IPIC Response to Federal Budget 2023

Yesterday, Deputy Prime Minister and Minister of Finance the Honourable Chrystia Freeland tabled the 2023 federal budget they are calling the “Made-in-Canada Plan.” With the pandemic in the rear-view mirror and Canada now in need of leadership on economic recovery, the budget does very little to support economic growth, and is virtually silent on incentives for Canadian innovative companies who hold intellectual property. 

“IPIC has spent significant time, over years, explaining to government the urgent need for economic policies that encourage Canadian companies to develop their intellectual property, protect it, and commercialize it in Canada and abroad,  said IPIC President and Chair of the Board Tim Lowman. “IPIC has urged the creation of comprehensive, coordinated IP policies covering technology transfer out of university research, first-patent subsidies, patent box tax incentives, and more.  To now see a budget with no content that moves Canadian intellectual property issues forward is profoundly disappointing.”

The budget was mainly focused on social programs, and with respect to industry issues only included three main themes: cleantech investments, healthcare spending, and support for the rising cost of living. To attract investments in new machinery and equipment, the budget proposes a 15% to 30% tax credit for eligible investments in green technology. On the healthcare front, the budget includes a Canadian Dental Care Plan, as well as further details on the recently announced healthcare transfers. To support Canadians with the rising cost of living, the budget proposes to introduce a Grocery Rebate, as well as a need to target “junk fees” charged by some companies.

“The recommendation I most often give to government on economic policy is to try and create a regulatory environment in Canada that encourages Canadian innovative companies to stay and one that attracts global IP-rich companies to come and set up shop…” said IPIC CEO Adam Kingsley “…and on the flip side of that coin, when companies holding IP as an output from a government funded subsidy get acquired by a foreign company, why aren’t there strings attached?”

The federal government is expecting a deficit of $40.1 billion in budget 2023-2024, a small reduction from the 2022 budget of $43 billion. The federal government states that they are projecting deficits to lower in subsequent years.  

IP Policy Issues to Note:

• Last year in Budget 2022, the federal government announced its intention to review the SR&ED program to ensure it is providing adequate support and improving the development, retention, and commercialization of intellectual property, including the consideration of adopting a patent box regime. Budget 2023 announced The Department of Finance “will continue to engage with stakeholders on the next steps in the coming months,” but with no specific commitment on introduction of the patent box regime.
• In Budget 2023, the government announced it will make the required legislative amendments to the Patent Act that they committed to under the Canada-United States-Mexico Agreement. Canada agreed to provide patent term adjustments as compensation to patent applicants who experience unreasonable delays in the issuance of their patent.
• Following the recent traction of private members Bill C-244 (Right to Repair) and C-298 (Interoperability), Budget 2023 announced that the government will work to implement their own right to repair system. With the aim of introducing a targeted framework for home appliances and electronics in 2024.
  • The government stated that they will launch consultations this summer, including on the right to repair and the interoperability of farming equipment, and work closely with provinces and territories to advance the implementation of a right to repair.

Assuming the right to repair system envisioned in Budget 2023 will be a standalone legislative and regulatory approach, this is one of the few bright spots for IPIC in this budget. IPIC recently recommended to Parliament’s Standing Committee on Industry and Technology (INDU) that the Copyright Act was not an appropriate statute to create and manage a right to repair system.

IPIC has regularly advised the government of the need to think proactively about intellectual property when providing large research grants or industry subsidies.  The organization has advised on several occasions that the government should assume that patents, designs, copyright, and trademarks will flow out of large research grants and subsidies.  IPIC is disappointed to see that no policies were introduced in Budget 2023 that would designate a small portion of industry funding announcements to be restricted for IP strategy and advice that a company will require to succeed in commercializing those ideas and inventions.

While IPIC may consider Budget 2023 to be a bust on both IP and economic growth policy, the Institute will continue to advocate for the introduction of IP policy incentives in 2023 and beyond.

Media contact:
Christina Locmelis, Director of Communications & Member Services, Intellectual Property Institute of Canada
clocmelis@ipic.ca