Canada’s innovation ecosystem doesn’t need a 167th government program

Last month, Ottawa wrapped up its pre-budget consultations, with the fall budget soon to follow. I’m guessing the consultations yielded many asks aimed at Canada’s innovation economy—a new startup fund, a new venture envelope, a new program to back whatever sector is hot this year, and on and on. Finance Minister Champagne should resist the temptation and turn down these requests.

That’s not to diminish the importance of startups and scale-ups. These firms matter a great deal; they turn new ideas into jobs, push productivity up, and if successful, go toe-to-toe with competitors abroad. Canada doesn’t have enough of them, and we’re losing ground fast. We’re starting fewer new companies these days, and the ones that do launch and succeed often leave anyway. They sell to an American buyer, or move south outright, because that’s where the networks, growth, and exits are.

You’d think a problem like that means Canada needs more support for startups and scale-ups. It doesn’t. Our country has plenty of programs already. As this DeepDive will argue, what we lack is any way for a founder to make sense of them, the confidence that the ones we already have are built to work, and robust evidence that any of this spending is closing the business innovation gap with our peers.

Charles Lammam argues that Canada does not need another government program to support its innovation ecosystem, as there are already 134 existing programs that are poorly coordinated and difficult for startups to navigate. He emphasizes that the current system rewards those who can effectively chase government funding rather than those focused on growing their businesses. Lammam calls for a streamlined approach, including a single website for program access and regular reviews of existing initiatives, to better support Canadian startups and scale-ups in a competitive global market.

Canada ranks 15th and earned a C grade in innovation performance among 19 peer countries.

Canada’s business R&D spending is 1.1% of GDP, compared to the OECD average of 2.0%.

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