Thank you for the kind introduction, Suzanne Fortier.
I'd also like to thank the team at Research Money for the invitation. This conference provides us all with a good opportunity to think about how we can harness the innovation potential across this country and translate that into long-term prosperity. All too often, conversations about technology and innovation revolve around the instantaneous. I'm encouraged to see so many of you here who are willing to ask one another how Canadian businesses can further drive innovation in Canada.
Since our government released Economic Action Plan 2012 in March, I've had the opportunity to speak with stakeholders about some of the innovation measures found in the budget.
I think we can all agree that competition for the brightest minds remains fierce. The pace of technological change is lightning-quick, and it is happening in both developed and emerging economies. This means that to ensure Canada's long-term economic competitiveness, we must create and nurture globally competitive businesses that innovate and create high-quality jobs.
Beyond our borders, the global economy remains tentative and any potential setbacks would have an impact on Canada.
Canadian businesses face ever-increasing competition from emerging countries as well as new realities associated with an aging population and demographic change.
Fortunately, Canada is facing these challenges from a well-established position upon which we can build.
With a comprehensive and forward-looking agenda that will deliver high-quality jobs, economic growth and sound public finances, our government's Economic Action Plan will allow Canada to overcome future adversity and emerge stronger than ever.
It builds on our positive record of achievement. The budget measures will help further unleash the potential of Canadian businesses and entrepreneurs to innovate and thrive in the modern economy to the benefit of all Canadians for generations to come.
Conferences like this one focus on long-term growth, and, in much the same way, our government is targeting its innovation measures on long-term priorities like high-quality jobs and prosperity.
By focusing on the drivers of growth and job creation—innovation, investment, education, skills and communities—the new measures in Economic Action Plan 2012 will solidify, strengthen and draw upon the entrepreneurial sector's role as the driving force behind Canada's economy.
Canada's businesses—entrepreneurs and —have proven time and again that they are up to the task if given the opportunity.
Well, ladies and gentlemen, with its Economic Action Plan, the Harper Government is ensuring that they will have all the opportunity they need to flourish.
For starters, this transformational agenda includes a new approach to supporting entrepreneurs, innovators and world-class research.
As a world leader in post-secondary research with a highly skilled workforce, Canada has strong fundamentals for innovation.
The federal government provides significant resources to support research, development and technology.
In fact, Canada tops the G7 for its higher-education expenditures on research and development (R&D) measured as a percentage of gross domestic product (GDP).
Our Scientific Research and Experimental Development (SR&ED) tax incentive program is currently one of the most generous systems in the industrialized world.
But these measures alone are not enough. Only results matter.
Our government realizes that the results of these policy measures need improvement.
Canada continues to lag peer nations in terms of overall innovation performance, including private sector investment in R&D. We also need to improve our ability to commercialize research into products and processes that create high-value jobs and economic growth.
Our government is taking steps to address these challenges.
First, we set up an expert panel, chaired by OpenText's executive chair Tom Jenkins. The panel was asked to determine how we could improve and optimize our incentives to turn around this lagging performance.
And now we are responding to the panel's recommendations in a way that will create high-value jobs through investments in:
- direct support for business innovation;
- financing opportunities for businesses with the potential to become globally competitive; and
- linkages between public research and market needs.
Among other things, our Action Plan will double the National Research Council of Canada's Industrial Research Assistance Program to better support R&D by small and medium-sized companies.
It will refocus the National Research Council on demand-driven business-oriented research that will help Canadian businesses develop innovative products and services.
It will support innovation through procurement by connecting Canadian companies with federal departments and agencies to build their capacity to compete in the global marketplace.
It will help high-growth firms access risk capital by committing $400 million to leverage increased private sector investments in early-stage risk capital and to support large-scale, privately managed venture capital funds.
It will support private and public research collaboration through internships for graduate students and funding for business-led R&D networks.
And it will streamline the SR&ED tax incentive program and invest the savings in direct support programs that will reinforce business innovation in Canada.
Our government is also building on earlier investments by proposing significant new resources to support advanced research and leading-edge infrastructure.
Furthermore, our Action Plan will enhance granting council support for research partnerships between industry and academia and provide new funding to research human health and genomics technology through Genome Canada.
It will link Canadian researchers to the world through the Canadian Institute for Advanced Research.
And it will enhance support for leading-edge research infrastructure through investments in the Canada Foundation for Innovation and CANARIE, Canada's ultra-high-speed research network, among others.
But, to effectively compete and succeed globally, Canadian job creators need more than bright ideas.
They must be supported by a modern regulatory environment that promotes competition, business investment and economic growth.
This implies a competitive and efficient tax system, a well-functioning financial system and access to international markets. That is why this year's Economic Action Plan includes key commitments in all of these areas, which will improve conditions for business investment and drive the next wave of job creation.
The budget also recognizes that, in uncertain times, living within our means is just as important as creating jobs.
In keeping with this fiscal discipline, we are implementing moderate restraint in government spending.
The savings from this federal review of expenditures amounts to less than 2 percent of expected federal program spending in 2016–17.
Although this was a comprehensive review of departmental spending, it was by no means an across-the-board cuts exercise.
We will ensure continued and growing funding for the programs and services that are a priority for Canadians. Economic Action Plan 2012 makes a wide range of important investments in business innovation that bear witness to this commitment.
The reductions in departmental spending simply reflect changes to refocus government and programs, to modernize and reduce the back office, and to make it easier for Canadians and businesses to deal with their government.
These actions will yield real dividends for Canadians. They will support the return to balanced budgets at an appropriate pace as the economy continues to recover from the global economic crisis.
And three years after the stimulus phase of Canada's Economic Action Plan was launched in response to that crisis, it is clear that our economic recovery is advancing.
There is renewed strength in our exports, and our domestic economy is continuing to grow. Since July 2009, employment has increased by more than 750,000 jobs and is now 320,000 above its pre-recession peak—the strongest job growth among G7 countries over the recovery and the largest back-to-back gain in the number of jobs in 30 years.
We are projected to return to a balanced budget over the medium term, and the federal debt is projected to decline to 28.5 percent of GDP in 2016–17, in line with its pre-recession level.
Canada continues to hold a significant fiscal advantage over other G7 countries in this regard.
The International Monetary Fund projects that, by 2016, Canada's total government net debt-to-GDP ratio will remain at about one third of the G7 average and more than 20 percentage points of GDP below that of Germany, the G7 country with the next-lowest ratio.
Reducing this debt is no mere abstract accounting exercise. It will have very real tangible benefits, including:
- freeing up tax dollars otherwise absorbed by interest costs;
- keeping interest rates low and encouraging investment; and
- preserving Canada's low-tax plan, encouraging the long-term growth that generates high-wage jobs for all Canadians.
So clearly our prospects are shining brightly. And we know that securing long-term prosperity for Canadians in uncertain times means that we must act today.
With Economic Action Plan 2012, we have done so decisively, creating long-term opportunities for jobs and growth in Canada.
All of these measures are aimed at creating the conditions necessary for a sustainable, competitive innovation system. These conditions include supportive regulatory and marketplace frameworks, engaged citizens, a highly skilled workforce, as well as world-class research and leading-edge infrastructure.
I wish you all a productive conference. I look forward to hearing about the discussions and outcomes of this gathering. Thank you.
