About BIOTECanada
BIOTECanada is the national association representing Canada’s biotechnology sector. The more than 230 member companies of BIOTECanada reflect the broader Canadian biotech ecosystem including early stage/start-ups, multinational pharmaceutical companies, clinical stage pre-commercial companies, venture capital, universities, incubators, and accelerators found across the country with hubs in every province.
Opportunity for Canadian Leadership
As 2025 unfolds, Canada is faced with a turning point for our country. At risk are the generations of integrated North American economic growth. Canada is dealing with economic upheaval impacting every traditional valued sector of the economy. Addressing those impacts by generating effective, timely and competitive guard rails to protect and promote economic opportunities for Canada is imperative.
Federal government programs and private sector investment have generated unprecedented value emanating from the life sciences sector. Key federal commitments including the Biomanufacturing Life Sciences Strategy (BMLSS), Strategic Innovation Fund (SIF), the replenishment of the Venture Capital Catalyst Initiative (VCCI) and the recently established Health Emergency Response Canada (HERC), have placed life sciences as a preeminent and highly valued sector in Canada. These initiatives have helped to place Canadian life science companies at the forefront of global industry growth and expansion. They have also served to improve Canadian capacity toward economic and health sovereignty against a global reality of unprecedented competition for the next generation of innovative technologies, especially the life science expanse of platforms and products.
The life sciences sector in Canada has been able to generate more than $26 billion dollars of investment in recent years. Competitively the world looks to the Canadian sector for the quality of the research it generates and the highly skilled labour force supporting sector growth. These prized assets are the cornerstone of how the Canadian industry is looking to expand its value and grow operations in Canada. The core opportunity for the sector lies in its ability to translate world leading scientific discovery into development of products by attracting investment from within Canada and from international investors, while establishing a comprehensive regulatory regime enabling those products into use as healthcare solutions.
Given the current economic threats facing Canada, we need to secure the long-term potential and value of Canadian led scientific and innovation driven enterprises developing healthcare solutions for the global marketplace. As referenced, much has been accomplished in recent years. To truly capitalize on those previous milestones, Canada must continue to allow the sector to thrive and compete for investment. This can be accomplished with timely fiscal commitments, signalling to global partners that Canada values its capacity within the life sciences sector. Importantly, Canada needs to capitalize on the investments made to date and remain competitive against challenging global economic realities.
Today’s geopolitical uncertainty and detrimental tariffs will impact all components of the Canadian life sciences sector. This includes biomanufacturers, innovative medicine manufacturers, medical device developers and suppliers, research and development expertise, as well as specialized health delivery resources such as pharmacies and pharmacists.
Given the current reality of U.S. tariffs and the implications for Canada, the government must ensure medicines and all ancillary related products, vaccines, medical devices, and critical inputs for their manufacturing are explicitly excluded from any Canadian countermeasures, now and in the future, and emphasize to the U.S. government that tariffs should not be placed on healthcare products.
Now more than ever there is an urgent opportunity to capitalize and enhance Canada’s economic sovereignty in research and development (R&D) capacity, particularly as other OECD countries are increasing investments into their biotech sectors (Source: https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm). Other leading economic jurisdictions in the world are also investing heavily into their domestic life sciences sectors as they too understand the vital role biotechnology innovation is playing in the global economy, health security, and sovereignty.
Globally, the competition for biotech ideas, companies, talent, and investment has never been more intense, particularly from the United States. Accordingly, it is imperative Canada be more aggressive, bold and ambitious to establish a globally competitive innovation environment to fulfil the maturity and capacity envisioned in the Biomanufacturing and Life Sciences Strategy and encourage companies to invest and grow here in Canada. Technologies such as artificial intelligence (AI) in biotechnology can speed up drug discovery, deliver analytics, accurately diagnose medical conditions, edit gene structures, develop personalized medicine, and do much more to accelerate next generation biotechnologies.
BIOTECanada offers the following recommendations:
I. Ambitious Regulatory Leadership
An effective regulatory environment ensures safety while encouraging the introduction, acceleration, and adoption of biotech innovation. The speed at which our governments responded to the COVID-19 pandemic, whether to create and launch relief programs, simplify and shorten procurement processes or expedite clinical trials, shows we can and must aim higher. A high performing world class regulatory system that is predictable, efficient, consistent and transparent, avoiding barriers to business investment is key to cementing Canadian’s access to biotechnology innovation. A competitive regulatory system will accelerate the growth of Canadian companies and facilitate the attraction of innovation to Canada for Canadian patients. Canada’s ambition to be a world leading regulator is key, particularly as new game-changing technologies are developed and deployed such as mRNA, cell and gene therapies, gene editing, radiopharmaceuticals and artificial intelligence.
Health Canada significantly updated and increased the cost recovery fees charged to companies to review submissions in past years and continues to increase fees on an annual inflationary basis with the goal to address the volume of work as well as added complexity from globalization, technological advancement and more sophisticated data and systems such as artificial intelligence (AI). The predictability in regulatory program performance is vital to meeting the needs of Canadians and health innovation.
Recommendation:
Health Canada must be resourced to deliver services and expedite the execution on modernizing regulations to remain internationally competitive, meet performance standards, and follow through on Canada’s ambition to create a regulatory environment that is “Best in Class” to attract global biotech companies as investors/partners in the ecosystem and as providers of next generation of therapeutics for Canadians.
II. Increased Availability of Investment Capital
In today’s uncertain geopolitical environment, Canada must avoid any measures that create a significant disadvantage vis-a-vis our global competition in biomanufacturing and life sciences.
New investment and government support are key to driving innovation forward. Initiatives to mobilize pension funds are timely and important. The global competition for investment will go to where it is best rewarded. To capitalize on biotech’s generational moment, now is the time to accelerate access to capital.
Recommendations:
Grow Access to Venture Capital
The government should invest $350 million to establish the Life Sciences Venture Capital Catalyst Initiative (LS-VCCI), a life sciences venture fund. With a 2 to 1 investment match from private sector, the $350M foundational investment would bring the total investment envelope to $1 billion to be created and deployed over 10 a year horizon (@ $100 million year).
Non-dilutive Investment Capital
Non-dilutive capital is important for the early stage of company creation and growth. A non-dilutive funding measure would jump start Canadian innovation at an early stage and provide it with a stronger possibility of scaling and staying in Canada because it is funding without giving up any equity or ownership of the business. The Health Emergency Response Canada (HERC) represents an opportunity to address health emergencies and BIOTECanada supports the rapid deployment of non-dilutive funding directly to companies through HERC to address future needs. To build on the roll out of HERC, the Government of Canada should implement additional non-dilutive funding for companies to:
- Meet federal research and development needs of health security
- Increase private-sector commercialization of innovation derived from federal research and development funding
- Stimulate technological innovation
- Foster and encourage participation in innovation and entrepreneurship by women and socially/economically disadvantaged individuals
- Foster technology transfer through cooperative R&D between industry and research institutions
Recommendation:
Canada builds an additional non-dilutive investment pool to capitalize on and support the scaling up of the companies emerging from the biotech ecosystem with a 3.2% of the extramural research budget (~$320 million) minimum spend each year.
III. Competitive Tax Environment
Capital Gains Taxation
The capital gains tax rate increase will significantly undermine the competitiveness of early-stage, pre-commercial biotech companies for whom stock options represent a vital compensation tool which allows them to attract and retain top talent needed to drive innovation forward. Importantly, the proposed increase will negatively impact companies at a critical time as the sector is experiencing a period of growth due to an increased availability of investment globally and the deployment of the government’s Biomanufacturing and Life Sciences strategy with its corresponding investments. In this context, BIOTECanada strongly urges the government to maintain the existing rate for Canadian biotech companies and those in other similar innovation sectors comprised of early stage/pre-commercial companies.
Recommendation:
The government must cancel the previously announced changes to capital gains tax rate and work to ensure any future changes do not unduly impact smaller, early-stage, pre-commercial innovative company growth in Canada.
Boosting Scientific Research and Experimental Development
The scientific research and experimental development (SR&ED) tax incentives remains an important cornerstone for the sector’s performance. Expanding the eligibility, and limits for SR&ED, and developing a patent box mechanism are important measures.
Recommendation:
BIOTECanada strongly urges the government to take immediate steps to expediate initiatives to enhance the SR&ED credit and develop a patent box mechanism. These budget measures complement federal and provincial life sciences strategies and the company growth those policy commitments are driving.
IV. Improve access to vaccines for Canadians
Vaccines are proven to be effective and affordable, but Canada has fallen behind in protecting its citizens from vaccine preventable diseases. Vaccines are unique and possess features that are very different from other medicines and health interventions. With the resurgence of measles in recent months, a vaccine-preventable disease, Canadians have been reminded about the complexity and rapid development of public health risks faced by Canada in a global context. Vaccines can and do play a critical role in addressing many public health challenges. Where old vaccine preventable diseases, and novel infectious diseases emerge, our industry works to mobilize the full scope of our scientific and manufacturing resources to respond.
It is well proven vaccines are an important tool in the prevention of infectious diseases and contribute to reducing the use of healthcare resources and maintaining Canadians health and productivity. The World Health Organization (WHO) states “Immunization is a key component of primary health care and an indisputable human right. It’s also one of the best health investments money can buy. Vaccines are also critical to the prevention and control of infectious disease outbreaks such as what North America is experiencing with measles. Vaccines underpin global health security and will be a vital tool in the battle against antimicrobial resistance”.1 In Canada, the Canadian Immunization Guide says “Immunization is one of the most important accomplishments in public health that has, over the past 50 years, led to the elimination, containment and control of diseases that were once very common in Canada”.2
Despite the well-established value that vaccines provide, Canadian governments’ investments in vaccines is estimated to be less than 0.2% of total healthcare spending (excluding COVID-19).3 With such a strong value proposition for individual health, healthcare system efficacy and outcomes, industrial and social productivity, vaccines should be a cornerstone of Canadian healthcare management and be funded adequately to ensure the benefits from vaccination can be achieved by every Canadian and jurisdiction. Of all the public health strategies, few, if any, rival vaccines’ ease of implementation, efficacy, predictable outcomes, and sustainability. As Canada embarks on the next phase of public health preparedness, vaccine coverage gaps need to be addressed to improve the health security of Canadians.
Recommendation:
The federal government must plan for a recurring annual budget starting in 2025 to support Canadians’ access to innovative, effective, safe and cost-effective vaccines.