The missing piece in our innovation strategy

By Lethbridge Herald on December 23, 2025.

Vincent Custode
Quoi Media

Another federal budget has come and gone and, while there are investments worth applauding, it’s hard to shake the feeling that Canada missed the bigger picture.

Renewed investments in infrastructure and improvements to the Scientific Research and Experimental Development (SR&ED) tax credits are welcome.  The proposed “super-deduction” to spur capital investment is also a step in the right direction.

These measures signal a government focused on productivity and competitiveness.

The budget also reaffirms its support for discovery research, an important foundation for scientific progress.  But discovery alone won’t fix Canada’s productivity challenge.  To compete globally, we need to better connect research to real growth.

That connection was missing in this year’s budget.

The government’s $1.7-billion commitment to attract international researchers to Canadian universities reflects an ambition to deepen Canada’s research capacity and compete globally for talent.  But without complementary investments in polytechnic applied research, where discoveries are turned into products, processes and prototypes, we’re missing the opportunity to activate discovery research.

That’s what the College and Community Innovation Program (CCIP) was designed to do.  It’s Canada’s only federal fund dedicated to supporting polytechnic and college applied research – connecting discovery to deployment and helping businesses bring innovation to market.

Just last year, Canada’s polytechnics completed thousands of applied research projects with industry partners, engaging nearly 20,000 students in hands-on innovation that helped businesses grow and graduates find jobs.

Yet CCIP funding was not just ignored, it is poised to fall back to pre-pandemic levels.  At a time when government is rightly focused on productivity, competitiveness and building things at home, neglecting this program is a mistake.

Canada is investing heavily in the front end of innovation but overlooking follow-through – the stage where ideas are tested, refined and scaled through industry collaboration.  That’s the role applied research plays and it’s the missing piece in our national productivity strategy.

Across the country, polytechnics are already advancing the very priorities this government has emphasized.  They are helping firms of all sizes decarbonize and improve operational efficiency in energy, agriculture and mining.  They are working with Canadian companies in aerospace and defence to enhance productivity and national security.  They are supporting healthcare innovation through rapid prototyping and testing of new technologies.  And they are applying artificial intelligence to real-world challenges in manufacturing, construction and logistics.

If Canada wants to build more homes, deliver more energy to the world, rebuild its military and become a more innovative economy, it needs to connect discovery to deployment.  That means sustained investment in applied research.  These collaborations are where innovation happens: in labs, on manufacturing floors and in classrooms where theories are tested and ideas deployed.

Crucially, these applied partnerships ensure that businesses retain ownership of their intellectual property, a model that accelerates commercialization and encourages companies to reinvest and scale in Canada.

The economic returns on applied research are significant – every dollar invested in polytechnic applied research generates between $8.09 and $18.49 in economic and social return.  At a time when Canada is in desperate need of innovation, SME growth and productivity, the lack of investment in a proven winner is puzzling.

The issue isn’t whether we value research; it’s whether we choose to invest in the entirety of the ecosystem.

Time and again, funding flows to headline projects and international recruitment, while the rest of the innovation pipeline is ignored.

Canada needs more than world-class discoveries.  It needs the capacity to translate them into impact.  That means supporting SMEs and entrepreneurs to adopt new technologies, develop prototypes and improve processes – the kind of applied work that delivers tangible economic returns.

To close Canada’s productivity gap, we must stop mistaking prestige for progress.

Canada’s discovery investments will only pay off if we also invest in the systems that turn research into results.  The expertise and innovation we’re searching for abroad already exist in our own backyard.  Canada doesn’t need to import innovation – it needs to build it here at home.

Vincent Custode is the Director of Policy at Polytechnics Canada, a national association of the country’s leading polytechnic institutions.

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