The Canadian Chamber of Commerce and PwC Canada have released a new report highlighting value chain gaps in key Canadian sectors like artificial intelligence and quantum computing, mining and critical minerals, energy, defence, and agri-food.
The “Beyond Potential: Turning Canada’s advantages into growth and a better life for all” report revealed that while Canada’s starting advantages are strong, value chain underdevelopment weakens Canadian value proposition.
For instance, the nation’s natural resources, energy, and agricultural capacity are accompanied by strong institutions, high-quality research, and a highly educated workforce. Moreover, Canada holds preferential trade access to 51 countries.
“We know Canada has enormous advantages along with a common problem – we can be slow and we don’t follow through enough to turn those advantages into results. Building out these incomplete value chains will mean a better life for families, workers and communities. It’s time to be bold because, thankfully, closing these gaps is well within our control,” said Candace Laing, the Canadian Chamber of Commerce’s president and CEO, in a statement.
AI
The report showed that while Canada took the global lead in AI research and talent early on, it has not translated into globally scaled local organizations. Growth-stage financing and commercialization were identified as gaps in this area, while the identification of quantum technology was marked as a significant opportunity for Canada to convert research leadership into a commercial one.
Critical minerals
Canada possesses geological resources; however, projects largely progress sluggishly, with major new production taking 10-15 years. The report indicated that much of the processing capacity to transform minerals into strategic inputs is offshore.
Energy
About 85 percent of energy exports from Canada are headed to the US, even though Canada is among the major energy producers in the world. Per the report, this highlights the value of infrastructure and access to more markets.
Defence
As Canada initiates a major defence spending expansion, procurement reform and the intentional development of domestic capabilities are necessary to prevent Canadian companies from becoming subcontractors rather than owners of system-level intellectual property and export opportunities. Otherwise, increased spending would merely accelerate foreign acquisitions.
Agri-food
The report highlighted the value-add that could be gained through focusing on processing, ingredients, technology, and stable infrastructure linked Canadian production to international customers.
“Canada holds one of the strongest hands in the global economy. In energy, critical minerals, AI, defence, agri-food, and most importantly, trust, the world wants what we have. The opportunity now is to capture more of that value here at home. By creating better conditions for businesses to invest, innovate and scale in Canada, we can turn our advantages into lasting economic growth,” said Anita McOuat, PwC Canada’s national managing partner - clients and industries, in a statement.
Thus, the report recommends accelerated regulatory and permitting processes, improved access to growth and project capital, infrastructure growth, specialized skills, enhanced commercialization pathways, and improved coordination between industries and governments.
“Government funding alone isn’t enough. Government also has a role to play as an early customer. Their participation as a customer bolsters adoption and volumes which facilitates scale and commercial viability,” said Greg Francis, Hypertec Group’s CFO, in the report.