The Future of Canada’s Economy Will Be Research-Based

Excerpted from: TheFutureEconomy.ca

Canada can be the best nation in the world for science and medical research. We have a storied history of punching above our weight, from Frederick Banting and Charles Best’s discovery of insulin at the University of Toronto and its first use at Toronto General Hospital, to Geoffrey Hinton, Yoshua Bengio, and Yann LeCun—the “Canadian godfathers” of artificial intelligence—creating the knowledge and conditions that have spawned one of science’s most exciting revolutions.

If we are to take up the challenge of remaining among the foremost nations in medical and scientific research, then we must demonstrate unabashed ambition and drive to achieve that end. The conditions and basic building blocks are in place in an increasingly fragile ecosystem that, once broken, may prove nearly impossible to repair. The very real challenge we face is to leverage the remarkable people and institutions in Canada and fund them with clear accountability to compete on the global stage.

_{Research Funding in Canada}

It is a fact that Canada’s research funding has fallen behind peer countries that have made research and innovation central to their economy. This not only threatens Canada’s health but also its prosperity, productivity, competitive economy, and citizen confidence. Civil society is built on strong economies, and strong economies are built on innovations derived from research.

‍“Canada’s research funding has fallen behind peer countries that have made research and innovation central to their economy.”

_{The Importance of R&D}

Canada’s 2024 federal budget is thankfully a good start on repairing an increasingly stressed research community. These investments will help to stabilize the fragile ecosystem that’s emerged in large part due to inflationary pressures, including the housing challenge and large urban settings for scientists and those who support them. The goal of global dominance must be openly stated and pursued. Future investment must put Canadian investigators on par with those best funded around the world. That means per capita spending and research that resembles those mentioned earlier in this article. These are not investments in research alone but investments in high-quality science-based jobs and the building of scientific infrastructure, which also creates high-quality engineering and construction jobs.

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The future is also about creating a higher ambition and aspiration for Canada to compete and even to lead. In Canada, and in particular in the heart of Toronto, we have an incredible academic research ecosystem, which includes the University Health Network, Canada’s top research hospital. We need to look no further than UHN’s Toronto General Hospital, the world’s No. 3 hospital in 2024, the University of Toronto, which is the second-most prolific health sciences research university in 2023 global rankings, and the Hospital for Sick Children, No. 2 among the world’s best pediatric hospitals in 2024, to recognize that we already keep company with the world’s best. The ambition of the brilliant and talented people working in these institutions to use research to solve challenges to civil society, grow industries and jobs, and continue to compete globally should be matched by government at all levels and set a vision for the future of Canadians to make Canada a global leader.

With an economy built around science and with increased research support, academic research organizations can keep Canada’s brightest minds working on the most important questions in the world. This requires the confidence to bolster the basic science research and curiosity-driven questions of Canada’s best scientific teams. These exceptional few, given the freedom to explore answers to the most vexing and important questions, will return Canada to the enviable position of being among the most competitive and impactful nations on our struggling planet.

_{The Economics of Research}

At UHN, the annual research budget has grown over the years to more than $539 million, an increase of more than 30% since 2018-19. However, that is despite diminished support from the Canadian Institutes of Health Research (CIHR), Canada’s primary agency for federally funded health research. CIHR’s annual budget in 2023 remained roughly at the same $1.2 billion it was in 2019, a decline of 17% once inflation is factored in, which compares with an increase of 6.5% in the annual budget of the National Institutes of Health, its American counterpart.

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UHN Research is directly responsible for approximately 5,000 well-paying jobs, with investments in research infrastructure creating further trickle-down employment opportunities in construction and other skilled trades. UHN’s annual research spending over five years would rank in the top 15 among Canadian corporations, alongside the likes of telecommunication and technology giants Rogers, TELUS, Ericsson, SAP, IBM Canada, and AMD Canada. Yet despite this economic impact, the average award through the CIHR’s Project Grant Program—the main open competition through which investigator-led research is funded—is lower today in inflation-adjusted dollars than it was during the inaugural competition in 2016.

Canada’s economic future also rests on being a place of not only discovery but also commercialization and retaining manufacturing within our borders. As the leading medical research commercialization hospital in Canada and fastest growing in North America, UHN is accelerating research into medical devices, products, diagnostics, and therapies that will have a global impact. UHN-incubated companies have attracted $1.69 billion in financing since 2014, some of which are from the most notable investors and venture capital firms in the biotech space, and $111 million in licensing revenues in the past six years.

As cornerstones in our thriving biotech ecosystem, UHN’s spin-off companies focus on innovations in cancer immunotherapy, ex-vivo technology that sustains organs outside the body suitable for transplant, emergency medicine deployed to disaster zones, and a diagnostic, liquid biopsy blood test for cancer, among others. This development infrastructure has injected more than $5 billion into the economy in that time and has made commercialization at UHN the largest driver of innovation in the Greater Toronto Region. As such, UHN’s gross licensing revenues over the past six years total $111 million, all being re-invested in programs and research across the organization.  

_{The Challenge and Opportunity of Commercialization}

Early-stage commercialization requires large, costly studies to evaluate their benefits and harms before being made accessible to those who may benefit from them. Significant funding is needed to support such studies—funding which is sorely lacking in Canada. Such funding is often sought across the border or even internationally, yet it is pivotal to the eventual market launch of a patient-facing therapy. Government support dedicated exclusively to the clinical commercialization of research discoveries could also help with such efforts. But to truly soar, we must make it attractive to industry to pursue this work here and now.

“Early-stage commercialization requires large, costly studies to evaluate their benefits and harms before being made accessible to those who may benefit from them. Significant funding is needed to support such studies—funding which is sorely lacking in Canada.”

Creating attractive conditions for commercial enterprises to invest heavily in science requires a reimagining of our taxation strategy, which will see public research investment increasingly surpassed by the private sector, which understands and embraces the long-term value proposition of a science-based economy. Governments cannot do this alone.

To mitigate the high-risk, high-cost nature of transforming early scientific discovery into a product impacting Canada, a precarious and gruelling process that can typically play out over many years, one of the things UHN is doing is launching a new Accelerator Fund in May 2024, generously supported by the donors of UHN Foundation and The Princess Margaret Cancer Foundation. The fund will invest in de-risking such technologies and improving their likelihood of scaling for patient impact. This fund, a first for a Canadian hospital, is expected to not only generate strong financial returns to support further research sustainability at UHN but also strengthen the overall global healthcare innovation ecosystem, helping ensure new medicines and therapeutics make it out of the lab and into the clinic.

“Inventions and discoveries from research-intensive organizations will not only fuel the future economy but could hold the potential to turn healthcare in Canada from an expense into a revenue stream.”

UHN is known for its research and, increasingly, for its successful commercialization program—a true win for the country’s economy, ecosystem, partners, and patients. Without further investment in the research that fuels all of this, however, our innovation pipeline is in jeopardy. That means the health and well-being of Canadians is in jeopardy, as is our future economic prosperity. Inventions and discoveries from research-intensive organizations will not only fuel the future economy but could hold the potential to turn healthcare in Canada from an expense into a revenue stream by creating high-tech jobs and products that can be monetized and made available internationally.

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Read the original full story on Future of Economy.ca  

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Source: Future of Economy - Canada