The Short Report: February 21, 2024

GOVERNMENT FUNDING

The National Research Council (NRC) announced that 11 Canadian firms are together receiving up to $5.1 million to collaborate on quantum technology projects with U.K. partners. The firms were selected following a joint Canada-U.K. R&D call for proposals by the NRC and UK Research and Innovation (UKRI). The successful projects focus on developing real-world quantum technologies for commercial use in networking, sensing and scalable solutions to quantum computing, as well as developing the supply chain. NRC is providing advisory services and R&D funding through its Industrial Research Assistance Program and the Collaborative Science, Technology and Innovation Program to support the 11  projects. Project partners from the U.K. will receive up to $7.1 million in combined funding support from UKRI’s Innovate UK to strengthen collaborative research and development through Canada-U.K. partnerships. NRC

Natural Resources Canada (NRC) and the Saskatchewan Research Council (SRC) announced an investment of nearly $5 million for SRC to develop an advanced and innovative process to separate rare earth elements. Funding is being provided through the Critical Minerals Research, Development and Demonstration Program. Rare earths are alloys essential for clean energy sources and technologies such as wind turbines and electric vehicles, including for developing Canada’s EV value chain. SRC’s process will produce about 20 tonnes per year of dysprosium oxide and about five tonnes per year of terbium, enough material to help build more than 500,000 electric vehicle motors annually. Once the project is complete, Canada will be able to produce these critical minerals at commercial scale – “a Canadian first for rare earth element processing,” the partners said. NRC

Environment and Climate Change Canada (ECCC) announced $3 million over five years for Birds Canada. The funding will support citizen science programs and open data, providing access to hundreds of millions of data records gathered by volunteers and professional biologists on the distribution, abundance and population trends for birds in Canada. The funding will allow Birds Canada to build and improve the tools needed to collect, analyze and share open-access data that will inform a wide range of conservation efforts. Through the annual Great Backyard Bird Count, experts and citizen science volunteers will be mobilized across Canada to monitor migratory birds, including species at risk, to identify priority habitats and inform land-use management to better protect them. The funding also will support Birds Canada’s NatureCounts platform, one of the world’s largest biodiversity databases that can be used to inform environmental impact assessments, climate research and industry practices, and to evaluate the effectiveness of conservation and recovery actions. ECCC

Finance Canada announced the Canada Carbon Rebate amounts for 2024-25. The Canada Carbon Rebate (previously known as the Climate Action Incentive Payment) returns fuel charge proceeds to Canadians through direct deposit or cheque, every three months, ensuring eight out of 10 families in participating provinces get more money back, with lower-income households benefiting the most, Finance Canada said. All direct proceeds are returned in the province of origin. Starting this April, a family of four will receive annual Canada Carbon Rebates of:

• $1,800 in Alberta ($450 quarterly)
• $1,200 in Manitoba ($300 quarterly)
• $1,120 in Ontario ($280 quarterly)
• $1,504 in Saskatchewan ($376 quarterly)
• $760 in New Brunswick ($190 quarterly)
• $824 in Nova Scotia ($206 quarterly)
• $880 in Prince Edward Island ($220 quarterly)
• $1,192 in Newfoundland and Labrador ($298 quarterly).

In addition to the base Canada Carbon Rebate amounts, starting this year, the federal government is proposing, through legislative amendments in Bill C-59, to double the rural top-up to 20 per cent, in recognition of rural Canadians’ higher energy needs and more limited access to cleaner transportation options. Quebec and B.C. residents don’t receive federal carbon rebates because these provinces have their own carbon pricing systems that meet the federal benchmark. Alberta Premier Danielle Smith said “rebranding” the federal carbon tax won’t fix what has become over five years a “resounding failure. The carbon tax has punished Canadians while failing to reduce emissions.” Steven Guilbeault, minister of Environment and Climate Change Canada, and Prime Minister Justin Trudeau “have the audacity to try and ‘rebrand’ the carbon tax – a cynical and desperate ploy that will fail,” Smith said in a statement. Department of Finance Canada, Govt. of Alberta

The Government of British Columbia is providing First Nations communities in the province with a total of more than $1.8 million for clean energy projects, through the First Nations Clean Energy Business Fund. Three First Nations on Vancouver Island will together receive more than $792,000 for projects to reduce greenhouse gas emissions. New projects on Vancouver Island include:

• T’Sou-ke Nation will power its community with clean energy by building and installing a solar photovoltaic system – $492,910.
• Pacheedaht First Nation will strengthen energy-efficient households by installing surge protectors, improving insulation and holding engagement events in the community – $149,961.
• Malahat Nation will install heat pumps in priority homes, conduct a band office energy assessment and a rooftop solar photovoltaic system screening to help build a greener community future – $149,646.

In an earlier announcement, the B.C. government also is providing $549,140 to two other communities on Vancouver Island and Flores Island, including:

• Uchucklesaht Tribe will improve quality of living for community members in the Ehthlateese village by developing innovative hydroelectric and solar-power initiatives – $499,140.
• Ahousaht First Nation will develop a comprehensive community energy plan to identify energy-efficiency measures and explore potential clean energy initiatives to help strengthen local resiliency – $50,000.

Govt. of British Columbia

RESEARCH, TECH NEWS & COLLABORATIONS  

The Intuitive Machines-1 (IM-1) mission launched February 15 aboard a SpaceX Falcon 9 rocket carrying Canadian technologies.  IM‑1, developed under the Artemis program, is headed to the Moon. If the landing is successful, these will be the first Canadian technologies to be operated on the Moon since NASA’s Apollo missions. As part of the IM-1 mission, Toronto-based Canadensys Aerospace Corporation is expected to demonstrate its 360-degree imaging systems, one of which was partially funded through the Canadian Space Agency’s Lunar Exploration Accelerator Program (LEAP). Other Canadian technologies from Canadensys and Brampton, Ontario-based MDA Ltd. are also flying on IM-1:

• Canadensys designed and built a lunar astronomical observatory and provided operational cameras that are an integral part of this and subsequent lunar landers.
• MDA was also selected by Intuitive Machines to provide lunar landing sensors that are aboard the mission. These sensors will help the spacecraft measure the distance to the surface of the Moon as the IM‑1 lander Odysseus descends.

If all goes well, the Odysseus lander is scheduled to touch down in the Moon’s south polar region on February 22. Canadian Space Agency

MDA Ltd. announced it received a $74-million contract from California-headquartered General Atomics Aeronautical Systems Inc. to help deliver the fleet of MQ-9B SkyGuardian Remotely Piloted Aircraft Systems (RPAS) recently ordered by the Canadian Armed Forces. As part of the contract, MDA will complete the assembly of the RPAS ground control stations at the company’s Richmond, B.C., facility. MDA will also deliver the combat search and rescue radios for the program and design the RPAS Ground Control Centre information management system that controls how information flows, is secured and shared. MDA Ltd.

Calgary-based GeologicAI, which offers artificial intelligence-driven rock and core-scanning robots and high-resolution imaging software, acquired Resource Modeling Solutions, another Calgary firm, which specializes in advanced geostatistical modelling of subsurface deposits for the mining sector. Financial terms weren’t disclosed. The partnership expands GeologicAI’s product and services offerings and opens new possibilities for both organizations, GeologicAI said. Last year, GeologicAI closed a Series A funding round of US$30 million, backed by Bill Gates’s Breakthrough Energy and Export Development Canada. GeologicAI

Halifax-based Xeos Technologies was acquired by maritime technologies firm Satlink, headquartered in Madrid, Spain. Terms of the deal weren’t disclosed. Xeos Technologies provides asset-tracking solutions and communications services for devices such as buoys, vehicles and moorings, operating under harsh maritime environments. Satlink provides high value-added technologies to the maritime sector, for the knowledge and management of oceans. With the acquisition, Satlink increases its presence in North America, where the company initially established a presence in 2020, with a new Canadian office. Satlink said that Xeos’ founders and management team will reinvest into Satlink. Satlink

Vancouver-headquartered Zafin is being acquired by Nordic Capital, a private equity firm based in Stockholm, Sweden. Nordic Capital said it signed an agreement to acquire a majority share in Zafin, which provides software-as-a-service (SaaS) core modernization and transformation solutions to financial institutions around the world. Terms of the transaction weren’t disclosed. The deal is one of the largest recent exits in the Canadian software industry, according to news reports. Nordic Capital said Zafin’s founders and management will reinvest in the company alongside Nordic Capital. Zafin’s core SaaS platform extracts product and pricing from multiple core systems, enabling users to work collaboratively to design and manage relationship pricing, products and packages, including personalized propositions. Nordic Capital

Toronto-based health care software company Think Research Corporation announced it entered into an agreement with its lender, Vancouver-based Beedie Investments Ltd., to acquire all of Think Research’s shares for 32 cents per share in an all-cash deal. That share price represents a 100-per-cent premium to the close price of the shares on the TSX Venture Exchange on February 15, 2024, Think Research said. The value of the deal is anticipated to be $85 million. The transaction, which still needs approval by at least two-thirds of shareholders, doesn’t include shares owned by certain directors, executive directors and “continuing shareholders” of Think Research. Think Research will continue to execute its strategy of delivering knowledge-based digital health software solutions as a private company upon completion of the transaction, the company said. Think Research Corporation

Ottawa-based Leonovus announced it sold its software and intellectual property to Delaware-based Cylentium Research Ltd. for $2.5 million. The all-cash transaction, which still needs approval from Leonovus’s shareholders and regulators, including the TSX Venture Exchange, is expected to be finalized by the end of June. The sale will provide Leonovus with “a significant amount of cash, a clean balance sheet and a public listing, positioning the company well to identify and complete an acquisition of assets or a reverse takeover,” said CEO Michael Gaffney. Leonovus also said it plans to settle $193,000 worth of debt by issuing 3.86 million common shares at a price of five cents per share. The move marks the company’s latest effort to stay afloat after failing to generate meaningful revenue from its software solution, which distributes and encrypts data across numerous cloud servers rather than a single on-premise location. Ottawa Business Journal

The Canadian Innovation Exchange (CIX) announced its lists of the top 20 early-stage startups and top 10 growth Canadian startups for 2024. The early-stage list saw a heavy presence of climate tech and med tech/life science startups, while fintech and climate tech firms made their mark in the top 10 growth-stage startups. The lists were determined by 150 global investors and experts on the CIX selection committee, which evaluated the startups on their business model, quality of product and service offering, innovation, market opportunity, management depth, and diversity, equity and inclusion of leadership. Recipients of the awards will get to pitch in person at the CIX Summit on March 26 and 27, being held at the Design Exchange in Toronto. The top 20 early-stage startups included: Toronto-based online marketplace Peggy; Hamilton-based industrial inspection drone company Skygauge Robotics; and Kitchener-Waterloo based biotech application programming interface software platform Scispot.io. Fintechs in the top 10 growth startups included: Toronto-based accounting software platform Railz; Toronto-based money management platform Relay; and Calgary-based wage access provider ZayZoom. BetaKit

The Government of Manitoba has rejected Calgary-based Sio Silica’s proposed silica sand extraction and mining project in southeast Manitoba. The government said will not issue an environmental license for the project, in the Rural Municipality of Springfield east of Winnipeg. After doing due diligence the government decided that the project's environmental risks outweighed any potential benefits. The province’s Clean Energy Commission’s (CEC) report identified several serious environmental concerns, which would have extracted sand through aquifers that provide drinking water to 100,000 Manitobans. “This proposal failed to adequately consider long-term impacts including potential aquifer collapse,” said Tracy Schmidt, provincial minister of Environment and Climate Change. The CEC also heard from hundreds of Manitobans opposed to the project, including the community of Springfield, local leaders, scientists and environmental advocacy groups. Sio Silica had planned to drill up to 7,700 wells south and east of Winnipeg over the next 24 years to extract silica sand, used in solar panels, computer chips, semiconductors batteries, fibre optics and specialty medical glass. The company’s application had included a study of what will happen to the quantity and quality of the groundwater in the Winnipeg Sandstone aquifer that supplies homes and business in eastern Manitoba. Two days before the announcement rejecting Silo Silica’s project, Premier Wab Kinew and Schmidt gave the go-ahead to Canadian Premium Sand (CPS), another Calgary-based company, to mine silica in Hollow Water First Nation east of Lake Winnipeg, and create a solar glass production facility in Selkirk. The CPS project employs more traditional open-pit mining methods with no requirement to dig through aquifers. Sio Silica’s method, where thousands of wells would be drilled through two aquifers to extract the sand, has never been done anywhere in the world, the Manitoba government said. Govt. of Manitoba

The Government of Canada and the U.K. government signed an agreement to work together on nuclear fusion energy. The agreement, signed at the International Energy Agency’s (IEA) ministerial meeting in Paris, is aimed at enhancing collaboration on key areas, including R&D, regulatory harmonization, and skills and workforce development. Canadian Nuclear Laboratories and the United Kingdom Energy Authority also signed a collaborative framework agreement to partner on developing technologies to manage tritium, a fusion energy fuel – including a commercial-scale fuel cycle for handling and reprocessing of tritium. Fusion involves mixing two forms of hydrogen and heating them to extreme temperatures, causing them to combine and release energy – in a hot gas known as plasma – which could then be harnessed to generate electricity. The energy generated from fusion is many million times more efficient than burning coal, oil or gas and could generate a near unlimited supply of clean electricity. However, the nuclear industry has spent more than five decades trying to build a fusion reactor, but no device has yet reached net power. Burnaby, B.C.-based General Fusion, which is developing fusion technology, received $13.9 million in 2009 from Sustainable Development Technology Canada and another $12.7 million in 2016. Natural Resources Canada, Canadian Nuclear Laboratories

The Hong Kong branch of a multinational company lost $25.6 million after scammers using AI-generated deepfake technology to pose as the firm’s chief financial officer and other employees in a video conference call ordered money transfers. The money transaction was ordered during a meeting where it was found that everyone present on the call except the victim were deepfakes of real people, Hong Kong police said. Police didn’t reveal the identity of the company or the employee. The scammers used deepfake technology to turn publicly available video and other footage of staff members into convincing meeting participants. The employee followed the scammers’ instructions and made 15 transfers totalling $25.6 million to five Hong Kong bank accounts. Amid at least 20 incidents between July and September 2023, where deepfakes have been used to make 90 loan applications and 54 bank account registrations, police said they’ve arrested six people so far. WION

VC & PRIVATE INVESTMENT

Toronto-based Nulogy Corporation, which provides supply chain collaboration solutions, announced it secured a strategic investment from Colorado-based Rubicon Technology Partners, a private equity firm that invests in enterprise software companies. The amount of the investment wasn’t disclosed, although Rubicon typically invests $50 million to $350 million per company. Nulogy’s multi-enterprise collaboration platform digitally enables manufacturers and their external supplier networks to collaborate seamlessly on a centralized, data-driven, AI-enabled platform. The company said the investment by Rubicon will accelerate Nulogy’s growth strategy as the company continues to scale through new product innovation and go-to-market expansion, while aiming to deliver greater value and service to its existing customers. Nulogy Corporation

Montreal-based enGene Holdings Inc., a clinical-stage genetic medicines company, announced it has raised $200 million in a sale of common shares at a price of $10 per share. EnGene’s Nasdaq-listed stock closed up 116.5 per cent on the day to US$16.50 after the company’s announcement. The financing included participation from new and existing investors, including Adage Capital Partners, LP, Blue Owl Healthcare Opportunities, Boxer Capital, Commodore Capital, Cormorant Asset Management, Deep Track Capital (an affiliate of Deerfield Management Company), Foresite Capital, Janus Henderson Investors, Logos Capital, Lumira Ventures, Marshall Wace, Perceptive Advisors, Soleus Capital, Surveyor Capital (a Citadel company), Venrock Healthcare Capital Partners, and a large investment management firm. enGene said it intends to use the financing to fund the continued development of EG-70, the company’s genetic medicine therapeutic candidate being evaluated in an ongoing pivotal study for BCG-unresponsive non-muscle invasive bladder cancer, evaluation of expanded EG-70 development opportunities, potential new R&D programs and for working capital and general corporate purposes. enGene

Quebec-based CDPQ, which manages investments by Quebec pensions and insurance plans, invested $125 million to support the acquisition strategy of Quebec City-based Levio, a consulting firm focused on achieving digital transformations. Founded in 2014 and now present in five countries, Levio specializes in supporting institutional and corporate clients when planning, managing and executing large-scale digital transformation program or mega-projects. The company is currently entering a new expansion phase, primarily in North America, with a view to increasing its geographic footprint, further strengthening its value-added offering, and developing new business practices. CDPQ

Toronto-based fintech Float, which offers corporate card and expense management technology, has secured a $50-million credit facility in partnership with Silicon Valley Bank, a division of U.S.-based First Citizens Bank. The funding will be used to expand Float’s Charge Card program for midmarket Canadian companies across industry sectors. The no-personal-guarantee credit program gives select small and medium-sized businesses up to 30 days of interest-free funding to extend their runway and invest in growth. Float said the program achieved nearly 300 per cent year-over-year payment volume growth in 2023. Float

Montreal-based AI startup Sibli (previously Responsibi) closed a $6-million seed round led by Staircase Ventures, a firm overseen by high-tech pioneer Janet Bannister (eBay, Kijiji). The deal included participation by The Group Ventures, Burst Capital, MaRS IAF, and private investors. The company also announced a rebrand to better align with its broader perspectives and vision. Sibli uses generative AI and leverages large language models to process enormous amounts of unstructured data, find relevant insights, and deliver them to asset managers. Sibli was founded in 2020 by CEO Alik Sokolov, then publishing academic research on deep learning capabilities and investment management with the University of Toronto’s financial risk management research unit, RiskLab. Sibli

Kitchener-Waterloo-based cleantech startup Evercloak has secured $2 million in a seed round led by Bioindustrial Innovation Canada’s Sustainable Chemistry Alliance fund. Investors in the round also included Greensoil Ventures, and Groundbreak Ventures, among others. Evercloak’s technology, based on graphene composite membranes, consists of ultra-thin “nanofilms” designed to reduce the energy used by commercial and residential air conditioning and dehumidification systems, while cutting greenhouse gas emissions. Evercloak said its technology can reduce air conditioning energy demands by more than 50 per cent. The funding will be used to scale up Evercloak’s membrane manufacturing capabilities, strengthening its commercial team, and commercialize the technology. BNN

The Alberta Investment Management Corporation (AIMCo) opened an office in New York City. AIMCo’s New York office brings the firm’s total number of global offices to seven, including Edmonton, Calgary, Toronto, London, Luxembourg and Singapore. The office in Singapore was opened in the fall of 2023. AIMCo, which invests on behalf of pension funds and other institutional investors in Alberta, said the organization’s presence in these countries provides access to deeper pools of talent that bring nuanced country- and sector-specific knowledge to secure the best investment opportunities. AIMCo has more than $164 billion of assets under management AIMCo

York Regional Council in Ontario’s York Region has committed $1.08 million over three years from the York Regional Innovation Fund to Project JumpSTART, to support international and women-led tech entrepreneurs. Project JumpSTART is a partnership between York University’s YSpace innovation hub, the Schulich School of Business’s Office of Innovation and Entrepreneurship, and the Treefrog Accelerator. The Towns of East Gwillimbury, Georgina and Newmarket are also collaborators in this initiative. Project JumpSTART will leverage the funding to expand York University’s YSpace ELLA Program and Treefrog Inc.’s Accelerator Program. Participants will have access to workshops and mentorship opportunities as well as the potential for specialized training through the Schulich Venture Academy. Women own just over 17 per cent of Canadian businesses in the private sector. York University

REPORTS & POLICIES

Ottawa’s proposed privacy and AI legislation “cannot stand as it is,” Assembly of First Nations says

The federal government’s Bill C-27, aimed at preventing abuses of personal information, AI and data, infringes First Nations’ right to data sovereignty which is essential for First Nations’ rights to self-determination and self-government, the Assembly of First Nations (AFN) says. “Bill C-27 infringes these and other rights in both the process of its development and its substance,” the Assembly said in a submission to the Parliamentary Standing Committee on Industry and Technology studying the proposed legislation.

The process that created Bill C-27 is flawed because it involved no Nation-to-Nation consultation between Canada and First Nations, said the AFN, which advocates for more than 600 First Nations across the country. Ottawa’s proposed Consumer Privacy Protection Act doesn’t consider collective harms to First Nations, particularly regarding consent provisions and use of de-identified data, the AFN said. The draft Personal Information and Data Protection Tribunal Act impinges on First Nations rights to self-government, the Assembly said. Also, the proposed Artificial Intelligence and Data Act and the Voluntary Code of Conduct Relating to Advanced Generative AI Systems “do little to assure First Nations that their individual and collective rights will be respected by commercial interests or governments.”

Ultimately, it is up to each First Nation to exercise their data sovereignty in keeping with their own world views, and thus only they can speak definitively to amendments that are needed to the proposed Acts, the AFN said. However, the organization warned that legal action by First Nations is likely if the Crown fails to meet its obligations, which could result in the suspension of the legislation entirely. 

The consultation process employed by Innovation, Science, and Economic Development Canada (ISED) didn’t meet the standard required by the United Nations Declaration on the Rights of Indigenous Peoples, a declaration Canada has adopted, the AFN said. ISED said since Bill C-27 was first tabled in June 2022, ISED consulted, in a series of meetings with almost 600 people drawn from “a broad cross-section of society,” and in roundtables with stakeholders that included representatives from academia, civil society, Canada’s AI research institutes, and industry.

But stakeholders aren’t rights holders, and limited engagement with some Indigenous individuals or representatives “does not meet the legal and moral duty to conduct Nation-to-Nation consultation.” the AFN argued. “Without the benefit of consultation, claims by the Department (ISED) ring hollow, and it shows in a Bill that is frightening in its potential for abuse of First Nations rights.”

The Consumer Privacy Protection Act doesn’t address risks to First Nations collective rights that may arise in using First Nations citizens’ personal data, the AFN said. The Act provides for the use of de-identified and/or aggregated data with consent, but there are circumstances laid out in Bill C-27 where consent isn’t required – including by commercial interests, organizations and federal works, businesses, undertakings for internal research, analysis and development, and “socially beneficial purposes.“ In these instances, the data could be used to enrich commercial interests and the Crown, profile individuals and communities, or impose on First Nations foreign concepts of 'socially beneficial purposes,' such as was the case with Residential Schools,” the AFN said.

The Tribunal Act section of Bill C-27 “is a direct affront to First Nations’ rights to self-determination, self-government and data sovereignty,” the AFN said. The Tribunal Act would create a new Tribunal which has authority to direct First Nations governments. Yet First Nations have sole decision-making authority over their data and how it may be used, shared, disposed, interpreted and accessed, the AFN said. Without recognition of First Nations data sovereignty, First Nations will be treated like any other entity, the organization said. “This is an overstep of federal authority and must be rolled back.”

The Artificial Intelligence and Data Act and the recently produced Voluntary Code “are sops to commercial interests” and don’t sufficiently limit the potential for abuse by governments, the AFN said. First Nations have been treated as criminals when they try to open bank accounts and they have been subject to racial profiling in the health sector, by police and government officials, the organization noted. “Imagine the potential for such abuse to continue or even worsen when biased and prejudiced individuals and organizations are building AI systems that will implicate First Nations.”

The delegated authority to an Artificial Intelligence and Data Commissioner to administer and enforce the Act is insufficiently independent from ISED’s minister, the AFN said. The non-application of the legislation to certain departments, including National Defence, the Canadian Security Intelligence Service, and the Chief of the Communications Security Establishment – along with “any other person who is responsible for a federal or provincial department or agency and who is prescribed by regulation” – “is chilling,” the AFN said. “It is in the Crown’s sole discretion to determine under regulations which persons, departments or agencies are exempt.” These powers must be curtailed before the legislation is passed, the AFN said. “The legislation cannot stand as it is.”

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AI is big business on its way to becoming colossal business

Artificial intelligence has become big business and the pace of innovation is only picking up, according to an article by staff at the Toronto-based MaRS innovation hub. According to Deutsche Bank, 175,072 AI patents were filed between 2012 and 2022, with more than half of them coming in the final three years. The bank anticipates a dramatic spike this year and next in companies adopting AI applications, especially in such fields as product development, sales, marketing and human resources. The global generative AI market is already worth roughly US$136.6 billion and is on track to reach U.S.$1.3 trillion by 2032. From 2022 to 2030, AI use by organizations around the world is expected to expand at a compound annual growth rate of more than 38 per cent.

Experts predict that as computational power grows exponentially, the capabilities of these AI applications – in reasoning, in accuracy, in specialization and in personalization – will skyrocket. At the same time, regulations and policy can take much longer to develop. The European Union, for example, spent three years drafting its 125-page law to regulate AI, introduced in April 2021. But the law doesn’t mention the breakthrough that powers applications like ChatGPT, because widespread use of such generative AI applications came after the EU’s law,  blindsiding lawmakers.

Canada, when it comes to average year-over-year growth in AI talent concentration, as well as publications per capita from AI researchers, outpaces all other G7 nations, the MaRS authors noted. Canada has one of the highest rates of AI patents filed and one of the highest per-capita levels of venture capital investment in AI enablers, developers and users. But when it comes to businesses actually using AI, the story looks quite different – and Canada is in danger of falling behind. A recent KPMG survey reported that only 35 per cent of large Canadian businesses currently use AI in their operations, compared with 72 per cent of large U.S. businesses.

Google estimates generative AI could save the average worker in Canada about 100 hours a year. And research from Goldman Sachs suggests generative AI could spur global productivity growth by 1.5 percentage points over 10 years. However, it can take up to five years to fully integrate AI into an enterprise. According to the 2021 Survey of Digital Technology and Internet Use conducted by Statistics Canada, the biggest barrier to adoption is a lack of motivation: 69 per cent of businesses that don’t use AI say they have not identified a business need for it.

To ensure new technologies are beneficial for everyone, businesses and customers must actively engage in tech stewardship, according to the MaRS article. This practice involves the development and use of technology that is purposeful, responsible, inclusive and regenerative – by designing and implementing technology with the intention of creating a positive impact.

The article highlights six ventures in the MaRS portfolio that the authors say are leaders in using AI and machine learning to help companies use AI responsibly to enhance their productivity, identify key insights, improve customer service and transform their business. MaRS

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Canada's innovation rate declined during COVID pandemic, Statistics Canada reports

Canada’s “innovation rate” declined to 71.9 per cent during the COVID pandemic period (2020 to 2022) compared with 79.8 per cent in the previous reference period (2017 to 2019), according to Statistics Canada. The innovation rate is the proportion of businesses that introduced product or business process innovations.

The innovation rate dropped for both product and process innovations. From the 2017 to 2019 period to the 2020 to 2022 period, the product innovation rate declined just over six  percentage points to 46.6 per cent, and the business process innovation rate decreased almost 10 percentage points to 63 per cent.

The impact of the pandemic was apparent in the extent to which it influenced the nature of innovation, StatsCan said. For product innovators, 5.1 per cent brought new or improved products to market exclusively in response to the pandemic, while 38.8 per cent reported that at least some of their product innovations were in response to the pandemic.

Likewise for business process innovation, 4.8 per cent of businesses reported process innovations as a direct response to the pandemic and 41.4 per cent of businesses declared that some of their business process innovations were related to the pandemic.

The ranking of the propensity to innovate across enterprise size groups and regions did not change with the pandemic. Large businesses (78.4 per cent) were more likely to innovate than medium businesses (75.1 per cent) and small businesses (71 per cent).

Regionally, from 2020 to 2022, businesses in Ontario (75.1 per cent) still reported the highest proportion of innovators. Ontario was followed by the “rest of Canada” category (Manitoba, Saskatchewan, British Columbia, Yukon, the Northwest Territories and Nunavut) (72.2 per cent), Alberta (71.5 per cent), Quebec (70 per cent) and Atlantic Canada (58 per cent).

The top four sectors with the highest innovation rates continued to be concentrated in the services-producing sector in the 2020 to 2022 period. These included the information and cultural industries (79.5 per cent), finance and insurance (excluding monetary authorities) (79 per cent), professional, scientific, and technical services (78.2 per cent) and wholesale trade (77.4 per cent). Conversely, the agriculture, forestry, fishing and hunting (50.9 per cent) sector had the lowest innovation rate.

From 2020 to 2022, a considerable proportion of businesses (34.1 per cent) reported using at least one government support program for innovation-related activities, up from 30.5 per cent during the 2017 to 2019 period. Over the 2020 to 2022 period, businesses that leveraged government support for innovation-related activities (83.3 per cent) had a higher innovation rate than those that did not depend on such support (66 per cent).

Of the 63 per cent of businesses that implemented business process innovations in  the 2020 to 2022 period, over two in five (41.1 per cent) businesses reported realizing savings in 2022 related to the overall cost of production of products or overall expenditures on support business functions – down from 48.8 per cent in 2019.

At the national level, the proportion of businesses that realized savings from business process innovations (41.1 per cent) hid underlying differences across businesses of different sizes, with large businesses (50.1 per cent) having the highest proportion, followed by medium-sized businesses (44.5 per cent) and small businesses (39.8 per cent), StatsCan said.

From 2020 to 2022, large businesses (42 per cent) were more likely to avail themselves of government support programs for innovation-related activities than medium businesses (34 per cent) or small businesses (33.6 per cent). But the likelihood of innovation was virtually the same for large businesses (88.5 per cent) or medium-sized businesses (87.2 per cent) using at least one government support service for innovation-related activities.

Government training and hiring programs (17.6 per cent), government tax incentive or tax credit programs (17.2 per cent), and government grants and contributions programs (15.6 per cent) were the top three government support program types used by businesses from 2020 to 2022.

From 2020 to 2022, nearly one-third (32.7 per cent) of businesses considered government tax incentive or tax credit programs as the most critical programs. They were followed by government grants and contribution programs (30.6 per cent) and government training and hiring programs (28.9 per cent).

Note from Research Money’s managing editor: StatsCan reported that from 2020 to 2022, large businesses were more likely to avail themselves of government support programs for innovation-related activities than medium-sized businesses or small businesses. Critics calling for changes to programs such as the Scientific Research & Experimental Development (SR&ED) tax credit program have complained that too much support from SR&ED’s $3-billion-per year program goes to big businesses, including subsidiaries of foreign entities in Canada, rather than to support Canadian SMEs. Critics have also complained that SR&ED and other federal innovation support programs are complex to access and navigate successfully for SMEs, especially small businesses that can’t afford consultant firms to help with this process. Also, StatsCan reporting that the agriculture, forestry, fishing and hunting sector had the lowest innovation rate among sectors is worrisome, given Canada’s reliance on its agricultural and agri-tech sector especially for exports, and the federal government’s significant investment in the Protein Industries Canada global innovation cluster to boost innovation in plant-based food products.

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Business groups urge federal government to “go back to the drawing board” on changes to the Competition Act

The federal government is jeopardizing Canadian businesses by rushing through several major changes to Canada’s Competition Act using two omnibus bills – Bill C-56 and Bill C-59 – without notice, consultation or meaningful debate in Parliament, according to six business lobby groups. The signatories were the Business Council of Canada, Canadian Chamber of Commerce, Canadian Life and Health Insurance Association, Canadian Manufacturers & Exporters, Canadian Marketing Association, and Retail Council of Canada.

In a joint open letter to François-Philippe Champagne, Minister of Innovation, Science and Industry, the six groups say Canada’s business community recognizes the need to modernize the country’s decades-old Competition Act to ensure it remains relevant in a rapidly evolving economy.

The groups note that Bill C-59 includes proposals to increase private rights of access to the Competition Tribunal, expand the scope of the civil competitor collaboration provisions to apply to past conduct, and allow the Tribunal to conclude that a merger is likely to prevent or lessen competition substantially, solely based on evidence of concentration or market share.

The Competition Act establishes one of Canada’s most important regulatory regimes. As the legal framework providing the rules by which all businesses operate in the economy, any changes to the Act can have far-reaching consequences, the business groups note.

“These proposed changes will have a major impact on the economy and must be thoroughly studied and debated by Parliament, along with their intended and unintended consequences,” they say. For instance, Parliament should ensure that an expanded right of private access is not used by businesses to hamstring their rivals with frivolous lawsuits rather than competing on merit, the groups say. However, with Bill C-59 being an omnibus bill, such rigorous review is unlikely to occur, they say.

“By limiting notice, consultation and debate, the government’s approach to reforming the Act introduces uncertainty and instability into competitive markets,” the groups maintain. The Act risks undermining competition between Canadian companies here at home, while also hampering foreign investment from abroad, they say. “Few companies, foreign or domestic, will seek to make significant investments in a country that changes its laws so arbitrarily and capriciously.”

In their February 12 letter, the six business groups urge the government to “go back to the drawing board.” Ottawa,  they say, should remove the proposed Competition Act changes in Bill C-59 and “recommit to its promised stakeholder consultation process to ensure a modernized Act truly benefits all Canadians.” Business Council of Canada

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Canada’s pharmaceutical sector charges much more for patented medicines, spends a lot less on R&D than in other countries

Canadian list prices for patented medicines were second-highest among the 31 Organisation for Economic Co-operation and Development countries in 2022, according to the annual report of the Patented Medicine Prices Review Board (PMPRB). This is up from the third-highest in 2021. At the same time, across 11 PMPRB comparator countries, the aggregated R&D spending-to-revenue ratio by the pharmaceutical sector was 19.8 per cent in 2020 – nearly six times the 3.4 ratio Canada.

Sales of patented medicines in Canada were $18.4 billion in 2022 – an increase of 5.7 per cent from 2021 – and accounted for approximately 49 per cent of the sales of all medicines in Canada. Canada represents 2.2 per cent of worldwide pharmaceutical sales. 

More than $31.2 million in excess revenues and potential excess revenues were offset by way of payments to the federal government through voluntary compliance undertakings, settlement, and Board orders, the report said. The Consumer Price Index rose by 6.8 per cent, while the national average transaction price for patented medicines increased by 0.8 per cent.

The average ratio of R&D expenditures to sales revenues for all pharmaceutical rights holders was 3.1 per cent, or $914 million, in 2022, a decline from 3.4 per cent in 2021, according to the report. The ratio of R&D expenditures to sales revenue for pharmaceutical rights holders has steadily decreased since the late 1990s, the report said.

In 2000, Canada had a pharmaceutical sector R&D-to-sales ratio of 10.1 per cent, lower than most PMPRB11 comparator countries. Canada’s ratio declined further to 6.9 per cent in 2010, lower than all other PMPRB11 countries except for Italy and Span. In 2020, Canada’s ratio dropped to the lowest – 3.4 per cent – among all comparator companies. Across all PMPRB11 countries, the aggregated R&D spending-to-revenue ratio in 2020 was 19.8 per cent – nearly six times that in Canada.

“A number of comparator countries with patented medicine prices that are, on average, lower than prices in Canada, have achieved much higher R&D-to-sales ratios,” the report noted. Although price levels and intellectual property protection are often cited as an important policy lever for attracting R&D, “the data has not supported this link domestically or internationally.”

Members of Innovative Medicines Canada reported R&D expenditures of $748 million in 2022, an increase of 1.7 per cent in 2021. With the adoption of 1987 amendments to legislation, Innovation Medicines Canada made a public commitment to increase its members’ annual R&D expenditures to 10 per cent of sales revenue by 1996. However, the ratio has been less than 10 per cent for the past 20 years, the PMBRB's report said.

The figures in the report aren’t  representative of all pharmaceutical research conducted in Canada. For example, a company may sell only non-patented medicines but still perform considerable research. Similarly, a company may conduct research and have no medicine sales at all.

Ontario and Quebec's pharmaceutical sectors accounted for the highest R&D expenditures across Canada by region – just over 52 per cent in Ontario and just over 26 per cent in Quebec. Quebec had the highest increase in R&D expenditures, 11.9 per cent, compared with a 10-per-cent decline in Ontario. Patented Medicine Prices Review Board

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Ottawa offers improvements to Clean Electricity Regulations

Steven Guilbeault, minister of Environment and Climate Change Canada (ECCC), released an update on the consultations and the design options being considered for the federal government’s final Clean Electricity Regulations. These options address the feedback received during the last six months of extensive consultations with provincial and territorial governments, the Canada Electricity Advisory Council, Indigenous representatives, electricity providers, industry, environmental organizations, and interested Canadians. The improvements under consideration would enhance the flexibility for provincial operators to continue to ensure reliable and affordable power while maintaining Canada’s ability to achieve its emissions reduction goal, Guilbeault said.

The updated regulatory design options involve a new approach to the performance standard that would set an annual emissions limit  tailored to each natural gas-fueled power generation unit, based on its size – rather than a fixed emissions intensity that applies uniformly to all units. This would enable more efficient and cleaner units to run for longer periods of time. It would also increase flexibility to address peak power needs and the use of standby (or on-demand) power to support the buildout of cleaner technologies. This approach could be supplemented by offsets, emissions pooling, and a more flexible approach to industrial cogeneration. The offsets option would allow a generating unit to emit over its emissions limit by a prescribed additional amount, providing the unit remits greenhouse gas emissions offsets to account for all excess emissions.

The Alberta government and the Alberta Electric System Operator (AESO) said in October 2023 that Ottawa’s proposed Clean Electricity Regulations unfairly disadvantage Alberta and impose an unfeasible timeline to decarbonize the province’s power system. The UCP government and AESO said the regulations would lead to higher energy costs for consumers and businesses and increase the risk of “brownouts,” or temporary electricity shortages, in parts of the province. Rebecca Schulz, Alberta’s minister of Environment and Protected Areas, said in a statement: “This report [with its improvements] makes no meaningful corrections to the most destructive piece of Canadian regulation in decades. This radical plan has dangerous implications for Albertans. Tweaks won’t work, it must be scrapped entirely.” The Clean Energy Regulations are scheduled to be implemented by mid-2024. ECCC

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Expect to pay more for electric vehicle insurance – if you can find an EV to buy

Electric vehicle buyers should expect to pay more for insurance when replacing internal combustion engine vehicles with EVs, according to a commentary by global credit-rating agency Morningstar DBRS, which has an office in Toronto. The agency’s note, titled, “Electrification 2035: Auto Insurance Rates to Increase as the Transition to Electric Vehicles Becomes Law in Canada,” discusses the effects that the federal government’s Electric Vehicle Availability Standard could have on automobile insurance rates as the transition to 100-per-cent zero-emission vehicle sales gains momentum. Ottawa’s standard requires the increasing sale of new light-duty vehicles (passenger cars, SUVs and light trucks) to be zero-emission vehicles, culminating in 100-per-cent zero-emission vehicles by 2035.

According to the commentary:

• As Canada's automobile landscape transitions, EV buyers should expect to pay more for insurance when replacing internal combustion engine vehicles with EVs. Insurers will also have to adjust their pricing models as more EV claims data are generated.
• EV owners in the U.K. already face higher premium rates and, in some instances, denial of coverage as insurers adjust their pricing models. This trend could manifest in Canada over time.
• Repairs and replacement parts for EVs are very expensive, prompting some insurers to total damaged vehicles instead of attempting to repair them.
• Auto insurance rates are highly regulated in Canada, which may help mitigate the pace of potential rate increases.

“For EV drivers in Canada, a silver lining might be found in the highly regulated Canadian automobile insurance industry,” said Victor Adesanya, vice-president, insurance at Morningstar DBRS. Provincial governments are responsible regulating auto insurance policies, including the monitoring of claims handling and dispute resolution, he said. Provincial regulators also review and approve requests made by insurers to increase rates before they can be implemented. “This could help mitigate the impact of insurance rate increases on the finances of EV owners on renewal or when an EV is registered for the first time. However, we expect that auto insurance rates will trend upward over time as insurers generate more claims data for EVs and reflect that experience in their pricing.”

The federal government’s timeline for requiring the sale of 100 per cent of new light-duty vehicles by 2035 is “unrealistic” and “rigidly ideological,” based on forecasts of production and sales, said Brian Livingston, executive fellow at the School of Public Policy at the University of Calgary. Livingston, in a working paper for the C. D. Howe Institute, estimated that based on each Canadian supplier’s production and sales plans, 860,000 battery EVs are likely to be sold in Canada in 2035 – 640,000 fewer EVs than Livingston’s assumed forecast of 1.5 million EVs in 2035.

If EV production does undershoot desired sales by more than 40 per cent, “that will cause serious disruption in the market,” Livingston wrote in a commentary in the Financial Post. Sellers may have to cut back on sales of gasoline vehicles, imports of slightly used EVs may be needed as well as longer use of existing gasoline vehicles, and an increase in vehicle prices, he said. The federal government should consider letting plug-in hybrids count as EVs and not limit them to 20 per cent of sales as current rules require, Livingston said.

Instead of forcing adoption of battery-powered vehicles, a better policy would be to encourage manufacturers to increase the range of plug-in hybrids, particularly pickup trucks, he argued. Canadian policy should follow the recent decisions of the EU and U.K. and make the phaseout of internal combustion vehicles more gradual, particularly those that can run on renewable fuels, Livingston said. Morningstar DBRS, Financial Post

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World’s largest carbon capture and storage project in Canada faces uncertainty

The world’s largest planned carbon capture and storage project – the $12-billion Phase 1 of the Pathways Alliance’s project in Alberta – faces uncertainty due to the long-term availability of federal economic incentives, according to a report by U.K.-based research and consultancy firm Wood Mackenzie. The report, “Black gold to green future?”, says Canada’s aspiration of cutting its greenhouse gas emissions by 40 to 45 per cent by 2030 from a 2005 baseline looks unrealistic given that emissions have only decreased by close to five per cent, hovering still around 700 million tonnes per year. A boom in oil sands bitumen production, from 1 million to 3.3 million barrels per day over that time, “has mostly negated other emissions reduction efforts, which have been small in magnitude.”

The Pathways Alliance, a consortium of six oilsands producers in Alberta, aims to be the largest upstream emissions reduction cluster in the world, and will play a major role as it targets a net reduction near 80 million tonnes per year by 2050, using carbon capture, storage and utilization (CCUS) technology, Wood Mackenzie’s report says. The CCUS economics of Phase I of the Pathways project would reduce 10 to 12 million tonnes or more of carbon dioxide per year. The project carries a capital spend estimated at $12 billion – with a final investment decision expected in 2025, the report says.

“The overarching question is who between government and industry is willing to underwrite the political risk of that price over a project that will take three to five years to build after sanctioning and need to operate for 20 to 30 years,” Peter Findlay, director of CCUS economics for Wood Mackenzie, said in a statement.

Most Canadian oil producers and industry associations are advocating for incentive levels matched to U.S. Inflation Reduction Act’s (IRA) 45Q provision, he noted. According to Wood Mackenzie, CCUS incentives in Canada are already much higher than in the U.S. In a hypothetical scenario where Cenovus’s (a Pathways Alliance member) proposed expansion to its Christina Lake oilsands project in Alberta is built in the U.S. (and its economics juxtaposed with the same project in Canada), Wood Mackenzie’s analysis shows the project would be much less economically attractive in its base case in the U.S.

However, what the U.S. IRA 45Q has going for it, is certainty, Findlay said. It is highly unlikely that the legislated support built into the U.S. tax code would or could be rescinded without strong support of both chambers of Congress and the U.S. president, which is unlikely given that CCUS has broad support from both Republican and Democratic legislators, he said.    

“The real challenge for Canadian CCUS then is not insufficient incentives – they are some of the most attractive in the world – but the uncertainty of their existence throughout project life. The value of most of these incentives could be changed by political whim at any point during the project life — even going to zero.”

Mackenzie’s report concludes that if federal and provincial governments and oilsands producers cannot collaborate to resolve this uncertainty, few CCUS projects will move forward and most, if not all of the Pathways Alliance project, will be delayed and potentially scuppered, as the industry has threatened.

Another scenario compounding the problem – although it’s not mentioned in Mackenzie’s report – is that Canada’s next federal election is scheduled to take place on or before October 20, 2025. With the Conservative Party currently polling well ahead of the Liberal Party, it’s possible the Conservatives will form the next government. Conservative leader Pierre Poilievre has vowed to scrap the federal carbon tax and likely also Ottawa’s proposed emissions cap on oil and gas industry emissions – which would be a disincentive for the Pathways Alliance project. Some observers have said Canada’s oil and gas industry is waiting to see who forms the next government before making any significant investments in CCUS and related energy transition projects. Wood Mackenzie

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B.C. government updates province’s carbon pricing system and Clean Energy Act

The Government of British Columbia is updating the province’s carbon pricing system for large industry, providing flexibility and incentives to lower emissions. Large industry consists of industrial facilities emitting more than 10,000 tonnes of carbon dioxide equivalent per year. Starting April 1, 2024, B.C.’s new output-based pricing system will see large industry pay for its emissions above a set target, and ensure companies have flexibility, support and incentives to reduce emissions and transition to a clean-energy future, the government said.

The pricing system sets a performance standard based on the average intensity for the respective industrial sector. Companies that surpass the standard are rewarded with carbon credits. Companies that do not meet the performance standard will have the flexibility to buy credits or offsets. The standard tightens over time as B.C. transitions toward a cleaner economy and in order to comply with federal requirements.

The pricing system will allow eligible companies to buy verified carbon offsets to satisfy some of their emissions obligations. This is a new pathway to reduce and sequester greenhouse gas and carbon emissions to protect the environment and create clean industry jobs in communities across B.C., the government said.

Industrial operators also have access to the CleanBC Industry Fund, which supports their transition to clean-energy solutions. Since 2019, the fund has invested $215 million back into industry and has reduced nearly 9 million tonnes of carbon emissions. The fund will be open for new project applications in spring 2024.

B.C. was the first jurisdiction in Canada to bring in a price on carbon pollution in 2008. The federal government’s changes to national carbon pricing requirements meant B.C.’s system needed updating, the B.C. government said. The shift to an output-based pricing system was a key request of industry following the introduction of the federal carbon pricing backstop. The output-based pricing system supports the province’s CleanBC goals to lower emissions by 40 per cent by 2030, 60 per cent by 2040, and 80 per cent by 2050.

The B.C. government said it is committed to working directly with industrial facilities that face unique, insurmountable challenges associated with a rising carbon price. These facilities could be eligible for cost-containment measures that provide temporary financial relief in order to protect jobs in B.C.

The new output-based carbon pricing system was welcomed by industry and climate/environmental policy groups alike, including Teck, Rio Tinto Aluminum, Innergex, Clean Energy Canada, Canadian Climate Institute, and the Pembina Institute.

The B.C. government also announced updates to the province’s Clean Energy Act to help ensure residents and businesses continue to have access to affordable, clean electricity. The changes the legislation include:

• adding a new objective to ensure that BC Hydro rate changes do not exceed cumulative inflation. BC Hydro has applied to the utilities commission for rate increases below the rate of inflation for six years in a row.
• adding a new objective to ensure that BC Hydro rate changes are predictable and stable from year to year, providing greater certainty for people and businesses looking to invest in B.C.
• adding a new objective to ensure that BC Hydro is ready to acquire enough electricity to meet B.C.’s long-term climate targets under the Climate Change Accountability Act.
• amending the existing objective that 93 per cent of the electricity generated in B.C. needs to come from clean or renewable electricity generation (which the province has surpassed) to a target of 100 per cent by 2030 for the integrated grid. This will not affect remote communities or the use of gas-fired electricity generation as emergency backup, or the use of natural gas for other needs, such as home heating.

The B.C. Utilities Commission publicly reviews and makes transparent decisions on applications from utilities to approve rate changes, long-term resource plans, supply contracts and other expenditures. The energy objectives in the Clean Energy Act don’t obligate the Commission or a public utility to undertake specific actions or guarantee a certain decision. However, they provide a signal to the Commission regarding the Province’s goals. 

This spring, BC Hydro will launch its first competitive call for power in more than 15 years to acquire new sources of clean, renewable electricity, including wind and solar. Govt. of British Columbia (carbon pricing system), Govt. of B.C. (Clean Energy Act changes)

 THE GRAPEVINE – News about people, institutions and communities

Montreal-based e-commerce software company Lightspeed Commerce Inc. announced the reappointment of founder Dax Dasilva as interim CEO. Dasilva most recently served as Lightspeed’s executive chair, and previous to this, served as CEO from the company’s inception in 2005 until February 2022. This appointment by Lightspeed’s board of directors, effective immediately, comes as Jean Paul (JP) Chauvet has stepped down from the CEO role. Lightspeed also announced several other changes to the leadership team and the board. John Shapiro, senior vice-president of retail technology, was promoted to chief product and technology officer, replacing Ryan Tabone who will be departing the company in April 2024. In addition, Patrick Pichette, currently the company’s lead independent director, will move into the role of interim chair of the board. Lightspeed

Scotiabank announced that Jake Lawrence, CEO and group head, global banking and markets, has decided to leave Scotiabank to join Montreal-based Power Corporation of Canada, as chief financial officer. Lawrence joined Scotiabank in 2002, and has held progressively senior roles in finance, treasury and global banking and markets, most recently leading the Scotiabank’s wholesale banking and capital markets business. Scotiabank recently announced the appointment of Paul Scurfield to global head, capital markets, global banking and markets. Michael Kruse now takes on the role of interim global head, corporate and investment banking, global banking and markets. Scurfield and Kruse will report directly to Scott Thomson, president and CEO, effective immediately, as Lawrence moves into the role of strategic advisor prior to leaving Scotiabank on March 15, 2024. Scotiabank

Game-based learning company Prodigy Education in Toronto appointed Jeff Cassidy as chief financial officer. Cassidy brings deep experience in the consumer education space, having previously served as CFO with brands including education travel firm EF Education First and Flatiron School, a tech training organization. Based in Boston, he will lead Prodigy Education’s finance and data teams to support the growth of the company’s EdTech products, Prodigy Math and Prodigy English. Cassidy’s arrival is the third recent senior leadership hire for Prodigy, following the appointments of Sarah Welch as chief marketing officer and Mateus Ximenes as executive vice-president, game, product. Prodigy Education

CIFAR announced five new Canada CIFAR AI chairs who will join the more than 120 Chairs already appointed at Canada’s three national AI Institutes (Amii in Edmonton, Mila in Montréal, and the Vector Institute in Toronto). The new chairs and the AI institutes to which they were appointed are:

• Elina Robeva – assistant professor of mathematics at the University of British Columbia, Amii.
• Geoffrey Rockwell – professor of both digital humanities and philosophy at the University of Alberta, Amii.
• David Ifeoluwa Adelani – assistant professor of computer science at McGill University, Mila.
• Xiaoxiao Li, assistant professor of electrical and computer engineering at the University of British Columbia, Vector Institute.
• Geoff Pleiss, assistant professor of statistics ta the University of British Columbia, Vector Institute.

CIFAR also announced the renewal of funding for three Canada CIFAR AI Chairs appointed in the first cohort of appointments in 2018. The renewed Chairs are: Martha White, from Amii and the University of Alberta, and two Chairs from Mila and McGill University, Joelle Pineau and Reihaneh Rabbany. The Canada CIFAR AI Chairs program is a cornerstone of the Pan-Canadian AI Strategy, launched in 2017. CIFAR

François-Philippe Champagne, Minister of Innovation, Science and Industry, announced the appointments of four new members to the Canadian Statistics Advisory Council for three-year terms. The independent advisory council has a mandate to advise the Minister of Innovation, Science and Industry and the Chief Statistician of Canada on the overall quality of the national statistical system. The new members are:

• Catherine Beaudry – a full professor mathematics and engineering at Polytechnique Montréal, who specializes in the economics of innovation and its impact on business performance, as well as in the evaluation of research and the science and technology system. 
• Anke Kessler – a full professor and current chair of the Department of Economics at Simon Fraser University. She pursues an active research agenda at the intersection of political economy and development economics, with emphasis on the connections between institutions, governance and well-being.
• Vinamra Mathur – an information technology specialist with the Canada Revenue Agency with experience in using cross-platform technologies and working on large-scale transformation projects in big data analytics at an enterprise level.
• Stephen Tapp – currently the chief economist at the Canadian Chamber of Commerce where he is responsible for leading business data and analytics. Innovation, Science and Economic Development Canada

Respected research scientist Andrej Karpathy has left San Francisco-headquartered OpenAI – which created ChatGPT – for the second time, The Information reported. Karpathy, a founding member of OpenAI, initially left the company to join Tesla in 2017. He left Tesla, where he led the autopilot team, in 2022 and rejoined OpenAI almost a year ago. Karpathy has built an immense following on social media and YouTube, posting thought-provoking writings on the nascent space and videos that explain the inner workings of AI. Karparthy confirmed in a post on X that he left OpenAI, “not a result of any particular event, issue or drama,” but to pursue his personal projects. TechCrunch

University of Alberta researcher Weixing Chen has found a way to produce carbon fibre from oilsands bitumen at half the cost of current commercial product and with 70 per cent lower carbon emissions. The chemical and materials engineering  professor has received $4 million – $1 million from Alberta Innovates and $3 million from Emissions Reduction Alberta – to scale up production to 5,000 tonnes a year by the early 2030s from a current rate of between 500 grams to one kilogram of carbon fibre per day. Chen has a launched a startup company, Thread Innovations Inc., to reach the production target and commercialize the carbon fibre production process. Chen’s team is one of five in Alberta and B.C. to successfully pass the third phase of the Carbon Fibre Grand Challenge, a contest aimed at finding new ways to produce fibre from bitumen. Most bitumen products today, such as gasoline, diesel and heating oil, are destined for combustion to produce energy. But carbon fibre is a high-demand product that could also be made from bitumen feedstock. The high strength and stiffness of carbon fibre – along with its low density and high corrosion resistance – make it superior to many conventional metals, wood products and commercial polymers used in electric vehicles, transportation, infrastructure, construction and consumer products. Chen’s process involves heating and softening bitumen at temperatures as high as 350 C, at which point carbon fibres are pulled from the feedstock. The process would use bitumen removed from heavy oil during refinement, taking advantage of a raw material far easier to source and process than expensive synthetic precursors, such as polyacrylonitrile or pitch, currently used to produce carbon products. University of Alberta

University of Waterloo researcher Sebastian Fischmeister, professor of engineering, and his team are developing new security controls to safeguard Canada’s energy sector supply chains against cyber-attacks. The team is using a physics-based hardware and software integrity checkpoint system designed to scrutinize and assess the elements underpinning Canada’s energy infrastructure, Fischmeister said. “Our aim is to compile these findings and present them to the Canadian government. By sharing our insights, we can empower them to make informed decisions.” Natural Resources Canada, supported by Defence Research and Development Canada, funds this initiative. Palitronica, a Kitchener-based startup spun off from the Real-time Embedded Software Group and the Velocity incubator at UWaterloo – and of which Fieschmeister is founder and CEO – is also part of the collaborative effort. In November 2023, Palitronica was awarded $1 million from Canada’s National Cybersecurity Consortium for the company’s three year PASCAL project, which aims to bring Palitronica’s Anvil Security Checkpoint system to supply chain cybersecurity for aerospace, defense and other critical industries. The Avil Security Checkpoint is a briefcase-sized device designed to thwart large-scale cyber-attacks by assessing the integrity and authenticity of both hardware and software in supply chain systems. University of Waterloo, Velocity

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