//The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada

The race to future-proof the economy: Navdeep Bains on the state of innovation in Canada

Navdeep Bains wants Canadians to know that things are happening. Lots of things. The Innovation, Science and Economic Development Minister has a big job on his hands, hauling Canada’s economy into the 21st century by embracing artificial intelligence and a panoply of digital technologies to boost productivity and keep us globally competitive.

But the federal government’s innovation agenda is still very much a work in progress. One of its pillars, the five marquee superclusters spaced evenly across the country, is mostly just an idea at this point, although $950 million in funding is beginning to flow. Does Canada feel more innovative than it did four years ago? Are we future-proofing our economy and seizing the jobs of tomorrow?

Bains certainly thinks so and that belief will probably be part of the Liberal’s pitch to voters when the country goes to the polls later this year. Next week, he will release a 100-page government report called Building a Nation of Innovators that mostly serves as a collection of the various policies, programs, plans and funding mechanisms the government has undertaken under the auspices of innovation.

In advance of the report’s release, Bains sat down with the Financial Post to talk about innovation and the economy.

FP: With the Innovation Nation series we’ve been doing, one of the themes that is emerging is that Canada has a real opportunity to seize the future economy. But we may be missing that opportunity if we’re not really proactive. We could be falling behind. As a country, are we innovative enough?

BAINS: Well, I beg to differ a bit. I think we have turned the corner. I think we are starting to create this culture of innovation in Canada where we have an economy that works for everyone. The key part is that it’s benefiting the many, not just a few, and it’s creating good quality jobs. And we’re really focused on making sure that it’s also inclusive, that it benefits people living in rural Canada, that it benefits young people who are getting coding. That’s really our goal.


Innovation, Science and Economic Development Minister Navdeep Bains.

Peter J. Thompson/National Post

FP: In reading through Building a Nation of Innovators it seems like it’s mostly looking back at the last two or three years since the Innovation and Skills Plan. Is this an election (campaign) thing?

BAINS: This is a report back to Canadians. In 2015, we said, look, we realize the economy is struggling. We put forward a plan and said we’re going to invest in a set of policies and programs to really benefit many Canadians and have it work for many Canadians. And so this is a report to Canadians on what those investments look like. What does it mean for Canadians living in Toronto, or if you’re in Red Deer? It’s telling Canadians, we made these investments. We ran on a campaign to invest in Canadians, to invest in their skills, to invest in companies so they can grow. We’re highlighting those in tangible ways in communities across the country.

FP: That does sound like campaigning.

BAINS: No, it’s a report card, because people need to know as a government you made promises, are you living up to those promises? And what does it mean to them, to their communities, for their own prospects and for their kids’ prospects? The speed and scope of change is phenomenal, and that creates anxiety and concerns that Canadians have. And we’re dealing with that and saying, look, we want you to succeed.

FP: How do you manage that pace of change? The people who are losing their jobs at the Oshawa GM plant are not going to start coding iOS apps overnight. How do you make sure people aren’t left behind as you make the shift?

BAINS: Well, that’s a key part. It’s really about making sure the economy, as I said, works for everyone. We’re promoting lifelong learning. Coding is an example to teach young kids critical skills, problem solving, how to work in teams, understand and develop digital literacy. But we also have programs for individuals mid-career. If there’s a change in their work, they can go to school through a grant, they can go to school with an interest-free loan and get the digital skills that they need.

FP: But do you actually believe that the people who lose their jobs to automation or shifts in global supply chains will take up coding and pursue those kinds of jobs?

BAINS: It’s not about coding only. That’s just one example. We recognize that all these sectors in every region are going through a major transformation. It’s about making sure people have the broad skill sets they need for those job opportunities.

FP: Why is the government’s responsibility so broad in this? It’s striking in reading the Building a Nation of Innovators report that there’s money for fundamental research, incubators, scale-ups, every stage along the way. Why does the government need to be dragging the economy into innovation? Can’t we just get out of the way and let this happen?

BAINS: We’re in a race. We’re competing with other jurisdictions. We want to level the playing field. Do you think China is getting out of the way? You think Europe is getting out of the way? You think the United States is getting out of the way? No, they’re all playing an active role. Why would we take a hands-off approach? The Conservatives clearly presented that as an option in 2015 — that laissez-faire approach. But it’s about creating the conditions of success for Canadians to get more job opportunities and, more importantly, for companies to grow and stay here in Canada.

I think we are starting to create this culture of innovation in Canada where we have an economy that works for everyone

FP: Something as simple as educating businesses on the importance of intellectual property — teaching them that if you’re going to exist in the 21st century, you need to have intellectual property — seems pretty basic. What do you think it says about the country that we need something like that?

BAINS: It really is a partnership model. It’s not about us dictating this. It really reflects what we heard from Canadian businesses, academics, researchers, different communities from across the country before we came forward with the Innovation and Skills Plan. Our objective is to really help those businesses understand the value, because for every company that promotes IP, for example, they on average pay 16 per cent more to their workers. For us, it’s about better-quality jobs.

FP: But if the preponderance of our small and medium-sized companies don’t understand IP, if the culture just doesn’t get that, isn’t that a massive problem?

BAINS: That’s the thing we’re trying to accomplish, really create this culture of innovation, saying we want a country full of innovators.

FP: We’ve been looking into the superclusters as part of our Innovation Nation project. They have been in the works for quite a while, but, still, I don’t think a lot of people really know what these things look like. And in a couple cases it’s a bit of a mess …

BAINS: It’s about jobs. It’s a job magnet, and it’s about the jobs of today and the jobs of tomorrow. And really, fundamentally, what did we do? We used our convening power to bring businesses together — large, but primarily a lot of small businesses — breaking down the silos, promoting collaboration and saying, look, work together to solve problems.


Bains during his interview with the Financial Post.

Peter J. Thompson/National Post

FP: Okay, but that’s really broad and expansive. What are the nuts and bolts?

BAINS: Okay, so nuts and bolts, our artificial intelligence supercluster, in Quebec, for example. They recognize that AI is going to represent $15.7 trillion with the economic opportunities in the coming years. We want a slice of that pie.

FP: Can you give me one example of a problem you expect them to actually solve?

BAINS: There’s many problems. For example, if you’re a company and you’re in the supply chain, how do you minimize inventory? Inventory cost is a significant operational challenge for many businesses. How do you deal with that? They’re going to use, for example, artificial intelligence throughout that process on the operational side, on the customer side. And it’s not only me saying this, but they’re going to come forward with projects and initiatives to demonstrate that in a very transparent way. But we have to get the governance right. The challenge of the superclusters is it’s doing things differently. You’re promoting people to work together. You have to work with others to align priorities to make sure there’s a better understanding of what those projects are and to work together. And that’s when the magic occurs.

FP: In the Building a Nation of Innovators report you describe the superclusters as an experiment. Is there a chance this experiment fails?

BAINS: Well, the way it’s designed, we’re really fortunate it’s not based on one company or one academic institution, or one idea. It’s really a reflection of many companies. If one company decides to walk away or is not financially stable, there’s other players as well. It’s really set up for success. It’s really about that ecosystem.

FP: Let’s switch to 5G, because that’s an area where the government is already being criticized about being slow on auctioning off spectrum. And there’s the whole issue of whether or not to allow Canadian telecom companies to use Huawei equipment in their networks. Are you worried that a decision to block Huawei puts Canada further behind on this transition?

BAINS: That would mean that I’m prejudging a decision. We haven’t come to that point yet. We are examining national security issues. Minister (Ralph) Goodale and his team of experts, he’s got incredible men and women behind the scenes, are doing a lot of good work to look at all the issues related to national security.

(Innovation is) about jobs, it’s about companies scaling up, it’s about companies staying in Canada

FP: But is economic development part of the decision?

BAINS: Of course, we’re going to be working with the telecommunication companies. I have already been engaged with them. They’ve already spoke with Minister Goodale and his team as well and indicated their challenges, their opportunities. The fundamental premise for us is, yes, we’re going to look at national security. Yes, we will engage the telecommunication sector. We’re also working with our allies as well. But we’re going to make a decision, ultimately, that’s going to benefit Canadians and make sure that Canadians’ privacy is protected.

FP: I wanted to ask you about open banking, something that my colleague Kevin Carmichael wrote about recently. We have a really strong financial sector in Canada, but this is something that other parts of the world seem to be ahead of us in embracing. Are you engaged on open banking? Is that something that you think Canada needs to embrace?

BAINS: My colleague (Bill) Morneau, as the minister of finance, is very closely engaged with the banks to look at regulations —  fintech, as some refer to it — to see what that means. He’s still engaged in a process with them. For me, I think of the broader issues of trust. When we talk about fintech or if we talk about technology, do Canadians feel that we have the appropriate legislation, programs and policies in place to protect their privacy? That’s what we’re focused on in the coming months. You will see us put forward a set of principles that will really establish a benchmark of trust with Canadians so that they understand the government is taking their privacy very seriously.

FP: You mention trust and privacy, let’s talk Sidewalk Labs. That was something that when it was announced in 2017 was really us taking a global leadership role and doing something interesting: building a smart city project affiliated with Google on Toronto’s waterfront. Since then, there have been resignations, privacy concerns and a significant backlash. Does the government need to take a more active role in terms of defining what sort of data is acceptable to be collected? Where it gets used? Who benefits from it? Defining those standards before these projects are already underway?

BAINS: The data questions that you raised are very thoughtful questions that Canadians have been raising for quite some time, and they go beyond just one project. These are fundamental questions all companies are facing, because all companies are becoming more and more data oriented. What we’re saying to Canadians is education and awareness are important. We will come forward with legislation that protects your privacy, and we will also create an expectation for the private sector. We’ve done so through PIPEDA (the Personal Information Protection and Electronic Documents Act), for example, in the past with the principles-based approach.


The Sidewalk Labs “307” building in Toronto, which serves as a combination office and community space for its proposed development project on the city’s waterfront.

Peter J. Thompson/National Post

FP: But the amendments to PIPEDA came into effect last fall, and the federal privacy commissioner says that it’s still way behind what the Europeans are doing, and there’s major holes in it. There’s…

BAINS: And that’s why we launched the data and digital consultation, to see what those gaps are.

FP:Sidewalk Labs, specifically, is an interesting project because I hear from people in the tech sector who say if we can’t get this project off the ground, then it sends a terrible signal about whether you can do innovative things in Canada.

BAINS: First of all, I beg to differ in terms of (focusing on) just one project to define Canada. We have to be very careful not to take things out of context.

FP: But this is a really high-profile project.

BAINS: There’s no doubt this is high profile. But when you look at our innovation report, for example, you’ve seen significant investments that I highlight in venture capital, for instance. People are investing in Canada. There’s 28 companies that have the potential to become unicorns in Canada. Our diversity is also pretty profound.

FP: Innovativeness is not that easy to measure. What’s the metric for you that people should look at to know if you’re succeeding?

BAINS: We talk about innovation and, frankly, people don’t know what that means. And that’s part of the object of this report, to highlight what that means. It means an economy that works for everyone. It’s about jobs, it’s about companies scaling up, it’s about companies staying in Canada. And that’s really what people will judge us on. How is innovation having a positive impact on their day-to-day lives? How is it dealing with anxiety of the uncertainty around the job prospects and their kids and how is it creating growth? And how is that growth benefiting the vast majority? Because if we don’t get that right, we’ve seen anti-globalization, anti-trade, anti-immigration populism and nationalism rise, because people feel that they have not been benefiting from economic outcomes that have occurred in the past. We do not want to replicate that with innovation, because they will fall behind in this global innovation race.

This interview has been edited and condensed for length and clarity.

Financial Post

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