A National Strategy for Homegrown Innovation
Canada possesses a vibrant innovation ecosystem, but our potential is undermined when domestic companies relocate abroad. This proposal outlines a targeted strategy to nurture homegrown innovation, ensuring Canadian investment translates into Canadian GDP.
The Core Challenge: Innovation Drain
While Canada is a world leader in founding innovative companies, we face a significant challenge in retaining them. Many of our most promising startups and scale-ups are acquired or relocate their leadership, taking valuable intellectual property, jobs, and long-term economic benefits with them. This visualization illustrates the gap between creation and long-term retention.
Three Pillars for a Stronger Canada[1]
To secure our position as a global leader, we must focus our efforts on key strategic areas where Canada is uniquely positioned to lead. This strategy focuses on three pillars, each with specific goals and incentives to foster a robust domestic ecosystem. Click on each pillar to explore the detailed approach.
EV & Hybrid Supply Chain
AI Compute Power
MedTech & Pharma
Electric & Hybrid Vehicle Supply Chain
The global shift to electric mobility presents a significant opportunity. Instead of relying on foreign multi-nationals, Canada can foster a robust domestic supply chain by encouraging the development of vehicles and components specifically designed for our country’s diverse terrain and climate. By reducing inter-provincial trade barriers, we can create a streamlined, efficient domestic market, ensuring our EV sector is built on Canadian soil from the ground up.
AI Compute Power
AI is reshaping every industry, and national leadership in this space is paramount. To minimize reliance on foreign interests and safeguard our strategic assets, we must invest in building a comprehensive Canadian AI ecosystem. This includes building more data centers, nurturing domestic development teams, and ensuring that any company receiving strategic government contracts has Canadian leadership. This proactive approach will guarantee that our AI capabilities align with our national interests.
Target Growth: Domestic AI Talent
MedTech & Pharma
Our healthcare system faces mounting costs, and innovation offers a path to greater efficiency and improved public health. By promoting the development of open-source drug production and incentivizing companies that create specific, low-cost treatments for the Canadian market, we can reduce our reliance on foreign pharmaceutical giants. Encouraging firms to hire Canadian employees and generate revenue domestically will not only stimulate the economy but also lead to better health outcomes for citizens.
The Solution: Aligning Venture Capital with National Interests
Unlocking this potential requires a fundamental change in how we incentivize capital. Venture capital (VC) is the engine of innovation, but we must align its interests with our national goals. This can be achieved through a balanced "carrot and stick" approach.
🥕 The Carrot: Incentivize Retention
Offer matching tax credits and other significant incentives for Venture Capitalists whose portfolio companies maintain Canadian leadership and file taxes in Canada for at least five years. This directly rewards long-term commitment to building a strong domestic ecosystem.
🏒 The Stick: Discourage Exodus
Implement an escalating tax on revenue from international IPOs for VCs who do not prioritize our domestic interests. This creates a financial disincentive for premature exits that move value and control outside of Canada.
Simulated 10-Year Impact[2]
This interactive dashboard simulates the potential 10-year impact of implementing the proposed VC incentives. Toggle the policy switch to see how aligning capital with national interests can accelerate growth in key economic indicators.
GDP Contribution
$15B
Domestic IP Retention
45%
High-Tech Job Growth
+80k