The Short Report: May 22, 2024

GOVERNMENT FUNDING

Natural Resources Canada (NRCan) announced the first co-investment by the federal government with the U.S. in two Canadian companies developing deposits of critical minerals. They are London, Ont.-headquartered Fortune Minerals Limited, with a cobalt-gold-bismuth-copper project located in the Northwest Territories, and Surrey, B.C.-headquartered Lomiko Metals, Inc., with its La Loutre graphite development in Quebec. Canada’s investment of $4.9 million in Lomiko will fund pilot plant testing to convert flake graphite into battery-grade material and is joined by a U.S. investment of US$8.4 million through the Defense Production Act Investments (DPAI) office. Canada’s investment of up to $7.5 million in Fortune will advance engineering and processing for the development of the company’s NICO project in the N.W.T. to ensure a reliable North American supply of bismuth, in addition to cobalt, copper and gold, and is joined by an American investment of US$6.4 million through the DPAI office. Both investments build on previous Government of Canada funding for Fortune and Lomiko and will support defence applications and the growing demand for long-duration energy storage and electric vehicles. The announcement is an example of the close bilateral collaboration under the Canada-U.S. Joint Action Plan on Critical Minerals Collaboration and the Canada-U.S. Energy Transformation Task Force – which was renewed in May for an additional year – for which critical minerals is also a key deliverable. NRCan

Halifax-based Maritime Launch Services is to poised to receive $12.9 million from the federal Strategic Innovation Fund (SIF). The term sheet provided by the Government of Canada to the company is proposing $12.9 million in project cost reimbursements and would be conditionally repayable, to support Maritime Launch’s Spaceport Nova Scotia. The company will develop and commercialize Canada’s first commercial orbital spaceport near Canso, N.S., with its first orbital launch scheduled in 2025. The term sheet is non-binding, and the proposed contribution is subject to operational and financial conditions that have not yet been met, approvals, and execution of a contribution agreement. Last year, Maritime Launch announced an investment of $13.1 million from the Government of Nova Scotia under the Capital Investment Tax Credit program. Maritime Launch said funding from the SIF would position the company to complete the spaceport with a launch control center, a satellite integration facility, and a launch pad. Spaceport Nova Scotia will focus on supporting small-class launch vehicles with total payloads not exceeding 1,250 kilograms initially, while growing the site to support medium-class launchers. Maritime Launch Services

The Federal Economic Development Agency for Southern Ontario (FedDev) announced $5.3 million for four southern Ontario businesses to scale up, create made-in-Canada products and launch first-of-its-kind technology. The recipients are:

• Albéa Canada Inc. (Brampton), a manufacturer of cosmetic, personal and oral care, and pharmaceutical packaging, received a $2.5-million repayable investment to transition to recyclable Greenleaf plastic packaging using new state-of-the-art technology.
• PiiComm Inc.(Plantagenet) is a managed mobility services tech company that helps Canadian businesses in the transportation, logistics, health care and government sectors implement solutions to connect, protect and scale mobile computers, printers and other devices. With a repayable investment of over $1.7 million, PiiComm has expanded its on-site technology and developed a free, AI-based mobility assessment tool to help clients overcome the challenges and costs associated with using mobile technology.
• Ferme Marseni Inc. (Casselman) is a Francophone-led, sustainable food producer that uses vertical farming to produce fresh and healthy greens in Ontario. The $750,000 repayable investment has supported the company in implementing an indoor vertical farming operation with innovative technology that uses less water to ensure more sustainable agricultural practices, without the use of pesticides and herbicides. As a result, the company has been able to sustainably grow basil for leading agri-food distributors and retailers in Canada.
• Edgecom Energy Inc.(Toronto) is a tech company that develops energy management software. The $300,000 repayable investment helped Edgecom Energy accelerate the adoption of its predictive energy and greenhouse gas emissions tracking tools. As a result, the company can equip customers with the needed tools to track and predict ways to meet net-zero goals and reduce their carbon footprints. FedDev

Decentralised Energy Canada (DEC) and the City of Medicine Hat launched the Energy Innovation Challenge, a three-year, $2.4-million initiative aimed at empowering small and medium-sized Canadian businesses to overcome commercialization obstacles and bring their innovations to market. The Challenge was launched to support small businesses with promising decentralized energy solutions. The Challenge is the first of its kind in Alberta and has two main objectives: to pilot innovations that address electricity grid congestion issues, and leverage government investment and private capital to strengthen the economy. “The Challenge provides Canadian innovators with a platform to demonstrate decentralized energy solutions and the technical and economic benefits they bring to Alberta,” Anouk Kendall, president of DEC, said in a statement. The $2.4 million in funding was sourced from government and private capital, including contributions from Decentralised Energy Canada, Prairies Economic Development Canada, Emissions Reduction Alberta, Natural Resources Canada, the City of Medicine Hat, Valhalla Private Capital, and APEX Alberta. PrairiesCan contributed $1.2 million through its Regional Innovation Ecosystem Program. The Challenge will bring more than $1 million of project support to early and growth-stage startups and will contribute to meeting targets identified in the federal government’s 2030 Emissions Reduction Plan. The Energy Innovation Challenge is now inviting applicants to submit their clean technology initiatives for review. DEC

Public Services and Procurement Canada (PSPC) announced the completion of the newly expanded TerraCanada advanced materials research facility in Mississauga, Ont. Completed in April 2024, the expanded facility is the result of a $77-million investment in science infrastructure. The TerraCanada advanced materials research facility consists of two new floors that add more than 6,000 square metres of laboratory and supporting spaces to the existing National Research Council of Canada building. This facility brings together scientists from the NRC and Natural Resources Canada (NRCan) to collaborate with federal scientists working at the complementary TerraCanada Hamilton facility located at the NRCan CanmetMATERIALS building, along with academic partners at Canadian universities and industry collaborators. The TerraCanada facilities in Mississauga and Hamilton will use materials acceleration platforms to make the process of discovering and developing materials faster and more efficient, cost-effective, accurate and precise by leveraging artificial intelligence, robotics and high-performance computing. PSPC

Fisheries and Oceans Canada (DFO) officially opened the Facility for Intelligent Marine Systems (FIMS). Renovations to the building that houses FIMS took place over four years, with a total project investment of almost $25 million. Located on the campus of the Bedford Institute of Oceanography, Canada’s largest ocean research facility, FIMS is a collaboration between Fisheries and Oceans Canada (DFO), the Department of National Defence (DND) and Natural Resources Canada (NRCan). Scientists and researchers from DFO, DND and NRCan working out of FIMS are pursuing  ocean research using state-of-the-art un-crewed surface and underwater data collection platforms. FIMS is co-located with the DFO Fish Lab, in a fully renovated building that is on track to achieve Green Globes Building Certification. During the renovation, a 100-kilowatt solar panel system was installed on the roof of the building, which is tied into the larger solar grid for the Bedford Institute of Oceanography campus. The building is also now being heated and cooled with new air-handling systems and the campus’ seawater heat pump system. It is estimated that the renovations have reduced greenhouse gas emissions for the building by 75 per cent. DFO

RESEARCH, TECH NEWS & COLLABORATIONS

 Eight Canadian universities are listed in the top 200 of the Center for World University Rankings (CWUR) 2024 edition of its Global 2000 ranking of nearly 21,000 institutions worldwide. Universities were assessed on their performances in the areas of education, alumni employment outcomes, faculty and research. Canadian universities in the top 200 are: University of Toronto (#23); McGill University (#27); University of British Columbia (#52); University of Alberta (#81); Université de Montréal (#123);, McMaster University (#171); Western University (#187); and the University of Calgary (#195). Harvard University, Massachusetts Institute of Technology and Stanford University were ranked #1, #2 and #3. The U.S. has eight universities in the top 10, and is the most represented country in the top 2,000 with 329 universities. In China, the number of universities in the top 2,000 is now 324, with all C9 League institutions improving this year. CWUR

Environment and Climate Change Canada (ECCC) Minister Steven Guilbeault issued an interim order to the petrochemical industry in Sarnia, Ont., responding to “the significant danger to human health of volatile organic compounds, including benzene [a known carcinogen], originating from these facilities.” Aamjiwnaang First Nation, which is bordered by Sarnia’s refinery and petrochemical district, and Sarnia have experienced poor air quality conditions that have spiked in recent months, according to monitoring done by ECCC, the Government of Ontario, and Aamjiwnaang First Nation. The high levels of toxic air pollution led to the closure of the Aamjiwnaang’s Band Office and community services buildings, including their daycare and resource centre. Aamjiwnaang First Nations residents said they became ill, suffering from headaches, sore throats, nausea and dizziness, with some sent to hospital. Guilbeault published an interim order under the Canadian Environmental Protection Act. The order requires petrochemical production facilities in Sarnia with fence-line concentrations [at the fence-line of each industry facility] of benzene above 29 micrograms per cubic metre measured in any of the two-week sampling periods beginning on March 1, 2023, and ending on February 29, 2024, at any sampling location established in accordance with Ontario regulations, to implement vapour-control measures, including fully closed vent systems with vapour control on certain storage tanks that store benzene. The order will be in effect for 14 days, pending Governor in Council approval, which would extend the order for up to two years. Sarnia and neighbouring St. Clair Township are home to three refineries and more than 35 chemical facilities. The Ontario government has suspended Ineos Styrolution’s operating approval until major fixes are made, including removing all benzene storage from the site and repairing leaky equipment. The federal government also released a “What we heard” public consultation update on the proposed  Reduction in the Release of Volatile Organic Compounds (Storage and Loading of Volatile Petroleum Liquids) Regulations that informed the interim order. The federal government is working to finalize proposed regulations in the coming months that would apply to terminals, refineries, upgraders, petroleum facilities, and bulk fuel facilities that store volatile petroleum liquids in specified-sized tanks and or load and unload volatile petroleum liquids in specified daily or annual quantities. ECCC

Canadian banks provided almost US$104 billion in fossil fuel funding last year despite the urgent need to reduce emissions, according to the latest annual Banking on Climate Chaos Fossil Fuel Finance Report 2024. The report by a coalition of climate groups said the total includes US$28.2 billion from RBC to place it seventh globally, and US$24 billion from Scotiabank to rank it 10th. The top 60 banks together committed US$708 billion, bringing the total since the 2016 Paris climate agreement to $6.9 trillion. For most of Canada’s five biggest banks, 2023 was among their lowest levels of oil and gas financing in the eight years since the Paris climate agreement. BMO had its lowest year of fossil fuel financing since 2016, with US$15.8 billion. CIBC, TD and RBC each had their lowest years with the exception of COVID pandemic year 2020, while it was the fourth-lowest year for Scotiabank. RBC and Scotiabank ranked No. 7 (financing $256 billion) and No. 10 (financing $192 billion) respectively, in the top 12 largest fossil fuel financiers since the Paris agreement (2016-2023). CIBC, RBC, Scotiabank and TD financed $2.09 billion to oilsands activities last year, the report noted. Banks’ climate targets are fairly long-term, including their net-zero emissions goal of 2050. Only BMO has set an absolute reduction target before then. Funding levels could fall further this year as major projects like the Trans Mountain pipeline expansion and Coastal GasLink pipeline are now finished. The report notes the companies behind those projects were among the top recipients of fossil fuel expansion funding globally. TC Energy Corp. raised US$15.3 billion from the 60 banks covered in the report, while Trans Mountain Corp. raised US$9.54 billion. Calgary-based Enbridge Inc. was ranked first with US$35 billion raised, though the report counts money the company used for acquisitions as well as expanded pipeline capacity. The report called on banks globally to prohibit all finance for fossil fuel expansion immediately. Canadian Press

The Canadian Centre for Cyber Security, a part of the Communications Security Establishment Canada, joined several global security partners in warning the public about a growing cyber security threat to civil society organizations and individuals. In a new advisory co-authored by Canada, the U.S., Estonia, Japan, Finland and the U.K. cyber security agencies shared new details about the ways and means foreign threat actors use for cyberattacks on civil society targets. The high-risk community of civil society organizations and individuals is defined as: nonprofit, advocacy, cultural, faith-based, academic, think tanks, journalist, dissident, and diaspora organizations, communities, and individuals involved in defending human rights and advancing democracy. According to industry reporting shared in the advisory, state-sponsored targeting of these organizations and individuals comes predominantly from the governments of Russia, China, Iran and North Korea. The industry reports highlight the growing and real cyber security threat to civil society, described as being at high-risk because:  

• Civil society organizations and their staff have a high threat of being targeted by malicious cyber-attacks – and are known targets – of state-sponsored cyber actors seeking to undermine democratic values.
• Civil society organizations have a low capacity to defend themselves from such threats, often due to resourcing and the public nature of their work.

The advisory warns that the tactics are growing more and more personalized and subversive, with threat actors known to invest significant time and resources to researching each target. The report includes examples of how threat actors may pose as trustworthy sources to trick a victim into interacting with a malicious hyperlink. In one example, the threat actors set up trojan-style fake apps and online app stores housing malicious software – allowing them to access targets’ personal accounts and devices – and even remotely take over a user’s device. The advisory includes prevention tips and resources for civil society organizations, individuals, and software manufacturers. Communications Security Establishment

The Government of Ontario introduced legislation that, if passed, would provide new tools to prevent and respond to cyber security threats and safeguard critical public services, such as health care and education. The Strengthening Cyber Security and Building Trust in the Public Sector Act, 2024 would also strengthen safeguards for children’s personal information and lay the foundation for the ethical use of artificial intelligence in the public sector. The government said the legislation works to better protect the people of Ontario by:

• Strengthening cyber security in the public sector. This includes critical sectors such as hospitals, schools and children’s aid societies. The legislation will help these organizations prevent and rapidly respond to cyber threats and attacks and minimize service interruptions, ensuring these organizations can continue to operate even when breaches occur.
• Safeguarding the data of children and youth from being stolen or used inappropriately, with stronger privacy protections when they are in settings like schools. Future regulations could prevent the misuse or sale of student data for predatory marketing by third parties, ensuring children are not unduly targeted or exploited by technology providers.
• Modernizing privacy protections. Increase the authority of the Information and Privacy Commissioner of Ontario to investigate and respond to privacy breaches and inappropriate use of personal data and mandate organizations to complete privacy impact assessments.
• Building a strong foundation in artificial intelligence governance to solidify Ontario’s leadership in the responsible adoption of AI and emerging technologies.
• Improving online customer service delivery. With the proposed changes, Ontarians who choose to opt in can enjoy a more efficient experience with government services. The introduction of “tell us once” features means users will not have to repeatedly enter the same information during their interactions. This not only speeds up processes but also reduces the potential for errors, making government services more user-friendly and effective.

Ontario is requesting comments on the draft bill from the public through the Ontario Regulatory Registry until June 11, 2024. Ontario has more than 400 AI firms and institutions, according to the government. In June 2023, the government provided the Vector Institute with up to $27 million to help more Ontario companies connect with Vector’s AI experts. Govt. of Ontario

The Government of Canada is planning a pilot project this fall to use artificial intelligence to try to address problems in the Phoenix pay system for federal employees. The Phoenix system was launched in 2016 after being introduced in 2009. While it was intended to save the government $70 million by consolidating pay systems across departments, it has since cost more than $2.2 billion. According to the Public Service Pay Centre dashboard, there were 425,000 payment transactions ready to be processed for client departments and agencies as of April 24, 2024. Of those, 111,000 were considered within service standard, while another 101,000 transactions were outside service standard, but less than a year old, and 213,000 were more than a year old. “We are exploring ways in which AI can contribute to pay processing and expect to implement these in the near future,” said Michèle LaRose, a spokesperson for Public Services and Procurement Canada. LaRose said the government has spent $154 million since 2018 looking into a new platform to replace Phoenix, and had awarded Dayforce a contract to “test the viability” of its system. Dayforce is a payroll and human resources management system already in use by 6,000 organizations, including the governments of Ontario and California. Ottawa Citizen

Winnipeg-based New Flyer Industries (NFI) Canada announced a contract with BC Transit Corporation for 33 next- generation Xcelsior CHARGE NG™ 40-foot battery-electric buses. BC Transit oversees municipal transit services for over 130 communities across British Columbia and has an annual ridership of more than 47 million passenger trips. In 2019, BC Transit announced its Low Carbon Fleet Program, which outlined the agency’s plan to expand its fleet and replace aging fleet vehicles with a focus on reducing greenhouse gases. BC Transit’s current goal is to transition to an entirely electric fleet by 2040. Currently, more than 600 of the vehicles operating as part of BC Transit’s fleet of over 1,100 buses are from NFI subsidiaries, including New Flyer, Alexander Dennis, and ARBOC. New Flyer

Walmart is closing its Global Tech office in Toronto, with its associates at the Toronto tech office and Dallas and Atlanta offices being asked to relocate to the retail giant’s larger hubs in Arkansas, New Jersey and California. The corporate job cuts won’t affect Walmart Canada’s headquarters in Mississauga, according to a company source. Some parts of Walmart’s business have made changes, including shifting away from working remotely at home, that will result in a reduction “of several hundred campus roles,” according to a memo from Walmart’s chief people officer Donna Morris. The move comes after Walmart last year closed its Toronto-based Blue Labs incubator – a company unit with a goal to disrupt the retail industry through innovative technologies – just eight months after launch. Walmart also announced last month it would close all 51 of its health clinics in the U.S. as it trims costs. Canadian Grocer

VC, PRIVATE INVESTMENT & ACQUISITIONS

Caisse de depot (CDPQ), Quebec’s public pension manager, is providing about $444 million in financing to Colorado-based Vantage Data Centers. Ares Management Corporation and Schroders Capital also participated in the total $1.1-billion financing agreement. The money will be used to expand Vantage Data Centers’ platform and business in Europe, the Middle East and Africa (EMEA). The Vantage EMEA portfolio is one of the fastest-growing hyperscale data centre platforms in the region and is currently comprised of 14 campuses, serving key markets in Europe and South Africa. Once fully developed, the portfolio aims to generate 751 megawatts of combined IT capacity, contracted over the long term to global cloud service providers and top-tier internet providers that require rapidly scalable, reliable and efficient high computing power. CDPQ

St. John’s, Nfld.-based engineering software startup CoLab raised US$21 million in Series B funding. Global software investor Insight Partners led the round, with participation from existing major investors, including Y Combinator, Killick Capital, and Pelorus VC. CoLab said its Design Engagement System enables customers to review engineering files, capture and track feedback. CoLab founders Adam Keating and Jeremy Andrews met while studying mechanical engineering at Memorial University. The company said it will use the funding to expand relationships with existing customers, reach new customers and accelerate development of technology, including with artificial intelligence. CoLab said it will also use the funds to expand its team, adding 30 to 40 new roles at headquarters in St. John’s and remotely across Canada and the U.S. CoLab

Toronto-based Radical Ventures led a US$26 million Series A round in AI-focused biotech firm Nabla Bio of Cambridge, Mass. The round included participation from all existing investors, and strategic collaborations with AstraZeneca, Bristol Myers Squibb Company and Takeda, which Nabla Bio said is worth more than $550 million in upfront and milestone payments, plus royalties. Nabla Bio develops integrated AI and wet-lab technologies that enable atomically precise drug design and high-throughput measurement of drug function, with an initial focus on antibodies targeting multi-pass membrane proteins. Nabla co-founder Frances Anastassacos said with the technologies the company is developing, it could double the number of disease-relevant drug targets that the pharmaceutical industry goes after. Nabla Bio

California-headquartered Gatik, which has an office in Toronto, announced a US$30-million equity investment in Gatik by Japan-based Isuzu Motors Limited, to further enhance development of the North American autonomous driving business. Gatik provides autonomous “middle mile’ services using Class 3 to 7 autonomous driving trucks. In Toronto, the company partnered with Loblaw to deploy its driverless trucks in 2022. The agreement between Isuzu and Gatik is focused on developing "middle mile" autonomous driving and will include the design and development of a new chassis that ensures safety when equipped with an autonomous driving system. Isuzu has partnered with Gatik with the aim of launching a level 4 (which includes redundant safety systems) autonomous commercial vehicle business in 2027. Gatik

Waterloo-based Nfinite Nanotech raised $8.9 million in seed funding to scale its nanomaterial product, a coating for sustainable and biodegradable food packaging that will help divert plastic waste from landfills. The round was led by Collateral Good, with participation from Suzano Ventures as a strategic investor alongside investment from FTW Ventures, MaRS IAF, Overlay Capital, Ponderosa, and Republic Capital, including non-dilutive funding from the Next Generation Manufacturing Canada global innovation cluster. The University of Waterloo startup, which had support from the university’s Velocity incubator, is developing an ultra-thin and high-performance material for consumer-packaged goods, like granola bar wraps and potato chip bags, that keeps them fresh longer without the use of excessive non-biodegradable plastic packaging. Plastic food packaging is adding to the more than nearly 400 million tonnes of plastic waste produced every year, according to the World Economic Forum. University of Waterloo

ThinkLabs AI, whose founder and CEO technology entrepreneur Josh Wong is based in Toronto, emerged as an AI development and deployment company spun out of GE Venova, and secured $6.8 million in seed funding to fuel its launch. The round was co-led by Vancouver-based Active Impact Investments and California’s Powerhouse Ventures, with support from Toronto-based Amplify Capital, Colorado’s Blackhorn Ventures, Switzerland-based Mercuria Energy, and an undisclosed national U.S. energy company. ThinkLabs, which set its headquarters as New York and established a Canadian subsidiary, is developing software to help utility control room operators and planners maintain electrical grid reliability, integrate renewables, and reduce bottlenecks and outages at a time when utilities’ workforces are also rapidly aging and retiring. BetaKit

Victoria, B.C.-based MarineLabs Data Systems, which offers maritime weather intelligence technology, raised $4.5 million in a seed funding round. The round was led by BDC Capital’s Sustainability Venture Fund, with participation from Seaspan Shipyards. MarineLabs’ flagship product, CoastAware, is a coastal intelligence platform that provides users with detailed, actionable, real-time and historical weather conditions data for informed decision-making by ports, vessel pilots and maritime operations. The company said the funding will be used to accelerate product development and expand market reach. MarineLabs

Montreal-based cleantech startup Relocalize secured a $2.3-million seed round extension to raise a total of $5.8 million in a round aimed at scaling up its autonomous microfactory platform. The seed round extension was led by Desjardins Capital with ongoing support from initial seed investors, including Quebec City’s i4 Capital, Waterpoint Lane in Toronto and RGS Ice in California. Relocalize cuts greenhouse gas emissions and costs by deploying microfactories – powered by a combination of proprietary software and off-the-shelf hardware – set up inside shipping containers at grocery distribution centres, to initially produce, hyper-locally, packaged ice but also food and beverages in the future. By decentralizing production, the company is able to eliminate 100 per cent of middle-mile transportation as well as de-risk supply chains. Relocalize said the investment will be used to accelerate the development and deployment of the company’s technology platform and deploy full-scale microfactories in Canada and the U.S. Relocalize

Toronto-based fintech startup Baseline Financial Technologies Corp. raised $2.2 million in a round led by technology-focused venture capital firm N49P, with participation from Exit North Ventures, angel investor Tim Dewerth, and other strategic angel investors. Baseline offers a comprehensive loan management system tailored to the evolving needs of the real estate private lending sector. The company’s proprietary software connects borrower-facing point-of-sale, loan origination, loan servicing, and investor management into a seamless platform. Baseline said the funding will enable  the company to continue its rapid pace of technology development. Baseline

Accelerate Fund III, an early-stage angel co-investment fund in Alberta, announced its investment in the CARE Group of Companies, an Alberta-based health innovation and technology company focused on digital mental health technologies and programs. CARE Group’s financing round attracted more than $2 million and included participation from Accelerate Fund, strategic angel investors and family offices. CARE Group’s platforms integrate virtual care with real-time monitoring and personalized patient engagement, delivering improved health outcomes at a lower cost. Capital for Accelerate Fund comes from the Alberta Enterprise Corporation, an independent corporation formed by the Alberta government. Accelerate Fund

Toronto-based Diversio, whose platform enables organizations to develop more inclusive and equitable workplaces, announced it acquired CCDI Consultancy, which specializes in diversity, equity and inclusion strategies. Financial terms of the deal weren’t disclosed. The sale of CCDI Consultancy was made by its parent company, the Canadian Centre for Diversity and Inclusion, a national charitable organization that provides consulting and training services to its employment partners. Diversio said the acquisition will broaden its ability to turn “insights into action” that drive measurable business action. The company said its integrated platform now includes a survey- and data-analysis dashboard, consulting services, goal tracking and hundreds of training courses. Diversio

Ottawa-based public safety tech firm Versaterm acquired Utah-based Mindbase, a mental health and wellness platform provider, for an undisclosed amount. Mindbase describes its platform as a tool for public agencies to both monitor the mental well-being of their first responders and proactively provide care and support to first responders. Its mobile app gives first responders access to tracking and resources for mental health and fitness, as well as connections to peer support networks. Versaterm said incorporating Mindbase into Versaterm’s end-to-end ecosystem enhances the company’s ability to deliver a more holistic approach to mental health and wellness and creates new possibilities for future product innovation. Versaterm

Vancouver-based virtual heath-tech services company CloudMD Software & Services Inc. announced an agreement to be taken private by Toronto-based private equity firm CPS Capital. Under the deal, CPS Capital will acquire all of the outstanding shares of CloudMD for four cents per share, paying out around $12 million to shareholders. CloudMD said it created an ecosystem of health care, but its forecasted liquidity issues after several acquisitions over the last four years “impacted the Company’s ability to remain a going concern.” CloudMD was unable to generate positive cashflow to support the business while making scheduled debt repayments and had limited refinancing opportunities. The company said the deal with CPS Capital provides the capital to support CloudMD’s business. The deal still requires shareholders’ approval. CloudMD

Canadian companies raised $1.3 billion in venture capital across 128 deals in the first quarter of 2024, according to a report by the Canadian Venture Capital and Private Equity Association (CVCA). That funding was similar to the investment level of the first quarter in 2023, but with a 28-per-cent decline in the number of deals – the lowest volume since 2021, the report said. The average deal size surged to $10 million, a 47-per-cent increase from the first quarter of 2023. The first quarter of 2024 was strong for life science investment, with $425 million raised across 30 deals. The life science sector nearly matched investment in information and communication technologies, which saw investment totalling $46 million across 69 deals. Early-stage VC investments remained strong with $576 million invested across 38 deals, maintaining consistency with the performance in 2023. However, seed and pre-seed stages saw a notable decline, with pre-seed investments dropping back to 2020 levels. Later-stage investments continued their downward trajectory with the lowest number of deals recorded since 2017. In private equity, Canadian companies raised $4 billion across 140 deals in the first quarter of 2024, up from $2.6 billion in 168 deals in the fourth quarter of 2023. CVCA

Canadian corporations lag firms in other countries in venture capital investment – including investing in startups in Canada

The number of venture-capital backed deals in Canada and the U.S. grew by around 30 per cent between 2019 and 2022, with deal participation from Canadian public or private companies (corporate venture capital, or CVC) nearly tripling, according to a report by Deloitte Ventures and BDC Capital, on the state of corporate venture capital in Canada.

However, an analysis of the 214 Canadian public companies with more than $1 billion in annual revenue found that only six per cent of these firms directly participated in a VC deal in 2023, compared with 40 per cent for comparable U.S. public companies.

“When viewed through the lens of share of CVC funding compared to share of global GDP, Canada underperforms relative to the United States and other industrialized countries,” the report said. “For Canadian CVCs to play a larger role on the global stage, more large Canadian corporations will need to spin up corporate venture funds of their own.”

In 2023, more than 60 per cent of Canadian CVC activity was attributable to the five most active corporations in the space. “And while some sectors are using corporate venturing as a strategic tool, major corporations in areas such as energy, industrials, and manufacturing have been largely absent from the corporate VC space,” the report said.

For example, from 2019 to 2023, the Canadian energy sector represented 22 per cent of Canadian companies earning more than $1 billion in annual revenue, but participated in only two per cent of the total CVC deals.

Corporate VCs in Canada invest most of their money (53 per cent in 2023) outside the country, the report found. Their rates of international investment were highest in 2021 and 2022 – 64 per cent and 60 per cent, respectively – as so-called tourist VC investors flooded the market.

Global corporations, meanwhile, have shown strong participation in Canadian companies, investing in 12 per cent to 18 per cent of all deals over the past five years. However, in 2023, Canadian-headquartered startups experienced the lowest level of corporate deal participation in five years.

Only 26 per cent to 41 per cent of Canadian startups receive any investment from Canadian CVC funds. In comparison, between 2019 and 2023, U.S.-based CVC firms took part in 75 per cent or more of VC deals with U.S.-headquartered startups.

The report noted that “it’s clear that Canadian CVC firms have enormous room to fund innovative, fast-growing, early-stage companies mush closer to home.”

Global CVC participation in Canadian-headquartered VC deals also fell by approximately 40 per cent between 2022 and 2023, from 128 deals to 77, according to the report.

“This suggests that foreign investors, who have traditionally been responsible for most CVC participation in Canadian VC deals, have been reducing their investment activities or focusing their attention on other markets.”

Corporations investing in venture capital can derive financial gains and strategic insight, as well as exposure to new technologies, markets and customers, the report noted. Startups, meanwhile, can gain access to the valuable resources, market expertise and brand power of large corporations. Simultaneously, the economy thrives as technology clusters generate job opportunities, enhance productivity, and foster innovative solutions at competitive prices.

“It’s our belief that increased engagement by Canadian corporations in venture capital can result in a triple win for Canada, benefiting not only the corporations and startups but also the economy as a whole,” the report’s authors said. “Very few Canadian corporations are actively involved in the CVC ecosystem today. This needs to change – and quickly.” Deloitte

REPORTS & POLICIES

Government spends over $6 billion a year on direct and indirect policy tools to stimulate business R&D – without knowing which approach is more effective

Governments can support R&D in the private sector through direct or indirect instruments. Direct instruments for R&D include grants, loans and procurement. Indirect instruments include R&D tax credits, R&D allowances and reductions in R&D workers’ wage taxes.

In Canada, Business Innovation and Growth Support (BIGS) programs and the Scientific Research and Experimental Development tax credit program (SR&ED) are the two main instruments that the federal government uses to stimulate the R&D expenditures of the business sector, according to a study from Statistics Canada (StatsCan). The study’s authors are Rashid Nikzad, a manager at the Treasury Board of Canada Secretariat, and Francis Demers, an analyst at StatsCan.

Empirical studies across OECD countries suggest that both BIGS and SR&ED can stimulate R&D expenditures and have a positive impact on the performance of recipients, their study says.

In 2019, 22,050 business enterprises received BIGS support and 23,140 enterprises received SR&ED, while 6,275 received both supports, according to the study.

Enterprises receiving BIGS accounted for 0.79 per cent of all enterprises, and those receiving SR&ED accounted for 0.82 per cent of all enterprises.

The highest number of recipients of both groups belonged to the revenue group of $1,000,000 to $9,999,999, followed by the revenue group of $100,000 to $999,999. Most recipients had fewer than 100 employees.

Total value received for both BIGS and SR&ED increased with the recipient’s revenue size, and the SR&ED value was skewed toward enterprises with higher revenue.

R&D performers received more SR&ED than BIGS. “This result is not surprising because SR&ED is a tax incentive for R&D spending," the study said. While more basic or applied R&D performers received SR&ED than BIGS in 2019, the total BIGS value was higher for this category.  

The main difference between direct and indirect instruments to support R&D is that tax incentives (an indirect instrument) usually allow private firms to choose projects, while in the case of direct subsidies, the government usually determines the project, either because it spends the funds directly on the project or because the funds are distributed via grants to the firms for specific research objectives. 

“The choice of R&D support instrument is an important point in the innovation system,” Nikzad and Demers’s study notes. The best balance of tools varies from country to country and is determined by the type of market failure being addressed, the type of R&D that the government wants to stimulate and the government’s public policy objectives.

According to the study, the advantages of direct support include:

• Direct support can directly correct market failures because it can target specific externalities, asymmetric information or public good problems associated with innovation.
• It can focus on specific barriers to innovation. Examples of barriers include undersupply of private investment in R&D, the failure of market actors to supply public goods, gaps in the market for early-stage equity finance, and difficulties faced by some small and medium-sized enterprises in accessing public procurement markets.
• It offers more flexibility to target projects with higher social rates of return. This means that, at least in theory, such funding could be concentrated in areas where there is a large gap between social and private rates of return.
• More direct support can be provided to individual firms for specific R&D projects, and it can focus on activities and actors that make the greatest contribution to meeting public policy goals, such as environmental improvement.
• The effects of direct support can be measured better than those from indirect support for the specific intervention.

The disadvantages of direct support, according to the report, include:

• Direct support may replace some or all of the R&D that the performing firms would otherwise have been ready to undertake ( R&D “crowding out”).
• Direct support may affect private sector investments negatively in the same technological areas because the expected rates of return to investment by firms that do not receive the support tend to be lower than the rates of those that receive the support. In other words, direct support could leave the receiving companies well positioned to enter the final product market with significant first-mover advantages.
• It may displace private real R&D investment by increasing the price of R&D inputs, particularly increasing researchers’ salaries.
• The administration of direct support by the government could pose problems related to:

  • information asymmetries between the innovator and government because the government agency that provides the funds does not necessarily have enough information to assess the merits of the R&D project.
  • the moral hazard on the part of the inventor or the innovating firm, as the firm may change its activities after receiving the funds.
  • costly bureaucratic procedures.
  • bureaucratic objectives.
  • political pressure on the government agency that administers R&D grants to fund specific projects to support certain stakeholders.
  • lack of expertise in the allocation of the support.

• There is the possibility that the politics of innovation policy would put pressure on the government agency to fund projects with a high private return, to ensure the appearance of a successful public R&D policy (“picking the winner”).

The various elements mentioned above could affect the impact of direct support in eliminating the gap between the social and private returns to R&D, the study says.

According to the study, the advantages of indirect support include:

• Tax credits are generally neutral in terms of R&D support, in the sense that all firms that perform eligible R&D can claim their expenditures, irrespective of the industry, firm size and objective of the innovation activity.
• Tax credit administration is easier to set up and maintain than direct support.
• R&D tax credit administration does not involve arbitrary decisions regarding the distribution of R&D support among sectors, regions, industries or firms.
• Indirect support does not interfere in firms’ R&D strategies and lets market mechanisms determine R&D priorities.
• Evidence suggests that the effects of tax incentives are less likely to be absorbed into higher wages and hence displace R&D expenditures.
• Indirect support may be more accessible than direct support by being equally available to SMEs, as well as large firms.

Disadvantages of indirect R&D support, according to the report, include:

• Although R&D tax credits stimulate overall R&D activity, they do not address the sources of market failures in innovation activities.
• It affects the composition of R&D, favouring activities that promise the largest short-term profit.
• Consequently, projects with high potential social rates of return, basic research and research infrastructure may be less stimulated by tax credits.
• The two latter issues could lead to rather weaker spillover benefits to other firms and industries.

A review of the existing literature suggests that it is not easily possible to conclude in favour of one instrument over the other, Nikzad and Demers’s study notes.

A study by the OECD suggested similar degrees of input additionality for both direct and indirect R&D supports, as well as potential complementarity between the two instruments. The OECD study also concluded that direct supports appear to promote more research, while tax support is more associated with the increase in experimental development.

Other research shows the positive effect of R&D tax credits and R&D direct support on business performance in Canada. One study found that Canadian firms that benefited from both policy instruments introduced more new products than their counterparts that benefited from only R&D tax incentives. These recipients also made more world-first product innovations and were more successful in commercializing their innovations.

In 2019, total government support for business R&D in Canada was at 0.25 per cent of gross domestic product, slightly above the OECD average. Moreover, the marginal federal tax subsidy rate for SMEs was 0.31 per cent, which was higher than the OECD median of 0.20 per cent.

The federal tax subsidy rate for large enterprises was 0.13 per cent, which was lower than the OECD median of 0.17 per cent. 

Although a 2022 OECD study suggested that more countries rely on tax supports to encourage business R&D now compared with a decade ago, Canada has shifted toward direct measures, Nikzad and Demers’s study says. “This is because Canada’s indirect support had been historically high and one of the most generous in the world, yet its business expenditures on R&D were lower than the OECD average.”

Given the importance of the right combination of direct and indirect R&D support instruments, the Science, Technology and Innovation Council in 2011 recommended decreasing spending through the SR&ED program and allocating the savings to direct-support measures.

Similarly, the Science, Technology and Innovation Council reported that in 2013, Canada ranked 4^th  out of 38 countries in indirect government support for business R&D, but 28^th in direct funding.

For business innovation and growth programs (BIGS), in 2019, 18 government departments provided more than $3.1 billion in direct support to around 22,000 ultimate beneficiary enterprises through 136 program streams. Both total investment and the number of recipients increased from 2007/2008 to 2018/2019.

The increase in BIGS spending and in the number of recipients is aligned with recommendations for the federal government to provide more direct financial support to firms to stimulate innovation, the study  says.

The five organizations reporting the highest average annual spending on BIGS over the period are Innovation, Science and Economic Development Canada, the Natural Sciences and Engineering Research Council, National Research Council of Canada, the Atlantic Canada Opportunities Agency, and Natural Resources Canada.

The SR&ED tax incentive program is the federal government’s main indirect tool to support innovation. In 2019, the program provided more than $3 billion in tax incentives to over 20,000 firms annually, making it the single largest federal program that supports business R&D in Canada.

in 2019, most BIGS and SR&ED recipients were in Ontario, followed by Quebec, British Columbia and Alberta. However, BIGS was received more than SR&ED in the four Atlantic provinces, and SR&ED was received more than BIGS in Ontario.

More enterprises received BIGS than SR&ED in Quebec and B.C., but the total value of SR&ED was more than that of BIGS in these provinces. The situation was reversed in Alberta.

Nikzad and Demers say further research is needed to address questions such as:

• Which of these instruments [direct or indirect], or their combination, stimulates R&D more effectively?
• Which instrument is more effective in terms of overall impacts on productivity and economic growth?
• What is the heterogeneity [the diverse elements] of effects across different types of firms and the interaction of different policies? StatsCan

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Failure to recognize and fix Canada Digital Adoption Program  “risks dooming us to the same mistakes”

The federal government’s flagship $4-billion Canada Digital Adoption Program (CDAP) was seriously flawed from the start but Ottawa didn’t take any step to fix the problems, according to an article in Policy Options.

The government cancelled the program in February, two years early, after spending less than one-fifth of its budget. A smaller grant of up to $2,400 for small businesses to build websites remains open.

“The issue has not received the attention it deserves,” wrote Noah Zon, co-founder and principal of Springboard Policy, a public policy research and advisory firm, in the Policy Options article. CDAP’s shutdown was only mentioned six times in Parliament in the last year – compared with nearly 1,000 for the ArriveCAN app – despite CDAP having a budget more than 60 times higher, he said.

CDAP was created because Canadian businesses persistently invest less in digital technology than international competitors. Only one in 20 small- and medium-sized Canadian businesses uses technology effectively, according to a study by the Business Development Bank of Canada.

Zon said CDAP’s shortcomings were many, including:

• Applying was cumbersome. Even before a first conversation with a consultant, businesses had to navigate a jargon-filled website to choose whether they were looking to “grow your business online” or “boost your business technology.”
• Businesses also had to find their way through a central application process and government-hosted marketplace. This meant spending time with new accounts and platforms, and sorting through service providers categorized by the program’s rules rather than how businesses would typically vet suppliers.
• The program was too rigid. Businesses could choose from a list of only government-approved consultants and it was exactly specified what kind of advice they could provide.
• Each digital adoption plan was required to follow a standard template – including an assessment of all current technology – regardless of whether the applicant was a single bricks-and-mortar store, a small manufacturer or an 80-person engineering firm.
• There was a shortage of consultants. Applications to be on the list closed early in a desire to move quickly because of the COVID pandemic. Many firms emerged ready to deliver assessments at exactly the $15,000 maximum available from the government, but others were turned off by the program’s limitations or not aware of it in time to meet the deadline.
• Prospective clients thus had a limited number of consultants from which to choose, especially if they were hoping for someone familiar with their sector.

Zon noted that more than a year before the initiative was shut down, journalist Paul Wells wrote about lagging applications in a part of the CDAP known as “Boost Your Business Technology.”

When Boost Your Business Technology was announced, Innovation, Science and Economic Development Canada said “up to 70,000 SMEs will be supported by Boost Your Business Technology funding,” Wells wrote.

By November 30, 2023, two-thirds of the way through the program’s first year, only 1,123 SMEs had received grant payments. Of those, 312 went on to the next step and had their applications for zero-interest loans approved. Those 312 loans had a combined value of $17.6 million.

“Today’s Ottawa is designed to ensure programs like this never get fixed,” Wells wrote “We have a government that thinks announcements are results. A thin-skinned government that can’t admit it sometimes gets things wrong, so it’s often the biggest obstacle to setting them right.”

Zon said that by the time of Wells’s article in January 2020, “the challenges would have been painfully obvious to the government . . . but it stuck with the status quo for another year before quietly winding down the program.”

A phased approach with user testing could have allowed initial design flaws to be caught and adjusted, he said.

Getting better results depends on being willing to openly concede when something isn’t working and then doing it differently, Zon said. “However, the federal government remains reluctant to admit that the digital adoption program was not a roaring success.”

“That head-in-the-sand approach risks dooming us to the same mistakes," Zon said. Policy Options

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General-purpose AI could produce both very positive and very negative outcomes in near future: international report

General-purpose artificial intelligence is accelerating so fast, the technology in the near future could produce both very positive and very negative outcomes – with current limitations on ways to reduce the risks.

That’s one main conclusion of the inaugural International Scientific Report on Advanced AI Safety, produced by an international expert advisory panel chaired by Yoshua Bengio, professor at Université de Montréal and founder and scientific director of Mila - Quebec AI Institute.

“If properly governed, general-purpose AI [AI that can perform a wide variety of tasks] can be applied to advance the public interest, potentially leading to enhanced wellbeing, more prosperity, and new scientific discoveries,” the report says.

However, it says, malfunctioning or maliciously used general-purpose AI can also cause harm, for instance through biased decisions in high-stakes settings or through scams, fake media or privacy violations.

As general-purpose AI capabilities continue to advance, risks such as large-scale labour market impacts, AI-enabled hacking or biological attacks, and society losing control over general-purpose AI could emerge, although the likelihood of these scenarios is debated among researchers, according to the report.

Different views on these risks often stem from differing expectations about the steps society will take to limit them, the effectiveness of those steps, and how rapidly general-purpose AI capabilities will be advanced, the report says.

“There are various technical methods to assess and reduce risks from general-purpose AI that developers can employ and regulators can require, but they all have limitations. For example, current techniques for explaining why general-purpose AI models produce any given output are severely limited.”

The report is the interim publication of the first International Scientific Report on the Safety of Advanced AI. A diverse group of 75 AI experts contributed to the report, including a 33-member international expert advisory panel nominated by 30 countries, the European Union, and the United Nations.

At the U.K. AI Safety Summit at Bletchley Park last November, countries promised closer cooperation to ensure AI technology is developed and used responsibly. The U.K. commissioned Bengio, an advisor to both the Canadian and U.K. governments, to lead work on a “state of the science” report focused on general-purpose systems, the multi-use models that underpin tools like ChatGPT.  

The interim report is published ahead of the AI Seoul Summit to be held this week. The final report will be published in advance of the AI Action Summit to be held in France.

The interim report also comes as Ilya Sutskever, OpenAI’s co-founder and former chief scientist, and Jan Leike, co-lead of the “super-alignment” team whose responsibility included safety, resigned from OpenAI last week. Leike warned that “safety culture and processes have taken a backseat to shiny products.” OpenAI said it would dissolve the team, with CEO Sam Altman on X promising details of a new approach shortly.

The International Scientific Report on Advanced AI Safety interim report notes that five years ago, the leading general-purpose AI language models could rarely produce a coherent paragraph of text. Today, some general-purpose AI models can engage in conversations on a wide range of topics, write short computer programs, or generate videos from a description.

State-of-the-art AI models have seen annual increases of approximately four times in computational resources (‘compute’) used for training, 2.5 times in training dataset size, and 1.5 to three times in algorithmic efficiency (performance relative to compute), the report says.

“However, the capabilities of general-purpose AI are difficult to estimate reliably and define precisely,” and the experts disagree on what to expect from the technology even in the near future.

Experts variously support the possibility of general-purpose AI capabilities advancing slowly, rapidly or extremely rapidly, according to the report. “This disagreement involves a key question: will continued ‘scaling’ of resources and refining existing techniques be sufficient to yield rapid progress and solve issues such as reliability and factual accuracy, or are new research breakthroughs required to substantially advance general-purpose AI abilities?”

Several leading companies that develop general-purpose AI are betting on scaling to continue leading to performance improvements, the report says.

 If recent trends continue, by the end of 2026 some general-purpose AI models will be trained using 40 times to 100 times more compute than the most compute-intensive models published in 2023, combined with training methods that use this compute three times to 20 times more efficiently. However, there are potential bottlenecks to further increasing both data and compute, including the availability of data, AI chips, capital expenditure and local energy capacity, the report points out.

Approaches to managing risks from general-purpose AI often rest on the assumption that AI developers and policymakers can assess the capabilities and potential impacts of general-purpose AI models and systems, the report says.

But while technical methods can help with assessment, all existing methods have limitations and cannot provide strong assurances against most harms related to general-purpose AI, according to the report.

“Overall, the scientific understanding of the inner workings, capabilities, and societal impacts of general-purpose AI is very limited, and there is broad expert agreement that it should be a priority to improve our understanding of general-purpose AI.”

Developers still understand little about how their general-purpose AI models operate, the report says. This is because general-purpose AI models are not programmed in the traditional sense. Instead, they are trained: AI developers set up a training process that involves a lot of data, and the outcome of that training process is the general-purpose AI model.

These models can consist of trillions of components, called parameters, and most of their inner workings are inscrutable, including to the model developers.

Testing the model or system on various inputs often misses hazards and overestimates or underestimates capabilities because general-purpose AI systems may behave differently in different circumstances, with different users, or with additional adjustments to their components, the report says.

Companies developing general-purpose AI often do not provide independent auditors with the necessary level of direct access to models or the information about data and methods used that are needed for rigorous assessment. Several governments are beginning to build capacity for conducting technical evaluations and audits.

“Understanding the potential downstream societal impacts of general-purpose AI models and systems requires nuanced and multidisciplinary analysis. Increasing the representation of diverse perspectives in general-purpose AI development and evaluation processes is an ongoing technical and institutional challenge.”

General-purpose AI research and development is currently concentrated in a few Western countries and China, the report notes. This “AI Divide” is multicausal, but in part stems from differing levels of access to the compute needed to develop general-purpose AI.

Since low-income countries and academic institutions have less access to compute than high-income countries and technology companies do, they are placed at a disadvantage, the report adds.

It says the resulting market concentration in general-purpose AI development makes societies more vulnerable to several systemic risks. “For instance, the widespread use of a small number of general-purpose AI systems in critical sectors like finance or health care could cause simultaneous failures and disruptions on a broad scale across these interdependent sectors, for instance because of bugs or vulnerabilities.”

Despite progress on technical risk mitigation methods, current methods have not reliably prevented even overtly harmful general-purpose AI outputs in real-world contexts, according to the report.

The report concludes that while the future of general purpose-AI is uncertain, nothing about this future is inevitable.

“How general-purpose AI gets developed and by whom, which problems it gets designed to solve, whether societies will be able to reap general-purpose AI’s full economic potential, who benefits from it, the types of risks we expose ourselves to, and how much we invest into research to mitigate risks – these and many other questions depend on the choices that societies and governments make today and in the future to shape the development of general-purpose AI.” Govt. of the U.K.

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Like Canada, Germany struggles with tech transfer and commercializing university research

Technology transfer and innovation are central themes of Germany’s “traffic light” coalition (named after the three parties’ traditional colours), a coalition government of the Social Democratic Party of Germany, the Free Democratic Party, and the Alliance 90/The Greens.

However, the scientific institutions responsible for technology transfer suffer from insufficient resources and a lack of appreciation of the need for tech transfer, according to a story by Markus Weisskopf in Science | Business news, published by the Science | Business Network. Furthermore, there is hardly any data and facts to date that measure their contribution to the innovation system, Weisskopf reported.

“Too much of what we produce in the science system is lost or not tracked,” Sabine Kunst, chair of the board of directors of the Joachim Herz Foundation in Hamburg, told Table.Media in an interview. The non-profit foundation promotes innovative, application-oriented research at the interfaces between business, engineering, natural sciences, and medicine.

There are also frequent complaints elsewhere that excellent research in Germany does not translate into added value, Weisskopf reported. Over the past 20 years, the third mission of universities – the transfer of knowledge and technologies to the society and the private sector – has not established itself as an equal pillar alongside research and teaching, according to his story.

Too few scientists in Germany consider the application of their research, said Thomas Gazlig, head of Charité BIH Innovation (the joint tech transfer office of the Berlin Institute of Health and the Charité University Hospital). Kunst said scientists have “lost the expertise to combine scientific work and application.” 

Gazlig makes it clear that there is a lack of incentives and political guidelines. Few technology transfer centres are adequately and sustainably funded. Many are dependent on third-party funding and are currently struggling to compensate for the cancellation of Exist Potentiale, a scheme aiming to activate a startup culture in Germany’s universities.

According to Christiane Bach-Kaienburg, managing director of Transferallianz, the German association for knowledge and technology transfer, the result is increased brain drain.

There are also too few figures, data and facts on input, output and impact. Nobody knows how much money is invested in technology transfer at universities in Germany. What comes out of it also remains unknown. According to Gazlig, this is also associated with the low visibility of the issue.

A survey by Transferallianz in which 81 technology transfer organizations from research institutions and universities took part, collected input and output data. The figures are from the 2021 reporting year and were collected in 2023:

• Patent applications: On average, just under 20 priority patent applications were reported per institution in 2021. However, the median value – that is, the most frequently cited value, is eight – so it is clear that some large institutions are distorting the values upwards.
• Income from the exploitation of intellectual property: 28 of the 71 institutions that responded to this question generated between €30,000 and €200,000 in 2021. The top value is €114 million.
• Number of contracts with industry for the purpose of knowledge and technology transfer: There is a clear difference between the small and medium-sized universities and institutes and the large institutions. While the median is 35 contracts, some top values raise the mean value to 115.
• Income from contracts with industry: At €723 million, the top performer in this category accounts for 59 per cent of the total volume. Most other institutions earn between €1 million and €2 million per year.
• Number of startups: The number of startups founded at universities each year is considered a key factor in the success of technology transfer. In fact, in the reference year 2021, no startups were founded at 16 of the 66 institutions responding. The average was 13.

Gazlig said that in order to professionalize structures and leverage the potential of research results, five per cent of the institutional budgets should be allocated to transfer and innovation in future. This would require politicians to ensure that transfer and its impact become part of the assessment of scientific work. 

Meanwhile, Germany’s Fraunhofer-Gesellschaft said the European Institute of Innovation and Technology (EIT) is “overly complex, costly and non-transparent” and should be discontinued, according to a separate story in Science | Business.

Fraunhofer operates 76 institutes and research facilities throughout Germany and has an annual research budget of roughly €3 billion. Since 1949 it has acted as a bridge between basic research and innovation, working to spur new business ventures based on research results.

In a paper, Fraunhofer argues that EIT “fails to provide added value to Europe’s innovation ecosystems and its industrial competitiveness,” and points to the high administrative burden of participating in EIT activities, a lack of involvement of universities and research institutes, and concerns over EIT’s financial sustainability.

Fraunhofer’s conclusion adds to the pressure on EIT after both Denmark and Latvia issued calls for it to be discontinued in the next Framework research program, FP10.

Fraunhofer’s core justification is that other EU funding schemes, such as the large collaborative projects funded under Horizon Europe pillar 2, or the European Innovation Council, are more adept at doing what EIT does.

In addition, with pressure mounting on the EU’s overall budget, Fraunhofer believes close scrutiny of how the research and innovation budget is spent is vital. Like many other research organisations, Fraunhofer is calling for FP10 to have a €200-billion budget, more than twice that of Horizon Europe. But Fraunhofer still does not think the EIT would offer a positive return on investment within that budget.  

According to the Fraunhofer’s paper, resources currently directed to the EIT should to be put back into FP10, in particular to support the European Innovation Council, the EU’s main startup fund.

In response, a spokesperson for EIT said the organization “is needed now more than ever. Innovation happens when you put different actors around the same table, and this is exactly what the EIT does, bringing together research, business and education.”

EIT said it welcomes constructive and factual feedback from its stakeholders, including those that call for more simplification, and it has already made moves to address this, for example by introducing multi-annual grants to maximize flexibility. Science | Business

THE GRAPEVINE – News about people, institutions and communities         

Innovate BC appointed Emilie de Rosenroll as the new chair of its board of directors, effective May 14, 2024. She has served on Innovate BC’s board since July 2021. de Rosenroll currently serves as the chief growth officer of Atreides, a data analytics platform company in the defence and intelligence sector. Prior to joining Atreides, she served as founding CEO of South Island Prosperity Partnership, Greater Victoria’s economic development partnership, and CEO of COAST (Center of Ocean Applied Sustainable Technologies). Additionally, she consulted as the lead architect to the Government of Nova Scotia on restructuring and launching six new economic development organizations. She takes over from outgoing Innovate BC board chair Andrew Petter. Innovate BC

Engineers Canada appointed Philip Rizcallah as its new chief executive officer, effective August 6, 2024. He succeeds Gerald McDonald, who’ll be retiring after six years of service to the organization. Most recently, Rizcallah served as CEO and deputy head of Accessibility Standards Canada, and prior to that he led teams at the National Research Council of Canada as both program director and director for the Building Regulations Resource Unit. Engineers Canada

Calgary-based Virtual Gurus, which offers virtual assistant solutions, appointed Elliot Schneier as chief operating officer. Under Schneier's leadership, the company plans to expand its service offerings, including the introduction of virtual receptionists and the enhancement of virtual assistant services, while maintaining a strong focus on its social mission. Founded by Bobbie Racette, Virtual Gurus has empowered over 800 professionals from underrepresented backgrounds, including single mothers, Indigenous peoples, the 2SLGBTQIA+ community, and those with alternate abilities. Virtual Gurus

Bret Taylor will leave Ottawa-based Shopify’s board of directors, with Uber chief financial officer Prashanth Mahendra-Rajah and Rostra CEO Lulu Cheng Meservey nominated as new independent directors. If elected at Shopify’s June annual general meeting, they will join the board, replacing Taylor who joined in June 2023. Taylor, former co-CEO of Salesforce and ex-chair of Twitter, is now chair of OpenAI and has launched AI startup Sierra. Shopify helps small businesses build an online store and sell online through one streamlined dashboard. Shopify

Montreal-based e-commerce firm Lightspeed Commerce Inc. reappointed Dax Dasilva as the company’s permanent CEO, removing the interim tag from his title. Lightspeed, which offers tools to manage point-of-sale products for retail stores and restaurants, announced total revenue of $232.2 million in the first quarter of 2024, an increase of 25 per cent year-over-year. The company reported a net loss of $32.5 million for the quarter, compared with a net loss of $74.5 million for the same quarter in 2023. Lightspeed

Lindsay Doyle is now the head of government affairs and public policy in Canada for YouTube. Doyle was previously the manager of government affairs and public policy for Google Canada, before taking a year of parental leave. Based in Ottawa, she takes over the role from Jeanette Patell, who moves into the role of director of government affairs and public policy for Google Canada. YouTube and Google are both owned by Alphabet Inc. Broadcast Dialogue

Long Calgary, Calgary’s community for founders, builders and creators, announced the opening of House 831, a highly curated clubhouse to serve as a co-working space, hosting fireside chats, mastermind sessions, networking events and collaborative opportunities. House 831, in southwest Calgary, is a collaborative effort by Tate Hackert, co-founder and president of ZayZoon, photographer and entrepreneur Scott Bakken, founder of Socality Inc., and photographer Jonathan Zoeteman, blending their backgrounds and networks in tech and creative fields. Membership to House 831 will be highly curated and will include perks and discounts to Calgary businesses, members-only access to event bookings and space usage, swag, and lots of coffee. Long Calgary

A team of Western University researchers led by Dr. Michael Strong has uncovered a potential path toward a cure for amyotrophic lateral sclerosis (ALS). The breakthrough, which shows how protein interactions can preserve or prevent the nerve cell death that is a hallmark of ALS, is the culmination of decades of research at Western backed by the Temerty Foundation. ALS, also known as Lou Gehrig’s disease, is a debilitating neurodegenerative condition that progressively impairs nerve cells responsible for muscle control, leading to muscle wastage, paralysis and, ultimately, death. The average life expectancy of an ALS patient post-diagnosis is two to five years. In a study published in the journal Brain, Strong’s team found that, in research on fruit flies and mouse models, targeting an interaction between two proteins present in ALS-impacted nerve cells can halt or reverse the disease’s progression. The team also identified a mechanism to make this possible. “Importantly, this interaction could be key to unlocking a treatment not just for ALS but also for other related neurological conditions, like frontotemporal dementia,” said Strong, who holds the Arthur J. Hudson Chair in ALS Research at Western’s Schulich School of Medicine & Dentistry. “It is a gamechanger.” Strong and his team have set a goal to bring their potential treatment to human clinical trials in five years, supported by a new gift of $10 million from Temerty Foundation. Western University

A University of Alberta (U of A) research project is exploring the most efficient way to process and manufacture specialized fibres from cellulose, a compound comprising linked sugar molecules found in all plants. The work, when fully developed, can benefit the environment, the economy and Canada’s textile manufacturing sector, said lead researcher Patricia Dolez, a textile scientist in the Faculty of Agricultural, Life & Environmental Sciences. Experimenting with cellulose from Canadian-grown hemp, Dolez and her team plan to determine the best parameters for producing lyocell, a synthetic fibre that can then be turned into textiles for a wide range of products. The solvent used in producing lyocell is almost 100-per-cent recoverable, making it a sustainable way to manufacture textile fibres. The regenerated cellulose fibres also provide a use for agricultural straw that would otherwise be left in the field, said Lelia Lawson, a PhD student in human ecology working on the project. In initial control experiments, the researchers have already been able to create a lyocell fibre using cellulose from wood pulp, laying the groundwork for experimenting with hemp. The work, which also includes the expertise of U of A researchers Jane Batcheller and David Bressler, is funded by the Alberta Innovates Agri-Food and Bioindustrial Innovation Program, Bioindustrial Innovation Canada and PrairiesCan. Industry partners include Davey Textile Solutions Inc. funded through the National Research Council Canada Industrial Research Assistance Program, clothing retailer Mark’s, Techfibre Industries and Plantae Technologies. U of A

An international research team including a Dalhousie University scientist has found a clear link between plastic production and plastic pollution, such that a one-per-cent increase in plastic production was associated with a one-per-cent increase in plastic pollution in the environment. The research, led by scientists at Dalhousie and a dozen different universities in the U.S., Australia, the Philippines, New Zealand, Estonia, Chile, Sweden and the U.K., also found that 56 global companies are responsible for more than half of all plastic pollution identified with a brand. According to their study, published in the journal Science Advances, the top five producers of branded plastic pollution were Coca-Cola Company, responsible for 11 per cent of roughly 910,000 branded items identified, followed by PepsiCo (5 per cent), Nestlé (3 per cent), Danone (3 per cent), and Altria/Philip Morris International (2 per cent). The top companies produce food, beverage or tobacco products. The team, including co-author Dr. Tony Walker of Dalhousie’s School for Resource and Environmental Studies, also determined that companies producing single-use consumer goods disproportionately contributed to the problem more than household and retail companies, and that most collected items had no discernible brand. The study marks the first robust quantification of the global relationship between production and pollution. The team also discovered that about 52 per cent of the more than two million inventoried plastic items had no identifiable brand, highlighting the need for better transparency about production and labeling of plastic products to enhance traceability and accountability. The researchers suggest creating an international, open-access database into which companies are obliged to quantitatively track and report their products, packaging and brands. Dalhousie University

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