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Innovation, Science and Industry Minister François-Philippe Champagne faced uncertainty over the federal government’s innovation cluster funding program. But with a new budget, changed name and political endorsements, he wants to double down on the program's efforts.Sean Kilpatrick/The Canadian Press

The federal government’s innovation cluster funding program has fresh money, a new name – and renewed political support.

Innovation, Science and Industry Minister François-Philippe Champagne spoke on Monday with the heads of the five non-profit “supercluster” bodies mandated by Ottawa to bring together academia and business to collaborate on innovative projects, spin out companies and create jobs, economic growth and intellectual property (IP).

He gave them a pep talk after months of uncertainty about the future of the program, once a centrepiece of the innovation strategy of a Liberal government that has come under fire for its handling of several files, including airport and passport delays and the invocation of the Emergencies Act.

The key message, Mr. Champagne said in an interview, was “we’re capable of more, so let’s double down” on the program. The minister said he wanted the agencies to “do more” regarding research and development, creation of IP and commercializing ideas, and to support objectives that include addressing climate change, reducing greenhouse gases and creating resilient supply chains. He called for better integration and collaboration among cluster participants. “We want to reach our full potential. I was trying to really inspire them: Let’s be proud of what we achieved but let’s be more ambitious.”

Mr. Champagne said he had given the program, previously called “Canada’s Innovation Supercluster Initiative,” a new name – “Global Innovation Clusters” – to better reflect its aim and objectives. “There’s a marketing aspect and a message you are sending,” he said. “It’s global talent, innovation happening in Canada, that was my frame of reference when I said we need to change that.”

“The meeting was extremely positive,” said Bill Greuel, chief executive officer of Protein Industries Canada, one of the cluster agencies, which funded $334-million of projects from June, 2019, through August, 2021, $124-million of which came from Ottawa and the balance from cluster participants. “It’s exciting to hear a minister talk about that level of ambition.”

The agencies, focused on digital technology, protein industries, advanced manufacturing, ocean industries and bringing advanced technology to supply chains, had called on the government to follow their initial five years and $950-million of funding by committing $1.5-billion more once the initial money ran out in 2023. They wanted to continue a program that was slow to start and delayed by the pandemic, but which a government-commissioned report from EY said had created 23,877 jobs and more than 800 “IP assets.”

The Liberals had shown little interest in a sequel: The party’s 2021 election platform did not mention superclusters, nor were they in Prime Minister Justin Trudeau’s December mandate letter to Mr. Champagne. The budget allocated more money to the clusters, but it was half of what they requested and was to be divided among the five “on a competitive basis.”

Mr. Champagne delivered some encouragement to the clusters. He said the strategy needed time and long-term funding like similar programs in South Korea, Israel and Finland, which “took decades to reach their full potential,” he told The Globe. “We have a solid base, so we need to give it time and the means for them to reach their full potential.”

He also clarified that the competition among clusters would not be Darwinian, and that everyone would get “base funding” to cover operations and finance projects. The competition, he said, would be for “the extra levers” for those with particularly strong projects.

Julien Billot, CEO of the Quebec-focused Scale AI cluster, which concentrates on supply chains, said in an interview “the tone was very engaging. The minister is telling us, ‘I trust you all, we need you as Canada to develop global innovation.’ It’s nice to hear you’re doing an important mission for the country.”

Program critics remain unswayed. Jim Balsillie, chairman of the Council of Canadian Innovators, which represents domestic technology companies, said the program’s design was “foundationally flawed” because it focused on evaluating IP assets “by counting them like cabbages in supermarket bins” rather than to what extent Canadian companies had secured strategic IP rights that empowered them to operate effectively in the world.

Intellectual property lawyer Jim Hinton, based in Waterloo, Ont., said data cited in the EY report, including jobs and IP assets created, were insufficient to prove the program’s success. “Anyone can spend money, but what is created? And more importantly, who economically benefited from $1-billion in taxpayer money? Microsoft?” – an active participant in most supercluster programs – “Canadians? Who actually knows?” He said the program had yet to demonstrate “the economic value created and retained by Canadians” and criticized its approach to tracking IP creation. “Spending more money is going to result in the same feeble outcomes. It is time to wind the superclusters down – they have failed.”

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