Biotechnology must factor into a broader Canadian industrial policy

The 2024 Bloom Burton Awards underscore the strength of Canada’s biotechnology and life sciences sectors. The award honours an individual who has made the greatest contribution to Canada’s innovative health care industry. This year’s finalists are Roberto Bellini of Bellus, Tom Frohlich of Chinook Therapeutics, and François Ravenelle of Inversago. Notably, all three work in the biotechnology and pharmaceutical industries. Each built businesses that have employed high-skilled workers including scientists, researchers, and technologists. Their innovations advanced medicine and contributed to the prosperity of our nation. To build upon our economy for the future, governments—both federal and provincial—should focus on three areas: supporting basic research, helping startups, and funding the scale-up of growth companies. Supporting basic research Frank Baylis is the executive chairman of Baylis Medical Technologies. Handout photograph Basic research is essential to innovation, providing the groundwork for future discoveries. Canada's universities—home to world-class research—require government support to continue leading in the biotechnology sector. Sadly, many universities are being financially squeezed at a time when they should be receiving increased investment to conduct research and educate the next generation of innovators. Properly funded, Canadian universities can compete at the highest level globally, fostering discoveries that lead to future technological advances. For instance, the groundbreaking GLP-1 medications, which have made Novo Nordisk one of the top 20 most valuable companies in the world, are based on fundamental research by Canadian professor Daniel Drucker. Without strong government support for such research, these types of innovations do not come to fruition. Helping startups Once basic research produces new discoveries, it’s up to startups to commercialize them. Supporting startups is critical to ensuring that promising ideas are turned into viable businesses. Canada already has the infrastructure to grow its biotechnology sector. Incubators like the Health Innovation Hub (H2i) at the University of Toronto play a vital role in this process. In just a decade, H2i has supported more than 200 startup companies. These firms have created high-paying jobs that contribute enormously to the Canadian economy. Governments should provide sufficient funding to incubators to ensure the next generation of biotech entrepreneurs has the support they need to thrive. As H2i’s co-founder and director stated, “Canada is a sleeping giant that has awoken.” With the proper government support, Canada’s biotechnology and life science sector can become a global powerhouse. Funding the scale-up of growth companies Of the many startups, only a few will emerge as winners capable of scaling their operations. Scaling up requires significant financial capital, and this is where governments can make smart investments. However, governments should not be in the business of directly picking winners, because they do not have the expertise needed to identify which companies will succeed, and they tend to make decisions for political reasons rather than business reasons. Instead, governments should work in partnership with venture capitalists (VCs) who specialize in assessing high-potential companies in the biotechnology sector. Governments can co-invest alongside VCs, requiring that the VCs contribute at least 50 per cent of the investment from their own resources. This way, government funding supports growth companies while leveraging the expertise and judgment of seasoned investors. Tax policy also plays an important role in encouraging businesses to take the risks necessary for innovation. Unfortunately, the recent increase in capital gains tax discourages the very investments needed to scale up companies. BIOTECanada, the association representing the Canadian biotechnology industry, has clearly stated that the “capital gains tax changes are a setback for Canadian biotech competitiveness.” To incentivize commercialization and risk-taking, governments should ensure that tax policies are structured to reward innovation and investment. The efforts to support the biotechnology sector should be part of a broader Canadian industrial policy aimed at building homegrown industries. Our country has the potential to become a global leader in the biotechnology sector, but there is much to be done. Governments must create an environment where innovation can flourish. Supporting basic research at universities, helping startups commercialize discoveries, partnering with venture capitalists to scale up businesses, and enacting constructive policies are all critical steps. With the right approach, Canada can lead in the development of life-saving medicines and breakthrough health-care solutions, ensuring long-term prosperity for our country. Frank Baylis is the executive chairman of Baylis Medical Technologies, a medical device company focused in the areas of interventional radiology and neurology. From October 2015 to October 2019, Baylis was the Liberal Member of Parliament for the riding of Pierrefonds-Dollard, Que. The Hill Times

Biotechnology must factor into a broader Canadian industrial policy

Governments should focus on supporting basic research, helping startups, and funding the scale-up of growth companies.

Canada’s aging crisis and a call for reform in eldercare

Sudan’s warring sides and the long-simmering ethnic conflict

Balanced approach needed on right-to-repair bill, protecting IP rights and public safety

Reflections from a new citizen

Public Safety Canada’s dealing with natural and communication infrastructure disasters

As COP29 wraps up, will Canada finally stop funding fossils this fall?

National strategy needed to address fragmented innovation ecosystem, say researchers

Canada needs to do more to scale-up our top young tech companies

Canada’s biomedical brain drain is reversing. Let’s continue that trend

Canada’s innovation advantage

Biotech sector is having a generational moment in Canada

News

Get free news updates

Opinion

Submit a guest opinion article

resources

Advertise

subscribe

get help

Get free news updates

Submit a guest opinion article

Biotechnology must factor into a broader Canadian industrial policy

Governments should focus on supporting basic research, helping startups, and funding the scale-up of growth companies.

Get The Policy Briefings Newsletter