BIOTECanada welcomed the federal government’s 2024 Economic Statement’s measures aimed at increasing the availability of investment dollars and enhancing the ability of Canadian companies to effectively deploy those investments in Canada. The measures reflect BIOTECanada’s input to the government in the context of its pre-budget, Scientific Research and Experimental Development (SR&ED) & (Phase 2), patent box, and Biomanufacturing and Life Sciences Strategy development consultations.
The Economic Statement’s proposed measures of significance for Canada’s biotech sector include:
- $1 billion to recapitalize the successful and effective Venture Capital Catalyst Initiative (VCCI) which will significantly grow the availability of investment capital in Canada;
- Removing the 30% ownership cap on investments by institutional investors provides an incentive for pension plans to invest materially in Canada’s innovation sectors;
- Enhancing the SR&ED tax to support the more effective deployment of investment capital by early-stage companies; and
- Committing to the creation of an intellectual property Patent Box which will allow Canadian companies to reinvest commercial earnings into their operations which will in turn enhance the stickiness of Canadian companies.
Combined, the Economic Statement’s proposed measures will increase the availability of investment capital and enhance the ability of companies to effectively deploy that investment capital. Importantly, these measures will also make Canada a more competitive jurisdiction to create, scale up, and retain biotechnology companies.
The commercialization timelines and corresponding investment dollars required for biotech companies are unique. Canada’s biotech sector has successfully attracted over $23 billion in investments over the past four years. This provides a timely opportunity for the Economic Statement’s commitments to build on the momentum these investments have generated to create more companies and drive their growth to become Canadian-based anchor companies. In this context, BIOTECanada will work with the government to implement the Economic Statement measures and continue to advocate for a $350 million Life Sciences Fund under the Venture Capital Catalyst Initiative, and improved access to non-dilutive funding to ensure the unique financing needs of biotech companies are met.