“There are many opportunities for German-Canadian cooperation”

Simon Kennedy, Canada’s Deputy Minister of Innovation, Science and Economic Development, was a guest speaker at Atlantik-Brücke’s German-Canadian Conference 2023 in Ottawa. On the sidelines of the conference, we interviewed him about current challenges and areas of cooperation for Canada and Germany. 

The Inflation Reduction Act has raised fears by trade partners of the U.S. around the world. What are the challenges, and how can German-Canadian synergies contribute to overcoming them? Will there, for instance, be more joint projects like the Cellcentric Fuel Cell Project in Burnaby?

The Inflation Reduction Act (IRA) is of significant interest to Canada. The Government of Canada is diligently working to understand and manage its implications. Canada is committed to continuing to attract investments in the green economy, and has put in place targeted measures for this purpose, such as tax incentives designed to grow a number of industries and sectors in the green economy, including critical minerals, hydrogen and nuclear technologies, and zero‑emission vehicles. The Government has also committed approximately $20 billion over five years to the energy transition, which represents a significant investment considering Canada’s GDP is roughly one‑tenth of that of the United States.

Given our shared interests, there are no doubt many opportunities for further Canadian‑German cooperation […] in addressing the challenges and opportunities that have arisen as a result of the IRA.

Given our shared interests, there are no doubt many opportunities for further Canadian‑German cooperation to leverage the synergies of our respective economies in addressing the challenges and opportunities that have arisen as a result of the IRA.

For example, it is clear that our countries could explore potential opportunities for digital and emerging technology firms, which will strengthen bilateral digital cooperation and continue to drive innovation across industries in both Canada and Germany. For instance, Siemens Digital Industries Software has partnered with two leading Canadian incubators, ventureLAB and MaRS Discovery District, to support and accelerate the development of digital technologies.

Joint projects such as Cellcentric’s fuel cell development underscore how Canada’s value as an investment destination lies in our competencies, such as our long‑standing global leadership in hydrogen technologies. These projects take advantage of experience and expertise from both countries, which will help support the move toward climate neutrality on a broader scale. Canada would be supportive of more such projects in the future.

Which industrial transformation processes offer the greatest opportunity for German‑Canadian cooperation?

In the face of geopolitical instability and the global transition to a green economy, Canada’s industrial policy includes a focus on building strategic relationships—by leveraging existing ones and forging new partnerships or alliances—in key industrial sectors.

Regarding the green transition, the Canada‑Germany Hydrogen Alliance represents a significant milestone in Canada’s efforts to accelerate the international market rollout of green hydrogen. It sets the stage for new transatlantic cooperation and will help ensure that the infrastructure is in place to enable low‑carbon hydrogen exports from Canada to Germany in the coming years. Continuing to leverage this newly established process will offer the greatest opportunity for ongoing Canada‑Germany collaboration in a cleantech subsector.

Additionally, Canada is doubling down on investments that support national expertise in harnessing the digital revolution, underpinned by modern, fit‑for‑purpose rules for data privacy and artificial intelligence (AI) through a series of Canadian initiatives, including the National Quantum Strategy, the National Cyber Security Strategy, the Digital Charter, and the Digital Adoption Program.

Digital and emerging technologies have the potential to transform and lead to new innovations in all industrial sectors, and international collaboration is essential given the current geopolitical environment and competition to introduce cutting‑edge digital technologies to market.

For instance, AI systems have the capacity to radically change industrial processes. They have the clear potential to contribute to a greener future. However, while these systems have the potential to yield enormous benefits to society, experts have raised concerns about the unique risks associated with advanced AI systems in their rapid, large‑scale deployment. Collaboration with Germany and other like‑minded partners on the responsible development and careful deployment of advanced AI systems will ensure that the world reaps the benefits of the technology while mitigating potential risks.

How do we maintain self-sufficiency in strategic industry fields during times of global crisis? What role does friendshoring play in this context?

Laying the groundwork for self‑sufficiency in critical or strategic industrial fields during times of global crisis requires a multi‑faceted approach. While governments around the world have been looking inward and developing or reinforcing domestic capabilities, a key element of this approach will always be enhancing cooperation with allied partners to ensure mutual benefits.

Another crucial component of this approach is innovation, which is vital to resiliency and future long‑term global economic competitiveness. Companies of all sizes, non‑profit organizations, and academia can play an important role in building greater domestic self‑sufficiency by helping countries improve their ability to transform innovative ideas into commercial products. Increased ecosystem cooperation can help accelerate work to better prepare for future global economic shocks.

To succeed in the face of shifting geopolitical and economic contexts, Canada is taking a multi‑faceted approach that includes developing supply chains and value chains in strategic sectors such as life sciences and critical minerals, as well as ensuring greater cooperation with like‑minded trading partners such as Germany.

COVID‑19 reinforced the importance of innovation and significant breakthroughs in critical sectors such as health sciences and technology. The Government of Canada’s Biomanufacturing and Life Sciences Strategy aims to build resilience within this sector by developing a long‑term strategy to support the development of novel and disruptive health technologies, including domestic capacity to develop and produce vaccines and therapeutics. Likewise, the Canadian Critical Minerals Strategy reinforces the importance of building a strong critical minerals ecosystem. This strategy aims to create good jobs and a globally competitive Canadian economy, and it better positions Canada as a reliable supplier of critical minerals to our allies.

From a Canadian perspective, friendshoring strategies are being pursued for specific supply chains whose security and resiliency are critical for our future economic well‑being.

Friendshoring allows like-minded partners to diversify their supply chains by relocating them to countries with shared interests or values. This entails coordinating joint strategies to secure the supplies of critical inputs and technologies and create shared markets in support of net‑zero industries. From a Canadian perspective, friendshoring strategies are being pursued for specific supply chains whose security and resiliency are critical for our future economic well‑being. It is a gradual process, and we have started making the investments and changes necessary to achieve this goal.

Once again, I would like to express my appreciation to you and your colleagues for putting together another successful conference. Canada, Germany, and other countries around the world continue to grapple with the impacts of the COVID‑19 pandemic and Russia’s illegal war of aggression in Ukraine, and the discussions that took place on June 5 were important, relevant, and timely. I look forward to next year’s conference and continuing cooperation and collaboration with our German partners and Atlantik‑Brücke.

Simon Kennedy is the Canadian Deputy Minister of Innovation, Science and Economic Development. Previously, he served as Deputy Minister of Health. Read his full bio here.