The Future of BioInnovation: What Canada Must Do Now to Lead

Canada is making a series of deliberate choices about its economic and strategic future. We are diversifying trading partners, investing in domestic capacity and strengthening our commitment to national defence and security.

In bioinnovation, the equivalent choice is whether Canada will simply be a discovery engine or whether it will build and own globally competitive companies from that discovery. 

The hard truth is that right now, too much of the economic and strategic value generated by Canada’s innovation ecosystem leaves the country. We fund world-class discovery through universities, hospitals and public research programs, then watch the resulting intellectual property, talent and commercial upside migrate elsewhere once commercialization begins. 

This is not a new observation, but it is an increasingly urgent one.

Why Bioinnovation Is Critical to Canada’s Future

Bioinnovation sits at the intersection of Canada’s most pressing priorities: health security, economic resilience and national defence. It is a sector where the ability to translate discovery into domestic capability matters – not just for growth, but for sovereignty. 

If Canada wants to lead, it must make a deliberate national choice: to build a system that consistently turns world-class science into globally competitive Canadian companies.  

Where Canadian Bioinnovation Is Today

The problem is not at the beginning of the pipeline. Canada’s scientific research output punches above its weight. And increasingly, it is not at the end either.

Canada is making important progress in filling domestic gaps to support later-stage growth through initiatives such as the strengthened Venture Capital Catalyst Initiative, BDC’s dedicated life sciences venture fund, the recently announced Canada Strong Fund, and Buy Canada procurement initiatives. 

These are important and necessary tools. A longstanding reliance on foreign capital at these stages has meant exporting too much of the value and returns these companies generate. But even the most sophisticated funding mechanisms can only invest in what exists.

That is the core issue.

Canada’s Structural Gap: Strong Science, Weak Company Creation

The most critical gap in Canada’s bioinnovation system sits between discovery and scale-up. It is often described as the “missing middle”, but in practice, it is a company creation gap.

Turning a scientific asset into an investable company requires more than capital. It demands purpose-built company formation that integrates experienced leadership, commercial R&D capacity, IP strategy, clinical and regulatory planning and market discipline from the outset. This work happens early, when risk is highest and private investment is least available, but is essential to bridge the gap between research and scale.  

Without it, there is nothing to grow.

Bioinnovation‘s Role in Economic and National Security

This is not just an economic issue. It is a strategic one.

Countries around the world are treating biotechnology as core infrastructure. It underpins health security, economic resilience, advanced manufacturing, national defence, and global competitiveness.

Life sciences are inherently dual-use. The same platforms that support military readiness also strengthen civilian health systems and pandemic preparedness. Investments in biomanufacturing, advanced therapeutics, diagnostics, and data-driven health technologies deliver returns across defence, healthcare, and exports.

Lessons from Global Bioinnovation Leaders

Other countries are not only funding science that supports national and health security objectives. They are building systems that turn science into companies – and companies into global leaders.

The United States offers a clear example. Early-stage, mission-driven investment – through agencies such as DARPA – helped support technologies that would later underpin companies like Moderna. This is not just about funding research; it is about building pathways from research to company creation, aligned with national priorities. 

Canada’s own Defence Industrial Strategy identifies medical countermeasures as a sovereign capability. That recognition creates an opportunity to align research, commercialization and industrial development in a way that strengthens both national security and economic growth. 

What Canada Must Do Now

There is no single solution, but four actions would materially strengthen our position: 

1. Make company creation a national priority

Canada’s innovation system is still built around funding research and scaling companies. It must explicitly support the stage in between by investing in organizations and platforms that combine capital, expertise and operational support to turn science into investable companies. 

Over the past decade, Canada’s life sciences sector has grown significantly and has been one of the strongest-performing areas for venture investment. We don’t need to invent a new model. We need to scale what is already working. 

2. Better align early-stage and growth capital

Recent initiatives are critical for mobilizing later-stage capital. But early-stage company creation remains disconnected from many downstream funding pools. 

Institutional investors are not in the business of incubating emerging companies. They need investable opportunities with clear governance, milestones and demonstrated global potential.

Better coordination would help companies built in Canada move more efficiently from formation to scale – and remain anchored here as they grow. 

3. Align with Canada’s defence priorities

Canada’s Defence Industrial Strategy creates a powerful, mission-oriented framework and a moment of extraordinary opportunity for life sciences.

We must seize this opportunity to double down on the research-to-commercialization pathways that strengthen public health preparedness, support the Canadian Armed Forces, and build globally competitive life sciences companies. 

Leveraging Canadian research strengths in this way advances defence readiness while anchoring industrial growth at home

4. Invest in talent that builds companies

Canada has deep scientific talent, but company building requires a different skill set. 

Experienced operators – leaders who have built and scaled companies – are critical to success. 

We need to do more to attract, develop and retain this talent in Canada. 

Without it, even strong ideas will struggle to become successful companies.

From Investment to Long-Term Impact

Canada does not lack ambition. What we lack is cohesion.

Important pieces are now in place: strong research, growing pools of capital and a renewed focus on domestic procurement and strategic sectors. The remaining gap is ensuring these elements are connected by a system that consistently produces companies capable of absorbing that capital and delivering on those national priorities.  

A deliberate focus on company creation is a critical part of completing that system. 

Canada’s life sciences future will be determined not only by what we discover, but by what we can build, scale and own.

The opportunity is clear. It’s time to connect the pieces.