Canada confronts a national health security emergency and the country’s life sciences sector faces an unprecedented crisis, according to a new report by the Public Policy Forum (PPF).

A shifting geopolitical and economic landscape – in large part the result of policies pursued by the Trump administration – has led to disruption in relations and trade.

“I think we significantly underestimate both the extent of upheaval now underway in the United States health care sector and scientific research and the degree to which that is going to have a major negative impact on Canada,” report author Christopher Waddell (photo at right), professor emeritus and former director of the School of Journalism and Communication at Carleton University, said in an email to Research Money.

“These emerging challenges have exposed vulnerabilities in Canada’s life sciences supply chains and increased public health risks,” says the report, Canada’s Code Red: An urgent playbook to build an economy-boosting life sciences sector.

The report highlights how Canada’s traditional approaches to health security need to change to address these challenges and respond to new opportunities in a changing world.

Building on lessons from the COVID-19 pandemic, Canada must urgently adopt bold strategies to strengthen its life sciences sector, the report says. “Such action, taken swiftly, will ensure the sector continues to thrive – generating strong growth, supporting healthy Canadians and creating a competitive Canada.”

The chaotic approach to policymaking by the current U.S. administration has created unprecedented levels of uncertainty, “with the administration’s health policies putting the health of Canadians at risk,” according to the report.

America’s “hyper-protectionist” approach to trade has disrupted supply chains and led to product shortages that could worsen health outcomes.

At the same time, an anti-science and anti-vaccine mentality has led to the U.S. abdicating its long-standing role as global leader in the fight against pandemics and is contributing to the spread of diseases such as measles and avian flu to Canada, the report says.

The shape of this new threat is exemplified by a recent decision by the U.S. Department of Health and Human Services to cancel a nearly $830-million contract to develop, test and license vaccines for flu variations that could trigger future pandemics.

As the U.S. withdraws from global health leadership, Canada must play a significant role in filling this gap, helping to lead the global fight against infectious disease and countering anti-science sentiment, the report says.

As trade agreements are violated and supply chains disrupted, Canada must stimulate investment in home-grown businesses, technologies and processes, as well as renew emphasis on Canada’s bilateral and multilateral international relationships and market development.

The report says a key step along this path is investment in Canadian innovation and commercialization, ensuring that valuable Canadian-developed intellectual property can draw on capital and scale up to commercial viability so our citizens can realize economic and health benefits.

Importantly, areas such as regulation, data accessibility and patient inclusion should be approached as enablers of our success, not as cumbersome barriers to growth, the report says.

To position Canada’s life sciences sector as a cornerstone of economy growth, the country must stop viewing life sciences as a cost centre and begin to understand that investment in the sector delivers real economic returns – both through direct growth and job creation, and indirectly, by enabling healthy Canadians to participate in the economy to their full potential, according to the report.

“By viewing the sector as an asset ripe for investment – both financially and through advantageous policy-making – Canada can position itself as a global leader in health innovation, creating jobs, boosting productivity, improving health outcomes and bolstering national competitiveness.”

Canada needs to make six critical “plays”

Waddell’s report recommends that Canada make six critical “plays” to address the challenges and respond to new opportunities.

"All six are very important and there is urgent need to take action on all of them,” he said in his email to Research Money.

The top two recommendations in importance are to fast track Health Emergency Readiness Canada (HERC) after its creation last year and adopt a “Made in Canada” approach to life science investment and procurement, Waddell said.

Prior to HERC being established, Canada was the only country without a health emergency preparedness agency. “Now it needs the financial and administrative capabilities to play a major role in the development of Canada’s life sciences sector while also building international relationships for a collective response for the next pandemic,” Waddell said.

It is very worrisome that the changes now underway in the U.S. regarding vaccinations and rejection of scientific research mean the next global pandemic could well originate in the U.S., making Canada very vulnerable, he said.

His report’s recommendation to implement a life sciences performance scorecard flows from the creation of HERC, he added.

Developing the scorecard by HERC working with the provinces and territories allows Canada to track progress on building the “Made in Canada” approach to life sciences investment and procurement by collecting and making public annual statistics on how Canada’s life sciences sector is performing compared with other countries.

“The ‘Made in Canada’ approach is similar to that underway in other sectors of the economy, all springing from the knowledge that our long-term relationship with and reliance on the U.S. is over,” Waddell said.

He said his report’s recommendation to give preferential treatment to Canadian research and discoveries can help build the life sciences sector and contribute to increasing Canada’s productivity, while attracting the funds and talent needed to grow the sector.

“But that will require significant changes in attitudes and roles for federal, provincial and territorial health departments and regulators,” he noted.

The need to act quickly and fundamentally rethink how we use data is part of those changes, including educating Canadians on the safety of anonymized data and its key role in building the life sciences sector here, Waddell said.

As the report suggests, he said, “Europe views data as an asset, while Canada sees data as privacy.”

By building on the enthusiasm for ending interprovincial trade barriers, “we must also end interprovincial differences in data collection, availability and interoperability,” Waddell said.

Doing so “will help Canadian researchers and innovators and also make Canada a better supply chain partner in the global response that will be required when the next pandemic strikes."

Details on the six critical “plays”

The report details six critical “plays,” or actions:

1. Recognize Canada faces a national health security emergency:To enable rapid legislative and regulatory changes, the federal government must recognize Canada faces a national health emergency, fostering urgency in decision-making and eliminating bureaucratic impediments.

“Business cannot continue as usual. To quickly implement new innovative solutions, the federal government must trigger a fundamental change in the operation of its public service.”

In practice, this means Health Canada and Innovation, Science and Economic Development adopting new, more efficient approaches to regulation-making and investment attraction.

As it stands, decision-making for health regulations is encumbered by too many people in multiple levels of authority, often working with outdated IT systems and procedures – creating a slow and inefficient regulatory process, the report says.

“This highly uncompetitive regulatory status is costly to Canadians. It can take years for health regulations to be enacted or modified, if at all.”

The report says a new model is necessary, capable of enacting new regulations quickly and efficiently, with the alignment of provincial and territorial regulations at its core.

One approach could see low economic-impact regulations requiring approval only from the Minister of Health, eliminating the current cumbersome Treasury Board processes and reviews.

For medium and higher economic impact regulations, a new process must be designed, backed by investment in appropriate IT systems, with agility, productivity, cost and level of risk in mind. Shortened approval times should be comparable, and preferably even better, than other developed countries.

2. Fast-track Health Emergency Readiness Canada (HERC):Accelerating the operationalization of HERC can facilitate preparedness for future health emergencies through national coordination in research, supply-chain management and response strategies.

HERC is a national health security agency, operating under Innovation, Science and Economic Development Canada and Health Canada, with a core focus on building the life sciences sector.

HERC must be fully operational, engaging with provinces, industry, researchers and international partners, by the end of 2025, the report says.

HERC also needs to expedite its efforts to make Canada attractive for investment in life sciences.

HERC must be funded at a comparable level to similar agencies in like-minded countries, and publish an investment plan by the end of 2025, the report says.

For example, the Biomedical Advanced Research and Development Authority [BARDA] in the U.S. has an annual budget of just under $1 billion. Its 2022-2026 Strategic Plan outlines how it uses that budget.

To match the commitment of the U.S., HERC requires an annual investment allocation of approximately $100 million from the federal government beyond the agency’s operating costs, the report says.

 [Editor’s note: The Trump administration’s proposed budget would cut funding for BARDA by $360 million, or 35 percent].

3. Create a Canadian Life Sciences Performance Scorecard:The federal government must establish ambitious and meaningful goals to measure progress.

A new panel consisting of representatives of the public sector, the life sciences industry and patients should be established within HERC to confirm target areas, goals and base-levels, reporting annually to Canadians on progress made, the report says.

Initial metrics could include: R&D investment and funding; number of life sciences companies; workforce and talent pool; innovation and research output; manufacturing and infrastructure capability; economic contribution to GDP by the life sciences sector; and public health outcomes and adoption of innovation.

“Made in Canada” approach to life science investment, training and procurement needed

4. Develop a national recruitment strategy for life science talent:Current and future skills gaps should be identified before developing a targeted recruitment strategy with competitive salaries. Immigration processes must be streamlined to attract international health and scientific researchers, including those alienated by current U.S. policies and prevalent anti-science attitudes.

HERC should coordinate the production and implementation of a talent-recruitment plan to attract those with the skills and expertise that would benefit Canada’s life sciences sector, the report says.

5. Adopt a “Made in Canada” approach to life science investment and procurement:Prioritize the build-up of domestic capabilities in life sciences manufacturing, research and innovation to reduce reliance on the U.S. while facilitating a “buy Canadian” approach in life sciences regulations and procurement.

A particular international strength has emerged in developing personalized medicine, the report notes.

Examples include: Blue Rock Therapeutics and its work on cardio and neural regenerative research on Parkinson’s disease; Aspect Biosystems, working on 3D printing of bio-tissues for diabetes treatment; and Satellos Bioscience’s stem-cell approach to treating muscular dystrophy through regenerating muscle using small molecule therapeutics.

To date, Canadian success has too often gone only so far before it becomes the same old story, the report says.

“Canadian startups are funded domestically, with resulting success in research, products and innovations, only to be bought out by American or European multinationals, and Canadian discoveries undergoing clinical trials outside of Canada.”

When successful, too frequently regulatory approval comes first from the U.S. Federal Drug Administration before public use can occur in Canada.

Federal and provincial governments should quickly develop and implement a made-in-Canada pathway to commercialization for domestic discoveries in those sub-sectors where Canada has a competitive advantage, the report says.

This plan should include: working with academic institutions; providing venture capital support;  prioritizing dedicated human resources training and hiring; preferential regulatory review and approvals for products developed from Canadian-based research and manufactured in Canada; accelerating clinical trials, committing to provincial purchasing of Canadian-made life sciences products for hospitals and end-use by physicians for patients.

The federal government should introduce an additional levy on non-Canadian manufacturers, reflecting the higher costs of working with foreign companies – with safeguards in place to ensure costs aren’t simply passed on to consumers.

Additional revenue should be given to HERC to invest in expanding Canada’s life sciences sector, with an annual detailed public report of HERC’s income and investments produced to track its success in expanding Canadian life sciences capabilities.

For the sector to reach its full potential, greater private capital needs to be mobilized alongside increased public sector funding, the report says.

One option for de-risking private investment is to pair it with public investment, providing greater certainty for fund managers and investors.

To this end, managers of Canadian VC funds, pension funds and other investors should be engaged by federal government and other partners to co-design new models for unlocking private capital in Canada.

For example, in the U.K., a $360-million, government-backed Life Sciences Investment Programme to address the growth equity finance gap aims to unlock a further $720 million of additional private financing.

6. Unlock our health data as an asset for Canada:Canadian health data represents a massive untapped resource that when unlocked can boost our competitiveness globally. To do this, common standards for data collection and storage need to be implemented across provinces. Barriers to its use must be removed to allow Canadians’ health data to be harnessed to improve decision-making, resource allocation and technological advancements.

Significant amounts of health data remain undigitized due to a lack of common computer systems and formats across the country, the report says.

Europe views data as an asset, while Canada views data as privacy. As a result, the EU “is miles ahead of Canada in the collection and use of data in all aspects of health care, health security and emergency preparedness and response.”

Canadian health data should be made available for preferential use by Canadian based researchers, the report says.

Canada also should build its data-storage infrastructure, mitigating the risk of having storage managed by non-Canadian entities.

The challenge of this pivotal moment in Canadian history underscores the urgency of rethinking traditional approaches to the life sciences sector and health security, the report says. “Canada must prioritize resilience, innovation and self-reliance.”

By implementing these six plays, Canada can mitigate risks posed by its strained relationship with the U.S. while positioning itself as a global leader in innovation and resilience, the report says. “With the right strategies and investments, Canada can meet today’s historic challenge and emerge more resilient and better prepared for the uncertainties of tomorrow.”

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