The Short Report: April 10, 2024

GOVERNMENT FUNDING

Federal government commits $2.4 billion for supercomputing infrastructure for AI sector

The Government of Canada’s budget on April 16 will invest $2.4 billion in computing and technological infrastructure for Canada’s artificial intelligence sector, Prime Minister Justin Trudeau announced on April 7 at the federally supported Scale AI global innovation cluster in Montreal, as part of his pre-budget tour.

The majority of the funding, $2 billion, will go toward computing and technological infrastructure for Canadian AI researchers and companies. It includes a new AI Compute Access Fund that will pay companies and scientists to use the processing power they need immediately.  Another $200 million is being committed to AI technology adoption in sectors such as agriculture, health care and manufacturing, to be delivered through regional development agencies.

The National Research Council of Canada’s Industrial Research Assistance Program will receive an additional $100 million to support startups developing AI products and solutions. Additional investments will be made in helping businesses incorporate AI, while $50 million is meant to help workers whose jobs may be affected by the adoption of AI.

“This is a timely investment in infrastructure (supercomputers) that will keep Canada competitive on the world stage,” Dr. Ryan Grant, PhD (photo at right), an expert in supercomputer design and assistant professor in the Ingenuity Labs Research Institute at Queen’s University, said in an email to Research Money, “A business-first approach will enable discussion on new ways of thinking about public-private funding of self-sustaining, secure compute infrastructure.”

Grant, who noted he was speaking personally and not on behalf of Queen’s, said: “Based on studies from other nations, we know that well-directed supercomputing infrastructure investments can not only pay for themselves many times over, providing excellent return on investment for taxpayers, but also accelerating business and improving overall economic productivity.”

“As an expert in supercomputer design with experience with the largest supercomputers in the world, I look forward to contributing to both the short- and long-term investment strategies proposed in this announcement, Grant said.

Benjamin Bergen, president of the Council of Canadian Innovators (CCI) said the CCI needs to better understand how Canadian companies will be able to access the computing power that the federal government is building with this investment. "But if this gives Canadian companies the resources to compete globally, [the] announcement is a step in the right direction," he said in a statement.

However, this kind of investment must be paired with smart industrial strategy which ensures that the intellectual property that results from Canadian innovation in artificial intelligence is owned by Canadians and commercialized for the benefit of the Canadian economy, Bergen said. "In past decades, we have seen world-leading Canadian research flow to foreign multinationals with minimal benefit for the Canadian economy, and we see the results of this showing up in Canada’s lacklustre productivity metrics." 

Done right, the investment ?could be an important step in ensuring Canada’s continued AI leadership; we are eager to work with the federal government to ensure success for the future," Bergen said.

Ottawa also will follow the lead of the U.S. and U.K. and  establish the Canadian AI Safety Institute to study the technology’s risks.

"This initiative is a step forward in the recognition of experts' calls for more regulation in this fast-growing space," Rosemary McGuire, vice-president of research, guidance and support at Chartered Professional Accountants of Canada, said in a statement. "We are supportive of policies that enhance trust and accountability."

Trudeau announced that the budget also will include $5.1 million to enforce the proposed Artificial Intelligence and Data Act through a new commissioner’s office. Finance Canada

See also: Lack of supercomputing power is impairing Canada’s research and business innovation

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Operators of Canada’s major research facilities call on Ottawa to significantly change how these facilities are funded

The operators of Canada’s major research facilities are asking the federal government in Budget 2024 to devise a better, more integrated and sustainable way to provide funding to keep these facilities operating.

Research advocates warn that if the government fails to act, it will be challenging for Canada to make the most of the billions of dollars invested in its research resources or to plan for the future, and the country will lose its talented graduate students and post-docs.

Canada’s major research facilities include: SNOLAB, the underground laboratory in Sudbury, Ont.; the TRIUMF particle accelerator in Vancouver; and the Canadian Light Source synchrotron at the University of Saskatchewan.

TRIUMF’s latest five-year funding allocation runs out next year, and the facility is seeking $450 million to cover expenses from 2025 to 2030, according to its pre-budget submission. The facility is owned by a consortium of 21 Canadian universities.

TRIUMF says that its operational funding from government has come in below requested levels over the last two decades, “thereby compounding pressures related to operational capacity and deferred maintenance.” Many TRIUMF facilities are approaching 50 years in operation, with a critical need for deferred maintenance beyond what can be supported as part of regular operations and repairs.

TRIUMF says the requested operating funds will enable the facility to continue delivering world-class science, including through two new world-leading infrastructure projects more than a decade in development. The funding also will help train the next generation of leaders and innovators, and maintain Canada’s leadership position in major international research collaborations, including shepherding Canada’s contributions to the CERN, a particle accelerator in Switzerland, and major U.S. Department of Energy projects.

“In the face of growing global competition, the lack of a coordinated support system for our domestic major research facilities, which considers the unique needs of these facilities and programs, puts Canada at a distinct disadvantage,” TRIUMF says in its pre-budget submission. “Without reliable life-cycle funding, a stable and structure funding process, and a framework for long-term planning and stewardship, Canada risks falling behind.”

The Canadian Light Source in Saskatoon  received $20.6 million of its $38.2 million budget for the year through March 2023 from the Canada Foundation for Innovation, according to the Canadian Light Source’s 2023 annual report. The facility saw users from 22 countries and 10 provinces last year. The facility’s current agreements with its federal support agencies expire in 2026.

SNOLAB, which is focused on research on neutrinos and dark matter and is operated by a coalition of universities, received federal funding of $102 million over six years, announced in 2022.

However, given its scientific significance and the specialized personnel and systems that support it, SNOLAB would be more sensibly handled as a national asset with a budget process and strategic framework to match it, Art McDonald, a Canadian Nobel laureate whose prize-winning neutrino experiment was conducted at SNOLAB, said in a story in The Globe and Mail.

Leaders of major research facilities are calling on the federal government to establish a dedicated major research facilities fund that would pay for capital costs for equipment, operating expenses to keep it running, and the staff who work with visiting scholars who use the facilities.

In total, 19 facilities or large-scale science initiatives across Canada face a similar situation, from one-off items like the Amundsen research icebreaker to more distributed efforts such as CGEN, a national platform for genomic analysis with hubs in Montreal, Toronto and Vancouver.

In 2022, the Advisory Panel on the Federal Research Support System, led by Dr. Frédéric Bouchard, PhD, Dean of the Faculty of Arts and Science and professor of philosophy at Université de Montréal, reviewed the federal government’s research support system. The panel’s recommendations, released in March, 2023, included that the government use a more coherent “portfolio and lifecycle approach” in funding major research facilities.

The panel recommended the government fund major research facilities not on the current six-year funding cycle, but as long-term infrastructure with predictable funding on a life cycle basis, through the planning, construction, operation, maintenance and decommissioning of facilities. The requirement to provide matching funds for major research facilities should be removed or significantly reduced, with their funding levels increased to international standards, the panel said.

The panel also recommended a national road-mapping exercise be developed, guiding priority-setting and planning for large-scale research infrastructure investments. TRIUMF, Canadian Light Source, The Globe and Mail

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The Department of National Defence (DND) announced a federal investment in the upcoming federal budget of $8.1 billion over the next five years, and $73 billion over the next 20 years, in Canada’s national defence across six major themes. One theme is “Building an Innovative Defence Industrial Base.” Under this theme, the government has committed $107 million over 20 years for Canada’s participation in the newly established NATO Innovation Fund, which will offer additional funding streams for innovative Canadian entrepreneurs. The Fund is the world’s first defence-focused multi-sovereign venture capital fund, providing investment in start-up firms developing dual-use, emerging and disruptive technologies critical to Canada's defence. Other defence-related funding commitments include:

• $2.8 billion over 20 years to stand up a joint Canadian cyber operations capability with the Communications Security Establishment, establishing a unified team that will conduct active cyber operations in support of Canadian interests.
• $1.4 billion over 20 years to acquire specialized maritime sensors to conduct ocean surveillance, including in the Arctic and North.
• $222 million over 20 years to build a new satellite ground station in the Arctic, to improve Canada’s ability to detect, deter and respond to malign activities.
• $218 million over 20 years for Northern Operational Support Hubs, to better ensure Canadian sovereignty by establishing a greater year-round presence across the Arctic and the North.

The new investments are expected  to bring Canada’s defence spending-to-GDP ratio to 1.76 per cent by 2029-30, still short of the NATO commitment of two per cent to which Canada agreed at the Vilnius Summit in 2023. DND

The Government of British Columbia is providing approximately $52.3 million, through the B.C. Knowledge Development Fund (BCKDF), to support infrastructure for 25 research projects at five post-secondary institutions. The projects include identifying resilient features of the human metabolism that could be targeted to fight common and debilitating diseases such as obesity, diabetes and obesity-driven cancers. The five institutions receiving funding are: University of British Columbia (UBC), University of Victoria (UVic), Simon Fraser University (SFU), University of the Fraser Valley (UFV), and British Columbia Institute of Technology (BCIT). The funding includes $6.84 million for the project, "Improved Pre-clinical Modeling of Metabolic Resilience for Novel Obesity and Diabetes Therapeutics," which will help fund UBC’s research infrastructure to better understand how bodies manage obesity and diabetes. Researchers will utilize approaches that include animal, cell culture and human organoid models and a hormone discovery platform to study metabolic resilience and develop new treatments. Apart from the projects focused on metabolism in the role of diseases, other projects supported by the BCKDF include:

• UVic, Environmental Simulation Facility – Climate Change Impact on Plant Health: This setup, using climate-controlled chambers, will help researchers study how climate change affects farm crops and forests. The goal is to find the best disease-resistant trees for breeding and reforestation, create better tests for plant sickness, identify new plant pathogens and predict how climate change will affect forests and berry farms in B.C.
• SFU, The Pacific Ocean Neutrino Experiment Demonstrator: This is a new neutrino telescope to be deployed at Ocean Networks Canada off the coast of Vancouver Island. The telescope will aim to reveal insights about the inner workings of the brightest and most enigmatic places in the universe and discover previously unknown astronomical phenomena.
• BCIT, Advanced Mobility Devices to Expand Wheelchair Capabilities for Increased Community Participation: Researchers will investigate and improve new wheelchair technologies to help people move better and faster. These technologies include power wheelchairs with robotic skills such as stair-climbing, and hybrid-manual wheelchairs with e-bike-like power assist units. The research may lead to improved health and daily life for wheelchair users, and guide clinicians and consumers in how they select and use these new products safely.
• UFV, Berry Environmental Resilience Research and Innovation Lab: A 980-square-foot facility outfitted with state-of-the-art technology at UFV’s Chilliwack campus will help researchers understand how berry systems adapt to climate challenges to help address food security issues and strengthen B.C.’s position as a global leader in sustainable berry production. Gov't of B.C.

The Prairies-based Protein Industries Canada global innovation cluster announced a $5.7-million project with Verve Seed Solutions, Farmer’s Business Network Canada (FBN), and Fresh Hemp Foods, with the goal of increasing yield per acre and bringing high-quality, low-cost hemp protein to the market. Protein Industries Canada will invest $2.5 million in the project, with the industry partners investing the remainder. Partners will work together to create an innovation value chain that will develop hybrid hemp cultivars with the physical and functional traits valued by processors, food ingredient companies and consumers. FBN manages hybrid canola- and hemp-breeding programs and together with Verve have the largest hemp seed genetics portfolio in North America. Verve, through its parent company HGI (2009), is one of the longest-serving hemp seed companies in North America and a leader in providing hemp varieties to the Canadian, U.S. and international markets. Fresh Hemp Foods, established in 1998, is a global leader in contract hemp production, food ingredient processing and hemp-based consumer packaged goods. Protein Industries Canada

Protein Industries Canada opened its third call for proposals under its Technology Leadership Project program stream. The call, which will close on May 22, 2024, is for projects that will further strengthen Canada’s position in ingredient manufacturing and food processing. Up to $40 million is available for co-investment into eligible projects. The call is focused on projects that will have measurable outcomes related to the development, scale-up and commercialization of innovations in:

• Germplasm development with an aim to improve protein content, processing efficiency, quality, sensory characteristics and the development of novel ingredients.
• Ingredient Manufacturing
• Food Processing
• Feed products
• Co-product development.

Expressions of interest (EOIs) will be accepted from consortiums of at least three partners, one of which must be an SME. Projects must include the use of a high-protein dryland crop such as lentils, peas, canola, fava, oat or soy. Approved projects may receive up to 45 per cent reimbursement of eligible costs. EOIs may be submitted until May 22, 2024, but consortiums are encouraged to submit their EOIs as soon as they are ready. EOIs will be reviewed on an ongoing basis, allowing successful submissions to move to the next step in the process in a timely manner. Interested consortiums are asked to visit proteinindustriescanada.ca/technology and fill out the form at the bottom of the page. Protein Industries Canada also is moving to a continual intake for projects under the Pan-Canadian Artificial Intelligence Program Stream. Projects should consider the application of AI to support innovations in areas such as genetics, improvements in primary production, sustainability, ingredient and food formulation, quality assurance and quality control. Projects will be accepted until Aug. 30, 2024, or until funds are fully committed. More information can be found at proteinindustriescanada.ca/artificial-intelligence. Protein Industries Canada

Agriculture and Agri-Food Canada (AAFC) announced up to $5 million for five projects under the Innovative Solutions Canada (ISC) program. Each of the selected small to medium-sized businesses is receiving up to $1 million to build a prototype of its new innovation. ISC’s Challenge Stream and Testing Stream helps startups and SMEs overcome technology testing and development hurdles so they can produce globally demanded products and services, while also improving government operations. Under the Canadian Meat Processing Technology Development Challenge, projects include:

• Exonetik Inc. (Sherbrooke, Quebec) – Developing a robotic arm system that utilizes artificial intelligence learning to automate challenging tasks.
• E. O.I Technologies Inc. (Calgary, Alberta) – Developing sensors to collect data on fast-moving conveyor systems.

Under the Enhancing Automation in Controlled Environment Agriculture Farming Challenge, projects include:

• Exonetik Inc. – Developing a robotic arm to work alongside humans to harvest fruits and vegetables.
• Kinova Inc. (Boisbriand, Quebec) – Develop a low-cost and accessible multi-produce picking solution using Kinova’s existing lightweight robotic manipulator technology.
• Mycionics Inc. (Putnam, Ontario) – Developing and creating a robotic mushroom harvesting system to address on-farm labour scarcity, reduce costs, streamline operational logistics and maximize yield through crop digitization. (AAFC)

The Government of Alberta is increasing the Aboriginal Business Investment Fund (ABIF) by $2.5 million for the second year in a row, doubling it from $5 million in Budget 2022 to $10 million in the 2024-2025 fiscal year. Since its launch 10 years ago, the ABIF program has provided capital grants to more than 85 Indigenous businesses and helped create more than 800 permanent jobs for Indigenous people in Alberta. The ABIF provides capital grants of up to $750,000 to help Indigenous-owned businesses develop and grow. It gives them the means to build, enhance or purchase the infrastructure and equipment they need to increase revenue, create jobs and contribute even more to their communities. The ABIF has supported businesses in construction, agriculture, oil and gas, retail, tourism and many other industries. One success story that the government said led it to increase funding for the program is Montana First Nation, one of four First Nations in Maskwacis in central Alberta. In 2021-22, Montana First Nation received a $500,000 ABIF grant to support the development of Akamihk Fresh greenhouse, which is now providing fresh vegetables and freeze-dried herbs to markets and restaurants in central Alberta and the Edmonton area. The greenhouse also supplies many schools in Maskwacis with fresh food for their students. As another example, the Blood Tribe’s Kainai Forage operation in southern Alberta received multiple rounds of ABIF funding and now exports premium hay across the world. Govt. of Alberta

Following months of engagement with the independent power industry, First Nations and stakeholders, BC Hydro has issued a request for proposals to acquire approximately 3,000 gigawatt hours per year (GWh/y) of electricity. This is BC Hydro’s first competitive call for power in 15 years and will add five per cent to its current supply, providing enough clean electricity to power 270,000 homes or approximately one million electric vehicles per year. The development and construction of new clean-energy projects in response to the call for power will generate an estimated $2.3 billion to $3.6 billion in private capital spending throughout the province and create approximately 800 to 1,500 jobs on average annually. BC Hydro expects electricity demand to increase by 15 per cent between now and 2030. This is due to population growth and housing construction, increased industrial development, including in the mining sector, and more homes and businesses switching from fossil fuels to clean electricity, among other factors. Similar to recent calls for power by other jurisdictions (including Alberta and Saskatchewan), projects must have a minimum percentage of equity ownership held by First Nations. The Canada Infrastructure Bank will make loans available as an option for First Nations to help finance as much as 90 per cent of their equity position in a project that is awarded an electricity purchase agreement under the call for power. Govt. of B.C.

The Government of Ontario is working in partnership with Webequie, Nibinamik, Neskantaga, Eabametoong and Marten Falls First Nations to expand clean and reliable electricity transmission and generation infrastructure to end these communities’ reliance on diesel-powered generators and support greater economic self-determination and prosperity. Through the Wataynikaneyap Power Transmission Project, which the government is supporting with a construction loan of up to $1.34 billion that started in 2019 and is expected to be completed this year, 16 remote diesel-dependent partner First Nations will be connected to Ontario’s clean electricity grid for the first time. However, other remote First Nation communities across northern Ontario continue to rely on costly, difficult to transport and unreliable diesel generation for electricity, which is a significant source of noise and emissions and limits opportunities for growth, including new community infrastructure and housing. Diesel fuel is currently trucked in seasonally on unreliable winter roads or flown in at massive expense. The government said it is working closely with interested First Nations partners to identify clean electricity supply options that meet their unique needs. Govt. of Ontario

The Government of Newfoundland and Labrador is investing $634,000 in the Centre for Research and Innovation, for skills development in the tech sector. The three-year investment will support the development and implementation of micro-credential and certified programming to help meet shortages in the province’s tech workforce by upskilling participants in a timely manner. In total, eight micro-credentials and four certificates will be developed in the first year, and then implemented in the second and third years. Funding is provided through the Canada-Newfoundland and Labrador Labour Market Development Agreement. The Centre for Research and Innovation is a partnership between: Grenfell Campus, Memorial University; College of the North Atlantic; and Corner Brook Pulp and Paper. The Centre supports applied research and teaching with a focus on bio, green, circular economies and entrepreneurship across all sectors of the western regional economy. Govt. of Newfoundland and Labrador

The Government of Alberta is providing $600,000 to small modular nuclear reactor developer X-Energy Reactor Company LLC, based in Rockville, Maryland, in partnership with TransAlta Corporation, to study the feasibility of repurposing a fossil fuelled-electricity generation site for nuclear power. The funding will come from Crown-owned Emissions Reduction Alberta, which is funded through revenues from Alberta’s industrial carbon pricing system. In January, Edmonton-based Capital Power and Ontario Power Generation announced an agreement to assess the feasibility of developing small modular reactors (SMRs) in Alberta. The Alberta government also is reconsidering whether the provinces should have conventional large nuclear power plants, said Affordability and Utilities Minister Nathan Neudorf. The first step is for the government to write regulations for the generation and use of nuclear power, then begin public consultations to gauge citizens’ appetite for a new power source, he said. Calgary Herald, CBC News

The Government of Nova Scotia announced new rebates for medium- and heavy-duty zero-emission vehicles, including commercial and industrial vans and trucks. The government is investing $500,000 in the one-year pilot program. Eligible vehicles include vans and trucks used for commercial or industrial purposes that weigh more than 3,856 kilograms and electric resurfacing machines like Zambonis. Clean Foundation is administering the new pilot through the Electrify Nova Scotia Rebate Program. It will offer rebates of up to $50,000 per vehicle – depending on its class – to businesses, non-profits, municipalities and Mi’kmaw communities that want to move to electric vehicles. Govt. of Nova Scotia

The Government of Manitoba’s 2024 budget invests $10 million in Winnipeg-based New Flyer Inc.’s All Canadian Build facility to build more electric buses in Manitoba and create a centre of excellence. The budget also offers rebates of up to $4,000 on new electric vehicles and plug-in hybrids and a $2,500 rebate for used EVs and plug-in hybrids. The budget also allocates $43 million to support post-secondary students training for their careers, and $1.5 million to increase the number of apprenticeship training seats to help grow the province’s skilled labour force. Govt. of Manitoba

RESEARCH, TECH NEWS & COLLABORATIONS

 The University of Waterloo and Ontario land development and homebuilding company Caivan Group launched the Future Cities Institute (FCI), thanks to a $10-million commitment from Caivan. FCI is an interdisciplinary hub housed within UWaterloo’s Faculty of Environment. FCI’s founding director is Leia Minaker, an associate professor in UWaterloo’s School of Planning who studies links between health and city design. Drawing on expertise from across faculties and leveraging partnerships with industry and government, FCI will take on big issues like the modernization of city planning and the optimization of infrastructure to prioritize not only how cities will be laid out, but also, how they will be sustainable. Deep examinations of the root causes of pressing issues, like housing and urban transportation, will lead to the development of data-supported toolkits and practical guides that industry and governments can apply to urban policy and building to drive prosperity for all, UWaterloo said. FCI will create a global network of academia, government, industry, and grassroots organizations to mobilize a large body of quantitative research and train a new generation of leaders. Its focus will be on four key areas of research: housing, modelling, mobility, and sustainable infrastructure – and how they intersect with sustainability, economics, society, health and technology. Caivan CEOs and co-founders Frank Cairo and Troy van Haastrecht, both alumni of UWaterloo, have supported the university’s Future Cities Initiative since 2020, donating an initial $1 million to seed the initiative. In addition to the current Master of Future Cities program, FCI will now offer a Master of Engineering degree in Future Cities, a graduate diploma program where students from graduate programs will be eligible to specialize in Future Cities. UWaterloo

The University of Calgary’s (UCalgary) Quantum City and QAI Ventures, a Swiss venture capital firm specializing in quantum tech innovation, have signed a non-binding letter of intent to collaborate to build and promote the UCalgary and pan-Alberta quantum ecosystem on a global scale. To initiate this collaboration, QAI Ventures and Quantum City plan to collaborate on a global quantum accelerator in Calgary, which will be called QAI Ventures Accelerator, powered by Quantum City. Additionally, QAI Ventures intends to invest directly in the accelerator’s startup cohort. The first program of the new QAI Ventures Accelerator powered by Quantum City will launch its first cohort in 2025 in Alberta at Quantum City. QAI Ventures is an ecosystem builder offering acceleration programs and investment funding for early-stage quantum and advanced AI startups worldwide. The QAI Ventures Accelerator powered by Quantum City will provide entrepreneurs and innovators premium access to cutting-edge technology, expert guidance, and tailored mentorship, supporting them throughout their journey in taking their projects from the lab to the market and pushing for faster development of Quantum startups. UCalgary

The Government of British Columbia announced a new dedicated wildfire training and education centre at Thompson Rivers University (TRU). The B.C. wildfire training and education centre is a first-of-its-kind program and is a flagship action stemming from recommendations from the Premier’s Task Force on Emergencies. The centre, the first in North America to transition wildfire training into degree programs and research, will offer comprehensive wildfire training and education programs that progress from basic skills training and learning in the wildfire field, to the future development of wildfire academic diploma and degree programs in wildfire and emergency management disciplines. Program design will start this year with intakes for program training beginning in 2025 in existing facilities. The program will initially be funded through enhanced BC Wildlife Service (BCWS) training resources, first introduced in Budget 2022. There are also plans underway to develop a state-of-the-art training facility and building. The new centre, delivered in partnership with TRU and the Ministry of Forests’ BCWS, will enhance the training capacity at BCWS. In addition, BCWS will transition some of its existing training programs and courses into the centre’s new curriculum. By 2028-29, more than 1,000 workshops will be offered per year, which will translate into 10,000 course registrations. The centre will complement the TRU Institute for Wildfire Science, Adaptation and Resiliency dedicated to research and innovation, which opened in October 2023. Both the new institute and B.C. wildfire training and education centre are building on an existing fire science lab and provincially funded Innovation Research Chair to form a world-class Wildfire Learning, Research and Innovation District at TRU. B.C. continues to implement recommendations from the Premier’s Task Force on Emergencies to help prepare for the upcoming wildfire seasons, including already announcing these key steps this year:

• increasing the use of new technology to better predict wildfire movement and growth
• readying more volunteers to support evacuees
• funding for communities to better support evacuees
• enhancing wildfire recruitment tactics
• boosting wildfire-fighting fleet and equipment. Govt. of B.C.

Toronto-based pharmaceutical company Apotex announced it will acquire Montreal-based Searchlight Pharma Inc. Financial terms of the deal weren’t disclosed. Searchlight is a private Canadian specialty and innovative branded pharmaceutical company that brings dermatology, allergy and other health products to market. Apotex said the acquisition further accelerates the company’s growth within the specialty branded pharmaceutical market, adding a diverse portfolio of over 60 products and a full-service branded pharmaceutical platform, as well as established business development networks in Canada and internationally. Apotex

Ford Motor Co. is delaying the start of electric vehicle production at its Oakville, Ont. plant by two years, amid growth in the EV market falling short of the automobile industry’s expectations. The U.S. automaker had planned to start production at the Canadian plant, which employs 2,700 workers, in 2025. In a news release, Ford said it was pushing that start date back to 2027. Ford announced plans last year to spend $1.8 billion to transform its Oakville assembly plant into a hub for electric vehicle manufacturing, including vehicle and battery pack assembly, as it transitions away from combustion engines. Work on overhauling the Oakville plant is still set to begin in the second quarter this year, as planned, Ford said in its release. Ford said the delay will give the consumer market more time to develop and enable Ford to take advantage of emerging EV battery technology. Ford Motor Co.

Victoria, B.C.-based Cuboh, which offers restaurants a complete suite of online ordering and marketing tools, was acquired by Los Angeles-based ChowNow, an online ordering and marketing platform for the restaurant industry. Financial terms of the deal weren’t disclosed. ChowNow said the acquisition will enhance the company’s suite of digital tools. The acquisition includes the integration of the Cuboh team. BusinessWire

The proposed US$3.4-billion Cedar LNG facility in British Columbia is getting closer to becoming a reality, after RBC Capital Markets said it expects Calgary-based Pembina Pipeline Corp. and its partner, the Haisla Nation in B.C., to green light the project with a final investment decision soon. Pembina said it expects to make its final investment decision on Cedar LNG by the middle of this year. Cedar LNG is a proposed floating liquefied natural gas facility that pipeline company Pembina is planning to build with the Haisla in Kitimat, B.C. The facility, which would produce LNG for export to Asian markets, would be owned by the Haisla, making it the largest Indigenous-owned infrastructure project in the country. Pembina announced last month that it signed a long-term natural gas supply agreement for the facility with ARC Resources Ltd., a Calgary-headquartered company that has natural gas drilling operations in the Montney region of northeast B.C. and northwest Alberta. Under the terms of the agreement, ARC will deliver approximately 200 million cubic feet per day of natural gas for liquefaction to the Cedar LNG facility, for a term of 20 years commencing with the start of commercial operations, which are anticipated in the second half of 2028. Pembina also said it issued a formal “notice to proceed” to its contractors for the engineering, procurement and construction of the LNG production unit. Cedar LNG has already obtained all major regulatory approvals and is advancing an agreement that would connect the floating facility to Coastal GasLink, the TC Energy-owned pipeline that will also carry natural gas to the Shell-led LNG Canada facility at Kitimat Global News

Royal Bank of Canada, along with Citigroup and JP Morgan in the U.S. reached an agreement with New York City Comptroller Brad Lander for the banks to disclose their ratio of financing for low-carbon energy projects compared with their financing for fossil fuel projects. Lander oversees NYC’s public retirement assets. In return for the agreement, retirement funds that Lander runs have withdrawn shareholder resolutions at each bank calling for the disclosures. The banks’ forthcoming reports should at minimum cover their equity and debt underwriting, syndicated lending and project finance, a representative for Lander said. RBC, which plans to triple its lending for renewable energy, said it plans to disclose a clean energy financing ratio in its 2024 climate report. Protesters gathered last weekend at several RBC locations across Canada for the second annual Fossil Fool’s Day. Vanessa Gray, the national spokesperson for Fossil Fools Day, said in a statement that RBC must “rapidly phase out fossil fuel financing” and ramp up investment solutions that are climate safe. Last year, a Banking on Climate Chaos report found that RBC was the world’s biggest fossil fuels financier, providing more than $42 billion in funding in 2022. Between 2016 and 2021, the bank ranked fifth in financing fossil fuels, according to the report. Reuters

Hamilton-based Innovation Factory and Burlington-based Haltech, two of southern Ontario’s leading tech accelerators, announced their amalgamation. The merger, effective Apr. 1, 2024, aims to bolster technological innovation, entrepreneurial ventures, and sustainable economic growth in the region. The two accelerators will be led by Innovation Factory CEO David Carter while operating under the Innovation Factory name. Both organizations have a history of supporting startups, with Innovation Factory and Haltech established in 2010 and 2011, respectively. No immediate changes are expected for existing clients, who can continue accessing services from their usual locations at McMaster Innovation Park in Hamilton and TechPlace in Burlington. Since their founding, Innovation Factory and Haltech have collectively supported over 3,000 Ontario tech startups. Their offerings have included advisory services, mentorship programs, networking opportunities, and various resources to assist business growth. The combined impact on the regional economy is significant:

• Over $1 billion raised in client funding
• Over $1 billion in revenue generated by clients
• More than 5,000 jobs created by clients. Invest In Hamilton

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University of Winnipeg confirms theft of personal information in cyberattack

The University of Winnipeg confirmed that a cyberattack last month  resulted in the theft of information. “We have now confirmed that data from a University file server has been stolen and that the stolen information likely includes the personal information of current and former students and employees,” U of W said in a statement.

Administration at the U of W confirmed a “threat actor” managed to gain entrance to its system, and that the university took its network down to protect its data.

The university said its investigation is continuing, but at this time it’s believed the theft most likely occurred in the week before March 24th. For all current employees and all former employees employed since 2003, the information exposed includes: names, social insurance numbers, dates of birth, street addresses, phone numbers and compensation information,

 For all current employees and all former employees employed since 2015, the information exposed is bank account information. For all students enrolled in Professional, Applied and Continuing Education and English Language programs since the academic year beginning in September 2019, the information exposed was: names, programs of study, street addresses, student numbers, dates of birth, social insurance numbers (domestic students only), and tuition amounts.

In addition, for all students to whom U of W issued T4A forms since 2016, the information exposed was: names, street addresses, social insurance numbers (domestic students only), and funding amounts.

U of W said it will provide individuals who are likely affected a two-year credit monitoring service, which allows a person to check for signs of identity fraud so protective action can be taken.

The cyberattack appears to be yet another example of how Canada has been far too slow to respond to cyber threats posed by foreign adversaries, said Christian Leuprecht, a professor at the Royal Military College of Canada and Queen's University, and an expert in cyber and national security.  Leuprecht said while it’s just as possible that the attack at the U of W was done by someone looking to extort a ransom from the school, universities are disproportionately targeted by adversarial states like China to steal research and intellectual property.

The size of the school, which is not as large or well-known as some other Canadian universities, demonstrates that “everybody’s a target,” he said. “It’s not just the large institutions – and it means that everybody needs to be paying attention, and much better attention.”

Leuprecht said action is needed both at the provincial level, to use the resources of government to procure cybersecurity protection technology for institutions and lease it back to them, and federally, where he called the current approach “homeopathic,” and said more funding for cybersecurity, a more robust research security policy and more guidance for universities are needed. U of W, CBC News

VC & PRIVATE INVESTMENT

Toronto-based fintech startup Brim Financial announced the closing of an $85-million Series C funding round led by Export Development Canada. Participation also included Vancouver-based venture capital firm Vistara Growth, alongside return investors White Owl Group, Epic Ventures and Zions Bank. Brim said the financing will fuel the company’s U.S. expansion strategy, including extending its market reach, accelerating product development, and forging strategic alliances. Brim’s modular platform and highly scalable product suite fully empowers financial institutions, fintechs and large international brands to issue credit cards and manage their credit card business and loyalty programs for their customers more efficiently. Brim Financial

Saint John, N.B.-based TrojAI, which provides enterprise artificial intelligence security solutions, raised $7.75 million in seed funding. The funding round was led by existing investor Flying Fish with participation from current investors including Build Ventures and Techstars, as well as new investors Alteryx Ventures and Flybridge Capital Partners. TrojAI also announced the appointment of Lee Weiner as the company’s CEO. He brings more than 25 years of B2B software experience, with an extensive background in the cybersecurity sector. The company said it also will expand its operations to the U.S. with a new office in Boston, Mass. TrojAI

Toronto-based software startup Eirene Cremation Inc., Canada’s first and only online funeral services provider, raised $4.1 million in seed funding, used to launch operations in the U.S.  Relay Ventures led the round, with participation from Export Development Canada and Saint Elizabeth Healthcare. Eirene’s technology platform provides families with online end-of-life solutions that are easy to use, simple to understand and affordable, the company said. Eirene said its cremation services cost less than half what traditional funeral homes charge, while still providing the same level of customer service and support. Eirene Cremation

Toronto-based insurance tech startup Beniplus, which provides employee group benefits to small businesses in Canada, secured a $1.1 million strategic investment, in an all-equity seed funding round extension led by Vancouver-based insurance broker Axis Insurance Managers. BeniPlus, which declined to disclose the round participants, said they are new investors. BeniPlus said it simplifies employee benefits through an app that allows employees to upload a receipt and receive same-day approval. The companay said the new capital will enable it to accelerate its growth plan and expand market share within the employee benefits space. BetaKit

Startup TNT, a pre-seed and seed investor in Western Canada, announced the top three companies in its 2024 Sector Summits, which are collectively receiving $500,000 in investments. Each of the companies will receive an aggregated pool of investment of between $120,000 and $210,000 from a combination of local angel investors and TNT’s venture capital fund. The three winners in each category are:

• Cleantech Summit winner: Calgary-based ConnectX, which secured more than $200,000. Connect X leverages technology to modernize aging electricity grids, leading to savings of energy usage and managed demands, and therefore decreasing energy costs with reliable electricity.
• Life Sciences Summit (powered by API) winner: Calgary-based OligomicsTx, which secured over $175,000. OligomicsTx is in the early stages of developing advanced therapies that can effectively combat rare and hard-to-treat nervous system disorders.
• Agri-Food Summit winner: Saskatoon-based BetterCart Analytics secured more than $140,000. BetterCart Analytics leverages AI to help organizations access real-time food supply chain data for a range of purposes to improve their business.

Startup TNT is now accepting applications for its Spring Summit IX which aims to raise $1 million for Prairie-based startups across all industry verticals. The deadline for companies to apply is April 15, 2024. Startup TNT

An expert panel appointed by the federal government to accelerate the growth of Canada’s sustainable finance market has disbanded at the end of a three-year mandate. The panel, the Sustainable Finance Action Council, was formed in 2021 to devise ways of attracting capital focused on mitigating climate change. The panel developed a framework for a made-in-Canada taxonomy of climate-focused investments, which would categorize them as either “green” or “transitionary,” depending upon the levels of greenhouse gas emissions they produce and whether they are likely to continue to be used well into the future. The group also recommended a speedy move to mandatory climate-related financial disclosure for private companies. Ottawa has yet to implement these things. Panel members have publicly expressed frustration that the government has not provided them with the direction and funding necessary to take the next steps toward finalizing the taxonomy. They had expected to hold meetings with industry, environmental and government officials. In last fall’s economic statement, Ottawa said it would provide $1.5-million to Finance Canada to fund consultations on a green investment taxonomy with regulators, financial players, industry officials and other experts. But the government did not commit to implementing such a taxonomy. The panel, which was made up of 25 experts from the banking, insurance and pension sectors, has said that putting climate-focused investment policies into action is critical to attracting an estimated $115 billion a year in capital required to reduce emissions to net zero by 2050. The Globe and Mail

REPORTS & POLICIES

Strategic Innovation Fund is having significant economic impact, ISED says

The Strategic Innovation Fund (SIF) is a program designed to encourage and de-risk private investments in large-scale transformative projects to help Canada prosper in a low-carbon and knowledge-based global economy.

Since its launch in 2017, SIF has been used to support projects across the country through two primary categories. Projects funded under the Business Innovation and Growth category, also known as direct-to-business contributions, foster the development of for-profit businesses so that they can invest in innovation, grow and create jobs for the prosperity of Canadians. Projects funded under the Collaborations and Networks category foster large, collaborative, business-led projects and innovation networks in areas where Canada has a demonstrated or an emerging advantage.

SIF is program of Innovation, Science and Economic Development Canada (ISED), which has released a report on SIF’s impacts during the program’s first five years of operation.

ISED says that within the automotive sector, SIF funding has been of strategic support in helping prepare the transition to electric vehicles, anchoring key activities such as battery manufacturing, resource processing, and electric vehicle assembly.

Within the biomanufacturing and life sciences sector, ISED says, SIF was leveraged to quickly respond to Canada’s COVID pandemic needs, which included projects on the development of vaccines and the manufacturing of personal protective equipment. Since then, SIF’s role within the sector has remained important as Canada seeks to build renewed manufacturing, research and pandemic prevention capabilities.

ISED compiled some statistics to show the scope and scale of SIF’s impact:

• There are currently more than 108 direct-to-business agreements, as well as 10 network agreements that have supported over 900 end-recipients.
• Together these agreements represent $8.2 billion in SIF contributions. The projects are expected to generate $72 billion of private sector investments in Canada. This suggests that every single dollar of SIF funding is linked to almost $9 of private investment in Canada. The commitments secured through SIF contribution agreements include the creation or maintenance of 113,000 full-time-equivalent jobs.
• While many SIF projects are still in their work phase – meaning they are building their factory or conducting research – a sizable portion have become operational and the results are already being felt. From 2017 to 2022, throughout economic turbulence, SIF funding supported innovation and R&D investment. SIF funding spurred $700 million of R&D expenditure in Canada in 2020, or 4 per cent of the nationwide total. In 2021, the amount was $1.2 billion, or 5 per cent of the national total. In 2021 alone, SIF-supported activities accounted for over 4,600 full-time-equivalent jobs.
• The activities resulting from these projects reach every Canadian province. They span many industrial sectors and technology areas, including agriculture, biomanufacturing, autos and batteries, and aerospace.
• SIF has also been used to help address 10 distinct federal government priorities, including the COVID-19 pandemic response and the strategy to develop Canada’s critical minerals assets.
• Through the federal government’s Net Zero Accelerator initiative to mitigate climate change, $8 billion is being deployed through SIF to help support emission reductions in both the short and long term.

SIF covers all sectors of the economy and is available to for-profit and not-for-profit organizations. The minimum SIF contribution amount is $10 million for projects of at least $20 million. The program works primarily on a repayable basis. But depending on the levels of benefits that a company is able to commit to, the program can provide partially or fully non-repayable contributions.

Governance for the SIF program involves several layers, from subject-matter experts to ministers. It also brings together up to 20 federal departments and agencies so that decisions are informed by all sources of federal expertise and are consistent with government-wide policies. Information may also be shared with provincial governments to support project due diligence and explore co-funding opportunities.

The SIF program started from a base of $1.2 billion in grants and contributions funding and accounts for $18.5 billion in funding as of December 31, 2023.

All SIF-supported projects are regularly monitored for contractual compliance, ISED says. In addition, their wider performance is measured through the Annual Public Benefits Report (APBR), a survey that all SIF funding recipients must complete every year.

The APBR collects a robust set of indicators, including detailed metrics on R&D, capital expenditures and employment as well as equity, diversity and inclusion. By comparing select aggregate metrics from APBR data to the averages found in Canada's national statistics, it is possible to observe the impact of projects supported through SIF.

SIF recipients adopt clean technology at higher rates, ISED says. SIF-supported projects also have:

• higher R&D spending (companies spend twice as much per employee on R&D for their SIF projects as they do on R&D for the rest of their business).
• high levels of collaboration with universities and other partners (64 per cent for SIF-supported businesses vs. 18 per cent for businesses without SIF support).
• higher education co-op student hiring (3,156 co-op placements).
• more intellectual property filings from active projects (close to 1,000 patents filed, at nearly 10 times the rate observed nationwide).
• higher capital expenditure for larger (500-plus employees) SIF-support companies (0.2 per cent vs. minus 9.1 per cent for the broader Canadian economy in 2020.

On average, SIF recipients have invested nearly twice as much in clean technology for their projects, compared with business-as-usual operations, ISED says. For example, two SIF-supported steel-electrification projects – one by Algoma and one by ArcelorMittal Dofasco – will together reduce a combined 6 million tonnes of annual emissions by 2030.

ISED also reported on results delivered by SIF in 10 specific areas: aerospace, agriculture, automotive and batteries, biomanufacturing and life sciences, clean technologies, critical minerals, digital industries, heavy industry, industry 4.0/advanced manufacturing, and natural resources.

The current SIF project pipeline includes a number of impactful projects expected to result in signed contribution agreements in 2024, ISED says. These projects include activities that support federal priorities, such as the Biomanufacturing and Life Sciences Strategy, the climate plan, or the Canadian Critical Minerals Strategy.

“SIF focuses on large-scale activities, and it continues to be an important part of the Government of Canada’s suite of programs to support strategic projects, promote long-term prosperity and help secure the greatest benefits for future generations of Canadians,” ISED says. ISED

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SR&ED program needs to incentivize incremental R&D spending and make the tax credit firm-size neutral, says policy think tank

The federal government should structure the Scientific Research and Experimental Development (SR&ED) program to incentivize incremental spending on R&D, and remove the enhanced 35-per-cent tax credit for small and medium-sized Canadian enterprises,  the Ottawa-based Centre for Canadian Innovation and Competitiveness recommends in a submission to Finance Canada. 

The government, which is considering changes to SR&ED, also should not “cripple SR&ED” by adding provisions to protect domestic intellectual property and retain Canadian ownership of companies, recommends the Centre, an affiliate of the Washington D.C.-based Information Technology & Innovation Foundation (ITIF). Also, the government should simplify how companies can obtain the credit and allow stacking of R&D credits from multiple levels of government, the submission says.

“SR&ED and other R&D tax credits increase R&D spending, creating additional jobs, increasing patent filings, boosting productivity and growth, supporting global competitiveness, and generating more in tax revenues than they cost,” the ITIF says.

However, a study commissioned by the federal government comparing tax assistance for R&D found that Canada ranks fourth in the world in terms of generosity to small firms but far below its peers for large firms, and excessively subsidizes small firms, the ITIF notes.

This ultimately costs the government more in assistance to small firms than the societal spillover benefits accrued, while additional tax incentives for large firms would go far further in stimulating innovation and productivity, says the policy think tank. “As such, ITIF strongly urges the government to reject recommendations designed to target most of the benefits to small, Canadian-owned companies. Doing so will make Canada a less attractive place for innovation.”

The existing SR&ED policy greatly favours R&D conducted by smaller firms by providing an enhanced, refundable 35-per-cent tax credit to domestic small and medium-sized enterprises, the ITIF says.

However, the SR&ED could be made far more effective by removing the enhanced rate for SMEs and using the savings to support a higher rate for other businesses instead, the policy think tank argues. “Doing so will increase total R&D spending in Canada, in part by making Canada a more attractive location for multinationals conducting R&D.”

Recent evidence from the Canadian Centre for the Study of Living Standards shows that every dollar spent by large firms on R&D generates $1.53 in returns for the firm and an additional $1.52 for the Canadian economy in spillovers, while small firms generate a private return of $1.17 and a social return of an additional $1.19, the ITIF says.

Research also shows that small firms tend to focus more on experimental development, while larger firms focus more on basic and applied research. “Combined with the fact that basic research tends to have the largest impact on long-run economic productivity, followed by applied research and then advanced development, providing greater generosity to larger firms will also provide more of a boost to Canadian productivity.”

The ITIF also argues that the significant drop-off in the generosity of the SR&ED tax credit for Canadian-owned private companies that reach taxable capital of more than $50 million, or that decide to go public to gain access to financial capital, results in companies being disincentivized to conduct R&D just as they are reaching the capacity to contribute greater social returns on public investment and getting to the point where they are big enough to compete on the global stage.

Research comparing Canada, Australia and Spain has shown that decreases in the generosity of R&D tax credits based on firm size have negative effects on levels of private R&D spending, the ITIF notes. Canada’s overall tax treatment heavily favours small businesses and encourages companies to stay small and less efficient, even incentivizing growth-oriented leaders to migrate or sell their businesses in the U.S., says the policy think tank.

“Removing the enhanced credit for [Canadian companies] and using the savings to boost SR&ED’s overall generosity across the board will remove one of the disincentives for Canadian companies to grow, helping to alleviate Canada’s scale-up problem.”

Moreover, SMEs in Canada already have access to several direct funding grant programs, such as the National Research Council of Canada’s Industrial Research Assistance Program (IRAP) and the Regional Economic Growth through Innovation program offered through the various regional development agencies, the ITIF says.

After combining the SR&ED enhanced rate with provincial subsidies and support from IRAP, the subsidy rate is 60 per cent, which ITIF says “is far above the socially optimal subsidy rate of 19 percent to match the positive social returns from spillovers from small firm R&D.”

Rebalancing the levels of support provided to small and large firms under the SR&ED will increase the overall net social benefit by providing a tax credit for large firms closer to the social rate of return, while reducing unproductive tax credits going to small firms that exceed the social rate of return generated from their R&D, the ITIF says. “In doing so, the government will increase overall benefits that Canada sees from private R&D spending while maintaining cost-neutrality for the incentive program.”

Use SR&ED to incentivize incremental spending on R&D

The federal government also should structure the SR&ED tax credit to make it “quasi-incremental,” to incentivize businesses to invest more in R&D, the ITIF recommends.

Under a formula the ITIF suggests, a company that spent a certain amount on R&D for four consecutive years, for example, would receive a higher tax credit if it kept R&D spending at that level for the following year, and an even higher tax credit if the company increased R&D spending in subsequent years.

With the new quasi-incremental system, for every dollar of increased R&D spending over the prior year, the firm would receive a tax credit of almost 50 per cent, as opposed to just 15 per cent or 35 per cent under the existing SR&ED program, the ITIF says.

The policy think tank notes that this proposal is designed to be cost-neutral, in that the total spending will not increase if R&D does not increase. However, since the proposal is designed to incentivize total private R&D investment, it would necessitate greater tax expenditure on SR&ED credits as private R&D spending increases.

The ITIF also argues that the SR&ED program not be “crippled” by adding provisions aimed at protecting domestic IP and retaining Canadian ownership of firms.

SR&ED is a “blunt instrument” that isn’t suited to dealing with the issues of commercialization and domestic retention of IP, the ITIF says. The government would be better off incentivizing domestic IP retention through the proposed patent box, as well as direct subsidies through IRAP or the forthcoming Canada Innovation Corporation, maintains the policy think tank.

The ITIF also argues that the the government shouldn’t – as some have publicly suggested – limit the ability of SR&ED recipients to sell their Canadian-developed IP and business abroad, or preventi firms with headquarters outside of Canada from receiving SR&ED credits.

Selling off IP or seeking exit options is sometimes the only viable strategy for some companies, the ITIF notes. “Instead of allowing Canadian entrepreneurs to operate and seek out returns on the global market, limiting their options could mean bankruptcy if they cannot find a buyer for their IP in Canada.”

Penalizing firms that sell off their IP or ownership of their businesses abroad would likely be administratively challenging, as this would require the Canada Revenue Agency to enforce performance requirements on tax recipients, requiring constant monitoring of thousands of firms for years after they first apply to SR&ED, according to the policy think tank. Also, it says, closing off the ability for foreign firms to access SR&ED, while Canadian firms access foreign R&D tax credits, could result in retaliatory actions being taken by Canada’s major trading partners.

“The claim that SR&ED credits do not create new R&D jobs in Canada is simply not supported by the long list of global firms that have chosen to employ significant R&D resources in Canada. Rather than cut off these infusions of R&D, Canada should be doubling down on attracting more of it.”

Finally, the ITIF recommends that the federal government greatly simplify the means for applying for R&D tax credits.

For example, the U.S., Australia, and Ireland all only require firms to apply simply by filling out a minimal amount of additional boxes on their business tax returns. In contrast, Canada, as well as countries like the U.K. and Germany, requires corporate tax filers to fill out multiple forms and keep up with rigorous compliance requirements “that impose enormous administrative burdens, particularly on SMEs with fewer resources to devote to full-time filing,” the ITIF says.

“There should be no filing whatsoever. Companies should simply be allowed to take the credit when they file their business tax forms each year.” Doing so, the ITIF points out, will eliminate the need for companies to hire dedicated SR&ED consultants who can charge up to 30 per cent of the total tax credit to businesses.

The SR&ED program also should scrap existing rules that reduce the eligible expenditures that businesses can claim whenever they receive provincial or territorial tax credits, as well as direct federal funding like IRAP, the ITIF recommends. Most other jurisdictions around the world allow businesses to receive tax credits from multiple levels of government and other sources of funding, it notes.

“Penalizing businesses from accessing multiple sources of innovation funding ultimately punishes businesses that are the most likely to succeed, as they have been vetted by the government multiple times and are conducting projects that are innovative enough to receive funding from IRAP.”

Making significant changes to modernize the existing SR&ED program will require a change in mindset, the ITIF says. “Canada needs to see SR&ED not as a way to subsidize R&D and ease financial burdens, but as a way to incentivize private companies to increase their R&D expenditures.” ITIF

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Nova Scotia presents its climate plan alternative to federal government’s carbon tax

The Government of Nova Scotia has sent the federal government a provincial plan to reduce greenhouse gas emissions and mitigate the impacts of climate change with actions “that are more effective than a carbon tax.”

The “Still Better than a Carbon Tax Plan” – essentially a package of several plans and initiatives – will collectively do far more to address climate change than the federal carbon tax, Nova Scotia Premier Tim Houston said in a letter to Prime Minister Justin Trudeau accompanying the plan.

Houston said Nova Scotia’s plan includes:

• Nova Scotia’s Coastal Protection Action Plan – helps coastal residents and communities prepare and mitigate climate risk.
• Nova Scotia’s Climate Plan – the Province's plan for clean growth to reduce greenhouse gas emissions and improvebility to be responsive and prepared for climate change.
• Nova Scotia’s Clean Power Plan – demonstrates a path to reach at least 80 per cent renewable electricity by 2030 and then net zero by 2050 [and] "is better than a carbon tax."
• Nova Scotia’s Green Hydrogen Action Plan – establishes a roadmap to support the emergence of a sector that makes best use of the Province’s natural resources to produce green hydrogen and hydrogen derivatives for export and for domestic use.

As a part of the province’s climate plan, Nova Scotia holds large emitters – which represent over 50 per cent of Nova Scotia’s carbon emissions – accountable to reduce their emissions, Houston said. “Together, these policies will reduce electricity sector emissions by 85 to 90 per cent by 2030. And once our Clean Power Plan is fully implemented, Nova Scotia will be a North American leader in emissions reductions from the electricity sector.”

Houston urged Ottawa to consider the province’s plan “as mechanisms to replace the carbon tax in an effort to make life more affordable for Nova Scotians.”

The premier pointed out that Nova Scotia’s Environmental Goals and Climate Change Reduction Act has legislated these goals:

• 80 per cent of electricity in the Province supplied by renewable energy by 2030.
• At least 53 per cent below greenhouse gas (GHG) emissions levels that were emitted in 2005 by 2030.
• Phase out coal-fired electricity generation in the Province by the year 2030.
• Achieve net zero by balancing GHG emissions with GHG removals and other offsetting measures by 2050.

Emissions from electricity are 43 per below 2005 levels and renewable electricity has increased from 9 per cent to 30 per cent in the last 10 years, Houston said. Emissions are projected to dramatically decrease further in the next 10 years, primarily with access to hydroelectric power from Muskrat Falls and the build-out of additional domestic wind.

Nova Scotia’s current electricity mix is expected to be more than 40 per cent renewable energy by the end of this year. By 2025-2026, Nova Scotia will reach an energy mix of 75 per cent renewable, Houston said. With more wind power coming online, Nova Scotia will reach its 80 per cent renewable target by 2030 through a combination of Maritime Link, wind, hydro, solar and biomass.

Partnership with federal government needed

To establish more aggressive targets for renewable energy, the premier said that Nova Scotia needs the partnership and support of the federal government and its buy-in of an affordable approach to greening the province’s electricity grid. This includes:

• Clarity on federal support for the Atlantic Loop (a series of high-capacity electricity transmission lines connecting Hydro-Québec hydropower facilities with New Brunswick, together with upgraded capacity linking New Brunswick and Nova Scotia).
• Additional investment in domestic renewable energy and battery storage, similar to the $250 million recently announced.
• Accelerated work to create a clear and transparent regulatory environment for offshore wind development – a significant and untapped resource.
• Invest in green hydrogen to put Canadian development on an even playing field with European programs and with the U.S., as its Inflation Reduction Act will immediately make green hydrogen a competitive source of energy compared to its fossil fuel alternatives.

Houston pointed out that in 2020, Nova Scotia’s emissions were 36.4 per cent below 2005 levels, making the province one of the national leaders in GHG reductions (second-largest reduction among all provinces). Nova Scotia also has the most ambitious target in the country, with a target to reduce GHGs by 53 per cent below 2005 levels, while the federal government’s target is set at 40 per cent to 45 per cent below 2005.

Nova Scotia‘s modeling shows that the federal carbon tax will result in 300,000 tonnes of additional GHG emission reductions in 2030 in the building and transportation sectors (the two sectors covered by a carbon price), Houston said. This is only a two-per-cent reduction from current total provincial emissions, he noted.

In comparison, he said, Nova Scotia’s plan and legislated new policies will reduce GHG emissions in the province by an additional 17 per cent, ensuring that the province achieves its 2030 target, instead of the federal carbon tax GHG reduction of two per cent over the same period.

Nova Scotia is also ranked first in electricity energy efficiency programming in Canada, Houston said. “To date our efficiency programs have resulted in over $1 billion in bill savings for Nova Scotians and $208 million in bill savings for low-income homeowners and tenants. At the same time, these programs have avoided over 1 million tonnes of GHGs annually.”

There is an immediate opportunity for the federal government to support Nova Scotia in surpassing its targets by formalizing and accelerating the commitment to work with us on investments in energy efficiency for low-income Nova Scotians, Houston said. “This is a gap in current federal programming.”

A carbon tax would see Nova Scotians paying over $1 billion in new taxes in 2030, and  achieve “a minimal reduction in GHGs, as compared to our approach,” the premier said. In 2025, financial impact models of the carbon tax project an average increase per household expenses of $2,036, of which $658 are direct costs and $1,378 are indirect costs, he said.

 In the past year, Nova Scotia has invested more than $100 million in climate change-focused projects, including low-income and small business energy efficiency programs, sustainable transportation options, support for communities and climate change adaptation, Houston said. This is in addition to utility demand-side management/efficiency programs in which Nova Scotians will invest approximately $170 million over the next three years.

Houston concluded his letter by requesting a meeting between federal and Nova Scotia officials to establish the technical path forward for the province’s proposal. “If we can demonstrate that we will continue to meet our well-defined targets, there is no need to implement a carbon tax in Nova Scotia. It would simply serve the purpose of being punitive.” Govt. of Nova Scotia

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Severe drought conditions in Western Canada expected to lead to water shortages impacting natural gas development, says Deloitte report

An ongoing and worsening drought across Western Canada is deepening water shortages and could have devastating impacts on communities and water-dependent industries like agriculture and oil and gas, according to a report by Deloitte.

 “This presents challenges and questions for oil and gas producers in Alberta and British Columbia, especially as they are primarily located in significant areas of drought,” the report says.

Northern Alberta and B.C. haven’t generally faced drought concerns, but persistent drought conditions through last summer and fall, combined with the lower-than-average snowpack in the mountains this winter, are increasing the likelihood of drought and limited water supply in the north in 2024, according to the report.

Provincial data up to early February showed that the B.C. snowpack was on average 39 percent below normal, and the British Columbia Energy Regulator noted that four major water basins in the province’s northeast are currently rated at drought level 5 – the most severe there is – which means “adverse impacts to socio-economic or ecosystem values are almost certain.”

In Alberta, the Peace River has logged its lowest average flow this century, and as of early March, the provincial government’s water information portal is showing multiple water shortage advisories in northern areas. An Alberta “Drought Command Team” has begun negotiating with major water users in the province to find ways of reducing usage.

Oil and gas development is concentrated in northeast B.C. and northwest Alberta, and water usage is important for drilling and well completion operations, the report says. The vast majority of natural gas development today involves hydraulic fracturing, which uses a combination of water, sand and chemicals to open fractures in underground reservoirs as pathways for natural gas to be brought to the surface.

“Canada’s production base has a concentrated need for water, and it’s located right in the middle of some of the country’s most severe drought zones,” the report says.

In Alberta in 2022, according to data from the  Alberta Energy Regulator (AER), just over one per cent of the total water used in oil and gas operations was recycled water. The remaining 99 per cent was primarily fresh water, with only three per cent being “alternative water.” The AER defines alternative water as “water other than surface water and non-saline groundwater, including saline groundwater, produced oilfield water, hydraulic fracturing flowback water, and wastewater.”

Deloitte’s report points out that the most significant field development of natural gas is scheduled in areas that are directly associated with the expected opening of Canada’s first and only large-scale liquified natural gas (LNG) export facility, LNG Canada, in Kitimat, B.C. A $40-billion joint venture between five global energy firms, the facility’s purpose is to ship LNG overseas and open up Canada’s natural gas market to Asia for the first time.

The LNG Canada plant has the industry anticipating increased demand for natural gas. In addition, construction on the Woodfibre LNG facility is expected to start this year. Also, intentions to start construction on the Ksi Lisims LNG project and Tilbury Phase 2 LNG expansion in 2024 have been published as well, the report says.

According to Natural Resources Canada, the completion of these projects should lead to an export capacity in excess of 4 billion cubic feet per day (Bcf/d) of LNG by 2030, with an additional 2 Bcf/d from projects currently awaiting final investment decision. This represents approximately 20 per cent to 30 per cent of current natural gas production levels in Western Canada.

“It’s no surprise that drought conditions and the resultant need for [water] consultation and alternative water sources are creating friction across the entire system,” it says.

In December, the AER warned fossil fuel companies that their access to water could be restricted if dry conditions persist into 2024.

The Mountain View Regional Water Services Commission, which owns and operates the Anthony Henday Water Treatment Plant on the Red Deer River, has banned oil and gas operations from using its treated water. “It’s reasonable to think that other regions will do the same if [drought] conditions continue.”

Natural gas developers will need to explore increased use of alternative water sources, including using recycled water or other alternative sources, with additives to achieve the necessary composition for effective hydraulic fracturing operations, the report says. “But it comes with costs,” is more complex than using freshwater, and requires additional equipment and services.

In the current low-price environment for natural gas, companies are already starting to cut back their investment budgets, the report says.

“The socio-economic impacts of drought conditions are wide-ranging and serious,” it says. It recommends that companies should act quickly to shift their strategies and consider alternative approaches to gas development and water use. Deloitte

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Recommended strategy for protecting national security involving U.S. research runs counter to Canada’s approach

The U.S. National Science Foundation (NSF) should identify research projects with the potential to threaten national security as they arise, rather than maintain a comprehensive list of sensitive research areas, says a report prepared for the NSF.

The NSF is the premier government organization supporting fundamental scientific and engineering research in the U.S.

The report’s recommendation runs counter to the approach now being used by Canada’s federal government, which has released a list of 11 sensitive technology research areas that Ottawa considers a potential risk to national security. Each high-level technology category is complemented by sub-categories which provide researchers with further specificity regarding where the main concerns are. The sensitive research areas are:

• advanced digital infrastructure technology
• advanced energy technology
• advanced materials and manufacturing advanced materials
• advanced sensing and surveillance
• advanced weapons
• aerospace: space and satellite technology
• artificial intelligence and big data technology
• human-machine integration
• life science technology, biotechnology, and medical and healthcare technology
• quantum science and technology
• robotics and autonomous systems.

The federal government also has released a list of more than 100 foreign institutions that Ottawa says pose a threat to national security. Canadian researchers and universities studying advanced and emerging technologies on the sensitive research areas list will be ineligible for federal grants if they’re affiliated with any of the foreign institutions on the government’s list.

The Canadian Association of University Teachers (CAUT) said when the government released its lists of sensitive research areas and foreign institutions that the restrictions raise concerns about academic freedom and international scientific collaboration. “Restrictions on university research and academic freedom can only be justified in rare cases,” CAUT executive director David Robinson said in a statement. “It is important that any restrictions be specific and not broadly defined, be based on fact and not conjecture, and do not target specific communities.”

The report, “Safeguarding the Research Enterprise,” for the U.S. National Science Foundation, prepared by MacLean, Virginia-based JASON, an independent group of elite scientists that advises the U.S. government on matters of science and technology, says differentiation between sensitive and non-sensitive research is most natural at the project level, not at the sub-field level. “Projects in the same sub-field can have very different levels of risk,” the report notes.

Openness and transparency in fundamental research promote scientific discovery, which improves national security, the report says. “International collaborations with those who share the ideals of openness and transparency benefit all participants.”

Risk mitigation must consider the spectrum of risk and be adaptable to changing trends in research, according to the report. Resources should be concentrated on areas of maximum risk to ensure that benefits outweigh the costs.

The report says that formal controls on research, such as a CUI (Controlled Unclassified Information) designation, will have unintended consequences, including: increasing the cost of doing research, diverting resources and sources better applied to expanding U.S. research efforts in critical fields, inhibiting rigorous and competitive development of new technologies, and discouraging some individuals and research organizations from engaging in U.S. research.

The report recommends that NSF’s process of identifying sensitive research projects should:

• differentiate research projects based on the sensitivity of their potential applications
• include the maturity of the development path (Technology Readiness Level— TRL) for potential applications in the assessment of risk
• include an assessment of the direct and predictable national security impact of the applications of each research proposal, if successful.

NSF should proceed with caution before adding access or dissemination controls to grants or contracts, the report recommends. In considering whether to apply formal controls to a sensitive research project, NSF should weigh the balance between the positive protective benefits and the unintended negative consequences of such controls.

“Controls can protect U.S. national security by preventing malign use of research results, but they can also hinder the beneficial free flow of research results in a way that negatively impacts broader U.S. economic and national security interests.”

Specific mitigation strategies for sensitive research projects should be negotiated and agreed upon by the principal investigator, NSF, and the sponsored projects office of the institution accepting responsibility for execution of the research, the report recommends. Specific mitigation steps should be proportionate to the assessed risk, relative to the associated costs.

The report also recommends that NSF should foster a culture of research security awareness by providing substantive information to researchers about real risks, making resources available for researchers to voluntarily seek guidance, and continuously engaging with researchers and their institutions about the efficacy of research risk mitigation and control efforts. NSF

THE GRAPEVINE – News about people, institutions and communities

CDPQ announced the appointment of Rana Ghorayeb as executive vice-president and head of real estate. In her new role, she will be responsible for leading the overall Ivanhoé Cambridge portfolio and investment team, which has assets of more than $77 billion. Ghorayeb has served as president and CEO of Otéra Capital, a CDPQ subsidiary specialized in real estate lending, for nearly five years. Before joining CDPQ in 2012, she served as vice-president of acquisitions at JP Morgan Asset Management in London, England, where she was in charge of real estate investments in several European countries. Previously, she worked in New York, where she led real estate transactions as senior partner at TIAA, a major U.S. pension fund. CDPQ

Dr. Tara Beattie was appointed vice-provost and dean of the Faculty of Graduate Studies at the University of Calgary (UCalgary), starting a five-year term on April 1, 2024. Beattie served as interim vice-provost and dean of Graduate Studies, a position she held since September 2023. Beattie, a full professor in the Departments of Biochemistry and Molecular Biology and Oncology at the Cumming School of Medicine, previously held the role of associate dean in Graduate Science Education at UCalgary, while serving as vice-president of research for the Association of the Faculties of Medicine Canada. UCalgary

Victoria, B.C.-based Redbrick, a software platform for digital entrepreneurs, announced Christine Tatham as its new chief people officer. Tatham is the former vice-president of human resources at Epicure, the gourmet lifestyle magazine, and the previous head of human resource for Pentland Brands, which manages some of the world’s best sports, outdoor and lifestyle brands. Tatham, a mother of four who describes herself as both a “career mom and a cupcake-making mom,” advises women to find and work at the companies that celebrate and support women for all the value they add in and outside the workplace. Vancouver Tech Journal

Laurentian Bank of Canada announced that Kelsey Gunderson, executive vice-president and head, capital markets, has decided to leave to focus on personal interests prior to establishing the next path in his professional journey. Gunderson jointed Laurentian Bank in his current role in 2019. His last day with the Bank will be April 12, 2024. In the interim, Brian Doyle, currently chief financial officer of capital markets, will assume the role of acting head, capital markets and acting president and CEO of Laurentian Bank Securities Inc., and will be responsible for its day-to-day operations. Doyle will continue to report into Yvan Deschamps, executive vice-president and chief financial officer. Laurentian Bank

A new international study co-led by a researcher at Western University shows that chemical companies have found a way to hide their pollution in their own subsidiaries. The study, co-authored by Pratima (Tima) Bansal, professor of general management, sustainability and strategy at Western’s Ivey Business School, shows American business law offers a way for chemical companies to buffer themselves from environmental fines by locating pollution-intensive activities lower in the corporate hierarchy. Notably, the study found simply adding a single layer of corporate hierarchy was associated with 39-per-cent higher toxic emissions. “Companies that place their pollution-intensive activities in lower-level subsidiaries are effectively buffering themselves from government-related regulatory risks,” Bansal said. “When the subsidiary is farther down the corporate hierarchy in a complex organizational structure, the parent company’s finances and reputation are difficult to pierce.” Bansal, with study co-author Juyoung Lee, assistant professor of Management at the Hong Kong Polytechnic University, analyzed 7,400 U.S.-based businesses, owned by the 67 largest chemical manufacturing groups headquartered in America. Their study, published in the Strategic Management Journal, examined actual business establishments, from low-polluting administrative locations to high-polluting industrial ones. By combining information from Dun and Bradstreet’s Corporate Family Tree Data and the U.S. Environmental Protection Agency’s Toxic Release Inventory program, among other sources, the authors pinpointed where the highest polluting sites fall in their corporate structures. Overwhelmingly, they were hierarchically distant from parent companies. Large corporations have used subsidiaries since the 1980s, and by the early 2000s 85 per cent of the 500 largest U.S. companies were multi-layered. The corporate veil created by this structure is the foundation of U.S. business law, and subsidiaries make multiple business ventures possible that established companies might otherwise find too risky. Each entity within a corporate group—both the parent company and subsidiaries—form a single legal corporation and is legally independent. This legal separation creates a liability firewall between business entities in the corporate group. So, although a parent company has ultimate decision-making authority over its subsidiaries, corporate law does not impose legal responsibility for the subsidiary’s actions on the parent company. Western University

University of Manitoba (UM) researchers are leading the university’s new AirSAFE lab, Canada’s first multi-disciplinary research centre for biomedical, engineering, natural science and occupational health experts to study how inhaled pollutants impact health and disease. The project is co-led by UM researchers Dr. Andrew Halayko and Dr. Neeloffer Mookherjee from the Rady Faculty of Health Sciences and the Children’s Hospital Research Institute of Manitoba. Last month, the federal and Manitoba governments announced funding of $2.4 million from the Canada Foundation for Innovation (CFI) and $2.4 million from Research Manitoba through the CFI – Innovation Fund Matching Program, totaling $4.8 million in strategic research infrastructure support. Some research shows that more than 20 per cent of premature deaths are linked to the detrimental effects of air pollution. By bringing leaders from different disciplines together, the AirSAFE lab will provide evidence to develop new policies for improving air quality and human health. Researchers will be recruited to Manitoba to investigate why and how bad air is leading to diseases and limiting the effectiveness of therapies for these diseases. UM

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