Speech to the Creative Economy Summit

The Honourable Gary Goodyear, Minister of State for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario)

Toronto, Ontario
February 28, 2012

Check against delivery

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Good morning ladies and gentlemen.

Thank you for the warm welcome.

I'd like to thank the Strategy Institute for the invitation to be here today, and for giving me the opportunity to speak to a room of visionaries and innovators such as yourselves.

I would like to speak to you today about the role of government in growing and sustaining the creative economy.

It's an appropriate topic for me, as the minister responsible for economic development in southern Ontario, as well as for science and technology across Canada.

As you know, science, technology and innovation are integral parts of the creative economy.

And they are just as integral to ensuring Canada can prosper today and in the future. Our long-term economic competitiveness depends on supporting businesses that innovate to create jobs and growth.

We all know targeted research that leads to the development of new technologies can make us healthier, save lives, and improve our quality of life.

Take, for example, technologies that help our children. Technologies like the KidsArm program at Sick Kids Hospital in Toronto.

Our government invested $10 million so that Sick Kids could perfect a robotic surgery technique to allow surgeons to safely and efficiently perform less invasive surgical procedures on their most precious patients – on our most precious treasures.

What we do not always recognize, and what is equally important, is that the development of these technologies results in jobs – high-quality jobs that require well-educated talent. The development of KidsArm was estimated to create 80 jobs – this includes a wide range of professionals: engineers, manufacturing workers, researchers, clinicians and many more.

Another one of Canada's precious resources is the focus of a wide-scale project here in southern Ontario.

With eventual testing sites in London, Borden, Guelph, Toronto, Waterloo and Hamilton, our government is helping equip a superlab for research in water technologies.

United in the common goal of providing clean water for communities around the world, universities, private sector companies, not-for-profit organizations, municipalities and our government will be able to develop, test, and demonstrate new, market-driven water technologies and services.

This innovative project will create an estimated 50 direct jobs during construction and after the lab is in operation. Hundreds of indirect jobs will also be created at private-sector companies that will be testing and developing new technologies. The impact of this project could be even more far reaching, as the participants will be tapping into a growing global market that is currently worth more than $400 billion.

Our government has invested in science and technology not only to create jobs and growth at home, but also to put Canadian ingenuity to work for the world.

Because, we're not unique in the problems we face. And we can sell our solutions to the world.

It's true to say that we have faced some difficult times over the past few years. The global recession hit us hard.

But we hit back with Canada's Economic Action Plan.

We made historic investments in infrastructure.

We encouraged businesses to invest and helped them to avoid layoffs.

We put substantial funding into skills training.

We extended support for workers who lost their jobs.

And now, while many other countries around the world are still feeling serious effects from the recession, our response and economic leadership have put us in an enviable position.

Ladies and gentlemen, I can tell you I'm extremely proud of this response.

I'm proud to say that since we introduced the Economic Action Plan, Canada has recovered more than all of the output and all of the jobs lost during the recession.

Canadians gave our government a strong mandate to implement our low-tax plan to create jobs and economic growth – a plan that is working.

We've got 610,000 more Canadians working today than when the recession ended, giving us the strongest rate of employment growth by far among G-7 countries.

Our low-tax plan for jobs and growth has worked and served Canadians well.

And the world has noticed.

Thanks to our efforts through the Economic Action Plan and more, we have emerged from the global recession in much better shape than most other economies around the world.

We already have the best post-recession GDP performance among the G-7 group of countries, and both the IMF and OECD forecast Canada will continue to have among the strongest economic growth among the G-7 this year and next.

And Forbes magazine recently ranked us as the number one country in which to do business.

This is considerable praise.

It reflects well not only on our achievements through the Economic Action Plan, but also on the actions we took before the global recession: namely lowering taxes, paying down debt, reducing red tape, and promoting free trade and innovation.

And it is also an excellent indication of the position we're in for the future.

For our government, embracing this future means embracing innovation and research, and making the most of the promise that exists in the creative economy.

In the months to come, our government will undertake important transformations to position Canada for growth over the next generation.

But we will continue to make the key investments in science and technology necessary to sustain a modern competitive economy.

The support of science, technology and innovation has been a fundamental priority for us since 2006.

Canada is already a global leader in research and innovation and we are committed to maintaining our competitive advantage.

Budget after budget, we have demonstrated this commitment.

Our investments are encouraging partnerships among the private sector, academia and government.

Partnerships that are turning promising ideas into the groundbreaking products, processes and applications that create jobs and lead to economic growth.

We know that science and technology is essential to ensuring Canada is competitive with others countries around the world, and can continue to prosper in the new economy.

That's why we announced new investments last year to support leading-edge research, international collaborations, health research, and the creation of world-class research centres in Canada.

But despite these and other investments, we continue to face challenges.

Our private sector participation in research and development is troubling. In fact, a report from the Science, Technology and Innovation Council noted it's actually limiting our overall performance in innovation.

In today's global economy, Canadian entrepreneurs and businesses face fierce competition, not only from our traditional trading partners, but from emerging markets like China, Brazil, India and South Korea. As Prime Minister Harper said last month at the World Economic Forum, 'the wealth of western economies is no more inevitable than the poverty of emerging ones.'

In other words, as a trading nation, we must embrace the global economy in order to maintain growth. To do this, we need to strengthen Canada's position as a leader in business-related R&D which leads to innovations.

Because when businesses invest in R and D, it helps them to stay competitive.

It allows them to grow in the future, and it helps the economy create new jobs.

This means a higher standard of living for Canadians.

Canada's long-term economic competitiveness depends on supporting business-related research and development that drives innovation.

Because we take this so seriously, our government asked an expert, independent panel to look at the effectiveness and appropriate balance of our support for business R and D.

This panel was headed by Tom Jenkins of Open Text. We received the panel's report last October, and while we don't necessarily subscribe to all of its recommendations, we do agree with what it perceives to be the key problems, namely:

• our programs are too spread out across too many government departments, making it hard for companies to locate the program that's right for them;
• our Scientific Research and Experimental Development tax credit is too complex, too unpredictable in what research qualifies for a credit, and too costly for claimants;
• we don't leverage procurement for innovation the same way other countries have successfully done;
• we don't have an R and D organization sufficiently dedicated to supporting business R and D;
• there is a lack of access to financing at both the early- and late-stage; and
• we don't have the leadership we need in Canada to oversee a broad strategy for business innovation.

Those are some hard realities for us.

And again, while we don't see eye-to-eye with everything in the report, we do agree with the panel's general analysis.

We do agree with the direction of the changes that need to be made to address these problems, and we will act soon.

We are committed to turning ideas and innovations into new economic competitiveness and a higher standard of living for all Canadians.

And as you all well know, ideas and innovation are what the creative economy is all about.

I should tell you I'm very familiar with the impact the creative economy can have, being from the Kitchener-Waterloo-Cambridge area.

Our entire region has been transformed by ideas and innovation. We are undergoing massive changes – for the better – as part of the creative economy.

And I'm sure this is something you'll hear more about from Rod Regier tomorrow from the City of Kitchener.

The region has embraced the idea of the economic cluster, and as a result it's not only attracting some of the world's leading companies, it's creating some of the world's leading companies.

It's home to world-class business and research incubators, universities that are spinning off technology companies at breakneck speed, and a college that is one of Canada's leading post-secondary institutions for applied research and commercialization.

It is a model for how to succeed in the creative economy.

For so many regions across southern Ontario, for businesses, and for governments, the writing is on the wall: Either embrace the concept of the creative economy and all that it has to offer, or get left behind.

And I can tell you that at FedDev Ontario, the concept of the creative economy is alive and well.

We have launched a series of initiatives designed to ensure southern Ontario grows and attracts the smartest minds, as well as builds and brings to market the most promising ideas.

These initiatives are designed to make the most of our ideas and innovation, with the goal of securing a prosperous economic future for southern Ontario.

Our strategy for this starts with our young people, where questions begin and ideas are born. We are encouraging our youngest minds to explore the benefits of pursuing an education and careers in the fields of science, technology, engineering and math – also known as the STEM fields – so they grow up to become our next generation of researchers and innovators.

We are working with post-secondary institutions and not-for-profit organizations to support skills and leadership development, foster innovation and productivity, and create new start-up businesses in the STEM fields.

These are the businesses of the creative economy.

And while it's important for them to have access to well-trained workers who generate new ideas, they also need access to the research and development capacity to help get those ideas to market.

For this reason, we have devoted significant attention to establishing partnerships between research institutions, academia and the private sector, and helping businesses develop promising news ideas and get them into the market.

We're also focusing on the big picture — what it takes to be competitive with the rest of the world.

We recognize that we must help businesses develop the tools they need to expand into new industries and markets and generate new opportunities for our region.

One of the initiatives our Government has put in place and that is tailor made for businesses in the creative economy is the Investing in Business Innovation initiative.

Through this initiative, we're providing access to financing for start-up businesses, boosting private sector investment, and helping accelerate the commercialization of new products and ideas.

Again, ideas and innovation: Jobs and Growth.

This is what it's all about.

It's through innovation that we will create jobs, improve the quality of life for all Canadians and strengthen our economy for future generations.

Through Investing in Business Innovation, we're helping to provide start-up businesses with access to the funding they need to bring their ideas and their innovations to life. This is one of the areas where the Jenkins report highlighted our government could play a role.

That's why today, I'm pleased to be able to announce funding under Investing in Business Innovation for a number of southern Ontario companies that have embraced the creative economy and are positioning themselves for success.

All told, these new investments total almost $4.9 million.

Together, these projects have the potential to create hundreds of new jobs in southern Ontario, and make a lasting impression on the economy of our region.

They span all sectors, but they have one thing in common: they exemplify what can be achieved through our innovation and ideas.

In the health sector, for example, we're investing $867,000 to help Profound Medical bring its MRI-guided treatment device for prostate cancer to the finish line, and get it into the market of the world. This is a project with a potentially huge impact for all of us and those we care about.

And we're providing a $965,000 investment in technology developed by Trillium Therapeutics that will treat a chronic bladder disease known as interstitial cystitis, which affects millions of women in North America. This project alone is forecast to create more than 100 jobs in the creative economy in the long term.

We're also investing more than $708,000 that will allow Axela to continue development of its suite of diagnostic tools which will enhance the analysis of proteins, DNA and RNA used in clinical research.

And in software and online services, we're helping a number of small businesses come up with applications and solutions to change the way we work and play:

• Fuse Powered Inc. will bring to market Fuseboxx, its next-generation mobile gaming platform;
• Futurestate IT will develop an online solution to give businesses the ability to migrate older software applications and data to new operating systems;
• Shiny Ads will expand their self-service online advertising platform;
• StickerYou will optimize its online platform and launch a mobile platform to help consumers and businesses create customized stickers online; and
• Field ID will accelerate the development of its platform for automating corporate inspection and safety compliance in the oil and gas, mining, utilities and construction industries.

As I mentioned, these investments have the potential to create hundreds of new highly skilled jobs here in southern Ontario, and they are but a few examples of the innovative projects and companies our government is helping across the country.

It is through investments like these that our government is ensuring Canadian researchers and entrepreneurs can make the most of every opportunity and keep Canada on top.

The ideas and innovations are out there, and we want to help bring them to life.

Canada has the world-renown post-secondary institutions and leading-edge thinkers and researchers.

We have the business expertise and leadership that is so essential in taking ideas to the next level.

We have the people with the skills, the drive and the desire to ensure we can thrive and grow now and into the future.

All these things will help us attract new businesses, and new national and foreign investors, while also supporting existing businesses and making sure they stay here in Canada.

They will ensure we can continue to achieve a sustainable and prosperous recovery from the economic downturn, both in our region and across Canada.

They will bring jobs, growth and prosperity for families, businesses and communities.

Thank you. Merci.