2025 Federal Election Primer: What Canadian Innovators Need to Scale

With Canadians set to head to the polls as early as this spring, our country finds itself at a pivotal moment. Rising costs, lagging productivity, global economic uncertainty, and geopolitical instability are reshaping the landscape for businesses and workers alike. From escalating U.S. trade protectionism to supply chain disruptions and the rapid emergence of artificial intelligence, Canadian firms are operating in an increasingly complex and competitive environment.

Amid these challenges, Canada’s top innovators are building the solutions, jobs, and technologies that will define the next era of economic growth. But they cannot do it alone. If Canada is to compete in a world where economic security and technological leadership go hand in hand, the federal government must step up with a strategic policy agenda that enables high-growth firms to scale, commercialize, and lead.

This is why the Council of Canadian Innovators (CCI), Canada’s 21st-century business association, is releasing “What Canadian Innovators Need to Scale”, a federal election companion document outlining the policy changes needed to ensure Canada’s innovation economy thrives. Political parties crafting their platforms must recognize that the status quo is no longer enough. Canada must choose: Do we continue with policies that leave our most innovative companies struggling to scale? Or do we take bold action to strengthen our economic resilience and global competitiveness?

In working with our 165+ homegrown member companies, CCI has identified the critical policy levers that will empower these scaling companies to win globally. These recommendations focus on strengthening economic resilience, modernizing regulatory frameworks, and ensuring that Canadian firms—not foreign multinationals—benefit from the country’s innovation economy. As political parties develop their platforms, they must prioritize policies that:

1. Make Canada’s Tax System Globally Competitive

• Modernize the Scientific Research and Experimental Development (SR&ED) tax credit to better reward innovation and commercialization.
• Scrap proposed capital gains tax increases that disincentivize investment in Canadian technology firms.
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2. Strengthen Canada’s Security and Economic Resilience

• Align defence and security investments with economic growth by supporting Canadian firms in critical technology sectors such as AI, cybersecurity, and quantum computing.
• Establish a national economic security strategy to mitigate the risks posed by foreign takeovers and unfair trade practices.
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3. Own and Commercialize Canadian Intellectual Property (IP)

• Build national leadership on IP commercialization, following successful models like Axelys (Quebec) and IPON (Ontario), and continue to support the Innovation Asset Collective.
• Ensure federal research funding is tied to strong IP retention and commercialization strategies, so Canadian breakthroughs generate economic returns at home.
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4. Reform Underperforming Government Incentive Programs

• Reallocate resources from ineffective programs like the Global Innovation Clusters to initiatives that deliver measurable economic outcomes.
• Streamline regional development agencies to ensure funding is driving firm-level growth, not bureaucratic overhead.
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5. Seize the AI and Deep Tech Opportunity

• Invest in domestic AI and compute infrastructure to reduce Canada’s dependence on foreign technology giants.
• Prioritize Canadian firms in AI commercialization, ensuring that homegrown companies—not global platforms—benefit from Canada’s AI leadership.
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6. Modernize Governance to Support Innovation

• Merge and modernize federal standards bodies to make regulatory processes more agile and innovation-friendly.
• Expand regulatory sandboxes to accelerate the testing and deployment of new technologies in Canada.
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7. Adopt a Strategic Approach to Trade

• Strengthen Canada’s trade position by integrating economic security into trade policy and ensuring that Canadian IP and innovation assets are protected from predatory foreign investment.
• Rebuild government-industry cooperation on trade strategy to counter growing protectionism from the U.S. and other major trading partners.
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8. Use Government Procurement to Drive Innovation

• Implement a Buy Canadian Tech strategy, prioritizing domestic technology firms in federal procurement to support growth and commercialization.
• Reduce procurement barriers that prevent Canadian innovators from competing fairly for government contracts.
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The 2025 federal election presents a rare opportunity for Canada’s political leaders to put innovation at the heart of our economic strategy. Innovation is not a niche sector—it is the engine of prosperity, competitiveness, and economic security. Yet for too long, Canadian policymakers have taken a passive approach to scaling our most promising companies, allowing foreign firms to dominate markets and extract the value of Canadian ingenuity.

The next government must do better. It must actively equip Canadian firms with the tools to scale, ensuring that the jobs, wealth, and technologies of the future are built here, not abroad. Furthermore, it must start purchasing Made-in-Canada solutions that are already used around the world by governments, healthcare systems, enterprises, and defence establishments.

The message from Canada’s innovators is clear: We are ready to lead. The question is—will our next government give our homegrown companies the tools to succeed globally?

To discuss CCI’s federal advocacy on behalf of scale-up companies in Canada, contact Daniel Perry, Director of Federal Affairs for CCI, at daniel.perry@canadianinnovators.org.