February 8th, 2016 - 10:06am
Innovation key to moving Canada forward for long-term stability
Will the new government rise to the challenge and act quickly to strengthen Canadian innovation? Or will they continue to oversee the sell-off of Canadian champions of innovation to foreign interest and the stagnation of business investment in R&D?
NDP MP Brian Masse
Canada’s economy is struggling. The steep decline in the price of oil and other commodities over the past year has created significant disruption in Canada’s natural resource sector. At the same time, our manufacturing sector has been so weakened through years of government neglect that it is unable to take advantage of export opportunities from a low Canadian dollar. In this climate, it is the essential for the federal government to kick-start innovation and to support workers and businesses adapt and thrive in an increasingly competitive global marketplace.
For the past decade, we have seen little to no growth in the innovation sector and the former government, instead of taking action, blamed business for this failure. Their 2008 Industry Canada report, Compete to Win, states: “Much of Canada’s poor productivity performance can be attributed to the comparatively poor performance of Canadian firms with respect to innovation.”
The former government acknowledged there was a problem, yet failed to act. Its following report, Seizing Canada’s Moment: Moving Forward in Science, Technology and Innovation 2014, notes that businesses spent even less by 2012, dropping Canada to 22nd place out of 34 OECD countries by spending only an average of 0.88 per cent of GDP on research and development (R&D).
All the while, Canadians watched as 400,000 manufacturing jobs vanished, and nearly 300,000 more Canadians are out of work than before the last recession. This is unacceptable and our current economic climate demonstrates that we can no longer wait for struggling businesses to take the reins and find a solution. Instead, the federal government must step up and deliver on the innovation file.
New Democrats have been clear that government investment in innovation is urgently needed in order to kick-start the economy. We understand the need for action and have worked with businesses small and large to understand their respective needs and the importance of innovation to Canadian businesses.
Small businesses are clear that keeping the tax rate for them low-down to nine per cent from 11 per cent-is an incentive for their continued growth and investment right back in our economy by way of jobs, professional training, and R&D. Larger companies need access to faster and more accessible funding opportunities to develop the innovative products that will help build their businesses and our economy for the future.
Using the automotive and parts manufacturing sector as an example, we watched our domestic auto companies struggle through the last recession with government support. However, challenging the last decade has proven for these manufacturers, they are back in a position to move Canada forward quickly and help get the economy back on track. They need a willing partner.
These manufacturers are global, and incentives from governments all over the world create increased competition for their respective business, training and R&D. They are ready to invest in Canada with proper incentives and this starts with their machinery, equipment, and property used in innovative boosting R&D.
The former government developed the Automotive Innovation Fund (AIF) as the only incentive for manufacturers. Although we have the success of the fund with $426-million in loans paid out and $3.14-billion returned in investments, industry has criticized the repayable and taxable features of this program as barriers to success. The new government should strengthen this program by making contributions tax free while ensuring investments are linked to job creation.
The government must also act urgently to renew support for the successful Auto21 Networks of Excellence. Auto21 has a proven track record of innovating and bringing Canada to the forefront in automotive manufacturing over the past decade, yet the former government refused to renew their funding. It will close this March for good unless the new government realizes the asset that Auto21 is to Canadian innovation.
The new government has not articulated a clear innovation agenda and the Liberal platform offered little in the way of a plan to help Canadian businesses succeed and grow in an innovation economy. Furthermore, the new government seems poised to sign the Trans-Pacific Partnership, which will cause significant harm to our auto sector and has been pointedly criticized by former BlackBerry CEO Jim Balsillie as putting Canadian innovators at a disadvantage to their U.S. counterparts.
Innovation is the key to moving Canada forward for the long-term and to creating long-term stability for workers and successful businesses alike. Will the new government rise to the challenge and act quickly to strengthen Canadian innovation? Or will they continue to oversee the sell-off of Canadian champions of innovation to foreign interest and the stagnation of business investment in R&D?
NDP MP Brian Masse, who represents Windsor West, Ont., is his party’s industry critic for innovation, science, and economic development.
The Hill Times