Unlocking Canada's Biotech and AI Potential: Governance, Gaps, and Growth

Canada stands at a crossroads in biotechnology and artificial intelligence. Despite possessing world-class scientific talent and innovation capabilities, the country has yet to emerge as a global powerhouse in these transformative sectors. This challenge was recently explored in depth during a talk is biotech! podcast interview featuring Guru Singh, Founder and CEO of Scispot (a leading provider of AI-powered laboratory management solutions for life sciences), and Kevin Chen, CEO of Hyasynth Bio (a synthetic biology company developing cannabinoid production platforms).

The conversation revealed a central theme: Canada lacks dedicated government leadership specifically focused on biotechnology and artificial intelligence. Unlike other nations that have established specialized ministries or agencies, Canada has no Minister of Biotech or Minister of AI championing these critical fields. Singh argues that creating such roles and shifting research funding toward measurable real-world impact could be transformative for the country's innovation ecosystem.

This analysis examines the key barriers hindering Canada's biotech and AI growth while exploring how strategic governance reforms could unlock the nation's full potential in these sectors.

Canada's Biotech and AI Ecosystem: Promise and Paradox

Canada's biotechnology and artificial intelligence sectors present a compelling story of strong foundations yet underwhelming commercial outcomes. The country possesses exceptional research capabilities in life sciences and artificial intelligence, hosting over 2,000 life sciences firms that employ approximately 220,000 people, primarily focused on research and development in both public and private laboratories.

Canadian scientists have achieved historic breakthroughs throughout history, from the discovery of insulin and stem cells to cutting-edge HIV therapies, thanks to a robust innovation ecosystem comprising universities, research centers, and startups. In artificial intelligence, Canada was an early pioneer, boasting three national AI institutes (Vector Institute, MILA, and Amii) recognized as global leaders. The country produced luminaries like Yoshua Bengio and Geoffrey Hinton, who helped birth the deep learning revolution. Canada currently ranks fifth globally on the Tortoise Global AI Index, reflecting strong innovation and research inputs to its AI sector.

These strengths, combined with Canada's diverse talent pool and access to rich health data, provide the essential ingredients for success in biotechnology and artificial intelligence. However, alongside this promise lies a significant paradox. Canadian researchers excel at generating knowledge, with the country punching above its weight in top-cited scientific publications and AI research breakthroughs, but often struggle to translate discoveries into commercial products and domestic industries.

The Commercialization Challenge

Canadian life science companies have faced difficulty scaling to meet domestic needs. The country has transformed from being a net exporter of pharmaceuticals to a net importer, with its pharmaceutical trade deficit tripling since 2016. Today, an estimated 85% of vaccines and therapeutics used in Canada are imported from other countries.

In artificial intelligence, despite a vibrant startup scene, many ventures face the pull of larger markets and investors abroad. The result is that Canada's innovations often enrich others, as intellectual property and talent frequently flow to the United States or Europe, where there is greater capacity to commercialize and scale breakthrough technologies.

Structural Factors Contributing to the Innovation Gap

Several key structural factors contribute to this situation:

Fragmented Leadership Structure

Unlike peer countries, Canada does not have dedicated ministries or senior officials focused exclusively on biotechnology or artificial intelligence. Responsibility is distributed across multiple agencies. For instance, biotech falls under health regulators, science granting councils, and industry programs, while AI policy is handled within broader innovation and digital portfolios. This fragmentation means there is no single "owner" of a national biotech or AI strategy driving priorities.

As Guru Singh points out, Canada's lack of a biotechnology minister or AI minister reflects a gap in vision and coordination at the highest levels of government. Consequently, strategy can become siloed and reactive rather than proactive and coordinated.

Research-Heavy Funding Model

Canadian research funding has historically emphasized academic output (papers, patents) over downstream impact (startups, products, market share). Public funding mechanisms, such as federal granting councils and innovation funds, pour billions into research and development, but only a small fraction directly supports commercialization efforts.

In the life sciences, roughly 80% of available funding programs target research activities, with under 20% oriented toward bringing innovations to market. This imbalance leaves many promising Canadian biotech discoveries stranded in laboratory settings. AI entrepreneurs likewise cite a shortage of scale-up capital and procurement opportunities in Canada, leading them to seek U.S. investors or customers.

Market Size and Investment Scale Limitations

Canada's smaller market and financing ecosystem also play a significant role. Developing a new drug or advanced AI system is expensive and high-risk, endeavors often underwritten by massive U.S. venture capital and government investments. By comparison, Canadian firms face a thinner capital pool and often more conservative funding approaches.

The United States dominates global biotech value with nearly 59% of the total share, whereas Canada's share remains relatively modest. In artificial intelligence, the U.S. and China attract the lion's share of global private investment, significantly dwarfing Canadian totals. Despite recent growth in Canadian AI venture funding and talent development, the resource gap remains a reality that pushes companies to look abroad for opportunities.

Current Government Support vs. Structural Gaps

The Canadian government has certainly invested in these sectors, but efforts have been intermittent and spread across different programs without a unifying strategic framework. On the biotech front, there have been sizable one-time infusions. For instance, Budget 2021 earmarked C$2.2 billion to bolster domestic biomanufacturing and life sciences after COVID-19 exposed critical gaps in vaccine production capabilities.

Similarly, in artificial intelligence, the government launched the Pan-Canadian AI Strategy in 2017 (the world's first national AI strategy) and renewed it with a C$443 million expansion in 2021. Most recently, in 2024, Canada announced a major funding package of C$2.4 billion for AI, with the bulk aimed at expanding AI compute infrastructure and scaling businesses.

These investments are significant and welcome. Government spending has helped Canada train AI talent and jumpstart regional innovation hubs in Montreal, Toronto, and Edmonton. Thanks in part to federal funding, Canada's AI sector has seen year-over-year increases in AI professionals, patents, and venture capital funding, contributing to its strong global ranking.

Persistent Coordination Challenges

However, these well-intended efforts haven't fully overcome the structural gaps. A fundamental issue is coordination. Without a dedicated coordinating body or leader, Canada's support for biotech and AI remains a patchwork of initiatives rather than a cohesive mission. The lack of a central ministry means that there is no single accountable entity tracking the health of the sector or its outcomes.

Tellingly, there isn't even consistent government reporting on biotech or AI as distinct sectors. The government does not provide comprehensive data or reporting on the sector's critical success indicators, such as GDP contribution, job figures, number of firms, and growth metrics, making it difficult to measure progress. This stands in contrast to jurisdictions like the United States or United Kingdom that regularly benchmark their innovation economies.

Funding Sustainability Issues

Another gap is sustained funding mechanisms. Canadian R&D spending as a share of GDP has been on a long-term decline despite periodic cash injections. Canada has underspent the OECD average on R&D for decades, largely because both government and business invest less (as a percentage of GDP) than international peers. Short-term boosts have not altered the overall trajectory, suggesting a need for more stable, strategic investment rather than ad hoc programs.

The Translation Challenge

Finally, Canada's innovation system faces a translation challenge: moving from research to products. The system is often described as "heavy on R&D funding, light on commercialization supports." Federal programs like the Strategic Innovation Fund (SIF) and Canada Foundation for Innovation (CFI) provide vital fuel for research infrastructure and projects. However, far fewer resources go toward later-stage needs such as clinical trials, startup scaling, or adoption of AI solutions in industry.

The result is an attrition of Canadian innovations. The majority of Canadian life science products remain stuck in pre-market development stages, even as Canada leads the G7 in scientific productivity of clinical trials. In effect, Canada incubates ideas but others harvest their economic fruits.

This imbalance is also evident in bureaucratic complexity. Canadian innovators often navigate a maze of small funding programs, spending considerable time applying for grants, whereas U.S. counterparts can secure larger one-stop grants from agencies like the NIH or DARPA.

Global Benchmarks: How Other Nations Catalyze Biotech and AI

Canada is not alone in seeking to grow its bioeconomy and AI capabilities, but peer countries have often been more proactive in aligning policy, investment, and institutional support. Examining international models provides valuable context and contrast for Canada's approach.

United States: Scale, Investment, and Mission-Driven Agencies

The United States has leveraged sheer scale and strategic focus to dominate both biotech and AI. While it has no single "Ministry of Biotechnology" or "Ministry of AI," it compensates with massive investments and specialized agencies.

In biotechnology, the National Institutes of Health (NIH) invests over $45 billion annually in medical research, far outstripping any Canadian equivalent. This sustained funding pipeline has led to the U.S. contributing the majority of new drug discoveries globally. In 2022, recognizing biotechnology as a strategic priority, the White House launched a National Biotechnology and Biomanufacturing Initiative, a coordinated "whole-of-government" effort that has already spurred $46 billion in combined public and private investment in America's bioeconomy.

Crucially, U.S. policy doesn't stop at research. Programs like the Small Business Innovation Research (SBIR) grants and the Biomedical Advanced Research and Development Authority (BARDA) specifically fund late-stage development and product commercialization, ensuring a pipeline from lab to market.

On the AI front, the U.S. advantage has been a thriving private sector (Big Tech firms pour billions into AI R&D) coupled with federal initiatives to coordinate AI strategy. The U.S. government established a National AI Initiative Office in 2021 and enacted the CHIPS and Science Act in 2022, which earmarks substantial funding for AI, semiconductor, and tech ecosystem development.

United Kingdom: Dedicated Leadership and Strategic Vision

The United Kingdom has increasingly treated biotech and AI as strategic sectors requiring focused oversight. Unlike Canada, Britain has appointed ministers and created offices specifically to champion these domains. In 2023, the U.K. government formed a new Department for Science, Innovation and Technology, and within it appointed a Minister for AI and Digital Government to steer AI policy and opportunities.

The U.K. also maintains a Minister of State for Science and Innovation and a Minister for Life Sciences position. These roles signal clear accountability: officials whose mandate is to advance AI adoption or grow the life sciences sector.

The U.K. complements this leadership with long-term strategy. It released a 10-year Life Sciences Vision in 2021, co-developed with industry and academia, setting ambitious targets such as becoming a global hub for biotech manufacturing and healthtech innovation. Implementation is coordinated by the Office for Life Sciences (OLS), a special unit that champions research, innovation, and the use of technology to transform health and care, acting across both the Department of Health and the business department.

Singapore: Coordinated Strategy and High-Impact Investment

Singapore, though much smaller, has managed to punch above its weight in both biotech and AI through centralized strategy and consistent investment. The government's approach is characterized by top-down coordination and clear national missions.

In biotech, Singapore decided two decades ago to build a biomedical industry from scratch. It established Biopolis, a sprawling R&D complex, and invested well over US$2 billion into biotech research infrastructure and incentives for global pharma companies to set up production in Singapore. Today, Singapore is a regional hub for biopharmaceutical manufacturing.

In AI, Singapore takes a similarly coordinated path. It launched a National AI Strategy in 2019 under its Smart Nation and Digital Government Office, identifying key "National AI Projects" in areas like healthcare, education, and smart cities. A dedicated National AI Office drives this agenda, ensuring that AI deployment aligns with economic priorities and public good.

Bridging the Gap: Toward Effective Governance and Impact in Canada

How can Canada turn its latent strengths in biotech and AI into realized economic and social benefits? The analysis points to several expert-driven, actionable steps that could markedly improve coordination and outcomes in these sectors.

Appoint Dedicated Leadership: Ministers of Biotech and AI

First and foremost, Canada should establish clear ownership of these agendas at the federal level. Guru Singh's call for creating a Minister of Biotechnology and a Minister of Artificial Intelligence reflects the need for champion ministers who focus daily on advancing these sectors.

Practically, this could mean assigning cabinet-level roles (or high-profile minister of state positions) with mandates to develop and execute national strategies for biotech and AI, respectively. Such ministers would coordinate across existing departments, aligning Innovation, Science and Industry programs with Health Canada regulations in the case of biotech, or working between ISED and the Digital Government Secretariat for AI.

The symbolic value alone is significant: it signals that Canada treats these industries as priorities on par with traditional sectors. Beyond symbolism, a dedicated minister can convene stakeholders, streamline interagency efforts, and troubleshoot barriers in ways that fragmented responsibilities cannot.

A Canadian Minister of Biotech could champion initiatives like a National Life Sciences Strategy, ensure funding programs are coordinated, and serve as a one-stop advocate for biotech entrepreneurs navigating government. Likewise, a Minister of AI could oversee everything from AI research centers and computing infrastructure to commercialization and AI governance.

Create a National Office or Council for Biotech and AI

Hand in hand with ministerial leadership, Canada would benefit from establishing permanent national offices (or councils) that bring coherence to biotech and AI initiatives. An Office of Biotech could be formed, similar to the U.K.'s Office for Life Sciences, to unite disparate efforts under one umbrella.

This Office of Biotech could report to the proposed Minister of Biotech and include representatives from industry, academia, and provincial governments. It would monitor key performance indicators (such as biotech's GDP contribution, jobs, clinical trials, venture funding) and issue annual "state of biotech" reports to inform policy. It would also coordinate regulatory modernization and work closely with the health system to encourage adoption of homegrown innovations.

Similarly, an Office of AI could ensure a coherent approach to AI research, talent retention, industrial adoption, and ethics. It might oversee the rollout of federal AI investments and serve as the central hub for AI stakeholders.

Shift Funding from Pure Output to Impact and Scale

Canada's funding model for innovation needs recalibration. The goal is not to spend less on research (basic R&D is the lifeblood of innovation and should continue) but rather to balance the portfolio by significantly boosting support for commercialization, scale-up, and adoption.

Currently, roughly 80% of life sciences funding supports research versus only approximately 20% toward commercialization stages. A systematic review of all biotech and AI-related funding programs is recommended, with an eye to reprioritizing spending toward later-stage impact.

Concretely, the government could redirect a portion of existing funds or introduce new programs that directly assist in "bringing discoveries to market." For instance, expanding the mandate and budget of the Strategic Innovation Fund to create a dedicated Biotech Scale-Up Stream that offers large, follow-on grants or loans to promising companies moving from prototype to product.

Criteria for academic grants could be updated so that a percentage of federal research funding is conditioned on an impact plan, a simple outline of how the research could translate into real-world application, with dedicated funds available to pursue those translational steps. As Guru Singh emphasizes, focusing on measurable impact over just research output can be operationalized through such metrics.

Invest in Enabling Infrastructure and Talent Retention

Another high-impact move is to invest in the hard and soft infrastructure that these sectors require to flourish. On the hard side, one pressing need is computing capacity for AI. Despite Canada's strengths in AI research, it currently sits last among G7 countries in AI compute capacity, creating a bottleneck for researchers and companies that need access to powerful computers.

The recent budget allocating $2 billion to an AI Compute Fund is a step in the right direction. Swift implementation of this fund is crucial: it should establish world-class supercomputing hubs available to AI startups and researchers nationwide.

In biotechnology, enabling infrastructure includes advanced bio-manufacturing facilities (for vaccines, biologics, cell therapies) and high-containment research labs. The government's investments in biomanufacturing capacity post-pandemic should continue with a long-term view, ensuring that Canada can produce at least a significant percentage of its own vaccines and biologic drugs by 2030.

Soft infrastructure is about skills and people. Canada needs to not only train but retain top talent in AI and biotech. This means expanding scholarships and fellowships in these fields while offering attractive career opportunities domestically. Governments can introduce "Canada Innovator" visas or immigration streams to recruit global experts, and perhaps more importantly, create incentives for Canadian graduates to stay.

Streamline Regulation and Procurement for Innovation

Governance is not just about funding and organization; it's also about creating an environment where innovation can thrive. For biotech, this means a regulatory system that is agile and responsive to emerging technologies. Canada should modernize approval pathways for gene therapies, AI-driven diagnostics, or novel biotechnology so that companies can pilot and launch products in Canada without undue delay.

Additionally, government procurement can be a powerful tool to support innovators. Public healthcare systems across provinces could agree to pilot Canadian-developed health AI solutions or prioritize domestic biotech products (once approved) in purchasing, giving local firms a valuable first market.

Foster International Partnerships and Learning

Canada should leverage international collaboration as part of its growth strategy. Establishing bilateral programs with the U.S. on biotech or with the U.K. on AI commercialization can provide Canadian firms access to larger markets and investment pools while keeping their base in Canada.

In AI, participating in global forums ensures Canada helps shape norms and can bring home cutting-edge regulatory ideas that balance innovation and ethics. The key is strategic integration into global value chains and innovation networks to amplify Canada's efforts at home.

A Roadmap for Canada's Biotech and AI Future

Canada stands at a pivotal moment in its biotech and AI journey. The country has accomplished the challenging task of building world-class expertise, fostering brilliant minds, top research institutions, and promising startups in both domains. The challenge now is to equip this ecosystem with the right governance and support to flourish.

The analysis suggests that what Canada needs most is intentionality: intentional leadership, intentional funding focus, and intentional coordination. By appointing dedicated leaders and creating structures that break down silos, Canada can give biotech and AI a seat at the cabinet table and a voice in policy decisions. By reorienting funding toward impact, it can ensure that taxpayer-funded research translates into jobs, companies, and improved quality of life.

The path forward will require concerted effort from government, industry, and academia. Change won't happen overnight, as building an industry or transitioning research culture is a gradual process. However, tangible progress can start immediately. In the next year, Canada could pilot a Biotech Scale-Up Fund, convene a national biotech council, and task a committee with planning a cohesive AI strategy 2.0 that complements its investments in compute.

Within 2-3 years, we could see the first Ministers of Biotech and AI appointed, signaling a new era of focus. Over a decade, these moves could pay off in the form of Canadian biotech companies bringing novel therapies to global markets, and Canadian-developed AI solutions powering industries and public services worldwide.

The payoff is not merely economic (though the markets are indeed large, with the global biotech market expected to exceed $1 trillion by 2030, and AI projected to add trillions to GDP globally) but also societal. A robust biotech sector means better health and resiliency for Canadians, including local vaccine capacity and new treatments for diseases. Leadership in AI means not only economic growth but also the ability to shape AI in accordance with Canadian values like inclusivity, transparency, and equity.

Canada's biotech and AI sectors are on the cusp of a breakout. The key issues holding them back are largely within our power to address through smart policy and governance. It represents a nation-building opportunity: by nurturing these sectors, Canada can secure prosperity and global relevance in the next frontier of innovation.

The talk is biotech! interview between Guru Singh and Kevin Chen sounded both the alarm and the call to action. This analysis charts a possible way forward, one that blends visionary thinking with practical steps. Canada has the brain; now it must build the backbone and the bandwidth to fully leverage it. The moment is ripe to transform Canada's biotech and AI landscape from one of untapped promise to one of realized impact.