COVID, Confederation, and Innovation

Picture of two white men with the text: COVID, Confederation, and Innovation David Castle: Professor, School of Public Administration and Gustavson School of Business, University of Victoria Peter Phillips Ph.D.: Distinguished Professor and founding director, Centre for the Study of Science and Innovation Policy (CSIP), Johnson Shoyama Graduate School of Public Policy, University of Saskatchewan


David Castle

School of Public Administration and Gustavson School of Business, University of Victoria


Peter Phillips

Centre for the Study of Science and Innovation Policy (CSIP), Johnson Shoyama Graduate School of Public Policy, University of Saskatchewan

Distinguished Professor and founding director

Describing and evaluating a country’s innovation system is conceptually and empirically challenging work. The two of us have for years been exploring the system, both at the national level and in the context of industrial and technological innovations at the local and regional level. Now we have led a team to explore the middle space – provinces and territories. 

Together with our colleague Bruce Doern, we undertook a study of the Canadian innovation system, published in 2016 as Canadian Science, Technology, and Innovation Policy: The Innovation Economy and Society Nexus. Like any study of national innovation systems, we held some institutional and organizational dimensions as constants to allow sharper focus on policy processes and implementation dynamics that were of interest to us. We could see      for example, how science for policy was distributed across departments and agencies, growing steadily since the 1970s in terms of impact, but yet rarely a point of discussion in the House of Commons. Regarding policies for science and innovation, we could see the effects of supply-side economics, recapitalization of infrastructure, and experiments in the geography and scale of innovation.

Our approach in our work with Doern was consistent with most of the scholarship about national systems of innovation that creates a portrait of innovation on the canvas of a nation state. To the extent that researching and writing a book is a sense-making project, this approach generates a coherent account. Yet the national systems of innovation approach may portray more coherence than actually exists. Being interested in testing this idea and wishing to deepen the state of knowledge about Canadian innovation, we embarked on a study of science, technology and innovation policy in Canada’s provinces and territories in 2019, to be published by the University of Toronto Press next year. 

Provinces and territories indisputably shape the regional cultural, political and economic context for science, technology and innovation (STI). For example, provinces create municipalities, which are the context for most STI related expenditures and value creation. Provinces and territories also create and significantly fund universities, colleges and technical institutes. Since provinces and territories are responsible for delivering most health services, they also take a keen interest in medical and health related research. They also regulate most firms, sectors and commercial transactions, and they also manage most labour and environmental law. 

With these constitutionally-empowered levers, one might think that there would be more overt or at least consistently identifiable sub-national STI policies advanced by provinces and territories, but that is not the case. Instead, provinces and territories define the context for implementing mostly federal STI policies, programs and initiatives – even if they have not contributed much to their design. It is at the sub-national level that we begin to see the coherence of a national innovation systems approach fade away. What we have learned is that the federal government tends to be the policy lead for STI in Canada, but once the tune has been called, provinces and territories rarely join in partnership in the same key or same tempo. Whether working alone or with the federal government, policies, programs and initiatives follow idiosyncratic trajectories in the provinces. Certainly, at the level of implementation, provinces and territories follow their own ideas and interests to create or modify institutions and programs. They rarely draw inspiration from other provinces and only recently have some provinces taken direct interest in how STI policy is developed and implemented in other jurisdictions like Japan, Germany the UK and Israel. Although some form of STI policy making at the sub-national level is increasingly common, the overall balance is tipped toward implicit rather than explicit policies. This gives rise to the aura of STI policy in the provinces and territories as a post-facto rationalization rather than a policy driver, often visible only when a past government’s programs is rebranded as those of their successor’s. Because STI policy does not play a conspicuous role in program design and delivery, program evaluation is often incapable of finding compelling evidence that STI policy has had a differential impact on innovation. 

How much does any of this matter? At the start of 2020 we could have concluded that we have a system coordination problem between levels of government that might continue Canada’s downward trajectory in innovation performance and business competitiveness. This is hardly a new concern but we would be able to argue that we had better evidence for it – a small academic victory that might be taken up by the handful of officials interested in STI policy. But that was then and this is now – all of our socio-economic problems are compounded and exacerbated by the COVID-19 pandemic. 

As part of the Rebuild Canada series launched by the Public Policy Forum, David Dodge has recently contributed a disturbing analysis of Canada’s post-pandemic predicament. We were already amassing considerable foreign debt, but the pandemic is now providing extra stress on the Canadian economy as we amass the largest public debt ever through social spending, to relieve Canadians of some of the burden of the pandemic. Dodge argues that we must become more innovative and add value in areas where we have core strengths, including: enhanced digitization in the production of goods and delivery of services; extending the life of an increasingly clean resource sector while rebalancing it toward higher value-added products; maximizing participation in the labour force and improving worker adaptability to new circumstances; and making public services more effective and efficient.

We might add to the list rather than argue with any item on it. But let us accept that Dodge is right that we have to climb the twin mountains of foreign debt and COVID-related public debt and that he has correctly identified areas of core strength where we should focus first. The challenge is that while his message was, to a great extent, meant for decision-makers in Ottawa to develop a plan to tackle ongoing deficit and newly incurred debt, all of the solutions he proposes track back to the provinces and territories holding the levers of control on cities, businesses and employers, higher education, health and the environment. 

Setting aside galvanizing rhetoric about ‘everyone being in this together,’ we know that in good and bad times that federal, provincial and territorial governments do not all pull in the same direction (and indeed, sometimes cities are at odds with their provincial masters). We already know this to be true in the case of the reaction to the Government’s September Speech from the Throne in which COVID recovery – ‘building back better’ – was explicitly linked to policies that would make the recovery ‘green.’ Already, the top four fossil fuel energy producing provinces, most notably Alberta, have publicly challenged the federal government’s approach. We are not making a prediction about solidarity on STI policies, programs and initiatives that will help us exit our current financial predicament, and neither are we suggesting that we need constitutional reforms to get the job done. We are concluding, however, that for the past 30 years in our analysis, provincial and territorial autonomy in STI policy has led to a solid track record of disunity, sometimes leading to missed opportunities but sometimes delivering strong innovation and growth. If we are going to have a strong post-COVID recovery, we might need to change the political rhetoric about how we think about the confederation, working to engage rather than isolate the provincial and territorial governments that are essential to implementing innovation strategies.