Innovation Canada: A Call to Action

Innovation Canada: A Call to ActionResearchCreate a Commercialization Superfundto address key commercializationchallenges. This fund would support largescale,private–public sector research andtraining partnerships in targeted sectors,while expanding existing programs andinitiating new ones to train highly qualifiedpersonnel (2006a, p. 18).Expand federal programs that supportseed and start-up firms in proving theirbusiness ideas. This would be achieved as afirst step by (i) increasing funding toprograms such as NSERC’s Idea to Innovationprogram, CIHR’s Proof of Principle programand the Industrial Research AssistanceProgram and (ii) providing funds for SSHRC toestablish a program similar to these three inorder to encourage, where applicable, thecommercialization of the research it funds.As a second step, funding would grow,based on evidence of success (2006a, p. 19).Increase the commercializationinvolvement of small and medium-sizedenterprises (SMEs), through a CanadianSME Partnerships Initiative. The objectiveof this initiative would be to make SMEs moreglobally competitive through two channels:(i) Partnerships Initiative — Research Funding,through which federal science-baseddepartments and agencies would competefor five-year funding for research aboveand beyond their existing budgets and(ii) Canadian SME Partnerships Initiative —Program Support, which would includeefforts such as support for technologyacquisition and R&D partnerships with firmsand research bodies in other countries(2006a, p. 21).CapitalImprove access to early-stage angelfinancing and expertise. This would beachieved through two initiatives: (i) FundingExcellence in Building Angel InvestorNetworks, which would develop angelinvestor networks and enhance thesupport they provide to early-stage firmsthrough a competitive process to fundnon-governmental organizations thatmobilize the resources within communitiesand (ii) a New Angel Investor Co-InvestmentFund Program that would establishcommunity based funds, capitalized by thefederal government, which would investalongside angel investors in seed and start-upcompanies (2006a, p. 24).Review the expansion-stage venturecapital market in Canada. This would beaccomplished by launching a comprehensivereview, potentially with the involvement ofthe provinces and territories, “of policies,programs and other factors influencing therole of the venture capital markets oncompanies during their expansion stage. Thisreview would involve the venture capitalcommunity and include assessing currentinitiatives and capital supply and demandconsiderations, including factors for firmsseeking financing” (2006a, p. 26).Remove barriers to foreign venturecapital investment. This would be achievedthrough the following measures: “eliminatethe withholding tax on capital gains made byforeign investors in the equity of privateCanadian companies; cover limited liabilitycorporations that are venture capital funds orprivate investment funds under Canada’sincome tax treaties and exclude them fromwithholding tax; extend rollover provisions tocross-border mergers, allowing companies toget access to strategic partnerships withforeign companies without triggeringtaxation; and eliminate the requirement fornon-Canadian investors to file a Canadianincome tax return” (2006a, p. 27).A-8