Will Election 2021 Produce a More Innovative Canada?

To describe the 2021 election as unnecessary is to repeat a sentiment that has been shared several million times since the start of the campaign. Like a child given a story book with blank pages, electors are judging election platforms with little substance. The Canadian political parties went into the election without a burning “ballot question” and without a central policy or political challenge beyond debating the worthiness of the current Liberal Party government. It has been left to the parties, aided by media commentators and opinion polls, to sketch a vague, largely post-election call set of national policy proposals.

In a classic demonstration of former Prime Minister Kim Campbell’s poorly timed (but painfully accurate) observation that national elections are ill-suited for major policy conversations, the 2021 election has shown few signs of devolving into a careful and considered debate about any specific policy field. Instead of thoughtful comments on health care, crime and gun control, abortion, childcare, and the other topics, the campaign continues to deliver the usual combination of platitude, invective and misdirection.

While it is easy to criticize the political parties for the rather vacuous nature of the 2021 election, the party leaders are clearly taking their inspiration from the electorate. An early September 2021 Leger poll that asked potential voters to rank their top issues highlighted standard bread and butter topics with a predictable pandemic twist. The top four issues were concerns about the cost of living, funding for health care, post-pandemic economic recovery and managing the pandemic. As has become the norm in Canadian politics, national campaigns typically focus on promises of direct returns or protections for voters rather than a robust appeal to electors to build collectively a better nation. 

In well-informed debates about the future of Canada, the focus often shifts to issues related to Canada’s ability to innovate and compete with other leading industrial nations. Here the emphasis is on research, post-secondary education, support for emerging and innovative firms, and national infrastructure. These, surely, are complex issues that cross federal/provincial/territorial policy boundaries and intersect with personal career and educational choices and private and public investments. In nations around the world, the race to be truly innovative and to create the companies, products and services needed for 21^st century success remains a top priority.

It is not that the main political parties are silent on these matters. The Liberals and the New Democratic Party combine long-standing support for expansion of post-secondary opportunities with a continuation of government subsidy programs for the commercialization of science and technology. Both parties, however, have policy proposals about taxing “the rich” and making moves on the banks and wealthy corporations, including Google, Facebook, Twitter and other digital platforms, that are potentially at odds with a straightforward approach to wealth creation.  The NDP have, unsurprisingly, a worker-centric approach to economic development that seeks to balance, not convincingly, support for Canadian business with criticism of government commercial subsides. The Liberal Party’s platform converts innovation into maple sugar: sweet but without a great deal of substance: “We know that the spirit of innovation requires more than just tax cuts. It requires a belief in science, ambitious partnerships between government, academia and the private sector, and a plan to invest in the freshest, most innovative ideas out there." Even major initiatives from the past, like the much ballyhooed multi-billion-dollar Innovation Superclusters Initiative, have vanished from public consciousness and appear to have delivered little.  Overall, the Liberal party seems committed to a policy set that retains the status quo, even though it has produced middling results, at best.

The Conservative Party, which tries to blend wealth creation with redistribution to economically disadvantaged groups, devotes more policy space to the field. There is an emphasis, shared with the Liberals and NDP, on supporting training in high demand fields, various support programs for institutional support, a substantial revision of existing tax credits and subsidies (including the long criticized Scientific Research and Experimental Development (SRED) program), and a “build it and keep it in Canada” approach to Canadian intellectual property. There is also a flagship promise for a Canada Advanced Research Agency, which would, the Conservatives hope, reproduce the (mixed) success of the American Defense Advanced Research Projects Agency or DARPA program. These proposals represent tinkering more than transformational approaches to national innovation policies.

Commentators have been less than impressed with policy proposals on offer to date.  Dan Breznitz, arguably Canada’s best analyst of innovation policy, was quoted in the Globe and Mail as saying: “The real problem Canada has is that we don’t innovate. Our startups are one of the only bright spots. We have as a government and as a country almost zero capacity for long-term planning and strategic vision, which is especially important with regards to innovation.”^[1] It is crystal clear that this election will not produce even a decent conversation let alone policy formulations about national innovation aspirations. The Liberals are largely staying with the status quo, with a few billion dollars (out of massive federal contributions promised for other new initiatives). The Conservatives get credit for a modest expansion that does not, however, have transformative potential. 

It is clear to observers that Canada is not policy-competitive on the innovation front, leaving Canada behind in the race for 21^st century investment, talent attraction, and national prosperity. There are major weaknesses in the country, particularly vulnerabilities on intellectual property, delays in commercializing developments in artificial intelligence and communications technologies, and problems in ramping up promising start-up and early-stage companies.

Governments are rarely early adopters of Canadian technologies and focus primarily on complicated application-based granting programs. Perhaps most significantly, Canada moves slowly in an era that emphasizes speed and proceeds with quintessential Canadian caution at a time when economic development favours high-risk, high-reward ventures. In addition, the national prosperity that gives Canada a chance to drive the innovation economy is drawn largely from the natural resource economy, a sector slowed and contracted by recent government policy.

The thin gruel of innovation policies is hardly a surprise, given the cautious and largely unoriginal approaches of successive Canadian governments and political parties to building a vibrant and expansive 21^st century economy. The problems lie, in part, with Canadian federalism and the division of responsibilities between federal and provincial governments in the fields of education, training and research. Even more directly, the policy vacuum reflects the systematically defensive approach to Canadian economy-building. The country is, at present, more focused on the economy of the past and present than on building the foundations for long-term innovation. 

Canada’s caution comes on the heels of the greatest expansion in non-wartime government spending in Canadian history in 2020-2021. The timely but ill-targeted financial interventions, focused more on reassuring a nervous pandemic-engaged population than rebuilding or improving the economy, have reduced government flexibility, for years if not for decades. The same amount of spending on selected infrastructure projects and major innovation initiatives could have underpinned future economic creativity and growth. Instead, the government will spend billons of dollars over the next future decades paying down the 1½ year (and counting) blitz in federal spending. The post-pandemic financial evaluation, when it finally comes, will hopefully describe the economic impact of massive government spending, both as a solution to a global pandemic and a medium and long-term factor in national economic development. Do not expect a happy portrait.

The last two years, however, witnessed a series of developments that speak to the need for a fundamental rethinking of economic policy in Canada. The pandemic-accelerated “working from home” phenomenon threatens to upend traditional approaches to work, which in turn could transform everything from the design of urban environments to family care, retailing, the hospitality industries and the very nature and meaning of work. Smaller centres, particularly in the economic shadow belt around major cities and in “beauty” areas have experienced rapid growth, but the implication for metropolitan areas remains unknown. On a national scale, the pandemic exposed several key fault lines in Canada – rich and poor, urban and rural, digital businesses and traditional companies, southern and northern communities – that will need to be addressed in the country’s economic planning. 

It is possible (but not inevitable) that the experience of pandemic work and the uncertainties associated with living with the prospect of mass death could accelerate the permanent departure from the workforce of hundreds of thousands of workers. Furthermore, the willing acceptance of Canada Emergency Response Benefit (CERB) and other personal subsidy programs, particularly in those families where the funds were not needed for financial survival, could have generational implications for attitudes toward work, personal responsibility, and unsustainable expectations about long-term government financial support. Add to this the disruption of learning environments for senior high school and post-secondary students and the turmoil in the Canadian labour force, and the potential emerges for a “lost generation” akin to those who lived through the disruptions of recent recessions and depressions. The list of major uncertainties goes on, including dramatic climate change, gut-wrenching increases in housing prices in many cities, geopolitical uncertainty (particularly regarding China), socio-economic and political tensions in the United States and the complex and little-understood implications on rapid and ongoing technological change. 

In other words, there is a lot at risk in the current Canadian economy, with major uncertainties clouding the decisions being faced by students, workers, businesses, investors. and governments.  The weight of these influences and the complexity of the decisions facing individuals and families can be seen in sky-rocketing levels of anxiety and depression, particularly among teenagers, the rise of political extremism and conflict, the disruptive influences of social media, a sharp decline in foreign investment in the Canadian resource sector and related infrastructure, a surprising and welcome surge in renewable energy, a marked flight to exurban and selected rural areas, and mixed signals about the future of Canadian manufacturing. These are, to be sure, troubling and even chaotic times. 

While the 2021 federal election will not see a thorough debate about the future of innovation in Canada, the country needs robust, creative and effective policy in this field now more than ever. In the past, innovation was viewed as a “nice to have” addition to the Canadian economic policy environment. Going forward from the 2021 election, when the winner will not be constrained by specific, complex, or well-understood policy formulations, the next government will have to find new ways to mobilize Canada’s wealth-creating systems. The Canadian electorate went into the 2021 federal election with low expectations on the innovation front. In a campaign that has focused on the explicit and unabashed cultivation of voters by all parties and eschews risk-taking and forceful leadership, the eventual victor will be unencumbered by high-profile political promises. 

At the same time, the challenge of building a globally competitive and sustainable innovation economy for Canada and Canadians remains present and even urgent. While it is unfortunate that Canadians will have not engaged with the political parties in a thoughtful debate about the country’s economic and technical future, it is now axiomatic that national elections turn on issues of personality, unrealistic promises, fear, and rhetoric, leaving the elected government with the task of tackling some of the most critical policy decisions without the benefit of a robust national consideration of alternatives. This is an unwelcome process for a democracy to tackle major political issues. But it has become the Canadian way, far from innovative, largely disconnected from the public, and without extensive discussion or endorsem

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[1] Conservatives aim to wrest innovation leadership from Liberals - but critics say neither party measures up - The Globe and Mail

Ken Coates is a Professor and Canada Research Chair in Regional Innovation in the Johnson Shoyama Graduate School of Public Policy.  He is also the Macdonald-Laurier Institute’s Senior Policy Fellow in Aboriginal and Northern Canadian Issues. He has served at universities across Canada (UNBC, UNB and Waterloo) and at the University of Waikato (New Zealand), an institution known internationally for its work on Indigenous affairs. He has also worked as a consultant for Indigenous groups and governments in Canada, New Zealand, and Australia as well as for the United Nations, companies, and think tanks. Ken has also served as the past president of the Japan Studies Association of Canada, and is a member of the Royal Society of Canada.