Atlantic Canada’s innovative companies are well-positioned to compete globally but the region needs an intellectual property and data strategy along with renewed and expanded access to global markets, according to a new report by the Council of Canadian Innovators (CCI).

Also, the region’s AI companies need to be embedded in nation-building projects and public services, and government purchasing power should be used buy Atlantic and Canadian where possible, the report said.

“Atlantic Canada is uniquely positioned,” said Karen Moores (photo at right), senior advisor, Atlantic Canada, at CCI.

“Our natural resources and clustered expertise in oceans, defence, bioscience, agritech, AI and cybersecurity create deep value chains, and our established dual‑use innovation ecosystem turns domain data and local research into competitive advantage," she said.

"To capitalize on our strengths, we must ensure the intangible meets the tangible: policy that protects, promotes, and keeps Atlantic Canada's prosperity here.”

CCI’s report notes that New Brunswick is a global hub for cybersecurity. Prince Edward Island has long led the world in bioscience and agritech successes.

Nova Scotia has built the ships for decades that protect Canada’s shores and fostered ingenuity in ocean technologies. Newfoundland and Labrador’s physical location and pioneering maritime and related defence technologies play vital role domestically and globally.

“I think the conditions here, coupled with our universities and our community technical colleges, is also a really ripe environment, an incubator,” Peter MacKay, (photo at right), strategic advisor with Deloitte, senior counsel with McInness Cooper and former federal cabinet minister, said during a CCI webinar about the report.

The innovation momentum in Atlantic Canada is evident from, for example, the decision to locate the Defence, Security and Resiliency Bank in Halifax, at a time when the federal government is significantly ramping up its spending on defence, he noted.

Also, the Nova Scotia government recently announced the awarding of licences in offshore and onshore natural gas, MacKay said.

“We still have that refining capability in Atlantic Canada,” and the ability to export liquified natural gas to international markets, including Europe, he said.

The region also has opportunities in renewable energy and small modular nuclear power in New Brunswick, he added.

CCI’s “playbook” and recommendations for Atlantic Canada focus on four priority areas where public policy can accelerate impact:

1. Artificial Intelligence: Support harmonized, region‑wide policies that let Atlantic AI companies scale at home and abroad. Embed homegrown AI in nation‑building projects and public services to drive productivity for businesses, governments and communities.

“We need to ensure the world-class AI innovators in Atlantic Canada have the domestic policies they need to scale at home and around the world. This is critical for the companies of today and tomorrow,” the report said.

Along the way, we need to ensure we use these homegrown AI technologies as an answer to our productivity challenges for businesses, governments and communities, the report added.

Jon King (photo at right), cofounder and CEO of Milk Moovement, said Canada’s AI Compute Access Fund “is a great step forward.”

King believes that locally developed AI models are going to be a “frontier of importance in the AI orchestration layer much faster than it's seeming right now,” which he said is a good opportunity for Atlantic Canada’s assistance programs and incubators.

“How can [local companies] pull the ability to have local AI models running in their facilities? Let's find the funding, get the models inside.”

“We can do things faster, we can do things cheaper, and we can do it with a small number of people,” King said.

Atlantic Canada needs a regional IP and data standards strategy

Emad Rizkalla (photo at right), CEO and founder of Halifax-based Bluedrop Training and Simulation, said a competitive advantage in Atlantic Canada is that the region has confident companies but not a “sort of arrogant, in-your face culture.”

“We’re really good at relationships and we're really good at networking,” said.

2. Intellectual Property & Data Strategy: Treat provincial data as a strategic asset, make high-quality public datasets available, and establish an Atlantic IP-support agency to help firms protect and commercialize their innovations. Incentives for IP creation –  such as provincial IP boxes – will help retain economic value in the region.

When it comes to IP and data standards strategy, the Atlantic provinces lack a cohesive agenda and a comprehensive strategy that is usable and reflects the needs of scaling innovators in this region, the report noted.

The CCI recommends that all four provinces commit to a regional IP and data standards strategy that protects our innovators’ IP and retains wealth in the region.

King’s Milk Moovement provides a supply chain software solution to the dairy sector, managing everything from milk planning, pickups at farms and delivery of product, to processing facilities, accounting, invoicing and regulatory management.

“The data is shared across the supply chain, so everyone has real-time visibility and operational intelligence in terms of what they need to do,” he said.

Milk Moovement received help in growing its company and solution from various programs in the Canadian ecosystem, including Export Canada, federal trade commissioners, and Sustainable Development and Technology Canada, King said.

As the world moves into a new agentic and AI phase, building vertically is really important for Atlantic Canadian companies, he said.

That means having bigger customers in smaller numbers and relationships in smaller cities internationally than Tier A cities, he added. 

3. Global Market Access: Improve air access, fund business development travel, and create provincial global trade concierges and coordinated trade missions so Atlantic companies can find and win customers in key markets.

Atlantic Canadian companies have been selling around the world for decades and aren’t new to global trade.

In this geopolitical moment, the region needs renewed and expanded access to global markets, the report said. “This means smarter, more efficient air access alongside greater regional coordination for trade missions and new market entry.”

          4. Procurement & Industrial Strategy: Use government purchasing power to buy Atlantic and Canadian where                          possible. Build regional procurement education, host Buy Atlantic roadshows, and pilot value-based                                          procurement to connect local innovators with public-sector buyers.

Canada needs to use government purchasing power to accelerate domestic innovation adoption and to develop a common playing ground for procurement policy in Atlantic Canada, the report said. This can drive regional competitiveness and create a superhub economy that competes with the provinces that have bigger populations.

Government purchasing power is a “powerful lever” for companies, perhaps more so than a loan or a grant option, Moores said, during a CCI webinar on the new report.

“The buy Canadian and buying Atlantic Canadian approach helps us create that super hub economy that competes and also drives our talent, our ambition, and our ingenuity,” she said.

Too often in the past, American companies have won the contracts for supplying products to government, Rizkalla said.

However, that’s changing with the Buy Canadian policy, he said. For example, last fall Boeing invested $1.4 million in Bluedrop to advance capabilities for the CV-22 Osprey Program.

“We can be our own engine to kind of help companies get to scale. And if we're very specialized and we pick a couple of key areas where we're really trying to give our companies that global [reach],” Rizkalla said.

He credits the Atlantic Canada Opportunities Agency and the National Research Council for supporting Bluedrop at its early stage.

“We've got to understand that our biggest risk is not someone's cousin getting a contract. Our biggest risk is not creating global champions coming out of Atlantic Canada,” he said.

Keep politics out of procurement, diversify financing options

MacKay pointed out that in the past, politics has interfered with procurement. He cited the “fiasco that was the Sea King helicopter, and the ongoing fiasco of [procuring] F-35s,” which he as defence minister in Stephen Harper’s government announced in 2012.

“And here we are, still without a modern fighter aircraft,” he said.

The F-35 procurement would have cost $9 billion at the time and have had enormous benefits for Canada, including in flight simulators which are made in Atlantic Canada for a global supply chain, MacKay said. “So that’s an instructive example of how these things can go astray when they’re politicized.”

Canada has “enormous capabilities” in some of the things that Canada’s military needs, such as rifles and night vision goggle, he pointed out.

Yet on the federal government’s procurement point system, Canadian companies “still are excluded at the end of the day, in many cases, for reasons that I, even after having been from a very privileged vantage point, viewed some of these contracts that went outside the country that made no sense whatsoever,” MacKay said.

King pointed out that securing capital funding has been a serious challenge for Canadian startups, especially in later-stage funding rounds. “[In] the further stages within a startup before your acquisition period, a full Canadian round [is] almost impossible to come by.”

However, AI will make companies in the Atlantic region and Canada as a whole “much, much stronger on the bottom line as they go through those later stages than they would have historically,” with later-stage VC deals looking different than they have in the past, he predicted.

Rizkalla said it would help if Canada had more “mezzanine financing options,” such as a hybrid of debt and equity that acts as “gap” funding.

 “Obviously, the longer you can hold out and the less capital that you need, especially international capital, the more likely that the wealth will stay here in Canada,” he said.

King said there’s a “tremendous amount of opportunity” for Canada to get the country’s banking industries well aligned to support Canadian companies that have strong financials “that have the ability to really knock something out of the park.”

The challenge for many people is how to leverage the transition of knowledge from company to company working in Atlantic Canada at the same level and efficiency that happens in Silicon Valley, as people move from company to company, he said.

“A small number of people executing outside of their abilities to really succeed is what Atlantic Canadian startups need to be about for the next decade forward. And how can we help get them there is what I think matters most,” King said.

Youth and SMEs need special attention

Rizkalla said “it’s a real danger” that youth are not being hired in the same way, especially for entry-level jobs that AI is taking over.

In the past, when a company had significant growth or a win, it would be looking for more employees, he noted. “Now our VPs come back and say, ‘No, no, we got it. We can handle it with the current number of staff. We don't need a lot of new people.’”

“I do worry about the impact of that kind of transition in our economy on all kinds of white-collar roles where what we're valuing now is creativity, relationship skills, marketing sort of genius, and finesse,” Rizkalla said.

He said he also worries about a lot of small and medium-sized businesses that aren’t yet involved with AI technology.

“There has to be some programs that help young people to transition into AI wizards that can help small and medium businesses, restaurant chains, tourism operators, and so on, leverage AI, because it will become an existential threat,” Rizkalla said.

“I think if you're a small and medium business that's not in technology and you're kind of hedging or waiting to see what this is all about, you're already at risk,” he said.

Ambition alone won’t turn potential into prosperity, CCI’s report said. “Coordinated public policy is the accelerator.”

"Atlantic Canada is a distinctive engine of innovation whose companies, talent and technologies are already driving national prosperity and economic growth," said Patrick Searle (photo at right), CEO of CCI. "Through strategic procurement, stronger IP and data protection, coordinated workforce investment, and policies that support global market creation, we can scale Atlantic Canadian solutions, capture more value at home, and build sustained economic advantage for the whole country,” Searle said.

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