Canada's research dilemma is that companies don't do it here

I've said it before - what Canada is doing is simply not working. And if its not working, why are we doubling down on the same old strategies and ruining the research that Canada does well? 

The paradox, he says, is that Canadian taxpayers have spent a fortune on R&D tax credits. The 2011 Jenkins report showed that as a percentage of GDP, Canadian R&D tax incentives were higher than anyplace else. But as Barlow showed, Canadian R&D still lags behind.

The reason, Smardon concludes, is that while taxpayers fork out for R&D, industrial R&D doesn’t happen here but in traditional R&D hubs abroad. He says that free trade agreements and a longstanding view by Canadian governments that business knows best mean it’s very difficult to put conditions on how that money is spent.

I don't have the solution. Maybe, as the article implies, we need to rethink our commitment to free trade. If it isn't serving Canada's interests, then we shouldn't so it. At the very least we need to launch a serious review of the various free trade agreements and the effects that they have had. Do what we can to keep the parts that are benefitting us, and try to rejig the parts that are hurting us. 

Maybe R&D benefits should be phased in over several years, be contingent on the companies R&D investment increasing each year, and be back-loaded so that most of the R&D tax credit can be claimed only after the company has shown that it stayed in Canada.

Maybe Canadian industry should be left to sink or swim on purely capitalist principles. Survival of the fittest. At the very least, it may make some of the so-called capitalists who actually benefit most from gov't subsidies, perhaps it will make them less vocal about gov't spending.

Perhaps we need to put emphasis on extraction companies paying in full the remediation and pollution costs. Perhaps the money needed for those costs could be put into a trust that the company pays up front, or perhaps an equivalent amount can be put into internal R&D that looks at reducing the damage their activities do to the environment or (in the case of oil companies) that encourages them to transition to renewables.

The key here is that business as usual can not be accepted anymore. And if that means we have to rethink some basic assumptions about how we do business, well, then we should rethink them.