Appearance before the Standing Committee on Industry, Science and Technology (INDU) by the Minister of Innovation, Science and Industry - October 3, 2024

Table of contents

• Mandate letter
• Departmental plan summary
• Bill C-27: Digital Charter privacy reform
• Government of Canada decision to transition Sustainable Development Technology Canada (SDTC) programming to the National Research Council of Canada (NRC)
• Supporting Canada's automotive industry: Zero emission vehicles and electric vehicle battery investments
• Competition policy reform
• Food price stabilization
• Futurpreneur Canada evaluation
• Strategic Innovation Fund
• Funding for Telesat
• Telecommunications: Reducing the cost of cellphone bills
• Rural and remote broadband connectivity
• Spectrum costs
• Bill C-26: Cybersecurity
• Canadian critical minerals development
• Modernization of the research support system
• Federal government support for science and research
• Intellectual property strategy
• Securing Canada's global AI advantage

Mandate letter

Dear Minister Champagne,

Thank you for continuing to serve Canadians as Minister of Innovation, Science and Industry.

From the beginning of this pandemic, Canadians have faced a once-in-a-century challenge. And through it all, from coast to coast to coast, people have met the moment. When it mattered most, Canadians adapted, helped one another, and stayed true to our values of compassion, courage and determination. That is what has defined our path through this pandemic so far. And that is what will pave our way forward.

During a difficult time, Canadians made a democratic choice. They entrusted us to finish the fight against COVID-19 and support the recovery of a strong middle class. At the same time, they also gave us clear direction: to take bold, concrete action to build a healthier, more resilient future. That is what Canadians have asked us to do and it is exactly what our government is ready to deliver. We will work to build that brighter future through continued collaboration, engagement, and the use of science and evidence-based decision-making. With an unwavering focus on delivering results, we will work constructively with Parliamentarians and maintain our strong partnerships with provincial, territorial and municipal governments and Indigenous partners. This decade has had an incredibly difficult start, but this is the moment to rebuild a more resilient, inclusive and stronger country for everyone.

The science is clear. Canadians have been clear. We must not only continue taking real climate action, we must also move faster and go further. As Canadians are increasingly experiencing across the country, climate change is an existential threat. Building a cleaner, greener future will require a sustained and collaborative effort from all of us. As Minister, I expect you to seek opportunities within your portfolio to support our whole-of-government effort to reduce emissions, create clean jobs and address the climate-related challenges communities are already facing.

This year, Canadians were horrified by the discovery of unmarked graves and burial sites near former residential schools. These discoveries underscore that we must move faster on the path of reconciliation with First Nations, Inuit and Métis Peoples. We know that reconciliation cannot come without truth and our government will continue to invest in that truth. As Ministers, each of us has a duty to further this work, both collectively and as individuals. Consequently, I am directing every Minister to implement the United Nations Declaration on the Rights of Indigenous Peoples and to work in partnership with Indigenous Peoples to advance their rights.

We must continue to address the profound systemic inequities and disparities that remain present in the core fabric of our society, including our core institutions. To this effect, it is essential that Canadians in every region of the country see themselves reflected in our government's priorities and our work. As Minister, I expect you to include and collaborate with various communities, and actively seek out and incorporate in your work, the diverse views of Canadians. This includes women, Indigenous Peoples, Black and racialized Canadians, newcomers, faith-based communities, persons with disabilities, LGBTQ2 Canadians, and, in both official languages.

Across our work, we remain committed to ensuring that public policies are informed and developed through an intersectional lens, including applying frameworks such as Gender-based Analysis Plus (GBA Plus) and the quality-of-life indicators in decision-making.

Canadians continue to rely on journalists and journalism for accurate and timely news. I expect you to maintain professional and respectful relationships with journalists to ensure that Canadians are well informed and have the information they need to keep themselves and their families safe.

Throughout the course of the pandemic, Canadians and their governments have adapted to new realities. Governments must draw on lessons learned from the pandemic to further adapt and develop more agile and effective ways to serve Canadians. To this end, I expect all Ministers to evaluate ways we can update our practices to ensure our government continues to meet the challenges of today and tomorrow.

The success of this Parliament will require Parliamentarians, both in the House of Commons and the Senate, to work together across all parties to get big things done for Canadians. I expect you to maintain constructive relationships with your Opposition Critics and coordinate any legislation with the Leader of the Government in the House of Commons. As Minister, you are accountable to Parliament both individually, for your style of leadership and the performance of your responsibilities, and collectively, in support of our Ministry and decisions taken by Cabinet. Open and Accountable Government sets out these core principles and the standards of conduct expected of you and your office. I expect you to familiarize yourself with this document, which outlines my expectations for each member of the Ministry.

Our platform lays out an ambitious agenda. While finishing the fight against the pandemic must remain our central focus, we must continue building a strong middle class and work toward a better future where everyone has a real and fair chance at success and no one is left behind.

As Minister of Innovation, Science and Industry, you will lead efforts to create more jobs and achieve long-term economic and industrial transformation towards a low-carbon future, including through the strategic delivery of the Net Zero Accelerator Initiative. You will work to ensure that Canada is a world leader in clean technology, with a focus on critical minerals and the development of a sustainable battery innovation and industrial ecosystem, and position Canada to seize the opportunities of the digital economy, protecting rights and competitiveness and establishing a digital policy task force to help integrate efforts across government. You will likewise continue to implement the Biomanufacturing and Life Sciences Strategy to improve economic growth and ensure pandemic readiness for years to come. And you will ensure we continue to better understand how our programs and policies impact Canadians through the increased use of disaggregated data.

To realize these objectives, I ask that you achieve results for Canadians by delivering the following commitments.

• With the support of the Minister of Environment and Climate Change and the Minister of Natural Resources, lead the implementation of the Net Zero Accelerator Initiative, anchored in a robust, horizontal governance structure and a clear long-term investment strategy to support the strategic review of large-scale investments targeting key industrial sectors across all regions in order to drive industrial transition and significant reductions in greenhouse gas emissions on a scale consistent with achieving Canada's climate goals and meaningfully transform Canadian industry to lead and compete in a net-zero emissions future.
• 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.
• Introduce legislation to advance the Digital Charter, strengthen privacy protections for consumers and provide a clear set of rules that ensure fair competition in the online marketplace.
• Accelerate broadband delivery by implementing a "use it or lose it" approach to require those that have purchased rights to build broadband to meet broadband access milestones or risk losing their spectrum rights.
• Work with the Minister of Health to continue demonstrating leadership in public health by strengthening surveillance and capacity to detect and act on public health threats, strengthening the security of medical supply chains, working with colleagues to advance the Biomanufacturing and Life Sciences Strategy, and investing in the study of the long-term health impacts of COVID-19, including the effects of "long COVID" on different groups, notably vulnerable populations and children.
• Lead the creation of a new fund to pursue moonshot research into high-impact illnesses where a vaccine may be possible.
• Continue to support the economic growth and recovery of Canada's traditionally strong industries, including but not limited to automotive, aerospace, natural resources and agri-food, to increase productivity and innovation, and to strengthen the manufacturing base of Canada.
• Support the Mines to Mobility Strategy by attracting anchor investments in key areas like minerals processing, cell manufacturing and zero-emissions vehicle parts and assembly manufacturing, and use all tools, including the Investment Canada Act, to ensure the protection and development of our critical minerals. This will include working with the Minister of Natural Resources to develop and launch a Canadian Critical Minerals Strategy to position Canada at the forefront of critical mineral exploration, extraction, processing and manufacturing, as a global leader in the production of batteries, and other clean and digital technologies, as well as to develop a sustainable battery innovation and industrial ecosystem in Canada, including to establish Canada as a global leader in battery manufacturing, recycling and reuse.
• Advance efforts to ensure that Canada is a world leader in clean technology, including by:
• Building on existing advisory services to guide emerging clean technology firms from formation to export;
• With support from the Minister of International Trade, Export Promotion, Small Business and Economic Development, helping to drive the development of Canadian clean technology companies and small and medium-sized enterprises working in the area of decarbonization;
• Working with the Minister of Public Services and Procurement to support procurement of Canadian clean technology; and
• Partnering with post-secondary institutions and Indigenous organizations to accelerate the creation and growth of Indigenous clean technology businesses.
• Work with the Minister of Natural Resources on the development of model building codes, including publishing a net-zero emissions building code and model retrofit code by the end of 2024 that align with national climate objectives and provide a standard for climate-resilient buildings. You will also work to amend the National Building Code of Canada to specify firefighter and first responder safety as a core objective. To ensure effective implementation of these performance standards, work with partners to develop strategies around incentives, training programs and pilot initiatives.
• Work with the Minister of Environment and Climate Change on the creation of a new infrastructure and innovation fund that will scale-up and commercialize made-in-Canada technologies and solutions for the reuse and recycling of plastics.
• Work with the Minister of Natural Resources to establish a global centre for excellence on methane detection and elimination.
• Support the Minister of Environment and Climate Change and the President of the Queen's Privy Council for Canada and Minister of Emergency Preparedness to develop a climate data strategy to ensure that the private sector and communities have access to data to inform planning and infrastructure investments.
• Contribute to broader efforts to promote economic security and combat foreign interference by reviewing and modernizing the Investment Canada Act to strengthen the national security review process and better identify and mitigate economic security threats from foreign investment.
• Working with the Minister of Justice and Attorney General of Canada, Minister of National Defence and Minister of Public Safety, and with the support of the Minister of Foreign Affairs, continue to advance the National Cyber Security Action Plan, ensuring Canada is well positioned to adapt to and combat cyber risks, and ensure the security and integrity of Canada's critical systems.
• Work with the Minister of Public Safety, the Minister of Foreign Affairs, and the Minister of National Defence, and in collaboration with implicated ministers, to develop and implement a renewed National Cyber Security Strategy, which will articulate Canada's long-term strategy to protect our national security and economy, deter cyber threat actors, and promote norms-based international behavior in cyberspace.
• Advance the Pan-Canadian Artificial Intelligence Strategy and additional measures, such as advancing standards and continuing to lead international efforts around coordination, to support artificial intelligence innovations and research in Canada.
• Launch a National Quantum Strategy to amplify Canada's strength in quantum research and grow our quantum-ready technologies, companies and talent.
• Invest in the National Research Council's Canadian Photonics Fabrication Centre and reinforce Canada's leadership in photonics research, testing and prototyping.
• Develop a new approach to support high-risk/high-reward transformative research and development to unleash bold new research ideas, drive technological breakthroughs, protect Canada's competitive advantage and help Canadian companies grow and create highly skilled jobs. In moving forward with a uniquely Canadian approach modeled on the Defense Advanced Research Projects Agency (DARPA), work with the Minister of Health to develop a plan to modernize the federal research funding ecosystem to maximize the impact of investments in both research excellence and downstream innovation, with a particular focus on the relationships among the federal research granting agencies and the Canada Foundation for Innovation.
• Add 1,000 Canada Research Chairs to help attract and retain top talent at Canadian universities and support graduate research, with a focus on improving gender and racial equity among faculty, promoting interdisciplinary research and reinforcing Canada's world-leading capabilities in life sciences and bio-medical research.
• Establish a new fund to help colleges and universities commercialize leading research, including identifying and securing patent rights for research done within their institutions and connecting researchers with people and businesses to help put these innovations into action and grow our economy.
• Continue to support innovation ecosystems across the country to support job creation, technology adoption and scale-up. This includes working with the Minister of Public Safety, and in close collaboration with Canadian industry and post-secondary institutions, to safeguard Canada's world-leading research ecosystem, as well as our intellectual property (IP) intensive businesses.
• As the Minister responsible for Statistics Canada, continue to support the President of the Treasury Board in their work in building a whole-of-government approach for the improved collection, analysis, availability and publication of disaggregated data.
• Improve support for Black and Indigenous researchers by including a specific equity target for their representation in federally funded scientific research delivered through the granting councils and providing dedicated funding to support promising graduate students, foster the mentorship and development of younger researchers and increase opportunities for Indigenous Peoples and Black Canadians in Canadian post-secondary institutions.
• Engage with provinces and seek feedback from universities, colleges, experts, lenders and other post-secondary education stakeholders to explore ways to better protect the public interest functions of public post-secondary educational institutions in insolvency and restructuring situations.
• Support the Chief Science Advisor in their work to bolster the capacity and increase the coordination of the use of science across government.
• Work with the Minister of Canadian Heritage to amend the Copyright Act to further protect artists, creators and copyright holders, including to allow resale rights for artists.
• To enhance consumer protection and ensure a level playing field for all businesses, undertake a broad review of the current legislative and structural elements that may restrict or hinder competition. This includes directly reviewing the mandate of the Commissioner of Competition, and in so doing, ensuring that Canadians are protected from anti-consumer practices in critical sectors, including in the oil and gas, telecommunications and financial services sectors.
• With the Minister of International Trade, Export Promotion, Small Business and Economic Development, work to strengthen and secure supply chains and support the Minister of Transport to reduce and prevent bottlenecks in Canada's transportation networks.
• 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.
• Work with the Deputy Prime Minister and Minister of Finance, and with the support of the Minister of National Revenue, to implement a beneficial ownership registry.
• Support the Minister of Public Services and Procurement, the Minister of Fisheries, Oceans and the Canadian Coast Guard, and the Minister of National Defence to renew the fleets of the Canadian Coast Guard and Royal Canadian Navy, advance the shipbuilding industry, including the process to add a third Canadian shipyard as a strategic partner to the National Shipbuilding Strategy, create middle class jobs and ensure Canada has the modern ships needed.

As Minister, you are also responsible for actively engaging with your Cabinet and Caucus colleagues. As we deliver on our platform commitments, it will be important that members of the Ministry continue to collaborate and work constructively to support rigorous and productive Cabinet decision-making. I expect you to support your colleagues in delivering their commitments, leveraging the expertise of your department and your own lived experiences.

To best achieve results for Canadians, Ministers must be rigorous and coordinated in our approach to implementation. I would therefore ask that you return to me with a proposed approach for the delivery of your mandate commitments, including priorities for early implementation. Furthermore, to ensure we are accountable for our work, I will be asking you to publicly report to me, and all Canadians, on your progress toward these commitments on a regular basis.

As we have been reminded throughout the pandemic, adapting to change is not only something government should do, it is something government must do. As you work to fulfil our commitments, I expect you to actively consider new ideas and issues as they emerge, whether through public engagement, your work with Parliamentarians or advice from the public service. I also expect you to work with your Deputy Minister to assess priorities on a continual basis as we build a better future for all Canadians. In addition to achieving results, you are responsible for overseeing the work of your department and ensuring the effective operation of your portfolio.

As you staff your office and implement outreach and recruitment strategies for federally appointed leadership positions and boards, I ask that you uphold the principles of equity, diversity and inclusion. This helps ensure that federal workplaces are dynamic and reflective of the Canadians we serve. You will also ensure your Minister's office and portfolio are reflective of our commitment to healthy and safe workplaces.

Canadians expect us to work hard, speak truthfully and be committed to advancing their interests and aspirations. When we make mistakes – as we all will – Canadians expect us to acknowledge them, and most importantly, to learn from them.

I know I can count on you to fulfill the important responsibilities entrusted in you, and to turn to me, and the Deputy Prime Minister, early and often to support you in your role as Minister.

Sincerely,

Rt. Hon. Justin Trudeau, P.C., M.P.
Prime Minister of Canada

Note: This Ministerial Mandate letter was signed by the Prime Minister in the Minister's first official language.

Departmental plan summary

Key priorities:

• Develop a sustainable battery innovation and industrial ecosystem, establishing Canada as a leader in battery manufacturing, recycling and reuse
• Advance the Biomanufacturing and Life Sciences Strategy through strategic investments to strengthen Canada's domestic biomanufacturing capacity
• Advance broadband delivery by connecting more households, including those in rural and remote regions across Canada, to achieve Canada's target of connecting 98% of Canadians to high-speed internet by 2026 and 100% of Canadians by 2030
• Help Canadians improve digital literacy skills, and support Canadian businesses in adopting digital technologies, to ensure all Canadians can thrive in the digital economy
• Advance recovery measures to support tourism businesses and help them position themselves for future growth
• Make Canada's entrepreneurial ecosystem more accessible by providing opportunities and support for individuals from under-represented groups to start, scale, grow, and maintain their businesses

Refocusing government spending

In Budget 2023, the government committed to reducing spending by $14.1 billion over the next five years, starting in 2023–24, and by $4.1 billion annually after that. As part of meeting this commitment, ISED is planning to contribute the following amounts:

• 2024-25: $141,182,000
• 2025-26: $158,071,000
• 2026-27 and after: $313,701,000

To achieve this objective, ISED will be implementing three savings initiatives:

1. Operating efficiency savings: The department aims to generate savings of $24.3M in 2024-25, ramping up to $38.8M ongoing by 2026-27 through a series of measures that will reorganize work to generate operational and administrative efficiencies and by not backfilling certain positions as they vacate through attrition. Implementation of these savings measures are not anticipated to impact the delivery of programs and services to Canadians
2. Temporary savings from transfer payment programs: The department will contribute an amount of $81.7M from two temporary transfer payment programs. First, the department will self-fund the 2024-25 CANARIE program estimated at $38M by leveraging available funding from the Digital Research Infrastructure Strategy envelope, rather than accessing new funding. In addition, the department will reduce the Canada Digital Adoption Program funding envelope by $43.7M in 2024-25
3. Permanent savings from transfer payment programs: Starting in 2025-26, ISED will return an amount of $11.4M per year from the Canada Foundation for Innovation program and will reduce the overall funding envelope for the Strategic Innovation Fund by $38.2M in 2025-26, ramping up to $141.4M in 2026-27 and subsequent years

In addition, the department is also committed to supporting government savings through the following efforts:

• Increase to revenue: The department aims to contribute an additional $7M in 2024-25 and 2025-26 and $52.1M ongoing starting in 2026-27 to the fiscal framework through new or increased user fees for services providing benefits to specific enterprises, organizations or individuals
• Rescaling of the Innovative Solutions Canada (ISC) program: The department supports a government decision to scale down spending on the ISC program by $28.2M in 2024-25 and $70M ongoing starting in 2025-26, with savings achieved through reduced contributions to the programs from participating departments across government. Allocation of the savings by department will be determined in spring 2024 and reflected through the government's supplementary estimates process

The figures in this departmental plan reflect these reductions.

Bill C-27: Digital Charter privacy reform

Key messages:

• Canadians want to take full advantage of the latest technologies knowing that their personal information is secure and their privacy is respected
• The Digital Charter Implementation Act (Bill C-27) was designed to uphold trust in the handling of personal information and the development and deployment of cutting-edge AI technologies, as well as meaningfully advance Canada's Digital Charter
• The Bill proposes to improve privacy protections for Canadians with special considerations for minors, encourage responsible innovation, and introduce a strong enforcement regime
• It also proposes to create a new risk-based framework for AI systems in Canada and a new regulator to enforce the Act

Supplementary messages:

• Actions proposed in Bill C-27 represent the most significant change to Canada's private sector privacy law in 20 years
• This Bill proposes important steps to ensure Canadians will be protected by a modern law that keeps pace with today's technologies and sets clear rules for businesses to guide them as technology continues to evolve
• The Consumer Privacy Protection Act and the Personal Information and Data Protection Tribunal Act, both of which are included in the Bil, will introduce significant new measures to better protect the privacy rights of Canadians, including special privacy protections for minors, heightened enforcement powers, and significant penalties for non-compliance, with funding in Budget 2023 for the Privacy Commissioner to implement this robust approach
• Bill C-27 also proposes an Artificial Intelligence and Data Act which will regulate high-impact artificial intelligence (AI) systems, such as those that determine access to employment and healthcare, as well as guardrails to address the potential risks from general-purpose systems. The Government will be able to update it regularly via regulation in order to align with international partners and keep pace with the rapid development of AI technologies

Background

In respect of privacy reform, Bill C-27 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 CPPA is rooted in three core pillars:

1. Enhancing individual control by supporting meaningful consent, the right to request deletion of personal information and data mobility frameworks
2. Supporting strong enforcement and oversight by expanding powers for the Privacy Commissioner including order-making powers and ability to recommend penalties. The Commissioner can recommend administrative monetary penalties (AMPs) up to 3% of an organization's global revenue – or $10 million – for each contravention of the Act.
3. Supporting innovation by providing exceptions to consent for collection and use of personal information necessary for business activities, internal research & development, clarifying rules for de-identified information and recognizing code of practices and certification programs to provide greater assistance and clarity for organizations to comply with the Act

Budget 2023 awarded $21 million over 5 years to the OPC to undertake more in-depth investigations of privacy breaches across public and private organizations, to improve response rates to privacy complaints from Canadians and operationalize new processes required to implement the Consumer Privacy Protection Act.

Bill C-27 also recognizes that the effectiveness of data protection is tied to the interoperability of Canada's privacy regime vis-à-vis domestic and international arrangements that support the transfer of data and knowledge. As such, it is drafted taking into consideration the interoperability of Canada's federal privacy regime with that of provinces such as Quebec's Law 25 and European Union's General Data Protection Regulation.

It also proposes the Artificial Intelligence and Data Act (AIDA), a new law that would make Canada a global leader in responsible artificial intelligence (AI) development and increase trust in the safety of AI systems used in Canada. Developers and deployers of high-impact or general-purpose AI systems would have to identify and mitigate risks of harm and biased output, and ensure appropriate testing and monitoring, among other requirements.

AIDA creates a new regulator, the Artificial Intelligence and Data Commissioner (AIDC) and sets out strong penalties and offences for noncompliance, including Administrative Monetary Penalties (AMPs). The Act is designed to be regularly updated via regulation, to keep up with the pace of technological development. Budget 2024 proposes $5.1 million in 2024-25 to stand-up the AI and Data Commissioner office.

AIDA is designed to be interoperable with international AI laws such as the EU's AIA, and is aligned with international principles and definitions, including those of the OECD.

The Bill was referred to INDU for study in April 2023 and the Committee commenced its study of the Bill in September 2023. Clause-by-clause study of the Bill started at INDU in April 2024.

Government of Canda decision to transition Sustainable Development Technology Canada (SDTC) programming to the National Research Council of Canada (NRC)

Key messages:

• Investing in the commercialization of world-class, homegrown clean technologies to support national climate targets is essential
• On June 4, 2024, the Government of Canada announced the transfer of Sustainable Development Technology Canada (SDTC) programming to the National Research Council of Canada (NRC) to enhance accountability, transparency and integrity, and restore public confidence in its clean technology offerings
• Canadians will continue to benefit from the economic and environmental objectives of SDTC's initiatives
• The government will continue to provide funding under the NRC 's strong governance and accountability framework and supported by staff with extensive industry and technical experience

Supplementary messages:

• The Government of Canada acted quickly and decisively in selecting the National Research Council of Canada (NRC) Industrial Research Assistance Program (NRC IRAP) to take on the existing programming of Sustainable Development Technology Canada (SDTC)
• With extensive experience in supporting tech-focused small and medium-sized enterprises, NRC IRAP's governance and due diligence processes will ensure that SDTC's economic and environmental goals are continuously met
• As a Government of Canada organization, the NRC is subject to strict oversight of its personnel and finances. This structure will help rebuild public trust while improving accountability, transparency and integrity
• As part of the NRC, SDTC investments will continue to advance the commercialization of homegrown clean technologies in support of Canada's climate priorities and to create high-skilled jobs across the country
• On February 15, 2023, the government released a blueprint outlining the Canada Innovation Corporation (CIC), which will help turn Canadian ideas and technologies into new products and services while maximizing business investment across Canada's economy
• Once the CIC is established by 2026-27, NRC IRAP and SDTC programming, and employees will join the corporation, creating a national platform to support business research and development, and innovation-driven growth

Background

Sustainable Development Technology Canada (SDTC):

Established in 2001, SDTC provides funding to support Canadian companies that develop, demonstrate, and commercialize new environmental technologies that address climate change, clean air, clean water and clean soil. SDTC is an arm's length foundation, with an independent b oard of d irectors responsible for overseeing its operations, including decisions on project funding. Since its inception, over $2.1 billion has been made available to SDTC for projects under the Sustainable Development Technology Fund.

Since 2016, Innovation, Science and Economic Development Canada (ISED) has managed SDTC's contribution agreement, which includes terms and conditions related to oversight, cash management (including delivery of payments), and SDTC's reporting obligations to the Minister of Innovation, Science and Industry.

SDTC transition to the National Research Council of Canada (NRC):

On June 4, 2024, it was announced that SDTC programming will transition to the National Research Council of Canada (NRC) as part of a new governance framework for clean tech funding. It is anticipated that the tasks required to transition employees and program from SDTC to the NRC and the launch of programming under NRC IRAP will be completed in the fourth quarter of the 2024-25 fiscal year. On September 3, 2024, the President of the NRC informed the House of Commons Public Accounts Committee (PACP) that the transition to the NRC would occur prior to April 1, 2025.

In the interim, as outlined in the news release announcing this transition, ISED will lead the phased wind down of SDTC as a separate corporation. As part of this transition, non-executive SDTC employees will be offered employment under NRC IRAP, given their experience supporting innovative, tech-focused SMEs. The decision allows the resumption of SDTC funding for eligible projects under an updated and strengthened NRC governance framework. SDTC programming as well as the NRC's IRAP will then come together under the previously announced CIC, which is to be established by the 2026-27 fiscal year.

Governance and a ccountability at the NRC:

NRC IRAP is governed by a senior leadership team composed of five regional and four central directors general, and a representative from human resources. Regular in-house financial audits of recipients are conducted to monitor program integrity. NRC IRAP also works with NRC Financial Monitoring to review, test, and validate business processes, assess risks and key controls, and provide senior management assurance on process effectiveness and efficiency.

All NRC employees must declare real, apparent or perceived conflicts of interest by submitting conflict of interest declarations, in accordance with the NRC conflict of interest policy. NRC IRAP employees are expected to submit new declarations on an annual basis at a minimum. All NRC employees can consult conflict of interest advisors year-round and submit new conflict of interest declarations in between due dates as new matters arise.

The NRC has multiple layers of safeguards to ensure proper stewardship of funding and is subject to most of Treasury Board's administrative and financial accountability regimes. As a separate agency under Schedule V of the Financial Administration Act (FAA), the NRC is its own employer. The NRC has an established values and ethics framework and supporting policies and procedures, including the NRC Code of Conduct, the Values and Ethics Code for the Public Sector, research ethics and integrity, conflict of interest, and harassment and violence prevention and resolution. NRC employees are also covered by the Public Servants Disclosure Protection Act and may make protected disclosures of wrongdoing to the NRC senior ethics officer or the Public Sector Integrity Commissioner.

All future (and current) NRC employees must comply with the NRC's established values and ethics framework and supporting policies and procedures as a condition of employment. To implement these policies and procedures the NRC employs a senior ethics officer and NRC Ombud. Employees are required to submit a completed NRC COI declaration form within 60 calendar days of their appointment if they have any outside employment, or if they have any outside activities or personal interests that could place them in a real, apparent, or potential conflict of interest situation.

The NRC has separate structures dealing with governance and oversight of project funding decisions, which differ from those at SDTC. The NRC's Council provides independent strategic advice to the NRC President and it reviews organizational performance. Meanwhile, NRC IRAP's Advisory Board members are appointed by the NRC IRAP vice president and they represent business and innovation stakeholders from across Canada. These governance structures are separate from funding decisions, which are safeguarded by NRC IRAP's due diligence processes to ensure proper stewardship of public funds and responsible investments in Canadian innovative SMEs.

Supporting Canada's automotive industry: Zero emission vehicles and electric vehicle battery investments

Key messages:

• The Government of Canada is committed to the automotive industry's transition to electrification, while creating and maintaining jobs, promoting economic growth and enabling a shift towards a net-zero economy
• Federal and provincial government collaboration with industry has attracted over $40 billion in announced investments since 2020 to transition to electric vehicle (EV) production and to establish a battery supply chain
• These investments are expected to generate thousands of jobs and long-term growth in the automotive industry
• Recognizing Canada's efforts to develop an end-to-end battery ecosystem, in 2024 Bloomberg NEF reported that Canada has the strongest EV battery supply chain potential in the world

Supplementary messages:

• Canada has everything it needs to lead in the global zero-emission vehicle ecosystem:
  • strength in automotive manufacturing
  • access to markets
  • talent
  • green energy
  • critical minerals
• The Government of Canada has attracted electric vehicle (EV) and battery manufacturing investments through a number of initiatives, including the Strategic Innovation Fund, Special Contribution Agreements tied to production, and the Clean Technology Manufacturing and EV Supply Chain investment tax credits (ITCs)
• Plans relating to announced projects may be subject to change, which could include production delays
• Responsible risk-taking is an inherent part of supporting innovation in a competitive global economy

Background

The Canadian automotive sector supports nearly 550,000 direct and indirect jobs, contributed $18 billion in 2023 to Canada's gross domestic product, and is one of the country's largest export industries. The sector is anchored by the presence of five automotive manufacturers:

1. Stellantis
2. Ford
3. GM
4. Toyota
5. Honda

The Government of Canada supports Canada's transition to electrified transportation. In 2022, Canada released its 2030 Emissions Reduction Plan, followed by Budgets 2022, 2023 and 2024, which proposed competitive measures to create jobs while fighting climate change.

Budget 2024 announced the Electric Vehicle (EV) Supply Chain investment tax credit (ITC) on the cost of buildings for businesses that invest in three supply chain segments:

1. EV assembly
2. battery production
3. cathode active material production

This complements the Clean Technology Manufacturing ITC, which covers 30 percent of costs in new machinery and equipment used to manufacture or process clean technologies and extract, process or recycle critical minerals.

In light of the global transition to zero-emission vehicles (ZEVs), Canada has stepped up to compete for key investments to produce EVs, as well as batteries and battery components. The government has recently attracted large anchor investments in ZEV manufacturing as well as battery material processing, all of which stand to increase the supply of ZEVs and further encourage the industry's transition. Some of these investments include:

• Honda: $15 billion to create Canada's first comprehensive electric vehicle supply chain in Ontario, including EV, battery, and battery material manufacturing
• NextStar Energy (Stellantis/LGES): $5 billion for an EV battery manufacturing plant in Windsor, Ontario
• PowerCo: $7 billion for a cell manufacturing plant in St. Thomas, Ontario
• Northvolt: $7 billion to establish a battery manufacturing facility in Saint-Basile-le-Grand and McMasterville, Quebec
• Stellantis: $3.6 billion for EV manufacturing at its Windsor and Brampton assembly plants
• General Motors (GM): $1 billion for production of Brightdrop EV600 and EV400, electric light commercial vehicles, in Ingersoll, Ontario
• GM/POSCO: $600 million to produce cathode active materials in Bécancour, Quebec

While these investments establish the foundation for long-term growth, the automotive industry is facing short-term challenges due to several factors including the significant cost and time needed to transition to EV production, compounded by a slowdown in the growth of EV demand, which has resulted in companies globally revisiting their investments in EV and battery production. Consequently, as it is the case in other jurisdictions, timelines and manufacturing plans for some of the announced investments in Canada may be adjusted to ensure assembly plants are prepared for long-term success.

In August 2024, the Government of Canada announced a series of measures to protect Canadian workers and key economic sectors from unfair Chinese trade practices.

In addition to supporting these initiatives, the government is investing in public charging infrastructure, supporting consumer purchases and encouraging manufacturers to adopt clean technologies.

Competition policy reform

Key messages:

• Encouraging more competition and offering options to settle disputes fairly in all markets will lead to more choices as well as better prices for Canadians
• That is why the Government of Canada has undertaken the most comprehensive modernization of the Competition Act in a generation
• Three phases of reform, through three separate Bills, have now been completed
• The government has also provided significant new resources to the Competition Bureau to better execute on its mandate

Supplementary messages:

On the three phases of reform:

1. The Competition Act was amended by the passage of Bill C-19 in June 2022 to fix certain loopholes in the law:
   • tackle business practices harmful to workers and consumers
   • increase penalties and access to justice
   • adapt the law to today's digital reality
2. The Act was further amended with Bill C-56 in December 2023 to better identify problems with how markets are structured :
   • to end anti-competitive mergers and collaborations that raise prices and limit choices for Canadian consumers
   • to simplify the legislation to prevent an abuse of dominance
   • to increase the maximum penalties possible
3. Bill C-59, the Fall Economic Statement Implementation Act, 2023, received Royal Assent on June 20, 2024:
   • t hese amendments from Bill C-59 further modernize merger reviews
   • they enhance protections for consumers, workers, and the environment
   • they empower the Commissioner of Competition to review and to remedy a wider selection of anti-competitive collaborations
   • they expand the reach of the law by enabling more private parties to bring cases before the Competition Tribunal and receive payment if their challenge are successful

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 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. Supply chain challenges and high levels of inflation have also led to acute concerns over corporate concentration and uneven market power.

On February 7, 2022, the Minister of Innovation, Science and Industry 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
• allowing private access to the Competition Tribunal for those impacted by abuse of dominance

The amendments also expanded the list of factors to be considered when assessing the competitive impact of a merger, competitor collaboration, or alleged abuse of dominance to better account for features of the digital economy such as network effects and non-price competition.

Alongside these changes, the government signalled that a broader review of the law was still to come, in accordance with the Minister's mandate letter and Budget 2022. On November 17, 2022, the government launched the review by seeking Canadians' views on a wide array of competition policy topics, including changes that would help the Competition Bureau better protect consumers and the integrity of the marketplace. Canadians were invited to make submissions online until March 31, 2023, and those submissions have since been published on the Innovation, Science and Economic Development (ISED) website.

A series of roundtables have also been held with a variety of stakeholders to ensure the government heard diverse views. The Consultation garnered significant interest, receiving over 130 submissions from identified stakeholders, as well as more than 400 responses from members of the general public. These submissions raised over 100 potential reform proposals.

In December 2023, the Parliament of Canada adopted a first set of legislative amendments to the Competition Act through Bill C-56, the Affordable Housing and Groceries Act. The amendments made a number of landmark changes, including:

1. a framework for the Competition Bureau to conduct market studies with the potential for compulsory information-gathering powers
2. expanding the scope of anti-competitive business collaborations to include those between businesses that are not competitors or potential competitors in certain circumstances
3. repealing the "efficiencies defence", which permitted otherwise anti-competitive mergers and collaborations to withstand challenge where they generated sufficient economic efficiencies to offset harm to competition
4. permitting remedial orders against abuses of dominance on the basis of anti-competitive intent or effects alone (instead of both), as well as raising maximum monetary penalties that may be in effect when both are proven

The government's most comprehensive response to the consultation, a set of further, wide-ranging amendments proposed to all areas of the Competition Act, received Royal Assent on June 20, 2024, via Bill C-59, the Fall Economic Statement Implementation Act, 2023. Broadly, these would modernize the merger notification and enforcement process, significantly increase the scope of review and consequences for anti-competitive collaborations, broaden and incentivize private enforcement, and address government priorities within the framework such as labour and the environment.

Food price stabilization

Key messages:

• All Canadians deserve to be able to afford to put food on their tables
• That is why the Government of Canada is taking concrete actions to promote the stabilization of grocery prices, including establishing the Grocery s ector code of conduct, amending the Competition Act, and investing in local food infrastructure
• The government has also called on companies throughout the food supply chain, both grocers and suppliers, to take meaningful actions to stabilize grocery prices
• Recent data has shown that food inflation has slowed, and the government will continue to take action to ensure Canadians are paying fair prices for groceries

Supplementary messages:

Grocery code of conduct:

• The Government of Canada, working in partnership with provinces and territories, recently announced the participation of all large grocery retailers in the Grocery s ector c ode of c onduct, a positive step towards uniting supply chain partners to collaborate to bring more fairness, transparency, and predictability to Canada's grocery supply chain and for consumers

Competition Act:

• The Government of Canada is prioritizing key amendments to the Competition Act to enhance competition and ensure the Competition Bureau has the tools and resources it needs to protect competition
• Three phases of reform have either been completed or are underway, in an effort to better align Canada's system with international best practices

Strengthening local food security:

• Local food programs enable communities to grow, process, store, and distribute food to those in need within the community, improving the availability of and access to nutritious, local food and reducing the need to shop at major grocery chains
• Budget 2024 proposed $62.9 million over three years to renew and expand the Local Food Infrastructure Fund to support community organizations across Canada to invest in local food infrastructure

Lower costs for farmers:

• When farmers have to purchase new, more expensive equipment to grow our food, it can drive up their costs, which get passed on to consumers at the checkout counter. Helping farmers keep costs low is a key component of ensuring the sustainability of our food supply chains. It also helps keep grocery prices in check
• Budget 2024 announced:
  • the launch of consultations in June 2024 on farming equipment interoperability
  • a call on provinces and territories to amend their contract laws to support interoperability
  • $64 million in 2024-25 to Agriculture and Agri-Food Canada to support a $250,000 interest-free limit on Advance Payments Program loans

Status of food inflation in Canada:

• Inflation for groceries has fallen from a peak of 11.4 per cent in January 2023 to 2.4 per cent in August 2024. The Government of Canada will not hesitate to take additional measures if required to ensure food price stability, and no options are off the table

Supporting consumers:

• In October 2023, the Government of Canada announced that it would be tripling its investment in the Contributions p rogram for Non-p rofit Consumer and Voluntary Organizations in support of efforts to examine and address factors affecting food affordability in Canada
• By providing further funding for consumer advocacy, the government is ensuring that consumer interest organizations are supported to meaningfully advocate for consumers
• On February 6, 2024, the government announced new funding for consumer advocacy:
  • The Public Interest Advocacy Centre will investigate food pricing policy and regulatory challenges
  • Union des consommateurs will bring together 100 experts to discuss solutions to the most pressing challenges Canadian consumers are facing
  • Food Secure Canada will investigate retail practices that negatively impact consumers, such as shrinkflation and skimpflation in the grocery sector
  • Option consommateurs will conduct research to help consumers identify and protect themselves from potentially unfavorable sales practices
  • Équiterre will highlight innovative solutions that provide consumers access to affordable, healthy, and sustainable food
  • The Consumers Council of Canada will conduct research on food fraud, per unit pricing, price scanner accuracy, and shrinkflation and skimpflation
• The government also launched an open call for proposals on February 27, 2024, to fund further consumer research and advocacy projects focused on affordability-related issues including in the grocery sector

Background

Competition Act:

The Government of Canada has enacted or proposed significant amendments to the Competition Act through Bill C-19, Bill C-56 and Bill C-59. These amendments seek to enhance competition to improve affordability and consumer choice across Canada by modernizing Canada's merger review process, revamping enforcement, addressing environmental and labour concerns, and ensuring that the Act is internally consistent and in line with Canada's legal framework as well as international best practice.

Grocery code of conduct:

The Grocery c ode of c onduct is an industry-led process that aims to bring transparency and certainty to commercial dealings across the agri-food value and supply chain by establishing a framework for dispute resolution and governance through the establishment of a Grocery c ode a djudicator's o ffice. A Grocery s ector c ode of c onduct (the Code) is viewed as an instrument to improve transparency, predictability and respect for the principle of fair dealing in supply chain relations.

ISED's Contributions program for Non-profit Consumer and Voluntary Organizations:

ISED's Contributions program for Non-profit Consumer and Voluntary Organizations is the only federal funding mechanism of its kind to support these organizations to conduct research and encourage financial self-sufficiency. The Contributions program for Non-profit Consumer and Voluntary Organizations is a grants and contribution program managed by the Office of Consumer Affairs and dedicated to supporting a broad range of consumer advocacy organizations.

Futurpreneur Canada evaluation

Key messages:

• Innovation, Science and Economic Development Canada's evaluation of Futurpreneur found that the program continues to provide effective support to young entrepreneurs, including those from equity-deserving groups
• The evaluation also found that Futurpreneur's tailored programming for Indigenous and Black youth, which is designed, led and administered by individuals from these communities, effectively supports young Black and Indigenous entrepreneurs
• Innovation, Science and Economic Development Canada will work with Futurpreneur to explore opportunities to improve support for young entrepreneurs, including improvements to the process of matching equity-deserving entrepreneurs with mentors from their communities to better reflect their lived experiences

Supplementary messages:

• Futurpreneur employs a non-traditional approach to credit approval which has enabled loans to remain in good standing and mitigate the traditional credit barriers faced by young entrepreneurs
• Young entrepreneurs supported by Futurpreneur have largely been able to maintain and grow their businesses to increase revenue, exports, and employment to the benefit of the Canadian economy
• Mentorship is a key component of Futurpreneur's non-financial support to entrepreneurs and the evaluation found that advice and support provided was useful, but also highlighted improvements that could be made to the mentor-mentee matching process, which ISED is working to implement in partnership with Futurpreneur
• Futurpreneur's evolution to the five-year funding cycle has allowed for organizational stability to meet the growing volume of applications, leverage partnerships, and scale the organization

Background

The Audit and Evaluation Branch (AEB) of Innovation, Science and Economic Development Canada (ISED) conducted an evaluation of Futurpreneur Canada for the five-year period 2018-2023. Formerly known as the Canadian Youth Business Foundation, Futurpreneur is a national not-for-profit organization that provides financing, mentorship and other programming to support entrepreneurs between the ages of 18 and 39. Futurpreneur also provides support to young entrepreneurs in equity-deserving groups through the Black Entrepreneur Startup Program and the Indigenous Entrepreneur Startup Program.

Strategic Innovation Fund

Key messages:

• Since 2017, the Strategic Innovation Fund has signed 129 contribution agreements valued at $9.5 billion resulting in $25.8 billion in research and development and other commitments to create and maintain over 125,000 jobs
• Budget 2023 built on the program's successes by providing an additional $500 million over ten years to support the development and application of clean technologies. A further $1.5 billion of SIF existing resources was directed towards clean technology, critical minerals, and industrial transformation
• Since the program's launch, the government has expanded and refined the ways in which it can support strategic projects in a range of industries, working alongside regional partners in order to build the enduring foundation for a growing, sustainable and innovation-based economy

Supplementary messages:

• In total, $9.5 billion in the Strategic Innovation Fund (SIF) investments have enabled the Government of Canada to leverage more than $78 billion in private investments since the Fund's inception
• Net Zero Accelerator (NZA) projects are achieving important outcomes such as:
  • Pivoting the steel sector towards next generation technologies, such as electric arc furnaces, and to make progress in hard-to-abate emissions
  • Laying the foundation for more efficient and electric aircraft
  • Making important investments in the Canadian battery supply chains
  • Positioning Canada in competitive clean technology markets such as emissions-free energy, hydrogen production, as well as carbon capture, utilization and storage
• SIF is working on a number of promising projects that would significantly reduce emissions at existing facilities and contribute to the decarbonization of high-emitting sectors, including electricity generation, hydrogen production and steel manufacturing

More recently, SIF has been leveraged as a vital tool to help advance the Canadian Critical Minerals Strategy through $1.5 billion in funding and directed it to prioritize the manufacturing, processing and recycling of critical minerals. Critical minerals carry immense strategic value for the Canadian economy, particularly in the transition toward clean technologies. They are an indispensable input into many modern technologies such as solar panels and EV batteries.

Background

• Strategic Innovation Fund (SIF) investments helped to secure over $25.8 billion in research and development (R&D) commitments, and to create over 35,000 co-op opportunities to develop Canada's next generation of innovators
• Budget 2021 provided $5 billion for SIF's NZA initiative, in addition to the $3 billion previously announced in Canada's Strengthened Climate Plan and funded through the 2020 Fall Economic Statement. This funding enables the government to provide up to $8 billion to secure good, well-paying jobs, and support projects with meaningful emission reductions that will give Canadian industries a competitive edge in a decarbonized global economy
• The Call for Action for High Emitting Sectors was launched in response to stakeholder consultations during the development of SIF's NZA initiative, which indicated that engagement of Canada's highest emitting GHG industries would be more successful through a strategic and structured call-out for proposals. In November 2022, the Government of Canada announced the short list of projects selected to move forward to the due diligence review process. The program is working with these promising early movers to significantly reduce emissions at existing facilities and contribute to the decarbonization of various heavy emitting sectors, including electricity generation, hydrogen production and steel manufacturing
• Budget 2023 provided $500 million to support the development and application of clean technologies in Canada. It also directed SIF to allocate up to $1.5 billion of its existing resources towards projects in sectors including clean technologies, critical minerals, and industrial transformation
• Budget 2022 announced up to $3.8 billion over eight years, starting in 2022-23, to implement Canada's first Critical Minerals Strategy. This includes $1.5 billion for SIF to expand Canada's manufacturing, mineral processing, and recycling capabilities across critical minerals supply chains. These are essential to the technologies needed to support Canada's transformation to a net-zero emissions global economy
• Budget 2022 announced $45 million to ISED to support semiconductor manufacturing through SIF to engage with stakeholders, conduct market analysis, and support projects that will strengthen Canada's semiconductor industry. This is in addition to the Semiconductor Challenge Callout, providing $150 million through SIF to seek out ambitious, large-scale ideas that address how Canada can build on existing R&D and manufacturing strength and contribute to a national network and supply chain. This funding positions Canada as a critical global supplier of specialized semiconductors which is necessary for Canada's economic and national security interests

Funding for Telesat

Key messages:

• The Government of Canada has committed to a repayable loan investment of $2.14 billion to support Telesat Lightspeed, Telesat's Low-Earth-Orbit satellite constellation
• Telesat Lightspeed will solidify Canada's position as a key global player in the highly competitive market for satellite communications services and the fast-growing new space economy
• Investing in Telesat's Lightspeed satellite constellation will create good-paying jobs and accelerate economic growth while improving high-speed Internet across Canada
• The investment will also help bring reliable high-speed Internet access to Canadians in the country's hardest-to-reach rural and remote communities

Supplementary messages:

• As part of this investment, the Government of Canada will receive interest on its loan and stock warrants so that Canadian taxpayers benefit from the financial success of Telesat's Lightspeed program
• The investment will also support the government's goal of connecting 100% of Canadians to high-speed Internet by 2030
• Telesat will need to meet certain closing conditions before the government provides any funds

Background

Low Earth Orbit (LEO) technology is the next generation of satellite communication. Featuring large constellations of small satellites that orbit closer to the surface than traditional satellites, LEO offers lower latency and higher bandwidth communications and will play an important role in connecting the hardest to reach homes in Canada, and in particular the far north. There are a number of proposed LEO constellations at various stages of development by companies around the world including Telesat, OneWeb, Kuiper (Amazon) and Starlink (SpaceX).

On September 13, 2024, Prime Minister Justin Trudeau announced an agreement with Telesat to complete and operate Lightspeed, one of the world's most innovative satellite networks. With a $2.14 billion loan from the Government of Canada, Telesat Lightspeed will be Canada's largest ever space program, supporting 2,000 jobs across the country through Telesat and its supply chain. This includes prime satellite contractor MDA Space, who develops and operates the iconic Canadarm technology.

Telesat Lightspeed will expand Internet and 5G networks in communities across Canada, with affordable, high-speed broadband connectivity. As a LEO satellite network, it will take less time to send and receive information, leading to better and faster Internet service, even in rural, remote, and Northern communities. The network will accelerate the government's work to connect all Canadians to high-speed Internet by 2030.

The term of the government's loan is 15 years and it will carry a floating interest rate of 4.75% above the Canadian Overnight Repo Rate Average (CORRA). Interest is payable in-kind during the Telesat Lightspeed construction period, followed by a 10-year sculpted amortization. The government will also receive 10% warrants in the project, which combined with loan interest will provide a positive rate of return to the government. Quebec is also providing $400 million to the project on terms similar to Canada's.

• As part of this loan, Telesat will also remain Canadian controlled and headquartered until at least 2039
• Spend at least $3.3 billion in domestic capital expenditure, and $1.15 billion in non-labour operating expenditure in Canada
• Directly create and maintain 700 high-paying jobs and support youth development through annual co-ops and scholarships in STEM
• Support government efforts to bolster resiliency of the telecom sector during emergencies by providing access to LEO services

Separate from the $2.14 billion loan agreement, the Government of Canada has also committed $600 million to secure satellite capacity for high-speed Internet over Canada on Telesat Lightspeed once it is operational. This capacity will be made available to Internet service providers at a reduced rate in order to support their efforts in bringing affordable, reliable high-speed Internet access to the most challenging-to-reach rural and remote communities in Canada, such as those in the Far North.

On July 24, 2019, the Government of Canada announced an $85 million investment in Telesat through the Strategic Innovation Fund (SIF) to build and test innovative technologies for its low Earth orbit (LEO) satellite constellation. The SIF funding is also separate from the $2.14 loan investment but will support the research and development of new technologies that will be used in the LEO satellite constellation.

Telecommunications: Reducing the cost of cellphone bills

Key messages:

• All Canadians should be able to access essential services at affordable prices, including high quality and affordable telecommunications services
• The Government of Canada has made significant progress to reduce the cost of internet, home phone, and cell phone plans, and to increase access to these services
• Budget 2024 proposes amending the Telecommunications Act to better allow Canadians to renew or switch between home internet, home phone, and cell phone plans so that Canadians can find better deals
• The government will continue to insist on improved competition and better prices for consumers

Supplementary messages:

Budget 2024 Proposed Amendments to the Telecommunications Act:

• Proposed amendments to the Telecommunications Act announced in 2024 would:
• Prohibit carriers from charging consumers extra fees to switch carriers
• Require carriers to help consumers identify plans, which may include lower-cost plans, in advance of the end of a contract
• Require carriers to provide a self-service option, such as an online portal, for customers to easily switch between or end plans with a provider
• The Canadian Radio-television and Telecommunications Commission will be responsible for implementing these measures and will consult on specific requirements

Progress on pricing:

• Data from Statistics Canada shows that with increased competition in the market since the Rogers-Shaw and Quebecor-Freedom transactions were approved, wireless prices have declined across the board by 25% (between March 2023 and February 2024)
• Some declines have been more dramatic. For example, in 2022, 20 gigabyte plans were being sold for an average of $73. In December 2023, these plans were widely available for prices in the range of $30 to $40. Other improvements, like much more attractive international roaming options, have been made as well
• Customers out of contract and dissatisfied with their current providers should consider switching to take advantage of the improved competition

State of competition:

• The Government of Canada has introduced measures in support to spectrum policies that promote competition and a new policy direction to the Canadian Radio-television and Telecommunications Commission
• The addition of a new fourth player, following Quebecor's acquisition of Freedom Wireless, and its additional spectrum and network access provides better competition against the national carriers
• These measures have resulted in lower prices, expansion of 5G service, and new unlimited roaming options
• Recent measures to improve competition, such as the Canadian Radio-television and Telecommunications Commission's (CRTC) Mobile Virtual Network Operator rules, continue to be implemented, and recently allocated spectrum will be put to use. The CRTC is also reviewing its rules for Internet competition and implementing the government's policy direction

Background

Wireless pricing:

• The government's 25% over two years price reduction benchmark was announced in March 2020 and successfully achieved ahead of schedule
• Studies commissioned by Innovation, Science and Economic Development Canada (ISED) and the Competition Bureau highlight the positive impact smaller carriers have in lowering prices

Rogers/Bell price increases:

• Rogers announced wireless customers out of contract would see price increases after January 17, 2024. Bell also increased prices for out of contract wireless customers beginning in February
• As part of legally binding undertakings in acquiring Shaw, Rogers agreed to maintain prices for Shaw Mobile customers for five years, who were not included in the announced price increases

Spectrum matters:

• Innovation, Science and Economic Development Canada (ISED) has taken successive actions through spectrum licensing to encourage competition. Most recently, in November 2023, the 3800-Megahertz (MHz) auction implemented a cross-band cap ensuring access to spectrum for smaller carriers. Since 2022, these measures have more than doubled their spectrum holdings, further strengthening their ability to offer competitive services

Canadian Radio‑television and Telecommunications Commission (CRTC):

• As of February 10, 2023, the government implemented a new policy direction to the CRTC on a renewed approach to telecommunications policy. The policy direction provides specific instructions to the CRTC to enhance and improve Internet and wireless competition. In March 2023, the CRTC launched a review of Internet competition rules. The CRTC also continues to implement its mobile competition rules regarding Mobile Virtual Network Operator (MVNO) access. MVNO rules enable smaller providers to get access to the mobile networks of Bell, TELUS, and Rogers to better compete

Rural and remote broadband connectivity

Key messages:

• Connectivity is essential for rural and remote communities, enabling access to the digital economy, essential services, educational opportunities, and remote work
• The Government of Canada is working hard to help ensure all Canadians have access to fast, reliable, and affordable i nternet
• With $3.2 billion dedicated to the Universal Broadband Fund, the government is making significant progress towards its connectivity targets
• The government continues to invest in rural, remote, and Indigenous communities to reach its goal of connecting 98% of Canadians to high-speed Internet by 2026, and all Canadians by 2030

Supplementary messages:

• To date, nearly 95% of Canadian homes have access to high-speed i nternet or are targeted to receive access through existing program commitments. This represents an improvement since 2017 when less than 85% of Canadians had access to high-speed Internet
• Under the Universal Broadband Fund, applicants that offer lower retail pricing are assessed more favourably and their proposed retail plans must remain in place for five years
• The Government of Canada has also announced significant agreements with Quebec, Ontario, Alberta, British Columbia, Newfoundland and Labrador, and Prince Edward Island to help provide high-speed Internet access to all Canadians by 2030
• The Universal Broadband Fund also includes $50 million to improve mobile services in areas benefitting Indigenous peoples. Under this stream, the fund improving cell coverage along British Columbia's Highway of Tears

Background

Whole of government status: Since 2015, the Government of Canada has made more than $7.6 billion available for Internet connectivity and is on track to meet its connectivity targets. By 2026, over 98% of households are projected to have access to speeds of 50/10 megabits per second (Mbps). To date, 94.8% of Canadian homes have access to high-speed i nternet or are targeted to receive access through existing program commitments.

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 $3.2 billion, up from the original $1 billion, towards connecting Canadians living in rural and remote areas to high-speed Internet, and improving mobile connectivity for Indigenous peoples. There are federal-provincial co-funding agreements with Quebec ($934 million), Ontario ($1.3 billion), Newfoundland and Labrador ($136 million), Alberta ($780 million), British Columbia ($830 million), and Prince Edward Island ($20 million) to connect 823,000 households.

Low Earth Orbit (LEO) satellite developments: The government is supporting Telesat's low Earth orbit satellite project (Telesat Lightspeed) via a loan investment of $2.14 billion. Support for this project will bolster Canada's leadership in the new space economy, create jobs and support connecting all Canadians to affordable high-speed Internet.

The government has invested up to $600 million to secure low Earth orbit satellite capacity over Canada via Telesat Lightspeed. These satellites will provide Internet 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, the 2023 3800 MHz auction, and the upcoming millimeter wave spectrum auction. To help 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.

Satellite-to-cellular technology: The Government is leveraging new technologies to help improve mobile connectivity in underserved areas. On June 17, 2024, ISED launched a consultation on a new framework to enable service providers to expand wireless service via satellites. This will allow mainstream consumer devices (e.g. existing cell phones) to stay connected even when outside the range of terrestrial networks by communicating directly with satellites.

CRTC Broadband Fund: In 2016, the CRTC established a fund of up to $675 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 has announced selected projects under their first, second and third calls for applications, and further project announcements are ongoing.

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.

Spectrum costs

Key messages:

• Spectrum is a valuable public resource that the Government of Canada manages to maximize its economic and social benefits for Canadians
• The goal of the spectrum auctions is to get spectrum into the hands of companies with the incentive to deploy quickly to provide telecom services
• The cost of spectrum does not determine the price of mobile services – competition does
• That is why spectrum auctions are designed to support competition and result in greater choice, lower prices, and better wireless services for Canadians

Supplementary messages:

• Revenues from spectrum auctions are remitted to the Consolidated Revenue Fund and used to support a variety of Government of Canada priorities and initiatives

Background

Spectrum auctions are conducted in Canada when the demand for a particular spectrum band is expected to exceed the supply of available licences. The government does not set spectrum prices, which are the result of competitive bidding.

The 3500 MHz auction, held in 2021, raised $8.9 billion for the Government of Canada and has prompted mobile operators to argue that Canadian spectrum prices are too high and are passed on to consumers in the form of higher wireless prices. In reality, bidding in the auction resulted in prices that were 15 times the opening bid prices set by ISED. In comparison, prices in the 2023 auction for 3800 MHz spectrum, which raised $2.2B for a larger quantity of similar spectrum, were significantly lower, even lower than equivalent spectrum in the United States.

Spectrum prices are driven by the expected return on investment for the licences being auctioned, depending on the use case of the spectrum and the retail prices providers expect to be able to charge. In other words, expected retail prices drive spectrum prices, not the other way around. Costs for spectrum have varied significantly among national operators, but these differences are not similarly reflected in significantly different retail prices, and average spectrum costs are typically only 3-5% as a percentage of average revenue per user (ARPU).

The degree of competition between service providers plays an important role in retail pricing. ISED continues to design auctions with pro-competitive measures, such as set-asides or spectrum caps, to make spectrum available for small and regional wireless carriers, which have been proven to lower prices and offer consumers more choice, by ensuring these carriers can access spectrum to build robust, competitive networks.

Bill C-26: Cybersecurity

Key messages:

• Cyber threats are evolving rapidly and Canada must be better prepared to deal with these threats to our safety
• Through Bill C-26, the Government of Canada is proposing to strengthen Canada's telecommunications framework to keep pace with evolving threats
• Amending the Telecommunications Act as intended would provide the government with an explicit legislative authority to promote the security of Canada's telecommunications system
• For example, the legislation would enable the government to prohibit the use of products and services from specific suppliers by services providers, if those suppliers pose a risk to the security and reliability of Canadian networks

Supplementary messages:

On the status of the Bill C-26:

• Committee study in the House of Commons has been completed and the efforts of members from all parties is appreciated to successfully study the bill and further strengthen it
• The government looks forward to the passing of this important bill for protecting Canada's telecommunications system

On global actions:

• Canada's critical infrastructure is becoming increasingly interconnected, interdependent, and integrated with cyber systems, particularly with the emergence of new technologies such as 5G
• The proposed legislative amendments align with actions taken by Canada's Five Eyes partners and will allow Canada to take strong action against threats to the security of our telecommunications sector

Background

• On June 14, 2022, the Government of Canada tabled Bill C-26, an Act respecting cyber security, amending the Telecommunications Act, and making consequential amendments to other Acts
• The Bill passed through clause-by-clause examination at the Public Safety and National Security (SECU) standing committee on April 8, 2024. It was reported to the House of Commons on April 19

Bill C-26 is comprised of two main elements:

1. Part 1 of Bill C-26 proposes amendments to the Telecommunications Act (TA) that would establish new authorities that enable the government to take action to promote the security of the Canadian telecommunications system, which could include taking measures with respect to high-risk suppliers, as well as information sharing and enforcement powers:
   • A new policy objective would be added to promote the security of the Canadian telecommunications system, enabling the Minister of Industry and the Canadian Radio-television and Telecommunications Commission (CRTC) to consider this objective when exercising their respective powers under the TA. It would allow for the same thing under the Radiocommunication Act which incorporates the TA objectives by reference
   • The legislation would enable the Governor in Council to impose prohibitions on the use of products and services from specific suppliers by Canada's telecommunication services providers (TSPs), should those products be deemed to pose a risk to the security and reliability of the Canadian telecommunications system
   • Additional authorities to promote the general security of the Canadian telecommunications system would rest with the Minister of Industry. The Minister would also be provided with information-sharing powers and enforcement authorities
2. Part 2 of Bill C-26 would enact the Critical Cyber Systems Protection Act, which would establish a regulatory framework to strengthen baseline cyber security for services and systems that are vital to national security and public safety, and give the Government a new tool to respond to emerging cyber threats. It would also introduce a regulatory regime requiring designated operators in the finance, telecommunications, energy and transportation sectors to protect their critical cyber systems. The legislation addresses longstanding gaps in the Government's ability to protect the vital services and systems Canadians depend on by enabling it to:
   • designate services and systems that are vital to national security or public safety in Canada as well as the operators or classes of operators responsible for their protection
   • ensure that designated operators are protecting the cyber systems that underpin Canada's critical infrastructure
   • ensure that cyber incidents that meet or exceed a specific threshold are reported
   • compel action by organizations in response to an identified cyber security threat or vulnerability
   • ensure a consistent cross-sectoral approach to cyber security in response to the growing interdependency of cyber systems

Canadian critical minerals development

Key messages:

• With the Canadian Critical Minerals Strategy as its guide, the Government of Canada has been investing to develop entire critical minerals value chains by expanding manufacturing, processing and recycling capacities
• Budget 2022 included $1.5 billion through the Strategic Innovation Fund (SIF) aimed at accelerating investments in critical minerals projects
• These investments will help build resiliency along critical mineral supply chains, bolster Canada's global economic competitiveness, and secure Canada's position as a global leader in responsibly sourced mineral products
• Budget 2024 proposed several new measures in support of Canada's critical minerals sector by expanding and clarifying the scope of activities eligible under the Clean Technology Manufacturing Investment Tax Credit, complementing investments made through SIF

Supplementary messages:

• Critical minerals are needed to power clean technologies such as solar panels, wind turbines, semiconductors and electric vehicles
• Canada is uniquely positioned to play an important role in the global energy transition, having an abundance of critical mineral resources, a skilled workforce, and high environmental, social and governance standards
• Globally, Canada is regarded as a strategic partner and a provider of reliably sourced high-quality critical mineral inputs that will contribute to the net-zero economy
• Government of Canada funding is stimulating industrial growth, attracting investments and furthering Canada's economic prominence in global markets
• The government is committed to working together with the provinces, territories and industry partners to ensure Canada's success

Background

The quantity and quality of critical minerals needed to support the world's ambitious low-carbon transition continues to bring to light bottlenecks in critical minerals supply chains. Non-market economies, especially China, currently dominate the production and processing of critical minerals like graphite and rare earth element, important inputs into the EV value chain. In response, governments are diversifying their supply chains to decrease dependence on non-market entities, while securing their value chains. Canada is achieving this by investing to support and secure the development of our domestic critical minerals value chains and those of our allies.

In Budget 2022, the Government committed up to $3.8 billion over eight years to support work announced in the Canadian Critical Minerals Strategy, which is being co-led by the Departments of Innovation, Science and Economic Development and Natural Resources Canada.

This funding is being used to drive industrial capabilities, contribute to the economic development of rural, remote and Indigenous communities, and help build a sustainable economy.

Through the Strategic Innovation Fund, $286 million has been allocated to date to support three major projects:

• E3 Lithium received $27 million to demonstrate the viability of the extraction of lithium from brines in Alberta. This facility will be the first step toward a full-scale lithium production plant that will produce up to 20,000 tonnes of battery-grade lithium
• Rio Tinto Fer et Titane received $222 million for a critical minerals project in Sorel-Tracy, Quebec to produce several critical minerals
• Vale in Becancour, Quebec, received $37 million towards a battery grade nickel sulfate plant to process nickel pellets and rounds

Budget 2023 introduced a number of new investment tax credits (ITCs) to provide an enhanced level of support for project proponents, and encourage investment in sectors such as clean technologies, energy, clean technology manufacturing, as well as carbon capture, utilization and storage. Draft legislative proposals to implement the Clean Technology Manufacturing ITC, which includes certain mineral extraction and processing activities, were released in December 2023. This incentive would provide a 30 percent tax credit on the cost of eligible activities related to producing all or substantially all of the six target minerals outlined in the Critical Minerals Strategy, i.e., copper, nickel, cobalt, lithium, graphite, and rare earth elements. Budget 2024 built on this by:

• providing support and clarity to businesses with projects covering multiple metals
• providing further clarification on using the value of the qualifying materials as the output metric to assess property usage
• modifying eligible investments to include eligible property used in qualifying minerals activities

Canada's abundance of the necessary resources for battery manufacturing, coupled with its strong automotive sector, gives it a competitive advantage over many countries. To leverage this advantage, Canada is working towards developing a world-class, domestic battery ecosystem, while maintaining its leadership in sustainability. In support of this work, Budget 2024 provided further funding to drive investment opportunities in the clean economy through the previously announced ITCs, along with a newly announced Electric Vehicle (EV) Supply Chains ITC. This EV Supply Chain ITC would provide a 10 percent tax credit on building costs for businesses investing in Canada across the following supply chain segments:

• Electric vehicle assembly
• Electric vehicle battery production
• Cathode active material production

Globally, Canada is regarded as a strategic partner and a provider of reliably sourced high-quality critical mineral inputs that will contribute to the net-zero economy. As Canada assumes presidency for the G7 group in 2025, it will seize this opportunity to further Canada's goals by reinforcing supply chain security, sustainability and responsible critical minerals sourcing.

Modernization of the research support system

Key messages:

• Canada's world-class scientists and researchers are solving the most pressing challenges of today, and making groundbreaking discoveries in areas such as climate change and health
• To provide better coordination across the federally funded research ecosystem and maximize the impact of government support, Budget 2024 announced the creation of a new research funding organization
• The new organization and structure will strengthen and modernize Canada's federal support for research
• It will help to advance internationally collaborative, multi-disciplinary and mission-driven research

Supplementary messages:

• The improvements the government is making follow extensive consultations, including with the a dvisory p anel on the Federal Research Support System
• Canada's federal granting agencies already do excellent work in their areas of expertise, but more needs to be done to maximize their effect
• The granting councils will continue to exist within this new organization, and continue supporting excellence in investigator-driven research, including linkages with the Health portfolio

Background

The structure of Canada's federal research support system has served Canada well, but needs to evolve to address changing realities by better supporting breakthrough research, responding to urgent challenges and opportunities, and capturing the benefits of new knowledge and discoveries.

The government created the a dvisory p anel on the Federal Research Support System to provide independent advice to ensure that federal support for research is coordinated and cohesive, responsive to modern research approaches, and agile to address emerging challenges.

The p anel's report, published in March 2023, concluded that Canada has been successful at generating research excellence across many disciplines and that the granting councils (the Natural Sciences and Engineering Research Council, the Canadian Institutes of Health Research, and the Social Sciences and Humanities Research Council) have excelled at creating knowledge and developing talent in their respective disciplinary areas. However, the system is fragmented, which is detrimental to collaborative, international and cross-disciplinary research and strategic vision and coordination. The p anel made 21 recommendations to address challenges in the system.

Guided by the advice of the p anel, the government announced actions in Budget 2024 to modernize the federal research support system. Central to this plan is a new research funding organization that will be established to drive coordination and enhance support for research. The granting councils will continue to exist within the new organization, focusing on supporting excellence in investigator-driven research while actively contributing to the collective and strategic direction of the new organization.

The government will also enhance strategic direction and coordination more broadly by establishing a Council on Science and Innovation to provide independent science and innovation policy advice, as well as developing a national science and innovation strategy that will provide clarity and certainty for researchers with respect to the government's science and innovation priorities. In addition, the government is investing in scholarships and fellowships, core research grant funding, and an improved and harmonized grant management system.

Federal government support for science and research

Key messages:

• Canada's science and research sector is solving some of the world's greatest challenges, while driving innovation, growth, and productivity
• Since 2016, the Government of Canada has invested over $22 billion in science and research initiatives, including fundamental research, emerging talent, and research infrastructure
• Budget 2024 provided $1.8 billion to the federal granting councils to increase core research grant funding and support Canadian researchers, as well as $2.4 billion to secure Canada's Artificial Intelligence (AI) Advantage
• By investing in research and supporting the recruitment and development of talent in Canada, the government is ensuring that Canada remains a world leader for future generations

Supplementary messages:

• Canadian researchers, entrepreneurs, and companies are the driving force of progress, from scientific discovery to bringing new solutions to market
• Budget 2024 also included $825 million to invest in talent, increasing the value and number of research scholarships and fellowships to support master's, doctoral and post-doctoral students

Background

The Government of Canada is supporting scientific discovery, developing Canadian research talent, and attracting top researchers from around the world to make Canada a global research and innovation leader with more than $22 billion committed since 2016. These commitments include nearly $4 billion in Budget 2018 for investments in Canada's research system; more than $500 million in Budget 2019 for support to third-party research and science organizations and the creation of the Strategic Science Fund (SSF). Later, Budget 2021 announced four national strategies:

1. Phase 2 of the Pan-Canadian Artificial Intelligence (AI) Strategy ($443.8 million)
2. Canada's Biomanufacturing and Life Sciences Strategy ($887 million to strengthen research systems and the talent pipeline)
3. the development of a Pan-Canadian Genomics Strategy ($400 million)
4. National Quantum Strategy ($360 million)

More recently, Budget 2024 provided:

• $2.4 billion to secure Canada's artificial intelligence (AI) advantage. This includes $2 billion over five years, starting in 2024-25, to launch a new AI Compute Access Fund and Canadian AI Sovereign Compute Strategy
• $3.5 billion in federal research support and strategic research infrastructure. This includes:
  • Federal research support:
    • $1.8 billion over five years, with $748.3 million per year ongoing to SSHRC, NSERC, and CIHR to increase core research grant funding and support Canadian researchers
    • $825 million over five years, starting in 2024-25, with $199.8 million per year ongoing, to increase the annual value of master's and doctoral student scholarships to $27,000 and $40,000, respectively, and post-doctoral fellowships to $70,000. This will also increase the number of research scholarships and fellowships provided, building to approximately 1,720 more graduate students or fellows benefiting each year
    • $30 million over three years, starting in 2024-25, to support Indigenous participation in research, with $10 million each for First Nation, Métis, and Inuit partners
    • $26.9 million over five years to the granting councils to establish an improved and harmonized grant management system
  • Strategic research infrastructure:
    • $399.8 million over five years, to support TRIUMF, Canada's sub-atomic physics research laboratory to upgrade infrastructure at the facility in order to keep Canada at the forefront of physics research, and enable new medical breakthroughs and treatments, from drug development to cancer therapy
    • $176 million over five years, to CANARIE, a national not-for-profit organization that manages Canada's ultra high-speed network to connect researchers, educators, and innovators, including through eduroam.
    • $83.5 million over three years, to extend support to Canadian Light Source. This specialized infrastructure contributes to breakthroughs in areas ranging from climate-resistant crop development to green mining processes
    • $80 million over 4 years to the Brain Canada Foundation
    • $45.5 million over five years, to support the Arthur B. McDonald Canadian Astroparticle Physics Research Institute. This is a network of universities and institutes that coordinate astroparticle physics expertise This supports innovation in areas like clean technology and medical imaging, and educates and inspires the next wave of Canadian talent.
    • $30 million over three years, to support the completion of the University of Saskatchewan's Centre for Pandemic Research at the Vaccine and Infectious Disease Organization in Saskatoon, advancing the study of high-risk pathogens to support vaccine and therapeutic development

Intellectual property strategy

Key messages:

• Canadians are smart, creative and innovative, but they need the know-how and tools to protect and leverage their ideas for commercial success
• The Government of Canada's National Intellectual Property (IP) Strategy ensures that Canadian businesses, creators, entrepreneurs and innovators have access to the best possible IP resources through IP awareness, education and advice, strategic IP tools for growth, and IP legislation
• Continuing the work of the IP Strategy, Budget 2024 provides $14.5 million for the patent collective, to ensure that small- and medium-sized clean tech businesses continue to benefit from IP support to grow their businesses and leverage IP

Supplementary messages:

On high profile patent sales or transfers:

• Strategic use of IP can take different forms, including commercialization, licensing, and selling at a profit. Canada's IP Strategy focuses on ensuring that companies make informed decisions
• 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
• Through the IP Strategy, the government aims to foster a stronger IP culture in Canada across all parts of the innovation ecosystem
• The leadership of public corporations is ultimately accountable to their shareholders for the decisions taken in advancing IP strategies

Background

Launched in 2018, the National IP Strategy aims to make sure that Canadian businesses, creators, entrepreneurs and innovators have access to the best possible IP resources through IP awareness, education and advice, strategic IP tools for growth, and IP legislation.

IP awareness, education and advice initiatives under the strategy include:

• 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
• an IP awareness and use survey to help understand how Canadians are using IP
• the creation of an IP Centre of Expertise to provide IP advice to federal government program officers working with businesses, creators, and officials and boost IP engagement
• support to establish an IP Clinics Program in universities

Strategic IP tools for growth include:

• accelerated dispute resolution at the federal court on IP issues and expedited tariff setting by the Copyright Board
• an IP marketplace (ExploreIP) to provide one-stop web-based access to IP owned by Canadian governments and universities that can be bought or licensed; and a patent collective pilot program to enable firms to share IP expertise
• Innovation Asset Collective (IAC), a not-for-profit organization, was selected to administer the patent collective with the purpose of assisting Canadian small- and medium-sized entreprises (SMEs) in the data-driven clean tech sector with their IP needs. IAC officially launched in 2020

Legislative initiatives following the launch of the IP Strategy include:

• the Budget Implementation Act, 2018, No. 2 (Bill C-86), which 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
• amendments to the Copyright Act to comply with a commitments made under the Canada-United States-Mexico Agreement (CUSMA), namely, to extend the term of copyright protection to the lifetime of the author, plus 70 years (up from 50 years)
• Bill C-47 amended the Patent Act to enable Canada to comply with a commitment made under CUSMA to provide patent term adjustments as compensation to patent applicants who experience unreasonable delays in the issuance of their patents. The government remains committed to ensuring patents are issued in a timely manner and will continue to support a robust and efficient patent system

In Budget 2021, the Government of Canada announced a Strategic Intellectual Property Program Review. The review, which is nearing completion, is intended as a broad assessment of IP provisions in Canada's innovation and science programming, from basic research to near-commercial projects. This work helps ensure Canada and Canadians benefit from innovations and IP. The Government also announced the creation of Elevate IP ($90M over two years) and IP Assist ($75M over three years) to help Canadian innovators, start-ups and technology-intensive firms access expert IP services. To build on these investments, Budget 2022 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
• $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, 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 IP Legal Clinics Program, which will make it easier to access basic intellectual property services

Budget 2022 also announced the establishment of the Canadian Innovation and Investment Agency (now known as the Canada Innovation Corporation (CIC)) as a new, operationally independent organization to maximize business research and development (R&D) expenditures across all sectors to boost exports, improve productivity, and support the transition to a net-zero economy. The CIC will also support business investment in, and protection of, IP rights to help grow Canadian businesses in global markets. The Government released a statement on December 19, 2023, indicating that the full implementation of the Canada Innovation Corporation (CIC) would be undertaken no later than 2026-2027.

Budget 2024 proposes to provide $14.5 million over two years, starting in 2024-25, to Innovation, Science and Economic Development Canada for the Innovation Asset Collective. This initiative will continue to ensure that small- and medium-sized clean tech businesses benefit from specialized intellectual property support to grow their businesses and leverage intellectual property.

Securing Canada's global AI advantage

Key messages:

• Artificial intelligence is one of the greatest technological transformations of our age and its Canadian ecosystem is among the best in the world
• Budget 2024 proposes $2.4 billion to help secure Canada's AI advantage by investing in compute capacity and infrastructure, accelerating responsible and safe AI adoption and deployment and supporting workers through skills training
• This budget will help spur innovation and drive economic growth
• It will help businesses and researchers have the tools they need to harness the power of AI, while ensuring the technology is safe and benefits Canadians

Supplementary messages:

Budget 2024 outlined a series of measures to secure Canada's global AI advantage. These measures include:

• investing $2 billion to build and provide access to computing capabilities and technological infrastructure for Canada's world-leading AI researchers, start-ups, and scale-ups through a new AI Compute Access Fund and a Canadian AI Sovereign Compute Strategy
• boosting AI start-ups through $200 million in support from Canada's Regional Development Agencies
• investing $100 million in the National Research Council (NRC) AI Assist Program to help small and medium-sized businesses scale up and increase productivity by building and deploying new AI solutions
• supporting workers who may be impacted by AI, such as creative industries, with $50 million over four years for a Sectoral Workforce Solutions Program
• creating a new Canadian AI Safety Institute, with a $50 million investment, to further the safe development and deployment of AI
• $3.5 million over two years to advance Canada's leadership role with the Global Partnership on Artificial Intelligence (GPAI)

Background

The government has been making targeted, strategic investments for many years to ensure Canada can capitalize on the potential benefits of this technology.

With combined government investments of nearly $570 million, the Pan-Canadian Artificial Intelligence Strategy (PCAIS) made Canada the first country to launch a national AI strategy.

Canada has also held a leadership role internationally on AI, including through work with France to launch the Global Partnership on Artificial Intelligence (GPAI) in June 2020. Canada has continued to engage actively, and even take on leadership roles, in forums related to AI governance, including the G7 Hiroshima AI Process, the G20, the OECD (including its Working Party on AI Governance), the Council of Europe's Committee on AI, UNESCO, and the Freedom Online Coalition.

Canada's Artificial Intelligence and Data Act (AIDA), proposed as part of Bill C-27, the Digital Charter Implementation Act, 2022, is among the first proposed legislative frameworks in the world to regulate AI.

Canada's Voluntary Code of Conduct for the Responsible Development and Management of Advanced Generative AI Systems will enable Canadian companies to demonstrate that they are developing and using generative AI systems responsibly and strengthen Canadians' confidence in the technology.

Canada also recently consulted Canadians on the impacts of recent developments in AI on the creative industries, in order to consider whether any changes are required to appropriately balance copyright and technological development for an evolving Canadian economy.

The Government of Canada has published a guide to help federal public servants assess the risks associated with generative AI and use it responsibly during their day-to-day activities.

Canada is also at the forefront of global efforts to spur innovation and raise living standards in low- and middle-income countries using the power of AI through initiatives like the Artificial Intelligence for Development in Africa (AI4D).