Innovation, Science and Economic Development Canada
This report is a summary of investments made through the Strategic Innovation Fund (SIF), along with their economic, innovation and public benefits, during the program's first 5 years of operation.
The report summarizes the "key statistics that show the scope and scale of the program's impact" as follows:
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There are currently over 108 direct-to-business agreements, as well as 10 network agreements that have supported over 900 end-recipients.
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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 dollars of private investment in Canada. The commitments secured through SIF contribution agreements include the creation or maintenance of 113 thousand full-time-equivalent (FTE) jobs.
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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 research and development (R&D) investment. SIF funding spurred $700 million of R&D expenditure in Canada in 2020, or 4% of the nationwide total. In 2021, the amount was $1.2 billion, or 5% of the national total. In 2021 alone, SIF-supported activities accounted for over 4,600 full-time-equivalent (FTE) jobs.
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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.
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SIF has also been used to help address 10 distinct Government priorities, including the COVID-19 pandemic response and the strategy to develop Canada's critical minerals assets.
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Through the Government of Canada'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
The report summarizes additional impacts under the following categories:
Fostering and scaling innovation
R&D Spending: Organizations supported through SIF were more likely to increase their R&D spending. It grew by an average of 45% in 2020 and 30% in 2021. This is much higher than the average growth for Canadian businesses over the same periods. For smaller businesses with fewer than 500 employees, the growth in R&D spending was even higher, reaching 84% in 2020 and 49% in 2021. Recipient 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.
Collaboration: A 2019 survey found that only 18% of Canadian businesses reported innovation-related collaboration. Among SIF recipients, that number is 64%—a more than three-fold advantage. On average, collaborative SIF projects engaged in 8.8 distinct collaborations. From 2017 to 2021, SIF recipients reported a total of 538 collaborations, of which half were with Canadian universities. Furthermore, as Figure 5 shows, 46% of collaborators are located within 150 km of each other.
Intellectual Property: The rate of patent filings for SIF projects is nearly 10 times the rate observed nationwide. SIF projects have resulted in close to 1,000 patents being filed, and 1 in 5 of these are Patent Cooperation Treaty (PCT) filings.
Capital Expenditure Investments: The year-over-year change in CAPEX investments for larger SIF-supported companies (500+ employees) was significantly stronger than for the broader Canadian economy in 2020 (0.2% vs –9.1%). This is shown in Figure 7. Coming out of the pandemic, SIF recipients' CAPEX investments accelerated, with an average reported growth of 36% in 2021, far outpacing Canada's growth of 10% during that year.
Creating jobs for all Canadians
Employment and the workforce of the future: In 2021, SIF direct-to-business projects employed over 4,600 full-time equivalents (up from 3,900 in 2020). Of these, 40% (up from 29% in 2020) were newly hired for the specific project. Furthermore, 80% of the jobs created through SIF projects to-date have been positions in the fields of science, technology, engineering and math, compared to 9% of jobs in the broader Canadian economy.
Equity, diversity and inclusion: For SIF recipients, 22% of management positions were occupied by women, which is the same as the Canadian benchmark. 13% of senior management positions were held by visible minorities at SIF-supported organizations, compared to the Canadian benchmark of 9%. Persons with disabilities held 1% of senior management positions at SIF-supported organizations, which meets the Canadian benchmark of 1%. 2% of senior management positions at SIF-supported organizations were held by Indigenous people (First Nations, Inuit or Métis), versus the Canadian benchmark of less than 1%.
The green imperative: Created in Budget 2021, the $8 billion Net Zero Accelerator (NZA) initiative, delivered through SIF, thusfar includes 17 agreements representing $3.2 billion in funding. The NZA has 3 pillars: decarbonization of large emitters, industrial transformation, and clean technology and battery ecosystem development. More broadly, since 2017, more than $5 billion has been invested across 50 SIF projects with clean technology components. On average, SIF recipients have invested nearly twice as much in clean technology for their projects, compared to business-as-usual operations.
