Overview of WD’s life sciences investment program in Western Canada

Under the Western Economic Diversification Act, 1988, WD is mandated to "promote the development and diversification of the economy of Western Canada and to advance the interests of Western Canada in national economic policy, program and project development and implementation." ¹

WD delivers financial assistance around three inter-related strategic outcomes: entrepreneurship and innovation, sustainable communities, and policy, advocacy and coordination. It is through the innovation priority that WD works to strengthen Western Canada's innovation system and increase the capacity of its knowledge-based economy.

Under the innovation outcome, WD has implemented six innovation objectives. These objectives support the goal of enhancing Western Canada's economic performance through strengthened regional innovation systems. The six innovation objectives are:

1. Enhancement of knowledge infrastructure and capacity
2. Increased technology research and development
3. Accelerated technology commercialization and adoption
4. Improved linkages among innovation system players
5. Increased innovation capacity of communities
6. Increased access to highly skilled personnel in innovative clusters.

WD invests and supports innovation in industries where there is demonstrated research and development and commercial strengths. Industries in which WD have provided investments and support include: life sciences, fuel cells, and environmental technology industries.

WD and the support of the life sciences cluster

In 2001 then Minister Ron Duhamel, Secretary of State for Western Economic Diversification, invited Dr. Henry Friesen, then Chair of Genome Canada, to consult with leaders in Western Canada on what was needed to build a strong and innovative health care system. Minister Duhamel challenged leaders:²

To reach consensus on the initiatives to be undertaken to strengthen our health research and commercialization activities in Western Canada.

The Western Canadian Task Force on Health Research and Economic Development, with the support of PricewaterhouseCoopers LLP (as the administrative body), organized the consultations.³  Over 300 leaders and decision-makers from over 100 organizations contributed to the consultations resulting in a series of forward-thinking recommendations that were intended to define a vision, create new models of cooperation and focus investments in health research and commercialization.

WD recognized that some of the recommendations could provide focus and guidance for future investments in the life sciences area.

Those recommendations focused on four priority areas that would provide leverage and competitive advantage to the research community:

1. Achievement of global excellence through a number of inclusive and well-supported managed networks.
2. Development of enough planned and focused capacity in and around the academic centres to respond to the new demands of the strategic priorities and managed networks, and to translate the new knowledge into better education and clinical practice
3. Establishment and ongoing commitment to harmonize health and bio-informatics information, patient registries and databases across disciplines and jurisdictions
4. Creation of seamless intellectual property and commercial development processes to bring new discoveries through business filters and intellectual property protection to investors and the market.

The life sciences investments reviewed during this study reflect the direction provided by Minister Duhamel's challenge and the four priority areas identified through the consultations.

WD's investments by pillar

In the project database, WD investments are categorized by pillar (strategic outcome), activities (innovation objectives), and sub-cluster (area of life science activity). WD investments reviewed during this study were made under the entrepreneurship and innovation pillar with the exception of one project made under the sustainable community pillar.

WD Investments by the six innovation objectives

The following list identifies each of the six innovation objectives:

1. Enhancement of knowledge infrastructure and capacity
2. Increased technology research and development
3. Accelerated technology commercialization and adoption
4. Improved linkages among innovation system players
5. Increased access to highly skilled personnel in innovative clusters
6. Increased innovation capacity of communities.

The percentage of investments reviewed during this study for each of the six innovation objectives are shown in Figure 6.1.

Figure 6.1 WD investments by the six innovation objectives
 

WD investments by sub-cluster

WD also categorizes investments in life sciences by sub-cluster. Rather than pursue a narrow innovation focus following a specific sub-cluster, WD has placed its investments in a broad cross-section of life science activity. In the list which follows there is some cross-over between sub-clusters, especially between biotechnology and health technology. Where practical, we have made adjustments to place project data under the appropriate sub-cluster. The sub-clusters are:

• Health Technology
• Genomics / Proteomics
• Biotechnology
• Ag Value-added
• Nutraceuticals
• Forestry
• Ocean Industries
• Wine Industries
• Other Technologies
• Multi-cluster

The percentage of investments reviewed during this study for each of the sub-clusters is shown in Table 6.1. The sub-cluster in which the largest dollar value of investments was made was Health Technology, accounting for 38 percent of the investments. The next largest investment was made in Genomics and Proteomics, in which 12 percent of investments were made.

Funds leveraged from WD's investments

WD's investments resulted in organizations being able to raise additional, leveraged funds from other public and private sources. The total cost of the 154 projects reviewed during the study was $474.9 million of which WD provided $130.8 million. In other words, every dollar invested by WD was matched by another $2.63 that was contributed by other sources. Table 6.2 summarizes the percentage breakdown of investments by funding source.

Table 6.2 Total Project Funds – 154 Projects

Total Project Cost	WD Investment	Balance of Project Costs
$474.9	$130.8	$344.1
100%	28%	72%

Table 6.3 summarizes the sources of additional funds and contributions making up the balance of project costs. Other federal investment in the projects was $56.8 million, or about 17% of additional funding. Contributions from provincial and other client sources were $143.0 million and $144.3 million respectively, with each accounting for about 42% of additional funding.

Table 6.3 Source of Funds Leveraged by WD Investment – 154 Projects (millions)

Total Funds Leveraged	Federal Investment	Provincial Investment	Other & Client Investment
$344.1	$56.8	$143.0	$144.3
100%	17%	42%	42%

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