A survey of biotech firms shows many are unhappy with Canada’s investment, taxation and regulatory climate.
Forty-eight percent of the companies surveyed for the Canadian Life Sciences Industry Forecast 2006 said they plan to move all or part of their business outside of the country.
“Canada stands to lose almost half of its life science and biotech companies if a more sustainable business environment is not established,” said Peter Brenders, president of BioteCanada, the national voice for the
industry.
With about 500 small to medium-sized firms spending $1.5-$1.8 billion annually on research and development activities, Canada has become a global leader in biotechnology. About 18 percent of those firms specialize in agricultural biotechnology.
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But it doesn’t take much for a firm to pick up and relocate.
“This is very portable intellectual property. You can do the science and research anywhere in the world,” said Brenders.
According to the survey conducted by PricewaterhouseCoopers in collaboration with BioteCanada, one of the biggest things the federal government can do to entice them to stay is create favourable tax incentives.
Brenders said changing the tax laws to recognize limited liability corporations would be a good start. And he would like to see enhanced science, research and development tax credits.
Survey respondents also called for increased funding from government sources and improvements in the turn-around time for regulatory approval of biotech products.
Brenders said there are indications the new Conservative government in Ottawa supports the industry.
“We’re encouraged by early signals that biotech and the value that biotech offers to the economy and how vital it is to the economy is important to the government.”
One of those early signals came from industry minister Maxime Bernier who was quoted in a March 27 newspaper as saying the government will do what it can to support all areas of research and development, including biotechnology.
“I appreciate the realities facing Canada’s biotechnology sector. I think that we can go a considerable distance in supporting our biotechnology firms by ensuring that the business environment is supportive for all industries, that we attract greater foreign investments and that there continue to be strong investments in R&D,” said Bernier.
The challenge will be to convert those words into immediate action. Brenders said a lot of biotech firms have only one year of cash on hand and will be looking for capital elsewhere if the Canadian investment climate doesn’t change soon.
