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The federal government is set to start handing out the $950-million earmarked for its so-called “superclusters” initiative after reaching funding agreements with five non-profit groups charged with administering its flagship innovation-underwriting initiative.

Innovation, Science and Economic Development Minister Navdeep Bains this week will announce funding amounts for three of the five groups, each comprised of dozens of companies, research institutions and business associations. All five have reached agreements-in-principle with Ottawa and final deals will be inked starting this week.

“We’re really kick-starting five major engines of growth,” Mr. Bains said in an interview. “Now this becomes more real. It’s literally a matter of weeks when the money will start to flow.”

Ottawa is giving $230-million to an Ontario initiative aiming to bring cutting-edge technology from the Toronto-Waterloo corridor to Ontario’s manufacturing stalwarts. The consortium, backed by auto parts maker Linamar Corp. and foreign-owned companies such as ArcelorMittal Dofasco and Siemens AG has pledged $800-million in cash and in-kind contributions.

The government is also giving $153-million to an initiative to develop new markets for the Prairies’ plant protein producers, and an equal amount to an Atlantic Canada group looking to bring together players in traditional ocean industries such as fishing and oil drilling to co-develop commercial ideas.

Sharing the remaining $414-million are a Quebec-based initiative to use technologies such as artificial intelligence to improve supply chains, and a B.C.-based “digital technology” supercluster. The exact amounts will be announced in the next month.

The government named the winners in February and has promised its funding, which will be more than matched by supercluster group members, will help create 50,000 jobs and $50-billion-plus in economic activity over the coming decade.

The money will be used by each group to fund collaborative commercial projects proposed by groupings of its members. “This is really about a group of individuals, sometimes who compete against one another … coming together to talk about common interests and common goals,” Mr. Bains said.

Under their deals with government, each agency must publish a five-year strategy in the next year, based on specific commitments about how they will develop skills, support research and development, employ a diverse work force and other criteria. The agencies must publicly report financial statements, industry matching amounts committed and detail funded projects and outcomes annually.

Jayson Myers, chief executive of the Ontario group, said his agency is set to green light eight initial projects that will use at least $30-million of its government capital. “Our objective is to accelerate the adoption of technology in manufacturing and accelerate the scale-up of new technologies in manufacturing,” he said.

Each supercluster brings together an eclectic mix of players with promises of combining efforts to bring innovative thinking and technology to Canada’s traditional industries. For example, the B.C. group, whose 200 members include forestry giants, video game developers, telecommunications carrier Telus Corp. and medical equipment supplier Stemcell Technologies Inc., has said it will pursue such efforts as developing personalized gene-based cancer remedies and creating a “digital twin” of the earth to help resource development projects.

Some observers have wondered whether the disparate groups will prove too unwieldy to manage. Intellectual property (IP) experts also fear R&D-driven multinationals such as Microsoft Corp. or DowDuPont Inc. – which are members of the consortia – will be the main beneficiaries of any patented technologies developed by the superclusters.

“If we see IP terms that are little more than sharing mechanisms among members that do not account for the asymmetry in ability to commercialize by the large foreign partners, then Canada has yet again failed to execute on innovation,” Waterloo IP lawyer Jim Hinton said.

“Foreign multinational partners should not be the beneficiaries of Canadian funded and generated IP, regardless of how much money they bring – this is not how you grow a domestic cluster of Canadian champions.… It is like filling up a pool and saying that partners can take what they’d like. The foreign multinationals bring their hoses and the Canadian companies bring their teacups.”

Mr. Myers said an IP manager would oversee IP-sharing arrangements between his group’s members “to ensure IP is commercialized as much as possible within Canada.” But he added: “It’s not bad to have Canadian IP commercialized outside Canada especially if Canadian companies are involved in that process.”

Said Mr. Bains: “I think we were able to achieve the goal of making sure that the vast majority of the benefits [of IP] remain in Canada.”

Follow Sean Silcoff on Twitter: @SeanSilcoffOpens in a new window

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