Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Stronger Teeth Needed to Protect Canada’s IP
IP Policy and Competition | August 7, 2025
Image: FreepikWeak IP Policy and Procurement Choices Are Eroding Canada's Sovereignty
On August 6, 2025, there's an inspiring OpEd in the Financial Post by Jim Hinton and Alexis Conrad, who argued that Canada’s sovereignty is being eroded not by military threats but by the loss of control over its intellectual property. They warn in today's economy it's no longer about "flags, borders, boots on the ground" that define national strength but rather it's the intangibles, such as the source code, algorithms patents, and digital infrastructure that strengthen global leverage and competitiveness, and Canada's current approach to IP is giving it away faster than innovators can build them.
See: Canada’s Productivity Depends on Intangible Tech Adoption
Prime Minister Mark Carney has committed to raising defence spending to $150 billion annually by 2035. But Canada still lacks a framework to retain the intellectual property created through public investment. More than 50 % of university-developed IP ends up in foreign hands, often with no commercial benefit to Canadian firms. Patent office filings show transfers of Canadian-invented technology from Dalhousie to Tesla and from the University of Toronto to Google. Researchers from 50 Canadian universities co-authored work with Chinese military related scientists between 2005 and 2022. Foreign ownership of Canadian inventions and patents has tripled since 2001, now accounting for 56 % of the total.
Procurement Policy is Reinforcing the Problem
Canada’s first major contract under the new defence strategy for an arctic radar system valued at $6.5 billion was awarded to an Australian firm. Although there may not be an exact equivalent defence supplier in Canada, there was no public evidence showed that Canadian options were seriously considered. In cleantech, a Burnaby-based carbon capture pioneer Svante is considering a move to the U.S. after being excluded from Canada’s clean tech tax credits. These examples show that public funding and procurement are not aligned with long-term national control.
ElevateIP is a federal initiative created to help startups protect and manage intellectual property, but it lacks key structural elements. It does not require Canadian IP ownership or tie support to procurement or national priorities. It does not coordinate with university tech transfer or public research institutions. It does not track the outcomes of supported IP. As a result, it helps educate founders on IP strategy but offers no protection against IP loss or foreign transfer.
Fintech IP is Equally at Risk
The challenges raised by this article are highly relevant to fintech. Canadian fintech companies often rely on proprietary algorithms, transaction infrastructure, digital identity systems, and embedded financial technologies that qualify as intellectual property. But there is no policy ensuring that publicly supported fintech innovation remains in Canadian control. Many early-stage fintechs are spun out of university labs or supported by public accelerators. Without clear ownership conditions or commercialization requirements, they face the same risks as cleantech and AI firms via acquisition or licensing by larger foreign organizations that ultimately repatriate value outside of Canada.
See: Landmark Legal NFT Decision Favours Intellectual Property Owners
Fintech IP is also foundational to digital sovereignty. Payments, lending, credit scoring, open banking infrastructure, compliance automation, and digital asset platforms depend on core IP and data control. If these are owned abroad, Canada risks falling behind on financial inclusion, global competitiveness, and platform security.
Public funding that supports fintech innovation without securing ownership or commercialization rights fails to build long term value at home.
Why This Matters Now
Countries like the U.S., South Korea, and Finland have updated their strategies to secure domestic IP and use procurement as a growth lever. Canada still relies on outdated models. Innovation without ownership means financing someone else’s economy. Canada must close the policy gaps between research, funding, procurement, and commercialization if it wants to retain control of its own innovation pipeline and competitiveness.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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