Canada’s a key AI innovator but American IP protection causes brain drain and destroys Canadian innovation.

It has impressive research bench strength. It has billions of federal dollars for the taking. It’s kind of a nice place to live. But when it comes to turning knowledge of artificial intelligence into companies, products and investment, Canada is lagging behind – and, some experts argue, actively shooting itself in the foot. Why give up all that brain power to Silicon Valley? That was a major line of questioning as Prime Minister Justin Trudeau spoke recently with tech journalists on a niche New York Times podcast. “We’re proud of Canada’s early role in developing AI,” Trudeau said on Hard Fork, noting that many breakthroughs have happened because Canadian scientists are well-funded. In 2017, Canada became the first country to have a national AI strategy. It launched a second phase five years later, allocating $443-million to connect research capacity with programs aimed at enabling commercialization. This year’s federal budget included an additional $2.4-billion investment in AI. And the government has boasted that Canada has 10 per cent of “the world’s top-tier AI researchers, the second most in the world.” Among them are two so-called godfathers of AI. But Ottawa is “fighting to make sure we keep our skin in the game,” Trudeau told the podcast hosts. He made the pitch, saying Canada has many of the ingredients it needs: among other things, clean energy, a good quality of life for workers and government programs to encourage the sector. In spite of that, Canada hasn’t always been “great at commercializing,” Trudeau conceded. More than that, Canadians have “fallen far behind,” argued Benjamin Bergen, president of the Council of Canadian Innovators, which represents the tech sector. The government spent “a tremendous amount on the talent side of the equation,” he said recently, but not on converting it “into building companies.” Bergen said the government has “institutionalized the transfer of our AI intellectual property to foreign firms.” The government’s 2022 strategy update promised that the country’s three AI institutes are “helping to translate research in artificial intelligence into commercial applications and growing the capacity of businesses to adopt these new technologies.” But Bergen argued an AI strategy focused on commercialization must start with Canada owning its own IP. “You cannot commercialize what you don’t own. Intellectual property lawyer Jim Hinton has been trying to quantify that problem. And the numbers show “a train wreck I’ve been watching happen in slow motion,” he said. About three-quarters of patents produced by researchers who work for Toronto’s Vector Institute and Montreal’s Mila leave the country, and most of these are in the hands of Big Tech, Hinton’s research has found. Another 18 per cent of the 244 patents he tracked – 198 from Vector and 46 from Mila – are now owned by North American academic institutions. Just seven per cent are held in the Canadian private sector. Of the foreign-owned patents, the largest number, 65, went to Uber, while 35 landed with the Walt Disney Company. Nvidia, which recently displaced Microsoft as the world’s most valuable company, got 34. IBM ended up with 15 and Google with 12. A handful of the patents were co-owned. Foreign companies benefit from Canada’s public funding, Hinton argued, and there are “no guardrails put on the ability for these foreign companies to basically pillage Canada’s really good AI invention.” Researchers can work at the AI institutes and foreign tech companies at the same time, Hinton said, charging that this is what allows the tech giants to take advantage. The Canadian Institute for Advanced Research, which co-ordinates the government’s AI strategy, pushed back strongly on that assertion. Executive director Elissa Strome said a “small number of our researchers” have part-time employment in the private sector. “Those private-sector organizations own the rights to the IP that is generated by those researchers,” she said, but only when they’re on the clock for those companies. Strome said it’s long-standing practice in Canadian research “that there are relationships around contract research with industry,” and “a really strong firewall” is in place between IP generated via public funds at the AI institutes and that which is generated through private funds.