To say that Canada’s life sciences sector is receiving the much-needed attention it deserves would be an understatement. For the first time in my career, there is genuine interest, much-needed discussions across sectors including governments, and the start of economic incentives to bring forth the financial investments needed to revolutionize and modernize our industry. Acknowledging that this topic is broad, I will focus my commentary mostly on the clinical trials segment of Canada’s life sciences ecosystem.
Canada’s vibrant life sciences sector
Canada’s broader scientific research and development sector is estimated to generate $17.5B of revenue per annum with over 77,000 well-paying jobs in 2025 [1], leveraging one of the key attributes of Canada as the highest ranked country [2] amongst the OECD countries with attainment of tertiary education. Research and development expenditures across Canadian universities and research hospitals was approximately $19B in fiscal year 2023-2024 [3].While exact figures regarding research expenditures in Canada from biotechnology and pharmaceutical sectors are hard to determine, it is estimated that research and development expenditures from pharmaceutical companies that have sales of patented medicines alone totaled $1.26B in 2024; of this 41.6%were expenditures from conducting Phase 1 to 3 clinical trials [4]. Given the proportionalities, the math is straightforward and the implications are clear: Canada’s research ecosystem is sustained through the public investments made by government grants and philanthropic gifts. While these key avenues of funding enable Canada to attract and retain significant scientific minds and infrastructure, they alone are not enough to translate research into impact. That translation requires private sector investment to enable commercialization, economic development, and ultimately the betterment of health for Canadians and beyond.
The Canadian competitive advantage is not enough to attract life sciences investment
As a life sciences executive, I tout much of the playbook on the key features of Canada’s competitive advantage. As described above, Canada has a vast footprint of world-class research hospitals and universities that are expertly staffed by a highly educated workforce. Another unique Canadian advantage - one that is highly valuable to industry - is the access to a diverse population under a single payer and universally accessible system. Further, Canada’s regulatory system enacts competitive timelines to other comparable regions such as the United States or United Kingdom.
Despite the assets of Canada, the data suggests Canada is losing ground in clinical trials. In 2024, Canada saw an 11% decline in clinical trials initiated and 8% decline in percentage of industry sponsored trials [5]. Furthermore, recent data suggests Canada fell from 5th to 8th place in the number of industry-sponsored Phase 3 clinical trials [6]; for context, Phase 3 clinical trials generally enable the greatest number of patients to access innovative treatments and generate the largest economic impact, as often they are the most expensive stage of the drug development cycle prior to regulatory approval.
The gaps described in recent reports vary but generally reflect three systemic challenges: fragmented clinical trials infrastructure, slow approvals to activate, and weak commercialization pathways [7]. While comprehensive and important, these factors alone do not fully explain why Canada is losing foothold in the globally competitive world of clinical trials.
Canada is addressing the gaps
As with many problems, the first step to addressing issues is often acknowledging them. I argue our country as a collective has done this, as many industry associations and institutions have presented their cases for the gaps in the Canadian clinical trials infrastructure. Most significantly, a comprehensive report was recently released that outlined 39 recommendations: the Pharmaceutical & Life Sciences Task Force: Report to the Ministers of Health & Industry.
Across the country there is much momentum in tackling many of these gaps identified, from efforts to create a Research Ethics Board with national scope, regional initiatives at creating the frameworks to accelerate the activation of clinical trials, to local institutional models aimed at tackling these issues head on. One such example is Unity Health Toronto’s Industry Preferred Partnerships Model which aims at partnering with select pharmaceutical firms to create scalable and nimble clinical trials infrastructure [8]; this initiative is supported by SPHERE CRO’s site management services.
Further, on September 15, 2026, the federal government announced the Productivity Mega Deduction which enables immediate expensing to deduct the capital cost allowance of select depreciable properties [9]. Notably, this included assets such as research and development. What remains unsolved is how this new deduction will support the gaps in insufficient growth capital and the economic incentives for Canadian grown firms to accelerate commercialization pathways. The strongest beneficiaries of this new deduction are likely the established pharmaceutical partners that can leverage sufficient taxable income to use these deductions immediately. We welcome those investments and desperately need those investments to not only grow but also recapture the market position we have lost over recent years. Disappointingly, however, it does not benefit those early-stage Canadian biotechnology firms nor their early-stage investors that often need the incentives to ideate, generate, build, and grow in Canada.
What we can do to strengthen Canada’s life sciences ecosystem
Neither myself nor the institutions that I represent can single-handedly solve the various issues described above. However, we can play a significant role in enabling clinical trials in Canada, whether with home-grown biotechnology or global pharmaceutical firms.
As described in the various reports, our system is fragmented, and while there are initiatives tackling elements of this, the reality is that navigating large health systems across jurisdictions, with variances in local resourcing, will always remain a complicated endeavour for industry to navigate. Leading institutions like Unity Health Toronto and academically affiliated CROs such as SPHERE must take charge in creating vertical and horizontal integrations across the sector; creating competitive local markets for clinical trials that rival large hospital networks or health systems in other regions like the US. This enables the scalability and attractiveness that increases the private sector’s investments. It is naïve to assume that we will attract investments without incentives. Governments have a role, as already demonstrated through efforts such as the Canada Investment Summit 2026, to create the economic conditions that help answer "Why Canada".
In the face of unprecedented challenges and uncertainty, our collective actions from sites, health systems, CROs, industry, and governments can finally answer "Why Canada". The answer lies not only in the great assets we have always touted, but also in the environment we will create; the most marketable country in the world supported by economic incentives, vertically and horizontally integrated infrastructure, streamlined processes that slash bureaucracy, and world-leading data infrastructure such as VITAL [10], all delivered with a hint of Canadian politeness and ingenuity.
Key Takeaways
- Canada has a vibrant life sciences sector, with world-class research institutions, a highly educated workforce, competitive regulatory timelines, and a diverse population within a universal health system.
- While Canada’s research ecosystem is sustained primarily by public investment and academic institutions, investment from the private sector is required to enable commercialization, economic development, and the translation of research into impact.
- Systemic challenges such as fragmented clinical trials infrastructure, slow approvals to activate, and weak commercialization pathways limit Canada’s research competitiveness despite promising national, regional and institutional initiatives.
- Coordinated action from governments, health systems, research sites, CROs and industry is needed to integrate infrastructure, streamline approvals, support investment, and create economic incentives that enable pharmaceutical and biotechnology research in Canada.
Conflict of Interest Disclosure: Mani Kang is the Chief Operating Officer of Research at Unity Health Toronto and Head of Operations for SPHERE CRO.
Footnotes
[1] https://my.ibisworld.com/industry/standard/canada/en/54171ca/1430/ataglance
[2] https://www.oecd.org/en/publications/education-at-a-glance-2026_c0e523a9-en/canada_ffe30439-en.html
[3] https://researchinfosource.com/pdf/CIL2025.pdf
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