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Feds say high-tech “superclusters” throughout Canada will grow regional economies

Peter Caulfield
Feds say high-tech “superclusters” throughout Canada will grow regional economies

In its February 2018 budget, the federal government announced it will spend $950 million on five innovation “superclusters” spaced evenly across the country.

The money will set up hubs of collaboration between researchers and industry that will, the government said, help Canada compete in the 21st-century global economy.

Innovation, Science and Economic Development Minister Navdeep Bains said the hubs will pump $50 billion into the Canadian economy over the next 10 years and create “more than 50,000 middle-class jobs.”

The budget announcement came at the end of a national supercluster competition that was launched in May 2017.

The winning superclusters include a group based in British Columbia that will create a digital technology supercluster to connect big data with health care, forestry, manufacturing and other sectors.

The Prairies will be home to a protein industries supercluster that will develop plant proteins.

A group in Ontario will focus on advanced manufacturing and one in Quebec will work on artificial intelligence and robotics.

An ocean supercluster in Atlantic Canada will “improve competitiveness” in fisheries, oil and gas and clean energy.

The five groups represent consortia of more than 450 businesses, 60 post-secondary institutions and 180 other participants, such as research institutions and non-government organizations, according to a government release prior to the announcement.

According to Hans Parmar, a spokesman for Innovation, Science and Economic Development Canada, each supercluster will get approximately $125-250 million from the federal government.

“Contributions take a variety of factors into account, including the value of the economic opportunity and level of industry investment committed,” said Parmar. “Program contributions will be matched at least dollar for dollar by industry contributions.”

Most of the details of the initiative remain to be worked out.

“Funding amounts will be finalized through the negotiation of contribution agreements,” said Parmar.

Some construction may be eligible for supercluster funding.

 

We need to diversify and find new markets

— Alex Carrick

ConstructConnect Chief Economist

 

“Depending on the contribution agreement, recipients may be permitted to make payments towards infrastructure costs, including construction, repair and maintenance, that are directly related to eligible activities and program objectives,” said Parmar.

All of the superclusters are still in the early stages of development. The one that is probably furthest along is the prairies-based Protein Industries Canada (PIC).

According to acting president Ron Styles, PIC is a federal non-profit with about 120 “contributors and supporters,” many of whom will become members once a membership program is developed in mid-2018.

Although Styles is located in Regina, PIC’s contributors and supporters are situated across the three prairie provinces.

“The physical clusters, called nodes of development, will be close to where the crops that can be processed into other products are located,” said Styles.

Examples of such crops and their locations are sugar beets in southern Alberta, canola in Saskatchewan, hemp in Manitoba and pulses in all three prairie provinces.

“Prairie agriculture needs to develop more food processing, and the processing of the by-products of processing, too,” Styles said. “They are the missing ingredients of prairie economic development.”

Alex Carrick, chief economist of ConstructConnect, Markham, Ont., likes the supercluster idea.

“The Canadian economy needs to be energized,” said Carrick. “We can’t continue to depend on commodities. Nor can we continue to depend on the U.S. market. We need to diversify and find new markets.”

Carrick says Canada must start thinking strategically about economic development, including identifying and nurturing knowledge-based clusters. “Because we haven’t been thinking strategically, we got caught flat-footed by Trump’s NAFTA demands,” he said.

In the US, by comparison, there are already many technology clusters.

“In addition to the most well known ones, such as Silicon Valley near San Francisco, and Route 128 near Boston, there are lots of other clusters, many less than 100 miles apart,” Carrick said. “And that’s where the young people want to go to live and work.”

Carrick is unsure if the supercluster initiative will lead to new construction.

“If there is new construction, it won’t be huge resource-processing buildings,” he said. “Any new construction will be small-scale and there might not be much of it, either.”

Jack Mintz, president’s fellow at the University of Calgary, likes innovation clusters, but doesn’t think government is effective at creating them.

“Every day or so there is a major innovation of some kind, and it’s hard to predict what it will be and when or where it will take place,” said Mintz. “Nobody knows in advance who the winners and the losers are going to be or where they’ll be located. Who would have guessed that fracking would become so successful? And it was all done by the private sector; no government money was involved.”

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