Honourable senators, today is World Intellectual Property Day, established by the UN’s World Intellectual Property Organization to build awareness of how patents, copyrights, trademarks and designs impact daily life and to celebrate the economic and social contributions of creators and innovators.

I want to focus on that second point: the contribution of IP to the Canadian economy.

Intangible assets such as IP, data and software now make up over 90% of the S&P’s market value. In the 1970s and 1980s, physical assets — things like natural resources and land — were overwhelmingly valued. That world is no longer. Today, investors look for companies that control valuable IP and data. They use those assets to control markets and capture superior economic rents from the work of others all around the globe. Think of the global efforts to control natural resources and land and you will have some sense of the battle that is currently raging to control intangible assets like IP. Those who control crucial IP can control access to markets and information.

But, globally, Canada has not yet adjusted to this highly technical, highly strategic global transformation.

Consider that about half of the patents that protect Canada’s publicly funded IP are transferred to foreign-owned entities once issued. As a result, that research output creates opportunities and wealth elsewhere in the world. The annual gross income earned from the IP licensed by Canadian universities produces a paltry 1.3% return on the $7 billion invested annually through university-based research in Canada.

We are investing in research without a modern strategy to protect and grow its economic value for the benefit of Canadians.

Some believe in the strategy of incentivizing foreign-owned tech giants to build IP branch plants or research facilities in Canada. But, yet again, the resulting IP leaves our country and creates wealth elsewhere.

Former Google CEO Eric Schmidt thanked Canada for the talent and IP that now underpins its business model. Some celebrated; I did not.

Canada’s IP problem results from a policy belief system that assumes that investments in research automatically convert into opportunity and wealth. This misconception has been sustained through both the Conservative government and the Liberal government who’ve each led our country for similar periods — over the last 40 years — where Canada’s living standards have declined steadily in relative terms. This trend is projected to continue — unless we change. We can quickly turn this around; we have the talent. But I fear that our investments in research will continue to diminish unless we finally implement a coordinated strategy that converts our best IP into, yes, Canadian jobs but also, even more importantly, into Canadian opportunities and Canadian prosperity.

Thank you, colleagues.