What Does Alberta’s Oil Patch Have to Teach Us About Canadian Innovation Policy?

By Jess Sinclair
CCI Director of Prairie Affairs

Since exploration of the Alberta oil sands began in earnest in the late 1960s, the province’s approach to economic policy has been anything but conventional.

Many people think of Alberta as the heartland of rugged “don’t tread on me” conservatism, but in actual fact, there is a remarkably rich history of forward-thinking leadership when it comes to the innovations that support extraction of the province’s energy resources — from sour gas to lithium.

But let’s focus on the oil sands here. Conventional oil had been a going concern in Alberta since the Dingman well was tapped in the spring of 1914, but as far back as the 1920s, chemists and engineers recognized that we would need a different approach to extract the heavier oil from the Athabasca oil sands.

Alberta established the country’s first provincial research and development agency — the Scientific and Industrial Research Council of Alberta (SIRCA) in 1921 to explore and commercialize ways of exploiting the province’s energy resources.

You may recognize SIRCA by its current name: Alberta Innovates. You might also be familiar with Steam Assisted Gravity Drainage (SAGD) — the groundbreaking technology allowed the province to unlock the fourth largest proven oil reserve in the world and billions in resource revenues since (nearly $17 billion last fiscal year alone).

Sometimes it pays for a government — even a conservative government — to figure out how to back a winning technology.

Alberta Technology and Innovation Minister Nate Glubish is fond of quipping that “every industry in Alberta is a technology industry.” He’s right. And Alberta’s original technology sector was the oil sands.

What’s more, throughout its history Alberta’s energy sector has been undergirded by intellectual property. Some of the biggest patent holders in Canada are companies that work in the oil sands.

So there are a few lessons policymakers can learn from the wild success of the province’s heavy oil industry:

1. Ideas matter, and when governments control the intellectual property, they can licence out those ideas to give private sector partners much needed freedom to operate. The Lougheed government’s focus on commercialization outcomes has paid dividends. In an economy where intangible assets are as critical as any natural resource, policymakers should focus on protecting and commercializing Canadians’ big ideas.
   
   
2. Economic ecosystems require local expertise. Government should revisit strategies that maximize public and private procurement opportunities for the local companies creating jobs and building communities here at home.
   ‍
3. Global value chains matter. Alberta leaders are keenly aware of how broader world energy politics affect the bottom line. Canada should be equally alive to how global value chains affect our bourgeoning IP-heavy sectors like semiconductors and medical devices.
   ‍

Canada’s lacklustre approach to research commercialization is structural, not cultural. Alberta has proven that governments can stand up responsive and thoughtful economic policies that support a key industry’s capacity to create jobs, enhance productivity and generate cash for the services we all depend on.

Policymakers are fond of shooting down the notion of “picking” private sector winners. How about we build them instead?

Jess Sinclair leads CCI’s advocacy efforts in the prairies, and can be reached at jsinclair@canadianinnovators.org.

‍

À propos du Conseil des innovateurs canadiens

Le Conseil des innovateurs canadiens est une organisation nationale basée sur ses membres qui remodèle la façon dont les gouvernements à travers le Canada pensent à la politique d'innovation, et qui soutient les entreprises d'envergure nationale pour stimuler la prospérité. Fondé en 2015, le CCI représente et travaille avec plus de 150 entreprises technologiques canadiennes à la croissance la plus rapide. Nos membres sont les chefs de la direction, les fondateurs et les cadres supérieurs qui sont à l'origine de certaines des entreprises à grande échelle les plus prospères du Canada. Tous nos membres sont des créateurs d'emplois et de richesses, des investisseurs, des philanthropes et des experts dans leurs domaines de la technologie de la santé, des technologies propres, de la fintech, de la cybersécurité, de l'IA et de la transformation numérique. Les entreprises de notre portefeuille sont leaders sur leur marché vertical, commercialisent leurs technologies dans plus de 190 pays et génèrent entre 10 et 750 millions de dollars de revenus annuels récurrents. Nous plaidons en leur nom pour des stratégies gouvernementales qui augmentent leur accès aux talents qualifiés, au capital stratégique et aux nouveaux clients, ainsi qu'à une liberté d'exploitation élargie pour leurs poursuites d'échelle à l'échelle mondiale.