Doubts over $ 918 million in Ottawa aid

Lean job creation, timid rise in GDP, innovation impossible to measure … the fallout from superclusters like SCALE AI may be thinner than expected, warns the Parliamentary Budget Officer (PBO).

“It seems highly unlikely that the government will meet its 10-year GDP growth target of $ 50 billion. Indeed, even taking an optimistic multiplier effect of 8.82, the GDP would only increase by $ 18 billion, ”slice Yves Giroux, Parliamentary Budget Officer (PBO), in a recent analysis published earlier this month.

In 2017, Ottawa allocated $ 918 million over five years to innovation superclusters to create 50,000 jobs over 10 years in addition to increasing GDP by $ 50 billion, recalls the PBO.

Towards broken promises

In Quebec, the SCALE AI supercluster co-chaired by Hélène Desmarais, director, spouse of Paul Desmarais Jr., chairman of the board and co-CEO of Power Corporation, received $ 230 million from Ottawa and $ 53.4 million from Quebec for carry out its mission.

However, in an analysis published on October 6, the Parliamentary Budget Officer sheds a harsh light on the promises of all the superclusters, overseen by the federal Department of Innovation.

Unclear objectives

Not only is job creation likely to be more timid than expected, the increase in GDP weaker than expected, but the very heart of their mission, innovation, is singled out by the Parliamentary Budget Officer, which cannot measure it, for lack of quantifiable objectives.

“Consequently, the PBO cannot say whether the Innovation Superclusters Initiative (ISI) really allows or will accelerate innovation”, goes so far as to say Yves Giroux in his 14-page report.

In light of the analysis, Donald Riendeau, Director General of the Institute for Confidence in Organizations (ICO), also notes that the results are still pending.

“When you look at initiatives like the cluster for AI, the intentions are good, but it appears that the objectives will not be achieved in the long term,” he said.

According to him, it is important for the country to focus on innovation, but the competition is fierce and governments must readjust their strategy.

Joined by The newspaper, SCALE AI CEO Julien Billot was unable to grant an interview. Its vice-president of marketing, Isabelle Turcotte, said she had read the analysis of the Parliamentary Budget Officer.

She argued that the report features a photo as of March 2020, when supercluster operations only really started in May 2019 and deployment has accelerated in recent months.

“We have already exceeded our objectives to support industry projects for the year 2019-2020, with total investments of $ 111 million, out of a target of $ 65 million, of which a proportion [71 M$ par les entreprises et 39 M$ par SCALE AI] much more than expected from businesses: for every dollar invested by the government, the industry invests $ 1.80, ”she said.

In terms of employment, SCALE AI has argued that its plans will rhyme with the creation of 2,542 jobs.

“This represents more than 20 projects, while many more are being evaluated,” she said.

SCALE AI

Expenses incurred and job creation planned (March 2020)

• Project funds: $ 83M
• Administration: $ 2 million
• Number of projects: 11
• Job creation: 970
• Trained workers: 2757

Five superclusters federal ($ 918 million)

• Digital Technologies (British Columbia)
• Protein industries (Prairies)
• Next Generation Manufacturing (Ontario)
• Artificial Intelligence (Montreal) (SCALE AI)
• Ocean economy (Atlantic provinces)

Source: Parliamentary Budget Officer (PBO)