The New Carney Government Must Anchor University Research to Canadian Industry
Canada is grappling with a productivity and technology competitiveness challenge, risking a slide into a relatively low-productivity economy centered on farming and natural resources. China’s dramatic ascent as a global technology leader, combined with President Donald Trump’s protectionist policies, makes it even more urgent for Canada to strengthen its innovation capacity. Whether the new government has the political will to shake things up and make the bold changes needed to steer the ship of state toward the beacon of a technology-driven economy remains uncertain.
However, as Robert D. Atkinson writes in a Research Money commentary, there is one fairly simple and low-cost step it can and should take: give Canadian industry more say in what research is done at Canadian universities.
Canada rightly prides itself on the strength of its research universities, which spend about 50 percent more on higher education R&D, as a share of GDP, than the OECD average. Yet other countries draw more industry funding into university research, and Canada still struggles to align research with industry needs or commercialize it domestically. The core problem is that universities reward grant-getting and publishing, not supporting Canadian commercialization, so while research occasionally helps domestic firms, most of it does not.
As Atkinson explains, if Canada is to regain its status as a technology economy, it must adopt a modern approach that better aligns university research with critical technologies and the needs of Canadian companies. To do that, federal and provincial research funding agencies should prioritize grants for researchers who secure concrete financial commitments from industry.
If a researcher or center can show that firms are willing to help fund their work, that should move them to the top of the list, with higher industry contributions translating to higher priority. To foster greater industry participation, the federal government should take two key steps:
- Innovation, Science and Economic Development Canada should exempt research funding alliances from antitrust scrutiny when firms contribute to a pooled fund administered by industry associations.
- Parliament should amend the Scientific Research and Experimental Development tax credit to offer a 40 percent credit for university research contributions, claimable directly on federal tax forms.
By tying university research more directly to industry competitiveness, Canada can help startups and established firms alike take a longer-term, innovation-driven view of success. But complacency and entrenched interests have long stood in the way. If the new Carney government is serious about renewal, it should start by linking research to Canada’s industrial future.
