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Innovation Minister Navdeep Bains with Finance Minister Bill Morneau


On Wednesday, the federal government unveiled its so-called "innovation budget." The man leading the charge, Navdeep Bains, the Minister of Innovation, Science and Economic Development, got most of what he requested from Finance, including: $400-million for venture-capital investments; a new initiative modelled on a successful U.S. program that would see Ottawa boost how much it buys from startups; the launch of a strategy to strengthen Canada's intellectual property regime; and $125-million to invest in the artificial intelligence sector.

The government, which is moving to speed up immigration for skilled foreigners, announced expanded funding of $950-million for a program to support "superclusters," and will help train those displaced by disruptive technologies.

The Globe and Mail's Sean Silcoff spoke with Mr. Bains Thursday.

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Were you surprised most of what you requested made it into the budget?

Our government ran on a campaign around growth and focusing on jobs and strengthening the middle class. One key way to do that is around innovation. Innovation is fundamentally about people. And it's about better outcomes, better communities, it's finding solutions so that people can live better lives. It's about our future. That's the message I was conveying to my cabinet colleagues, that's the message I heard from Canadians, and that's reflected in our budget. Other parts of the world are focusing on protectionism and we're betting on innovation and skills and training and we're going to focus on people to really grow the economy in a meaningful way for years to come.

There's an initiative to follow on the last government's Venture Capital Action Plan (VCAP), which saw Ottawa provide $400-million mostly to a "fund-of-funds" [which raised $900-million more from private sources and then distributed it to VC firms to invest in startups]. How will the new program differ?

The Venture Capital Catalyst initiative is really building upon the successful model that we had with VCAP. We received a lot of positive feedback from the first program. The fund-of-funds model is a very successful approach. This time it's really about long-term growth capital. We're definitely looking at [repeating the fund-of-funds approach]. We want to leverage more money from the private sector this time. We're going to flesh out the program design details very shortly. Beyond that, we have $1.4-billion allocated for investments for clean tech.

Will you be more prescriptive with this VC program and ask that investments be targeted to specific types of companies?

That's something we're looking at. We haven't necessarily finalized on that.

You're introducing a strategic procurement program to buy new technologies from innovative companies, modelled on the successful U.S. Small Business Innovation Research program, which mandates departments with heavy research and development budgets to set aside some of their spending for new technologies from small firms. How much of the $9-billion the government spends annually on non-defence goods and services would be earmarked for this?

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It would be roughly around $100-million [about 1 per cent] to start. Our ambition is to get it to $300-million eventually. We've been working closely with Public Procurement to look at how we can implement it. The dates haven't been fixed but we'll be launching this in the coming months. The idea is the government would go out and say: 'These are a bunch of challenges we have and we'd look at Canadian solutions that can address those challenges.'

You're also launching an intellectual property [IP] strategy. Do you agree with critics that Canada is badly behind on this file?

The fundamental premise of IP is to help companies to have the freedom to operate. It's about making sure there's a really good understanding of IP processes and capturing the value of R&D investments and making startups and scale-ups more strategic about IP. There's no doubt compared to some of our international peers that we need to do a better job of educating our businesses and building more literacy and building it in their business plans.

Last year, your government committed $800-million to fund several "clusters." Now it's $950-million for three to five "superclusters." Many people don't know what "clusters" or "superclusters" actually are.

The objective is to see who can create the best consortia or model that brings together industry, academia, civil society, different orders of government looking at research and development, at job creation, at companies scaling up and growing. The idea is you create an environment where companies and industry and academia and civil society are working together on solutions, commercializing those ideas, generating revenue, which means they're creating jobs. That's really what I tell people. We want these superclusters to be job magnets.

You've earmarked $125-million for artificial intelligence initiatives. Does this preclude AI-sector participants from applying for more supercluster funding?

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If they were to parlay that and be part of the open competition [for supercluster funding] we would definitely be open to that.

This interview has been edited and condensed.

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Beata Caranci, chief economist at TD Bank says the 2017 federal budget did not have large initiatives and is a very safe budget in terms of spending
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