Canada delays CIC launch to 2026-2027; policy revisions for innovation initiatives, tax incentives, and BDC improvements announced. (IT World Canada)
The joint statement by the Department of Finance Canada and Innovation, Science and Economic Development Canada (ISED) revealed a delay in the launch of the Canada Innovation Corporation (CIC) until the fiscal years 2026-2027. This postponement implies that the CIC's existence hinges on the continuity of government post the upcoming general election in October 2025.
The integration of the National Research Council of Canada Industrial Research Assistance Program (NRC RAP) into the CIC, which was previously slated following an announcement in February, will also be deferred until 2026-2027. In the interim, NRC IRAP will persist under the administration of the NRC, as stated by the departments.
Initially described by the government earlier this year as more than a mere funding body, the CIC aimed to foster increased Canadian business investment in research and development (R&D), earmarked to receive C$2.6 billion over a four-year span as outlined in the last February budget.
A senior government official, speaking to The Globe and Mail, attributed the delay to the challenge of establishing an agency from the ground up and the difficulty in securing suitable personnel from the private sector to lead the agency.
Despite assurances in June about the imminent commencement of the CIC with a board and executive, the government is yet to disclose the individuals tasked with overseeing the CIC.
Benjamin Bergen, the president of Council of Canadian Innovators (CCI), expressed disappointment over the delay, terming it as unwelcome news for leaders within Canada's innovation sector. Bergen initially lauded the creation of the CIC but lamented the two-year delay, casting doubt on its eventual establishment as envisioned.
However, Bergen appreciated the announced review of the Scientific Research and Experimental Development (SR&ED) tax incentive program, hoping it would enhance transparency concerning the beneficiaries of these tax incentives. This program, allocating about C$3 billion annually to over 20,000 claimants (with 75% being small businesses), encourages R&D and skilled workforce employment.
Moreover, the government's declaration outlined plans for consultations starting the following month on a "cost-neutral modernization" of the SR&ED program. Additionally, it announced forthcoming improvements to the Business Development Bank of Canada (BDC) following recommendations from a legislative review. The BDC, a federal Crown corporation aiding small and medium-sized enterprises (SMEs) and entrepreneurs, received suggestions to enhance support for underrepresented entrepreneurs and expand its reach in underserved regions. The review also highlighted the necessity for BDC to reassess its "risk appetite" to support entrepreneurs most in need.
Bergen, acknowledging the government's response to concerns about BDC's risk-averse stance, emphasized that real change would be evidenced in the decisions made by BDC's leadership and staff in the future, hoping they grasp the genuine needs of Canadian innovators.
