Innovation in Canada: Bright Ideas, Bright Future

Innovation needs more than just a good idea - it also requires a robust support system. That means a stable national economy, healthy banks, a strong financial sector, and a proactive government that nourishes a business climate geared toward success, including low corporate tax rates and generous R&D tax incentives. Combine those attributes with a highly educated work force and the result is an environment that entrepreneurs, venture capitalists, and foreign investors find safe and attractive. These are all reasons why Canada has an international reputation for groundbreaking innovation and discovery.

For 2011-2015 The Economist Intelligence Unit ranks Canada first in the G-7 and fifth in the world as a country in which to conduct business. Canada was also the world's eighth-largest recipient of foreign direct investment (FDI) inflows from 2001 to 2010, averaging about US$36 billion annually - a direct result of international confidence in the Canadian economy. That's not all - KPMG's Competitive Alternatives 2010 report indicates the cost of R&D in Canada is the lowest in the G-7 and as much as 12.9 percent lower than in the United States. Nine of Canada's top 25 corporate R&D spenders in 2009 were foreign investors, including IBM, Pratt & Whitney, Ericsson, GlaxoSmith-Kline, and Merck.

The NRC
Innovation and research in Canada is anchored by the National Research Council (NRC) - the federal government's leading research agency. NRC partners with industry, government agencies, and universities across all fields of research. Canada's "Made-in-Canada" innovation model, where basic research is integrated with business applications, has driven down research costs and accelerated time to market for investors. As a result, research and development spending in Canada has steadily increased, totaling about $29 billion in 2010.

The National Research Council oversees 19 research institutes, two innovation centers, and four technology centers. The federal Networks of Centers of Excellence (NCE) program creates and funds multi-disciplinary partnerships among these groups and other universities, government and non-government organizations, and private-sector companies. The centers of excellence are often the core of high-tech clusters where innovation is flourishing. The federal government continues to commit new resources and programs to support leading-edge research and international collaborations in key innovation-intensive sectors, especially clean energy, information and communication technology (ICT), and life sciences.

Clean Energy
The Canadian government recently renewed funding of almost $100 million over two years for research, development, and commercialization of clean energy technologies. It has also committed about $40 million over two years to Sustainable Development Technology Canada to support the development and demonstration of new clean technology projects.

Canada's clean energy industry consists of more than 400 technology companies spanning nine sectors, including bioenergy, alternative energy, energy efficiency, recycling, transportation, and water treatment and management. Key clusters are located in Toronto, Montreal, Calgary, and Vancouver.

British Columbia has the highest ratio of clean-tech companies to GDP in Canada; Vancouver is especially well known for green transportation systems, energy-efficiency technologies, and water treatment. The city's $25 million Innovative Clean Energy Fund provides financial assistance to companies that develop commercial renewable energy technologies.

Burnaby, B.C.-based Ballard Power Systems is an international leader in the development and manufacture of fuel cells. The company just won Frost & Sullivan's "2011 New Product Innovation Award" for its proton exchange membrane (PEM) fuel cell power generation system called CLEARgen™.

"Ballard's solution surpasses the competition in terms of fuel cell durability, product cost, and load-following capability, all keys to commercially viable grid-scale solutions," says Tomasz Kaminski, a research analyst with Frost & Sullivan.

CLEARgen™ is a complete system designed to generate clean energy from hydrogen and reduce demand for grid electricity. Toyota Motor Sales plans to install this system in California to provide electrical power and heat during peak times, utilizing hydrogen produced by the steam reformation of renewable bio-gas generated at a landfill.

Calgary, Alberta, long known as a global energy leader, is responding to the world's growing need for renewable energy through its Sustainable and Renewable Energy (SURE) industry group. These proactive companies conduct important R&D in wind, solar, biofuel, and waste management technologies.

For example, Calgary-based Alter NRG Corp., recently tested an advanced industrial waste-to-ethanol conversion process for Australian company Phoenix Energy. Waste feedstock - including simulated municipal solid waste, sewage sludge, and tires - was successfully gasified by Alter NRG into clean syngas, which was then converted to ethanol.

"Conducting this test was critical to our project development plan," states Peter Dyson, owner of Phoenix Energy. "The successful results have given us the confidence to continue the development of our project to be located near Melbourne, Australia, which will convert up to 2000 tonnes per day of waste to ethanol."

Information and Communication Technology (ICT)
This rapidly growing sector is a key driver in the Canadian economy and continues to receive strong research support from the federal government. Major ICT clusters are located in Waterloo, Ontario; Montreal; Vancouver; and Toronto.

Toronto is the third-largest ICT sector in North America and Canada's largest center for ICT research and development. It is home to almost one third of the nation's 40,000 ICT firms, with nearly half of all Canada's ICT R&D investment carried out in the city. Moreover, six of the 10-fastest growing ICT companies in Canada are located in the Toronto region. Collaborations abound, such as the August 2011 agreement between the province of Ontario and Cisco Systems to invest almost $500 million in research and development facilities, creating 300 jobs in Ottawa and Toronto.

Wireless technology is one of the fastest-growing ICT sub-sectors. The Canadian government encourages wireless R&D through its many centers of research excellence, including the Communications Research Centre Canada and National Institute for Information Technology (NIIT). Major wireless clusters can be found in Ottawa, Toronto, Waterloo, Montreal, Calgary, and Vancouver.

Wavefront, an incubator for wireless and new media companies in Vancouver, recently partnered with the federal government to launch a national Centre of Excellence for Commercialization and Research for wireless technologies. The Wavefront Wireless Commercialization Centre (WWCC) will receive $11.6 million in federal funding through the Networks of Centres of Excellence program, and about $11 million from participating industrial, academic, and government partners. "WWCC will build world-class commercialization capabilities in machine-to-machine technologies," says Jason Cohenour, president and CEO of Sierra Wireless, an industry partner. "We look forward to advancing Canada's position in this fast-growing market through new sophisticated wireless devices, value-add hardware, advanced applications, and complex systems integration."

Life Sciences
Canada is home to about 800 life science companies that employed nearly 30,000 highly skilled workers. Growth sectors include agri-biotechnolgy, biopharmaceuticals, medical devices, and contract services. Key clusters include Toronto, Montreal, and Vancouver, which is one of the fastest-growing life sciences clusters in North America.

Vancouver is well known for its cutting-edge research in oncology, genomics, infectious disease, neuroscience, regenerative medicine, HIV/AIDS, and cardiology. While many of the companies in this sector are small, some have become very successful through strategic partnerships with major international firms, such as Neuromed Pharmaceuticals' $500 million collaboration and license agreement with Merck & Co. to develop next-generation chronic pain drugs.

With over 600 private companies and 150 university and public research organizations, Greater Montreal is internationally recognized as a life sciences center that specializes in pharmaceuticals, biotechnology, and medical technologies. It's also home to the National Research Council's Biotechnology Research Institute (BRI). Recent discoveries at BRI include a biodegradable polymer that is stronger than steel and incredibly durable. Called nanocrystalline cellulose, this renewable and recyclable resource has the potential to enhance the strength and function of just about any manufactured product - even adhesive bandages and gauze. NRC has licensed this technology to Nova Scotia biotech firm Bio Vision Technology. "We are interested in developing new bio-products that can replace or supplement petrochemical supplies," says Stephen Allen, vice president of technology for Bio Vision. "By replacing just 2 percent of the polymers that are now made from petrochemicals, companies can significantly reduce their carbon footprint."

Emerging life science/biomed clusters can be found in Winnipeg, Manitoba, and Halifax, Nova Scotia. Winnipeg is a leader in MRI research and other noninvasive surgical technologies. Much of this work is conducted at the NRC's Institute for Biodiagnostics, Canada's most advanced facility for magnetic resonance technologies. In Halifax, more than $100 million is invested in life science R&D every year. Local companies - such as MedMira Laboratories, which specializes in in-vitro diagnostics - are gaining national and international attention. The Brain Repair Centre at Nova Scotia's Dalhousie University - a multidisciplinary collaboration of more than 100 world-class researchers and physicians - is internationally known for its innovative treatment of Parkinson's disease.

Recent Halifax, Nova Scotia-based initiatives in the neuroscience area have attracted major multinational players such as Elekta Neuroscience, as well as start-up companies like Neurovox and Mindful Scientific, which developed the world's first clinical use of a neurosurgical simulator.

"The goal has always been to take research from the lab and use it to help patients," says Dr. Ryan D'Arcy, Mindful Scientific's scientific advisor at NRC. "Our research allows us to create technologies that can have an immediate impact on people's lives. Neuroscience is a Canadian strength and is getting stronger in its ability to translate that research into everyday improvements in healthcare."

With its abundance of farmland, it's no surprise Saskatchewan is home to almost one third of Canada's agricultural biotechnology industry, with more than 700 scientists working in 30 research centers across the province. Among these facilities is the Saskatoon Research Center, which conducts R&D targeting production of prairie crops, especially the global use of oilseeds as industrial crops. Research is showing these plants can be engineered to have higher resistance to cold, drought, salt stress, and disease.

Similar work is being conducted by Saskatchewan's Agriculture Development Fund (ADF), which funds innovative research in the agriculture and agri-food sectors. In 2011 the Saskatchewan Ministry of Agriculture committed $14.5 million for 71 ADF research projects, including exploring the untapped potential of oilseeds as lubricants, bio-pesticides, fish feed, and components in jet fuel. Other projects focus on innovative bio-product processing technologies and sustainable farming systems and practices.

A Bright Future
The Canadian government will continue to support innovation across all its industries; this is especially true for life sciences, ICT, and energy, which are seen as powerful economic drivers that result in positive global change. This effort is led by the well-funded National Research Council, whose mission is to facilitate scientific discovery and commercialization of new technologies that improve quality of life. Moreover, realizing the importance of a creative, enabled private sector, the NRC is adapting its focus to include more collaboration with companies and research institutes to help identify economic opportunities and solve commercialization challenges.

"Our new direction aims to bring greater strategic and market focus to the research, technology development, and innovation work we do with industry and the rest of the public sector so that we can create greater short-term impact and contribute to Canada's long-term sustainable prosperity," comments Ian Potter, vice president of the Engineering Division at the National Research Council of Canada. "We are focused on results and targeting outcomes important to Canada and our clients, such as enhanced productivity, high-quality jobs, technology commercialization, and increased business expenditure on R&D."

To ensure success, Potter indicates Canada is adopting a market-driven approach that places a greater emphasis on engaging the private sector and public agencies and institutions.

"We are putting in place business models attuned to the private sector," he adds. "This allows us to address real industry issues such as increasing innovation capacity, reducing risk in early-stage technology development, and facilitating the development and deployment of innovative products, processes, and services for targeted markets."