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

13 February 2023

Strategic Q&A

Contexte

The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry will be appearing in front of the Standing Committee on Industry and Technology to discuss the priorities listed in his mandate letter.

Tag Line

Canada offers what 21st-century economies need: a talented workforce, clean renewable energy and the sustainable mining of critical minerals.

Key Messages:

  • It is my pleasure to appear before this committee today to discuss my priorities as Minister of Innovation, Science and Industry.
  • Since being appointed Minister in January 2021, I have worked hard to set the conditions for economic success.
  • The government is positioning Canada through strategic investments and partnerships to lead in key economic sectors central to a green economy.
  • By focusing on innovation and good, green jobs, and by working with like-minded countries, the government is building an inclusive, resilient, sustainable and competitive economy.

Questions & Answers

Economic Recovery

Q1. As Minister of Innovation, Science and Industry, how are you leading efforts for a post-pandemic economic recovery?
  • Canada, like other countries, is facing record high inflation, ongoing supply chain challenges and labour shortages.
  • In these changing times, the Government of Canada is monitoring the economy and its recovery closely to position Canada for success.
  • The government's focus will continue to be to support businesses, invest in green and digital transformations, and develop fuel innovations to achieve a resilient, inclusive and low-carbon economy.
Q2. How is Canada leveraging its human capital and competitive advantages to aid the economic recovery?
  • Canada has everything it needs to thrive: our workforce is one of the most educated in the world; we have world-class research institutions and abundant sources of clean energy; and we are the only country in the world with free-trade access to the entire G7 and European Union.
  • As a strong, stable, and reliable trading nation, Canada's prosperity depends on the exchange of ideas and goods and building a skilled workforce.
  • As Minister of Innovation, Science and Industry, I am committed to expand Canada's trade ties, unlock investment opportunities and do everything for Canada to remain a top destination for businesses. 
Q3. How is Canada adapting its industrial policy in light of recent geopolitical events?
  • The world is witnessing rapid transformation in breakthrough technologies that are crucial to both industrial growth and national economic strength.
  • By focusing on innovation and good, green jobs, and by working with like-minded countries, Canada is building an inclusive, resilient, sustainable and competitive economy.
  • The recent movement towards localization of manufacturing is coming at the same time as nations around the world, including Canada, take concrete steps to produce zero-emission goods.
  • To enable the transition towards a net zero economy, Canada is working to further develop its critical minerals sector.
  • Canada is also making major investments to support decarbonizing key industry sectors and working closely with businesses of all sizes to strengthen domestic manufacturing capacity across a range of sectors: semiconductors, photonics, the life sciences, steel and aluminum, textiles, and many others.
  • Additionally, Canada continues to work closely with NATO Allies, EU and G7 partners, and the broader international community to coordinate our response measures and support for Ukraine.
Q4. As Minister of Innovation, Science and Industry, how have you been able to support innovation and business growth here in Canada?
  • Since being appointed Minister in January 2021, I have worked hard to set the conditions for economic success. This includes working with my department to have a full suit of programs that support innovation and business growth, and create good, well-paying jobs for Canadians.
  • Since the program's launch in 2018, the Global Innovation Clusters have been finding new ways to build connections between SMEs, large companies, academic institutions and different level of governments to develop thriving ecosystems; invest in promising projects; help firms scale up; create high quality jobs and a talent pipeline for skilled workers; and position Canada as a global leader in the innovation space.
  • As of September 30, 2022, the Clusters have approved more than 500 projects with a co-investment of over $2.24 billion that involves more than 2,390 partners, more than half of which (1,257) are small and medium enterprises.
  • Moreover, the Global Innovation Clusters program is expected to create or sustain 23,900 jobs in Canada's economy.
  • Since its launch, the Strategic Innovation Fund (SIF) has invested $6.9 billion in companies that have shown potential, which has brought in investments of 10 times that amount, about $67 billion.
  • Another program investing in tech and innovation strategies is Innovative Solutions Canada, a program that leverages the procurement power of 21 federal departments and agencies, and other government organizations. This program enables the Government of Canada to leverage R&D procurement to assist innovative Canadian businesses (primarily SMEs) grow, scale-up, develop Canadian-made IP, export and create high value Canadian jobs.

Climate Change

Q5. As Minister of Innovation, Science and Industry, how are you supporting advances in clean technology and the adoption and commercialization of cleantech?
  • Canada is growing a sustainable and competitive economy while helping to meet Canada's climate goals and become a reliable, premium supplier of energy in a net-zero world.
  • Canada is also proposing significant new funding and measures directed at green economic growth that will help industry remain competitive in the growing net-zero economy, create middle-class jobs and build a clean future.
  • As Minister of Innovation, Science and Industry, I am working to put in place measures that boost innovation in clean technology and make it easier and more affordable for Canadians and businesses in Canada to adopt clean technologies.
  • These measures include building on existing climate action and achievements to date and positioning Canada as a leader in the critical minerals that power the cleantech required for our net-zero emissions future.
Q6. What is the department doing to achieve the zero emissions target?
  • Climate change threatens the health of Canadians, their way of life, and the planet. That is why Canada has announced a plan to exceed Canada's 2030 climate goal and reach its goal of net-zero emissions by 2050.
  • To help achieve this goal, we have 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.
  • Canada also created the $8-billion dollar Strategic Innovation Fund Net Zero Accelerator initiative to invest in projects that significantly reduce greenhouse gas emissions.
  • A new investment tax credit for clean technologies will be implemented for Electricity Generation Systems, certain Stationary Electricity Storage Systems, Low-Carbon Heat Equipment and Industrial zero-emission vehicles and related charging or refuelling equipment.
Q7. What is the government doing to make Canada a world leader in critical minerals and create a sustainable battery ecosystem?
  • Canada has everything it needs to be a global leader in critical minerals, particularly those for battery manufacturing.
  • Canada is a strategic partner that offers a competitive investment value proposition, including access to secure, stable and reliable access to critical minerals, a mining sector known for its environmental, social and governance (ESG) standards, a stable political system, unparalleled access to clean energy, low-cost electricity, a highly skilled workforce, proximity to the U.S. market with integrated supply chains, and a competitive business environment.
  • Global investors are realizing what Canada can offer in a world where supply chain unpredictability, unsustainable mining, and energy scarcity are not acceptable risks any longer.
  • That is why as Minister of Innovation, Science and Industry, I am working to expand Canada's manufacturing, mineral processing and recycling capabilities across critical minerals supply chains, which are essential to the technologies needed to support the transformation to a net-zero emissions global economy.
  • Canada has been making strategic investments to manufacture EV batteries and retool facilities to produce low and zero-emission vehicles as part of efforts to achieve 100 per cent net-zero electricity future.
  • These investments, along with mandating the sale of zero-emission vehicles, will help Canadians breathe cleaner air and pivot the industry towards a net-zero emission future.

Digital Economy and Privacy

Q8. How are you ensuring that the right to privacy is respected as we develop new technologies, including artificial intelligence?
  • The Government of Canada is committed to making sure Canadians can continue to benefit from the latest technologies, knowing that their personal information is safe and secure and that their privacy is respected now and in the future.
  • In June, the Government proposed Bill C-27, the Digital Charter Implementation Act, 2022, that strengthens privacy protections for Canadians, with special considerations for minors, provides rules to encourage responsible data-driven innovation by Canadian organizations and introduces a strong new enforcement regime to hold organizations accountable for how they handle personal information.
  • The bill's Consumer Privacy Protection Act represents the most significant change to Canada's private sector privacy law in 20 years. It also includes new measures focusing on AI that would make Canada a global leader in responsible AI development by setting ground rules for the design, development, deployment and operation of AI systems in Canada.
  • With the proposed bill, the Government of Canada is helping to strengthen Canadians' trust in the digital sphere and empowering them to reach their full innovative and economic potential in our evolving economy.

Telecom

Q9.The government has been promising lower internet and telecom bills for consumers. What progress has been made to date?
  • Canadians need access to high-quality telecommunications services at affordable prices.
  • That's why the government has introduced measures to make telecom services more affordable, such as the new proposed policy direction to the CRTC published in May 2022.
  • The government's new proposed policy direction to the CRTC would require the Commission to put in place new rules to improve competition and advance consumer rights, leading to lower prices and better telecommunications services for Canadian consumers.
Q10. What is the government doing to ensure that companies use their valuable spectrum resources in the interest of Canadians?
  • 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.
  • The government's recent spectrum auctions have had the strongest deployment rules to date, requiring companies to use the spectrum they win in a timely manner, or lose the spectrum.
  • The government recently consulted on additional measures for making unused spectrum available and will continue to put rules in place, so spectrum is used for the benefit of all Canadians.
Q11. Will you, Minister Champagne, block the spectrum license transfer from Shaw to Videotron?
  • The Government of Canada is aware of the Federal Court of Appeal's decision regarding the Competition Tribunal's ruling on the Rogers-Shaw transaction and is reviewing it closely.
  • Regarding the decision on the request to transfer spectrum from Shaw to Videotron, Innovation, Science and Economic Development Canada will issue a decision in due course.
  • Promoting competition and affordability in the telecom sector has been – and remains – the government's top priority.

Science and Research

Q12. What are you and your department doing to support the quantum sector in Canada?
  • The Government of Canada is committed to supporting the continued growth of the emerging quantum sector as it helps drive Canada's economy and supports highly skilled, well-paying jobs.
  • On January 13 (2023), I announced the launch of Canada's National Quantum Strategy, which will shape the future of quantum technologies in Canada and help create thousands of jobs.
  • Backed by an investment of $360 million committed in Budget 2021, the strategy will amplify Canada's existing global leadership in quantum research and grow Canada's quantum technologies, companies and talent.
  • We have also announced a Quantum Advisory Council, which will provide independent expert advice on the implementation of the strategy.
Q13. How is the government ensuring that Canadians are adequately protected against cybersecurity threats, foreign interference and IP theft?
  • Canada is strengthening and modernizing its telecommunications framework to keep pace with the evolving threat environment.
  • Amending the Telecommunications Act would provide the government with an explicit legislative authority to promote the security of Canada's telecommunications system.
  • Digital technologies provide tremendous benefits and Canadians need to be able to rely on the integrity, authenticity and security of the services they use.
  • Canada developed the National Cyber Security Strategy and established CyberSecure Canada, a voluntary certification program that helps small to medium-sized organizations protect themselves against cyber threats.
Q14. How will the new Canadian innovation and investment agency help improve private-sector investments in R&D?
  • Key to growing Canada's economy and creating good jobs is improving business investment in research and development and developing and applying new technologies.
  • The new agency will support Canadian business research and development projects to maximize Canadian innovation across all industries, boost exports and support Canada's transition to a net-zero economy.
  • The new agency will complement existing programs through a market-oriented approach and focused mandate to increase Canadian business enterprise R&D across new and established industries, and in all regions of Canada, for the purpose of generating new and improved, globally competitive, products and processes.
  • Further details on the new agency will be released in a blueprint in the coming weeks.

Artificial Intelligence

Q15. How are you supporting Canada as a global artificial intelligence hub?
  • Artificial intelligence is one of the greatest technological transformations of our age. Canada has communities of research, homegrown talent, and a diverse ecosystem of start-ups and scale-ups.
  • The Government of Canada is investing an additional $443.8 million over ten years, starting in 2021-22, in support of the Pan-Canadian Artificial Intelligence Strategy.
  • By leveraging our position of strength, we can also ensure that Canadian values are embedded across widely used, global platforms.
  • Through the Global Partnership on Artificial Intelligence (GPAI or Gee-Pay), Canada is also working with like-minded partners around the world to explore how AI can be used to address complex global challenges, such as fostering more inclusive economic growth and improving working conditions.
  • Canada is proud to have been a founding member of GPAI and its inaugural Chair in 2020-21 and continues to collaborate with member-countries to make sure AI is developed and used responsibly and to the benefit of all citizens.

Beneficial Ownership

Q16. What are you doing to deter money laundering and tax evasion?
  • The Government of Canada is committed to protecting Canadians against money laundering and terrorist financing, and to deterring tax evasion and tax avoidance.
  • Budget 2022 proposes to amend the Canada Business Corporations Act to implement a public and searchable beneficial ownership registry of corporations governed under the Act by the end of 2023.
  • The government is working to establish a registry that will increase the transparency and accessibility of corporate information, while ensuring it remains easy to do business in Canada. The registry will be scalable to allow access to data held by provinces and territories.
  • The government will continue to collaborate with provincial and territorial partners and key stakeholders in the creation of the registry.

Intellectual Property

Q17. How is the government helping Canadian entrepreneurs to protect their intellectual property and support IP-rich firms?
  • Canadians are smart, creative and innovative, and they need the know-how and tools to protect and leverage their ideas for commercial success.
  • That is why the Government of Canada launched the National Intellectual Property (IP) Strategy in 2018 and Elevate IP and IP Assist in 2021.
  • Building on previous investments, Budget 2022 announced an additional $96.6 million, starting in 2022-23, and $22.9 million ongoing to further strengthen Canada's world-class intellectual property regime.
  • We are also making good progress in support for IP-rich firms. In fact, we have finalized investments with multiple companies under the $250 million fund that was set aside under the Strategic Innovation Fund (SIF) in Budget 2021. These deals will be announced soon.
  • We fully expect every dollar of the $250 million set aside for IP-rich companies to be invested in our leading, innovative Canadian firms to help anchor and grow them in Canada.

Biomanufacturing

Q18. How is the government strengthening Canada's biomanufacturing sector?
  • The Government of Canada continues to actively invest in the growth of a robust, competitive, domestic biomanufacturing and life sciences sector that will ensure that Canada is prepared for future health emergencies.
  • Budget 2021 provided $2.2 billion to grow a strong, competitive domestic life sciences sector, with cutting-edge biomanufacturing capabilities.
  • Over the last two years, the government has committed more than $1.8 billion to 32 projects in the biomanufacturing, vaccine and therapeutics ecosystem, strengthening domestic pandemic response capabilities and life science innovation.
  • These investments, guided by the Biomanufacturing and Life Sciences Strategy, will help build Canada's talent pipeline and research systems, and support the growth of Canadian life sciences firms.

Genomics

Q19. What is the government doing in the area of genomics?
  • Genomics technologies and innovations are crucial to finding solutions to global challenges such as climate change, environmental protection, precision health, and food and energy security.
  • Canada has demonstrated world-class strength in genomics research due to the robust Canadian research ecosystem, a strong public health care system, and access to natural resources.
  • The Government of Canada is developing a Pan-Canadian Genomics Strategy to drive further innovation in genomics through commercialization and adoption.
  • The strategy will create socioeconomic growth and cement Canada's position as a world leader in research and innovation.
  • The results of a public consultation conducted in the spring and summer of 2022 to help inform the strategy will be released via a What We Heard Report in Winter 2023.

Support for the Aerospace Sector

Key Messages:

  • Aerospace is one of the most innovative and export-driven industries in Canada. Last year, it contributed over $24 billion and close to 200,000 jobs to the Canadian economy.
  • Budget 2021 provided $2 billion in direct support for Canada's aerospace industry to foster innovation, bolster competitiveness and accelerate the industry's green transformation.
  • In July 2021, our government and Quebec announced investments of up to $685 million to support the development of greener, more sustainable aircraft. These investments will create more than 1,000 jobs, and more than 6,000 co-op placements for students in Canada.

Supplementary Messages:

  • Our government's COVID-19 Economic Response Plan included measures to help businesses in all sectors, including aerospace. Along with direct support for aerospace firms, these measures will help Canada's aerospace industry emerge from the pandemic strong and ready for the future.
  • Budget 2021 included a target of $1.75 billion in investments through the Strategic Innovation Fund and $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.

Background

Aerospace Industry Context

Canada's aerospace supply chain depends on strong demand for new aircraft. The reduction in air passenger traffic during the pandemic reduced the number of aircraft deliveries and impacted Canada's aerospace manufacturing and service sectors. Aerospace is among the hardest hit of 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. 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 of Quebec 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 of Canada 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.

COVID-19 Airline Industry Context

During the pandemic, Innovation, Science and Economic Development Canada (ISED) supported the development and negotiation of agreements with Air Canada, Air Transat, Porter Airlines, and Sunwing, through the Large Employer Emergency Financing Facility (LEEFF). These agreements provided financial support to the airlines to protect jobs, ensure vital national and international connectivity for Canadians and Canadian businesses, and support the long-term success of the aerospace 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 government is also 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. 

Industrial and Technological Benefits (ITB) Policy Context

Canada's ITB Policy leverages major defence procurements to contribute to jobs, innovation, and economic growth across the country. The policy requires companies awarded defence procurement contracts to undertake significant business activity in Canada equal to the value of the contracts they have won. It is estimated to contribute more than 42,000 jobs and over $4.7 billion to GDP annually in Canada, with the aerospace industry comprising of 55% of the business activity. Given the number of upcoming major aerospace procurements, including the Future Fighter Capability Project, Canadian Multi-Mission Aircraft Project, and Future Aircrew Training Project, among many others, significant investments are expected over many years that will support this sector.

Automotive Industry (ZEV)

Key Messages:

  • Canada's strength in automotive manufacturing, combined with its world-class information technology and its natural resources, position Canada to lead in designing and building the vehicles of the future.
  • As the North American automotive sector pivots to the production of zero-emission vehicles (ZEVs), battery manufacturing investments will be a critical component of the new value chains.
  • Investments building Canada's capacity in battery production will have significant benefits for Canadian workers and the Canadian economy, both now and in the future.
  • Canada is supporting the transportation sector and building a green economy by investing to achieve net-zero greenhouse gas emissions by 2050.

Supplementary Messages:

  • The Government of Canada supports manufacturers that want to embrace the electrification of transportation and build Zero-Emission Vehicles (ZEV), right here in Canada.
  • The biggest players in the automotive industry have announced investments in Canada: Ford, Honda, GM and Stellantis have committed billions to growing their businesses here.
  • The government is also attracting anchor investments in battery material processing and cell manufacturing to build a domestic battery ecosystem. The battery-related industry's announced investments include:
    • PowerCo (Volkswagen): to establish an electric vehicle battery manufacturing plant in St. Thomas, Ontario (details to come).
    • NextStar Energy (Stellantis/LGES): $5 billion for an electric vehicle battery manufacturing plant in Windsor, Ontario.
    • GM/POSCO: $500 million to produce cathode active materials in Bécancour, Quebec; and
    • Umicore: $1.5 billion for a battery materials plant in Loyalist, Ontario.
  • Potential benefits to Canada from these generational investments include anchoring and accelerating investment across the value chain, promoting growth in the automotive sector of the future, supporting the shift to a net-zero economy and securing good jobs for Canadians.

Background

The Canadian automotive sector supports over 500,000 direct and indirect jobs, contributed $16 billion in 2022 to Canada's gross domestic product, and is one of the country's largest export industries. Overall, Ontario is the second-largest automotive manufacturing jurisdiction in North America.

Canada's automotive sector represented 15 per cent of total manufacturing exports in 2022. The sector depends on the U.S. market, with about 95 per cent of vehicles produced destined for the U.S. The Canada-United States-Mexico Agreement (CUSMA) outlines a renewed understanding between the parties on the importance of these trade relationships.

It is projected that the global sales of electric vehicles (EV) will be nearly 5 times higher in 2030 than in 2022, and Canada is well positioned to be a major player in EV production. Building off the Mines to Mobility initiative launched in 2019, Canada is in the driver seat, with investments that have been secured across the EV supply chain that will benefit all Canadians. Canada's continued strength in automotive production is a key pillar in building a resilient, prosperous, and healthy future for Canadians. As part of these efforts, the Government of Canada released, in April 2022, its 2030 Emissions Reduction Plan, as well as Budgets 2022 and 2023, which, all together, propose measures to create thousands of new, good-paying jobs and grow the economy, all while fighting climate change.

Potential benefits to Canada from these investments include:

  • Anchoring the future Canadian supply chain: Around 50 per cent of the battery's total value accrues in battery cell and pack production activities—anchoring a significant portion of value-added production in Canada. 
  • Accelerating investment across the value chain: Battery manufacturing activities generate important demand for Canadian critical minerals and can help attract additional processing activities to Canada.
  • Promoting growth in the automotive sector of the future: Integration between battery and automotive manufacturing activities can help make Canada an even more attractive investment destination for future EV assembly and parts manufacturing.
  • Securing good jobs for Canadians: Battery ‘gigafactories' typically employ thousands of people, create valuable economic spin-off benefits for local communities, and support even more good jobs across their supply chains.
  • Supporting the shift to a net-zero economy: The shift to using batteries and EVs is a vital part of Canada's plan to reach net-zero by 2050, and will help to reduce pollution across Canada.

The automotive sector has been affected by an ongoing shortage of semiconductors and other supply chain disruptions which has limited production capacity and reduced sales. Several factors have played a role in driving the semi-conductor shortage, including increased demand for consumer electronics, supply chain issues, natural disasters, and COVID-19. With current demand still exceeding supply in the automotive industry, and no new rapid supply for hard-to-procure components such as semiconductors, rare earth metals or other battery elements, supply chain constraints are likely to continue through 2023. To address this, automakers and suppliers plan to accelerate the establishment of their own production and supply chains where possible, a trend we are seeing in Canada as well.

Critical Minerals

Key Messages:

  • Critical minerals are the building blocks for the transition to the low carbon economy, including cleantech applications, information and communications technology, and advanced manufacturing.
  • The growing demand for critical minerals presents a generational opportunity for industrial diversification, high-quality employment and sustainable development across Canada, especially in rural, remote and Indigenous communities.
  • The Canadian Critical Minerals Strategy is being implemented through collaboration between federal departments, provincial and territorial partners, and industry stakeholders.
  • Budget 2023 builds on the supply chain approach, adding value to Canada's resources domestically from mineral processing through to manufacturing and recycling.

Supplementary Messages:

  • Canada is well placed to take advantage of this generational opportunity with our abundant natural resources and clean energy supply. Twenty one of the 31 critical minerals on Canada's list are already produced domestically, including graphite, copper, lithium and nickel.
  • Budget 2023 supports the Canadian Critical Minerals Strategy with a new refundable tax credit. This credit is worth 30 per cent of the cost of investments in machinery and equipment used to manufacture or process key clean technologies, and also to extract, process, or recycle critical minerals.
  • The Strategic Innovation Fund will continue to be the federal government's principal investment mechanism for de-risking large projects that will contribute to Canada's critical minerals goals.
  • Additionally, projects can be supported through the Canada Growth Fund, a $15 billion arm's length public investment vehicle that will encourage private investment in low carbon projects, technologies, businesses, and supply chains.

Background

As a trusted supplier of responsibly sourced minerals, Canada is working to leverage its resource endowment, and environmental, social, and governance (ESG) credentials to meet the rising global demand for critical minerals and their downstream value-added products. The growing demand for critical minerals presents a generational opportunity for industrial diversification, high-quality employment and sustainable socioeconomic development in every province and territory, predominantly in rural, remote and Indigenous communities. Through the creation of sustainable jobs, critical mineral value chains can support Canada's transition toward a net-zero emissions economy.

Previously announced funding of $3.8 billion over eight years will be used to implement the Canadian Critical Minerals Strategy, growing the production of the critical minerals necessary to power the green and digital economy at home and around the world. This Strategy is now being delivered through new investments in Canada's industrial capacity, policy levers, research and development initiatives, and other mechanisms to support industries along critical value chains.

The Strategic Innovation Fund (SIF) is an important tool for supporting industrial transformation, with advanced-stage projects across the transportation and energy sectors. These investments will advance the development of value chains, enabling the transition towards a green and digitalized economy. Included in the $3.8 billion strategy is $1.5 billion earmarked for critical minerals investments through the SIF. This is the primary support mechanism for industry to de-risk large projects that contribute to Canada's critical minerals objectives. To date, two critical minerals projects have been announced through the SIF:

  • E3 Lithium in Alberta: $27 million to produce lithium from brines.
  • Rio Tinto Fer et Titane in Quebec: $222 million for a multi-faceted critical minerals and blue smelting project.

Budget 2023 includes a targeted value chain approach from mines to manufacturing by supporting manufacturers of clean and green technologies through a new refundable tax credit. This credit would support 30% of the cost of investments into new machinery and equipment used to manufacture or process key clean technologies, and extract, process, or recycle key critical minerals.

In addition, the Canada Growth Fund will be capitalized with $15 billion, and will have the flexibility to invest across the capital structure via equity, debt, and derivative contracts to draw in private investment to companies. The Fund will work one-on-one with strategic partners, such as industrial emitters, clean technology companies, and companies across low-carbon supply chains, including producers of critical minerals, to invest in their projects and/or growth. This will include investment in the domestic production of clean energy, critical minerals and components, as well as exports of these industrial goods.

The development and processing of Canada's critical minerals will also require new transportation infrastructure and sources of clean energy. The government recently launched the Critical Minerals Infrastructure Fund, which will allocate $1.5 billion towards energy and transportation projects needed to unlock priority mineral deposits. In addition, Budget 2023 positioned the Canada Infrastructure Bank (CIB) to play a leading role in electrifying Canada's economy. CIB will invest at least $20 billion in the building of major clean electricity and clean growth infrastructure projects. These investments will be sourced from existing resources.

Economic Recovery

Key Messages:

  • Canada, like other countries, is facing record high inflation, ongoing supply chain challenges and labour shortages.
  • In these changing times, the Government of Canada is monitoring the economy and its recovery closely to position Canada for success.
  • The government will continue to support businesses, invest in green and digital transformations, and develop fuel innovations to achieve a resilient, inclusive and low-carbon economy.
  • Through these actions, the government provides the foundation for boosting Canada's long-term growth and creating well-paying jobs – the best way to make life affordable for years to come.

Background

The Canadian short-term economic outlook remains positive. Monthly real gross domestic product (GDP) continued to expand in May 2022 and was 2.2% above its pre-pandemic level of February 2020. While most sectors exceeded their pre-pandemic level of output (e.g., Information and communications technology (ICT) (+11.9%) and professional, scientific and technical services (+8.0%)), the recovery remains protracted in some others (e.g., air transportation (‑40.8%) and arts, entertainment and recreation (‑9.6%)). Employment declined slightly in July 2022, although remains more than 400,000 higher than pre-pandemic, with the unemployment rate reaching its lowest level since 1976 at 4.9%. Yet, some sectors are experiencing slower recovery, including, for example, employment in accommodation and food services, which remains almost 180,000 below pre-pandemic level.

There are, however, some headwinds clouding the longer-term outlook. Ongoing labour market shortages are widespread, with vacancies about half a million higher in May 2022 relative to early 2020. The indirect effects of the conflict in Ukraine also have the potential to affect growth in Canada. For instance, supply chain issues may continue limiting supply in Canada and lower global demand (world growth for 2022 was revised down from 4.5% to 3.0% according to the latest Organisation for Economic Co-operation and Development (OECD) forecast). Forecasts for Canada from the Bank of Canada and the OECD are, respectively, 3.5% and 3.8% in 2022. Moreover, the rising cost of commodities and inputs are one of the main sources of high inflation in Canada. In response, the Bank of Canada has increased the policy interest rate, by 200 basis points since the beginning of 2022, with further increases expected this year. Combined with high levels of household and corporate debt, these factors could affect ongoing economic recovery. 

Budget 2022 outlines a fiscal plan consisting of both budgetary balance and reducing the debt as a percentage to GDP in the coming years. Canada continues to have the lowest net debt-to-GDP ratio among Group of Seven (G7) nations. Budget 2022 included

  • Up to $3.8 billion for Canada's Critical Minerals and Clean Industrial Strategies to contribute to the development of a domestic zero-emission vehicle value chain, including batteries, permanent magnets, and other electric vehicle components.
  • Up to $1.5 billion for infrastructure investments that would support the development of the critical minerals supply chains.
  • $1 billion to create an operationally independent federal Innovation and Investment Agency.

Budget 2022 measures to support small and medium-sized enterprises' (SMEs) growth and innovation:

Cutting Taxes for Canada's Growing Small Businesses

  • Budget 2022 gradually phases out access to the small business tax rate, with access to be fully phased out when taxable capital reaches $50 million, rather than at $15 million. This will allow more medium-sized businesses to benefit from the reduced rate, increase the amount of income that can be eligible for the reduced rate, and deliver an estimated $660 million in tax savings over 2022-23 to 2026-27.

Returning Fuel Charge Proceeds to Small and Medium-Sized Enterprises

  • Budget 2022 provided up to $30 million over two years, starting in 2022-23, to Environment and Climate Change Canada to administer direct payments to support emission-intensive, trade-exposed small and medium-sized enterprises in those jurisdictions.

Strengthening Canada's Trade Remedy

  • Budget 2022 provided $4.7 million over five years, starting in 2022-23, and $1.1 million ongoing, to the Canada Border Services Agency to create a Trade Remedy Counselling Unit that will assist companies, with a focus on small and medium-sized enterprises.

Building More Resilient and Efficient Supply Chains

  • Budget 2022 provided $603.2 million over five years to Transport Canada to help build more resilient and efficient supply chains in order to lower prices for Canadian, improve the ability of Canadian businesses to export goods, and deliver essential goods to communities.

FES 2022 measures to support SMEs:

Lowering Credit Card Transaction Fees for Small Businesses

  • FES 2022 announced the government's intention to enter into negotiations with payment card networks, financial institutions, acquirers, payment processors, and businesses to lower credit card transaction fees for small businesses in a manner that does not adversely impact other businesses and protects existing reward points for consumers. Specifically, the government is publishing draft legislative amendments to the Payment Card Networks Act to regulate credit card transaction fees for small businesses should industry not come to an agreed solution in the months to come.

Investing in Skills for a Net-Zero Economy

  • FES 2022 proposed to provide $60 million over three years, starting in 2023-24, to create new supplemental supports for existing federal and provincial or territorial jobs programming to help ensure Canadians have the skills to success, and that the economy has the workers it needs to thrive.

Budget 2022 Sector-Specific Support Measures for SMEs:

Supporting Canada's Performing Arts and Heritage Sectors

  • Budget 2022 provided an additional $50 million in 2022-23 to the Department of Canadian Heritage, the Canada Council for the Arts, and Telefilm Canada to compensate Canadian arts, culture, and heritage organizations for revenue losses due to public health restrictions and capacity limits.

Growing Canada's Health-Focused Small and Medium-Sized Businesses

  • Budget 2022 provided $30 million over four years, starting in 2022-23, to build upon the success of the CAN Health Network, and expand it nationally to Quebec, the territories, and Indigenous communities.

Support for Canada's Tourism Sector

  • Budget 2022 provided $20 million over two years, starting in 2022-23, in support of a new Indigenous Tourism Fund to help the Indigenous tourism industry recover from the pandemic, and $4.8 million over two years, starting in 2022-23, to the Indigenous Tourism Association of Canada to support its operations to help the Indigenous tourism industry rebuild and recover from the pandemic.

Previously Announced Measures to Support SMEs

Reducing Regulatory Burden

  • Budget 2021 announced measures aimed at reducing unnecessary burden on businesses, including renewed funding for the External Advisory Committee on Regulatory Competitiveness, a third round of Targeted Regulatory Reviews and the intent to table a second Annual Regulatory Modernization Bill to remove outdated or duplicative regulatory requirements (introduced in Parliament on March 31, 2022).

Canada Digital Adoption Program (CDAP)

  • The government announced $4 billion for CDAP, which launched in March 2022 to help businesses move online, boost their e-commerce presence, and digitalize their businesses. CDAP consists of two streams: Stream 1, Grow Your Business Online; and Stream 2, Boost Your Business Tech.

Canada Small Business Financing Program (CSBFP)

  • Budget 2021 and 2022 announced enhancements to the CSBFP, increasing annual financing to small businesses by an estimated $560 million.

Women Entrepreneurship Strategy

  • The government invested up to $146.9 million over four years to the Women Entrepreneurship Strategy to provide affordable financing, increase data, and strengthen capacity within the entrepreneurship ecosystem.

Black Entrepreneurship Program

  • In September 2020, the government created the first-ever Black Entrepreneurship Program with an investment of up to $265 million, including $130 million from the Business Development Bank of Canada in the Black Entrepreneurship Loan Fund, to support Black Canadian entrepreneurs.

Small Business and Entrepreneurship Development Program (SBEDP)

  • The government provided up to $101.4 million over five years for the SBEDP to help simplify and streamline the government's support programs, and to help equity deserving entrepreneurs access funding and capital, mentorship, financial planning services, and business training.

Investment in Global Innovation Clusters

Key Messages:

  • The Global Innovation Clusters are accelerating Canada's global competitive edge by bringing together companies of all sizes, academic institutions, and not-for-profits to generate bold new ideas.
  • The clusters have already approved more than 495 projects worth over $2.21 billion.
  • Building on their success to date, these clusters will expand their national presence and collaborate to deepen their impact on key government priorities such as fighting climate change and addressing supply chain disruptions.
  • Our additional investment of $750 million over six years will support the further growth and development of the clusters.

Supplementary Messages:

  • Since they were announced in 2018, the clusters have helped build successful and growing innovation ecosystems across the Canadian economy. These include:
  • Plant-based protein alternatives.
    • Ocean-based industries.
    • Advanced manufacturing.
    • Digital technologies; and,
    • Artificial intelligence for supply chain and logistics.
  • The clusters are a co-investment by government and industry across 11 provinces and territories.
  • The clusters have generated more than 855 new intellectual property (IP) rights.
  • There is an opportunity now to build on the success of this model to strengthen networks between the private sector, academia, and government to promote innovation, help firms scale up in Canada, and grow the economy.
  • This new funding will be allocated between the five clusters on a competitive basis to ensure it meets industry and government needs.

Background

In February 2018, the government announced five innovation clusters, in areas where Canada has the potential for significant competitive advantage: Digital Technologies, Protein Industries, Advanced Manufacturing, Artificial intelligence (AI), and Ocean technologies. 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. Analysis since then shows the program is on track to meet or exceed program targets.

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

Protein Industries Cluster (Protein Industries Canada): 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 Cluster (Next Generation Manufacturing Canada): Based in Ontario, NGen is building next-generation manufacturing capabilities, such as advanced robotics, to position Canadian companies to lead industrial digitalization.

AI-Powered Supply Chains Cluster (Scale AI): Based in Quebec, Scale AI brings the retail, manufacturing, transportation, infrastructure and information and communications technology sectors together to build intelligent supply chains.

Ocean Cluster (Ocean Supercluster Canada) 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.

Canada's clusters are on track to meet or exceed the overall job creation target of 15,000 direct, indirect and induced jobs created by 2023, and 50,000 by 2028. 

This program is finding new ways to build connections — among sectors, large and small-sized businesses, and academia — that mobilize knowledge, drive innovation and have ecosystem-level results. To achieve 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 the clusters were set up to succeed.

Growing and supporting small and medium-sized enterprises (SMEs) is key to advancing Canada's edge internationally. With the help from the clusters, 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 Canada's Global Innovation Cluster projects are small- and medium-sized businesses, making them key to success of the program.

The program's approach to IP is to generate collaborative IP and ensure that it is cultivated to maximize accessibility for members, foster innovation, and support good commercial outcomes. To date, the program is generating more than 7.5 IP rights per project, and the clusters have delivered educational IP touchpoints such as webinars, workshops, video series, blogs, articles, and 1-on-1 support.

Competition Policy Reform

Key Messages:

  • A competitive economy is a fair, growing, and innovative economy.
  • Amendments recently proposed to the Competition Act are a preliminary phase in modernizing the competition regime.
  • The Government of Canada intends to undertake a broader, public review of competition policy, and potentially introduce further reforms.
  • Through this process, the government is helping to create the kind of marketplace that will allow Canada's economy to innovate and grow.

Supplementary Messages:

  • The recent legislative amendments to the Competition Act have helped address shortcomings in the Act and moved Canada to be more in line with international best practices.
  • The 2022 Budget indicated that the government will continue to consult broadly on the role and functioning of the Competition Act and its enforcement regime, as first signalled by Minister Champagne in February of that year.
  • 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, both bilaterally and within multilateral fora.

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.

On February 7, 2022, the Minister announced a commitment to pursuing potential changes to the Competition Act to make targeted improvements, broadening the Bureau's scope of activity, fixing loopholes and adjusting maximum penalties to better account for the power of today's major actors. This came to fruition with the Budget Implementation Act, 2022, No. 1, which included several key reforms to modernize the law and align it more closely with international norms. These included, among others: reformulating maximum penalties; prohibiting wage-fixing and no-poach agreements between employers; clarifying that incomplete price disclosure is a deceptive marketing practice; and allowing private access to the Competition Tribunal for those impacted by abuse of dominance.

The government has signalled a broader review of the law still to come, in accordance with Minister Champagne's mandate letter and Budget 2022. Such an examination will afford stakeholders the opportunity to make their voices heard on a wide array of competition policy topics.

Rural and Remote Broadband Connectivity

Key Messages:

  • Canadians know that access to reliable high-speed Internet is essential.
  • That is why we're working hard to ensure all Canadians, no matter where they live, have access to fast, reliable, and affordable Internet services.
  • The Universal Broadband Fund provides $2.75 billion in funding to bring high-speed Internet to underserved areas.
  • We will continue to invest in rural and remote communities, with the goal of connecting 98% of Canadians to high-speed Internet by 2026, and all Canadians by 2030.

Supplementary messages:

  • 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 significant agreements with provinces, cost-sharing approximately $3.8 billion in total investments to provide access to high-speed Internet to up to 823,000 households.
  • The UBF also includes $50 million to improve mobile services in areas that will benefit Indigenous peoples. Under this stream, the UBF is providing support for cell coverage along British Columbia's Highway of Tears.

Background

Whole of Government status: Since 2015, the Government of Canada has made $7.2 billion available for broadband connectivity. By 2026, just over 98% of households are projected to have access to speeds of 50/10 megabits per second (Mbps). To date, more than 100,000 households are on track to receive access to speeds of 50/10 Mbps by the end of 2022.

Universal Broadband Fund (UBF): In Budget 2019, the government set a target for 95% of Canadians to have access to speeds of at least 50/10 Mbps by 2026 and 100% by 2030. With new investments, the target for 2026 has been increased to 98%. The UBF has dedicated $2.75 billion, up from the original $1 billion, towards connecting Canadians living in rural and remote areas to high-speed Internet and improving mobile Internet for Indigenous peoples. There are federal-provincial co-funding agreements with Quebec ($920 million), Ontario ($1.2 billion), Newfoundland and Labrador ($136 million), Alberta ($780 million), British Columbia ($830 million), and Prince Edward Island ($20 million) to connect 823,000 households. This includes 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. These satellites will provide high-bandwidth, low-latency broadband coverage to rural and remote regions of Canada, including the North.

Spectrum Initiatives: The government is releasing spectrum to support 5G technologies and the provision of telecom services across Canada, including through the 2019 600 MHz auction, the 2021 3500 MHz auction, and upcoming auctions for 3800 MHz and millimeter wave spectrum. New rules for the 3800 MHz spectrum auction were announced on June 30, 2022, and are an important step in ongoing efforts to ensure Canadians have access to affordable and high-quality telecom services. 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. As well, 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 in August 2021 that support rural and remote services and promote spectrum sharing. On August 3, 2022, ISED also published a consultation that will provide localised access to shared 5G spectrum to smaller users including wireless Internet service providers, vertical industries, and Indigenous communities.

Canadian Radio‑television and Telecommunications (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 improve mobile coverage along major roads. The CRTC's fund is sourced from a levy on carriers' 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): CTI (announced in Budget 2016), will bring improved Internet speeds to over 975 rural and remote communities, including 190 Indigenous communities, by 2023.

Telecommunications – Reducing the Cost of Cell Phone Bills

Key Messages:

  • Canadians rely on telecommunications services for work, school, finances and health care – making access to high quality and affordable wireless services essential.
  • Our government has been clear that greater affordability, competition and innovation in the Canadian telecommunications sector are important.
  • That is why we have introduced measures to make wireless services more affordable, including spectrum policies that promote competition and a new policy direction to the CRTC.
  • We will continue to build on the progress made to promote competition and to further reduce prices.

Background

Wireless Pricing

  • The government's 25% price reduction benchmark was announced in March 2020. The quarterly results published on January 28, 2022, demonstrated that the price reduction target was met ahead of the March 2022 deadline.
  • Wireless prices have generally declined. The 2021 Price Comparison Study of Telecom Services, commissioned by ISED, shows continued wireless price declines at all levels, with some plans as much as 22% lower compared to 2020. This builds on reductions as high as 31% in the previous year.

Spectrum Matters

  • ISED has taken successive actions through spectrum licensing to encourage competition. Most recently, on June 30, 2022, the government published rules for the 3800-Megahertz (MHz) auction, which include implementing a cross-band cap that will effectively reserve a total of 150 MHz across both the 3500 and 3800 MHz bands for smaller competitors. These rules build on those used in the 3500 MHz auction in 2021, which enabled small and regional providers to increase their total spectrum holdings by over 50%. The 3800 MHz auction will take place in 2023. 

Canadian Radio‑television and Telecommunications Commission (CRTC)

  • On May 26, 2022, the government announced a proposed new policy direction to the CRTC on a renewed approach to telecommunications policy. The new policy direction provides specific instructions to the CRTC to enhance and improve wholesale Internet access and competition, along with giving it improved support to better regulate going forward.
  • The government is also providing the CRTC with clearer direction on a number of important matters, including measures to support wireless competition, improve consumer rights, speed up service deployment and universal access, and build better regulations for a world where telecommunications are essential.

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.
  • Our government 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

The 2021 mandate letter for the Minister of Innovation, Science and Industry called on him to establish “a digital policy task force to integrate efforts across government and position Canada as a leader in the digital economy and in shaping global governance of emerging technologies.” The DPTF could potentially study and provide advice on critical issues for Canadians, including with respect to data and privacy rights, online violent extremism, the ethical use of new technologies, and the future of work.

While it will not examine early legislative priorities that continue from previous mandates, it is anticipated that the DPTF could advise on ongoing alignment and coherence of supporting regulatory instruments.

With respect to innovation and economic opportunity, the DPTF could consider common approaches in support of responsible use of data and artificial intelligence across all sectors of the digital economy, including through consideration of the mandate of a proposed Data Commissioner. 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. 

The timing of the establishment of the Task Force and the sequence of its workplan can be leveraged to support related digital policy initiatives, in particular the regulatory tools that would be needed to implement a new Digital Charter Implementation Act.

Securing Canada's Telecommunications System (SCTS) – 5G Security [HUAWEI]

Key Messages:

  • Our government is ensuring the long term security of our telecommunications infrastructure.
  • Canada intends to prohibit the inclusion of Huawei and ZTE products and services in Canada's telecommunications systems.
  • This follows a thorough review by our independent security agencies and in consultation with our closest allies.
  • Telecommunications companies in Canada will not be permitted in their networks products or services that put our national security at risk. Providers that already have this equipment installed will be required to cease its use and remove it. 

Supplementary Messages:

  • The government will always protect the safety and security of Canadians and will take any actions necessary to safeguard our telecommunications infrastructure.
  • The government intends to implement these measures to protect Canada's telecommunications networks in consultation with industry.

Background

  • Canada has been able to mitigate cyber security risk in 3G and 4G networks through a collaborative risk mitigation framework, the Canadian Security Establishment's Security Review Program. The program will evolve to mitigate security risks in 5G networks and the telecommunications system more broadly, in collaboration with industry.
  • The Government of Canada undertook an in-depth 5G Security Examination. It found that while 5G technology will bring significant benefits and economic opportunities, it will also introduce new security concerns that malicious actors could exploit.
  • The government intends to implement the following actions, following consultation with industry:
    • The use of new 5G equipment and managed services from Huawei and ZTE will be prohibited, and existing 5G equipment and managed services must be removed or terminated by June 28, 2024.
    • Any use of new 4G equipment and managed services from Huawei and ZTE will be prohibited, and any existing 4G equipment and managed services must be removed or terminated by December 31, 2027.
    • The government expects that telecommunications service providers will cease procurement of new 4G or 5G equipment and associated services by September 1, 2022.
    • The government further intends to impose restrictions on Gigabit Passive Optical Network (GPON) equipment used in fibre-optic networks.
    • During these transition periods, telecommunications service providers that use this equipment and managed services would be required to comply with any assurance requirements prescribed by the government, building from the Communications Security Establishment's Security Review Program.
  • These measures will be implemented as part of a new telecommunications security framework, which includes amendments to the Telecommunications Act to ensure that promoting the security and protection of our telecommunications system is an overriding objective of Canada's telecommunications policy.
  • The amendments will include mechanisms to prohibit the use of equipment and services from designated suppliers where necessary to protect Canada's telecommunications system.

Beneficial Ownership Information

Key Messages:

  • The Government of Canada is committed to protecting Canadians against money laundering and terrorist financing, and to deterring tax evasion and tax avoidance;
  • Budget 2022 proposes to amend the Canada Business Corporations Act to implement a public and searchable beneficial ownership registry of corporations governed under the Act by the end of 2023.
  • The government is working to establish a registry that will increase the transparency and accessibility of corporate information, while ensuring it remains easy to do business in Canada. The registry will be scalable to allow access to data held by provinces and territories.
  • The government will continue to collaborate with provincial and territorial partners and key stakeholders in the creation of the registry.

Background

Corporate law is a shared responsibility with the provinces and territories, and therefore an area in which national-level priorities must be advanced in collaboration with partners. Approximately 87% of corporations are incorporated at the provincial and territorial levels; strong collaboration and engagement with provincial and territorial governments are vital to establish a coordinated national strategy that prevents regulatory arbitrage and loopholes.

In December 2017, federal, provincial and territorial (FPT) finance ministers agreed in principle to pursue legislative amendments to their respective corporate statutes to require corporations to hold accurate and up-to-date information on beneficial owners, and to eliminate the use of bearer shares. FPT officials also agreed to develop legislative changes through an FPT Working Group. 

In 2018, the government amended the Canada Business Corporations Act (CBCA) to require federally incorporated, privately held corporations to create and populate a register of “individuals with significant control”. In June 2019, further amendments allowed police and tax authorities to make a request to these corporations to provide information from their registers where authorities believe it would be relevant to an investigation.

In June 2019, most FPT finance ministers convened and agreed “to cooperate on initiating consultations on making beneficial ownership information more transparent through initiatives such as aligning access through public registries, while respecting jurisdictional responsibilities with respect to corporations.”. Federally led consultations on registry options were conducted with a variety of stakeholders in the winter and spring of 2020, and will inform next steps. A “What We Heard Report” was produced to reflect stakeholders' key messages and was published in April 2021. 

In December 2021, the Minister of National Revenue was directed in her mandate letter to support the Deputy Prime Minister and Minister of Finance and the Minister of Innovation, Science and Industry in their work to implement a beneficial ownership registry.

As of January 2022, the governments of British Columbia, Manitoba, and Prince Edward Island have instituted requirements similar to federal legislation, while Nova Scotia and Saskatchewan have passed legislation that is not yet in force. New Brunswick and Ontario have each publicly announced their intention to pass legislation to implement this type of requirement. Quebec is the only province that has introduced legislation requiring businesses to both gather and retain beneficial ownership information and submit it to a publicly accessible provincial registry.

Budget 2021 provided $2.1 million over two years to Innovation, Science and Economic Development to support the implementation of a publicly accessible corporate beneficial ownership registry by 2025. Budget 2022 proposed to accelerate this commitment, making the registry available by the end of 2023. Scalable

Budget Implementation Act 2022 No.1, which received Royal Assent on June 23, 2022, included amendments to the CBCA that would require private federal corporations to send information on their beneficial owners to Corporations Canada on an annual basis and when a change in control occurs. They would also authorize Corporations Canada to provide all or part of that information to investigative bodies, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and other prescribed entities.

The amendments approved in BIA1 are a first step towards fulfilling Budget 2022 commitment to implement a public and searchable beneficial ownership registry by the end of 2023. A second series of amendments, notably with regards to public dissemination, privacy protections and a compliance regime will be included in the Budget Implementation Act, 2022, No. 2 this Fall.  All CBCA legislative amendments and the contours of the registry regime are informed by national consultations that took place in 2020 as well as targeted stakeholder engagements that took place in June 2022.

Copyright Act

Key Messages:

  • Canada's copyright framework needs to adapt to reflect today's digital world.
  • The Government of Canada has engaged in recent public consultations on copyright matters that are important to Canadians and is committed to ensuring that the Copyright Act remains responsive to modern realities.
  • The Government of Canada is working to amend the Copyright Act to further protect artists, creators and copyright holders, many of whom are businesses.

Supplementary Messages:

Term Extension

In June, through Budget Implementation Act, 2022, No. 1, changes to the Copyright Act to extend Canada's general term of copyright protection to life of the author, plus 70 years, received Royal Assent. These changes to the Copyright Act will be brought into force through an Order in Council.

Online Intermediaries

  • The Government of Canada recently consulted Canadians on a modern copyright framework for online intermediaries and took note of the issues affecting rights holders and users in today's online world.
  • The government's approach will need to strike the right balance between protecting and encouraging the use of copyright-protected content online, safeguarding individual rights and freedoms in an open Internet, and facilitating a flourishing digital market.

Artificial Intelligence and/or the “Internet of Things”

  • The government is continuing to review the stakeholder comments received during its public consultation on a Modern Copyright Framework for Artificial Intelligence and the Internet of Things.
  • The government has committed to providing a “right to repair”, including by amending the Copyright Act, to better facilitate the repair of consumer devices and equipment integrated with copyright-protected software or other content. The government is considering how best to fulfil this commitment, taking into account the submissions received as part of the consultation.

“Resale Right”

  • The Minister of Innovation, Science and Industry and the Minister of Canadian Heritage have been tasked with amending the Copyright Act to provide artists with a “resale right” for remuneration for subsequent sales of their works.
  • Such a right has many complex economic and cultural implications for Canada, as well as many international examples to draw from. The government will consider these domestic issues and international lessons carefully as it determines how best to implement this commitment.

Educational Uses of Copyright-Protected Content

  • The government will work to ensure a sustainable educational publishing industry, including fair remuneration for creators and copyright holders, as well as a modern and innovative marketplace that can efficiently serve copyright users.
  • The July 30, 2021, Supreme Court of Canada York University v. Canadian Copyright Licensing Agency (Access Copyright) decision provides important context and guidance in the government's ongoing review of this issue as it considers what may be required to ensure Canada's copyright regime meets these objectives.

Background

The Copyright Act is an important marketplace framework law and cultural policy instrument that fosters the creation and dissemination of intellectual and artistic works. The Minister of Innovation, Science and Industry is responsible for the Act, but shares responsibility for copyright policy more generally with the Minister of Canadian Heritage.

In their December 2021 mandate letters, the Ministers of Innovation, Science and Industry and of Canadian Heritage were tasked with working together “to amend the Copyright Act to further protect artists, creators and copyright holders, including to allow resale rights for artists”.

This process will occur within charged stakeholder and policy contexts, and will need to take into account a number of significant perspectives, government initiatives, and market developments, including:

  1. the findings and recommendations made by the Standing Committee on Industry, Science and Technology (INDU) and the Standing Committee on Canadian Heritage (CHPC) in their respective 2019 reviews of the Copyright Act.
  2. three in-depth public consultations conducted by the government in 2021 on specific policy proposals and other issues relating to extending the general term of copyright protection and ensuring a modern copyright framework for online intermediaries, artificial intelligence and the “Internet of Things”.
  3. an ongoing, intense dispute between rights holders of content used in education and educational institutions about the latter's payment for such content, which resulted in a landmark and widely publicized 2021 Supreme Court of Canada decision and a subsequent hearing on the issue by CHPC.
  4. growing domestic and international discussion of a “resale right” that would entitle artists to remuneration for the subsequent sales of their works.
  5. several government initiatives affecting online uses of copyright-protected content, including proposed reforms to the Broadcasting Act, a proposed regime requiring remuneration of news outlets for certain uses of their content online, and an anticipated proposed regime to address “online harms”.
  6. reforms made to the legislative and regulatory framework of the Copyright Board in 2018 to make its decision-making processes more predictable and efficient, as well as remaining stakeholder dissatisfaction with the Board's progress.
  7. other copyright-related litigation before the courts, including litigation concerning the availability and parameters of website-blocking and related orders and a recent decision of the Supreme Court on the scope of certain rights under the Copyright Act; and,
  8. the next statutorily required parliamentary review of the Copyright Act, which could begin as early as November 7, 2022, although exact timing would be a matter for Parliament to decide.

In June 2022, through Budget Implementation Act, 2022, No. 1 (BIA1), changes to the Copyright Act to extend Canada's general term of copyright protection to life of the author, plus 70 years, received Royal Assent.  In order to satisfy a requirement of the Canada-United States-Mexico Agreement (CUSMA), these changes to the Copyright Act will need to be brought into force before the end of a 2.5-year transition period starting from the entry into force of CUSMA (i.e., within 2.5 years from July 1, 2020).  Pursuant to BIA1, these changes to the Copyright Act will need to be brought into force through an Order in Council.

Right to Repair

Key messages:

  • Consumers want to be able to repair their digital products, and they want their home appliances purchases to last longer.
  • The Government of Canada has committed to providing Canadians with the right to repair their devices by requiring manufacturers to supply repair manuals and spare parts, and to inform Canadians of the environmental impacts of consumer products.
  • The government has also committed to amending the Copyright Act to remove an important obstacle to repair.
  • This will allow Canadians the flexibility to choose the best options for maintaining and repairing the devices and equipment they own.

Supplementary Messages:

  • The Government of Canada is working to build a more resilient, sustainable, and competitive economy. Facilitating the repair and extending the life of home appliances supports this objective.
  • Facilitating repair is a multi-faceted public policy challenge that might require a variety of measures, including at the provincial level. The government will do its part to remove as many obstacles as possible and to incent manufacturers to better meet the needs of consumers.
  • The government consulted Canadians on the right to repair last year, and thanks everyone who participated.
  • The government is reviewing submissions received, is developing policy options, and is looking forward to proposing amendments to the federal legislation that support the right to repair.

Background

On February 21, 2021, Bill C-272 was introduced to amend the Copyright Act to facilitate the repair of products that contain computer programs protected by copyright and technological protection measures (TPMs). On June 2, 2021, the House of Commons unanimously voted to refer Bill C-272 to committee.

On June 22, 2021, the Standing Committee on Industry, Science and Technology (INDU) undertook its study of Bill C-272 by inviting the Bill's sponsor to appear before the committee. INDU was not able to complete the study of Bill C-272 before the parliamentary summer break and the subsequent dissolution of Parliament.

On July 17, 2021, the Government launched the third of its 2021 copyright consultations, a Consultation on a Modern Copyright Framework for Artificial Intelligence and the Internet of Things. The consultation sought stakeholder views on a number of issues that were raised as part of the 2018-19 parliamentary review of the Copyright Act. One of those issues was how best to remove obstacles to repair in the Copyright Act. The consultation ended on September 17, 2021. All the submissions received in response to the consultation are publicly available on the government's website in accessible format.

On February 8, 2022, Bill C-244 was introduced, previously introduced as Bill C-272 in February 2021. The two bills are identical. The second reading of Bill C-244 in the House of Commons is expected to be completed in Fall 2022.

On June 17, 2022, Bill C-294 was introduced to amend the Copyright Act to expand the exception permitting the circumvention of a TPM in order to achieve interoperability. In proposing to remove a barrier to the interoperability of products, Bill C-294 notably seeks to give consumers more control over their products and extend their life cycle in accordance with the spirit of "right to repair". The second reading of Bill C-294 in the House of Commons is expected to start in Fall 2022.

Beyond the copyright framework, a person who wishes to repair a product with an embedded copyright-protected computer program and who needs to circumvent a TPM could face other potential impediments, such as contractual terms and conditions in an end-user license agreement attached to the product. Such agreements could include conditions that prohibit certain acts necessary for repair, or that void the product warranty if the owner repairs the product themself or does not use an authorised repair service provider. Contracts generally fall under provincial jurisdiction.

Other challenges and considerations also come into play regarding repair. For example, independent repairers might have difficulty accessing proprietary diagnostic, servicing, and repair materials or tools owned and closely held by original equipment manufacturers, which are required to repair a product.

As a result of these obstacles, on December 16, 2021, the Prime Minister asked the Minister of Innovation, Science and Industry, via his mandate letter, to: “Work with the Minister of Environment and Climate Change to implement a ‘right to repair' to extend the life of home appliances, particularly electronics, by requiring manufacturers to supply repair manuals and spare parts, and by amending the Copyright Act to allow for the repair of digital devices and systems.”

Two other Ministers were similarly mandated:

  • The Minister of Finance was asked: “To extend the life of home appliances, introduce a 15 per cent tax credit of up to $500 to cover the cost of repairs performed by technicians;” and,
  • The Minister of Environment and Climate Change was asked to: “Work with the Minister of Innovation, Science and Industry to implement a “right to repair” to extend the life of home appliances, particularly electronics, and require businesses to inform Canadians of the environmental impacts of consumer products.”

Investment Canada Act

Key Messages:

  • Foreign investments encourage innovation enabling economic growth that benefits all Canadians.
  • We have 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:

  • In March 2021, the Government of Canada updated the Investment Canada Act (ICA) 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.
  • In August 2022, the government introduced a voluntary mechanism that allows foreign investors making certain types of investments not otherwise required to make a filing under the ICA to do so.
  • The government's actions are based on facts and evidence, and the advice of Canada's security and intelligence agencies and responsible government departments.

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 of Innovation, Science, and Industry (ISI) and the investor. Three applications for net benefit review were approved in fiscal year 2020-21. Another 823 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 of ISI and the investor. In fiscal year 2020-21, all 826 investment filings, as well as additional investments in Canada by non-Canadians, were reviewed for their potential to harm Canada's national security. Eleven investments resulted in a section 25.3 order for national security review by the Governor in Council. Of these, four required no further action, three were withdrawn by the investor and three resulted in a final section 25.4 Governor in Council order: one to block the investment and two requiring the non-Canadian to divest of wind-up the Canadian business.

The Minister of ISI published Guidelines on the National Security Review of Investments, which include 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. The guidelines also indicate 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.

The Minister of ISI published the Policy Statement on Foreign Investment Review and the Ukraine Crisis in March 2022. The statement advises foreign investors and Canadian businesses that investments by Russian investors will be found to be of net benefit to Canada under only on an exceptional basis. In addition, any investments controlled by or subject to influence by the Russian state will also support a determination by the Minister ISI that there are reasonable grounds to believe such an investment could harm Canada's national security.

Intellectual Property Strategy

Key Messages:

  • Canadians are smart, creative and innovative, and they need the know-how and tools to protect and leverage their ideas for commercial success.
  • That is why the Government of Canada launched the National Intellectual Property (IP) Strategy in 2018 and Elevate IP and IP Assist in 2021.
  • Budget 2022 proposes to build on previous investments and provide $96.6 million, starting in 2022-23, and $22.9 million ongoing to further strengthen Canada's world-class intellectual property regime.

Supplementary Messages:

Budget 2022 (IP initiatives falling under ISED) provides:

  • $47.8 million over five years, starting in 2023-24, and $20.1 million ongoing to launch a new national lab-to-market platform to help graduate students and researchers take their work to market.
  • $10.6 million over five years, starting in 2022-23, and $2 million ongoing to launch a survey to assess the government's previous investments in science and research, and how knowledge created at post-secondary institutions generates commercial outcomes.
  • $2.4 million over five years, starting in 2022-23, and $0.6 million ongoing to expand use of ExploreIP, Canada's intellectual property marketplace, so that more public sector intellectual property is put to use helping Canadian businesses.
  • $0.8 million over five years, starting in 2022-23, and $0.2 million ongoing to expand the Intellectual Property Legal Clinics Program, which will make it easier to access basic intellectual property services. Additionally, Budget 2022 proposes to make legislative amendments to the College of Patent and Trademark Agents Act to better enable directors of the College to prioritize the public interest and to improve the efficiency of the College's operations.

If pressed on high profile patent sales or transfers:

  • The global marketplace of patents plays a critical role in the global economy. Strong competition in a free and open market drives entrepreneurship and innovation, which leads to lower prices and more choice for Canadian consumers.
  • The leadership of public corporations is ultimately accountable to their shareholders for the decisions taken in advancing Intellectual Property strategies.
  • The government has aimed to foster a stronger culture of IP in Canada through the National IP Strategy, which encourages all parts of the innovation ecosystem to be strategic and savvy in their IP posture.

Background

Budget 2021

The direct investments proposed in Budget 2021 would be complemented by a Strategic Intellectual Property Program Review. It is intended as a broad assessment of intellectual property provisions in Canada's innovation and science programming, from basic research to near-commercial projects. This work will help ensure Canada and Canadians benefit from innovations and intellectual property.

IP Strategy

On April 26, 2018, a number of IP programs and initiatives were introduced to help Canadian entrepreneurs better understand and protect IP. These include:

  • Amendments to key IP laws to reduce barriers to innovation, including to the Patent, Copyright and Trademarks Acts to clarify acceptable practices and to prevent misuses of IP rights.
  • The creation of a College of Patent and Trademark Agents to ensure that professional and ethical standards are maintained, and to support the provision of quality advice.

Additional programs and initiatives focusing on education, awareness and outreach:

  • An IP awareness and use survey, to be conducted by Statistics Canada to help understand how Canadians are using IP.
  • An awareness and education program, led by the Canadian Intellectual Property Office (CIPO) to increase organizations' understanding of IP.
  • Establishing better IP governance in the government.
  • Creating a team of IP experts to provide advice to federal government program officers working with businesses, creators, and officials to boost engagement with IP; and,
  • Support for IP clinics at law schools, which provide basic IP advice.

Initiatives that provide strategic IP tools for growth including:

  • Accelerated dispute resolution at the federal court on IP issues and expedited tariff setting by the Copyright Board.
  • An IP marketplace that will provide one-stop web-based access to IP owned by Canadian governments and universities that can be bought or licensed.
  • Support for the inclusion of Canadian-owned IP in international standards.
  • A patent collective to enable firms to share IP expertise.

The Budget Implementation Act, 2018, No. 2 (Bill C-86), laid the foundation for the government's new financial consumer protection framework. It included amendments to key IP frameworks, including the Patent Act, Copyright Act, and Trademarks Act, that clarify acceptable practices and prevent misuses of IP rights. Most of these amendments are now in force.

Canada-US-Mexico Agreement (CUSMA)

CUSMA creates new minimum standards across all areas of IP protection and enforcement. The IP chapter provides Canadian exporters and investors with a predictable and transparent framework of rules across the North American marketplace.

CUSMA requires a number of changes to Canada's IP laws, notably: 

  • A patent term adjustment in respect of “unreasonable” patent office delays.
  • A general term of copyright protection of “life plus 70 years” for works of authorship (Canada currently has a term of “life plus 50 years”).

Work on implementing these obligations is ongoing. Canada has a transition period of 4.5 years to implement patent term adjustment and 2.5 years on term of protection for copyright, following the entry into force of the agreement to implement these obligations.

The new agreement also includes provisions on Internet service provider liability to address online infringement, which enable Canada to maintain its current “notice-and-notice” regime, requiring Internet intermediaries—such as Internet Service Providers (ISPs)—to forward on notices from copyright owners to Internet subscribers.

Foreign Acquisition of Canadian IP

Strategic use of IP can take different forms, including direct commercialization, licensing the technology to others to commercialize, and selling IP at a profit. The ideal approach will depend on different market variables. For these reasons, the IP Strategy focuses more on ensuring that companies make informed decisions.

Bill C-27: Digital Charter Implementation Act, 2022

Modernizing Canada's privacy framework by introducing 3 new legislatives acts

The Government must act to protect Canadians' privacy, reduce the risk of harms, provide innovator clarity for emerging technologies, and increase confidence in the digital marketplace.

This proposal seeks authority to strengthen our legislative protections by:

  1. Introducing a new Consumer Privacy Protection Act (CPPA)
    • The Act would strengthen privacy protections for Canadians, establish clear rules for innovative businesses, and enhance the enforcement powers of the Privacy Commissioner
    • This would replace Part I of the Personal Information Protection and Electronic Documents Act (PIPEDA)
  2. Introducing a Personal Information and Data Protection Tribunal Act
    • This Act would establish an expert body to provide an important review of complex privacy cases prior to deciding on financial penalties under the CPPA, and to review contested orders of the Privacy Commissioner in a forum that is more accessible to individuals and SMEs than the Courts
  3. Introducing an Artificial Intelligence and Data Act (AIDA)
    • This Act would establish a legal framework to encourage responsible artificial intelligence (AI) development and deployment in order to build public trust, protect Canadians from a range of potential harms, and set clear redlines for AI development

Privacy reform builds on previous consensus, with key improvements

Extensive engagement on the former Bill C-11 has resulted in a series of technical amendments that will address key stakeholder concerns. Notably, the new bill will:

  • Clarify the difference between de-identified and anonymous information:
    • Businesses wanted clarity on what they could do with de-identified information, and assurance that anonymous information fell outside the scope of privacy law; the new Bill makes these clarifications
  • Align exceptions to consent with global best practices:
    • The Privacy Commissioner (and others) wanted more clarity around the use of exceptions; the new Bill allows companies to proceed with a collection of personal information without consent where individuals would expect such an activity, and where consent is not possible and risks are assessed and mitigated (for ex. Google Streetview – no consent is possible – but faces are blurred)
  • Expand the range of contraventions that are subject to fines:
    • The Privacy Commissioner argued that many more activities should be subject to fines; the new Bill expands the number of contraventions
  • Greater operational discretion for the Office of the Privacy Commissioner:
    • The Commissioner sought full flexibility to choose what to investigate and how to work with companies; the new Bill strikes a balance that ensures Canadians still have access to fair and transparent processes
  • Greater level of expertise for Tribunal members:
    • Businesses and civil society wanted assurance that the Tribunal would be qualified to assess complex legal privacy issues; the new Bill specifies that more Tribunal members will need mandatory privacy experience

New AI law will protect Canadians – and our technology advantage

  • AI is rapidly evolving, and it is important to draw bright lines as quickly as possible. Companies need clear legislative guardrails to know what is acceptable and what cannot be tolerated
  • This is an area where the state of the art is shifting rapidly and technical detail matters. A new framework must be flexible to adapt and remain relevant as technology changes, and the details must be informed by industry / academic expertise
  • The law will therefore set out the most important duties right now and establish immediate enforcement powers – more guidance on how to comply will be provided in regulations and standards, which will be developed with the full engagement of experts

This tailored approach will allow the framework to stand the test of time, as the technology matures—and ensure that Canadian companies are leaders in responsible AI development, as well as the technologies that will be used to measure compliance

Digital Charter Implementation: Q&As

How does Bill-C27 implement Canada's Digital Charter?

Key Messages

The Digital Charter Implementation Act, 2022 will establish new rules that pertain to data governance in the digital sphere to strengthen Canadians' trust in the modern economy.

The Bill is a multi-pronged approach that would enact three pieces of legislation:

  • the Consumer Privacy Protection Act (CPPA),
  • the Personal Information and Data Protection Tribunal Act, and
  • the Artificial Intelligence and Data Act (AIDA).

The Consumer Privacy Protection Act would create new personal information rights for Canadians, support responsible innovation, and enhance the enforcement powers of the Privacy Commissioner.

The Personal Information and Data Protection Tribunal Act would support the new privacy law's much strengthened privacy regime by creating a body to levy penalties and hear appeals of orders issued by the Privacy Commissioner.

AIDA would establish rules to ensure the responsible use of artificial intelligence technologies. It would require that companies that use high-impact AI systems assess the risk of harm associated with the systems, monitor these systems, and adopt measures to mitigate potential harms to Canadians. It would also create criminal prohibitions against the deployment of AI systems with gross negligence.

As part of this initiative, the Government is also fulfilling a commitment to provide funding to the Standards Council of Canada to continue its work on the implementation of the Canadian Data Governance Standardization Roadmap.

Considerations

  • On June 16, 2022, the Government tabled Bill C-27, the Digital Charter Implementation Act, 2022. The Bill would modernize Canada's private sector privacy law and introduce new rules to ensure responsible development and deployment of artificial intelligence (AI) systems in Canada.
  • In respect of privacy reform, the new Bill builds on legislation proposed in the previous session of Parliament under former Bill C-11 and addresses concerns raised by stakeholders with respect to that Bill. It proposes the creation of the Consumer Privacy Protection Act (CPPA), which would replace Part 1 of the existing Personal Information Protection and Electronic Documents Act (PIPEDA), and establishes the Personal Information and Data Protection Tribunal, strengthening Canada's privacy enforcement regime.
  • The Bill also proposes the Artificial Intelligence and Data Act (AIDA); a new law that would make Canada a global leader in responsible AI development. Inspired by the draft EU AI Act and the direction set out in the Canada's Digital Charter, AIDA sets a foundation to regulate the responsible design, development, deployment and operation of AI systems and criminalizes behaviours that cause serious harms to individuals.
  • As housekeeping, Bill C-27 would also create stand-alone legislation for the Electronic Documents Act, which governs use of electronic documents by the federal government.
  • The legislation follows the Government's launch of Canada's Digital Charter in May 2019. The Digital Charter comprises 10 principles – universal access; safety and security; control and consent; transparency, portability, and interoperability; open and modern digital government; a level playing field; data and digital good; strong democracy; freedom from hate and violent extremism, and strong enforcement and real accountability – to guide the modernization of Canada's marketplace frameworks including for privacy.

Part 1 & 2: The Consumer Privacy Protection Act, and the Personal Information and Data Protection Tribunal Act

How would the Bill modernize the privacy framework?

Key Messages:

The Consumer Privacy Protection Act would replace the existing privacy law and would

Enhance individual control through:

  • updated rules to ensure that individuals can provide meaningful consent for the handling of their personal information.
  • a new framework allowing individuals to withdraw their consent and to request that organizations dispose of their information.
  • a new regime for data mobility to enable individuals to direct the transfer of personal information from one organization to another: and
  • new rules requiring that organizations be transparent about their use of automated decision-making systems.

Enable responsible innovation through:

  • a new exception to consent to allowing organizations to disclose de-identified personal information to public entities for socially beneficial purposes, such as health.
  • a new regime recognizing the use of codes of practice and certification schemes to support compliance.
  • a new exception to consent to cover business practices reasonably expected by consumers; and
  • a new exception to consent that covers the use of de-identified information for research and development purposes; and

Strengthen enforcement and oversight through:

  • empowering the Privacy Commissioner of Canada to issue orders to non-compliant organizations, and recommend that a newly created Personal Information and Data Protection Tribunal impose substantive administrative monetary penalties for non-compliance;
  • authorizing greater cooperation on investigations and research between the Privacy Commissioner, the Canadian Radio-television and Telecommunications Commission, and the Commissioner of Competition; and
  • expanding the range of criminal offences for serious violations of the law, and the fines associated with those offences.

Considerations

In respect of privacy reform, Bill C-27 proposes the creation of the Consumer Privacy Protection Act (CPPA), which would replace Part 1 of the existing Personal Information Protection and Electronic Documents Act (PIPEDA), and establishes the Personal Information and Data Protection Tribunal, strengthening Canada's privacy enforcement regime.

The CPPA would carry over all of the rights and obligations within PIPEDA, while also updating the privacy framework through a number of reforms.

How would this Bill improve on the privacy reforms proposed in the last session of Parliament?

Key Messages:

In response to stakeholder feedback on the former Bill, Bill C-27 would improve on the proposal in several ways:

  • The Act would strengthen protections for information about kids by providing that such information is always “sensitive” under the law. That means the law will hold organizations to a higher standard for their protection of children's information.
  • The CPPA would also allow parents to exercise privacy rights on behalf of their children allowing for more immediate redress of key rights, such as the right to deletion.
  • The CPPA would align more closely in with approaches in other jurisdictions, both in Canada and internationally. In particular by,
    • Aligning rules for de-identified information more closely with Quebec's new privacy law.
    • Aligning rules for transparency of automated decisions making systems, such as AI, more closely with laws in Quebec and the EU.
    • Aligning exceptions to consent around business activities and legitimate interests, as well as associated safeguards, more closely with models in the EU and Singapore.
    • Aligning the exceptions to the right to disposal more closely with models in the EU.
  • The CPPA would expand the number of contraventions that could be the subject of an administrative monetary penalty, including, for example, consent rules.
  • The CPPA would require a higher level of privacy expertise for members of the Personal Information and Data Protection Tribunal.
  • The CPPA would provide more discretion to the Office of the Privacy Commissioner to manage cases within their existing resource levels.

Considerations

  • The Government was able to extensively engage industry and civil society stakeholders, and the OPC, on the draft legislation proposed by former Bill C-11. Bill C-27 contains several amendments to that proposed legislation that reflects that feedback.
  • Stakeholders called on the Government to do more to protect children's privacy and to address harms such as bias in AI and algorithms. An increasing number of international partners are also acting in these realms. Bill C-27 addresses such concerns through special protections for children: the law would consider information about children to be inherently “sensitive” thereby holding organizations' handling of such information to a higher legal standard. The revised bill would also exempt minors from certain grounds for organizations to refuse individual requests for the disposal of their information. With regard to AI, the proposed AIDA would regulate the responsible design, development, and deployment of AI systems and criminal certain behaviours that seek to cause serious harms to individuals.
  • Many stakeholders, particularly from industry, also expressed uncertainty about the law's handling of de-identified personal information under the previous bill. Bill C-27 provides legal definitions of “de-identify” and “anonymize”, to clarify that de-identified information is still considered personal information, and therefore subject to the law, whereas “anonymized” information (from which it is practically impossible to identify an individual) would not be subject to the law.
  • Industry stakeholders also called for closer alignment with legal developments in other jurisdictions – including Quebec and the EU – on the issues of transparency in automated decision-making, exceptions to consent, and the scope of the right to disposal. Under Bill C-27, the right for individuals to request explanations of automated decisions would be limited to situations that have a significant impact on them, and there would be a greater number of situations in which an organization could turn down a request to dispose personal information. These amendments are to ensure that the new law does not impose undue regulatory burdens on organizations. In addition, Bill C‑27 would create a new exception to consent, subject to safeguards, covering an organization's “legitimate interests.” These provisions would align the federal law with counterparts in Quebec, the EU, and Singapore.
  • With regard to enforcement, to address concerns that the OPC and civil society stakeholders had expressed over former Bill C-11, Bill C-27 would add critical provisions (including those pertaining to consent) to the scope of contraventions that could be subject monetary penalties. The OPC would also have greater discretion to consider which cases to investigate and more flexibility on its initiation of audits. The law would also require greater number of the members of the new Tribunal to have privacy expertise than would have been the case under former Bill C-11.

Does the Consumer Privacy Protection Act apply to de-identified information?

Key Messages:

  • The Consumer Privacy Protection Act defines de-identified information and confirms that such information is subject to the law's protections and oversight by the Privacy Commissioner.
  • The law would also make a clear distinction between de-identified and anonymized information and confirms that anonymized information is not subject to the law.
  • At the same time, the new law will provide clear rules and greater flexibility around the use of de-identified information to enable data-driven innovation.

Example:

  • Exception to consent for an organization's use of de-identified data in the course of its research, development, and analysis activities.

Considerations

  • The exceptions to consent involving de-identified information under the CPPA are intended to clarify and incentivize the use of de-identification of personal information as a safeguard for privacy and also as a means to facilitate responsible innovation. Certain CPPA provisions (such as the right of access, amendment, disposal, and mobility) do not apply to de-identified information because it would be impracticable for organizations to fulfil those obligations in respect of information that they have properly de-identified.

What new powers is the Privacy Commissioner receiving?

Key Messages:

  • The Consumer Privacy Protection Act will provide the Privacy Commissioner with broad order-making powers.
  • This will empower the Commissioner to order an organization to stop an activity that is offside the law, or to make changes that will bring it into compliance with the Act.
  • The Commissioner will also be able to recommend that the Personal Information and Data Protection Tribunal impose administrative monetary penalties of up to $10M or 3% of global revenue, for certain contraventions of the law.
  • Finally, under the new law the Commissioner would also have more flexibility on the threshold to initiate an audit in response to a possible contravention of the law.

Considerations

  • Currently the Privacy Commissioner oversees the existing law as an ombudsperson, in his capacity as an Agent of Parliament. The Commissioner can only issue non-binding recommendations at the end of an investigation; if they cannot resolve a complaint through persuasion or mediation, or if a business down accept their recommendations at the end of an investigation, the only option to pursue further enforcement action is to bring the matter to the Federal Court. Many stakeholders see this enforcement framework as a major weakness of the current law.
  • The success of the new enforcement framework will depend on its acceptance by regulated organizations, and their confidence in the procedural fairness of the system. For this reason, separate legislation would create a new Personal Information and Data Protection Tribunal to oversee the OPC's use of its new powers. The Tribunal would determine whether to impose an AMP following an OPC recommendation. Organizations and individuals would also have the right to have the Tribunal review OPC orders and decisions. Tribunal decisions would be reviewable by the Federal Court.

Why is the new Personal Information and Data Protection Tribunal necessary?

Key Messages

  • The Tribunal will ensure procedural fairness within the enforcement regime of the CPPA by providing a mechanism for individuals and organizations affected by Privacy Commissioner decisions, to seek a second opinion.  
  • The Tribunal will also make the final decision as to whether an administrative monetary penalty recommended by the Commissioner should be levied against an organization, and the amount of that penalty.
  • The Tribunal will provide more efficient and accessible recourse than the Courts, especially for individuals, and for small businesses without legal departments.
  • Rulings from the Tribunal will also increase the body of case law. This will in turn make the law easier for businesses and the Privacy Commissioner to interpret and apply.

Considerations

  • The success of the new enforcement framework will depend on its acceptance by regulated organizations, and their confidence in the procedural fairness of the system. For this reason, separate legislation would create a new Personal Information and Data Protection Tribunal to oversee the OPC's use of its new powers. The Tribunal would determine whether to impose an AMP following an OPC recommendation. Organizations and individuals would also have the right to have the Tribunal review OPC orders and decisions. Tribunal decisions would be reviewable by the Federal Court.
  • In addition, as an administrative tribunal, proceedings before the new Tribunal would be less formal than is the case for Federal Court proceedings. The cost and time associated with court proceedings can be a barrier, particularly for individuals and small and medium-sized enterprises. For these reasons. The Tribunal supports the goal of fostering greater access to justice in respect of the new law, while also alleviating burdens on the courts system.

Does the new Bill include stronger protections for children online?

Key Messages:

The Consumer Privacy Protection Act (CPPA) would explicitly define the personal information of a minor as “sensitive.” This will make all the rules in the law more stringent when it comes to kids.

For example:

  • organizations will generally need express consent to handle information about kids.
  • the retention periods for storing kids' information will likely have to be shorter; and
  • the law will hold organizations to a higher standard to justify the need to handle kids' information and in their safeguarding o their information.

The right to request the disposal of information will also be stronger for kids.

Taken together these changes will place the onus on organizations to take a very high standard for the protection of children's information, and empower children, and their parents, to manage their reputation online.

Considerations

  • The approach in the CPPA is a novel in Canadian privacy law and has the goal of providing special protections to minors in recognition of their vulnerability when managing their personal information.
  • This approach will provide greater protection for minors, given that the CPPA requires organizations to consider the sensitivity of personal information when fulfilling many of their obligations under the Act.
  • Stakeholders have noted privacy risks that are particularly acute for minors online, given the potential for information that individuals generate as minors to “follow them” for the rest of their lives. For this reason, information about minors would also be exempt from certain situations where an organization may refuse a request to dispose of information. This will make it easier for minors to manage their information.

Will the bill ensure Canada maintains its adequacy status with the EU?

Key Messages:

  • Based on engagement to date with European officials, the Government is confident that Canada is currently in an excellent position to seek continued adequacy standing under the EU General Data Protection Regulation.
  • The Consumer Privacy Protection Act (CPPA) will further align Canada's framework for privacy protection within the marketplace with that of the European Union in critical areas.
  • In particular, the enforcement framework in the new law would provide significant financial penalties and invest the Privacy Commissioner with broad order making powers.
  • The new law will ensure that, going forward, Canada's privacy framework remains interoperable with those of its trading partners.

Considerations

  • Since 2001, PIPEDA has been deemed “adequate” to the European Union's data protection framework. This designation allows transborder data flows – the movement of personal data between countries – from the EU to Canada without the need for additional safeguards. This “adequacy status” is with reference to the EU's old Data Protection Directive, which the EU replaced with a new General Data Protection Regulation in May 2018.
  • Since 2017, ISED has led a whole-of-Government engagement with the EC as part of the latter's monitoring of Canada's existing adequacy status. Based on this work, The EC's will soon release its assessment report, opining on third country data protection frameworks including Canada's (however the exact timing is unknown). The report will include an evaluation of Canada's existing privacy framework as compared to the EU's GDPR.
  • The EC's assessment report will be limited to PIPEDA as it currently stands.
  • The report is a key first step in maintaining our adequacy with the EU GDPR. The final implementing decision indicating whether Canada will retain its adequacy designation under the GDPR will be taken at the political level by EU and is the last phase of the review process.

Does the Consumer Privacy Protection Act under Bill C-27 address concerns that Parliamentarians expressed over former Bill C-11?

Key Messages

  • There was all-party support for the introduction of the former Bill to amend PIPEDA. All parties wanted to see it move to Committee study.
  • At the same time, some MPs raised questions around protections for minors, the role of human rights in the law, and potential burdens on small businesses.
  • The Bill before you respond to all these concerns, including with stronger protections for minors, a preamble affirming the importance of privacy law to protecting human rights, and a number of provisions to ensure the law provides a flexible framework that meets the needs of small businesses and all organizations.

Considerations

  • There is broad, multi-partisan report for modernizing privacy law. A 2018 report by the Standing Committee on Access to Information, Ethics, and Privacy provided recommended comprehensive reform of PIPEDA, had all-party support, and provided the initial impetus for the Government's work on legislative reform. The Conservative Party of Canada and the New Democratic Party each spoke to the importance of protecting privacy in their 2021 general election platforms.
  • All opposition parties spoke supportively during the Second Reading debate of former Bill C-11 and were in favour of it advancing it to the Committee Stage, despite raising concerns about specific matters. Conservative MPs advocated for the needs of small- to medium-sized enterprises and potential regulatory impacts. NDP MPs called on the Government to enshrine privacy as a fundamental human right within the law. MPs across party lines have noted broad concerns with the protection of children in the digital realm. Bill C-27 contains amendments from the previous proposal that speak to these concerns.
  • Opposition concerns during Second Reading of Bill C-27 have focused largely on AIDA, with some MPs calling for the removal of that legislation from the Bill.

Why is the Government introducing new regulations for businesses in an uncertain economic climate?

Key Messages:

  • Innovators cannot succeed in the digital marketplace without a solid foundation of trust.
  • The pandemic forced organizations and individuals to conduct more of their business online. This made the need for privacy rules that uphold consumer trust and confidence, and provide businesses with greater regulatory certainty, stronger than ever.
  • The calls from industry for a modernized privacy law have continued through the pandemic and ongoing global uncertainty.
  • The CPPA answers those calls and will meet businesses' needs and create the conditions for data-driven innovation in important ways.

For example:

  • The Bill provides new exceptions to consent for the collection or use of information for reasonable and anticipated business activities, and for the use of de-identified information.
  • The Bill provides a regime to recognize the use of codes of practice and certification schemes to provide organizations with tools to aid and incentivize compliance; and
  • The Bill provides a clear framework for organizations to seek guidance from the Privacy Commissioner without fear of enforcement action.

Considerations

  • The response from industry to both Bill C-27 and former Bill C-11 has largely been to welcome the proposed reforms, as a whole.
  • In particular businesses have noted the need to align Canada's frameworks with the legislative reforms that Canada's trade partners such have adopted, in particular the EU.
  • Some businesses have also emphasized the need for the federal government to ensure a continued national baseline for privacy protection, given that Quebec has enacted reforms to its private sector privacy law, and given that Alberta, British Columbia, and Ontario are all considering similar measures.

Why is the Government refusing to place the new law on a human rights footing?

Key Messages:

  • Canadians can be confident that this bill will uphold their privacy rights.
  • Bill C-27 includes a preamble that speaks to the importance of privacy law in protecting human rights. This language reflects previous Court decisions.
  • The CPPA's purpose clause also recognizes the right of privacy of individuals in their personal information.
  • The CPPA would regulate the protection of personal information specifically within the context of commercial conduct, rather than in the context of civil rights, which is a provincial responsibility.

Considerations

The Constitutional basis for the enactment of PIPEDA and proposed new CPPA is the federal general trade and commerce power.  For this reason, the law is focused on the general regulation of commercial conduct and the need for rules that promote the responsible collection, use, and disclosure of personal information, while also ensuring businesses are able to meet their legitimate need to handle such information.

The CPPA would enhance individual rights under the Act, while also making explicit the requirement for organizations to only handle personal information for appropriate purposes. Combined with a new and significantly stronger enforcement framework, the intent of these changes is to provide individuals with much more control over how organizations are able to handle their personal information and create much more severe consequences for organizations that fail to uphold privacy protections.

Why does the Bill allow for disclosures of de-identified information without individuals' consent?

Key Messages:

  • Despite the growing importance of de-identification techniques as a privacy protection tool, the status of de-identified information is currently in a legal grey zone.
  • In light of this, and to encourage this important practice of de-identification, the CPPA defines de-identified information, clarifying that it remains personal information subject to the law's protection, and oversight by the Privacy Commissioner of Canada.
  • To protect individuals whose information has been de-identified, the CPPA introduces clear prohibitions, backed up by criminal sanctions, against re-identifying personal information, except in clearly defined and limited circumstances.
  • Backed up by these protections, law would provide a limited number of targeted exceptions to consent where organizations could use or disclose de-identified personal information.
  • Uses and disclosures of de-identified information would be subject to oversight by the Privacy Commissioner, who could investigate and audit where they have concerns.

Considerations

Some civil society stakeholders, notably Citizen Lab, have claimed that Bill C-27 would allow for “unlimited” disclosures of de-identified personal information. This is a misapprehension of the law's provisions, which only allow for use and disclosure of de-identified information in specific circumstances, including for internal research and analysis, or for socially beneficial purposes such as health, environment, or infrastructure development.

Overall, the inclusion of specific rules around the de-identification and anonymization of personal information is an improvement from the perspective of protecting privacy interests. The current legal status of de-identified information is unclear, with some organizations being under the impression that any measures to render personal information less identifiable removes the information from protection of privacy law.

The CPPA will provide greater regulatory certainty and accountability around this issue.

Why does the Bill not require “privacy by design”, as the Privacy Commissioner and other experts have recommended?

Key Messages:

  • Privacy by design is a collection of principles to guide organizations to build privacy into their processes and services from the very start.
  • Taken together, the various requirements of the CPPA meet this objective.

Considerations

Privacy-by-Design Principle CPPA Provisions

Proactive, not reactive, and preventative, not remedial: Anticipate and prevent privacy invasive events before they happen.

Accountability and purpose limitation rules will require organizations to proactively ensure that their handling of personal information does not go beyond what is necessary or appropriate.

Privacy management program (s.9): Organizations must implement programs to fulfil their privacy protection obligations.

Appropriate purposes and limiting collection, use, and disclosure (s.12 – 13): Before handling any information, organizations must identify their purposes for doing so and assess whether those purposes, and the manner in which they handle the information, are appropriate.

Privacy as the default setting: Individuals are not required to take action to protect their privacy – privacy is built into the system, by default.

Improved rules for obtaining consent, as well as accountability and purpose limitation rules, ensure that individuals do not have to take action to ensure that the handling of their personal information does not go beyond what is reasonable and appropriate.

Appropriate purposes and limiting collection, use, and disclosure (s.12 – 13):

Consent (s.15): Organizations must obtain consent prior to the handling of personal information and may not require the individual to consent to handling beyond what is necessary to provide the service.

Retention and disposal requirements (s.53): Organizations must dispose of personal information as soon as feasible after the information is no longer necessary for purposes for which it was collected, used or disclosed.

Privacy embedded into design: Privacy is embedded into the design and architecture of the systems that handle personal information.

Requirements around privacy management programs, appropriate purposes, purpose limitations, and retention periods will all require organizations to embed privacy protections into their services and business processes.

Privacy management program (s.9)

Appropriate purposes and limiting collection, use, and disclosure (s.12 – 13):

Retention and disposal requirements (s.53)

Full functionality: positive sum instead of zero sum: Privacy does not incur trade-offs; all legitimate interests and objectives are accommodated in a “win-win” manner.

A “positive sum” approach animates the law as a whole. In particular, the purpose of the law is to protect the right of privacy while also meeting the need for organizations to handle personal information. Certain exceptions to consent clearly manifest this general principle.

Purpose clause (s.5): Sets out that the law's purpose is to recognize individuals' right of privacy and organizations' need to handle personal information.

Exceptions to consent for business activities and legitimate interest (s.18): Exceptions provide flexibility for organizations to handle personal information, with built-in safeguards to ensure the protection of privacy.

End-to-end security – full lifecycle protection: Strong security measures are essential to privacy, from start to finish.

Requirements for safeguarding personal information held by organizations ensures that it is securely retained while being handled and is destroyed at the end of its lifecycle.

Security safeguards (s. 57): Organizations are required to protect the personal information it handles and the level of security must consider the sensitivity of the information.

Retention and disposal requirements (s.53)

Visibility and transparency: Openness and accountability regarding policies and procedures.

Plain language and transparency requirements ensure that organizations communicate meaningfully with individuals on how they are handling personal information.

Plain language requirements (s. 15(4); s. 62(1)): When obtaining consent or providing privacy policies and practices under the Act, organizations must do so in plain language.

Openness and transparency requirement (s.62): Organizations must provide information on their overall information handling practices.

Algorithmic transparency requirements (s.62(2)(c) and s.63(3)): Organizations must provide specific information on the use of impactful automated decision making systems (i.e., artificial intelligence systems).

Respect for user privacy – keeping it user-centric: Strong privacy defaults, appropriate notice, and empowering individuals.

Strengthened individual rights will require organizations to enable individuals to make meaningful choices about how the handling of their personal information.

Consent provisions (s.15): Rules to ensure consent is meaningful and that individuals can put a stop to the handling of their information by withdrawing consent.

Disposal at an individual's request (s. 55): Individuals may request that an organization dispose of their personal information in certain circumstances, for example when consent is withdrawn.

Data mobility (s. 72): Subject to regulations, individuals will be able to direct organizations to transfer their personal information to another organization (e.g., disclosing banking information when the individual changes banks).

Why does the bill not provide Canadians with a right to be forgotten?

Key Messages:

  • The CPPA provides an explicit right for individuals to request that organizations delete their information permanently.
  • This would be subject to a limited number of clear exceptions that recognize the practical realities of business, such as contractual obligations.
  • However, the CPPA does not go as far as the EU, which allows individuals to request the removal of their information from search engine results.
  • This search engine issue raises complex questions which are currently before the Courts, about how to balance privacy with other fundamental Canadian values such as freedom of expression.

Considerations

  • There is a distinction between the right to disposal or deletion, and a right to be forgotten, as implemented in the EU. The European right to be forgotten largely concerns de-indexing, or the removal of links or references to third party content displayed by search engines indexes.
  • The issue of de-indexing engages significant concerns around other rights, including rights protected by the Charter of Fundamental Rights and Freedoms such as freedom of expression and the freedom of the press.
  • The CPPA would ensure a robust ability for individuals to request removal of their information, without impinging on other fundamental rights.
  • Overall, an enhanced “right to deletion” strikes the appropriate balance between increasing individuals' control over their personal information; upholding other fundamental rights and freedoms, such as freedom of expression; as well as recognizing specific circumstances where organizations may be unable to dispose of personal information, for example, where there are legal requirements to maintain or where the information is still necessary for a product or service.

Why does the law contain carve-outs to weaken the role of individual consent in protecting privacy?

Key Messages:

  • In line with the recommendations of the 2018 Report of the ETHI Committee on its study of PIPEDA, the CPPA modernizes the existing consent regime. 
  • The CPPA imposes stronger, clearer rules for obtaining meaningful consent, rules that are backed up by significant administrative monetary penalties.
  • Under the CPPA, consent is not something organizations may obtain by pointing to long, complicated privacy policies that most people will never read.
  • Organizations will need to seek consent in plain language and give the individual the clear ability to say “yes” or “no.”
  • If it is not necessary to handle your information to give you the service, the organization will not be able to make you consent to that.
  • At the same time, in order to focus consent to where it matters for individuals, the CPPA will contain new provisions to recognize where consent is not necessary.
  • In those limited and defined cases, the law would permit the collection and use of personal information without consent, but with important safeguards built in.

Considerations

CPPA will improve consent as a privacy protection mechanism in two ways: 1) by strengthening the specific requirements around how organizations must obtain consent (including providing individuals the choice to say “no” to a proposed handling of information); and 2) removing the requirement for consent for certain collections and uses of information that would be well anticipated by the individual in the circumstances (e.g. because there is no way for an organization to provide the service without a particular handling of the information).

Why does the bill not prohibit the mass surveillance of Canadian consumers and employees by businesses?

Key Messages:

  • The CPPA is a law of general application and is intended to provide as much flexibility in light of evolving business models, and technological evolution.  Therefore, the Act does not impose prohibition on specific technologies or specific activities.
  • Instead, the CPPA imposes parameters and protections designed to prevent abuse and inappropriate applications of technologies.
  • First, the CPPA will generally require organizations to seek consent to handle Canadians' information.
  • In the limited and defined cases where consent is not necessary, there are important safeguards built in.

For example:

  • Whether or not consent is required, an organization may only handle personal information for appropriate purposes and in an appropriate manner. The Act defines how “appropriate” is determined.
  • In addition, the CPPA ensures that organizations that don't comply with these requirements could be subject to strong enforcement action, including broad orders from the Privacy Commissioner to undertake or stop any activity, and significant administrative monetary penalties.

Considerations

The CPPA, like PIPEDA, would remain a principles-based, technologically neutral, and sector agnostic law.  This approach future-proofs the Act.

It allows the greatest flexibility for the Act to apply to new circumstances, business models, services or technologies that may become an essential part of society and that drive economic growth and society.

The financial industry has called for changes to privacy law to protect against money laundering and anti-terrorist financing. Why will the Government not take on reforms?

Key Messages:

  • Detecting, preventing, and responding to money laundering and other financial crimes is a multifaceted issue that demands a whole-of-government response.
  • These issues are complex and they require careful consideration from a holistic perspective.
  • That is precisely why my colleague, the Minister of Finance, is set to launch a comprehensive review of Canada's framework in this space.

Considerations

The CPPA is a privacy law of general application intended to increase privacy protections for individuals while also ensuring that organizations are able to collect, use, and disclose personal information in the course of commercial activities. The law is not necessarily an appropriate vehicle to address broader concerns around the ability for the financial industry to work with law enforcement and national security agencies to address other compelling public policy challenges such as financial crime.

Does the Bill do anything to hold online platforms to account for their failure to protect children sexual predators and other online threats?

Key Messages:

  • A key principle in the Digital Charter is that all Canadians should be safe online and free from harassment, hate, and discrimination.
  • This very issue is being examined in the context of work online harms and safety being carried out under the leadership of the Minister of Heritage.
  • The protection of privacy certainly has a role to play here. And the Bill does exactly that by holding organizations to a significantly higher standard when it comes to their handling of children's information.
  • But protections from the threats facing children in the online environment go beyond privacy and require cooperative solutions at all levels of government.

Considerations:

  • Bill C-27 contributes to the Government's efforts to better protect children online by enhancing the privacy protections that organizations must apply to the information of children, and strengthening the ability for children, and their parents, to manage their online reputation. The CPPA would explicitly define the personal information of a minor as “sensitive.” This means that organizations will generally need to use express consent when collecting, using, or disclosing the information; will need to consider carefully whether their reason for collecting, using or disclosing of the information is appropriate; will need to apply stronger security data security safeguards; and will need to ensure they use shorter retention periods for this information than for information of adults.
  • In addition, the Bill would make it easier for minors or their parents/guardians to manage the minors' personal information, by providing a right to deletion that supersedes an organizations' standing retention policy. This would help reduce the risk that children's mistakes in the online environment will follow them through life.
  • Many threats to children fall into the criminal space, for example child pornography and sexual exploitation. In such cases, it is up to the police, public prosecutors, and the courts, to protect against these threats and bring wrongdoers to justice. The Criminal Code contains number of offences that specifically protect children including failure to provide the necessaries of life, child abandonment and, as noted above, a number of child-specific sexual offences

Will the CPPA be aligned with provincial laws such as Quebec's or other provincial privacy laws?

Key Messages:

  • The Consumer Privacy Protection Act would align with many of the new rights and obligations found in Quebec's privacy law.  For example, the CPPA definition of de-identified information, and requirements for transparency around the use of personal information by automated decision-making systems are very similar by design.
  • The CPPA would carry over and enhance the federal regulatory framework for recognizing provincial and territorial laws as “substantially similar”, to encourage the continued domestic harmonization of privacy laws that apply to the private sector. 
  • This framework is key to the establishment of a national baseline of protection for Canadians, and to minimizing regulatory burdens for businesses.
  • That is one reason why the timely enactment of this Bill is so essential.

Considerations

  • ISED consulted provincial/territorial counterparts before and after the tabling of former Bill C-11 and has worked to ensure that Bill C-27 is aligned with provincial/territorial priorities on privacy reform. In particular, the version of the CPPA proposed by Bill C-27 would align with key aspects of the new privacy law that Quebec enacted in 2019 (in particular, around automated decision-making systems and the treatment of de-identified and anonymized information).
  • The CPPA, like PIPEDA, will contain a power for the Governor-in-Council to make an order related to a “substantially similar” provincial privacy regime.  When such an order recognizes a provincial law as “substantially similar” the federal regime would no longer apply to commercial activities taking place wholly within that province.
  • With the federal private sector privacy framework being updated, it is important to clarify the status of provincial laws currently considered substantially similar to PIPEDA. Future regulations would outline the requirements for substantially similar status, including a process for considering and reconsidering such status. Provincial governments would need to meet those regulatory requirements in order to obtain and maintain this status.

Part 3: The Artificial Intelligence and Data Act (AIDA)

Why is the Artificial Intelligence and Data Act (AIDA) needed?

  • The Artificial Intelligence and Data Act (AIDA) would establish rules for high-impact artificial intelligence systems and related data governance practices.
  • A standardized, national approach to responsible development and deployment of artificial intelligence is particularly important given that such technologies transcend provincial borders and can be the basis of a Canadian advantage abroad.
  • The AIDA targets commercial AI systems with the greatest impact. It will require that organizations assess impacts of their systems, adopt reasonable measures to mitigate harms and implement ongoing monitoring and compliance assessment of these systems.
  • The Act will be overseen by the Minister of Innovation, Science and Industry with support of a delegated AI and Data Commissioner, and with powers to request documents, make orders, and introduce regulations to support the Act. Companies will be responsible for meeting standards, acting responsibly, and demonstrating their compliance.

How would AIDA protect Canadians?

  • Over the last decade, artificial intelligence (AI) technologies have expanded rapidly and have benefited Canadians in a variety of ways. However, these technologies are evolving rapidly and there is a need for common standards in order to build public trust. There is increasing evidence of harms due to the use of AI systems, if proper precautions are not taken.
  • AIDA would establish rules to promote a human-centred approach to artificial intelligence and the related data governance practices. It would require that companies operating high impact AI systems assess risk, monitor their systems, and adopt measures needed to mitigate harms.
  • AIDA will ensure that development of AI systems is done responsibly, and that organizations are accountable for their practices, so that AI systems that are deployed in Canada are safe and non-discriminatory.

How will AIDA impact Canadian organizations' ability to innovate with data?

  • AIDA would create incentives to develop standards and codes as well as certification regimes that support responsible use of data and artificial intelligence systems.
  • AIDA would align with international best practices and will place Canada at the forefront of digital policy internationally, making the Canadian digital economy a safe and prosperous place for investment and innovation.

How will AIDA be enforced? How can we trust private corporations to implement the requirements themselves?

  • Companies will have an obligation to demonstrate how they comply with the law.  The Minister of ISED would also have extensive oversight powers and could make a variety of orders where compliance has not been demonstrated or is lacking. This would include ordering production of information, inspections or audits, mitigation measures, or cessation orders, if public safety or health were threatened.
  • The Minister would be supported by a delegate, an AI and Data Commissioner, that would support the administration and promotion of the Act's objectives related to responsible development of AI.
  • To ensure that they could be enforced, Ministerial orders could be registered through the Courts. Serious violations could be investigated and, if appropriate, prosecuted.

What were the consultations undertaken for this new bill?

This is a comprehensively consulted piece of legislation.

  • In 2018, the Government launched extensive public consultations that led to the establishment of Canada's Digital Charter. At the same time as the Charter, we launched broad-based consultations on specific proposals to reform the current privacy law.
  • After tabling former Bill C-11, the Government also had the opportunity to extensively engage with industry and other stakeholders on the proposals that Bill.
  • The Government used stakeholder feedback to build on former Bill C-11 in important ways, including by strengthening protections for children and ensuring the alignment of the legislation with domestic and international models.
  • To validate the proposed new approach, the Minister hosted two roundtables to hear directly from a wide variety of stakeholders.

What are other jurisdictions doing to address AI – does this approach align with our international partners?

  • Interoperability with international partners remains a key priority. The EU in particular has advanced a framework for regulating AI that would set standards for any AI systems being deployed in the EU market. The UK, given its close affiliation to the EU, is also exploring a regulatory approach although this is still in its early stages.  We will want to keep pace with our partners by laying the foundation for standards of our own.
  • By taking a risk-based approach grounded in common standards and clear prohibitions, Canada's approach, while less prescriptive, is aligned with the EU approach. Canada's flexible and evolving approach is meant to allow for alignment with international standards, while accommodating small and medium-sized businesses.
  • In parallel to AIDA, the Standards Council of Canada will be advancing codes, standards and certifications for AI. This will ensure that Canada has a voice in the development of international standards, support the growth of a responsible industry in Canada, and provide opportunities for Canadian companies to become leaders and seize market opportunities in this space.

Could individuals or corporations be subject to imprisonment if AI systems unintentionally cause harm?

  • The criminal offences in s. 38 and s. 39 of the Act carry punishments including imprisonment. However, these offences require both the occurrence of serious harm or substantial economic loss caused by an AI system and criminal intent, which can range from knowing or being reckless as to whether serious harm would be caused or intent to defraud the public and cause substantial economic loss. In order to obtain a conviction, the Crown would need to prove these beyond a reasonable doubt, which is the highest threshold available in the Canadian legal system.

Would any individual who contributes to the development of an AI system, for example a student intern, be a “person responsible” under AIDA and potentially be held responsible for harms that may result?

  • No – this is not how the responsibilities under the Act are structured. A “person responsible” under the Act can be a natural person or a legal entity. The person only needs to comply with the regulations specific to their role with regard to the system. For example, specific obligations may apply during the design phase of an AI system. When AI systems are developed by organizations, the organization would be responsible for compliance with obligations under AIDA unless an employee takes action without authorization.

Does AIDA address systemic harms?

  • AIDA is designed to address systemic harms. Therefore, the requirements of the Act refer to AI systems and require persons responsible for them to take proactive measures to assess and mitigate risks of harm and bias. The term individual is used in the sense that individuals would be the object of harms or bias. However, no harm to specific individuals need be identified – it is the risk of harm or bias, including with regard to protected groups, that must be assessed and mitigated. Of course, when harm due to a system is identified, this should be used to inform the mitigation measures for that system.

Science Accomplishments

Key accomplishments to date include:

  • Dr. Mona Nemer was announced as Canada's Chief Science Advisor on September 26, 2017. Most recently, she was reappointed for a term of two years, effective September 25, 2022. She has collaborated with the Government of Canada's departmental science advisors, the U15 Group of Canadian Research Universities, Compute Ontario and the University of Toronto to launch CanCOVID, a new Canada-wide network of health, science and policy researchers to facilitate COVID-19 research collaboration. The Chief Science Advisor represented Canada at the 2022 G7 Science Ministerial in June 2022.
  • Fundamental Science Review: An independent panel, the first of its kind in 40 years, was commissioned to review federal support for fundamental science. It was launched in June 2016; since then, the government has continued to invest in science, research and the people who power it. More concretely, the government has provided more than $14 billion in new resources to support science and research.
  • Strategic Science Fund (SSF): 2021 competition: The SSF represents a new merit-based approach for allocating federal funding to third-party science and research organizations, based on the advice of peer review. On August 13, 2021, Ministers of Innovation, Science and Industry and Health opened the call for letters of intent. On November 2, 2022, the Ministers announced that Elizabeth Cannon, President Emerita of the University of Calgary has been appointed chair of the Expert Panel which will make recommendations to government. Results are expected in 2023.
  • Advisory Panel on the Federal Research Support System: The Advisory Panel on the Federal Research Support System was launched on October 6, 2022. The Panel will provide the Ministers of Innovation, Science and Industry and of Health with policy advice on the structure, governance and management of the federal system supporting research and talent as well as how to ensure that federal support for Canada's academic research enterprise is coordinated and cohesive, responsive, and agile.

Emerging Technologies & Life Sciences

  • National Quantum Strategy: This emerging field will transform how everything from life-saving drugs to next-generation batteries are designed and developed, and Canadian scientists and entrepreneurs are well-positioned to take advantage of these opportunities. Budget 2021 provided $360 million over seven years and committed the Government of Canada to develop a National Quantum Strategy to support Canada's quantum sector and solidify Canada's leadership in this fast-growing field. The strategy, which is expected to be announced on January 13, 2023, will amplify Canada's strength in quantum science, grow its quantum-ready technologies and companies, and advance quantum talent, research and commercialization in Canada.
  • Pan-Canadian Artificial Intelligence Strategy (PCAIS): Announced on June 22, 2022, a second phase of the Pan-Canadian Artificial Intelligence Strategy (PCAIS) was launched. Backed by an investment of more than $443 million committed in Budget 2021, the second phase of the strategy will seek to bridge world class AI talent and cutting-edge research capacity with AI commercialization and adoption, helping to ensure that Canadian ideas and knowledge are mobilized here at home. Implemented in collaboration with partners from across Canada, including the Canadian Institute for Advanced Research (CIFAR), the national AI institutes, the Standards Council of Canada, the Digital Research Alliance of Canada, and Canada's Global Innovation Clusters, this investment supports three pillars of activity: commercialization, standards development, and research and talent.
  • Pan-Canadian Genomics Strategy and Genome Canada: May 24, 2022, the Minister of Innovation, Science and Industry, announced the launch of public consultations for the upcoming Pan-Canadian Genomics Strategy. Budget 2021 provided nearly $400 million to support the creation and implementation of a Pan-Canadian Genomics Strategy, including: $136.7 million over five years, starting in 2022–23, to Genome Canada for challenge-driven programming, $2.7 million for a joint ISED-National Research Council of Canada secretariat to provide dedicated support for the development and implementation of the strategy, and $260.3 million to support the strategy's activities.
  • Biomanufacturing and life sciences strategy: On July 28, 2021, Ministers of ISI and Health launched the Biomanufacturing and Life Sciences Strategy. This means more than $2.2 billion over seven years from Budget 2021 to continue growing a strong and competitive sector and to ensure our country is prepared for future pandemics. The Biomanufacturing and Life Sciences Strategy is driven by two objectives: to grow a strong, competitive domestic life sciences sector, with cutting-edge biomanufacturing capabilities, while creating good jobs for Canadians, and to make sure Canada is prepared for pandemics and other health emergencies in the future. This includes increasing domestic capacity through investments and partnerships to produce life-saving vaccines and therapeutics.
    • Results of the first competition under the CFI bioscience capital and infrastructure funding was announced: More than $127 million to support upgrades to eight biocontainment facilities across the country.
  • adMare BioInnovations: On March 30, 2022, the Minister of ISI announced a $92 million investment in adMare BioInnovations to drive company innovation, scale-up and training activities in Canada's life sciences sector.
  • Stem Cell Network: On Thursday May 12, 2022, Parliamentary Secretary Andy Fillmore, announced the Stem Cell Network's largest single investment in stem cell research in Canada — $19.5 million in funding for 32 regenerative medicine research projects and clinical trials involving more than 400 researchers, clinicians, and trainees from across Canada. 59% of the projects are led by women, with 12 projects led by early career investigators. In total, the projects cover 20 different disease areas and illnesses such as, stroke, cardiovascular disease, type 1 diabetes, Parkinson's, muscular dystrophy, blood cancers, multiple sclerosis, wound repair and sepsis.
  • Canadian Institutes of Health Research (CIHR) - Clinical Trials Fund: The 2021 Federal Budget announced funding for CIHR's Clinical Trials Fund (CTF), an integral component of Canada's Biomanufacturing and Life Sciences Strategy (BLSS). In support of this, the CTF will provide funding through three specific vehicles: platforms with the development of a pan-Canadian Clinical Trials Consortium; people with the funding of training platforms as well as projects through the funding of a broad spectrum of clinical trial initiatives.

Equity, Diversity and Inclusion

  • Tri-agency EDI Action Plan (2018-2025): Launched in 2018, the Tri-Agency Equity, Diversity and Inclusion Action Plan outlines measures to increase equitable and inclusive access to granting agency funding opportunities. It also details how the granting agencies can influence the achievement of an inclusive post-secondary research system and culture in Canada.
  • SSHRC Funding for Research on Systemic Barriers: SSHRC announced the launch of the Race, Gender and Diversity Initiative. Starting in 2021-22, SSHRC will fund research into systemic barriers facing diverse groups, with grants valued at up to $450,000 over three years.
  • Funding for Black Researchers: Speaking at the Canadian Science Policy Conference, Minister Champagne also announced that the application period for Budget 2022 funding to support Black student researchers is now open. This funding will not only strengthen Canada's research excellence but also increase the diversity of Canada's research community.
  • National Institute for Women's Health Research: Budget 2021 provided $20 million over five years, starting in 2021-22, to support a new National Institute for Women's Health Research. The new institute will advance a coordinated research program that addresses under-researched and high-priority areas of women's health and ensure new evidence improves women's care and health outcomes. It will also ensure an intersectional approach to research and care to tackle persistent gaps for all women, including for racialized women, Black and Indigenous women, women with disabilities, and members of LGBTQ2 communities.

Indigenous Research

  • In 2017, the Canada Research Coordinating Committee (CRCC) reaffirmed the federal research funding agencies' commitment to the Calls to Action of the Truth and Reconciliation Commission with the creation of a national dialogue with Indigenous communities to co-develop an interdisciplinary Indigenous research and research training model that contributes to reconciliation.
  • An Indigenous Research Strategy, Setting New Directions to Support Indigenous Research and Research Training in Canada, was launched in 2020. The plan co-developed with Indigenous stakeholders, including members of an Indigenous Advisory Circle, to identify new ways of doing research by and with Indigenous communities. This included strategies to grow the capacity of First Nations, Métis and Inuit communities to lead their own research and partner with the broader research community.

Research Security & Intellectual Property

  • Securing Canada's Research from Foreign Threats: Canada announced the implementation of new, dedicated research security funding through the Research Support Fund (RSF). To further support institutions, this new funding will be made available through the Incremental Project Grants and extended to institutions that receive $2 million or more in eligible research funding.
  • Cyber Security Innovation Network (CSIN): The National Cybersecurity Consortium (NCC) will receive up to $80 million to lead the Cyber Security Innovation Network (CSIN). This funding will help foster a strong national cyber security ecosystem in Canada and position the country as a global leader in cyber security. By encouraging partnerships between academia and industry, the network will help address the shortage of cyber security specialists.
  • Building a World-Class Intellectual Property Regime:
    • The government recently provided $47.8 million over five years, starting in 2023-24, and $20.1 million ongoing to launch a new national lab-to-market platform to help graduate students and researchers take their work to market. The consultation process has recently begun.
    • The government provided $10.6 million over five years, starting in 2022-23, and $2 million ongoing to launch a survey to assess the government's previous investments in science and research, and how knowledge created at post-secondary institutions generates commercial outcomes. The process to design this new survey has recently begun.

Talent

  • Mitacs: Government of Canada announced in Budget 2021 $708 million in funding over five years to create 85,000 innovation internships. This gives Canada's young innovators more opportunities to succeed while supporting businesses of all sizes across the country by providing them with the talent they need to get ahead in the competitive global marketplace.
  • Canada Excellence Research Chairs (CERC): In Budget 2022, the federal government announced $38.3 million to be awarded over four years, starting in 2023-24, and then $12.7 million annually on an ongoing basis, for the federal research funding agencies to add new, internationally recruited Canada Excellence Research Chairs in the fields of science, technology, engineering and mathematics. A portion of this additional funding will be applied to the current Canada Excellence Research Chairs competition, to support a further six to 12 new Canada Excellence Research Chairs—reinforcing Canada's competitive advantage as a destination of choice for world-class researchers. The remaining portion of this additional funding will be applied to the next competition.

International

  • Horizon Europe: On November 30, 2022, the Government of Canada and the European Commission announced that Canada will be entering into formal negotiations for closer collaboration under Horizon Europe. Association with Horizon Europe would mean new opportunities for international collaborations for a broad range of Canadian academics and research and innovation players. This membership would grant fuller access to the program as well as leadership opportunities to Canadian participants and allow for Canada to take part in the decision-making processes of the program.
  • Strengthening science policy collaboration with South Africa: under an MoU between Canada's Innovation, Science and Economic Development (ISED) and South Africa's Department of Science and Innovation (DSI) (signed in 2019), annual Joint Committee meetings are held to advance collaboration on shared priorities. The fourth ISED-DSI Joint Committee Meeting will take place in January 2023 in South Africa.
  • Canada-U.S. Collaboration: On November 18, 2021, Canada's Minister of Innovation, Science and Industry and the United States then-Director of the White House Office of Science and Technology Policy released a Joint Statement to Leaders highlighting priority areas to strengthen ST&I collaboration (e.g., AI, quantum, research security, climate change, etc.), and noting that Canada and the U.S. will work to “define a bilateral ST&I agreement.”

National Research Council (NRC)

  • 75th Anniversary of the Industrial Research and Development Program (IRAP): IRAP celebrates it's 75th anniversary in 2022. IRAP continues to support over 8,000 innovative Canadian clients annually.
  • Biologics Manufacturing Centre: The NRC completed construction of the Biologics Manufacturing Centre construction in June 2021, 10 months after groundbreaking. Following an inspection of the Biologics Manufacturing Centre, Health Canada issued the facility's drug establishment licence in August 2022. This licence demonstrates the facility's compliance with good manufacturing practices, which ensure the safety of vaccine production for humans.
  • The Canadian Photonics Fabrication Centre (CPFC): The CPFC provides world-class engineering and manufacturing services, commercial-grade prototyping and pilot-run production facilities. Budget 2021 provided $90 million over five years to the National Research Council to retool and modernize the Canadian Photonics Fabrication Centre.
  • The James Webb Telescope: This is the most powerful ever built and is an international collaboration between the National Aeronautics and Space Administration (NASA), the European Space Agency (ESA) and the Canadian Space Agency (CSA). It was launched in December 2021 with Canadian-made scientific instruments and guidance sensors on board. Webb will allow researchers to capture images of some of the first galaxies ever formed by peering deeper into the Universe. The NRC has worked with the Canadian Space Agency to support the science and technology behind this exciting science mission.
  • National Building Codes: As of April 2019, the NRC is offering free access to the downloadable and online formats of the National Building Code, the National Fire Code, the National Plumbing Code, and the National Energy Code for Buildings, as well as the provincial codes published by the National Research Council of Canada (NRC). The 2020 versions of the National Model Codes, which include the National Building Code of Canada, National Plumbing Code of Canada, National Fire Code of Canada and National Energy Code of Canada for Buildings included nearly 400 updates, including new provisions focused on improving energy efficiency in buildings and housing.
  • Wolf Prize in Physics: Dr. Paul Corkum, Canada Research Chair in Attosecond Photonics, Director of the Joint Attosecond Science Laboratory, Co-director of the NRC-uOttawa Joint Centre for Extreme Photonics and a uOttawa professor, is one of the recipients of the Wolf Prize in Physics for 2022. Prof. Corkum is recognized for his pioneering work in the development of attosecond science, one billionth of a billionth of a second.
  • National Research Council Challenge programs: These are mission-oriented programs across industries where researchers and facilities from the NRC's 14 research centres collaborate with academic and industrial partners. Through the Challenge programs ($30 million per year ongoing), the NRC is advancing transformative, high-risk, high-reward research that address Canadian priorities. The challenges (i.e., missions) were defined through wide-ranging consultations with science, technology and innovation communities. They are established in nine priority areas: 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, and Applied Quantum Computing.

Research and Scientific Publication in French

Key Messages:

  • ISED and the granting agencies are actively involved in supporting and encouraging research and scientific publications in French, which is key to ensuring the strength of Canada's research ecosystem. 
  • The programs in my portfolio align with the government's objectives in key areas, including promoting equity, diversity and inclusion and ensuring alignment with policies and legislation that govern official languages and scientific publications.
  • Beyond alignment with policies and legislation relating to official languages, ISED and the granting agencies actively promote French publications and growing the pipeline of French researchers. Key programs like the Aid to Scholarly Journals (ASJ) funding opportunity and the Awards to Scholarly Publications program (ASPP) delivered by SSHRC have funded bilingual and French publications at rates above English publications. In addition, initiatives such as NSERC's Promo Science, Science Odyssey and Science Literacy Week work towards inspiring French students to pursue STEM careers.
  • While ISED does not directly fund scientific publications, the department provides funding through contribution agreements with third-party organizations to fund and conduct research and training, and to promote science. These contribution agreements require the recipient organization to provide its communications and services in both official languages.
  • Most notably, as the most significant Canadian funders of academic research and training, the granting councils adhere to policies and legislation that govern official languages and publications. The granting councils have the systems, processes, personnel, and capacity to thoroughly assess the scientific merit of an application, regardless of whether it is written in French or English.
  • In particular, about a quarter of NSERC and SSHRC's reviewers and selection committee's members are francophone, which is proportionally higher than the number of applications submitted in French. As you heard in a previous meeting on this issue, NSERC applications that are written in French have an average success rate of 73%, compared to 66% for all NSERC applications between 2009-2018.
  • Between 2011 and 2021, applications that were submitted in French to SSHRC core programs had similar or better success rates than applications submitted in English, for Talent Grants, Insight Grants and Partnership Grants.
  • I keenly recognize the importance of promoting French and strengthening the vitality of Francophone communities across the country, including in the science and research enterprise that is critical to developing new knowledge and skills that strongly benefit the Canadian economy and society.

Supplementary Messages:

  • ISED provides funding through contribution agreements that include requirements related to both official languages. These requirements are determined following the completion of an official language analysis to ensure we are aligned with Government of Canada policies and that the Department is meeting its obligations under the Official Languages Act.
  • ISED does not intervene in granting agencies' funding decisions, which are made at arm's length on the basis of peer-reviewed competitive processes.
  • While NSERC does not have funding programs to explicitly support publications, translation costs associated with the dissemination of research findings are considered an eligible expense in NSERC's grants according to the Tri-Agency Guide on Financial Administration.
  • The NRC Publications Archive is the NRC's institutional repository for the storing, managing and sharing of NRC-authored technical reports, conference publications, articles, (and other similar works). Documents in the NRC Publications Archive, including NRC peer-reviewed publications, are available in the language in which the authors have chosen to communicate their scientific results. However, abstracts may, upon request, be made available in both official languages.
  • The Communications Research Centre within ISED regularly research findings in online academic journals. The CRC website provides a link to these journal articles, along with the abstracts. The CRC ensures that the abstracts on the CRC website are available in both official languages. In addition to research publications, the CRC has research-related stories and videos in both English and French on its website

Update

Marc Fortin, Vice President, Research Grants and Scholarships Directorate, NSERC, appeared before the Committee on October 17, and spoke to NSERC's capability to fairly assess grant applications in both official languages.

Nipun Vats, Assistant Deputy Minister, Science and Research Sector, ISED and Valérie La Traverse, Vice-President, Corporate Affairs, SSHRC appeared before the Committee on October 31, and spoke to their respective organization's role in supporting research and scientific publications in French.

Supporting Facts and Figures

Selection Committees

  • The granting agencies are deliberate about ensuring capacity to fairly and effectively review applications submitted in French.
  • On average, NSERC's Selection Committees have 26% of members that identify as francophone and 45% of members that self-declare as being bilingual.
  • Since 2015, 25% of SSHRC's reviewers participating in the merit review process are francophones.

Success Rate

  • The success rates of French applications are equal or higher to English applications.
  • Between 2009-2018, aggregated data across NSERC's programs show that applications written in French have an average success rate of 73%, compared to the all-NSERC success rate of 66%. NSERC also has continuing efforts to deliver unconscious bias training and science promotion campaigns with francophone audiences.
  • Over ten years of funding (2011-2021), SSHRC's data shows that applications to its core programs submitted in French have had success rates of 40.1% for Talent Grants (vs 38.5% in English), 33.3% for Insight Grants (vs 36.1% in English), and 63.1% for Partnership Grants (vs 53.9% in English).

Funding and Promotion

  • The agencies are also proactively engaged in conversations and looking for ways to increase the number of applications submitted in French.
  • NSERC promotes the importance of science to francophone communities through Science Odyssey and Science Literacy Week. NSERC partners with Quebec organizations to deliver over 600 science promotion events in French. These events reach over 200,000 participants of all ages.
  • In addition, NSERC's PromoScience program provided funding to close to 30 francophone organizations.
  • In addition to its direct funding for research training and for research and knowledge mobilization projects, SSHRC funds scholarly communications through the Aid to Scholarly Journals (ASJ) funding opportunity and the Awards to Scholarly Publications program (ASPP). In ASJ, the distribution of awards are: Bilingual – 30.33%; French – 31.15%; English – 38.52%. In ASPP, since 2019, the program reviews English and French applications separately and funded 64% of English and 67% of French publications applying for funding.
  • SSHRC funds research, research training and knowledge mobilization on topics of bilingualism, official languages and official languages minority communities. From 2016 to 2020, SSHRC provided $24.1M in funding on such topics through six Canada Research Chairs, 246 research projects, 465 researchers and 115 graduate students.
  • CHIR, NSERC and SSHRC are committed to improving and promoting the results of Agency-funded research, and to increase the dissemination and exchange of research results. Societal advancement is made possible through open science and barrier-free access to research and knowledge, enabling researchers and the public to use and build on this knowledge.

State of research and scientific publication in French

  • According to an Acfas (Association francophone pour le savoir) report, French is broadly in decline across Canada's research system for both grant applications and publications. This is largely due to increased internationalization of research, where researchers seek visibility among global audiences as English is the lingua franca. The same pressures to publish in English also exist in non-Anglophone countries such as Germany, Spain and Italy, as the proportion of publications in English continue to rise globally.
  • In 2019, English represented nearly 100% of articles in the medical and natural sciences, 97% in the social sciences, and 90% in the arts and humanities in Canada, based on Web of Science data.  In Quebec, when combining data from Web of Science and Érudit, a Quebec-based digital research publishing platform, about 70% of the articles in social sciences and 30% of the arts and humanities were in English, and the share of English language scientific publications is increasing.

Moonshot Programs

Key Messages:

  • Moonshot initiatives set ambitious goals to apply research and innovation to tackle major environmental, economic, and social challenges.
  • Focusing Canada's best and brightest on these challenges translates into bold research in areas of key importance, increased innovation, and ultimately better wellbeing and economic advantage for Canadians.
  • For example, the government's Biomanufacturing and Life Sciences Strategy is an ambitious plan to establish capabilities across the domestic life sciences ecosystem and ensure preparedness in the face of future pandemics and health emergencies.
  • Other major initiatives such as the Pan-Canadian Genomics Strategy, the National Quantum Strategy and the Pan-Canadian Artificial Intelligence Strategy will help us tackle societal challenges through advances in various fields, such as: energy, public health, food and natural resources.

Supplementary Messages:

  • In addition to national strategies in critical areas, the mission-oriented NRC Challenge program is tackling ambitious goals, such as: developing new materials for clean and sustainable sources of energy, improving the quality of life of older adults and their caregivers through innovation that will support safe and healthy aging, and addressing pressing issues impacting the quality of life of people in the north.
  • We are also establishing a new Canadian Innovation and Investment Agency, which will support Canadian business research and development projects to maximize Canadian innovation across all industries, boost exports and support Canada's transition to a net-zero economy.
  • Leveraging the ambitious vision of space exploration, while aiming to address key global problems, the Canadian Space Agency is calling on the ingenuity and expertise of Canadian researchers to address the needs of astronauts on deep space missions and to transform remote healthcare delivery and food production at the same time.
  • Specifically on the climate change challenge, the Net Zero Accelerator initiative of the Strategic Innovation Fund supports Canada's net zero goals to help transform the economy for clean and long-term growth.

About the mandate commitment to a Vaccine Moonshot program

  • Vaccine moonshot research funding could represent an opportunity to deliver high impact investments in Canada's most promising vaccines and therapeutics and significantly accelerate their development toward commercialization.

Background

On September 26, 2022, SRSR agreed to: (i) study international “moonshot programs” that aim to resolve difficult environmental and social problems, set ambitious research and development programs, and attract researchers from around the world, and (ii) make recommendations regarding what such a program could look like here in Canada.

Moonshot programs can be defined as initiatives where ambitious goals are set to apply innovation to tackle “massive” environmental, economic, and social challenges. Through moonshot programs governments and/or their executive agencies often play a leading role: partnering with businesses and researchers to generate ideas and technologies in response to major challenges and supporting the translation of these ideas and technologies into commercial solutions. It is by focusing on these challenges that the economic benefits of innovation can ultimately be realized.

The U.S. Defense Advanced Research Project Agency (DARPA) inspire a significant number of moonshot agencies and programs. They fund and coordinate exploratory and ground-breaking projects (moonshots), which deploy radical solutions by developing breakthrough technologies to meet complex and ambitious goals. They focus on specific and ambitious problems to be solved and are implemented in dedicated agencies or programs with strong leadership.

While Canada does not have a moonshot initiative equivalent to DARPA, it does have a number of initiatives tackling ambitious societal problems.

Biomanufacturing and Life Sciences Strategy:

  • Driven by the current COVID-19 pandemic, the Government of Canada released the Biomanufacturing and Life Sciences Strategy, a comprehensive plan to establish capabilities across the domestic life sciences ecosystem and ensure preparedness in the face of future pandemics and health emergencies. As part of this Strategy, the government has committed:
    • $500 million over seven years for the Canada Foundation for Innovation (CFI) to support bioscience research infrastructure needs of post-secondary institutions and research hospitals, through the Biosciences Research Infrastructure Fund (BRIF).
    • $250 million over five years for the Social Sciences and Humanities Research Council (SSHRC) to implement the Canada Biomedical Research Fund (CBRF), on behalf of the three federal granting agencies.
    • $250 million over three years for the Canadian Institutes of Health Research (CIHR) to establish a new Clinical Trials Fund (CTF).
    • $150 million over four years for the National Research Council's Industrial Research and Assistance Program (NRC IRAP) to support COVID-19 related clinical trials; and,
    • $1 billion over seven years in biomanufacturing and life science projects through the Strategic Innovation Fund (SIF).
    • Vaccine moonshot research funding could represent an opportunity for the strategy to build on existing programs and deliver high impact investments in Canada's most promising vaccines and therapeutics to significantly accelerate their development toward commercialization and offer ongoing support to the ecosystem.

Pan-Canadian Genomics Strategy ($399.7 million over six years)

  • In recognition of Canada's world-class strength in genomics research, Budget 2021 announced the creation of a Pan-Canadian Genomics Strategy (PCGS). The PCGS will aim to drive further innovation in genomics through commercialization and adoption, create socioeconomic growth and cement Canada's position as a world-leader in research and innovation.
  • Advancements in genomics research have led to the development of cutting-edge technologies and innovations applicable across a number of sectors, including public health, food and natural resources.
  • Insights gathered during consultations earlier this year will help shape the Pan-Canadian Genomics Strategy, which is in development.

Canada's National Quantum Strategy ($360 million over seven years)

  • The Government of Canada is also developing a National Quantum Strategy to support Canada's quantum sector and solidify Canada's leadership in this fast-growing field. Quantum science will transform how everything from life-saving drugs to next-generation batteries are designed and developed, and Canadian scientists and entrepreneurs are well positioned to take advantage of these opportunities.
  • When released, the Quantum strategy will highlight key long-term missions that will being together academia, industry, and government to realize key opportunities for Canada to lead the world in the development and adoption of disruptive quantum technologies.

Pan-Canadian Artificial Intelligence Strategy ($125 million for Phase I and $443.8 million over ten years for Phase II)

  • Through the Pan-Canadian Artificial Intelligence Strategy, the Government of Canada is investing in efforts to drive the adoption of artificial intelligence across Canada's economy and society.
  • The first phase of the Strategy was launched in 2017, in partnership with CIFAR, to build a strong Canadian talent pipeline and ecosystem, including the establishment of centres of research, innovation and training at the national AI institutes.
  • The second phase launched in June 2022 bridges Canada's world-class talent and research capacity with programs to enable commercialization and adoption to help ensure that Canadian ideas and knowledge are mobilized and commercialized here at home.

National Research Council (NRC) Challenge programs ($30 million per year ongoing)

  • NRC's Challenge mission-orientated programs foster collaboration between NRC's 14 research centres collaborate and academic and industrial partners. Through the Challenge programs, the NRC is advancing transformative, high-risk, high-reward research that address Canadian priorities.
  • The challenges (i.e., missions) were defined through wide-ranging consultations with science, technology and innovation communities. They are established in nine priority areas: 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, and Applied Quantum Computing.

Canadian Innovation and Investment Agency (CIIA)

  • Through Budget 2022, the Government of Canada announced $1 billion over five years starting in 2022-23 to establish the CIIA as a new, operationally independent organization that will maximize business research and development (R&D) expenditures across all sectors (including traditional sectors) to boost exports, improve productivity, and support the transition to a net-zero economy.
  • In developing the CIIA, consultations are being held with leading innovation agencies from around the world that have demonstrated results in promoting innovation-driven growth (Israel, Finland, the United Kingdom, Switzerland, the Netherlands, Ireland, and Austria).
  • ISED and Finance Canada officials are also actively consulting with industry stakeholders representing a wide range of interest groups across Canada. This includes the academic sector, industry associations, regional business associations, equity-seeking groups, and start-ups.

Deep Space Food and Healthcare Challenges

  • The Canadian Space Agency has dedicated $880K to two projects that will address the respective challenges of food security and access to healthcare. In an example of true multidisciplinarity and maximizing impact, the CSA realized that many of the same issues astronauts face in space are similar to the challenges faced by people in the North. As such, one project will look at ways to develop space technology for low mass, low energy and low waste systems food systems that could also be employed in the north.
  • The second project will develop new tools or adapt current ones in order to give astronauts – and people in the north - the autonomy to detect and diagnose medical conditions quickly and efficiently. They need solutions that help them identify concerns early, and they need diagnostics that empower them to make decisions that lead to effective treatment plans and the best patient outcomes.

The Net Zero Accelerator (NZA)

  • This initiative will provide up to $8 billion to support large-scale investments in key industrial sectors across the country to ensure that Canada remains competitive in a net-zero economy and reduces greenhouse gas (GHG) emissions.
  • This is part of Canada's efforts to invite forward-looking Canadian companies to contribute to Canada's efforts to global leadership by meeting our ambitious GHG reduction target of 40-45% by 2030 and our net-zero by 2050 goal.
  • The NZA investment pillars have been chosen to maximize the impact of program investments:
    1. Decarbonization of large emitters: focusing on near-term emissions reduction
    2. Industrial transformation: helping established industries transition to the net zero economy
    3. Clean technology and battery ecosystem development: capitalizing on net zero opportunities by fostering emerging sectors
  • The Strategic Innovation Fund (SIF) recently held a call to action to solicit project applications from high emitting sectors that are approaching a final investment decision and that will reduce existing GHG emissions in Canada within the next decade. First assessment phase has been completed and ten projects have been selected to advance to the due diligence process. These companies were assessed as promising early movers that would contribute to the decarbonization of their sectors, including electricity generation, natural gas production and iron for the steel industry. Based on the companies' own estimates, these projects would create a reduction in GHG emissions of up to 10 million metric tons by the year 2030, or roughly equivalent to taking 2 million cars off the road. The names of ten companies were announced on November 8, 2022, in Alberta.

For additional context, the following are examples of international moonshot projects:

  • Norway's Pilot-E is a cross-agency scheme that supports climate emission free and energy saving solutions from idea to market as a means of reducing emissions both in Norway and internationally. PILOT-E is a public mission-oriented instrument addressing societal challenges by combining financial schemes from different governmental bodies and tailoring them for targeted projects.
  • Sweden's Challenge Driven Innovation Initiative is an initiative that supports demand-driven projects of at least three project partners that require inter-disciplinary and cross-sectoral cooperation along the innovation chain to tackle societal challenges with clear relation to Global Sustainability Goals in Agenda 2030. This initiative is a direct response to the 2009 Lund Declaration that called for a new focus on "grand challenges" to move away from narrow thematic approaches and involve both the public and private sectors in concerted efforts to tackle them.
  • The UK's Industrial Strategy Challenge Fund is part of the UK government's Industrial Strategy, the long-term plan to raise productivity and earning power in the UK. The fund is a core pillar in the government's commitment to increase funding in research and development by GBP 4.7 billion over 4 years to strengthen UK science and business. It invests in the world-leading research base and highly innovative businesses to address the biggest industrial and societal challenges today. A key aspect of the Fund is to provide additional funding for multidisciplinary research, and enhancing the link between all relevant scientific research, relevant to deliver solutions to ambitious industrial and societal challenges.
  • The US ARPA-E or Advanced Research Projects Agency–Energy is a government agency tasked with promoting and funding research and development of advanced energy technologies. It is modeled after the Defense Advanced Research Projects Agency (DARPA). Like DARPA does for military technology, ARPA-E is intended to fund high-risk, high-reward research involving government labs, private industry, and universities that might not otherwise be pursued. ARPA-E has four objectives: (1) To bring a freshness, excitement, and sense of mission to energy research that will attract the U.S.'s best and brightest minds; (2) To focus on creative, transformation energy research that the industry cannot, or will not support due to its high risk, but that has high reward potential; (3) To utilize an ARPA-like organization that is flat, nimble, and sparse, capable of sustaining for long periods of time those projects whose promise remains real, while phasing out programs that do not prove to be as promising as anticipated; and (4) To create a new tool to bridge the gap between basic energy research and development/industrial innovation.