Canada’s Thriving Life Sciences Industry Creates Opportunities and Challenges

Over the past five years, Canada’s life sciences industry has flourished.1  In 2021, Ontario alone recorded $846.8 million of venture capital investments in life sciences.2  Supported by Canadian, U.S. and other international investors, along with government funding and incentives, Canada's life science sector is well-positioned to drive the development of cutting-edge products, attract top talent in the industry, and propel Canadian companies to market success. As this growth trajectory continues, the need for life science insurance is also expected to increase.

Furthermore, Canada’s response to the global pandemic played a crucial role in industry growth with the federal and provincial governments recognizing the importance of accelerating innovation. Development and financial support better prepare Canada to respond to public health challenges while also establishing a long-term foundation for economic growth.3    

In 2021, U.S. investors emerged as the primary backers of Canadian life sciences, with growing interest from investors in China and Hong Kong. U.S. investors explored diverse investment opportunities in Canada because of intensified competition for life sciences ventures in Silicon Valley and Boston, as well as the cost advantages of operating in Canada.4

With financial support through Canada’s Strategic Innovation Fund and the Canada Biomedical Research Fund, and the tax incentive program from Scientific Research and Experimental Development, we expect that momentum will continue to grow.5  

However, rapid growth brings new challenges. Companies must scale up, increasing the demand for executive talent.6  While Canada has a reputation for top tier research and development, commercialization remains an area that requires significant improvement.7  

To address these new challenges, the federal government has presented a biomanufacturing and life science strategy that intends to rebuild the sector brick by brick. The strategy focuses on five pillars: 

1. Strong and coordinated governance: Enabling rapid decision-making, informed by experts; and ensures investments return maximum potential impact.
2. Laying a solid foundation by strengthening research systems and the talent pipeline: From post-secondary institutions, research hospitals and Canadian scientists, the government will support the foundational inputs necessary for a healthy life sciences ecosystem.
3. Growing businesses by doubling down on existing and emerging areas of strength: The government offers continued support for Made-in-Canada solutions through the Strategic Innovation Fund. This includes a pipeline of projects across the country that will create jobs while closing key gaps in the biomanufacturing supply chain.
4. Building public capacity: This takes advantage of capacity at Canada's National Research Council, including its new Biologics Manufacturing Centre. The centre has the capacity to produce biopharmaceuticals like viral vector, protein subunit, and virus-like particle vaccines and other biologics. 
5. Enabling innovation by ensuring world class regulation: This will position Canada as a more attractive destination for leading life sciences firms to establish and grow and ensure Canada’s readiness for future pandemics and other health emergencies.

With robust backing from venture capitalists and strong government support, Canada's life science industry continues to grow. This growth, in turn, drives a higher demand for life science insurance. At CNA Canada, we have a dedicated team of Healthcare and Life Science underwriters that can provide coverage solutions for companies at any stage of development. In the rapidly evolving healthcare industry, we actively develop solutions to serve the broad continuum of care.

 1 Statistics Canada. Table 36-10-0402-01: Analysis of Gross domestic product (GDP) at basic prices, by industry, provinces and territories (x 1,000,000). https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610040201. 
2 https://www.maplecouncil.org/momentum-content/2023/4/20/unleashing-innovation-and-collaboration-ontario-canadas-life-sciences-sector-leads-the-way#:~:text=The%20Province%20achieved%20record%2Dbreaking,%24846.8%20million%20in%20life%20sciences. 
3 https://thefutureeconomy.ca/op-eds/life-sciences-sector-najah-sampson-pfizer-canada/ 
4 https://www.torys.com/en/our-latest-thinking/publications/2021/11/accelerated-growth-in-canadas-life-sciences-industry#:~:text=A%20new%20wave%20of%20government,a%20robust%20life%20sciences%20industry. 
5 https://www.torys.com/en/our-latest-thinking/publications/2021/11/accelerated-growth-in-canadas-life-sciences-industry#footnotes 
6 https://lifesciencesbc.ca/wp-content/uploads/2024/02/FINAL-LSBC-LS-LMI-Study-Executive-Summary-Feb-2024-1.pdf 
7 https://www.theglobeandmail.com/opinion/article-canadas-life-sciences-pipeline-is-clogged-heres-how-we-can-fix-it/ 
8 https://ised-isde.canada.ca/site/biomanufacturing/en/canadas-biomanufacturing-and-life-sciences-strategy (paraphrased)