federal budget 2023: a green response to maintain the country's leadership in a single key sector

The federal government's 2023 budget was tabled on March 28 by the Honourable Chrystia Freeland, Minister of Finance.Inflation Reduction Act (IRA) in the United States, where massive investments will be made in clean technologies and the fight against climate change.

the green economy is key to canadian innovation

this budget includes major tax credits aimed at increasing investment in clean energy, including wind and solar power; in clean technologies, including zero-emission vehicles and renewable and nuclear energy equipment; and in clean hydrogen. the Government of Canada also intends to invest in clean energy projects, notably through the Infrastructure Bank of Canada, and in the development and application of clean technologies through the Strategic Innovation Fund.

In short, the Government of Canada is betting big on the cleantech sector to continue positioning itself as a leader in the battery, zero-emission vehicle and clean energy sectors, which also gives Quebec a strategic advantage.

little investment in young innovative companies

In addition to massive investments in the green economy totalling more than $40 billion over the next five years, most of which will continue until 2034-2035, Canada's budget does not include specific investments in innovation and support for entrepreneurs starting up innovative start-ups. There are also a number of measures in this budget that are not quantified investments, but rather wishes from the government that will result in consultations and, perhaps, legislative changes favorable to innovation.

We note the expansion of the College and Community Innovation program, administered by the Natural Sciences and Engineering Research Council of Canada (NSERC), which is dedicated to colleges and CEGEPs in Quebec that already benefit from it, and especially the Centres collégiaux de transfert de technologie (CCTT).

Among the funding that will contribute, we also note several upcoming actions, the results of which will be beneficial to innovation: the launch of a new phase of the Smart Cities Challenge, from which the city of Montreal has benefited in the past; the introduction of the bill to create the Canada Innovation Corporation, which also involves changes to the role of the National Research Council of Canada; an amendment to the Patent Act; and, consultations to establish a right to redress.

the absence of new specific measures to support intellectual property was also noted by several economic players, including the Canadian Council of Innovators. However, we also note that the budget lists several actions taken in recent years in this area, including the creation of innovation superclusters and the Intellectual Property Strategy.

innovation projects in specific sectors

In addition to the more generic measures that will affect innovation, some specific sectors will get extra funding to adopt innovative practices and benefit from new ideas from innovative start-ups.

theCanadian Space Agency has received substantial funding for severalspace exploration initiatives, including theacceleration lunar exploration program, which aims to develop new technologies. thedairy industry, thanks to Agriculture and Agri-Food Canada, is also looking to innovate in the research and development of new solid non-fat (sng)-based products. We also note projects involving innovation in nitrogen management practices by farmers in eastern Canada(Agriculture and Agri-Food Canada), the establishment of a green marine corridor program involving investment in dockside feeding technologies(Transport Canada), and research and development in the forestry sector(Natural Resources Canada).

let's hope for continuity in innovation that works well

The Government of Canada's budget holds great promise for maintaining Canada's leadership in the green economy, and we're hopeful that the diversity of our innovation economy will continue to be a consideration for the federal government.

budget envelopes and ongoing programs are still being maintained, despite the fact that no additional funding has been earmarked in the 2023 budget. These include global innovation clusters such as Scale ai in Montreal, as well as the expertise of Innovation Canada, which pilots programs such as Innovative Solutions Canada. we would also like to point out that a number of funds for the Network of Centres of Excellence are coming to an end, and that this network contributes to the creation of technological innovations leading to the creation of startups.

we will be closely monitoring the progress of these initiatives, which have a considerable impact on innovation in Canada and Quebec, and in particular the planned integration of the Industrial Research Assistance Program (NRC-IRAP) into Canada's new innovation corporation.

to find out more about measures of interest to Quebec's innovation gas pedal community, see our 2023 Federal Budget briefing note.