mobile services in areas that will benefit Indigenous peoples.
The Canadian Radio‑television and Telecommunications (CRTC) continues to announce projects under its Broadband Fund that will improve transport, access, and mobile wireless projects in underserved communities.

Background:

Universal Broadband Fund (UBF): In Budget 2019, the government set a national target for 95 per cent of Canadians to have access to speeds of at least 50/10 megabits per second (Mbps) by 2026 and 100 per cent by 2030. With new investments, the target for 2026 has been increased to 98 per cent.

The UBF has dedicated $2.75 billion, up from the original $1 billion, towards connecting Canadians living in rural and remote areas of the country to high-speed Internet as well as improving mobile Internet for Indigenous peoples. The UBF includes a Rapid Response stream dedicated for projects to connect rural Canadians quickly. There are federal-provincial co-funding agreements with Quebec ($920 million) and Ontario ($1.2 billion) to connect 446,000 households by September 2022 and 2025 respectively. There is a $300 million co-funding agreement with Alberta where the two levels of government will co-select UBF projects. There is also a $4.5 million co-funding agreement with British Columbia to provide mobile connectivity along the Highway of Tears.

Low Earth Orbit (LEO) satellite developments: The government has partnered with Telesat and invested up to $600 million to secure LEO satellite capacity over Canada to reach the most remote communities. These satellites will provide high-bandwidth, low-latency broadband internet coverage to rural and remote regions of Canada, including the North. On August 12, 2021, the government announced an agreement-in-principle with Telesat to invest $1.44 billion into Telesat’s advanced LEO satellite constellation, Telesat Lightspeed. This investment will advance Canadian leadership globally in a strategically important sector.

Spectrum Initiatives: Innovation, Science and Economic Development Canada (ISED) is releasing spectrum to support 5G technologies and the provision of telecom services across Canada, including through the 2019 600 MHz auction, the recently completed 3500 MHz auction, and upcoming auctions for 3800 MHz and millimeter wave spectrum. To ensure this spectrum is put to use in a timely manner, especially in rural and remote areas, ISED has deployment requirements that reflect the minimum population coverage that licensees are required to meet within a service area within a specific timeframe. On August 4, 2021, ISED published four consultations on several initiatives that support rural and remote services and promote spectrum sharing.

CRTC Broadband Fund: In 2016, the CRTC established a fund of up to $750 million to help achieve universal access at speeds of 50/10 Mbps, as well as mobile coverage along major roads. The CRTC’s fund is sourced from a levy on telecommunications service providers ’revenues. The CRTC announced its first set of projects in northern and satellite dependent communities in August 2020 and continues to announce projects under its national call.

Connect to Innovate (CTI): Through CTI (announced in Budget 2016), 750 communities and 250,000 households across Canada are already benefitting from improved Internet speeds. By 2023, CTI will bring improved Internet speeds to over 975 rural and remote communities across Canada, including 190 Indigenous communities.

Use it or lose it spectrum policy

Key Messages:

The Government of Canada has long recognized that fast, reliable, and affordable access to telecommunication services is a necessity, and connecting rural and remote communities continues to be a priority.
Our recent spectrum auctions had the strongest rules to date, requiring companies to use the spectrum in a timely manner, or lose the spectrum.
We recently consulted on additional measures for making unused spectrum available, and we will continue to put rules in place so spectrum is used for the social and economic benefit of Canadians.

Background:

ISED recognizes that sufficient and appropriate spectrum resources need to be available to ensure that Canadians continue to benefit from advancements in wireless technology. To ensure that service providers put their spectrum to use in a timely manner, especially in rural and remote areas, ISED issues spectrum licences with conditions of licence which include deployment requirements. These requirements reflect the minimum population coverage that licensees are required to meet within a service area within a specific timeframe. Different coverage levels are set for each licence area based on the population of that particular licence area.

In recent licensing processes, ISED has increased its required coverage levels both in percentage of population and geographic coverage throughout the licence term. ISED has also begun imposing these requirements based on smaller, more targeted areas, which will require companies to extend coverage well into rural areas to meet them. ISED actively monitors compliance with these deployment requirements based on relevant milestones. Failure to meet deployment requirements or other conditions of licence can have serious consequences, including the return to ISED of all or a portion of the licence in question.

To further address concerns that there is licensed spectrum in rural and remote areas that is not being used, and that insufficient access to this spectrum is impeding the expansion and improvement of wireless broadband services for consumers and businesses, ISED published several consultations on August 4, 2021 that support rural and remote services and promote spectrum sharing, including:

a new regime for licensing unused spectrum; simplified access to the secondary market; and access to more shared whitespace spectrum
reintroducing and increasing deployment requirements for Cellular and Personal Communications Service (PCS) bands

Digital charter - Privacy reform

Key Messages:

The COVID-19 pandemic has transformed how Canadians live, work and access information and connect with each other, making digital technology more important than ever.
The Government of Canada is committed to ensuring that Canadians’ personal information is safe and secure and that their privacy is respected in these digital spaces.
In 2020, the Government introduced former Bill C-11, which proposed world-class privacy and data protection for Canadians, including the strongest financial consequences for privacy law.
The Government remains committed to implementation of Canada’s Digital Charter, and a foundational element is modernization of the Personal information Protection and Electronic Documents Act.
With the benefit of significant discussion on the former proposal, the Government intends to return to Parliament soon with a new Bill that addresses the key concerns of stakeholders.

Supplementary Messages:

Embracing digital and data-driven technologies is key to re-invigorating our economy by allowing Canada to create new business opportunities and high-value jobs in emerging sectors.
At the same time, digital technology presents risks, including to privacy. These risks are real and Canadians' trust in the digital world is crucial to prosperity in our new reality.
A modernized privacy law is key to ensuring Canadians can trust that their data is safe and their privacy is respected, while allowing innov
The Government received extensive feedback on former Bill C-11, and will return to Parliament soon with a new Bill to implement the Digital Charter, which builds on consensus about the former Bill’s strengths, while making targeted and substantive improvements.

Background:

On November 17, 2020, the government tabled Bill C-11, the Digital Charter Implementation Act, 2020. The Bill was received significant attention from Parliamentarians during 2nd Reading stage in the House of Commons, and received all party support to move to Committee study, however agreement could not be reached on the choice of Committee. The Bill died at 2nd Reading stage with the call of the general election in August 2021.

The bill was introduced to replace Part 1 of the existing Personal Information Protection and Electronic Documents Act (PIPEDA), and to introduce a new administrative tribunal as part of a strengthened privacy enforcement regime.

Reintroduction of a privacy reform Bill will advance the Digital Charter, by helping to enhance Canadians' trust and empowering them to reach their full innovative and economic potential. In particular by implementing the Government’s commitment to strengthen the enforcement powers of the Privacy Commissioner of Canada, and to provide individuals with more control over how organizations handle their personal information.

The Government enacted PIPEDA in 2001 – before the advent of technologies such as social media and the Internet of Things. There is now widespread agreement on the need for wide-ranging changes to Canada’s private sector privacy framework, in order to meet Canadians’ privacy expectations, ensure the security of personal information safe, and maintain the law’s alignment with the frameworks of Canada’s close trade partners.

Response to Bill C-11 from the Office of the Privacy Commissioner of Canada (OPC)

On May 11, 2021, the Privacy Commissioner of Canada sent a submission to the House ETHI Committee on Bill C-11. The Privacy Commissioner has indicated in the submission that he believes that significant amendments to the bill are needed, and the submission includes a list of recommended changes. Broadly, these recommendations include: redrafting the law on a human rights basis; introducing more prescriptive standards and requirements for accountability and demonstrating compliance; introducing conditions for cross-border data transfers; increasing discretion for the Commissioner; expanding the scope of AMPs; and not creating the Personal Information and Data Protection Tribunal.

ISED officials are reviewing these recommendations, in addition to the views of other stakeholders, with a view to providing recommendations on proposed changes to former Bill C-11.

Digital Policy Task Force

Key Messages:

Canada needs to collaborate more broadly to improve the digital economy and to better leverage the economic and social benefits of data, while maintaining trust.
The Government of Canada will establish a Digital Policy Task Force (DPTF) to position Canada as a leader in the digital economy, and to shape the global governance of emerging technologies.
This task force will provide the government with expert advice and guidance to navigate the digital global economy, including examining policy approaches to support Canadian firms to succeed.

Supplementary Messages:

The Digital Policy Task Force (DPTF) will provide an opportunity for the government to leverage the significant expertise of Canadian business, civil society and academic sectors. Input from a broad range of stakeholders will be sought to ensure that Canada’s digital policy of the future is forward-looking, inclusive, and fosters innovation.
The task force may consider such important topics as data governance, artificial intelligence, digital trade, and enabling public-private data sharing for social and economic good.
The government is working to establish the scope and mandate for the DPTF, and anticipates that it will become operational in the near future.

Background:

With respect to innovation and economic opportunity, the DPTF could play a pivotal role in examining ways to leverage and implement codes of practice, certification and standards (including implementation of the DGSC roadmap) to adapt principles-based law to particular sectors.

With respect to international trade and technology partnerships, including the protection of shared norms and values, the DPTF could advise on the development of a whole-of-government digital strategy that leverages domestic policies and programs in support of global partnerships and other foreign policy objectives. It can also advise the government on how best to organize itself in order to develop holistic digital policies and programs and better leverage domestic assets to capitalize on economic opportunities afforded by multilateral engagement.

This initiative is at an early stage of development, and further work will be undertaken in the coming months to propose it scope, workplan, membership, and initial objectives. The government anticipates that the early scope and objectives will encompass the full range of federal interests in this field, and that the DPTF will represent Canada’s diversity, as well as a wide range of technical, industrial and policy interests.

National Cyber Security Action Plan

Key Messages:

In June 2018, the Government of Canada released the National Cyber Security Strategy. The Strategy outlined Canada’s vision for security and prosperity in the digital age and established three strategic goals in response to the evolving digital environment.
Under the Strategy’s supporting National Cyber Security Action Plan, 14 horizontal initiatives are led by eight federal organizations. The Action Plan is the National Strategy’s supporting roadmap which lays out how the goals of the Strategy are to be realized.
Lead departments and agencies are meeting key milestones as set out in the Action Plan and are achieving results against the Strategy’s intended outcomes.
The Action Plan led to the establishment of the Canadian Centre for Cyber Security and the creation of the National Cybercrime Coordination Unit. These two bedrocks of the Strategy are on track and meeting performance targets.
The Canadian Centre for Cyber Security is the single, authoritative source for expert technical advice and support for Canada and Canadians.
As a result of the Action Plan, Government of Canada systems are among the best protected in the world, and we are better positioned to fight cybercrime and defend critical government and private sector systems.

Background:

The National Cyber Security Action Plan is a blueprint for the implementation of the National Cyber Security Strategy, released in 2018. It sets out the initiatives and milestones supporting each of the Strategy’s three goals, and presents a roadmap for how the Government plans to achieve and maintain Canada’s vision of security and prosperity in the digital age. Funded through Budget 2018 ($507.7M over five years, and $108.8M ongoing), the 14 horizontal initiatives in the 5-Year Action Plan (2019-2024) are led by eight federal departments and agencies.

The Action Plan and Strategy support and amplify a range of other priorities for the Government across its security, defence, foreign policy, and economic agendas. This includes ongoing efforts to protect GC systems, enhance cyber policy in Canada’s international agenda, develop the Canadian Armed Forces’ cyber capabilities, and fulfill the Minister of Democratic Institutions’ mandate to defend the electoral process from cyber threats.

Departments and agencies are meeting key milestones as set out in the Action Plan and are achieving results against the Strategy’s intended outcomes.

For instance, since 2018, the Government has taken important steps to defend Canada against cyber threats, deter malicious actors, and further develop Canada’s cyber security maturity. Collaboration with partners, both domestic and international, along with enhanced capabilities, have enhanced the GC’s ability to protect Canadians from cybercrime, respond to threats, defend critical government systems, and support private sector systems and critical infrastructure. The GC is also playing a leadership role in growing Canada’s cyber security sector through federal investment in research, innovation, and skills development. In addition, Canada is helping to shape the global norms of state behaviour in cyberspace in a manner that advances Canada’s values, and economic and security interests.

Key achievements to date include the establishment of two flagship organizations under the Strategy: the Canadian Centre for Cyber Security (Cyber Centre) under CSE and the National Cybercrime Coordination Unit (NC3) under the RCMP. Additionally, CSIS established a dedicated Cyber Operations branch to more fully investigate threats to the security of Canada emanating from hostile cyber actors. In addition to the 14 initiatives in the 5-Year Action Plan (2019-2024), more than 80 federal initiatives across more than 15 federal organizations have cyber-related components that support the goals of the Strategy.

Another key initiative delivered through the Action Plan is the ISED-led CyberSecure Canada, a national cyber security standard and certification process that was established for Canadian small and medium sized businesses. CyberSecure Canada is enhancing the cyber resilience of Canadian business, and as use of the standard grows, Canadian businesses will be better positioned to compete globally.

The Action Plan also includes two Grants and Contributions programs that fund Canadian innovation in cyber security: Public Safety’s Cyber Security Cooperation Program and Natural Resource Canada’s Cyber Security and Critical Energy Infrastructure Program. Through these funding programs, the Government of Canada supports advanced research and innovation, works with partners to drive investment and fosters cyber security research and development.

Renewing the Pan-Canadian Artificial Intelligence Strategy

Key Messages:

Artificial intelligence (AI) is one of the greatest technological advances of our age and Canada already has strong communities of research, talent, and companies in this area.
Canadian innovators need support to ensure Canada’s economy benefits from AI’s future enormous growth opportunities.
Budget 2021 provided more than $443 million in support of the Pan-Canadian Artificial Intelligence Strategy to continue to attract, retain, and develop academic research talent, create jobs, and drive innovation in AI here in Canada.
By leveraging Canadian innovators’ strengths, the government is ensuring that Canadian values are embedded across widely-used global technology platforms.

Supplementary Messages:

The Budget 2021 investment builds on the success of the first phase of the Pan-Canadian Artificial Intelligence Strategy, launched in 2017, to help make Canada a world leader in AI research and its economy more innovative and prosperous.
This new, enhanced strategy will further grow the sector, create good jobs, attract talent and help Canadian companies adopt and commercialize AI, while positioning Canada as a leader in the responsible development and use of these new technologies.

Background:

Artificial intelligence (AI) is the use of computer systems to do things that normally require human intelligence.

Budget 2021 proposed up to $443.8 million over 10 years, starting in 2021-22, in support of the next phase of the Pan-Canadian Artificial Intelligence Strategy, including:

$185 million over five years, starting in 2021-22, to support the commercialization of AI innovations and research in Canada;
$162.2 million over 10 years, starting in 2021-22, to help retain and attract top academic talent across Canada—including in Alberta, British Columbia, Ontario, and Quebec. This programming will be delivered by CIFAR;
$48 million over five years, starting in 2021-22, for CIFAR to renew and enhance its research, training, and knowledge mobilization programs;
$40 million over five years, starting in 2022-23, to provide dedicated computing capacity for researchers at the national AI institutes in Edmonton, Toronto, and Montréal; and,
$8.6 million over five years, starting in 2021-22, to advance the development and adoption of standards related to artificial intelligence, led by the Standards Council of Canada.

Budget 2021’s proposal for the Pan-Canadian Artificial Intelligence Strategy builds on the first phase, announced in Budget 2017, with funding of $125 million provided over five years. Administered by CIFAR, the strategy works to attract, retain, and develop academic research talent and build national centres of expertise and training at the Alberta Machine Intelligence Institute (Amii) in Edmonton, Mila in Montreal, and the Vector Institute in Toronto.

The strategy helps Canada secure strong talent and maintain a globally competitive position in AI research. Since 2017, CIFAR has appointed over 100 top academics to the Vector Institute and Mila, including over 50 leading international researchers. The institutes have trained nearly 1,500 graduate students and post-doctoral fellows. Today, Canada ranks ninth on the Stanford Global AI Vibrancy Index, and second on the index among Group of Seven nations.

Canada’s National Quantum Strategy

Key Messages:

Quantum science is at the leading edge of research and innovation, with enormous potential for commercialization.
This emerging field will transform how everything from life-saving drugs to next-generation batteries is designed and developed, and Canadian scientists and entrepreneurs are well-positioned to take advantage of these opportunities.
The Government of Canada outlined the need for a National Quantum Strategy in Budget 2021, to support Canada’s quantum sector and solidify Canada’s leadership in this fast-growing field.
The strategy will amplify Canada’s strength in quantum science, grow its quantum-ready technologies and companies, and advance quantum talent, research and commercialization efforts in Canada.

Supplementary Messages:

Budget 2021 provides $360 million over seven years, starting in 2021-22, to launch the National Quantum Strategy.
To inform the National Quantum Strategy, the government consulted with stakeholders and the general public and will release a report in winter 2022.
The government will continue working with Canada’s quantum community to ensure the success of the National Quantum Strategy.

Background:

Quantum science

Quantum science is the study, manipulation and control of systems at the atomic and subatomic level. Recent advances in the field have enabled greater control of systems to perform tasks with higher precision.

The principles of quantum science can be applied to develop quantum-based technologies, such as computing, sensing, measuring and communications technologies. While quantum technologies will have far superior capabilities for such applications, quantum computing can present security risks because it offers the potential to bypass current encryption standards.

Quantum technologies also have the potential to grow the economy and create jobs. A study commissioned by the National Research Council of Canada (NRC) in 2020 estimates that the total economic impact of quantum technologies in Canada by 2025, including direct and indirect effects, will be $533 million, with 1,100 jobs and $188.3 million in returns. By 2045, quantum technology could be a $42.3 billion industry with 209,200 jobs.

Canada and quantum science

Canada is a leader in quantum science, having invested more than $1 billion since 2009, supporting centres of quantum expertise in several universities across the country, as well as companies, including some that have pioneered world firsts.

Quantum technology activities are spread across the country, with research capacity spanning several specializations. Key regional clusters of activity are located in greater Vancouver, the Calgary-Edmonton corridor, Toronto-Waterloo, greater Montréal, Sherbrooke, and Québec City. Canada’s growing quantum sector has attracted healthy private sector investments, including foreign-sourced venture capital. However, some funding gaps remain.

New federal investments

The government announced in the 2021 federal Budget an investment of $360 million in a National Quantum Strategy for Canada’s quantum sector. This funding also established a secretariat at Innovation, Science and Economic Development to coordinate this work.

To inform the development of the National Quantum Strategy, in summer 2021, ISED completed a public consultation, including five stakeholder roundtable discussions with a total of 70 participants. The roundtables addressed the following themes: research; commercialization; talent; security; and international cooperation. An online survey also collected feedback from the public. Over 240 responses were received. A “What We Heard” report, reflecting roundtable and online feedback, will be released in winter 2022.

National security

Quantum technologies will be disruptive, affecting many sectors of the Canadian economy by increasing industrial capabilities while creating new vulnerabilities. The biggest risk is that quantum computers could be used to perform cyberattacks, targeting current encryption standards while posing a threat to financial systems, utility grids, infrastructure and national security. Canada has the potential to develop and distribute commercial solutions to reduce these risks.

Federal government partners are working together to address quantum security concerns. In addition, the National Quantum Strategy will take precautions to protect the security of Canadian research, intellectual property and knowledge development, in alignment with the government’s Spring 2021 Research Security Policy Statement and the National Security Guidelines for Research Partnerships announced in July 2021.

Canada Advanced Research Projects Agency

Key Messages:

To keep Canada competitive, help companies grow, and create highly skilled jobs, Canadian scientists and innovators need to develop and test bold new ideas.
That is why the Government of Canada will continue to explore new ways to strengthen Canada’s science and innovation funding ecosystem, including exploring a uniquely Canadian approach modeled on the US Defense Advanced Research Project Agency (DARPA).
The government will seek the advice from respected experts with deep experience in transformative innovation and ensure support to high-risk/high-reward research is adapted to the Canadian context.

Background:

In the Minister of Innovation, Science and Industry Mandate Letter (December 16, 2021), the Minister was mandated to develop a new approach to support high-risk/high-reward transformative research and development to unleash bold new research ideas, drive technological breakthroughs, protect Canada’s competitive advantage and help Canadian companies grow and create highly skilled jobs. In moving forward with a uniquely Canadian approach modeled on the Defense Advanced Research Projects Agency (DARPA), the Minister was also mandated to work with the Minister of Health to develop a plan to modernize the federal research funding ecosystem to maximize the impact of investments in both research excellence and downstream innovation, with a particular focus on the relationships among the federal research granting agencies and the Canada Foundation for Innovation.

DARPA is a $3.5 billion (annual) United States (U.S.) Department of Defense (DoD) agency whose main goal is to create new, disruptive technologies in the interest of U.S. national security. At DARPA, the desire for innovation has guided investment both in terms of program design and recruitment. Research and development (R&D) activities are structured to be project-centered, emphasizing an expectation of revolutionary rather than evolutionary project outcomes. Characterized as a lean and agile organization which is also idea-driven and outcome-oriented, DARPA supports a culture that accepts risk and project failures as a prerequisite for achieving impressive results.

Over the years, there have been attempts to replicate the DARPA model in the U.S. in other research areas such as ARPA-Energy and the Intelligence Advanced Research Projects Agency. Other countries, like the United Kingdom (i.e. Advanced Research and Invention Agency), have also announced plans to replicate the DARPA model, while Japan has already developed a program based on it (i.e. Moon Shot Program).

Two main federal programs in Canada support high-risk / high-reward R&D:

The New Frontiers Research Fund (NFRF) is a tri-council research funding program that fosters world-leading discovery and innovation by encouraging Canadian researchers to explore, take risks, lead, and work with partners across disciplines and borders. The NFRF has three streams that support specific goals and the flexibility to launch special calls: (1) Exploration generates opportunities for Canadians to conduct innovative high-risk, high-reward interdisciplinary research; (2) Transformation provides large-scale support for Canada to build strength and leadership in interdisciplinary and transformative research; (3) International enhances opportunities for Canadian researchers to partner on international projects; (4) Special calls are targeted to support emerging research as needed. The Fund has a budget of $275 million over five years (2018–19 to 2022–23) and will grow to have an annual budget of $124 million in 2023–24.
The National Research Council (NRC) Challenge programs are a component of the new collaborative R&D programs announced in 2019, as part of the Canada Innovation and Skills Plan and commitment to support business innovation. Through the Challenge programs, the NRC is partnering with private and public sector, academic and other research organizations in Canada and internationally to advance transformative, high-risk, high-reward research that address Canadian priorities. Areas of focus are as follows: Pandemic Response; Materials for Clean Fuels; High-throughput and Secure Networks; Artificial Intelligence for Design; Disruptive Technology Solutions for Cell and Gene Therapy; Aging in Place; Internet of Things: Quantum Sensors; Arctic and Northern; Applied Quantum Computing. The government has provided $150 million over five years, with $30 million per year ongoing to fund NRC researchers and their innovative partners from post-secondary institutions and businesses on multi-party R&D programs. An additional $15 million in funding was announced in the fight against COVID-19.

Covid-19 – Support for the aerospace sector

Key Messages:

Aerospace is one of the most innovative and export-driven industries in Canada. It contributed over $22 billion in gross domestic product and approximately 207,000 jobs to the Canadian economy in 2020.
The Government of Canada recognizes that the aerospace sector is facing long-term impacts from COVID-19. That is why Budget 2021 provided $2 billion in direct support for Canada’s aerospace industry.
Budget 2021 also includes $250 million for the Aerospace Regional Recovery Initiative to help small and medium sized aerospace enterprises strengthen their productivity and commercialization, and make their operations and products greener.

Supplementary Messages:

The government’s COVID-19 Economic Response Plan includes measures to help businesses in all sectors, including the aerospace sector. Along with the direct support for aerospace firms, these measures will help Canada’s aerospace industry emerge from the pandemic strong and ready for the future.
In July, the governments of Canada and Quebec announced investments of up to $685 million to Pratt & Whitney Canada, Bell Textron Canada, and CAE to support the development in Canada of greener, more sustainable aircraft. These investments will also create more than 1,000 jobs, and co-op placements for more than 6,200 students.

Background:

Aerospace Industry Context

Canada’s aerospace’s supply chain depends on strong demand for new aircraft. The reduction in air passenger traffic during the pandemic has reduced the number of aircraft deliveries and affected Canada’s aerospace manufacturing and service sectors. Aerospace is among the hardest hit manufacturing sectors and may require three to five years to recover to 2019 levels.

Budget 2021 measures were well-received by the aerospace industry, in particular the recognition of the strategic importance of Canada’s aerospace sector. In addition to the funding, the Aerospace Industries Association of Canada continues to advocate strongly for a national aerospace strategy.

On July 15, 2021, the governments of Canada and Quebec announced investments in Pratt & Whitney Canada, Bell Textron Canada, and CAE for research and development projects totalling $2 billion. Pratt & Whitney Canada received up to $49 million from Canada and $20.5 million from Quebec to develop technological components to design the first hybrid-electric propulsion demonstrator aircraft. Bell Textron Canada received up to $200 million from Canada and $75 million from the province to develop and commercialize environmentally friendly aviation technology. CAE received up to $190 million from Canada and $150 million from the province to implement a global research and development program in digital technology, electric aviation, and health care.

On November 23, 2021, the Speech from the Throne further committed the Government to bolster climate action and economic growth by advancing Canada’s leadership in producing the world's cleanest steel, aluminum, building products, cars, and aircraft: “As a country, we want to be leaders in producing the world’s cleanest steel, aluminum, building products, cars, and planes. Not only do we have the raw materials and energy to do that, most importantly, we have skilled, hard-working Canadians to power these industries.”

COVID-19 Airline Industry Context

The government is providing up to $206 million over two years to support regional air transportation, including regional air carriers, through the Regional Development Agencies’ Regional Air Transportation Initiative.

In spring 2021, the federal government announced individual agreements with Air Canada, Air Transat, Sunwing and Porter Airlines through the Large Employer Emergency Financing Facility program. As part of its agreement, Air Canada will ensure regional air connectivity, provide refunds for certain pandemic-related cancellations, protect airline jobs, pensions, and collective agreements, and remain a customer for Canada's aerospace sector. Air Transat, Sunwing and Porter Airlines will provide refunds for pandemic-related cancellations and protect jobs in Canada’s airline sector.

In November 2021, Air Canada announced it was voluntarily exiting the LEEFF program after determining it was no longer in need of emergency financing. The company did access separate funding of $1.2 billion to provide refunds to travelers. Air Canada stated that it has been continuously recalling employees and adding new routes and frequencies to its network. On November 2, the company purchased two additional Airbus A220 aircraft, to be delivered in 2024, bringing the total fleet size to 35.

Automotive Industry

Key Messages:

The Government of Canada recognizes that the automotive sector is important to Canada’s economy. It supports the employment of more than 550,000 Canadians.
At the same time, governments and companies worldwide agree that a prosperous and green future needs electric vehicles.
That is why, through tools like the Strategic Innovation Fund, the government is supporting a transformation towards electrification in the Canadian automotive sector.

Supplementary Messages:

Canada’s strength in automotive manufacturing, combined with its world-class IT cluster and its natural resources, positions Canada to lead in designing and building the vehicles of the future.
Investments announced for the Lion Electric Company and Ford highlight Canada’s commitment towards electrification.
Some automakers have announced details of their investments in Canada. Ford will invest $1.8 billion in Oakville where the company expects to begin producing electric vehicles projected in 2025; the automaker will invest between $1.3 billion and $1.5 billion in Windsor, adding a new line capable of producing electric vehicles; and GM will invest approximately $1 billion in Ingersoll, Ont. to transition to the production of electric commercial delivery vehicles.

Background:

In 2019, Ontario produced nearly 1.9 million vehicles, the second-largest automotive manufacturing jurisdiction in North America. The automotive sector generates more than 561,900 direct and indirect jobs. It contributes $16 billion to Canada’s gross domestic product and is one of the country’s largest export industries.

Canada’s automotive sector represents $81 billion (14 per cent) of total merchandise exports in 2019. The sector depends on the U.S. market, with about 95 per cent of exports destined for the U.S. The Canada-United States-Mexico Agreement outlines a renewed understanding between the parties on the importance of these trade relationships.

The automotive sector has been affected by an ongoing shortage of semiconductors which has limited production capacity and reduced sales. Several factors have played a role in driving the shortage, including increased demand for consumer electronics, supply chain issues, natural disasters, and more recently, a COVID-19 outbreak in Malaysia, where the final assembly of many semiconductors occurs. Throughout 2021, forecasted impacts have continued to worsen with recent estimates suggesting that the production of close to 8 million vehicles will be lost globally and will cost the automotive industry US $210 billion in foregone revenue by year end.

The Canadian and U.S. automotive industries are highly integrated, thus making them highly reliant on each other for the supply of vehicles and parts. Given this level of integration, issues which negatively impact trade with the U.S. are of significant concern. One such area of concern is the proposed U.S. incentives for the purchase of electric vehicles produced in the U.S. These incentives contradict U.S. trade obligations.

Economic Recovery

Key Messages:

The Government’s top priority remains protecting the health and safety of Canadians.
The government aims to finish the fight against COVID-19 and ensure a robust economic recovery that brings all Canadians along.
This recovery will put people first, create jobs, grow the middle class, and ensure Canada’s future will be healthier, more equitable, prosperous and greener.
For businesses, this includes a plan to break down barriers to full economic participation for all Canadians.

Supplementary Messages:

The Government of Canada will continue to support businesses in the most-affected sectors, such as tourism, arts and culture, and accelerate investment in digital transformation of small and medium-sized businesses.
The government will also work toward achieving inclusive economic participation – ensuring that growth is shared, and supports a diverse, skilled workforce prepared for jobs of the future.
The government will continue to invest in a greener recovery that fights climate change and builds a net-zero economy by supporting world-leading technologies that make industry cleaner.

Background:

Prior to the COVID-19 pandemic, Canada was doing well economically compared to its G7 counterparts, placing second in GDP growth and featuring historically low unemployment. The COVID-19 pandemic has created an unprecedented economic shock to the global and Canadian economies. While all sectors were affected, the impacts have been asymmetrical across sectors, regions and groups of workers.

There are signs of economic recovery in Canada. GDP returned close to its pre-pandemic level (99.6% of February 2020 output) in October 2021, and employment rose to surpass its pre-pandemic levels in September 2021, with certain areas still facing challenges. While most sectors are currently faring relatively well in terms of pre-pandemic output (e.g., retail trade (+5%), finance and insurance (+6%), and professional services (+4%) as of October 2021), the recovery remains protracted and fragile in some others (e.g. air transportation (-68%), arts, entertainment and recreation (-27%), and accommodation and food services (-13%) as of October 2021).

The recent emergence and spread of the Omicron variant is impacting the public health situation in Canada. Actions to mitigate its spread through lockdowns and other measures to protect public health, may further impact Canada’s economy and its recover from the pandemic.

Given the general state of the economy, the government is moving to more targeted support, while extending support for industries that continue to struggle. As such, three targeted programs streams were introduced last fall:

The Tourism and Hospitality Recovery Program (THRP) will provide both rent and wage subsidies, similar to the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS), with a maximum rate of 75 per cent for businesses in selected tourism and hospitality industries that have been particularly affected by the pandemic and continue to struggle. Eligibility requirement qualifications for this program are an average monthly revenue reduction of at least 40 per cent between March 2020 and February 2021, and a current-month revenue loss of at least 40 per cent.
The Hardest-Hit Business Recovery Program (HHBRP) will provide similar support as the THRP, with a maximum rate of 50 per cent, for those industries that are not included in the eligible industries’ list, but which have nonetheless experienced significant hardship. Eligibility requirements for this program are an average monthly revenue reduction of at least 50 per cent between March 2020 and February 2021, and a current-month revenue loss of at least 50 per cent.
The Local Lockdown Program will provide businesses that face temporary new local lockdowns up to the maximum amount available through the wage and rent subsidy programs. In December 2021, eligibility was expanded to include employers subject to capacity-limiting restrictions of 50 per cent or more; and the current-month revenue decline threshold requirement was reduced from 40 per cent to 25 per cent.
These programs are set to run from October 24, 2021 to May 7, 2022. From March 13, 2022 to May 7, 2022, the subsidy rates will decrease by half.

As well, the repayment deadline for partial forgiveness on loans through the Canada Emergency Business Account (CEBA) has been extended from December 31, 2022 to December 31, 2023.

The government in the last mandate provided unprecedented support to Canadian workers and businesses to meet their immediate liquidity needs due to COVID-19. Canada’s response, including through Budget 2021, has been one of the largest and fastest among G7 countries. This is in addition to supports for Canadians and Canadian workers who were most affected by the pandemic mitigation measures. Budget 2021 includes, for instance:

$250 million over three years, starting in 2021–22, for proven industry-led, third-party approaches to upskill and redeploy workers to meet the needs of growing industries. This initiative will help approximately 15,500 Canadians connect with new work opportunities.
Support to SMEs to pivot their business delivery online through investments like the $57 million for Digital Main Street. By working with provincial and industry partners to develop practical, on-the-ground solutions, we can ensure that small business in Canada is future-proofing their delivery in order to prosper in the digital economy and lead the way for a connected economic recovery.
Additionally, Budget 2021 initiatives will support small and medium-sized businesses with up to $101.4 million over five years, starting in 2021-2022, for the Small Business and Entrepreneurship Development Program. It also proposed several transformative programs, such as:
A new Canada Digital Adoption Program to assist over 160,000 businesses with the cost of new technology. It represents $1.4 billion over four years, starting in 2021-2022, to provide businesses with advice to get the most of new technology with the help of 28,000 young Canadians who will be trained to work with them.
Allowing Canadian small businesses to fully expense up to $1.5 million in capital investments in a broad range of assets, including digital technology and intellectual property. This represents an additional $2.2 billion investment in the growth of Canada’s entrepreneurs over the next five years.

Moving forward, priorities will be to continue following through on Budget 2021 initiatives and pursuing additional measures to support Canada’s economic recovery and growth, consistent with the mandate letter of the Minister of Innovation, Science and Industry to, for example, continue to support the recovery, create jobs, improve the resilience of the Canadian economy against pandemic-type shocks, and achieve long-term economic growth and transition into a digital and low-carbon economy.

Investing in Superclusters

Key Messages:

The Innovation Superclusters Initiative is accelerating Canada’s global competitive edge by bringing together companies of all sizes, academic institutions and not-for-profits to generate bold new ideas.
Now in their fourth year, the Superclusters are showing strong results and exceeding program targets in many areas.
Superclusters are, on average, doubling the level of expected industry funding and creating triple the amount of projected IP assets per project.
The Superclusters have yielded more than 395 approved projects worth almost 1.8 billion and are creating thousands of new jobs across Canada.

Supplementary Messages:

The unique public-private partnership is fueling results: to date, industry and other partners have committed more than $1 billion to innovate projects, and membership has grown by seven times its target to more than 6,000 members across all five Superclusters.
In 2020, the Superclusters pivoted rapidly to help the Canadian COVID-19 response, through projects such as the Advanced Manufacturing Supercluster’s $5 million project from March 2020 for the design of an open-source, safe effective, and cost-efficient ventilator and identification of manufacturers and suppliers to quickly ramp up production.
More than 850 intellectual property rights have been generated over 114 Supercluster projects including patent applications, copyright, trademarks and trade secrets. This averages out to 7.6 IP rights per project, exceeding the expectation of one per project.
The Government of Canada’s additional investment of $60 million over two years in Budget 2021 will allow the Superclusters to continue their important work.

Background:

In February 2018, the government announced five innovation Superclusters, in five areas where Canada has the potential for significant competitive advantage: Digital Technology Supercluster, Protein Industries Supercluster, Advanced Manufacturing Supercluster, Scale AI Supercluster, and Ocean Supercluster. They were projected to create more than 50,000 direct, indirect and induced jobs and grow Canada’s GDP by more than $50 billion over the next 10 years.

In October 2020, the Parliamentary Budget Officer released a report on the progress of the initiative. Prior to their analysis, no updated data or key performance indicators were requested from the government, resulting in an outdated picture of the program’s performance, especially in light of the strong momentum achieved over the course of 2020. The program’s formal response highlighted this issue and provided up-to-date information and data.

Digital Technology Supercluster: based in British Columbia, the Digital Technology Supercluster is unlocking the potential of data to improve service delivery and efficiency in the natural resources, precision health and manufacturing sectors.

Protein Industries Supercluster: based in the Prairie provinces, PIC is establishing Canada as a lead in plant protein and increasing the value of key Canadian crops, such as canola and pulses.

Advanced Manufacturing Supercluster: based in Ontario, NGen is building next-generation manufacturing capabilities, such as advanced robotics, to position Canadian companies to lead industrial digitalization.

Scale AI Supercluster: based in Quebec, Scale AI brings the retail, manufacturing, transportation, infrastructure and information and communications technology sectors together to build intelligent supply chains.

Ocean Supercluster: based in Atlantic Canada, the Ocean Supercluster taps the combined strengths of the industries operating in Canada’s oceans, including marine renewable energy, fisheries, aquaculture, oil and gas, transportation and ocean technology.

The Superclusters are estimated to have created close to 11,000 direct jobs (based on announced projects to date) and have created over 850 IP rights, such as patent applications, copyright, trademarks and trade secrets over 114 projects. As of September 30, 2021, Superclusters have approved more than 395 projects worth over $1.79 billion and involving more than 1,780 partners. This includes over 80 projects in response to the COVID-19 pandemic with a total investment of almost $220 million.

Right from the start, this program has been about doing things differently and finding new ways to build connections — among sectors, large and small businesses, and academia — that mobilize knowledge, drive innovation and have ecosystem-level results. To get these long-term results, it was important to invest in this new innovative model and give the program time to build a solid foundation to ensure Superclusters were set up to succeed.

Growing and supporting SMEs is key to advancing Canada’s edge internationally. Through the Superclusters, SMEs are able to leverage expertise and find new opportunities to collaborate, helping them to scale-up, and access new markets, clients and supply chains like never before. More than 75 per cent of business partners of the Superclusters’ projects are small and medium-sized businesses, making them a keystone for the success of the program.

The program’s approach to IP is to generate collaborative IP and ensures that it is managed to maximize accessibility for members, foster innovation, and support good commercial outcomes.

By incentivizing collaboration and growing strong Canadian ecosystems, the Superclusters are generating good middle-class jobs, contributing to a robust economic recovery by fostering stronger and resilient Canadian economic growth.

On April 19, 2021, the Federal Budget announced an additional $60 million over two years, starting in 2021-22, to the Innovation Superclusters Initiative. The Digital Technology Supercluster, the Protein Industries Supercluster and the Advanced Manufacturing Supercluster each received $20 million.

SME Support during COVID-19

Key Messages:

Small businesses are the backbone of our economy, our main streets, and our communities.
The Government of Canada has made a historic investment to address the challenges caused by COVID-19, protecting millions of jobs and supporting businesses across Canada.
In fact, eight out of every ten dollars committed in Canada to respond to the pandemic have come from the federal government.
New programs and ongoing support for businesses in the most affected sectors will protect and create jobs, ensure the strongest possible recovery, and help businesses get back on their feet.

Supplementary Messages:

COVID-19 has caused businesses across the country, both large and small, to rethink their approaches. Entrepreneurs and owners are looking at more digital options, more creative solutions, and more climate-friendly investments.
Key Figures: (Data last accessed January 12, 2022):

o CEBA: 898,254 businesses received $49.17 billion

o CEWS: Total applications approved: 4,888,140

Total disbursed: $99.13 billion

Supported employees: 5.3 million

CERS (includes Lockdown Support): Total applications approved: 1,962,390

Total disbursed: $7.46 billion ($6.37B for CERS and $1.09B for Lockdown Support)

Background:

The Tourism and Hospitality Recovery Program (THRP) targets selected tourism and hospitality industries that have been particularly affected by the pandemic and continue to struggle. Will provide both rent and wage subsidies, similar to the CEWS and CERS, with a maximum rate of 75% for both. The THRP is set to run from October 24^th, 2021 to May 7^th, 2022. The rent and subsidy rates will be reduced by half starting March 13^th, 2022, until the end of the program in May.

The Hardest-Hit Business Recovery Program (HHBRP) will provide similar support as the THRP, but for those industries that are not included in the eligible industries’ list, but which still faced significant hardship. The rent and subsidy rates will be reduced by half starting March 13^th, 2022, until the end of the program.

The Canada Worker Lockdown Benefit (CWLB) will provide income support to workers who are unable to work as a direct result of government-imposed lockdowns. It will be available retroactively as of October 24th, 2021, and will run up to May 7^th, 2022. The benefit will provide $300 a week for the duration of the lockdown, and be available to workers irrespective of their EI eligibility.

Canada Recovery Hiring Program (CRHP) was introduced in Budget 2021 to help employers hire the workers they need to recover and grow, with a subsidy of up to 50 per cent of additional eligible salary or wages. The CRHP will be extended until May 7^th, 2022.

The Highly Affected Sectors Credit Availability Program (HASCAP) is providing further support to hard-hit businesses through the COVID-19 pandemic. Eligible businesses are able to access government-guaranteed, low-interest loans ranging from $25,000 to $1 million at any participating financial institution. As of October 31, 2021, 11,489 loans were approved, valued at $2.655 billion. The HASCAP deadline has been extended until March 31, 2022.

Canada Recovery Caregiving Benefit (CRCB) and Canada Recovery Sickness Benefit (CRSB)

provide a payment of $500 per household for each 1-week period to individuals who cannot work because they or a family member are sick, self-isolating or at risk of serious health complication due to COVID-19. The CRCB and CRSB will be extended to May 7^th, 2022. The CRCB has delivered $3.58 billion to 7,154,360 applicants. The CRSB has delivered $742.2 million to 1,484,390 applicants.

The Shop Local initiative was launched in June 2021. $33 million to encourage Canadians to shop locally, provided through provincial and territorial chambers of commerce to support awareness-building campaigns. The initiative draws to a close at the end of March 2022.

Canada Digital Adoption Program (CDAP). Budget 2021 announced the $1.4 billion CDAP to help SMEs adopt new digital technologies and to fuel the recovery, jobs and growth. CDAP consists of two streams of support for businesses, Stream 1: Grow Your Business Online, and Stream 2: Boost Your Business Tech. Stream 1 will provide SMEs micro-grants to help with the costs related to adopting digital technologies as well as support and advice from a network of youth digital advisors. Stream 2 will help businesses develop and implement digital adoption strategies.

Closed Programs:

The Canada Emergency Rent Subsidy (CERS) and Lockdown Support. On October 24, 2021, the CERS was replaced with the Tourism and Hospitality Recovery Program (THRP) and the Hardest-Hit Business Recovery Program (HHBRP).

Canada Emergency Wage Subsidy (CEWS) As of December 19, 2021, the Canada Emergency Wage Subsidy has helped more than 5.3 million Canadians keep their jobs, with over $99 billion in support already paid out through the program to help employers re-hire workers and avoid layoffs. On October 24, 2021, the CEWS was replaced with the Tourism and Hospitality Recovery Program (THRP) and the Hardest-Hit Business Recovery Program (HHBRP).

Canada Emergency Business Account (CEBA). New applicants can no longer apply for a $60,000 CEBA loan or the $20,000 expansion at their financial institution. As of December 2, 2021, the number of businesses approved for CEBA loans is 898,254. The number of businesses approved for CEBA expansions is 569,282. The total funds approved for CEBA loans and expansions is $49.17 billion. On January 12, 2022, the repayment deadline for CEBA loans to qualify for partial loan forgiveness was extended to December 31, 2023 for eligible borrowers in good standing.

Canada Recovery Benefit (CRB) gives income support to employed and self-employed individuals who are directly affected by COVID-19 and are not entitled to Employment Insurance (EI) benefits for up to a total of 27 eligibility periods (54 weeks) between September 27, 2020, and October 23, 2021. The CRB was extended until October 23, 2021. As of January 2, 2022, a total of 29,855,270 applications were approved, valued at $28.39 billion.

Regional Relief and Recovery Fund (RRRF) is a $2 billion liquidity assistance for businesses affected by the COVID-19 pandemic that have been rejected by or were unable to access other federal pandemic support programs. Eligible applicants can get funding up to $40,000, with up to $10,000 forgivable if the non-forgivable portion is repaid by December 31, 2022. An additional funding over $40,000 and up to $60,000 is available, with up to $10,000 forgivable if the non-forgivable portion is repaid by December 31, 2022. On January 12, 2022, the repayment deadline to qualify for partial forgiveness was extended to December 31, 2023.

Business Credit Availability Program (BCAP). Loans of up to $12.5 million through BCAP’s co-lending program to assist with operational cash flow - interest-free for the first year and provided on commercial terms. The mid-market financing program extended loans $12.5 million to $60 million. As of June 30, 2021, approximately 700 companies have received nearly $1.2 billion. Onboarding period ended on December 31, 2021, but organizations with a Guarantee in place continue to be covered for up to five years from the loan signing date.

Competition policy reform

Key Messages:

Competition is a key driver of innovation, productivity and efficiency, ensuring consumers have the best quality and variety of products at the lowest prices.
Canada’s transformation to a digital economy is turning toward a post-pandemic marketplace, so now more than ever, effective competition law and enforcement are necessary for market forces to work for consumers and businesses.
To ensure competitive markets, the Government of Canada is reviewing legislative and structural barriers to competition, including considering improvements to the Competition Act.

Supplementary Messages:

Budget 2021 provided $96 million over five years, starting in 2021-22, and $27.5 million ongoing, to enhance the Competition Bureau’s enforcement capacity and ensure it is equipped with the necessary digital tools for today’s economy.

Background:

The Competition Act is a federal law governing most business conduct in Canada. Its purpose is to maintain and encourage competition, in order to provide consumers with competitive prices and product choices, among other things. The Commissioner of Competition heads the Competition Bureau, and is responsible for the administration and enforcement of the Competition Act.

The Competition Act contains civil and criminal provisions that allow the Commissioner of Competition to review business conduct and mergers that may harm competition and consumers. The Commissioner conducts investigations and, where necessary, takes cases before the Competition Tribunal or the courts to be adjudicated. The Commissioner also carries out non-enforcement functions, such as advocacy for greater competition both within and outside of government, as well as international collaboration.

In light of the significant changes that the Canadian economy has undergone with the global digital transformation and the rise of data-amassing “Big Tech” giants, questions have arisen as to the adequacy of the current legal framework. Upon launching the Digital Charter in 2019, the former Minister of Innovation, Science and Industry wrote to the Commissioner of Competition to ask that he assign officials to work with Innovation, Science and Economic Development Canada (ISED) to “review recent trends and emerging market practices and international approaches with an eye to ensuring our own law, policy, and practice is keeping pace with the dynamism of the marketplace.”

Across the world, the role of competition policy in the data-driven economy has come increasingly under scrutiny, prompting major reviews and legislative proposals in several jurisdictions. In Canada, competition policy issues and the Competition Act have been the subject of several Parliamentary committee sessions, including with respect to data accumulation, retail grocery practices, and the proposed merger of Rogers and Shaw.

Amid concerns over industry concentration and unchecked market power of “Big Tech” giants, opinion pieces have appeared in Canadian media with increasing regularity, calling for legislative action to better protect consumers, workers and small businesses. In the fall of 2021, Senator Howard Wetston launched a consultation featuring a paper commissioned from University of Toronto law professor Edward Iacobucci that raised a number of questions for public comment. Many stakeholder submissions indicated an appetite for a review and reform of the law.

The Bureau’s capacity was bolstered in the 2021 Budget, which included funding ($96 Million over 5 years, $27.5 Million ongoing) to modernize its digital enforcement and intelligence capabilities, among other areas. The Commissioner of Competition has also called for a review of the law and a stronger mandate. Canada’s antitrust regime and competition levels have been rated as less robust than those of G7 partners in recent international rankings, with Canadian law diverging from peer countries in several key areas.

On February 7, 2022, the Minister of Innovation, Science and Industry announced a commitment to pursue potential changes to the Competition Act to make targeted improvements to broaden the Bureau’s scope of activity, fix loopholes, and adjust maximum penalties to better account for the power of today’s major actors.

Use of disaggregated data

Key Messages:

The Government of Canada is committed to using better data to drive better outcomes so that every Canadian can reach their full potential, free of systemic barriers.
That’s why Budget 2021-22 proposes to provide $172 million over five years, with $36 million ongoing, for Statistics Canada to implement the Disaggregated Data Action Plan.
This plan will provide Canadians with the detailed statistical data that are currently lacking to address gender gaps and systemic racism and bring fairness and inclusion to decisions that affect all Canadians.

Supplementary Messages:

The Government has heard the call of many Canadians who are seeking the data they need to bring the social and economic impacts on marginalized groups into the heart of decision-making. We are answering their clear call to action.

Background:

Budget 2021-2022 builds on pervious federal investments made to Statistics Canada to ensure Canada has the data it needs to make evidence-based decisions related to women, Indigenous Peoples, racialized communities. Canadians living with disabilities and LGBTQ2+ communities. Having access to these data will improve the ability of policy makers to respond to social inequality and address their root causes.

Protecting Canada’s world-leading research ecosystem

Key Messages:

To build a strong economy and improve the lives of all Canadians, Canada needs an open and collaborative research environment with international partnerships.
The Government of Canada must ensure Canadians benefit from its significant investments in science and research by implementing critical safeguards.
That is why the government released the National Security Guidelines for Research Partnerships and created the Safeguarding Your Research portal to help researchers identify and minimize risks.
The government will support Canadian research to remain open and collaborative while protecting and advancing Canada’s discoveries and innovations.

Supplementary Messages:

If pressed on what the government is doing to safeguard research:

The National Security Guidelines for Research Partnerships better position researchers, research organizations and federal granting agencies to identify and mitigate potential national security risks to research.
The government also hosts Safeguarding Your Research, an online research security portal where researchers can find best practices and tools to protect their research.

If pressed on why the government funds projects involving partners, such as Huawei, who may be subject to foreign government influence:

The Government of Canada takes the issue of safeguarding Canada’s research ecosystem very seriously.
Granting agency funding is awarded following competitive and impartial processes of independent merit review – managed at arm’s length from the government – that are designed to ensure the highest standards of excellence.
All granting agency-funded projects must demonstrate benefits to Canada and to Canadians by supporting knowledge discovery and the application of knowledge in Canada.
With the National Security Guidelines for Research Partnerships, all research project applications to Natural Sciences and Engineering Research Council’s (NSERC) Alliance Program involving a private sector partner are assessed for potential national security risks.
In cases where the risks to Canadian interests cannot be sufficiently mitigated, or where those risks do not outweigh the potential benefits, research funding will be declined.

Background:

On September 14, 2020, the government released a policy statement instructing all organizations, in particular those involved in COVID-19 research, to remain vigilant and alert to potential security threats. It also launched the online Safeguarding Your Research portal. The portal serves as a public resource to raise awareness and to provide guidance and best practices for identifying and mitigating potential security risks.

On February 9, 2021, Canadian Security Intelligence Service (CSIS) Director David Vigneault cited Canada’s biopharma and health sector, artificial intelligence, quantum computing, ocean technology, and aerospace sectors as facing particularly severe threats. Emerging technologies in these sectors were identified as being among the most vulnerable to state-sponsored espionage because they are largely developed within academia and small start-ups. They are attractive targets because they may have less security awareness or protections in place, and are also more likely to pursue financial and collaborative opportunities abroad.

On March 24, 2021, the government released a new policy statement on research security outlining the next steps the government will take to balance openness and collaboration with appropriate safeguards for Canadian researchers’ knowledge, data, and intellectual property. The government asked members of the joint Government of Canada–Universities Working Group to develop specific risk guidelines to integrate national security considerations into the evaluation and funding of research projects and partnerships.

These National Security Guidelines for Research Partnerships were publicly launched July 12, 2021. These guidelines better position researchers, research organizations and government funders to undertake consistent, risk-targeted due diligence of potential risks to research security. The guidelines also complement the work already under way by the granting agencies and the Canada Foundation for Innovation.

All researchers are encouraged to use the guidelines, but as a phased, risk-based implementation process, the guidelines currently only apply to NSERC Alliance Grants.

ISED, national security agencies, and granting agencies are collaborating with the research community to operationalize the national security assessment process and the structure necessary to implement these guidelines. Additionally, a consultation process will evaluate ease of use and identify additional resources required to support further implementation of the guidelines.

Federal science review

Key Messages:

The Government of Canada is committed to supporting greater equity and diversity in science and research, reinforcing Canada’s position as a world leader in research and innovation and improving the lives of Canadians.
Budget 2018’s $4 billion in funding was the largest investment in fundamental research in Canadian history.
New resources committed during the COVID-19 pandemic and in Budget 2021 furthermore help Canada build back better and solve major problems at home and around the world.

Supplementary Messages:

The Government of Canada believes equity, diversity and inclusion strengthen Canada’s research community and the quality, social relevance and impact of Canadian research.
Budget 2018 tied new funding to the federal research granting agencies to clear objectives and plans to achieve greater equity and diversity. Since then, the government has continued to improve the representation of marginalized and under-represented communities in Canada’s research ecosystem, and to address deeply entrenched systemic biases, to enable all talented individuals to participate in research if they wish to.
To move research in innovative directions and respond to the changing research landscape, the government created the New Frontiers in Research Fund. The fund encourages Canadian researchers to take risks, meet new challenges, push disciplinary boundaries, and lead transformative projects with partners at home and abroad.
The government continues to demonstrate its commitment to supporting Canada's world class researchers and scientists, providing new resources during the COVID-19 pandemic and in Budget 2021 to support a long-lasting recovery.

Background:

The Government of Canada launched a comprehensive review of federal support for fundamental science in June 2016, to ensure that federal support is strategic and effective.

The report of the Independent Advisory Panel that oversaw the Fundamental Science Review (FSR) was released on April 10, 2017. The panel made 35 recommendations in three broad categories:

Governance of the funding system, with the panel recognizing the need for measures to improve system-wide coordination, including the creation of a National Advisory Council on Research and Innovation to provide broad oversight of the federal research and innovation ecosystems; the creation of a Special Standing Committee on Major Research Facilities to provide coordination and oversight of these facilities over their lifetimes; and support for Federal and Provincial/Territorial (FPT) collaboration.
Diversity in the research community, with the panel recommending that more be done to achieve better equity and diversity outcomes, including particular attention to Indigenous researchers and Early-Career Researchers (ECRs).
Measures to reinvest in the research ecosystem, including $3.621 billion over four years in the following areas: direct project funding; infrastructure; personnel; and facilities and operations. The panel also recommended enhanced support for multi-disciplinary research, international partnerships, high-risk/high-reward moonshot research, and research on fast-breaking issues.

The government responded to the panel’s recommendations with a comprehensive Vision for Science. Key measures included:

Launching the Canada Research Coordinating Committee (CRCC) to achieve greater harmonization, collaboration, and coordination of the policies and programs of the granting councils and the Canada Foundation for Innovation. Since its creation, the CRCC has made progress on a number of fronts, including: leading the implementation of the tri-agency New Frontiers in Research Fund; providing oversight for the Tri-Agency Action Plan on Equity, Diversity and Inclusion and Early Career Researchers; and, advancing a strategic plan to support Indigenous research and research training.
Creating the Council on Science and Innovation (CSI) in response to the recommendation to the create a new National Advisory Council on Research and Innovation (NACRI) to provide broad oversight of the federal research and innovation ecosystems. While the CSI was officially created through an Order-in-Council and an anticipatory call for applications was published, the new council has not yet been launched.
Investing to advance progress on the above themes, notably through Budget 2018, which provided the single largest investment in investigator-driven research to date. Budget 2018 provided $925 million over five years to the granting agencies to support “fundamental research”, and $231.3 million over five years to strengthen support for the indirect costs of research through the Research Support Fund. It also provided $462 million per year to establish permanent, stable funding for the Canadian Foundation for Innovation (CFI). $275-million was invested to create the New Frontiers in Research Fund, which provides support for research that is international, interdisciplinary, fast-breaking, and higher risk.
Investing in the Canada Research Chairs program and the agencies’ scholarships and fellowships programs to support the next generation of researchers. EDI has been strengthened both through new investments, such as the creation of the Dimensions program and the EDI Institutional Capacity-Building Grants program), and through ongoing changes to the granting agency policies and programs.

Since March 2020, the government has invested in science and research to strengthen Canada’s capacity to respond to the current and potential future pandemics:

Early in the COVID-19 pandemic, the government invested approximately $250 million through the granting agencies for COVID-19 projects that span from diagnostics and potential treatments to public health responses and communication strategies.
To strengthen Canada’s biomanufacturing and life sciences sector, Budget 2021 announced $250 million for the granting agencies to create the new Canada Biomedical Research Fund as well as $250 million to increase clinical research capacity through a new Clinical Trials Fund. An additional $443.8 million over 10 years will be invested in support of the Pan-Canadian Artificial Intelligence Strategy; $360 million over seven years to launch a National Quantum Strategy; and $400 million over six years to launch a Pan-Canadian Genomics Strategy. Further, Budget 2021 provided nearly $47 million to fund research partnerships between colleges, CEGEPs, polytechnics, and businesses, and $12 million to fund academic research into systemic barriers that prevent diverse groups from participating fully in Canada’s society and economy.