In addition to nation-building projects that focus on energy and resources, we need investments that focus on the entire technology ecosystem.
With nation-building projects and increases in defence spending, there is currently an opportunity to improve Canada’s performance in technology development and to strengthen its technology ecosystem. Let’s take a look at how things are rolling out so far.
Our current predicament stems in part from an over-reliance on globalization as our engine of economic prosperity, as globalization is predicated on a level of geopolitical stability that does not currently exist. It is already problematic to ignore human rights abuses by trading partners, but things become more difficult when one trading partner threatens to attack another or tears up an existing trade agreement. Therefore, while trade diversification is important, a second crucial element to enable Canada to be better buffered from geopolitical instability is increased self-sufficiency. Expanding Canada’s base of domestic technologies is critical to self-sufficiency, as is talent development and retention.
The first two rounds of nation-building projects announced focus on energy and critical minerals. While these projects will likely be beneficial, there is surprisingly little emphasis on low-carbon energy generation. For example, investment toward accelerating the production of biofuels needed by the aviation sector would be a valuable contribution to Canadian self-sufficiency with export potential. Moreover, while there are parallels between the current projects and similar ambitious undertakings during the postwar boom, there is also a crucial difference. During the postwar era, organizations such as the National Research Council (NRC) grew and thrived; now their budgets are being slashed. Federal government investment must carefully balance short-term needs and opportunities with long-term interests, where the former require targeted investments while the latter need a broad portfolio to put the country in a position to address future needs and capitalize on future opportunities that cannot be anticipated. The present approach, where strategic short-term investments are accompanied by across-the-board cuts—in many cases to departments that were already underfunded—will further weaken important foundational pieces in Canada’s technology ecosystem.
One recent victim of budget cuts is the lunar rover announced in 2022. The prime contractor was Canadensys, an important Canadian space company, and the project involved more than 30 partner organizations. This was an important and highly visible project for the Canadian technology community, providing inspiration and employment opportunities for young Canadians. As Canadensys must now seek new partners, it is quite possible that this technology will eventually contribute to American or European lunar programs—a significant loss for Canada. Another important Canadian space company, MDA, also received bad news recently with NASA’s pausing of the Lunar Gateway space station, which was to feature MDA’s Canadarm 3. Fortunately, development of Canadarm 3 continues, as it is capable of addressing a range of applications other than the space station.
On the defence front there is a possibility that Saab will manufacture some fighter jets in Canada, and Airbus some helicopters. This is welcome news, but also a reminder that despite our proud history in aerospace, Canada currently has no significant presence in either military or commercial aircraft design and development, while Sweden, a country roughly one-quarter the size of Canada, exports military aircraft. Overall, it remains to be seen how the increase in defence spending will affect the Canadian technology ecosystem, including companies, the NRC, and universities, but there needs to be a recognition that the entire ecosystem is critical to success, and funding should be tailored to the specific needs and capabilities of the different sectors. For example, a Canadian version of the United States’ Air Force Office of Scientific Research would be of great benefit to the academic sector.