Tech Wins Gold: How Canada Can Rebuild Its Olympic Pipeline

SPEAKERS

Jennifer Heil, David Shoemaker, John Stackhouse

John Stackhouse 00:00:05

Hi, it’s John here.

When I say Milano Cortina, what jumps to mind? The Olympics, of course, but what are the images? Is it Courtney Sarault on the short track ice winning four medals or is it Mikael Kingsbury winning a silver in traditional moguls and then that unbelievable gold run in the brand new dual moguls event? The perfect ending to the greatest freestyle skiing career ever. Or is it those two amazing hockey gold medal games and unfortunately those two overtime losses to the USA? Or is it something else?

Whatever stays with you and still inspires you from the Olympics, it probably revolves around an athlete and those unforgettable Olympic moments of human achievement. Our athletes did incredibly well, even though the medal count was not what they wanted it to be. But what we probably all overlooked in this Olympic experience is the role of technology and the financial support that is essential to Olympic achievement at the level that we all know Canada is capable of. High performance technology is accelerating as fast in Olympic sports as it is anywhere else. It’s through the skis and skates that propel our athletes and yes, those remarkable BMW made bobsleds that help the Germans win gold, silver, and bronze.

Whatever the sport, technology is playing an increasingly valuable role. And as Canada thinks about the Olympics of the future, we need to think more ambitiously about the investments we can make in technology and in supporting our athletes.

This episode of Disruptors is so timely, not only because the Milano Cortina games are just a couple of weeks behind us, but because the always awesome Paralympics are well underway now and technology is just as important there as anywhere else.

Today we have two very special guests, Jennifer Heil, the Olympic champion and moguls and one of Canada’s most decorated freestyle skiers with gold in Turin and silver in Vancouver. She’s also Team Canada’s Chef de Mission for Milano Cortina 2026, and also the founder and CEO of her own tech company, Revvel Health, which we’ll hear a lot more about in this episode. And we’re joined by David Shoemaker, the CEO and Secretary General of the Canadian Olympic Committee. Before coming home to lead Canada’s Olympic movement, David spent seven years as CEO of NBA China and previously served as President of the WTA Tennis Tour. So he’s seen how the world’s biggest sports organizations build performance systems and scale them.

The world’s top Olympic programs are now running on tools that track every training rep, every night’s sleep, every hour of recovery, and feed that data into a unified athlete platform so coaches can intervene before an injury happens, but also use that data to help their athletes perform at their very best. And here’s what’s key to this conversation and frankly key to Canada for the years ahead. Other countries are funding this as infrastructure. Canada is treating it as a cost and we’re not treating it very seriously. That’s the context for today’s conversation. If we want to own the podium, we need to invest a lot more in our athletes, their support teams, and the technologies that other countries are racing ahead with. This is a moment of nation building. And as we’re seeing in Milano Cortina, there are a few better nation builders than our Olympians.

So let’s hear from a couple of our champions on what we can all do to continue to build Canada as an Olympic power. David and Jen, welcome to Disruptors.

Jennifer Heil 00:03:59

Thanks for having us.

David Shoemaker 00:04:00

Thank you for having us.

John Stackhouse 00:04:02

I’m so excited for this conversation, as I’m sure our listeners are too. And I want to start by taking us back to Milano. David, I’ll start with you, what was the standout moment for you?

David Shoemaker 00:04:13

Wow, that is definitely asking me to pick my favorite child. The saying in the Olympic sport is, “The only thing tougher than winning a gold medal is defending one.” And our women’s speed skaters in the team pursuit defended a gold medal from Beijing. So this is Isabelle Weidemann, Valerie Maltais and Ivanie Blondin. And they defended that gold medal and then they got up on the podium, and when “O Canada” was played, Isabelle embraced her teammates. And I usually try to belt down “O Canada” and I choked up after the first couple of lines. It was a really special moment for me and for everyone watching, and I’ll remember that one forever.

John Stackhouse 00:04:56

Love it. Jen?

Jennifer Heil 00:04:58

Yeah, I have two big takeaways. One is personal in that I left there inspired like the nine-year-old kid who first picked up a magazine seeing Olympic athletes. And I’ve been involved in the Olympic movement for so long. I didn’t expect it. I came back to my everyday life and I was like, “I want to be better.” And then in terms of a specific moment, I would have to say it was Megan Oldham. And that comes back to being a female athlete myself in an action sport. And these women at this Olympics across skiing, snowboard, they literally took it to new heights. And the level at which they’re competing now blew me away, left me so excited. And Megan is so tough. So she crashed really badly in her second run in slopestyle. She had so much bruising she could hardly stand on her leg. She went back up and won a bronze medal and then followed it up two days later with a gold. So for me, that’s the standout moment.

John Stackhouse 00:05:59

What wonderful Olympic memories, and that says so much about the Olympics. It is just humanity at its best. What we’re talking about today is how all of us as Canadians can do better in terms of supporting and investing in our athletes. And one of the great needs, as I said in the introduction, is technology. You’ve both been to lots of Olympics, seen lots of sports. Anything jump out at you at these games in terms of how fast technology is advancing?

David Shoemaker 00:06:29

From a viewing standpoint, the use of drones, and I guess I should be careful because it feels like two years ago when I used the word drone in public, we were talking about it in a very different context. But what it’s done if you watch some of the downhill ski racing or watched Megan Oldham in slopestyle or Kingsbury go down a mogul course and give you that bird’s eye view of what it’s like, how steep it is, how big those moguls are, how high they fly in the air and do their flips and their spins. It is really an awesome way of bringing the winter games into 30 million Canadian homes that watch these Olympic Games more than Paris.

Jennifer Heil 00:07:11

Yeah, I was totally blown away. I felt like I was on the Alpine course with the athletes, and it made me excited in the sense of really bringing people into the performance and the intensity of it. I would say what’s really interesting is ML and AI as a whole, it’s actually very good on the technical side. So it can do a very good job obviously of pattern recognition and identifying biomechanics and movements in sport. The opportunity there is immense on the judging side as someone that comes from a judged sport. I think that at a minimum, it should be incorporated into the next Winter Olympics where it’s making sure that there’s no anomalies within the judging score. I think that’s a great way to standardize what we’re seeing more and remove some of the error that just is always going to happen. So I think there’s a huge opportunity. We’re still very early in adopting that from the technical side of sport, but we know nations are working on it.

John Stackhouse 00:08:10

One of my eye-popping moments was with the bobsled and the Germans who, of course, dominate that have a program with BMW. Of course they do. They’re German making BMW quality bobsleds, and that’s not the only reason they won gold, silver, and bronze, but I suspect that’s one of the key differentiators. So just an indication of what other nations are doing.

David Shoemaker 00:08:33

Yeah. The Olympic movement will have to come to grips with whether technological advancement and innovation is something to embrace and let nations that can afford that gain from that, or by contrast, in Monobob where there are all the bobsleighs are made by one company, and while you can paint them up with your nation’s colors, it’s basically an equalizer. What do we want to see be the baseline of competition, technological advantage, or trying to have everybody start from the same starting point? And I don’t think we’ve quite figured that out as an Olympic movement yet.

John Stackhouse 00:09:11

What’s your view? It’s hard to imagine hockey players being required to wear the same skates or use the same sticks or Alpine racers using the same skis, but maybe I’m not thinking widely enough.

David Shoemaker 00:09:21

No, but maybe at least put some limits to it the way, let’s say the sport of golf has said, we need to say that the coefficient of rebound on a driver needs to be limited to a certain amount or a ball has to conform to certain specifications and then have at it.

Jennifer Heil 00:09:37

I’d like to see it broken into two things. I think it’s going to be very hard to stop AI and the use of technology to optimize performance, but from an equipment place, I think we should absolutely standardize it more and it shouldn’t be the differentiator between nations at the degree it is in some sports.

John Stackhouse 00:09:57

So if standardized or not, we’re going to need to invest. And I say want to invest a lot more in a whole range of things, but those technologies as well, they also have wonderful spinoff benefits. David, I wonder if I can ask you to speak to the request that you and the COC have made for $ 144 million coming out of the games. It seems like such a small number when we’re talking about billions and tens of billions for so many other things in society. And every dollar has a value. I’m not trying to make false comparisons, but as you said, this was Games that Canadians, regardless of the results, embraced and loved. And in this moment of national pride, it really is something I imagine most Canadians do want to lean into more, whether they’re athletes or not. What do we need to understand about where this money should go and would go?

David Shoemaker 00:10:47

Yeah, this matters so much to me. I’ve been in this role since January of 2019, and I can think of no issue that I’ve prioritized more than advocating to the federal government on behalf of our national sports organizations and in turn, on behalf of this nation’s great athletes. For clarity, and I feel compelled to mention this every time this comes up, we’re not asking for a penny for the Canadian Olympic Committee. We are almost entirely privately funded. We have 39 marketing partners who support us generously. We’ve been able to increase our investment in Canadian sport and Canadian athletes by 300% in the last 20 years, and we’re going to continue to do more. We announced a 10-year strategy where we’re going to put $500 million into Canadian sport and to Canadian athletes over the next 10 years. But what has trailed us is the federal government’s investment in the 62 national sports organizations. They have not had an increase in their core funding since 2005. These are the organizations that the federal government has entrusted with, and you can imagine what things cost back in 2005 and what they now cost in 2025.

What we’ve seen happen over the course of the last five, 10 years is as they’ve been experiencing this financial distress, the burden of these financial problems has been shifting increasingly to athletes. And so athletes are increasingly being asked to pay what are called team fees, 10, 20, $30,000. So I’ve equated it to, “Congratulations, you’ve made the national team in your sport. Here’s the invoice to be a representative of Team Canada, and that doesn’t fit my vision for the sport.” So we are trailing our competitive nations. Germany’s putting about a billion dollars a year into sport, and we need to do better. Where will it go? It’ll go into high performance sport because these athletes are a great source of pride for us, and we need to continue to support them to do what they do to unite communities around the country, but we also have to invest in linking the impact of that triumph to what happens in the communities, to getting more young people broadly across the country, lowering the barriers to access to sport and to organized sport. And that’s where the money would go.

John Stackhouse 00:13:06

Jen, tell us a bit about what this means to athletes and maybe share a bit of your own experience as an outstanding athlete, but what you had to go through from a financial perspective.

Jennifer Heil 00:13:36

So I lived through a pretty big inflection point in the sport system. So that was where Canada was hosting the 2010 Olympics and we created Own the Podium. And so everything shifted in that moment, including the culture of sport. So what did we do? We got a strategy on how we were going to build a strong system. We had the resources to support that, including innovation. We brought a lot of innovation, a lot of top minds in staff and sport into Canada at that time. And then we had this culture of winning and there was this pride and this excitement. I mean, how many books have been written on culture building and company culture? All of that came together in a way where we had our best success winning the most gold medals of anyone that year. And we’ve seen the continued effects of that. And we’re at the tail end of this now, and we are at the moment of total brain drain in our system of the best minds in sport.

When I was asked about this issue at the Olympics, I had a top sports scientist in the world who’s been to nine Olympic Games, works for Canada, be like, “Jen, I want to work in Canada. This is where my family is. This is where I want to be.” He’s like, “I don’t know if I’m going to have a job after March.” I spoke to one of the best sports nutritionists globally who lives and works in Western Canada, and he’s already had to move 80% of his time out of the country and into the US because there isn’t the funding and support. I heard from a bunch of athletes on the ground and support staff, and they said, “Other countries want to come to Canada. It is a source of pride to be able to coach and be a sports scientist in Canada.” And so it’s not that people don’t want to be here and we don’t have a lot to offer, it’s just quite frankly, we can’t afford them right now.

John Stackhouse 00:15:02

What a great point. We talk a lot about talent attraction at this point in history and how many super talented people could and should be moving to Canada. And that includes not only athletes, but all the professionals who support them. Hearing you both speak so passionately and eloquently, I think, boy, we got to move on from elbows up to pony up.

David Shoemaker 00:15:23

We have the absolute best athletes in the world who continue to do more with less. And when we see what they do and the pride they instill in us, this is a very, very modest investment when you compare it to the other nation building activities we are so committed to.

John Stackhouse 00:15:41

David, can you give us a sense of what other countries are doing? And I’m not thinking of the United States because it’s kind of in a category of one in how it approaches these things, but smaller European nations, as an example, who certainly win more medals than us. I think in Norway, obviously, but other countries that we like to compare ourselves with.

David Shoemaker 00:16:01

Our Chief of Sport, Eric Miles, often talks about the fact that in Norway or in the Netherlands, if they call a team meeting among all their national athletes, they can all get there in an hour and a half. We don’t have that advantage. But whether you measure it in absolute dollars or whether you measure it on a per capita basis, we are being out invested at the federal level five, six, 10 times more by our peers. And that makes it awfully difficult for our sport organizations and for our athletes to compete at the level that they do. Our athletes did incredibly well. But when we look at the medal table, it’s not where we aspire to be at the winter games. And we know we can do better. We know we have a thinning talent pool. We know 75% of our medalists were over the age of 30, and that’s something that we’ve really got to address.

John Stackhouse 00:16:55

Can I stop you there? I don’t think most of us appreciate this point about a thinning talent pool. And when we think, or you think certainly about 2035 and beyond, what kind of situation are we looking at?

David Shoemaker 00:17:09

Well, we can illustrate it. Maybe the best one would be our long track speed skating team who actually did marvelously in Milano Cortina, but it was basically the very same medal hopefuls that we put on the track in Beijing. I don’t want to speak for any of them in terms of what their longer term plans are for 2030 and the games of the French Alps, but that puts a lot of pressure on them to then come back four years later and continue to perform. What has happened in order for Canadian sports to continue to perform at the highest level is that they’ve been mortgaging the future for the sake of the present. And that means that when they’ve been able to put less money into the development of the next generation of athletes, athletes who are likely five to eight years out, giving them international experience, giving them World Cup experience, giving them Olympic experience where other nations are able to bring them along. And that’s where we’ll see our lack of investment in the next generation catch up with us when we’d sort of say, “Okay, who’s up next? Who’s on deck?” And we look and the bleachers are empty.

Jennifer Heil 00:18:15

We’re creating a pay-to-play system, and I think that goes counter to Canadian values and what we aspire sport to do in this country. And what the other countries who are succeeding are doing well is that they’re investing deeper into the system where that has virtually disappeared in Canada. So for example, Norway isn’t funding every sport. They don’t have 62 NSOs that they’re funding. They’re choosing sports that align to their culture and their values, and they’re going deep into that system. Canada has to make some decisions and look at that on how we can be more efficient in the way we fund our operations. That for sure has to be part of the conversation. But what I was hearing on the ground in terms of this pay-to-play system and the younger athletes is that families are saying, “We’re here for one Olympic cycle, but we can’t afford to be here for two and three.” Which is where those conversions into medals start to happen. We’re saying, “How do we create the system that works in Canada?” And our athletes will always punch above their weight. And so to your question around technology, there’s so many opportunities that are opening up there. Yes, it’s expensive to invest in it, and yes, we need to have a strategy to make sure it’s part of how we move forward, but AI offers some incredible cost savings. And the company I’m building is a performance tech company where we take the knowledge base and we work with the experts, the very best in class to basically democratize access to that knowledge. So there’s ways that if we plan for this and we look strategically into the future, we can actually reduce costs over time and get more of these expertise to more athletes as an example of how we can be efficient and save costs if we embrace this and have a plan.

John Stackhouse 00:20:00

Jen, tell us a bit more about the company and what your vision is.

Jennifer Heil 00:20:04

So the company is called Revvel, and it’s really based off of my experiences in the sports system where under the conditions that we talked about around 2010, I had the best sports science and medical team around me that anyone in the world would have. So physio, sports psychologists, nutritionists, the best of the best. And it was extraordinary and it allowed me to go on and achieve my goals, but I started to think that was normal. And so when I retired from sport, I was like, “Wait a minute, this is weird. Where is everybody?” And so my goal has always been, how can we create these structures and get this knowledge that’s in the sports system that’s best in class on the human body, human performance? How do we get that into the general population? And so I went down to Stanford with this thesis where I did a one-year MBA and was able to go and explore the technology to do this because it’s never been scalable before. And so we’re building the platform where with the experts, we create their AI knowledge base, which is like a living, breathing thing that they have to upkeep. And then through an app, you’re able to access that knowledge and personalize it to your own life context.

John Stackhouse 00:21:13

You also co-founded something called B2ten, which is designed to fill the gap between the national system and what athletes actually need. Tell us a bit more about B2ten and where it might take us.

Jennifer Heil 00:21:25

Yeah. So I mean, when we look at the sport system holistically, we need a lot of different players at the table. David has talked about the COC and the private investment. That’s a critical piece to our sports system. B2ten was really about bringing private dollars, philanthropic dollars into the system. And our donors have been with us for 20 years, have raised tens of millions of dollars, and it all comes down to nation building for them. They understand the importance of sport. They understand how sport brings us together as a country. And so we’ve been able to bring these top resources and really create these athlete-centric training programs, which is so key in terms of the culture, but also getting these expertise into the country and keeping them here. So that’s been a huge focus of it. We also have an arm of getting physical literacy into daycares and making sure that that connection from elite sport down to grassroots is happening. 2ten continues and needs to do its part in the system and making sure that the best in class are accessible to our athletes is a key part of the focus.

John Stackhouse 00:22:30

How do we get future generations more engaged? How do we support them and how do we use technology to re- up the pipeline?

David Shoemaker 00:22:39

You may have heard of RBC Training Ground, which is basically a talent identification program that has worked marvelously in its 10th year. RBC has been able to go around the country and find athletes and help them determine what sport they’re most likely to have success in. And we have some really amazing stories that have come out of that. For example, Kelsey Mitchell, who won a track cycling gold medal at the Tokyo Olympics was only five years prior to that a soccer player and had power in her legs that was off the charts. And Avalon Wasteneys, who was a rower and was identified by RBC Training Ground and was part of that Women’s Eight team that’s been so successful. I think also with AI, we can, and I’ll use Jen’s turn of phrase, democratize talent identification in the country. Imagine being able to go to youth all around and say, “Okay, here’s the new app on the phone, show us how you jump, how you run, how you throw, et cetera, et cetera and we’ll come back to you and tell you what sport you should go and sign up for at your local club.” We know that there’s efforts to do this in part of the African continent to try to get a little bit more Olympic activity out of some of those countries and Senegal in particular in the lead up to the Youth Olympic Games that’ll be happening later this year there. I’m excited about how sort of technology could help us in a country as large as Canada, tap into the talent that’s surely out there.

John Stackhouse 00:24:12

As we move towards close, I wonder if I can get both of your thoughts on what we need to strive for. I’m fascinated what other countries have done, we all know about Britain’s success with cycling, investing heavily in that. Australia’s invested more in sports science. Ireland funds a national athlete data platform for a country that’s pretty much the size of Greater Toronto. So other countries are making really interesting strategic bets. So as we think about that big vision, also what are some of the big bets we should be thinking about?

David Shoemaker 00:24:45

Well, we’ve announced a Team Canada 2035 10-year strategy that has three core pillars: podium, play, planet. And in terms of podium, we aspire to be top five in the world on a combined basis when we aggregate our summer and winter Olympic performance. In terms of play, we aspire to get a million more young people into organized sport. And that’s about linking the incredible performances on the world stage and the inspiration that creates in young people. So when Summer McIntosh ignites a world of young people to want to get into swimming, they’re not just left to wonder, how do I contact my local swim club? The local swim club is there for them and offering access at levels that are much lower than they are today.

And then planet is about our belief that we cannot achieve either of those first two pillars if our sporting environments aren’t preserved. And this is a winter problem, but it’s also a summer problem with incredible heat and air quality issues, but we do have to preserve our sporting environments with melting polar ice caps and snow issues. And technology plays a really important role there. We see more and more countries tenting snow over the summer months so that it exists for a reliable snow season going forward. And I think we’re just beginning to scratch the surface of what leadership could be in that space so that the winter games are here with us in the way we see them for many, many years to come.

Jennifer Heil 00:26:13

I want to just say the athletes don’t lack ambition. And that was very clear to me in Milano Cortina, being on the ground with some of the lesser funded sports, the heartbreak there was so real of the athletes. One of the athletes in a sliding sport spoke to her coach and she was like, “I want to be better. I’ve been here for eight years. What do I have to do?” And the coach who was a former athlete said, “Well, when I was that far into my career, I had more time on the track. I had that extra training camp or two training camps every year.” And the response was, “Okay, well, how much do I have to pay?” So this isn’t the system we want to build. It’s not sustainable. I want to see that same ambition matched from the leadership of the government. I think it’s important that as Canadians, we don’t mix up humility with ambition. Our athletes are hugely ambitious. We know that Canadians like waving the flag. We saw it in 2010 when there was just this incredible wave of pride in our country and pride to stand on top of the podium. We know that to be true, but the point is is that we do need a strong functioning system to inspire the youth to get Canadians active. All of this matters and all of this can be connected, but we have a lot of work to do.

John Stackhouse 00:27:36

Well, I think it’s on all of us. We all embrace the Team Canada spirit. What do we all need to do in the next, let’s say, two years to pick up the pace towards those longer term goals?

David Shoemaker 00:27:49

I believe the linchpin here is federal funding. I believe we have a Prime Minister in Mark Carney who believes mightily in the power of sport. We’ve seen him in hockey jerseys on the campaign trail. We have confidence that he hears our athletes, but we need action in that space. We have a Minister of Sport in Adam van Koeverden, an Olympic champion, an icon who also understands the power of sport. And so we just need to get this one over the line and then deploy it in a way that makes sense, consistent with the vision in the way that Jen’s spoken so well about.

John Stackhouse 00:28:28

Maybe one last question to all the young Jennifer Heils out there today, what’s your message to them?

Jennifer Heil 00:28:34

To me, sport equals joy. And I can tell you that being an Olympian, standing on top of the Olympic podium, some of my best moments in sport were school sport, where being a part of the school volleyball team was going to the Canada winter games and meeting incredible people from Newfoundland who sent me letters in the mail for an extra decade. To me, it’s about going out and striving to be your best in a positive environment. And I think that’s what we should aspire to build, whether that’s community, provincial, national team level. That’s what we should aspire to offer our youth. But for me, it was always about challenging myself to be my best, and that kept the fire alive. Of course, I wanted to win medals, that those were the outcomes, but that wasn’t where the joy was.

John Stackhouse 00:29:25

Being our best in a positive environment, what wonderful words. That really, really is joy. Thank you both for your leadership, for your inspiration. Let’s keep at it. It’s “Go Canada” time. Thank you for being on Disruptors.

David Shoemaker 00:29:37

It sure is. Thanks so much, John.

Jennifer Heil 00:29:39

Go Canada.

John Stackhouse 00:29:43

When you think of the payoff of 30 million Canadians cheering their athletes from a distance of future generations, investing themselves in sport and all that comes with that, or the technologies that have so many benefits and applications well beyond the playing field, we need to stop putting so much burden on our athletes and start thinking more strategically on how we as a country can invest in the sports infrastructure.

And a special note for budding athletes, you heard David reference RBC Training Ground. It’s a remarkable program and is resuming its search for the next generation of Canadian Olympians. In just a couple of weeks, anyone aged 14 to 25 is invited to register at rbctrainingground.ca and come out to any of the free local qualifying events that are happening right across the country to test your speed, power, strength, and endurance. If you’re looking for more ideas and insights, visit rbc. com/ thoughtleadership. There you’ll find a whole range of critical insights on how we could all make more informed decisions in a rapidly changing world.

You’ve been listening to Disruptors, an RBC podcast. If you like what you’ve heard, please rate, review, and follow us on Apple or Spotify. That helps more people find conversations like this one.

I’m John Stackhouse. Thanks for listening.

Harvest Now, Decrypt Later: The Quantum Era’s Encryption Challenge

SPEAKERS

Christian Weedbrook, Dr. Stephanie Simmons, John Stackhouse

John Stackhouse 00:00:09

Hi, it’s John here. I don’t want to be a scaremonger, but right now as you’re listening to this, are pretty good that adversaries somewhere maybe trying to collect your data, even your encrypted data. If you’re running a company, a hospital, a public institution, or just sharing data. Basically if you rely on encryption to create digital trust or rely on digital trust for anything, this episode is for you.

Now, these sorts of challenges have been with us for decades, but there’s one word that is really sharpening the challenge in the 2020s and that word is quantum. Today we’re going to talk to two of Canada’s leading quantum pioneers to not only understand what’s at stake in this new global battle that’s taking place in machines all around us, but to get a true sense of how Canada has become a true global leader in both the science of quantum and the art of trust.

We’ll be joined by Dr. Stephanie Simmons. She’s the founder and Chief Quantum Officer at Photonic. It’s a remarkable company that I’ve had the chance to visit in Burnaby B.C. And we’ll also be joined by Christian Weedbrook, the founder and CEO of Xanadu and we’ll visit his quantum lab in downtown Toronto.

You may know both of their names from previous episodes of Disruptors. They joined us in 2023 when most of us probably still filed quantum under the label “someday.” Now, these systems are moving from research labs into production infrastructure and will be critical to Canada’s competitiveness and sovereignty in a high stakes global digital economy.

Here’s a bit of background for those of you who may not have your high school physics textbook quite at hand. Quantum computers use qubits. Those are units that can exist in multiple states simultaneously. And when qubits become entangled, they behave as one coordinated system, solving certain problems exponentially faster than any classical computer could. But as powerful as quantum states can be, they are also incredibly fragile.

The real engineering challenge is correcting errors in real time before all those calculations collapse. Once a system reaches so- called fault tolerance, where they can fix errors faster than they can occur, today’s encryption becomes obsolete. Imagine the threats that can go with that, and guess what?

They’re already active. “Harvest now, decrypt later” means actors, usually bad ones, are collecting encrypted data today to decrypt tomorrow. And if that protection breaks, we just don’t lose privacy, we may lose trust in every institution that holds our information. So today’s episode is about protecting that trust layer of the economy before it’s too late and the breakthroughs that come with it. Let’s get into it. I’m here at the Toronto headquarters of Xanadu, which is really in some ways ground zero of quantum technology, certainly here in Canada. I’m with Christian Weedbrook, the founder and CEO of Xanadu, and behind me is Aurora, a creation of Xanadu and the world’s first networked quantum computer. Tell us what we’re looking at.

Christian Weedbrook 00:03:30

So the first thing to notice is this is a quantum computer. It’s the most advanced quantum computer anywhere in the world in terms of its networking capability. So what we see here is four server racks. They’re roughly about seven feet tall. They wouldn’t look out of place in a normal data center. And this is setting the vision for what quantum computing will become, but the challenge here is how to connect them together. Quantum mechanics makes it typically very difficult to connect server racks together unless you’re using photons or light, which is our approach.

John Stackhouse 00:004:01

Okay, take us deeper into that because certainly to the lay eye, it looks like server racks as you say. So what’s going on here that makes this quantum?

Christian Weedbrook 00:04:11

For any quantum computer, you need to be able to access things like the superposition principle entanglement and interference. So all those properties are occurring here. So we’re using photons or light. Qubits are creating up here. And as they propagate downwards, gates are acting on them. And so it’s very much typical of a normal computer. You have inputs, the bits normally, you have gates and then you have the readout. We have a quantum mechanical version of this where you actually have qubits, gates and then measurements at the bottom.

The key point here is that you actually have light starting at the top, getting created qubits and going all the way down. And that’s happening individually and all these server racks. But the really cool thing is they’re actually talking to each other. You can see down here the yellow cables of fiber optics being connected to their nearest neighbor. And that’s really the revolutionary aspect of this Aurora computer when it relates to scalability.

John Stackhouse 00:005:04

And speaking of scale, how much bigger does this get or is this the size and it’s just the intensity that needs to be focused on?

Christian Weedbrook 00:05:13

This can scale up to arbitrary number of server racks now, so that’s being solved.

John Stackhouse 00:05:17

So how do you improve the performance?

Christian Weedbrook 00:05:19

Essentially, let’s take a laser pointer. Whenever you shine a laser pointer at a wall, you can see the laser on the wall. But if you imagine the wall getting taken kilometers away, the imprinted laser starts diluting. It becomes faint. And that means photons have been lost.

Loss here actually causes the errors in our computation. And as mentioned before, that’s why we use error correction codes, so that will protect us against the loss of information. But the other one is working more and more with foundries. So we actually have photonic integrated chips. And we design them here in Toronto and send them off to different foundries around the world. They made or fabricated these chips and send them back to us. What we need to do is improve the performance of those chips, and that’s how we reduce loss from a physical point of view.

John Stackhouse 00:06:07

Christian isn’t giving us a scoreboard today. He’s actually showing us a path to scale. And here’s the uncomfortable part. Once systems like this truly scale, and they will, the encryption that protects identity and transactions today becomes obsolete. “Harvest now, decrypt later” is the storm on the horizon. Encrypted data is being collected and stored now to be open later, but if that promise of protection breaks, we just don’t lose privacy, we may lose trust in those who hold our information.

Implementing post- quantum cryptography is like replacing your roof before the storm hits. If you wait until water is coming through the ceiling, well, it’s already too late. So what does that actually mean for the trust layer of our economy? Stephanie’s going to break down the risk and what leaders need to do next. Stephanie, welcome back to Disruptors.

Dr. Stephanie Simmons 00:07:00

Thank you so much for having me. I’m excited to be here.

John Stackhouse 00:07:03

John Stackhouse: It’s great to have you as a repeat guest. What do you think about most when you think about this idea of “harvest now, decrypt later,” and what’s at stake?

Dr. Stephanie Simmons 00:07:12

Yeah. What I like about quantum is that we know it’s coming and we have the opportunity to prepare. When ChatGPT happened, it took everybody by surprise. But we know this is coming, so we have the opportunity to just take a deep breath and move. “Harvest now, decrypt later.” Data is a lot cheaper to hold onto today. We know that there’s quite a bit of tracking being done and holding onto communications today so that one could decrypt it in the future.

Now, what’s needed for the cryptographically relevant quantum computer has come down considerably. So just for reference, I’m a founder of a company called Photonic. And one of the things that we brought into the market about a year ago now was efficient QLDPC codes, much more efficient codes. What it does is it’s meant that the requirements to build these big quantum systems that can break into all these codes came in by an order of magnitude or more.

So a lot of these things are moving really quickly. And we know that what it can do is it asks us to think about coming up with a new cryptographic solution for the way that we communicate. Now, that’s just the cryptography side.

John Stackhouse 00:08:15

Well, let’s talk about some of the challenges in commerce and what could break down. Is it going to be identity, authentication, signing? Where do you think the vulnerabilities are?

Dr. Stephanie Simmons 00:08:26

It can do the math that we rely upon for what we’ll call the asymmetric layer of our cryptographic systems. And that’s kind of every exchange. So it’s not just authentication, although for sure it is every step along the way where you could take a look. What we use today is we use a, for the asymmetric part of the encryption, we have this handshake. So two different teams over the internet or whatever network, they have this agreement. We’re like, ” Okay, hey, you are who you say you are. And I’m going to rely that this math problem is really hard to solve, but if you have the solution, it’s really easy to check.” So that’s why it’s called asymmetric.

And what you have is that math is kind of what we’re trusting is unbreakable for all the comms. And so when you’re logging into your account, when you’re logging into anything, when you’re forming any communication, that math is what you’re trusting. And so I think that in the early instances, if an adversarial organization were to use that, it would get access to basically any communication we use online.

Now, okay, what I want to say is that there are new cryptographic standards that people are really excited about and they hope they will withstand all future quantum algorithms. We don’t know all the future quantum algorithms, but there is reason to hope that these ones will be resilient. And so we have the opportunity now to change our software and hope that those new cryptographic standards hold.

So there are solutions here, and people have been working on this, as you can imagine, quite a bit. What I’m glad to hear in this conversation here is the interest in actually taking that step and shift. And it’s not easy. It’s not easy because a lot of teams use third party suppliers that themselves are using vulnerable cryptography. So I think we have that awareness moment. The community knows that this is in five years plus or minus. And we can take the time to go in and just put that additional layer of security to know that we’re going to be quantum safe through the coming years.

John Stackhouse 00:10:38

So that’s the threat. “Harvest now, decrypt later” isn’t science fiction, it’s a trust crisis on a timer. We’ve seen the threat, we’ve seen the defense architecture, but there’s another side to this story. Back to Christian Weedbrook. What can quantum computing actually do for us today and what will enterprises use first?

You’re doing a lot around drug discovery, which is one of the big opportunities with quantum. Tell us more about what you’ve done and where you’re hoping that will go.

Christian Weedbrook 00:11:08

Once you have a large enough quantum computer, as mentioned, once you have hundreds of these server racks performance, our world will look very different. So if you look at pharmaceuticals, it starts off with classical simulation of quantum systems. You go through then synthesizing candidates for drug discovery, same with materials. And then you do clinical trials. So meaning you go from simulations all the way through.

And then ultimately what happens is 90% of the candidates after all these trials fail and you’ve wasted 10 years, one to two billions of dollars, and you only have a 10% success rate. So quantum computing will flip that. So whether it’s drug discovery materials, the simulation of complex systems as the starting point, which traditional computers are doing, quantum computing will do significantly better. And the hope is instead of taking 10 years, you can actually do it in significantly less time, say a year or even a few months. And so that’s why our world will look very different.

John Stackhouse 00:12:08

Stephanie, walk us through some of the opportunities that you’re most excited about.

Dr. Stephanie Simmons 00:12:14

Quantum mechanics is hard to simulate classically. By classically, I mean using light switch, zeros and ones. And because of that, we are okay at simulating small chemicals like some of the small elements that we use for drug design and the rest. But once we get to heavy atoms or complicated molecules, even as complicated as caffeine, we can’t simulate it fully.

So having a tool fit for purpose for the material world opens up with the opportunity to produce not just a large language model, but a large chemistry model or a large physical model to really understand how the physical world works, which would be a whole other layer of capability that we can then bring to whatever industry we want. That can help with corrosion, it can help with metabolism, it can help with more complicated drug design, photosynthesis or redesigning of the energy landscape with having new catalysts to help with all kinds of energy efficiencies. That’s a big one.

In the financial world there’s a lot of people that are looking at how to use these tools to better help with some of those applications, whether or not it be optimization or detection of anomalies or whatnot.

There’s a way to leverage not just AI and classical computing, high-performance computing, but then bring quantum into the mix to have all of the computational tools available to sort out our most challenging problems computationally.

John Stackhouse 00:13:39

I’ve had the privilege of getting to see your computer up close. Most people will not get to see a quantum computer, but they’ll discover quantum through the cloud and through quantum as a service. Tell us a bit more about QaaS, Quantum as a Service and how different enterprises, but also individuals should be thinking about accessing quantum through the cloud.

Dr. Stephanie Simmons 00:14:03

We should all have roadmaps internally. By we, I mean the broader community. How does it impact your business? And understanding those applications and doing the application engineering and development to know what kind of quantum resources you’re willing to pay for. If we were to put a hyper capable quantum computer into the cloud, most wouldn’t know what to do with it. So having that roadmap for like, ” Hey, what would you pay for?” I think that’s really important because if you don’t do it, your competitors will, and then they’ll be able to use it to their advantage in a first mover sense.

Quantum as a Service is the way to get quantum capabilities into the hands of everybody who needs them, but can’t afford a single system. But this is similar to how we’re using cloud compute today. Most teams don’t want to build their own data centers, but they do want to have access to that capability. And I think what’s going to happen over time is the field will progress and the quantum part of it will be under the hood, and you’ll only see the application layer.

And that is again, how people are using a lot of the tools today, right? AI or high performance computing, the really, really high performance teams will go all the way in and understand how to do it themselves, but there will still be a lot of appetite for the high level access that only is providing solutions to problems, not compute cycles themselves.

John Stackhouse 00:15:29

As that evolves, again, help but think about sovereignty and security, the more that quantum is distributed. If you have your own computer as you do, I imagine that is more secure, but as quantum gets distributed through the cloud, there’s more vulnerabilities. How should we be thinking about both sovereignty as a country, but also security for organizations and individuals as that distribution starts to accelerate?

Dr. Stephanie Simmons 00:15:56

That’s a wonderful question because the last thing you want to do is have a quantum computer that could hack anything just be freely available online. That one might be a bit messy.

John Stackhouse 00:16:06

That’s a scary thought.

Dr. Stephanie Simmons 00:16:07

Well, I mean, okay, let’s just be clear. If we get through the cybersecurity transition, which will be a transition, there’ll be some number of years and then we’re done with it, then we should have those tools available for everybody to use for whatever they need. So there will be a place where we think about yes, sovereignty and security through this transition, and that’s where, again, especially because Canada invested in quantum so early, we have a little bit more cultural awareness here than most other countries. We should take that step and be in front of it because then we could be one of the first to actually, from a security perspective, leverage the full benefits.

Now, this comes back to the value side. Perhaps all you’re asking for is an optimization to a problem. And you could submit that job rather than have access to the computer. Then you could make sure that the actual requests are secure, right? Because asking for an optimization is different than asking to hack a communication. Right? And so that could be managed from a security perspective by the providers and done so in a way where it’s not limiting the providers to actually provide value to the world.

Now, I would share that Canada’s way ahead of many, many nations on quantum. And there’s maybe a top 10 list of teams around the world that are on this race to deliver these big commercial scale systems with all these applications. And so from a sovereignty perspective, we have the opportunity to not make the mistakes that we did before and actually double click on a commercialization frontier for this technology, not just invention.

I think it’s our time to learn lessons of commercialization from a sovereignty perspective, because if you take a look at how a lot of new technologies have been developed, you take a look at the iPhone for example. Most of the components for the iPhone were developed through DARPA contracts, a US government agency that fueled defense aspects, but also then were used in the commercial market. And I think that we can learn lessons like that because those programs, they’re absolutely part of the mix, especially if it’s important from a sovereignty perspective to be first and have an actual commercial landing.

Some of the other incentives that come along are all kinds of matching programs or incentive programs. These are really part of the game. And teams want to succeed in stable, lovely places like Canada, but the money talks too. So yeah, we do have to think about that structure and make sure that the plans and structures are in place because people want to win here, and we absolutely can.

John Stackhouse 00:18:41

Companies and universities, public sector organizations and individuals need to come to grips with this incredible opportunity. What’s the key to get going with and focus on in the year ahead?

Dr. Stephanie Simmons 00:18:53

Yeah, I would suggest get a quantum transition plan in place. There’s a lot of work that now exists that you can leverage. You don’t need to start from scratch. Part of that is going to be putting some of the suppliers on notice that you as an org need them to be quantum secure. And also think about internally how you want to benefit from the applications that are known already, and then think about developing them further. Because I would tell you that those applications are coming in thick and fast now because people are really seeing how close this is.

I think back to Avro Arrow and Bombardier and Nortel and Blackberry, I mean, we can do it and we can keep it if we learn from what structurally seems to be working elsewhere, just honestly pattern- matching and hitting that market. So one of the things that the US government is doing, for example, is putting in $ 300 million per quantum company that they think has a shot on goal. And Canada very helpfully is playing with that market force. And so that’s an awareness thing that I think is really positive progress.

From a regulation perspective, I think it’s important to not get too fearful and lock it down because that could be a market force that’s a disincentive to actually build. But let’s just be smart about it, right? Let’s get the cybersecurity in place across the country. We already have a date now. 2030 is our date with the Five Eyes. In general we are thinking about this date, plus or minus. I think we need to bring it in a little bit personally, but that’s because I know some things that maybe others don’t. And we can do it. There’s nothing wrong with it, and then we can really benefit. I think it’s going to be a wonderful wave of capability that we can use on all kinds of hard problems.

John Stackhouse 00:20:30

John Stackhouse: It’s no coincidence that in pretty much every national strategy we now see whether it’s defense and space or autos, and of course, AI, quantum is a key element. And a lot of that is due to your leadership, Stephanie. So thank you for that and thank you for being on Disruptors.

Dr. Stephanie Simmons 00:20:48

Oh, absolutely. Thanks for having me on. It’s a great conversation. Really appreciate it.

John Stackhouse 00:20:55

Here’s one thing that’s really important to remember. Quantum computing isn’t some day, it’s now. The systems are real. The threat is active, the clock is ticking, but this isn’t a story about inevitable disaster. It’s a story of choice. You can treat quantum as both a capability bet and a security retrofit. You can start now inventorying where you rely on cryptography, prioritizing what must stay secure and migrating to post- quantum strategies before today’s protected data becomes tomorrow’s breach. Or I guess you can wait for the headline moment, but by then, too late.

If you want to know more about quantum, check out rbc.com/thoughtleadership. You’ll find lots of great content there, including a new quantum primer from our research associate, Sabrina Schuchel.

You’ve been listening to Disruptors, an RBC podcast. Please rate, review and follow us on Apple or Spotify or wherever you get your podcasts. It helps more people find conversations like the one you’ve heard today. I’m John Stackhouse. Thanks for listening.

The $15m Cliff:  Keeping Canadian Agri-Food Startups Scaling at Home

SPEAKERS

Lisa Ashton, Darren Anderson, Kyle Scott, John Stackhouse

John Stackhouse 00:00:10

Hi, it’s John here coming to you from Ottawa to talk about agriculture. Now, I know this isn’t exactly the place you probably think about for agriculture, or for that matter, the time of year. Ottawa is frozen, and by frozen, I mean minus many double digits, and it’s hard to see any green shoots around the place even during Winterlude. But Ottawa this week is actually the very center of an important debate about Canada’s agriculture future and particularly about the kind of capital we’re going to need to grow quite literally a lot more in the years and decades ahead.

On this episode of Disruptors, we’ll hear from leading innovators as well as capital mobilizers, but I want to kick off with my colleague, Lisa Ashton, who is RBC’s Ag Policy lead, and the author of a new report on Canada’s growing challenge of capital for agriculture and particularly ag tech. The report’s called Seeding Scale. Lisa, welcome back to Disruptors.

Lisa Ashton 00:01:13

Thank you for having me.

John Stackhouse 00:01:14

What do we need to be thinking about as a country in terms of the capital that farmers and all the techies behind them are going to require in the years ahead?

Lisa Ashton 00:01:24

So over the last few months, I’ve had the opportunity to go literally coast to coast, meeting with farmers and processors in PEI and incubators in Vancouver. There’s a deep concern that we’re exporting our startups because we’re not supporting them at the growth stage.

John Stackhouse 00:01:42

Let me pause you there, Lisa, because that’s a well-known challenge in tech land that get gobbled up by American VC firms or bigger tech companies. This is actually happening in ag too. Tell us more about the ag tech companies that are getting gobbled up, particularly by the US.

Lisa Ashton 00:02:00

Certainly, so it’s not even just ag tech companies. What we’re hearing is this challenge about agri-food companies within the Canadian context. They have relatively strong support at the early stage. We have incubators, accelerators, venture firms that are really growing within the sector. But once they get to about the 15 million market-

John Stackhouse 00:02:20

Is that 15 million in capital size or revenue or something else?

Lisa Ashton 00:02:24

In injections in venture into a growing company. What that means is that those companies that are looking for Series B, Series C, Series D types of funding to grow their business, they have to start to seek foreign funds, which isn’t necessarily a bad thing. But when we think about the domestic regulatory frameworks in terms of bringing products to market and getting approvals in Canada, mixing that with the capital challenge drives companies to foreign markets so you can almost simply think about it as we’re investing in Canadian IP and then exporting that IP to benefit other countries’ productivity, job growth, and expansion of their agri-food sectors.

John Stackhouse 00:03:08

One of the things I found really interesting in your report, again, it’s called Seeding Scale, is that this was not always the case. In fact, just a decade ago in the 2010s, Canada was doing much better in terms of capitalizing ag-tech, and then it seemed to go off a cliff with the pandemic.

Lisa Ashton 00:03:26

Yes, there’s certainly a downturn in terms of growth capital across sectors. We see a 10-year low in terms of value in deal count for agri-food growing companies. Venture firms were really hot and heavy up to the 2021 peak, and we’re seeing the capital flow much slower. The sector attracted roughly 4% of growth capital over the last five years, and when you think about that in comparison to the sector’s contribution of GDP, around 7%, it’s certainly undercapitalized in that regard as well.

John Stackhouse 00:04:00

One of the other challenges I’ve seen is also the lack of knowledge in a lot of companies, whether it’s those federal agencies or VC shops, they have people who really understand software as a service, but have no understanding of how agriculture works. That’s not the case in the United States. When I get to visit VC shops in Silicon Valley, there will be an ag-tech expert who has deep subject matter expertise. Two things going on this week that we’re part of. One is a national round table with Canada’s agriculture minister, Heath MacDonald, as well as investors and operators and innovators from across the country talking about this very challenge. Also, Farm Credit Corp, a big federal agency, has its annual Future of Food conference where farm leaders and agriculture leaders from across the country get together. Maybe that’s one of the reasons it’s happening in February, not a lot to do back on the farm.

Follow us on our social media channels for more on those engagements. I think it’s worth stressing that for all the talk we’re hearing, and it’s good talk about the amount of capital Canada is going to need over the next decade to build more economic independence across the country and across all sectors. Yes, we’re talking about oil and gas and minerals and advanced manufacturing and auto and defense and space. Not enough talk about agriculture.

Lisa Ashton 00:05:27

I couldn’t agree more, John.

John Stackhouse 00:05:28

It’s probably maybe closer to 10% of the national economy, that and more of export potential. I like to say it is the one sector that stitches together every single community across this country. It’s also important to our national fabric, and it is all about technology. As we’re talking about attracting capital, retaining capital, growing capital, in all these other sectors, we got to think agriculture, agriculture, agriculture as a place where we can really scale fast. Lisa, before we get to our guests and expanding this conversation, what’s the one thing you would love Canadians to really come to grips with as we think about the year and the years ahead?

Lisa Ashton 00:06:13

I really hope that Canadians come to grips with the potential in agri-food. It’s a large exporter. It’s a key exporter for the Canadian economy, but within our regional hubs from Vancouver to PEI, it really is a driver of innovation across universities and businesses and governments. And so it really is a place for career development, but again, that investment in terms of the opportunity to grow and meet Canada’s ambitions that have been clearly laid out over the last few months.

John Stackhouse 00:06:47

Let’s hear now from a couple of amazing Canadian innovators who are on the front lines of all this and more. Darren Anderson is CEO of Vive Crop, a company building solutions that have to work in the real economy in real growing seasons. And Kyle Scott is the Managing Partner of Emmertech, a Canadian ag-tech investor who knows a thing or two about how to attract and grow those millions of dollars that we’re going to need in the years ahead for Canada to be a true ag superpower. Darren and Kyle, welcome to Disruptors.

Darren Anderson 00:07:19

Thank you for having us.

Kyle Scott 00:07:20

Thanks very much.

John Stackhouse 00:07:21

Darren, I’m going to start with you. Give us a snapshot of the vision you have for the company.

Darren Anderson 00:07:26

Sure. We make more sustainable and effective pesticides, and it’s all based on technology that was originally developed at the University of Toronto almost 20 years ago now, which is kind of crazy to say out loud. But we bring products to market that increase producer productivity, increase their profitability, increase their sustainability, primarily focused on North America and our products will be used in about three million acres this year.

John Stackhouse 00:07:48

And how big are you today?

Darren Anderson 00:07:50

We’re about 75 people. About 95% of our revenues in the US will be about 25 million in revenue in Canada this year.

John Stackhouse 00:07:59

Great story just getting going. We’ll come back to what you need to keep that going. But Kyle, tell us a bit about Emmertech.

Kyle Scott 00:08:06

Emmertech is a Canadian-based investment firm. We invest solely in agriculture companies, mainly domiciled in Canada. It’s mainly strategic egg companies, so some of the large corporates in the sector, and then a number of high-net worth farmers from across the Canadian prairies as well.

John Stackhouse 00:08:21

And Kyle, what have you needed to get Emmertech up and running and to succeed where maybe others have shied away in Canada?

Kyle Scott 00:08:29

I’m originally from Saskatchewan. Spent most of my time working out in Toronto in management, consulting and private equity with some of the largest players in Canada. I think that one of the things that I noticed then as well as now is there’s just not a lot of people who come from that space who are pursuing agriculture and agricultural opportunities. I view it as a pretty big part of my role to get more of those people interested and knowledgeable about the space to be able to bring more investors and more capital into agriculture.

John Stackhouse 00:08:58

And one of the big things, if I can call it that, that you’ve been instrumental to is a commitment this week among a range of financial institutions and capital mobilizers to get roughly a commitment for $ 4 billion of new capital. For ag-tech, this is being led by Farm Credit Corp. RBC is part of the pledge. Kyle, what were the biggest challenges in getting those commitments to this $ 4 billion?

Kyle Scott 00:09:25

Yeah, for sure. More champions in the sector and doing a better job of telling our story, I think are two of the big ones. We have some of the greatest founders in the world here, especially when it comes to agriculture. And when you speak with Canadian founders, it’s truly compelling how close they are to their end customer base. I think, John, you might’ve alluded to this earlier about how agriculture in Canada touches every community and touches everyone in the country.

And one of the things that’s starting to attract more and more capital into the sector is just having those founders out there, doing a better job of telling our story, and quite frankly, starting to have some pretty significant wins. When you look at a company like Vive, like Darren’s company, what they’ve been able to build and grow domestically from Canada has been truly amazing and it’s just getting started, and there are myriad other examples like Darren across the country.

Darren Anderson 00:10:18

Well, and I think there’s actually a unique opportunity in Canada specifically because, to put it bluntly, because we tend to operate in a more capital constrained environment, Canadian founders tend to build real companies earlier than maybe some of our competitors down south. And so I think one of the things that that means is when companies are now ready for that growth stage, they’ve built one heck of a foundation to grow off of that their competitor companies just don’t have.

Lisa Ashton 00:10:43

Darren, just quickly, what do you mean by real company? We heard from a lot of stakeholders that startups may be coming out with solutions that don’t actually solve a problem in the agri-food sector. Is that maybe what you’re referring to or is it something else?

Darren Anderson 00:10:58

There are a set of companies that, to put it bluntly, are better at selling to their balance sheet customer, to their investor set than they are at selling to real farmers and making a real difference on the farm. And those companies can often raise capital quite successfully and grow quite successfully, but those are also the ones that tend to get way out over their skis and potentially end up just not making it. And I think we’ve seen a number of those high profile failures recently. I think for a lot of Canadian companies, presuming the farmer need is there, the reality is because they’re capital constrained, they have to know how to make money out of the gate. They have to know how to generate a real demand, real value to the farmer. They have to know how they’re going to make money, and then that sets them up to be able to scale quite rapidly as they build that repeatable, predictable, scalable engine inside their companies.

John Stackhouse  00:11:49

Darren, one of the riddles I think a lot of us wrestle with is the opportunity and challenge of the United States. So you said, what was it? 95% of your revenue is now in the US, that’s great. I mean, every Canadian company needs to be almost out of the gates an exporter. The best market to start with an export strategy is the United States, despite all the concerns that we have right now, it is our ticket to scaling, but it can’t be our only ticket.

One of the challenges though that I hear about over and over and over again is that a company becomes largely beholden to the US market. Then it starts to raise Series C, D, E from US VC companies who offer sometimes more favorable terms, who have subject matter expertise, and then say, “Oh, by the way, now that we’re taking a material share in your company, we’d like you to move to Austin or Silicon Valley or wherever they see the opportunity to scale there because you’re in a bigger ecosystem.” Walk us through how Vive is navigating those currents.

Darren Anderson  00:12:53

Yeah, we’ve been fortunate in that our shareholder base is still very much dominated by Canadians. We haven’t had some of the pressures that you’ve been talking about.

John Stackhouse  00:13:02

95% of your revenue in the US, 80% of your capital in Canada.

Darren Anderson  00:13:06

Correct. And I mean, there are many issues with that. I’m incredibly passionate about bringing our tools to Canadian growers, and if you think about it, 80% of our capital is coming from Canadian capital pools effectively to help US growers out compete Canadian growers because the US growers have our tools and the Canadian growers do not. I don’t think that’s what any of us want to be happening, but if we look at our next stage of growth, there is no growth stage capital in Canada for companies like ours, almost nothing. What FCC is doing is incredible and has the potential to be incredibly catalytic, but before they came along, there was almost nothing as far as growth stage capital.

And so for us, the next stage of growth was going to have to be in the US or in Europe or in Brazil where you have these major funds that have the agricultural expertise that you all talked about and know what it takes to build a company. And I worry about taking capital from those types of organizations and having them say, “Yeah, I understand it’s awesome that you’re a Canadian company, but why don’t you look at moving?”

John Stackhouse  00:14:04

But we can fix that. Kyle, I’m looking at you.

Kyle Scott  00:14:08

Yeah, it’s a bit of a funny problem. Up here, we do really, really well with early stage financing. The problem is that we’re one of the larger ag tech investors in the country, and we can’t go in when Darren or some other companies that we know quite well across the country are looking to raise 30, 40, 50 million dollars. That’s an entirely new snack bracket and requires an entirely different fund structure to be able to participate in. So in Canada, it’s once you hit that growth stage that there’s really, really a significant lack of capital. This year, two of our other companies as well have gone out and successfully raised $ 30 million plus rounds, and almost all of the capital and certainly the lead investors from those have come from either Europe to US or elsewhere, not domiciled in Canada.

John Stackhouse 0 00:14:56

What on the corporate side, Lisa, do we need to ensure that the value chain, as it’s called, is investing in farmers and ag tech companies?

Lisa Ashton  00:15:04

There are a few movements that are happening currently in the agri-food ecosystem, particularly the Canadian Food Innovation Network has designed a program that is specifically for connecting corporates to early stage founders. This is mutually beneficial so that food retailers, for example, can actually see what’s coming down the pipeline, seeing what kinds of food innovations or food products are being developed, and then it provides the startups with early access to their potential buyers, their potential exit, or their potential collaborator across the supply chain.

Kyle Scott  00:15:43

Yeah, one of the things that we definitely see is more and more productive corporate engagement when they’re participating with funds. Either as an investor in a fund that then invests in companies or alongside into the company, there’s quite a few examples, fairly well known, that when a corporate gets too involved and has too much control directly of a company, it can go pretty sideways pretty quickly for the founders. There’s some different mechanisms to get more involvement, and I think what Lisa was referring to there, the corporate participation, if we could see an elevated level of that working alongside more of the investors in Canada, I think that that’d be super, super helpful.

John Stackhouse  00:16:27

Kyle, take us through the typical journey of a growth company. As you’re saying, there’s plenty of early stage capital from folks like you. Get to $ 15 million valuation, you’re fine in Canada. Now we may have public sector entities like FCC and BDC that would help bridge the valley of death as it’s known. But with all due respect to those organizations, they tend not to be cutting edge on a global platform to help companies get to that unicorn status. What should we be thinking about as a country to ensure that we do have that sophisticated, savvy, globally relevant growth capital operation that firms like Vive can work towards as they get through the valley of death?

Kyle Scott  00:17:14

Holy smokes. It’s a tough nut to crack, and one of the things I’ll say about the Crown Corporation, specifically EDC, BDC, and FCC, they’re an interesting participant in the ecosystem because I firmly believe that they want to be helpful and they will follow another investor into an investment, but they will not lead an investment. And so the challenge you run into is that those groups are there to participate. They are not there to solely carry the torch for a company going forward. So without someone to match or someone else to lead, that tool stays in the tool belt and can’t be used. So that becomes one of the challenges with those groups. The broader point about how do we create more globally relevant larger growth stage ag-tech investors. To be perfectly honest with you, it’s one that I’m trying to fix right now. It’s a gap that we’ve clearly identified as we’ve invested in early stage companies and they’ve grown up.

One of the number one places for us to be able to go is our Canadian financial institutions and our Canadian agriculture corporations who really, really care about the sector. And so for us, it becomes much like when our founders go out to raise capital, it becomes being able to tell the story, show why this sector is important, and because you are investing in financial assets, show why you’re able to make money doing it. To tell those three parts of the story to people who are unfamiliar with the sector takes time, it takes resilience, and it takes on your investor side, someone willing to take the leap with you and put money to work in the sector.

John Stackhouse  00:18:47

One of the challenges there I suspect is just exposure. It’s knowledge. If you go into any financial institution or large investment operation, likely they have experts in life sciences and health tech. Increasingly, I suspect there will be that expertise in defense tech because that’s the hot hot thing now with tens of billions of dollars of new NATO commitment coming to the fore. And then there’s poor old agriculture, our original growth sector where we just take it for granted, but don’t have that expertise in probably the large pension funds, but other large institutional investors as well.

Kyle Scott  00:19:23

Yeah. To your point about the institutional knowledge around agriculture, it’s funny. I say this pretty frequently. It’s nice for agriculture that it hasn’t been, and I say this lovingly, co-opted by the MBA mentality. I’m an MBA, so I get to say that. But the downside of it is that a lot of the folks who rise up into those roles and come from there, they just don’t know the sector. I think that one of the challenges there is more fundamental and goes back to how do we make agriculture a cool, interesting industry for more folks who are passionate about finance, passionate about investing to be able to come in and actually drive those outcomes.

John Stackhouse  00:20:00

Make agriculture cool again. I’ll let people play with that, especially in MBA schools for all the MBA deans listening.

Lisa Ashton  00:20:11

Darren, you raised a really interesting point that beyond just the growth capital challenge, there’s a number of other factors to why you’ve seen your markets grow in the US much faster than Canada. In our report, we looked at the three Cs beyond capital, and one of those is competitiveness. Would love to hear your view on that and why you’re seeing those factors lead you to a market growth in the US relative to Canada.

Darren Anderson  00:20:37

I do think for any Canadian agri-tech company, they’re going to have to be looking at the US as a market, but unlike in almost every other sector where the US is 10 times the size of the Canadian market, in most areas in agriculture, you’re looking at being something like a third. So the question is just how do you capitalize on them? So as you noted, we started selling in the US in 2016 when we received our first regulatory approval. We received our first regulatory approval in Canada in 2023. We have 11 products approved for use in the US right now. We have one product approved for use in Canada.

John Stackhouse  00:21:08

Darren, let’s pause for a second there. You’re saying that you’ve had one regulatory approval in Canada, 11 in the US. If Team Canada loses 11 to one to Team USA, it will be a national crisis. We got to come to grips with that. Give us a sense of the quick changes that you would like to see happen this year to allow us not to lose 11 to one, but actually maybe win 11 to one.

Darren Anderson  00:21:33

I’ve got one big swing, and then one small swing, if you’ll permit me. On the big swing, I think there’s an opportunity for Canada to target a culture of reciprocity, reciprocal recognition of regulatory approvals from other countries. Now that wouldn’t be in all cases, right? But default is that if something’s been approved in Australia or if it’s been approved in the US, it should be a faster path to be able to bring those products to market here in Canada. That would be one change. It’s a big one, but it is doable and it is something that I’d like to see our trade representatives focused on. The smaller ask is, if you think about, we’re spending so much time right now talking about “buy Canadian,” what about “regulate Canadian?” Canadian domestic companies, front of the line for regulatory approvals.

John Stackhouse  00:22:17

Seems easy. Kyle?

Kyle Scott  00:22:19

We often say capital’s like water, it’ll find the path of least resistance to the largest ROI. And so removing some of those regulatory burdens and regulatory pathways that allow our companies to scale and commercialize rapidly would be hugely beneficial to attracting more capital to the sector.

John Stackhouse  00:22:35

Yeah, capital is like water. There is no shortage of capital in the world, no shortage of capital in Canada actually, but a lot of it is flowing to the US because of those opportunities. Even over the last 12 months, capital has been flowing fairly assertively to the US because of the opportunities there, including in ag-tech, which we know is so critical to the country. We know what the challenges are, but let’s also think of the opportunities. We are hearing more interesting Canada from around the world, across all sectors.

I actually got to spend time with a European investor who, the firm’s been around for 400 years. They said, “We have 50 year strategic plans and we review them once every five years. And we’ve just gone through a review and we’re actually really interested in Canada and we’re really interested in Canadian agriculture because when we think about all that the world is going to need over the next 50 years, food is going to be one of the big needs. So we are looking for investible opportunities in Canada right through the value chain over the long haul.”

Darren, give us a macro view of what you’re seeing out there in the world and help us understand what we can do to bring more of those opportunities to Canada.

Darren Anderson  00:23:57

The way we view the world right now is there are a massive number of companies out there that would be really, really interesting targets for us to go acquire. We’re actually actively in market right now looking at a number of those targets where we can bring them in house, take advantage of our distribution network, our technology, and build that unicorn right here in Canada. Canadian companies, because they tend to be capital constrained, are good companies. These companies have solid foundations and those are amazing foundations to build off of whether you’re looking at organic or inorganic growth, and I think given the overall market conditions right now, it’s an amazing opportunity to be building something like this in Canada.

John Stackhouse  00:24:36

As we move towards close, I want to take that big picture idea forward. Our research at RBC shows, Lisa, I think we can grow our exports by at least 20% by the end of this decade. That’s our moonshot as a country, and it isn’t just producing more at the farm level. It’s developing lots of technologies right through the value chain of agri-food production so that we can be more competitive here at home, reduce food costs for everyone, but also make ourselves more relevant in an increasingly competitive global market that is going to need lots more food. Kyle, what’s the one thing we as a country need to come to grips with this year in 2026 to get that payoff by 2030?

Kyle Scott  00:25:22

I’m going to cheat and say that there’s two things that I’m thinking about. The first one is working with international partners, attracting more FDI into the country, investing alongside in our companies with knowledgeable investors who can help us export to other markets is critical. So whenever we hear there are other investors passionate about investing in Canada, I think it’s wonderful. The second thing I would say is there’s a lot of ag infrastructure that is due for an upgrade where we can leverage some new technologies as well to become a more reliable, not only producer, but trade partner and exporter.

John Stackhouse  00:25:56

That’s a really interesting point about export infrastructure. Darren, what are the one or two things you would suggest we come to grips with this year for that 2030 payoff?

Darren Anderson  00:26:05

I want to see the FCC capital commitment and the capital commitment by groups like RBC and Emmertech land successfully. I actually think that that is an absolutely transformative and catalytic event for the ag-tech space here in Canada. I think it has the scale that’s coming behind it and the ability for it to have an impact across the entire ecosystem is incredible, and I think making sure that we follow through on those commitments would honestly be the single most transformative thing this year. The nice thing is it’s already underway.

John Stackhouse 00:26:36

Lisa, as we wrap up, seeding scale has so many ideas in it. What are one or two that you want to leave us thinking about?

Lisa Ashton 00:26:44

Darren, you brought up unicorns. When we looked around the world, we looked at China, the US, India, they have stables full of unicorns. The UK, Australia, even Ireland, more countries that we would consider our peers have examples of unicorns in the agri-food sector. Canada has none. So these unicorns, they’re privately held startup companies that are building revenues of over a million dollars per year. And I think building some unicorns in Canada should certainly be a moonshot for Canadians to be thinking of.

John Stackhouse  00:27:17

Yeah, we really should have the Shopify of ag-tech.

Lisa Ashton  00:27:20

Absolutely.

John Stackhouse  00:27:21

There’s no reason that Canada can’t. We just need to continue to scale what we’re doing. Thank you all for being part of that scaling story and for being on Disruptors.

Kyle Scott  00:27:31

Thanks so much for having us.

Darren Anderson 00:27:32

Thank you.

John Stackhouse 00:27:35

Before we go, if there’s a through line from today, it’s that this is a solvable design problem. Canada has the land, the operators, the science, and the entrepreneurs. The work now is alignment, capital that fits agri-food realities, pathways that prove adoption in the real world, and the confidence to build value add here at home. Lisa, your report, Seeding Scale, how can people find it?

Lisa Ashton 00:28:02

It’s live now. Please visit rbc.com/thoughtleadership. It’s part of our growth project where we’re really focusing on key levers within the Canadian economy that can help us achieve our national growth ambitions.

John Stackhouse 00:28:17

If you found this episode useful, please follow Disruptors wherever you listen. Better still leave a rating and share it with someone who’s building or funding what comes next.

I’m John Stackhouse, thanks for listening.

Risk as Signal: A Canadian Playbook 

SPEAKERS

Gerald Butts, John Stackhouse

John Stackhouse 00:00:03

Hi, it’s John here. I’m just back from Davos, Switzerland and the World Economic Forum. If you’ve been tracking the WEF as it’s known for years, it often feels and seems like the status quo. Well, this year was anything but.

The World Economic Forum was all about disruption and, of course, the disruptor in chief, Donald Trump, was there along with a massive US delegation, more CEOs, more cabinet secretaries, I think, than anyone could remember. That was quite intentional. Davos 2026 was America’s turn to make a statement to the world about America First. Of course, Mark Carney was there too, making his own bold, perhaps even disruptive statements about how Canada and our allies need to pivot. If you’re a middle power anywhere, and that’s what Canada is, this new world certainly will be for the brave, and that may be just what Canada needs more of, some bravery in how we take on new technologies, new economic opportunities, and new geopolitical forces right around the world.

I came home with another signal well apart from all the noise you may have heard, and that is the world is paying more attention to Canada. Big investors from Asia, the Middle East, and certainly Europe are looking to move billions of dollars to Canada if and when they can find the economic opportunities. That will be in infrastructure, it will be in natural resource development, but it also will be in technology, particularly in AI, where Canada’s leadership is known right around the world. Here’s the other message that was certainly clear to me, we don’t have a lot of time. If there’s a window open, it’s not going to stay open much beyond this year. So whatever our ambitions are, we need to get down to execution right now. Davos was about much more than Donald Trump and Mark Carney. There were incredible conversations about renewable energy and robotics, as well as how AI is being applied in pretty much every sector across the economy.

You can find my full Davos report on our website, rbc.com/thoughtleadership. It’s called “Davos ’26: Making Sense of a New World Order.”

Now, Davos isn’t the be all and end all, and we’re probably all better for that. We actually need a year-round conversation about where our world is heading and where that will take Canada. To help with that, we’ve teamed up with the Eurasia Group to build a new platform to help Canadians understand where the world is going and where that may be taking Canada. You’ll be hearing lots more from us in the coming months about that, including a big Canada-US summit we’re putting on in June to help our two countries build what should be the most vibrant, dynamic, innovative, and prosperous economic relationship in the world. Canada needs that, but so does the US. Building or rebuilding that relationship doesn’t come without a lot of risks, and, of course, doing nothing is also a risk.

To help us understand some of the biggest risks that Canada is up against in 2026, I’m joined today by Gerald Butts. He’s the vice chair and senior advisor at Eurasia Group, and you also may recognize him from one or two Canadian conversations. Before joining Eurasia Group, Gerry was a senior advisor to Prime Minister Justin Trudeau. He’s also been a key advisor to Prime Minister Mark Carney and a host of other leaders, not just in Canada, but around the world. Regardless of your politics, there aren’t many Canadians I know who cares deeply about Canada as he does. This year, we worked together to publish a report on the 10 biggest risks that Canada faces in 2026.

Now, let’s get right at it with Gerald Butts of the Eurasia Group. Gerry, welcome to Disruptors.

Gerald Butts 00:04:02

It’s great to be here, John.

John Stackhouse 00:04:03

You’ve seen a fair bit of history, not trying to age you, but you’ve seen cycles, political cycles, economic cycles, geopolitical cycles. How are you thinking about where we’re at in January 2026?

Gerald Butts 00:04:17

It’s really important that Canadian business leaders and policymakers and regular Canadian citizens understand that we’re coming out of a long period of stable equilibrium led by the United States. The United States, for all of our lifetime, has been the world’s most important shock absorber of geopolitical risk, and now it’s become probably the world’s most significant generator of geopolitical risk. So when the United States changes its disposition toward the world, when it’s inevitably going to affect us in Canada comprehensively, we’re all being reminded every day that economic growth, prosperity, innovation, all of these things depend on geopolitical peace and stability.

John Stackhouse 00:05:03

So I think most of us are coming to grips now with the reality that our best friend, best customer, best partner on so many things is also one of our biggest challengers on so many things as well. As we look deeper into 2026, how should Canadians be thinking?

Gerald Butts 00:05:23

First of all, Canadians should recognize that we’ve been here before. We’ve had four, maybe five elections where the ballot box question has been the disposition of our relationship with the United States. We’ve been neighbors to the United States for a long time, and the United States has gone through some stuff in that period, and we have negotiated it well in the past. My favorite example that is almost eerily similar to what we’re enduring today is the US Tariff Act of 1890, which President McKinley expressly said he was designing to make Canada the 45th state. We’ve seen this movie before. It’s just been a long time, and we’re going to have to relearn all of the muscle memory that helped us negotiate it in the past.

John Stackhouse 00:06:11

John Stackhouse: That’s fascinating from a historical and a political theory point of view. I also want to think through what it means from a practical point of view. If I’m a tech company, for instance, a Canadian tech company, I’ve grown up with an assumption, and it’s been a pretty good assumption, that I’ve got the free flow of data, of people, talent, and of capital with US. That’s worked really well for tech centers from Waterloo to Burnaby in this country. If I’m a critical minerals operation or any mining operation, it’s been a pretty safe bet that I’ve got the free flow of rocks-

Gerald Butts 00:06:47

Of course.

John Stackhouse 00:06:48

… literally rocks across the border, both ways. Do we need to think about just recalibrating a little bit on the margins of that, or is it a sea change for those sectors and more?

Gerald Butts 00:07:01

It is a sea change, and it’s also a reversion to the mean that we have lived through this extraordinary period in economic history of the free flow with minimal friction of good services, people, data, capital, et cetera. We’re now firmly back in a world where there are impediments to all of those things. If you’re a firm whose business model depends on the trade in those commodities, you have to get very skilled in separating the sheep from the goats. You have to know what are real obstacles, what are being described as obstacles, but are really the political issue that will come and go with the mood of the president of the United States or the state of the point we find ourselves in the electoral cycle. Some things really matter, some things seem like they matter, and some things don’t matter at all.

John Stackhouse 00:08:00

When you think about the Canada-US relationship, what matters most of all?

Gerald Butts 00:08:04

The continuation of the Framework Agreement is what matters most. Maybe the best thing we can hope for coming out of this year is an annual continuation of the USMCA. We really don’t want to see it fall apart because it’s a trillion dollar trade, and a lot of people’s jobs depend on it on both sides of the border. So the challenge we have in the short to midterm 2026 to the end of the decade is to figure out how to walk and chew gum at the same time when it comes to economic development.

John Stackhouse 00:08:36

You at Eurasia Group have called it zombie CUSMA as the like of what we have now, but what is zombie CUSMA?

Gerald Butts 00:08:43

It’s a shorthand term for an agreement that exists on paper, but is impossible to enforce. Even if we do end up with a theoretical dispute resolution mechanism, there are all kinds of ways the Trump administration can avoid court, so to speak, but of course the agreement is there to facilitate trade. It’s not there to solve the problems that are associated with trade. The important thing is that the agreements stay in place so that there isn’t a massive disruption in trade.

John Stackhouse 00:09:15

Yeah, and Canada has an advantage there. We may not feel like one, but we still have the best arrangement compared to all of our other competitors, great access to the US, notable sectors that would not agree with that and are enduring significant economic consequences of the 232 tariffs and other measures. But how do we play this strategically knowing that we’re not the sole target of this, and others are enduring greater frictions or even barriers?

Gerald Butts 00:09:48

Even when you include the 232 tariffs, if you take an all-in comprehensive approach, we still have the lowest tariff rates of any economy to export to the United States. Part of that is due, of course, to the fact that we’re the biggest export market for the United States. This is an important fact to remind decision makers in Washington, to remind Congresspeople as they are campaigning for reelection, that, for many of them… and many of them are feeling the pain from the cratering of Canadian tourism and the decision Canadian consumers are making not to buy American alcohol. As Canadians, we have more power than we think. Obviously, the United States is a much more powerful country than we are by any objective measure, but we shouldn’t sell ourselves short either.

John Stackhouse 00:10:39

It’s also always interesting and important to follow the money. When I watch the money flows, it’s fascinating that a lot of Canadian capital is still going into the US, in fact, more.

Gerald Butts 00:10:51

Big time.

John Stackhouse 00:10:51

I haven’t seen the last quarter of evidence, but it’s significant. This is a critical strategic question for Canada. We need more capital, more growth capital for our tech companies, for our mining companies, and for all the big things we’ve talked about on this podcast, but how do we get more Canadian capital as well as global capital to work this year in our country?

Gerald Butts 00:11:15

Ultimately, it comes down to whether or not we have investible assets. Basically, our entire career, John, people like you and me, business leaders, decision makers, and government politics, we’ve all grown up with this common macro policy that deeper and broader integration with the United States economy was our ticket to prosperity, and we need to build an economic strategy that absorbs that really important change in our relationship with our most important trading partners. We have a whole generation of economic actors in the country who are not accustomed to building our own assets without the participation, if not outright control, equity control, of the United States. We’ve got a lot of work to do to figure out how to build our own investible assets and attract capital to them. I think we’ve got to be probably a lot less judgy about the sources of our capital. We’ve got to think much more clearly and probably more hardheadedly about why and why not we would allow foreign capital to invest in the country.

John Stackhouse 00:12:24

There was a great book going way back into the 1980s with the title Money Has No Country-

Gerald Butts 00:12:30

Still true.

John Stackhouse 00:12:31

… and I think we’re coming to grips with that.

Gerald Butts 00:12:34

Yeah.

John Stackhouse 00:12:34

A lot of capital sources are looking to Canada because of all the great opportunities that we have, but the world, and you hear this over and over again, also has some raised eyebrows when it comes to Canada. We don’t deliver, especially projects, certainly with the speed that much of the world is used to. In our risk report that we did together, one of the risks is cheekily titled The Charter Strikes Back, which gets into this point that Canada is here by design as a confederation, and there is power sharing between the federal government and the provinces. Many of the provinces signed on after 1867 with a full expectation and even demand that there would be this power sharing. The same sentiment is held by many, if not all, Indigenous communities that some feel they haven’t signed on yet. That’s the beauty and frustration of our family called Canada. This is a real tension for the country, and it’s going to perhaps inhibit or slow down some of the things we want to do.

Gerry, how are we going to balance this need for speed, need for delivery, need for execution with the need to respect the design of our country?

Gerald Butts 00:13:54

I think it’s the old-fashioned fine art of persuasion. We’ve got a prime minister, full disclosure, as you know, I worked hard to elect him prime minister, who is, I think without question, the finest economic mind we’ve had in that chair ever. I really hope the premiers around that table seek common cause with the prime minister, and I think the early returns are good. There is no magic bullet to solve the complexity of our constitutional issues. It’s not a question of political will. This is in our constitution. So if you want to guarantee that we get nothing done, then we would ignore the views of the constitutionally enshrined rights holders of the country, and that includes the provinces and Indigenous people.

John Stackhouse 00:14:46

What is your sense of how China right now is viewing Canada? If you could put yourself in Xi Jinping’s shoes, how is he and the power structure there viewing Canada at this moment?

Gerald Butts 00:14:59

I think from a geostrategic point of view, they would love to use the United States’ treatment of Canada as an opportunity to wedge Canada against the United States. I think that that is at the macro level unlikely to happen, but it is more likely to happen than it would otherwise be, and it will probably happen around the edges of our relationship. If I’m Xi Jinping, I’m much more confident about my ability to throw my weight around. Because if you think of geopolitics as a complex version of price discovery, what he has figured out in 2025 is that he has a card that Donald Trump can’t abide being played. So he’s happy with the way the world is developing, and he’s especially happy with the way Russia’s ill-advised invasion of Ukraine has created a resource cubby for his country. The world has unfolded pretty well if you’re Xi Jinping, and he would see Canada as a nice-to-have, but not a necessary partner.

John Stackhouse 00:16:06

A lot of thinking right now seems to be binary.

Gerald Butts 00:16:09

Yeah.

John Stackhouse 00:16:09

Do we attach ourselves more to the US or more to China? Of course, the world is much richer and more complex and diverse than that. Auto sector is a great example of it has thrived for half a century by being integrated with the United States, and maybe that continues. How do we think about these third options, not just for the auto sector, but economically when we’re literally joined at the hip by geography with the United States and have a very attractive customer with a lot of potential for growth in China?

Gerald Butts 00:16:42

It’s really important to take a step back and look at what’s happened to the global economy since the last time we, in earnest, had a discussion about developing a, quote, unquote, “Third Way.” When the Pierre Trudeau government in the 1970s was trying to develop a trade diversification strategy, the United States was just a much larger share of global GDP. The challenge that the Canadian business community has is that it’s always been easier to get on a plane and go to New York or Los Angeles or Boston than it is to hoof it to Tokyo or Singapore, and we’re going to have to learn how to do both because it is undeniably true that we have too many eggs in one basket, and we ought not to because we have so many assets in our country. It’s been a rough time in Canada for sure, but there’s still no country in the world that wouldn’t trade places with us tomorrow. We’ve got a lot going for us in Canada. We just need to figure out how to organize ourselves to deliver prosperity for our people.

John Stackhouse 00:17:47

That’s a great way to set up maybe my last question here. As you think ahead well beyond 2026… You’ve got young kids who are going into adulthood, I’m in the same situation, we have kitchen table conversations about like, “What is our country going to be like 25 years from now?” I wonder what you tell your kids in how you think about Canada in the 2040s and ’50s well beyond 2026. We’ll get through 2026, but what kind of country are we shaping up to be for the next generation?

Gerald Butts 00:18:24

I often reflect on the fact that my real source of success in life was being born in 1971 in Canada, that the dice were loaded in my favor by the circumstances of my birth, having parents who loved me and having a community where my public schools were excellent and all I had to do was study hard and do well and the world was my oyster. I understand why younger Canadians are very pessimistic about the future. I think if you put yourself in their shoes, the millennials, for instance, the first real geopolitical event they remember is 9/ 11. It was followed quickly by the ill-advised invasion of Iraq. Coming on the heels of that was the great financial crisis. Then Donald Trump got elected, and they had to endure COVID. If that’s the first 30 years of your life, that’s a much tougher start than winning the Cold War, watching the wall come down, and narrowly but successfully fighting a referendum campaign. That was kind of our version of what millennials have gone through.

What Jodi and I have tried to do with our kids is just to give them a broader sense of the spectrum of possibilities that, in the grand scheme of things, they were still extraordinarily lucky to be born in Canada in 2006 and 2007, they’re both studying at public universities that will give them excellent educations mercifully, and I consider this my greatest achievement in life along with my wife, that both my kids are studying science and not social science. The world is going to be probably a more difficult place to be in than the one we lived through in the late ’80s and ’90s, but it’s still a big, beautiful place, and they live in the best country in the world, and it’s really their responsibility to make it even better. That’s probably less true than it was when I was born, but it’s still true, and it’s precious, and it’s worth holding onto and fighting for.

John Stackhouse 00:20:43

What a great note to end on that Canada is such a great country for regular people, not only those who are born here, but those who continue to line up to come here from pretty much every-

Gerald Butts 00:20:53

Absolutely.

John Stackhouse 00:20:53

 … corner of the world. It’s also a great place to be an extraordinary person. We have to continue to make it an even better place for all people, including the builders, the innovators, the darers.

Gerald Butts 00:21:04

Those are not mutually exclusive things.

John Stackhouse 00:21:06

Absolutely, it’s not mutually exclusive. Finding that balance, that equilibrium has always been actually one of Canada’s quiet strengths. We’re just being put to a fresher and maybe harder test, but I think we both agree we’re up to it as a country.

Gerald Butts 00:21:22

Yeah.

John Stackhouse 00:21:22

Gerry, thank you so much for this conversation.

Gerald Butts 00:21:26

Real pleasure, John.

John Stackhouse 00:21:29

If you take one thing from that conversation, to me, it’s that risks aren’t new to Canada. In fact, this country was built by risk takers who dared to do things that people all over the world might’ve thought crazy or even impossible. That’s the Canadian way. We just tend to be a bit quieter about it. That’s probably part of our risk management. But we should also recognize that the risks facing the country today are as great as perhaps many of us have ever seen, but with risk comes opportunity. Canada is blessed with a better mix of geography and natural resources, as well as people and talent, and an ability to build communities that not only live together, but work together and build together.

In the year ahead, we’re going to have to figure out how to hold on to those strengths while also being bolder and more daring than perhaps we’ve ever been. I don’t know if it’s an overstatement to say that the country is at risk, but we should all get at it every day with that possible threat in mind. That doesn’t mean being defensive, quite the contrary. It means embracing a bigger, more ambitious world, and a whole new age of technologies, as well as the incredible relationship that we have with the United States to create even more opportunities for the country. That’s how disruptors succeed. When they see risk, what they really see is opportunity.

We’ve linked the full RBC Eurasia Group risk report in the show notes, along with my Davos report. If you’re looking for more ideas and insights, check out our website, rbc. com/ thoughtleadership. Our team delivers critical insights to help businesses, policymakers, and communities make informed decisions in a rapidly changing world.

You’ve been listening to Disruptors, an RBC podcast. Please rate, review, and follow us on Apple or Spotify. It helps more people find the conversations like the one you heard today.

I’m John Stackhouse. Thanks for listening. Talk to you soon.

Climate-led Investing: What’s Next 

SPEAKERS

Dr Lisa Ashton, Clara Barby, John Stackhouse

John Stackhouse  00:00

Welcome back to Disruptors, and Happy New Year. I’m John Stackhouse, and this is the start of season 10. We’re kicking off this year with climate because 2025, was a year of proof and pressure, proof that the transition is scaling pressure, yes, on grids, prices, policy and frankly, public support. To capture where we’re at, The RBC Climate Action Institute has just published its annual assessment of Canadian progress. We call it Climate Action 2026 and in it you’ll find some remarkable deep dives, as well as real life case studies on policy changes, capital mobilization, industry action and consumer reality. So to get a better picture of where the opportunities and challenges may lie in the year ahead, I wanted to talk to one of the world’s most sophisticated and respected climate investors, Clara Barby is a senior partner at Just Climate. Now, if you haven’t heard of Just Climate, it was created by Generation Investment Management. That’s the climate focused firm that was co founded by Al Gore and David Blood, a pretty sophisticated investor who previously ran Goldman Sachs Asset Management, Clara and her team are trying to scale what they call climate led investing. And her firm, Just Climate is scaling quickly, including a major industrial strategy that we’ll hear about alongside a natural climate solutions strategy that focuses on land use and agriculture that’s backed by institutional investors, including RBC, who want to accelerate practical solutions that cut emissions now while strengthening the systems we rely on.

John Stackhouse  01:51

Clara, welcome to Disruptors.

Clara Barby  01:53

Thank you so much for having me.

John Stackhouse  01:54

Well, this is our first episode of the year, brand new year 2026 and we’re talking about climate and clean tech in the state of the world, frankly, the mood is a bit grim on climate. There’s not a lot of enthusiasm, as our new report Climate Action 26 shows in Canada, it’s not a top priority on people’s minds. I don’t think that’s a surprise. One of the things that actually encourages me is the amount of funding that actually is still going into climate both private capital and public capital. Clara, I wanted to kick off with your New Year’s view of how you’re feeling going into 26

Clara Barby  02:32

Well, I’m glad I’m your first guest of the year, because I am not optimistic in a foolish way, but I think I’m more determined than ever, John, and some of that determination is driven by the mission of what we need to achieve as a global society, but some of it is also just driven by the economic opportunity that I see every day as an asset manager focused on solutions that are low or no carbon, and a lot of the solutions that we see are indeed just better products or services or systems than the ones we’ve had historically, and so that so part of the determination is fueled by just that very practical observation that some of these things work really well and actually will lead to better Financial and societal outcomes, in our view.

John Stackhouse  03:22

Is there a product or service that most excites you right now, as you watch it both go to market and expand in market?

Clara Barby  03:29

We should talk about the land transition, because it’s such a ripe opportunity for Canada. Part of the way we think about the land transition is that historically, when you think of the way capital markets have organized their strategic asset allocation and even their teams around natural capital, it is typically gravitated to real assets, to holding assets and managing land that continues to be an important area for capital deployment. But actually the really promising opportunity we’re seeing is in the growth equity opportunity of the land transition. And what that means is investing in the products and services that the landowners, the industrial farmers, the forestry managers that they need in order to decarbonize their land and even make it regenerative, which means it can sequester carbon as well. And so that takes you actually to bio pesticides, bio fertilizers, precision agriculture, waste to value, water management and even some of the newer restoration opportunities. So that’s the area of focus for us, and I think bio pesticides stands out as an example of that, where you’re starting to see product come through. We have a portfolio company, and it’s using an RNA based method, and it’s just better. It is a drop in solution. It doesn’t require behavior change, it doesn’t command a green premium, and it delivers very precise, targeted pesticide to solve for what farmers need. So that, for me, is a good example. John, to your question.

John Stackhouse  04:58

 Well, I want to underscore two things you just said. It doesn’t require behavior change and it doesn’t come with a green premium. Those should be real filters on a lot of policy thinking. You were at COP 30, which seems a lifetime ago, but was just a couple of months ago in Brazil. What was your big takeaway? And what are you traveling with going into 26 from there?

Clara Barby  05:19

I’m glad you’ve asked about this. I had the privilege of moderating, facilitating the Asset Owner Summit. It’s actually the first time that a cop has had a formal Asset Owner Summit as part of the program in the blue zone. And that’s a really important step, because if you step way back and look at the key actors in addressing climate change, actually it’s the universal asset owners who are inherently economy wide exposed and long term in their thinking, who are in many ways the best allies for governments in terms of thinking through the imperative to address climate change, because they’re very, very exposed. And so this time at COP, we brought together those asset owners with the multilateral leaders, the development finance leadership, and also, obviously the COP President and CEO, etc. And it was a really fruitful discussion, because there was, so there are actually seven things that came out of it, a really important one, relevant for Canada specifically, was we do need a transition framework that can be referenced by asset owners that is consistent with the macro reality. Solutions need to be a no brainer. That being said, there’s a certain amount of abatement we can do with no brainer solutions. And then you do need policy to come in. I think, in fact, your report has a great line on this where you sort of say, Look, no one actor can do this on their own, no brilliant inventor, no government, no sector, no company. Everyone needs to come together. And I think in some ways, we need to talk about the no brainers in terms of solutions that can work now and just need market force. And then we should talk about the things where you do need governments, and actually without a consistent macro framework for how you define transition finance that links to government, the sort of the NDCs at government level, the Nationally Defined Contribution goals, and those go down to local policies, sticks and carrots that actually are consistent with the NDCs, that’s consistent with the global framework. Without that coherence, I think it’s really hard for asset owners to develop policies and approaches that will not expose them to green washing, that will actually be an economic case. And so that was a real call. Can we have a consistent framework you touch on carbon storage in your report? You know, I think carbon capture and storage is a really interesting kind of case study, because if you look at what’s holding CCUS back, it’s not just one factor.

John Stackhouse  07:40

Clara, let me just jump in there on CCUS, because that’s a huge priority for Canada. Certainly those trying to get the pathways, initiative accelerating here would lead to a major reduction in emissions for Canada, but it’s gummed up for a whole host of reasons, including the ones in some ways too complex, and everyone’s trying to solve everything all at once. How can we be thinking about these massive, big, hairy, audacious challenges, as they used to be called, and de complexing them in a way that allows capital, especially private capital, to have the confidence to jump into especially first of a kind or fairly novel technologies, or technologies like CCUS that, frankly, have not been proven at industrial scale?

Clara Barby  08:28

So if we just look at CCUS as, again, as a case study, you’ve got this combination of lack of sufficiently high carbon price for adequate project returns, you’ve got high CapEx. You’ve got lack of infrastructure and sequestration hubs near the industrial emitters. You’ve got slow moving permitting, going to the example I was giving before, and then you’ve got fragmented value chain in which you’ve got your CO2 source, you’ve got capture, transport and storage, and each of them is provided by a different Counterparty, and there’s an unclear allocation of risk and liability between those different counterparties. So I hope that spells out. When we say complexity, that’s what we’re talking about. I think that CCUS is a particularly complex case. I think if we look at some of the areas where we’ve seen progress, though, you can extrapolate ways to break through these things. So if you take cement John, or you take steel, what we tend to see as a way to break through complexity is that you have to have someone who convenes all of those stakeholders around a table. Because the way in which you break through the complexity typically is to actually have the off takers. So those who are buying the cement or the steel, they have to come together with the banks, who have a hugely important debt financing role in this, but they need the confidence. You need the equity club there, and even the equity club often needs to talk to everyone. Needs to talk together. What kind of risk are you willing to take? Which one am I willing to take? How can we structure this in a smart way? And I’ll come in first. You come in next, and then you have to have the policy makers and sometimes the government led banks. When you bring that group together, they need to feel confident. You need stellar management at the company level in a first of a kind of effort. And so what we found is often having someone who’s come from perhaps a big incumbent in the industry, knows it back to front, and then actually can see the vision of what low or no carbon versions of this looks like and really have them lead is critical. If you can get everyone around the same table, you can unlock it for sure, and actually you can tranche it smartly.

John Stackhouse  10:32

We’ll be right back after this short break. Here’s Dr Lisa Ashton, interim head of the RBC Climate Action Institute to tell us more about the Climate Action Report, and I should note, Lisa is a real authority on Nature-based solutions. You should check out her own recent report Unearthing Value, how nature can play a critical role in pro growth agendas. We’ll be back with Clara Barby in a minute.

Dr Lisa Ashton  10:59

Thanks, John. Every year, our research team takes a pulse on Climate Action in Canada and its key economic sectors, from Agriculture to Energy. We’re not just looking at targets, but results. And today, we’re releasing our new report Climate Action 2026 Retreat, Reset or Renew. 2025 was the first year since our 2019 baseline that national climate action in Canada fell, primarily driven by rollbacks on climate policy, capital investment and consumer action, a signal of retreat diving deeper we go sector by sector, agriculture, buildings, electricity, heavy industry, transportation and oil and gas, to identify where progress is made or not on climate action and why. Canada’s climate action picture is complex, but Climate Action 2026 can help you navigate this important issue if you want the charts, the sector scorecards, the case studies and our idea of the year, please visit rbc.com/cai

John Stackhouse  12:09

And we’re back. Another issue we get at in our report, which is electrification. Electrification certainly for Canada, but I suspect for a range of countries, is the biggest opportunity, also maybe the biggest capital need billions, trillions of dollars, in fact, globally, needed some progress being made, fits and starts, but real challenges on the return side in electrification, because someone has to pay for it at the end of the day. And as we look into 2026, and hopefully a better year of electrification. How are you thinking about the challenges, but also the opportunities?

Clara Barby  12:48

Gosh, that’s a huge question. Actually, in some areas, and particularly because of AI, we’re starting to see things that we thought were broadly getting on track now becoming more off track. So when you look at climate technologies. If you’re a growth equity investor like us, our interest is in areas where you have very high levels of emissions, which is why we’re interested in things like steel and cement and critical materials for batteries. The cost curve of the technology that can address those emissions is yet to come down, and so you have this up. So there’s not binary technology risk. The mouse trap works, but it hasn’t yet been scaled up. And so you have this opportunity to really bring come down that cost curve. If you look at something like offshore wind in the UK, that was the story. If you go back over a decade, and then actually it came all the way down and became cost competitive. And so we haven’t, as an investor, started out looking at things like that. There’s core renewable areas because they they were more on track. But actually what we’re seeing with the rise of AI in particular is that there is now going to be more work to do. And so we are particularly looking at data centers. John, for that reason, I think it’s an area where we’re particularly interested in which geographies are most ripe for data centers, and how can we be really smart about that? And it may be some of the areas that are less you know, are less obvious, but that’s an area of huge interest for us as we look at 2026

John Stackhouse  14:15

And when you’re looking at data centers, is it for the opportunity around data centers as a category, or is it the decarbonisation of data centers?

Clara Barby  14:24

For us, it’s the decarbonisation of data centers, we think is a really important area, including water management.

John Stackhouse  14:33

Well, that’s a perfect segue back to the focus we both have on nature. We did a an episode last season on data centers and what’s going on in Alberta. So listeners can check that out on our site or their podcast stream. And the focus was on abating natural gas, which in Alberta will probably be what powers a lot of the data centers there. For this conversation, pulling in capital, especially private capital, for water and nature solutions around data centers, is really interesting. Canada’s got a lot of water. We got a lot of power. Therefore, we should be probably taking advantage of this and using nature, to put it crudely, as an asset class, a bit more to help with the the economics of of this. Help our listeners think more broadly about the role that nature can play to allow us to do other stuff, like build a data center that is going to need a lot of water.

Clara Barby  15:34

Yeah, and I might just for a moment, talk about language as well, because it’s sensitive this. You know, I was speaking to an Aboriginal leader, actually at the COP. And there’s a resistance to talking about natural resources, but the reference to them as sacred elements, rather than nature, is incredibly important in some of these conversations. And so I just want to acknowledge the delicacy of this upfront at the same time to your point on, how do we invest in this? I do think we need to carry over some of the paradigms from our existing investment practice. I look at natural resources groups, for example, and I wonder whether they will evolve to include looking at nature as part of how asset allocators think about what they formerly called natural resources, because water and soil health, soil richness are indeed key natural resources for the economy. And so I think we’re going to be on a journey with how nature is seen. I think it’s, it’s historically perhaps, you know, you use the term nature, and people might think of a, you know, a book of botanicals by the bath. And we’re so in a different place now talking about the importance of land waste water, and how it fundamentally drives economic value. So in some ways, I’m pleased we’re having the right conversation. I think Canada should be a leader here because of the structure of the country. I think we will see much more on the solution side there. I also think for those of us who own large public companies, the risks associated with this in large corporations is going to keep rising. And I think if you look at the way climate disclosure has unfolded, so Canada, you have the Standards Board in Canada, so you’ve got, you’re starting to get the teeth around that in terms of climate disclosure, John in Canada, but nature’s following really quickly, and in some ways, is seen as more of a bipartisan issue. I think nature is seen to be very important to a wide range of political views, and I very much expect nature related risk and opportunity disclosure to follow suit of climate and to that to be expected of a lot of those large companies as well as we go forward. And that’s important to mention, because that will then, in turn, drive more demand for those solutions again, which creates more opportunity for private market capital to flow into them.

John Stackhouse  17:44

Well, my conservative friends like to say nature was our issue, and still is, and that’s the whole idea of conservative, conservation. Not to be crass, but there’s an important economic opportunity here. It’s about integrating nature, both for sustainability reasons, but also for prosperity reasons. Help us understand how that plays out in the real economy.

Clara Barby  18:09

I don’t think it’s crass at all to point out that economic opportunity and what is better for society, especially if you are a long term economic actor, what we’re seeing in nature, just to give a couple of real world examples, you know, when we looked at the cement opportunity, it was really clear to us that there’s two real factors you need to focus on. One is applicability of the way in which you produce low carbon cement for emerging markets, because 90% of cement use in the next decade is going to be in emerging markets, where they’re developing infrastructure at a faster rate than in mature markets. So that’s a people oriented question. But then secondly, from an environmental perspective, the inputs for that new version, that better version of cement, must be careful about what those inputs are. They can’t come from coal in the way they have historically, if that’s not an asset of the future. And so how do we make sure they come from something that’s widely available, that’s not going to disrupt nature in a way that actually, you know, causes more emissions. And so we spend a lot of time on that. And for us, that’s economic. That question is not just about the science or the sustainability. And so we found a solution that could it actually can process any kind of crush rock. It’s an amazing solution in that respect, because it can actually respect nature in the process of doing so. So that’s one example. Another one would be on how we think about but transmission lines, we have companies that require significant power. Now it’s renewable power because we’re investing in low carbon solutions, but nevertheless, it’s significant power, and that typically will mean transmission lines running to substations, often a very, very significant scale. And one of the things that has surprised me is that investors aren’t doing more direct community engagement to understand in their diligence processes, what are these different admissions lines going to mean, especially if you’ve got indigenous communities using the land that you’re on. So I think that we just need to be more front footed as investors about engaging with all of these issues. They are economic.

John Stackhouse  18:55

Clara, what you and the team at Generation more broadly are doing along with Just Climate is really important, and we’re lucky to be partners with you and be able to invest in natural climate solutions and a huge opportunity for Canada as one of the world’s great kind of stores of natural assets. A lot of this episode, Clara has been talking about investing in market opportunities at macro level, it’s been a couple of tough years for certainly clean tech investing. How are you feeling as we get into the year about the investment environment and opportunity for clean tech and, more broadly, nature based investing opportunities?

Clara Barby  20:59

So one of the strange things about being an investor is that at times when there can feel like strong headwinds in sectors that you’re focused on, valuations come down, and it can actually be very interesting time to deploy capital. And so as we go into 2026 that’s really where we find ourselves, we’re looking at companies which may have been overvalued or it just may not have been as financially interesting to go in, and now we’re finding that valuations are coming down and actually going in now and then watching different scenarios play out. Could make it, in retrospect, a very ripe time to invest as a climate investor.

John Stackhouse  21:43

That’s probably the best message to keep in mind as we go into 2026 when things seem grimmest or loneliest in any market opportunity, but certainly in policy as well, that’s often the time to do things when there isn’t a crowd, when there isn’t a bubble, and when you can actually take advantage of good, practical opportunities and work with as you articulated. Clara, thank you again for being on Disruptors. It’s been a great conversation.

Clara Barby  22:09

Good to see you, John, thank you.

John Stackhouse  22:10

If you’re interested in climate action in Canada, there’s no better place to find out more than our annual assessment. In the report, you’ll find that climate action barometer that I talked about, as well as indices for our six major heavy emitting sectors. You’ll also find case studies exploring how companies and communities are advancing climate action, often in small but really meaningful ways. And you’ll find interesting measures of how business and governments are thinking about climate policy as we move from 2025 into 26. Find it on the climate action Institute’s LinkedIn page or at our website, rbc.com/cai, a big thank you to the team at the Climate Action Institute and all the contributors who provided so many invaluable insights. You’ve been listening to Disruptors an RBC podcast. If you like what you heard, please rate review and follow us on your favorite podcasting platform that will help others discover these great stories of innovation and promise and grow our audience. If you have an idea for an episode, just drop us a line in the comments. I’m John Stackhouse, thanks for listening.

Building Canada: A new generation takes charge

John Stackhouse: [00:00:00] Hi, it’s John here. Welcome to Disruptors, the Canada Project, Alberta, Vancouver, Manitoba, Newfoundland, Nova, Scotia, Nunavut, Waterloo, Quebec, Saskatchewan. This season we’ve been crisscrossing the country, meeting with some of Canada’s brightest minds to learn how they’re tackling some of our biggest challenges.

Chris Avery: When President Trump came into power and tariffs were levied against Canadian goods, really amplified the need for us as a nation to diversify our Trade.

Janice Stein: Tech sovereignty would guarantee Canadians. Their core services and core data are free from coercion by outside powers.

Chris Avery: It’s important to know that Nunavut is relying a hundred percent by burning diesel.

Anne Raphaele: That is, I import into the territory mostly from the United States. Canada’s at a critical [00:01:00] moment for our economy and for our shared future.

The way, you may have gotten a sense of a new map of Canada being drawn. It’s not the one you memorized in grade school, but it’s a map of ports and launchpads of power grids and AI data centers.

And for that matter, battery belts and northern fiber lines. It’s a map of a new economic future, a bolder one, a more global one, a more innovative one. And it’s one that Canadians right now are shaping every day.

Jean Charest: The countries that will prosper in the future are the ones that are going to commit themselves to these added value products, and that’s exactly where Canada is going.

P.J. Akeeagok: When Canadians think about growth, we don’t always think about the architect, but we should.

Daniel Smith: We wanna ensure that we can meet the electricity demands of emerging sectors like data centers, artificial intelligence, and other technologies that depend on secure power. 24 7,

Chris Hadfield: we got the [00:02:00] landmass, we got the intellectual property, we got the education, we got the raw materials, we got the history.

John Stackhouse: We can do it here and sell it to the world. Those are just a few of the many ambitious Canadians we’ve heard from this season on disruptors, the Canada Project. It’s been eye-opening to explore some of the ideas and initiatives that Canadians are putting forward to meet this pivotal moment. As trade and supply chain disruptions collide with broader questions of climate security, economic advancement, and sovereignty.

Today as we wrap up our journey, we’re gonna zoom out several thousand feet, or maybe that should be several thousand meters to talk to Daniel Debo and Lucy Hargraves of Build Canada. They’re two of the many people behind what’s become a movement to get Canada building again, to turn big ideas into real world impact Build.

Canada is a network and really a movement that connects and amplifies entrepreneurs, creators, and innovators committed to a more prosperous Canada. [00:03:00] Daniel is a serial entrepreneur who you may remember from past episodes of disruptors. He’s chair of the Build Canada Board, and Lucy, who comes from a background in government, is the CEO.

Together, they bring deep experience in technology, innovation, entrepreneurship, policy and partnerships. In this episode, we’ll dig into what building the country really means. The ambition, the tools, and the challenges involved when citizens from coast to coast to coast say yes to shaping Canada’s future.

Daniel Lucy, welcome to Disruptors.

Thanks, John. Happy to be here. Thanks so much for having us, John.

We’ve had this amazing virtual CrossCountry tour hearing from all sorts of Canadians who are. Building amazing things from space launchpads to data centers, and I thought, who better to help wrap up that tour than the people behind Build [00:04:00] Canada?

Lucy, let me start with you and just give us a quick sense of what Build Canada is and what you’re setting out to do.

Lucy Hargreaves: Yeah, for sure. Thanks, John. For those of your listeners who don’t know, we’re a non-partisan, mission-driven movement focused on making Canada the most prosperous country in the world.

We’ve been around for almost a year now. And we started out sharing actionable, bold policy memos from Canada’s leading entrepreneurs and business leaders. And we’re also doing a lot more in person. And so bringing Canadians together around the country in city chapters and campus clubs. So what I’m seeing is like incredible passion for this idea of focusing on growth.

We’re growing kind of 10 to 15% week over week in terms of the size of our movement, rallying towards this sort of optimistic, bold vision of what Canada can be.

John Stackhouse: I wanna come back to that growth opportunity and also the growth that you’re capturing. It’s really impressive. But let me ask you both about where we’re at as a [00:05:00] country as we come to the end of a really extraordinary year, 2025.

Um, I think no one had. Forecast or certainly predicted it would play out the way it has. How are you feeling about the state of Canada as we wrap up this momentous year?

Daniel Debow: Cautiously optimistic. Rationally optimistic. I think it’s important to remember like Canada didn’t get here by accident. It’s a series of choices that we made and policy decisions that we made all along the way.

And I think what’s optimistic, as Lucy pointed out, is that Canadians understand that they have agency. They can choose which path they wanna take, and politicians understand this. When we started this experiment, right, like can we publish some policy memos to help guide and help inform and, and give ideas out there from Canada’s great entrepreneurs to both parties?

Uh, all parties. Actually, we did not expect to get the reaction that we got. We did not expect, I think actually Lucy. We did not expect to have to set up a full-time merch shop so people could [00:06:00] buy t-shirts that say giver on it. And that to me is really optimistic. That’s positive. It doesn’t mean there aren’t lots of things we have to get over, but boy, it tells me that Canadians want change.

And if you want politicians to change, they need to see a constituency. They need to see people want that. And I think that’s what we can see the beginnings of now. We can’t give up, we can’t stop. But boy, that that is a reason heading into the new year, to feel at least cautiously optimistic despite all the headwinds and challenges we face.

John Stackhouse: Give us the origin story of the Giver T-shirt and why it’s gone viral.

Daniel Debow: I’ve always loved that Canadian expression of giver, like, you’re behind the car, you’re in a ditch. Things suck. But Canadians, they rally. They just say, yeah, I know that this sucks, but we gotta go. So giver, give it your best shot and we’ll be okay.

I think that is a very good reminder. It’s a positive, optimistic view of what it means to be who we are, and it resonated,

Lucy Hargreaves: and I think it’s a really important point. We have to remember who we are. Canada [00:07:00] is a nation of builders. Like it was forged by explorers. People who were risk takers we’re a nation that discovered insulin.

We built a railroad across our country. We became a top global defense manufacturing hub during World War ii. So we have to remember and like remind ourselves that we’ve done ambitious things before and we can do them again, and that Canada is still very much a work in progress. We are a project, uh, still that is being built.

I think this is what resonates, especially with the young people who, you know, 18 to 35 year olds who are really gravitating towards the Build Canada movement is that they can be part of it, that they have agency and that they can actually get off the sidelines, get off the couch, get outta their house, and they can participate in this nation building project.

John Stackhouse: Tell us a bit more about the mindset that you’re. Challenging us all to develop, as I watch [00:08:00] what’s going on in the country, a lot of it is about building, but it’s frankly about other people building stuff somewhere else in the country. And that’s, that’s all very good. But there’s 40 million of us. And what kind of mindset do all of us 40 million need to aim for and develop to be a builder nation?

Lucy Hargreaves: There’s some principles, uh, that we sort of repeat over and over again. Bold, beat, safe growth is good. You can just do things. Doing things is better than complaining. It’s this kind of mindset that, you know, when you see a problem or you, you see an issue in your society or your community and you’re, you’re frustrated by it, that instead of complaining about that, you can actually take action.

And that’s what we encourage at Build Canada. And that’s kind of that. Mentality that we’re encouraging across the country, we can go for gold. And I think as a nation and as individuals, uh, many times we are satisfied with going for bronze or silver and not striving to be the [00:09:00] absolute best and to win.

Daniel Debow: We cannot wait for the government to solve every problem, right? People have to step up. That’s part of the ethos, and that’s just people saying, I, I don’t wanna sit around and complaint. I want to go do something. I wanna connect with my other Canadians and I wanna actually feel connected to other Canadians who do feel this way.

I’m not alone. I want it to grow. So I think that’s a big part of the mindset. I think there’s another part which is like, what does it mean to be a builder? And I think it’s a bias to action. You have to take a risk. You have to put yourself out there. Getting a bronze medal is as much effort as going for gold.

You might as well go for gold. Right? And reminding Canadians that they are actually amazing, can make great things, is a very powerful mindset that we can put in. We have to go be a force in the world. If you believe the world to harken back to a prior age needs more Canada, well then we have to go make it want what we have.

And that’s gonna be by becoming economically strong, it’s gonna be by becoming, uh, militarily strong. Like strength and sovereignty really are linked to those two things. They happen because of those 40 million [00:10:00] Canadians making individual choices every day to kind of act the way that we’re talking.

John Stackhouse: When you talk about Canada needing to be a force in the world, it takes me straight back to some of the builders we’ve met this season who are already trying to do that in very Canadian ways, in orbit, under the sea, and deepen the ground. They’re all trying to turn our unique advantages into things. We actually build own and export.

Rahul Goel: We already do such a great job as Canadians training our workforce. In fact, we train our workforce and it enables other countries to build their space programs. We have a massive exodus of talent, of capital, of sovereignty, of national pride.

So all of those factors led to the founding of North Space. The amazing thing about building capabilities in space is that it spans the entire spectrum. Highly specialized key roles that, you know, Canadians are really, really good at and creating opportunities. But at the end of the day, the retention is really the problem.

David Shea: One of [00:11:00] the great advantages that they have in Newfoundland when we talk about hardening technology, building technology, proving that it can work. If it can work off the coast of Newfoundland, then it can work anywhere. It is one of the harshest climates in the world. When you go out on the ocean, it is not long before you are in the middle of the North Atlantic.

Eric Desaulniers: We’re optimizing the usage of this hydro to be carbon neutral. So having the four reason to buy in Canada, great geology to start with two hours away. We have a great industrial park in big and core with sheep, hydro, and all reagents and all the the right area to develop this safely. And then we have the right talents and we have the customer now in our backyard who really need graphite and they really need to diversify from a single source in China.

John Stackhouse: Space launches, subsea, robotics, critical minerals, those are very different sectors, but you kind of get the pattern, Canadians trying to turn our geography, our geology, and our grit into a [00:12:00] real edge in the world. For all those builders, how are you seeing momentum grow to support them?

Daniel Debow: I think you had Rahul from Nord space on there. Um, I was an investor prior space company in Canada from the CDL. Honestly, most of the time when I talked about it, people were rolling their eyes like, what are you talking about? A Canadian space company? That’s not a real thing. And I just don’t see that now as people hear about North Space and what they’re doing, uh, similarly, there was no way you could start a defense company in Canada even five years ago, and now that’s a possibility.

And they’re moving very, very quickly. And what’s important is they’re doing it in partnership. Like I see all sorts of military folk who are quite interested in like a new way, a new approach of doing these things. Dan and I are very privileged to be able to have incredible conversations across the country with some of Canada’s leading entrepreneurs and innovators,

Lucy Hargreaves: I’m encouraged actually on the attention now being paid to major projects and all of [00:13:00] the possibilities in the natural resources sector.

Both in oil and gas, but also critical minerals and mining. I think it’ll take a while for that to change, but it does seem like through the work that the major Projects Office is, is doing, and a lot of the conversations specifically in the critical mineral space, that there’s some appetite to, you know, go faster there.

And it’s so inspiring to me that I actually see these people just, they’re just moving ahead, right? They’re not waiting for the government to create a new subsidy program or a grant program or a tax incentive. Like in many, many cases, they are builders and they are just focused on moving ahead and getting things done.

Daniel Debow: I actually am very encouraged when provincial or federal leaders reach out and say, well, what are these ideas you have about ai? What are these ideas about exporting more lentils and pulses? What are these ideas about how we can open up our export of natural resources? How can we build more homes? Like those are positive things.

I’m not saying it’s the end of the story, but that’s optimistic to me.[00:14:00]

John Stackhouse: Those are great companies you’ve referenced. Fast growing sectors that Canadians can really seize on space. We’ve, we’ve been doing research here at RBC on the potential of the space sector, and I’ve been able to speak with investors in Europe and the US particularly, who are so keen to invest more in Canada.

They see the talent and opportunity here and as a country, I don’t think we’ve got our heads fully around the idea of private capital. Driving stuff, but it is that private capital that really accelerates things. And part of that requires us to think through what you might call the reward function. So there’s of course, the expression, no risk, no reward, but if you have no reward, you’re not gonna get a lot of risk either.

We need arguably different reward functions for entrepreneurs and the people who, who back them. Tell us a bit about how you’re thinking about the [00:15:00] reward function. And what Canada needs to do to up our game on that front in the years ahead.

Daniel Debow: We want Canadian entrepreneurs, whether it’s the people who created Mike’s Hark Lemonade, or the people who create Lululemon, or the people who create Cirque de Soleil or Shopify’s, like, we need those folks.

Those are great and those are capitalistic, uh, profit seeking enterprises. That’s not a dirty word. That should be a positive thing. You know, entrepreneurs are human beings. They have the ability more than most actually to be mobile. And I think that the, one of the things we have to do is the reward function has to be that you are socially rewarded.

You are a good part of the country. That reward function really does matter because it’s a cycle of everyone’s psyche. You ask the beginning, what’s the mindset? I’m like, well, geez. The mindset has to be that these are Canadian heroes. Now we can’t just say nice things though. And have photo ops, we have to actually back it up.

John Stackhouse: Well, if I can just jump in quickly, I, I love your passion, number one, but also it’s so critical how you’re laying this out. That reward is both tangible [00:16:00] and intangible, and they’re both incredibly powerful and we need to lean into both.

Lucy Hargreaves: Yeah. This is not just about financial rewards, and as Dan said, we’re not just talking about the founders. We’re talking about like the early employees who also leave relatively stable jobs and, and go and try and start new things. So we should celebrate and reward that. Financially speaking, what I say is, you know, we always need to remind ourselves as a nation that we don’t exist in isolation. We operate in a global economy, and we have to think about our reward and incentive and tax structure in that context.

Entrepreneurs have options. Many of them, you know, are very mobile. They can make different choices. Highly talented employees of companies can make different choices. We have the US right there. There’s a whole big wide world out there. And so we, when we think about our tax incentives and rewarding risk takers, we have to think about it in that global context.

We published a number of memos on [00:17:00] this, specifically on capital gains tax. We, um, had a great memo from Matt Cohen who’s, uh, with Ripple Ventures, uh, looking at how we can make our capital gains rewards, uh, and system not just on par with the us but actually more competitive than what’s on offer in the us.

The US has this thing called QSBS. Which is essentially their capital gains structure for small businesses. It’s incredibly competitive. It has a much higher capital gains cap of 15 million per company. This is the key thing Per company. Yeah. Whereas our capital gains cap in Canada right now is around 1.5 million, whereas the US has this 15 million cap that can be stacked across multiple exits, and so that’s.

It might seem small to, to some people, but this is like a real meaningful difference maker in, uh, people’s decision making for how much risk they wanna take. And it’s also, um, from an investor’s perspective, often investors [00:18:00] are, you know, looking for Canadian companies and Canadian founders to relocate to the US so that the investors can benefit from the US capital gain structure There.

Daniel Debow: Of course the only reason people build companies isn’t just to make money, but it is part of the reason, and we are fooling ourselves if we don’t understand that. We have to create incentives for our best Canadians to stay here. We have to figure out a way to do that if we wanna get our most amazing Canadians who wanna do this.

Also wanna say, this isn’t just about tech people, right? This is about. The folks who are losing their jobs, unfortunately, we want some of them to go start drone manufacturing supply chain companies, people who are in manufacturing, building next generation humanoid robots. We need to create opportunities across our stacks, small businesses that this is something that they can, and really, the, the balance of keeping a job versus trying something, it becomes overwhelmingly better that you’re like, I wanna try something more in society.

But you’ve got to remember that innovation is not something entrepreneurs do outta the goodness of their heart. It is something that’s done because they want to win. They either wanna win new customers or market share, or they don’t wanna lose that from someone else who’s [00:19:00] coming to eat their lunch, and that’s a good function for society.

John Stackhouse: Let’s talk a bit about hustle in the public sector. I think one of the many things Mark Carney has done to rattle cages has been to set real deadlines that many people, from what I understand, say, oh, that’s impossible. We’ve seen this in the, uh, in the energy agreement with Alberta. Some pretty huge things have to be done by April 1st and July 1st, and as you know, that’s the way the private sector works.

You set deadlines and you manage the work accordingly. It’s one of the basic principles of project management, but there’s more to it. There’s a builder mindset versus an operator mindset, and that’s something you’ve both stressed through. Build Canada. Help us understand the difference between the two and how a builder mindset can help the public sector.

Lucy Hargreaves: The culture of the public service and the incentive structure in the public service is one that [00:20:00] reinforces a risk averse mindset to operating. They are incentivized to be a steady hand to avoid risk and to not take bold bets that might get themselves or the minister or prime minister of the day into trouble.

So. I think it is a bit of a shock to the system for many public servants to have a Prime Minister kind of come in and have these ambitious goals and deadlines. But I think it’s a good thing. I mean, I think having deadlines and focusing attention on the things that really matter. We have to focus on growth and make the main thing the main thing.

And it seems like this prime Minister is, uh, you know, attempting to make the main thing, the main thing, which is the economy and driving the public service towards that. You know, we’ve been talking about a lot the reinvigoration of the interchange program, uhhuh, which is now called the Build Canada Exchange Program.

Yeah. The budget of this year, they re have [00:21:00] rebranded to call the Build Canada Exchange Program. Is, is there a copyright issue there? Everyone should use it. There’s no, they should use it. If it works, they should use it well for it.

John Stackhouse: Tell us a bit about the Build Canada Exchange program ’cause it’s a neat innovation?

Lucy Hargreaves: Yeah, so the interchange program, build slash Build Canada interchange, so it’s been around for a number of years in the public service and, and has been designed to bring in. Private sector experts on sort of like a secondment basis into the public service. To, you know, help deliver programs or provide specific expertise and it, you know, sort of an exchange.

So the private sector sort of better understands public service. Public service can better understand perspectives, uh, from various different industries. And so now this rebranding is build candidate exchange. And so the Komen is to bring in 50, uh, private sector experts into the public service. Across a number of different sectors for a period of 12 to 18 months and have them do a rotation within, within the public service.

This idea that you recognize that, you know, there’s various [00:22:00] sectors where you need help and that the help exists in the private sector, and, and finding ways to bring those people in, give them the right authority, and really, you know, set up the structure for good collaboration and sharing. I, I think is, is a great idea.

And I’m excited to see that, you know, hopefully get implemented pretty rapidly in the next few months.

John Stackhouse: It’s exciting to see these kinds of innovative approaches where the public and private sectors actually learn from each other instead of talking past each other. And it also reminds us that public service doesn’t have to be a 40 year career.

It could be a tour of duty, a period in your life where you step in, help build something better for the greater good, and then bring that experience back out into the rest of the economy. All season on Disruptors, the Canada Project, we’ve seen how that orientation towards the greater good drives the long-term infrastructure work that will shape our future.

From food corridors on the prairies to ports on both coasts to hydro and fiber [00:23:00] lines into the Arctic. The decisions we make now will define what kind of country our kids and grandkids in Hara. Canada.

Tamara Vrooman: Canada is a country with a large geography, but a small population, and so we literally need connectivity and transportation infrastructure to make our country work, and we certainly need that infrastructure to connect our country to the world.

We have the component parts. They’re just not integrated in the way that they could be to allow for that speed and resilience that the international trade market is going to demand.

Devan Fitch: We’re the size of the next five largest Canadian ports combined in terms of the amount of commodities that we move, uh, through the Port of Vancouver.

The terminals that we’re looking at right here, they were also built many decades ago, and they just don’t simply have the birth depth that’s required. You couldn’t pull up next to the container terminal because it’s just gonna bottom out on the, on the birth face there. We have to be planning for what the trade infrastructure looks like in 2050 and 2060, not in [00:24:00] 2026.

Murad Al-Katib: If I was Prime Minister for a day, I would spend a hundred billion on trade infrastructure. It will pay for generations to come. Supply chains are all about connectivity. Each link has to be efficient. Data and technology will also make that more efficient. So let’s seize that opportunity.

John Stackhouse: We just heard the voices of Tamara Ruman, Devon Fitch, and Marad Al Kaip.

They’re just a few of the builders and shapers we’ve spoken to on this series. Daniel, Lucy, if you’re in your twenties today listening to all of that, the stakes, the infrastructure projects, the need to think long term, what would you actually do with it? What’s your message to those younger Canadians about the decades ahead and the role they can play?

Daniel Debow: First message is they should go to Build Canada do com and they should sign up. Yeah, join Build Canada newsletter and find a way to volunteer. I mean, I say that in a little in jest, but in reality. Yeah, because that’s a great first step. That’s what we want. Sign up. I was actually shocked how many people sign up just to learn about how the government works.

[00:25:00] They’re like, I didn’t know what a budget is. I didn’t know this stuff. But what’s the main message? I mean, I look, I have four young kids. Just because there are challenges, that does not mean that there’s no future for you. There’s no hope for you. You have to be kind of a rational optimist that yes, there are challenges, but you can pull this off.

I think the second message is exactly that, that you have agency, right? You are not necessarily a victim. You can make change in your own life, in your own community, your own family, with your own friend group, and in fact, you have, at least in the digital realm, you have access to tools that were like truly science fiction.

You know, 50 years ago, 25 years ago, right? You can see people building tools with ai, learning how to do things that run circlers around the folks of us on this call. The third thing is you can’t be quiet. You have to actually say that, I want this to be better. And so if you’re willing to step up and say, I think we can do things different around transit or around youth employment, or around any one of the issues that matter to you, you can do it.

They should not give up. I mean, I think that is the [00:26:00] key, key message I would have for those young people, that they have a right to fight like hell and to make the project what they think it should be, and they can define the future.

John Stackhouse: Canada is a project and we all have agency to help build it. That’s a great message.

Lucy, final word to you?

Lucy Hargreaves: Yeah, absolutely. I have three kids that are a little bit younger than Dan’s kids, I think, but I think about them a lot. I think about their future a lot, and I have the privilege of being able to talk to a lot of the folks who have been coming to our Build Canada events across the country.

So hundreds of people. They’re so energized and so optimistic about the future. And so my message to them really is recognize that you are part of this incredible journey that our nation is on, and that you have a role to play. Canada is going places. Don’t aim small, you know, think bold and take risks.

There are so many ways to show up. To get involved. That is what actually makes change at the end of the day is, is [00:27:00] multiple people across the country showing up and speaking up for the future that they want. So I would encourage folks to do that. We can all do more love. All these messages about building a better Canada.

John Stackhouse: To quote your website, people want to join up, go to build canada.com. Lucy, Daniel, thank you so much for being on disruptors and for helping to build Canada. Thanks, John, and thanks for, for this uh, series. It’s been great. Thanks so much, John. Appreciate it. As we close out this season of disruptors, I wanna leave you with a simple thought.

Canada’s future isn’t something that happens to us, it’s something that we build through the choices we make, the jobs we take on, the risks that we lean into, and the communities that we strengthen. Each of us has a role in shaping what comes next. Yes, the world is throwing a lot of disruption at us all at once.

But Canada has the geography, the resources, the global credibility, and the [00:28:00] traditions to turn challenge into opportunity. And Canadians have the ideas, the ambition, and the talent to do just that. That’s what we call the Canada Project Canadians working together. To innovate, to compete, and to build.

If you’re looking for inspiration, explore more nation building stories and ideas at rbc.com/thought leadership and revisit the episodes of Disruptors, the Canada Project, an RBC podcast on Apple or Spotify, or wherever you get your podcasts. Thanks for joining us on this incredible journey and for being a builder.

I’m John Stackhouse. See you in the new year.

John Stackhouse: [00:00:00] Hi, it’s John here. Welcome to Disruptors, the Canada Project, Alberta, Vancouver, Manitoba, Newfoundland, Nova, Scotia, Nunavut, Waterloo, Quebec, Saskatchewan. This season we’ve been crisscrossing the country, meeting with some of Canada’s brightest minds to learn how they’re tackling some of our biggest challenges.

Chris Avery: When President Trump came into power and tariffs were levied against Canadian goods, really amplified the need for us as a nation to diversify our Trade.

Janice Stein: Tech sovereignty would guarantee Canadians. Their core services and core data are free from coercion by outside powers.

Chris Avery: It’s important to know that Nunavut is relying a hundred percent by burning diesel.

Anne Raphaele: That is, I import into the territory mostly from the United States. Canada’s at a critical [00:01:00] moment for our economy and for our shared future.

The way, you may have gotten a sense of a new map of Canada being drawn. It’s not the one you memorized in grade school, but it’s a map of ports and launchpads of power grids and AI data centers.

And for that matter, battery belts and northern fiber lines. It’s a map of a new economic future, a bolder one, a more global one, a more innovative one. And it’s one that Canadians right now are shaping every day.

Jean Charest: The countries that will prosper in the future are the ones that are going to commit themselves to these added value products, and that’s exactly where Canada is going.

P.J. Akeeagok: When Canadians think about growth, we don’t always think about the architect, but we should.

Daniel Smith: We wanna ensure that we can meet the electricity demands of emerging sectors like data centers, artificial intelligence, and other technologies that depend on secure power. 24 7,

Chris Hadfield: we got the [00:02:00] landmass, we got the intellectual property, we got the education, we got the raw materials, we got the history.

John Stackhouse: We can do it here and sell it to the world. Those are just a few of the many ambitious Canadians we’ve heard from this season on disruptors, the Canada Project. It’s been eye-opening to explore some of the ideas and initiatives that Canadians are putting forward to meet this pivotal moment. As trade and supply chain disruptions collide with broader questions of climate security, economic advancement, and sovereignty.

Today as we wrap up our journey, we’re gonna zoom out several thousand feet, or maybe that should be several thousand meters to talk to Daniel Debo and Lucy Hargraves of Build Canada. They’re two of the many people behind what’s become a movement to get Canada building again, to turn big ideas into real world impact Build.

Canada is a network and really a movement that connects and amplifies entrepreneurs, creators, and innovators committed to a more prosperous Canada. [00:03:00] Daniel is a serial entrepreneur who you may remember from past episodes of disruptors. He’s chair of the Build Canada Board, and Lucy, who comes from a background in government, is the CEO.

Together, they bring deep experience in technology, innovation, entrepreneurship, policy and partnerships. In this episode, we’ll dig into what building the country really means. The ambition, the tools, and the challenges involved when citizens from coast to coast to coast say yes to shaping Canada’s future.

Daniel Lucy, welcome to Disruptors.

Thanks, John. Happy to be here. Thanks so much for having us, John.

We’ve had this amazing virtual CrossCountry tour hearing from all sorts of Canadians who are. Building amazing things from space launchpads to data centers, and I thought, who better to help wrap up that tour than the people behind Build [00:04:00] Canada?

Lucy, let me start with you and just give us a quick sense of what Build Canada is and what you’re setting out to do.

Lucy Hargreaves: Yeah, for sure. Thanks, John. For those of your listeners who don’t know, we’re a non-partisan, mission-driven movement focused on making Canada the most prosperous country in the world.

We’ve been around for almost a year now. And we started out sharing actionable, bold policy memos from Canada’s leading entrepreneurs and business leaders. And we’re also doing a lot more in person. And so bringing Canadians together around the country in city chapters and campus clubs. So what I’m seeing is like incredible passion for this idea of focusing on growth.

We’re growing kind of 10 to 15% week over week in terms of the size of our movement, rallying towards this sort of optimistic, bold vision of what Canada can be.

John Stackhouse: I wanna come back to that growth opportunity and also the growth that you’re capturing. It’s really impressive. But let me ask you both about where we’re at as a [00:05:00] country as we come to the end of a really extraordinary year, 2025.

Um, I think no one had. Forecast or certainly predicted it would play out the way it has. How are you feeling about the state of Canada as we wrap up this momentous year?

Daniel Debow: Cautiously optimistic. Rationally optimistic. I think it’s important to remember like Canada didn’t get here by accident. It’s a series of choices that we made and policy decisions that we made all along the way.

And I think what’s optimistic, as Lucy pointed out, is that Canadians understand that they have agency. They can choose which path they wanna take, and politicians understand this. When we started this experiment, right, like can we publish some policy memos to help guide and help inform and, and give ideas out there from Canada’s great entrepreneurs to both parties?

Uh, all parties. Actually, we did not expect to get the reaction that we got. We did not expect, I think actually Lucy. We did not expect to have to set up a full-time merch shop so people could [00:06:00] buy t-shirts that say giver on it. And that to me is really optimistic. That’s positive. It doesn’t mean there aren’t lots of things we have to get over, but boy, it tells me that Canadians want change.

And if you want politicians to change, they need to see a constituency. They need to see people want that. And I think that’s what we can see the beginnings of now. We can’t give up, we can’t stop. But boy, that that is a reason heading into the new year, to feel at least cautiously optimistic despite all the headwinds and challenges we face.

John Stackhouse: Give us the origin story of the Giver T-shirt and why it’s gone viral.

Daniel Debow: I’ve always loved that Canadian expression of giver, like, you’re behind the car, you’re in a ditch. Things suck. But Canadians, they rally. They just say, yeah, I know that this sucks, but we gotta go. So giver, give it your best shot and we’ll be okay.

I think that is a very good reminder. It’s a positive, optimistic view of what it means to be who we are, and it resonated,

Lucy Hargreaves: and I think it’s a really important point. We have to remember who we are. Canada [00:07:00] is a nation of builders. Like it was forged by explorers. People who were risk takers we’re a nation that discovered insulin.

We built a railroad across our country. We became a top global defense manufacturing hub during World War ii. So we have to remember and like remind ourselves that we’ve done ambitious things before and we can do them again, and that Canada is still very much a work in progress. We are a project, uh, still that is being built.

I think this is what resonates, especially with the young people who, you know, 18 to 35 year olds who are really gravitating towards the Build Canada movement is that they can be part of it, that they have agency and that they can actually get off the sidelines, get off the couch, get outta their house, and they can participate in this nation building project.

John Stackhouse: Tell us a bit more about the mindset that you’re. Challenging us all to develop, as I watch [00:08:00] what’s going on in the country, a lot of it is about building, but it’s frankly about other people building stuff somewhere else in the country. And that’s, that’s all very good. But there’s 40 million of us. And what kind of mindset do all of us 40 million need to aim for and develop to be a builder nation?

Lucy Hargreaves: There’s some principles, uh, that we sort of repeat over and over again. Bold, beat, safe growth is good. You can just do things. Doing things is better than complaining. It’s this kind of mindset that, you know, when you see a problem or you, you see an issue in your society or your community and you’re, you’re frustrated by it, that instead of complaining about that, you can actually take action.

And that’s what we encourage at Build Canada. And that’s kind of that. Mentality that we’re encouraging across the country, we can go for gold. And I think as a nation and as individuals, uh, many times we are satisfied with going for bronze or silver and not striving to be the [00:09:00] absolute best and to win.

Daniel Debow: We cannot wait for the government to solve every problem, right? People have to step up. That’s part of the ethos, and that’s just people saying, I, I don’t wanna sit around and complaint. I want to go do something. I wanna connect with my other Canadians and I wanna actually feel connected to other Canadians who do feel this way.

I’m not alone. I want it to grow. So I think that’s a big part of the mindset. I think there’s another part which is like, what does it mean to be a builder? And I think it’s a bias to action. You have to take a risk. You have to put yourself out there. Getting a bronze medal is as much effort as going for gold.

You might as well go for gold. Right? And reminding Canadians that they are actually amazing, can make great things, is a very powerful mindset that we can put in. We have to go be a force in the world. If you believe the world to harken back to a prior age needs more Canada, well then we have to go make it want what we have.

And that’s gonna be by becoming economically strong, it’s gonna be by becoming, uh, militarily strong. Like strength and sovereignty really are linked to those two things. They happen because of those 40 million [00:10:00] Canadians making individual choices every day to kind of act the way that we’re talking.

John Stackhouse: When you talk about Canada needing to be a force in the world, it takes me straight back to some of the builders we’ve met this season who are already trying to do that in very Canadian ways, in orbit, under the sea, and deepen the ground. They’re all trying to turn our unique advantages into things. We actually build own and export.

Rahul Goel: We already do such a great job as Canadians training our workforce. In fact, we train our workforce and it enables other countries to build their space programs. We have a massive exodus of talent, of capital, of sovereignty, of national pride.

So all of those factors led to the founding of North Space. The amazing thing about building capabilities in space is that it spans the entire spectrum. Highly specialized key roles that, you know, Canadians are really, really good at and creating opportunities. But at the end of the day, the retention is really the problem.

David Shea: One of [00:11:00] the great advantages that they have in Newfoundland when we talk about hardening technology, building technology, proving that it can work. If it can work off the coast of Newfoundland, then it can work anywhere. It is one of the harshest climates in the world. When you go out on the ocean, it is not long before you are in the middle of the North Atlantic.

Eric Desaulniers: We’re optimizing the usage of this hydro to be carbon neutral. So having the four reason to buy in Canada, great geology to start with two hours away. We have a great industrial park in big and core with sheep, hydro, and all reagents and all the the right area to develop this safely. And then we have the right talents and we have the customer now in our backyard who really need graphite and they really need to diversify from a single source in China.

John Stackhouse: Space launches, subsea, robotics, critical minerals, those are very different sectors, but you kind of get the pattern, Canadians trying to turn our geography, our geology, and our grit into a [00:12:00] real edge in the world. For all those builders, how are you seeing momentum grow to support them?

Daniel Debow: I think you had Rahul from Nord space on there. Um, I was an investor prior space company in Canada from the CDL. Honestly, most of the time when I talked about it, people were rolling their eyes like, what are you talking about? A Canadian space company? That’s not a real thing. And I just don’t see that now as people hear about North Space and what they’re doing, uh, similarly, there was no way you could start a defense company in Canada even five years ago, and now that’s a possibility.

And they’re moving very, very quickly. And what’s important is they’re doing it in partnership. Like I see all sorts of military folk who are quite interested in like a new way, a new approach of doing these things. Dan and I are very privileged to be able to have incredible conversations across the country with some of Canada’s leading entrepreneurs and innovators,

Lucy Hargreaves: I’m encouraged actually on the attention now being paid to major projects and all of [00:13:00] the possibilities in the natural resources sector.

Both in oil and gas, but also critical minerals and mining. I think it’ll take a while for that to change, but it does seem like through the work that the major Projects Office is, is doing, and a lot of the conversations specifically in the critical mineral space, that there’s some appetite to, you know, go faster there.

And it’s so inspiring to me that I actually see these people just, they’re just moving ahead, right? They’re not waiting for the government to create a new subsidy program or a grant program or a tax incentive. Like in many, many cases, they are builders and they are just focused on moving ahead and getting things done.

Daniel Debow: I actually am very encouraged when provincial or federal leaders reach out and say, well, what are these ideas you have about ai? What are these ideas about exporting more lentils and pulses? What are these ideas about how we can open up our export of natural resources? How can we build more homes? Like those are positive things.

I’m not saying it’s the end of the story, but that’s optimistic to me.[00:14:00]

John Stackhouse: Those are great companies you’ve referenced. Fast growing sectors that Canadians can really seize on space. We’ve, we’ve been doing research here at RBC on the potential of the space sector, and I’ve been able to speak with investors in Europe and the US particularly, who are so keen to invest more in Canada.

They see the talent and opportunity here and as a country, I don’t think we’ve got our heads fully around the idea of private capital. Driving stuff, but it is that private capital that really accelerates things. And part of that requires us to think through what you might call the reward function. So there’s of course, the expression, no risk, no reward, but if you have no reward, you’re not gonna get a lot of risk either.

We need arguably different reward functions for entrepreneurs and the people who, who back them. Tell us a bit about how you’re thinking about the [00:15:00] reward function. And what Canada needs to do to up our game on that front in the years ahead.

Daniel Debow: We want Canadian entrepreneurs, whether it’s the people who created Mike’s Hark Lemonade, or the people who create Lululemon, or the people who create Cirque de Soleil or Shopify’s, like, we need those folks.

Those are great and those are capitalistic, uh, profit seeking enterprises. That’s not a dirty word. That should be a positive thing. You know, entrepreneurs are human beings. They have the ability more than most actually to be mobile. And I think that the, one of the things we have to do is the reward function has to be that you are socially rewarded.

You are a good part of the country. That reward function really does matter because it’s a cycle of everyone’s psyche. You ask the beginning, what’s the mindset? I’m like, well, geez. The mindset has to be that these are Canadian heroes. Now we can’t just say nice things though. And have photo ops, we have to actually back it up.

John Stackhouse: Well, if I can just jump in quickly, I, I love your passion, number one, but also it’s so critical how you’re laying this out. That reward is both tangible [00:16:00] and intangible, and they’re both incredibly powerful and we need to lean into both.

Lucy Hargreaves: Yeah. This is not just about financial rewards, and as Dan said, we’re not just talking about the founders. We’re talking about like the early employees who also leave relatively stable jobs and, and go and try and start new things. So we should celebrate and reward that. Financially speaking, what I say is, you know, we always need to remind ourselves as a nation that we don’t exist in isolation. We operate in a global economy, and we have to think about our reward and incentive and tax structure in that context.

Entrepreneurs have options. Many of them, you know, are very mobile. They can make different choices. Highly talented employees of companies can make different choices. We have the US right there. There’s a whole big wide world out there. And so we, when we think about our tax incentives and rewarding risk takers, we have to think about it in that global context.

We published a number of memos on [00:17:00] this, specifically on capital gains tax. We, um, had a great memo from Matt Cohen who’s, uh, with Ripple Ventures, uh, looking at how we can make our capital gains rewards, uh, and system not just on par with the us but actually more competitive than what’s on offer in the us.

The US has this thing called QSBS. Which is essentially their capital gains structure for small businesses. It’s incredibly competitive. It has a much higher capital gains cap of 15 million per company. This is the key thing Per company. Yeah. Whereas our capital gains cap in Canada right now is around 1.5 million, whereas the US has this 15 million cap that can be stacked across multiple exits, and so that’s.

It might seem small to, to some people, but this is like a real meaningful difference maker in, uh, people’s decision making for how much risk they wanna take. And it’s also, um, from an investor’s perspective, often investors [00:18:00] are, you know, looking for Canadian companies and Canadian founders to relocate to the US so that the investors can benefit from the US capital gain structure There.

Daniel Debow: Of course the only reason people build companies isn’t just to make money, but it is part of the reason, and we are fooling ourselves if we don’t understand that. We have to create incentives for our best Canadians to stay here. We have to figure out a way to do that if we wanna get our most amazing Canadians who wanna do this.

Also wanna say, this isn’t just about tech people, right? This is about. The folks who are losing their jobs, unfortunately, we want some of them to go start drone manufacturing supply chain companies, people who are in manufacturing, building next generation humanoid robots. We need to create opportunities across our stacks, small businesses that this is something that they can, and really, the, the balance of keeping a job versus trying something, it becomes overwhelmingly better that you’re like, I wanna try something more in society.

But you’ve got to remember that innovation is not something entrepreneurs do outta the goodness of their heart. It is something that’s done because they want to win. They either wanna win new customers or market share, or they don’t wanna lose that from someone else who’s [00:19:00] coming to eat their lunch, and that’s a good function for society.

John Stackhouse: Let’s talk a bit about hustle in the public sector. I think one of the many things Mark Carney has done to rattle cages has been to set real deadlines that many people, from what I understand, say, oh, that’s impossible. We’ve seen this in the, uh, in the energy agreement with Alberta. Some pretty huge things have to be done by April 1st and July 1st, and as you know, that’s the way the private sector works.

You set deadlines and you manage the work accordingly. It’s one of the basic principles of project management, but there’s more to it. There’s a builder mindset versus an operator mindset, and that’s something you’ve both stressed through. Build Canada. Help us understand the difference between the two and how a builder mindset can help the public sector.

Lucy Hargreaves: The culture of the public service and the incentive structure in the public service is one that [00:20:00] reinforces a risk averse mindset to operating. They are incentivized to be a steady hand to avoid risk and to not take bold bets that might get themselves or the minister or prime minister of the day into trouble.

So. I think it is a bit of a shock to the system for many public servants to have a Prime Minister kind of come in and have these ambitious goals and deadlines. But I think it’s a good thing. I mean, I think having deadlines and focusing attention on the things that really matter. We have to focus on growth and make the main thing the main thing.

And it seems like this prime Minister is, uh, you know, attempting to make the main thing, the main thing, which is the economy and driving the public service towards that. You know, we’ve been talking about a lot the reinvigoration of the interchange program, uhhuh, which is now called the Build Canada Exchange Program.

Yeah. The budget of this year, they re have [00:21:00] rebranded to call the Build Canada Exchange Program. Is, is there a copyright issue there? Everyone should use it. There’s no, they should use it. If it works, they should use it well for it.

John Stackhouse: Tell us a bit about the Build Canada Exchange program ’cause it’s a neat innovation?

Lucy Hargreaves: Yeah, so the interchange program, build slash Build Canada interchange, so it’s been around for a number of years in the public service and, and has been designed to bring in. Private sector experts on sort of like a secondment basis into the public service. To, you know, help deliver programs or provide specific expertise and it, you know, sort of an exchange.

So the private sector sort of better understands public service. Public service can better understand perspectives, uh, from various different industries. And so now this rebranding is build candidate exchange. And so the Komen is to bring in 50, uh, private sector experts into the public service. Across a number of different sectors for a period of 12 to 18 months and have them do a rotation within, within the public service.

This idea that you recognize that, you know, there’s various [00:22:00] sectors where you need help and that the help exists in the private sector, and, and finding ways to bring those people in, give them the right authority, and really, you know, set up the structure for good collaboration and sharing. I, I think is, is a great idea.

And I’m excited to see that, you know, hopefully get implemented pretty rapidly in the next few months.

John Stackhouse: It’s exciting to see these kinds of innovative approaches where the public and private sectors actually learn from each other instead of talking past each other. And it also reminds us that public service doesn’t have to be a 40 year career.

It could be a tour of duty, a period in your life where you step in, help build something better for the greater good, and then bring that experience back out into the rest of the economy. All season on Disruptors, the Canada Project, we’ve seen how that orientation towards the greater good drives the long-term infrastructure work that will shape our future.

From food corridors on the prairies to ports on both coasts to hydro and fiber [00:23:00] lines into the Arctic. The decisions we make now will define what kind of country our kids and grandkids in Hara. Canada.

Tamara Vrooman: Canada is a country with a large geography, but a small population, and so we literally need connectivity and transportation infrastructure to make our country work, and we certainly need that infrastructure to connect our country to the world.

We have the component parts. They’re just not integrated in the way that they could be to allow for that speed and resilience that the international trade market is going to demand.

Devan Fitch: We’re the size of the next five largest Canadian ports combined in terms of the amount of commodities that we move, uh, through the Port of Vancouver.

The terminals that we’re looking at right here, they were also built many decades ago, and they just don’t simply have the birth depth that’s required. You couldn’t pull up next to the container terminal because it’s just gonna bottom out on the, on the birth face there. We have to be planning for what the trade infrastructure looks like in 2050 and 2060, not in [00:24:00] 2026.

Murad Al-Katib: If I was Prime Minister for a day, I would spend a hundred billion on trade infrastructure. It will pay for generations to come. Supply chains are all about connectivity. Each link has to be efficient. Data and technology will also make that more efficient. So let’s seize that opportunity.

John Stackhouse: We just heard the voices of Tamara Ruman, Devon Fitch, and Marad Al Kaip.

They’re just a few of the builders and shapers we’ve spoken to on this series. Daniel, Lucy, if you’re in your twenties today listening to all of that, the stakes, the infrastructure projects, the need to think long term, what would you actually do with it? What’s your message to those younger Canadians about the decades ahead and the role they can play?

Daniel Debow: First message is they should go to Build Canada do com and they should sign up. Yeah, join Build Canada newsletter and find a way to volunteer. I mean, I say that in a little in jest, but in reality. Yeah, because that’s a great first step. That’s what we want. Sign up. I was actually shocked how many people sign up just to learn about how the government works.

[00:25:00] They’re like, I didn’t know what a budget is. I didn’t know this stuff. But what’s the main message? I mean, I look, I have four young kids. Just because there are challenges, that does not mean that there’s no future for you. There’s no hope for you. You have to be kind of a rational optimist that yes, there are challenges, but you can pull this off.

I think the second message is exactly that, that you have agency, right? You are not necessarily a victim. You can make change in your own life, in your own community, your own family, with your own friend group, and in fact, you have, at least in the digital realm, you have access to tools that were like truly science fiction.

You know, 50 years ago, 25 years ago, right? You can see people building tools with ai, learning how to do things that run circlers around the folks of us on this call. The third thing is you can’t be quiet. You have to actually say that, I want this to be better. And so if you’re willing to step up and say, I think we can do things different around transit or around youth employment, or around any one of the issues that matter to you, you can do it.

They should not give up. I mean, I think that is the [00:26:00] key, key message I would have for those young people, that they have a right to fight like hell and to make the project what they think it should be, and they can define the future.

John Stackhouse: Canada is a project and we all have agency to help build it. That’s a great message.

Lucy, final word to you?

Lucy Hargreaves: Yeah, absolutely. I have three kids that are a little bit younger than Dan’s kids, I think, but I think about them a lot. I think about their future a lot, and I have the privilege of being able to talk to a lot of the folks who have been coming to our Build Canada events across the country.

So hundreds of people. They’re so energized and so optimistic about the future. And so my message to them really is recognize that you are part of this incredible journey that our nation is on, and that you have a role to play. Canada is going places. Don’t aim small, you know, think bold and take risks.

There are so many ways to show up. To get involved. That is what actually makes change at the end of the day is, is [00:27:00] multiple people across the country showing up and speaking up for the future that they want. So I would encourage folks to do that. We can all do more love. All these messages about building a better Canada.

John Stackhouse: To quote your website, people want to join up, go to build canada.com. Lucy, Daniel, thank you so much for being on disruptors and for helping to build Canada. Thanks, John, and thanks for, for this uh, series. It’s been great. Thanks so much, John. Appreciate it. As we close out this season of disruptors, I wanna leave you with a simple thought.

Canada’s future isn’t something that happens to us, it’s something that we build through the choices we make, the jobs we take on, the risks that we lean into, and the communities that we strengthen. Each of us has a role in shaping what comes next. Yes, the world is throwing a lot of disruption at us all at once.

But Canada has the geography, the resources, the global credibility, and the [00:28:00] traditions to turn challenge into opportunity. And Canadians have the ideas, the ambition, and the talent to do just that. That’s what we call the Canada Project Canadians working together. To innovate, to compete, and to build.

If you’re looking for inspiration, explore more nation building stories and ideas at rbc.com/thought leadership and revisit the episodes of Disruptors, the Canada Project, an RBC podcast on Apple or Spotify, or wherever you get your podcasts. Thanks for joining us on this incredible journey and for being a builder.

I’m John Stackhouse. See you in the new year.

Power to Compute: How Alberta is powering the AI age

Daniel Smith: We wanna ensure that we can meet the electricity demands of emerging sectors like data centers, artificial intelligence, and other technologies that depend on secure power 24 7.

John Stackhouse: That’s Danielle Smith, premier of Alberta from a conversation we recorded recently in Edmonton. Part of Alberta’s ambition is to export more energy to the world, but part of the strategy is also to harness that energy at home, to bring in more investment, and particularly to drive the new AI economy.

We’re all using AI pretty much every day and in many parts of our lives, and those data centers require energy. In fact, a lot of energy, which is where Alberta may have a big advantage. It’s got heaps of pretty much everything from renewables, like solar and wind to natural gas to emerging ambitions for nuclear package, all that energy together with an [00:01:00] expanded grid, and you can see the case that Alberta’s making to be one of North America’s leading data center hubs.

And not just for the American hyperscalers as they’re known, but for Canadians trying to build our own tech stack right here so that we’re not as reliant on foreign tech companies or exposed to the risks that we’re all seeing with foreign interference when it comes to our data. This new data economy is where Alberta and Canada really can have game.

But to do that, we’re first going to have to up our game.

Daniel Smith: And our approach is if you build your own power, we’re gonna say yes. If you want to hook to the grid, we’ll very likely build the transmission line for you. And we want to create an environment where we’re incentivizing them to build their own ’cause.

I think the hyperscalers are experts at to supply chain and logistics.

John Stackhouse: Those logistics are considerable. A single medium sized AI data center can draw as much electricity. As a small city, that’s a huge load to suddenly pull from the grid. When it comes to data and this new AI economy, there really is no room for glitches.[00:02:00]

If a site like this goes dark, the economy it supports goes dark as well. So like Daniel Smith said, the expectation is that private players, especially the hyperscalers, step up, invest in generation, and even sell surplus power back into the system. Yes, it’s big and it’s bold, but if you know this province, it’s also a very Alberta model.

Daniel Smith: One of the things we’re hoping to do is bring on AI data centers with a model that they’ll be able to help us out if they can do some behind the grid or behind the meter investment and power build more than they need and then be able to sell us the rest. We think that might be a low cost way of adding new power, but also giving them the reliability that they need.

We’re pretty smart human beings and I think we can figure it out and I, I think it’s important that we do. Especially when we talk about the challenge that we’re facing at manufacturing intelligence, that’s the next really exciting frontier, and I just want North America

to win that [00:03:00] race.

John Stackhouse: I’m John Stackhouse. Welcome to Disruptors the Canada Project. This season, we’re crisscrossing the country to meet the builders using technology to tackle Canada’s toughest problems, and along the way, sketch a blueprint for a stronger, more competitive nation.

Today’s destination, the Key Hills and Sundance Power sites just west of Edmonton, near the South shore of Wman Lake. These power plants belong to a company every Canadian should know. TransAlta was formed in 1911 and really represents the story of Canadian energy. It was once a powerhouse of coal. In fact, these plants used to be among Canada’s biggest.

More recently, it’s invested heavily in hydro and renewables, especially wind power in Western Canada, Ontario, parts of the United States, and even Western Australia. TransAlta is now investing more in natural gas, in part to power this new [00:04:00] AI economy. To find out how we’re going to deliver on the promise of AI power, we’re joined by John cus Norris, president and CEO of TransAlta, which owns and operates Key Hills and Sundance.

And is betting that Brownfield Power plants like these can be Canada’s blueprint for AI power, balancing, reliability, speed, and emissions in a world that suddenly needs a lot more electricity and may need it fast. John, thanks for being on Disruptors.

Happy to be here. John. Thanks for inviting me. Well, I’ve been so excited for this conversation, not only because we’re going to look deeper into AI and data centers, but also talk about some of the energy transformation that appears to be underway in Canada, and you and TransAlta are very much a part of that.

But John, let’s start with the big picture around ai. I mean, you can’t turn the corner these days without seeing some sort of hype expression around ai. How are you and TransAlta thinking about [00:05:00] the opportunity?

John Kousinioris: From our perspective, it’s sort of a once in a generation kind of opportunity for a company like ours to see a significant increase in demand for our product, which is electricity.

And what we’re particularly excited about is the ability of the province of Alberta to be a leading location for data centers. Certainly in the Canadian context, given all the natural attributes that we have in our part of the world, I think it’s gonna be critically important for our economy in the future.

To be able to have a significant domestic AI slash data center capability, and I’m, and I’m concerned about us falling a little bit behind when you look at some of the major clusters in the world, you know, you don’t see very many Canadian locations there because I think as you look forward. Having that just compute capability located in your country is gonna be critically important and I think important to support the great AI work that our researchers and universities and, [00:06:00] you know, our commercial enterprises have.

So it’s about marrying that cutting edge capability that we have as a country with actual processing capability within the country going forward and conveniently for us. It also increases the demand for power and creates another pillar in the economy. So very, very important.

John Stackhouse: There aren’t many places better situated than Alberta, both for its energy supply and also access to major markets, including the us.

I’ve read that there are 33 projects, I think, that have submitted applications to Alberta, and in total they would pretty much consume all the electricity that is now generated in Alberta. So how are you? Thinking about doing this in a stepwise, thoughtful manner, when, as you said, there’s other jurisdictions that are racing forward, including with a full kind of array of power sources

John Kousinioris: As you look at the rest of the country, what many people don’t realize is that pretty much in every [00:07:00] jurisdiction, or either short power or on the cusp of being short.

Power and Alberta for a bunch of reasons happens to be relatively long power at the moment. So we actually do have an element of excess supply and, and, and in fact, I’d say we presently have a bit of a supply and demand imbalance when it comes to power. So I think the government realized that and went about in its first phase, considering how much.

Data center load, could it bring into the province while ensuring reliability? And our system operator went ahead with the government that did that work and came up with a 1.2 gigawatt number, and then they went through a process of allocating that act. So, you know, we used to think of a three legged stool for our sector that needed to be imbalanced in order to be successful.

And that was sort of reliability, affordability, and sustainability. There’s a fourth leg now, and that’s velocity. Like it’s just speed to [00:08:00] power. How quickly could you get it? And if any one of those legs breaks, the stool ticks over. And so we’re really grappling with the velocity part of the equation. And so our vision at the moment really sees kind of three phases, I would say, John, to data center powering in Canada.

The first one would be to utilizing existing underutilized generation. Probably more with a natural gas fired feel to it. Replacing that generation in the 2030s with more efficient generation would be the second phase. And then in my view, the greening of that generation would then follow shortly thereafter in kind of a third phase as we develop solutions for data centers in the country.

And our bet is that it is in fact, you know, hyperscalers, the tech companies, they’re gonna drive, I would say generation. Breakthroughs, sort of the technological evolution in our space that will see the eventual, you know, greening of the solutions that they [00:09:00] need to be able to provide, but with the ability to provide that reliability which they need, which is super hot to be able to see it through.

John Stackhouse: That’s a great point about velocity. I haven’t heard it added to the trilemma as it’s often, uh, referred to with energy. I guess someone will call that a quad lema or something, uh, like that. But give us a sense of how fast the velocity is. How, how fast is this coming at us?

John Kousinioris: So speed to power is important.

And when you look at the parts of the world that I think have done well, places like PJM, and you look at North Virginia and all the locations that have occurred, you know, all the data center locations that have occurred there. I mean, in part that’s because they have the ability to be able to power them.

I think a lot of the proponents of, of data centers wanna be able to see that if, is it a two year time horizon, two and a half year time horizon. Be able to see their project developed, built on the ground within our processing units installed and and being [00:10:00] up and running and being able to scale out.

That’s a good point To maybe pivot to the Key Hills Project, and I’m hoping you can tell us more about what your vision and ambition is there. For those who don’t know. Key Hills used to be a big coal plant, right? Coal plant. That’s right. And now you’re looking to develop it into a natural gas facility to power AI data centers.

That’s

John Kousinioris: exactly right. And so it is a facility which is about 60, 70 kilometers west of the city of Edmonton, and you are right, it used to be a series of three interconnected power plants. Each one of which just to, to keep it simple, is about 400 megawatts in generating capacity. So it’s, I tend to think of it as about 1.2 gigawatts of generation.

We have. In that broader area and our Sundance facility is just west of there, about 40,000 acres of land that we own and, and these plants were built on top of a coal mine. So in many respects, it’s a reclamation operation where [00:11:00] all of the plants are off of coal. They’ve been converted to. Natural gas.

Gas or shut down or mothball over time. And so when we look at key hills, we see, um, reasonably efficient gas, fire generation. Our transmission interconnection is there, the workhorse is there. We have clinical natural gas supply, we have water rights and the ability to cool the data centers, which is critically important from all the existing infrastructure that we have there.

It’s a temperate. Climate. We have existing pooling ponds, for example. The land is there, we’ve re permitted the land. So it’s been zoned in an appropriate way for data center development. So we’re excited about all of the attributes that we have and the ability to actually permit our customers to locate and approximately to our, uh, generating facilities and be able to.

Meet their needs directly from those facilities there. Now, in the initial phase, they would be grid connected, so they’d be able [00:12:00] to get that reliability by being able to extract power from the grid. But it would be our facilities that would be powering the grid in that area to permit that to occur. And the other thing that we’re excited about the opportunity, excited about being able to repurpose existing.

Facilities to meet the need of a new industry and do it relatively quickly as we develop kind of new, more longer term generating solutions for the customers.

John Stackhouse: As I understand it, the electricity that you’ll produce out of your plants goes into the grid, and then the data centers draw from the grid. Pull from the grid, right?

Why then do they need to be located by the power facility?

John Kousinioris: Yeah, in this case. So I think what you’ll actually see in the future is they could, in theory, locate in Calgary as long as they procured power that was being provided to the grid to ensure that the grid maintained that level of reliability.

It’s just that where we are right now, you know, we were exploring potentially a behind [00:13:00] the fence solution we, where we would power them directly, for example. And it turned out that just having the land, because it can chew up quite a bit of land to be able to do the set at scale, potentially hundreds of acres of land, was good.

It’s proximate to the city of Edmonton, which is and, and U of A in particular is a bit of a hotbed for AI development. So locationally it is good, but to get the kind of reliability that they need, let’s say it’s a 99 point, you know, 9, 9, 9, 9, doing that behind the fence is challenging. I think.

Realistically, you need to be grid connected to get that level of reliability.

John Stackhouse: All of this is gonna require a lot of investment and confidence, uh, certainly in policy as well as in markets. And that was part of the thinking behind the memorandum of understanding between the federal government and province of Alberta that uh, we saw a Danielle Smith and Mark Carney sign.

A fair bit. In fact, pretty much all of the attention and debate around the [00:14:00] MOU has been around pipelines and having read the MOUA couple of times I was struck of how much other stuff is in there. Yeah. Including around electricity and specific mentions about. Ai. Yeah. You were involved in the conversations.

John, I wonder if you can give us a deeper sense of the strategic thinking behind that and how that matters to a company like TransAlta and also to the investors who you’re trying to draw more capital from For what we’ve been talking about.

John Kousinioris: I think to your point, John, a lot of kind of attention in the media has gone towards, you know, pipelines and just sort of more the up oil and gas flavor associated with it.

But, uh, certainly from our sector, the electricity sector in Alberta, the MOU is a monumental opportunity and shift for us in terms of our ability to be able to meet the needs of data centers. So what the MOU does is it recognizes the. The challenge [00:15:00] to being able to get reliable generation built in real time in a manner that is environmentally responsible, but also meets the needs of the AI data center opportunity.

And I think imperative that the country has, I think is critical. You can’t have one without the other. In our view. And I think the initial location for this industry pillar is, my expectation is the province of Alberta. And so it is a real enabler and then associated with that will be an appropriate pathway to net zero, which I think, as you would’ve seen in the MOU remains an element of the target that everybody is looking at a really robust carbon pricing regime and, and I think all of that is gonna result in a continual greening of the grid, certainly from an emissions intensity perspective, but it was so lucky in Canada, so blessed to have.

The natural resources that we have where you see a relatively [00:16:00] decarbonized grid, like 80, 84% of our electricity generation in Canada is emissions free. Whether it’s, you know, the nuclear that you see in Ontario to the hydro blessings that the province of British Columbia, Manitoba, Quebec have, I think that the country has really great green publicity generation credentials.

We’re talking about other jurisdictions that don’t have those resources like Alberta, Saskatchewan, and maybe some of the Atlantic provinces to be able to use natural gas to be able to, to meet the opportunity. So I, it, it was a really, um, I think, important piece of cooperation and candidly shows a lot, at least from our perspective, great vision and cooperation on the part of the province of, and the government of Canada.

Very impressed with what they’re doing to get our country going. It’s gonna be very important.

John Stackhouse: Tell us a bit more about how the extra natural gas production fits in with a pathway to net zero by 2050.

John Kousinioris: That’s a [00:17:00] great question. And look, in our company in many respects has been in the vanguard of decarbonization in Canada, if you go back 15 years or so, you know, TransAlta would’ve emitted probably in the range of 40 megatons of CO2 a year.

So think of that as 5% of Canada CO2 emissions. We’ve gone from 40 down to about eight. So just our company alone has contributed about 10% of Canada’s Paris commitment. From a decarbonization perspective, what we are focused on now, given you know, how much we’ve lowered emissions over overall the country in our sector, I think there’s other sectors that that still have work to do from a decarbonization perspective.

We think that feathering in. A responsible way, natural gas fire generation that is hyper efficient, like the new plants that we would be looking to build would replace or less efficient, more highly emitting plants. So I think that trajectory of emissions intensity would [00:18:00] continue to go down with time, and it would be our expectation that we would add renewables as well.

But we would need that natural gas fire generation from an affordability perspective today to provide that level of reliability that we need. Our team studies carbon capture, our team study storage. We continue to look at kind of all the technological work that is being done and do expect with time. As I said earlier in, in our discussion, we do expect the tech sector itself to continue to drive kind of innovation and decarbonization over time.

So we, we see the gas as having a role to enable the build out of the sector. We don’t think. Overall, it’ll end up changing the emissions profile of the credit overall that much. And over time we’ll continue to work on partner. Well,

John Stackhouse: you call the MOU monumental. What do we need to do now to not only ensure it’s affected, but to take advantage of this moment?

Bearing in mind the velocity challenge that you [00:19:00] keep mentioning.

John Kousinioris: I think what it’s gonna require is, um, the MOU kind of sets forth a vision. And it requires a bit of work to be done around carbon policy in the province of Alberta, which which has a short time frame. It’ll be sort of in q2, uh, 2026 kinda landing the existing carbon pricing and tier regime that we have in a way that would be acceptable to move things forward.

I mean, making sure that we’re clear about phase two of data center development in the province of Alberta, which we think will have a similar, if not quicker timeframe, to see how that will be played out will also be something. I think that will be important to see through and then it’s all go gonna be about execution.

Like it’s making sure that companies like ours begin riving with our customers, the kind of investment decisions that are necessary. Because I, you know, sometimes I think in Canada we tend to point fingers at the government, why don’t they do this? Or why don’t they fix this? I think this is rightly, I think, a [00:20:00] call by most levels of government to now look at industry and say, look, we will do our part.

Well, you kind of talks about directionally what we need to do from a regulatory perspective. We need you guys to step up too, and I think that’s something that we take pretty seriously in our company and will be a focus for us going forward.

John Stackhouse: TransAlta has been around for more than a century and has lived and succeeded through multiple generations of energy development in this country. John, as we move to close, I’m not gonna ask you to look out a hundred years, but maybe look out 10 years and give us a sense of what success looks like for TransAlta, for Alberta and for Canada.

John Kousinioris: You know, it’s funny you say that ’cause I, I almost sort of, you know, to surface swept and people ask me to kind of make that forecast and I’m, I’m reminded, I joined the company here in 2012 and in 2011 we commissioned our last coal plant, which was a billion and a half dollar investment people three.

[00:21:00] Expecting it to run on coal. I think it was until 2063. That plant is now on natural gas. It’s amazing how disruptive that has been and is gonna probably, you know, I’m not sure it’ll be running in its current trajectory past 2040. So it’s amazing how quickly it ends. What I see our company, if I were to look forward sort of 20 years, I see a company that continues to have a mixture of generation.

Natural gas fire generation, including new natural gas fire generation in the province of Alberta, will be in a place where it is beginning to evaluate and bringing on more renewables to be able to reduce the emissions profile of that generation as we go forward. We often talk about our convictions as a company when we look sort of long term.

Maybe that’s the best way to answer the question. So it is our belief that the demand for renewables generation will continue and accelerate over time. [00:22:00] It is our belief that the technological progress being made around storage and renewables will continue and they will become increasingly affordable over time.

We’ve had a bit of a hiatus in that. Costs have gone up pretty significantly, and I hope they, they start to, to come down again. It is our belief that carbon will become more expensive over time, but it’s also our belief that natural gas fire generation will have a critical role to play in electricity generation, certainly in our part of the world for many, many years to come as well.

So it’s sort of directionally, I think that gives you a bit of a sense on how we see things developing and kind of the way we think about making long-term investments.

John Stackhouse: And for Alberta and for Canada, what, what does success look like 10 plus years out,

John Kousinioris: I think success would look like having our country be considered one of the, you know, continuing on our path to decarbonization over time.

But at the same time, having [00:23:00] a vibrant data center, AI industry that centered initially in the province of Alberta, but also migrates to other parts of the country. And Canada is considered a leader. In that entire industry space, which is kind of nascent. And although we’re doing great in terms of kind of some of the primary work, I worry that we’ve slipped behind in the actual locations of the excellent process.

But I’m optimistic. I think we’ll get there

John Stackhouse: and if anyone can get the quad lema, if we’re gonna call it that, right? Uh, it’s gotta be the people of Alberta and the people of Canada. John, thank you for being on disruptors. Thanks so much, John. Be well. Canada is in the midst again of an important even existential debate about the role of energy in our economy and in our country.

And much of the debate has been focused on what many have called the energy trimmer of reliability, affordability, and sustainability. But as John stressed, [00:24:00] there’s a fourth variable that we need to pay more attention to, and that’s velocity speed. We all know how fast AI is growing in our lives and in our work, and we have to ensure that we have energy systems that grow and adapt at the same speed.

Otherwise, we’ll see our data and all the opportunities that go with it move to other countries. That’s the bet TransAlta is making at Key Hills and Sundance, that it can be one of the engines of Canada’s AI ambitions. It’s about energy security and energy sovereignty, because without those, we’ll continue to struggle for true economic sovereignty.

Even more so in the transnational world of AI and data on so many counts, Alberta already has a headstart. It’s got the land, the transmission systems, the cooling water, and the people who know how to build and run sophisticated energy systems. Those assets and that talent is ready to be scaled for the next wave of demand.

The challenges won’t be [00:25:00] easy. There are huge supply chain constraints for anyone trying to build a new power plant, whether it’s to get in queue for a gas turbine or find the steel and copper and other materials to build out a grid. We’ll also have to continue to get better and better at producing all this energy more sustainably.

If we’re gonna use more natural gas to power, more data centers will want to continue to find ways to capture the methane and other greenhouse gases that come with all that production. Alberta has long been a global leader in that. And by harnessing all these potential new investments, it can continue to be a technology leader for sustainable energy production.

And then there’s the talent challenge. Alberta, like so many other parts of Canada, is going to need more people and more skills to be a global leader in the data center economy. So the next time you use chat, GPT or perplexity, think about where all your data’s going. Where all the energy is coming from for the massive compute that is enabling this new information age.[00:26:00]

We can build most of that right here in Canada if we make the smart investments. Now

you’ve been listening to Disruptors, the Canada Project. Thanks for joining us on this journey across the country. And there’s more ahead. If you enjoyed this episode, please follow rate and leave us a review. It helps others discover the show. And if you wanna gain deeper insights into the ideas shaping Canadian business and the economy, visit rbc.com/thought leadership.

Join us next time as we meet more of the innovators and leaders helping Canada meet this moment boldly and on our terms. I’m John Stackhouse. Thanks for listening.

The Trust Advantage: How OpenText is Securing Canada’s Information Layer

Janice Stein: Sovereignty would guarantee Canadians that their core services and core data that are essential to the functioning of Canadian society are free from coercion by outside powers that matters in a world where great. Power competition is back and even more surprising, our neighbor to the South, which has been a trusted partner for so long, is no longer our cyber protections inside government are among the best in the world.

The. Encryption that protects the most fundamental government data, which other governments would like to access. The core health data that is so important to people in this country, as well as the data that is [00:01:00] embedded in core financial services. These are all things that affect Canadians every day of their life.

And we cannot take the risk that any outside power could use access to that data to coerce us.

John Stackhouse: That’s Janice Stein of the Munk School of Global Affairs and Public Policy at the University of Toronto. She’s a leading Canadian voice on security and tech governance. You just heard her define tech sovereignty plainly.

Keep core services and data free from coercion.

Janice Stein: We have to bring the private sector to the table with our government to work together and make decisions. What are the core things that we need to protect from coercion, and then we need to fund some infrastructure that will be ring-fenced with the consensus of Canadians and with the active participation.[00:02:00]

Uh, the people who make the tools that’s in the private sector, the people who use the tools, those are Canadian companies and Canadians and those who ensure the tools, and that’s our government. We all have to share a sense of urgency in a world that is just not friendly to Canada in the way

that it was.

John Stackhouse: I’m John Stackhouse. Welcome to Disruptors the Canada

Project. This season, we’re crisscrossing the country to meet the builders using technology to tackle Canada’s toughest problems. And along the way, sketch a blueprint

for a stronger, more competitive nation.

Today’s destination, Waterloo, Ontario.

For decades, this region helped Canada wire the world for secure mobile communications. Think back [00:03:00] to research in motion, AKA Blackberry setting the bar for enterprise grade trust on a global scale. Back then, most of us pushed far less data as a sense of scale. In 2003, global internet traffic was about 0.8 exabytes per month.

Today, estimates suggest roughly 0.4 zettabytes of data are created every day. I’ll save you the math. That’s about 500 times more every day than a whole month in 2003, and a lot of that flood is because of ai. Different measures, same signal. We’re operating at a completely new scale. Now, most people hear AI and think chatbots and productivity.

They also know it takes a lot of data centers to power up, and Canada is building them backed by clean power and billions in investment. But that’s not the whole story. Here’s something we all might take for granted. The real stakes are one layer down our information layer, who can see our [00:04:00] data, where it lives, and whether the rules are enforced in code.

Under Canadian law, our peers are already baking sovereignty into their tech stacks. Governed data residency, auditability as standard practice. Now we’re catching up, but we can leapfrog. Our guides today are Tom Jenkins and Shannon Bell of OpenText, a Waterloo born, globally deployed tech champion for 35 years.

Their teams have helped enterprises and governments govern data in code policy and keep critical systems running even on bad days in their world. The product is trust. Keys we hold, rules we encode and proof we can show. So Canadian organizations can scale AI under Canadian rules and export that standard to allies.

Tom and Shannon, welcome to Disruptors.

Shannon Bell: Thank you.

Tom Jenkins: Great to be here.

John Stackhouse: Tom, I wanna start with this question of tech sovereignty. You are one of Canada’s leading thinkers and voices on [00:05:00] this have been for many years. What does tech sovereignty mean to you?

Tom Jenkins: Tech sovereignty just simply means your ability to control your environment.

So in the case of sovereignty, in the analog world, that would mean control of your borders, control of the oceans that we live adjacent to. So in tech, it just simply means control of your technology environment.

John Stackhouse: I think we used to call it resilience, and we all had backup clouds, backup systems because things break.

But now there’s kind of a new challenge to resilience, which is foreign interference and wanting to have our own tech infrastructure while also working with and integrating with other tech infrastructures.

Tom Jenkins: That is the downside of globalization. We’ve all benefited throughout the world with globalization, but with globalization comes the ability.

To communicate things, whether it’s COVID or SARS or [00:06:00] whatever. The reality is when we’re part of the global community, we have to exist with both the good and the bad.

John Stackhouse: Shannon, you build a lot of this stuff. How hard is it for Canada and for Canadian companies to build our own tech stacks versus working with those global platforms that were in some ways an extension of that globalization era?

Shannon Bell: It’s a little bit like back to the future. So for years and years, for decades, we had to build data centers and infrastructure to run applications, and that was part of how every company ran. And with the advent of cloud services, it became very easy to leverage those services to drive faster paths to market.

And in the discussions around sovereignty, it’s really what do you need to control and why? How do you protect your data? And increasingly, data is becoming a differentiator for companies and for businesses. And so what are the pieces in the technology stack that are going to enable a business to [00:07:00] differentiate themselves, and therefore those are the pieces that you need to control.

John Stackhouse: And data is the essential input to ai. So as everyone thinks about ai, how it’s transforming our lives, but every business as well, take us further into that

Shannon Bell: For sure, so data is really, as you said, the power or the fuel for ai. And if you think about an enterprise, 90% of their data is sitting behind their firewalls, not in the public domain.

And so with the advent of ai, it’s been trained on everything that’s publicly available, and that’s being leveraged today through tools like Chat, GPT, and otherwise in the consumer domain. From an enterprise business perspective, it really is all of that data that they’ve accumulated over decades that is enabling them to identify and pinpoint trends, train AI models to drive intelligent agentic behavior that is helping them differentiate their business in the global markets.

So it’s really about that data [00:08:00] set, how businesses are using it to leverage, and what amount of that data they’re comfortable having in the public domain. Versus wanting to control it in a sovereign cloud type of environment. And so that’s really the discussion point.

John Stackhouse: I might’ve thought of data as kind of a global phenomenon.

My data lives, it transcends borders. But listening to you and others, I’m getting the sense that there are perhaps national boundaries around data and there may be more of that. Is that how we’re gonna think of the future of a bit more nationalistic or data within borders approach?

Tom Jenkins: Well, we’ve actually already thought that way.

There’s something called GDPR, which is the General Data Protection Regulation. At first arose, oh, about 15 years ago. As people started to realize, eh, it might not be a good idea to put somebody’s health results on the public web or to put their bank account or their tax form, people started to realize that even things [00:09:00] like open government, which on one hand sounds like a really good idea.

It’s actually not such a good idea if you can figure out which patient is for which doctor, you know, in Sault Saint Marie. And so data and data sets became a big point of focus for public policy about 15 years ago. And so this idea of GDPR basically started to say, if you have somebody’s information.

Then within that legal jurisdiction, so say in the case of Canada, that information’s gotta stay in Canada, can’t go outside of Canada. It has to be run on Canadian servers, and it has to be monitored, managed, governed, controlled, secured by Canadians. It allows a government within their jurisdiction to assure their citizens that the data is being protected, that there is good governance, it’s orderly, [00:10:00] and you know, some international player is not gonna run off with your data.

Data is sort of the stuff you put up in your attic in a box. And you go get your records when you need it, or you go get your photo album when you need it, and that sort of thing. Ai, well, that’s like being broadcast in the middle of a movie theater, in a shopping mall. You know that it’s highly, highly public.

And so GDPR is now starting to be adapted to deal with things like artificial intelligence.

John Stackhouse: But Tom, do those rules transcend easily into the age of generative ai? Isn’t our data now moving in all sorts of new directions that may be good, but were not the directions that we were thinking about 15 years ago.

Tom Jenkins: So the simple answer is absolutely, you’re right, John. That what we thought about in terms of, uh, fixed data, [00:11:00] think of the, the box of files up in your attic is very different from broadcasting that data through a generative ai. And, and you see the dilemma with generative ai. It’s a fantastic innovation.

AI was never intended to forget something. It can forget, by the way, but you have to start all over again. And that’s enormous cost, enormous time,

Shannon Bell: And I think it’s also important to differentiate consumer and enterprise. And so it’s amazing what consumers are willing to say on the internet or share on the internet and accept, but they hold enterprise and government to a much higher standard.

And so when you think about generative ai, what’s in the public domain? Yes. One piece of the puzzle and what people are willing to share with chat. GPT. Or exposed through their email or whatever. Facebook, other applications is one thing, but from an enterprise perspective, they’re much more cautious about what they [00:12:00] share because a lot of the data in the enterprise is what differentiates the business.

And so, you know, think of a simple example. Your, uh, technology company and your source code is your intellectual property. Are you going to put that on the internet? No, of course not. And so those are the types of things that there’s a higher degree of protection around. And so I think you always have to think about it in that domain.

What’s consumer is one vein and enterprise is a, is a different story.

John Stackhouse: Tom and Shannon, you’ve just written a book on some of these challenges.

Maybe tell us a bit about it.

Shannon Bell: Yeah, absolutely. I was privileged enough to work with, uh, Tom and David Fraser as well.

John Stackhouse: David Fraser being a former military leader in Canada and has spent a number of years now with OpenText and others.

Shannon Bell: Yeah. And an incredible leader, uh, that just brings great insights into the enterprise world as well. We worked on a book on enterprise AI and how you can leverage data to drive that from a sovereign cloud [00:13:00] perspective. So very much that enterprise angle and looking at all of the pieces of the puzzle that need to come together to drive agentic AI for enterprise.

Tom Jenkins: Perhaps the way to think of this term, enterprise ai, most, uh, of our listeners have played with chat BT or they’ve. Played with a variety of other chatbots, code, et cetera. What they may or may not realize is that all answers that they’re getting, let’s say, are from the public domain. So famously Chat, GBT was trained on Reddit and trained on Wiki and trained on various things that were part of the digital commons, if you will.

And as Shannon had mentioned earlier. That’s, uh, you know, roughly speaking between five and 10% of the world’s information. Most of it is behind the firewall or, and therefore enterprise. So an AI built from the [00:14:00] enterprise is using different information than you would’ve had in Reddit.

Shannon Bell: Yeah, absolutely. I think a great example where you’ve got information in the public domain and information in the private domain, and how the two intersect is think about when you’re going to file for a passport application.

You’re providing a lot of confidential sensitive data, and you’re providing that into the government and they’re processing it and they’re providing information back to you. And if you think about public domain information, some of your information lives in the public domain and they’ll use that to validate certain things about you.

And much of your data resides in the private domain. And so when we think about applying agentic AI to an example like that, we think about. What’s public information, what’s private information? So I might go on the government website and start the process of my passport application, validate certain things, but then my information is going to get handed over into that private domain where they’re going to run my, [00:15:00] maybe a criminal record, check my background, check my address, check all the verifications required.

References and so on in order to then correspond with me back in the public domain where all of that information needs to be stripped of anything that’s private or confidential. And so you get into this domain where you have agentic AI working across public and private domains, and that’s really where the magic happens.

As you start to think of the evolution of enterprise ai.

John Stackhouse: That’s a really great framing for where I hope we can take the conversation now in terms of what this means for Canada, but for Canadian enterprises, uh, be they public sector or private, we all know data is essential to every firm’s competitiveness, also essential to the efficiency and well-functioning of, uh, public sector operations as well.

But all of that needs to be seen anew in light of this new focus on sovereignty. So how do we think about these data challenges through the prism [00:16:00] of tech sovereignty?

Shannon Bell: I think there’s multiple pieces to sovereignty that you need to think about. So data sovereignty’s, one piece, operational sovereignty’s, another.

As an enterprise is looking at leveraging AI into specific use cases. The most critical piece that’s required to enable or build those use cases is subject matter expertise around the business. The business processes, the data itself, and so that is something you know that the business uniquely has and can build on and build as a differentiator, the ability to train and model those use cases.

And so we talk a lot about AI and. Its ability to potentially displace certain roles. I actually think it’s a phenomenal opportunity in Canada for us to be able to leverage the domain expertise that we have across different industries and use that to train and build a agentic AI use cases. We can do that here in Canada, which solves one of the sovereignty pieces.

The data is resident here in Canada, so you’re building use [00:17:00] cases and deploying and operating those inside of, and building out an expertise that’s not common across the industry today. And so those unique skills to build on top of business processes and data sets, the ENT frameworks are things that I think we can uniquely do here in Canada and build as a capability to differentiate across different industries.

Tom Jenkins: There’s also, uh, when it comes to sovereignty, John, a darker side to this, that we should be all very, very aware of. The simplest way to think of this, it, it’s a bit trite, but what is the difference between shutting off a power plant and bombing a power plant? There really is no difference because you’re depriving someone of the use of that plant.

This is part and parcel of what we talked about before with globalization. You get the good with the bad because, uh, on the one hand we get all this automation, we get efficiency, we get innovation, but now we’ve [00:18:00] got different governance problems. We have to make sure that citizens are protected, that the utilities that they count on are there and they’re properly controlled and governed, and that they’re safe.

It’s everything around us. We know if there’s a power outage, it’s very difficult to check out your groceries at the grocery store. It’s very difficult to get gas from the gas station. Electricity has permeated our lives and that electricity is run by tech, and so we have to think of sovereignty in in a completely new way now.

John Stackhouse: That’s a very good warning, Tom.

For years, those cyber threats have largely been malicious. They’ve been rooted in criminal gangs and maybe in some, uh, malicious state actors. But now we’re also into a new age where even friendly states and the United States might be among them. Might use [00:19:00] its reach through technology to influence or affect others, uh, including economic partners.

There is that expression, the Trump kill switch, which sounds alarming, but it does illustrate a challenge that we need to think ahead to that a superpower or even a power might be able to flip a switch and shut down parts of our economy or enterprises. How as Canadians should we be thinking about this rapidly evolving security paradigm?

Tom Jenkins: You have to take a hard noses approach to capacity versus intent. And, uh, you know, in the case of the Americans, we couldn’t have had and have a better ally anywhere in the world, but we as Canadians, we should be concerned when someone has the capacity to control things inside our country, that’s a different issue.

And, and it’s not about the Americans, [00:20:00] it’s about anyone, any third party actor. We shouldn’t allow anyone that is not elected. Buy our citizens to have control over our life because that’s the whole point of a democracy in a sovereign country.

John Stackhouse: So how do we build that invisible border? Do we need a Canadian cloud and is that even possible?

Shannon Bell: I think there’s a combination of approaches and I, I think we need to understand that the future of technology with respect to sovereign cloud is, is a hybrid approach. It starts with the foundation of understanding your data, where it is, where it resides, how it’s being moved, and that’s so critical because AI is transforming economies and because data is the fuel to the ai, it becomes really that piece of the puzzle that you must have control over.

Now that being said, a lot of the data that’s going to be critical for enterprise sits in their own domain. In order to build AI [00:21:00] models that make sense and can drive that economic advantage, we need to unlock that data that’s sitting in the enterprise. And that’s really where Sovereign Cloud becomes so critical.

And I think the important piece of it is being able to classify the data and know what is the truly protected data and having a solution to manage that versus the data that you can leverage in the public cloud and leverage the economies and efficiencies of scale in the cloud. That is why we think it’s so critical to really know and understand and build out that hybrid architecture so that you can protect the data that is truly business differentiating and protect the AI that you build from that data, and also leverage the benefit and economies of scale of the public cloud.

It’s hybrid,

Tom Jenkins: And the good news about this is the parts that have to be protected are actually really small. Think of your own daily life. Most of what we do is in the public domain. It’s really when you [00:22:00] go get a health checkup or you go to the hospital or you file your tax forms. These are important private things.

They’re actually a very, very small part of the overall picture, and so when we speak about hybrid, we’re actually only talking about a small fraction, might be less than 10% of what we do in the day, and the data that we keep and the interactions that we have, it’s actually a very small amount, but it’s a vital part.

Of our lives. It’s a vital part of who we are as people and as a country.

John Stackhouse: Tom, you’ve been a leader for years in terms of taking Canadian tech to the world. You get to travel the world and talk to tech thinkers and leaders. What are some of the leading countries thinking about now in this new security paradigm in terms of [00:23:00] tech sovereignty?

Tom Jenkins: Many of them have come to Canada and asked us for help as as a sort of third party, if you will.

And this so long tradition that Canada has had, many people don’t realize whether it’s the Canadian Mint, even the Canadian Post Office, for decades and decades, we provided the infrastructure to many other countries for their currency, for their mail service, simply because. We’re big enough that we can build our own and yet a middle power.

We’re not very threatening to anyone. We’ve had dozens of countries approach us and say, can you build us a sovereign cloud that has an independent stack that would not be subject to things like the United States Cloud Act and things like that. So many, many countries are on the same journey. They’re not as fast as we are in Canada [00:24:00] because we have so much of that infrastructure already.

They’re all asking the question, what does it mean to be sovereign in a digital world? And those are pretty profound questions for societies all over the world. The great benefit Canada has is because we’re right beside the United States, we have a huge technology community and an ability to build an entire sovereign cloud stack.

We have all the component pieces over many decades of development. Many other countries do not benefit from that. They do not have that deep technological heritage that we do.

Shannon Bell: And I would say that it’s not just a government question. And so there’s some interesting Gartner research out that actually talks about the fact that 50% of multinationals will have a sovereign cloud strategy in the next few years.

And I think that’s really important because when we talk about sovereignty and data [00:25:00] protection and AI sovereignty and so on. Yes, some of the discussion has started with governments, but it actually is a broader discussion across enterprise, and so we hear it from governments and we hear it equally from many of our largest customers around the world.

John Stackhouse: Tom, when you mentioned the history and positive legacy of the Mint and the uh, and Canada Post, I also thought of the role Canada’s played in decades past as a store of gold and many countries literally stored their gold in Canada because it was considered a safe place for that. Very different age today.

Are other countries and companies in those countries looking to use Canada as the place where they store their data or use as a critical base of infrastructure?

Tom Jenkins: Yeah, we’ve been heavy into those discussions over the last oh two quarters, like about last six months. And I have to say, John, it’s a combination of the two because this situation [00:26:00] specific.

If you are a large middle power, such as a Japan or a career, you already have a pretty substantial technology stack, and so you’re really looking to fill gaps. But if you’re a smaller country. Ireland, or you know Romania, small countries in the eu, small countries in Africa, south America, they have very little stack from which to draw upon.

So in that case, they’re looking for a complete set of capabilities from one country. But it all begins with the domestic telecom. Whatever is the domestic telecom it, it could be cable and wireless in the uk. It could be NTT in Japan. It could be France Telecom, Deutsche Telecom. You know, ev, everyone’s got a domestic telecom for the very same reason.

They wanted to be able to have sovereign control over their communications on behalf of their [00:27:00] citizens. I think you’ll find all of those stacks will begin. With that. So in our case in Canada, whether it’s Bell Canada or Telus or some of the other telecoms, I think you’ll see those sovereign clouds begin with the, let’s say, the part of the stack that a government regulates and society has control over.

John Stackhouse: You’ve both mentioned the competitive advantage of skills of talent, as well as a range of companies, including OpenText, including Cohere, which we’ve had on the podcast in the past. There’s also the intangible of trust. How much is trust a factor and an attribute for Canada?

Tom Jenkins: Oh, it’s the number one thing. No one should ever think that trust does not matter. It matters to all of us in our daily lives. Why do you use one bank instead of another? It’s based on your personal [00:28:00] experiences and how you trust that bank. Trust is absolutely paramount on this topic because it, it really goes to the heart of what you’re trying to protect.

I know that having done this for 35 years at OpenText, the number one thing that we sell is trust. They, our customers have to trust that we keep up in cybersecurity, that we keep up in a whole variety of different ways, and so trust is paramount. It’s more important than anything else.

Shannon Bell: And when you think of the size and scale of the networks, we operate, you know, over 80 data centers around the world, over 75 cloud landing zones.

You know, we deal with over 300 billion cyber events a month. I mean, we are managing 15 trillion annually in supply chain. Like trust is at the core of everything we do, and that is something that’s synonymous with being a Canadian company. [00:29:00]

John Stackhouse: We’ve talked through this series that we’re calling the Canada Project on all the opportunities for Canada, from defense and space to AgriFood to critical minerals, what we can provide to the world.

I’m so glad that we’re also talking about tech capabilities, about data and that, uh, competitive advantage of trust. As we move towards close in our conversation, what does Canada and what should Canadians be thinking about over the next couple of critical years to both maintain our sovereignty and build it, but also be more competitive and relevant in a rapidly changing world?

Tom Jenkins: Well, I’ve lived this world for pretty much my entire professional career, and I can tell you as a firsthand observer. Canadians are great at this. The reality is we have a fantastic heritage of doing this. OpenText is a good example. More than 50% of our revenues come from [00:30:00] outside of North America and we’re well received all throughout the world.

We were talking about trust. But it’s also quality. We’re competitive. We’re very good Canadians. We’re really tough on each other, and that’s good. That’s a good part of a democracy. But make no mistake, when we go abroad, we’re the very best in the world. We’re very good at many, many things. I think that the reexamination of our role in the world is a good thing for Canada, and I think Canada has a tremendous set of advantages.

It’s just that, uh, maybe we got a little complacent. Maybe we got a little too used to a single market. So I’m actually quite bullish on this. I think Canadians will do very well in the world. They just have to get out there and prove it to themselves.

Shannon Bell: And I think here at Home technology is an enabler for helping us solve some of the challenges.

You know, we talk a lot about workplace productivity and [00:31:00] efficiency in the market, and I think that leveraging ai, adopting and embracing ai, we’ve been a little slow as a country to do that, but I think that will be an unlock for our own economy as well. And it’s an area where we can develop differentiating skills in our workforce, uh, differentiators for our enterprise and for our government that then we can take globally.

So I, I think the two go hand in hand and we are very well positioned as long as we embrace technology to enable that.

John Stackhouse: So a new age with all sorts of opportunities as far not to be excited. Shannon, for those listening who run enterprises, who run organizations who are thinking about ai, what are a few of the critical things they can and should come to grips with?

Shannon Bell: I think for enterprises starting the journey, the most important thing is to start. Oftentimes we get overwhelmed by the. Magnitude of potential and don’t know where to start. And really starting the journey is key to actually starting to see some results. [00:32:00] And I always advise our teams internally and our customers start with the simplest use cases, the simplest use cases to start to understand, build literacy in the organization around AI and its potential.

Remove some of the fear and allow you to embrace change management. And once you start with those simple use cases, you can grow in complexity and start to see better outcomes. And understanding the baseline and don’t underestimate the change management as a part of that. It’s not just a technology problem, it’s a people in process problem.

John Stackhouse: Shannon, great advice for any team leader, any organizational leader. Tom, what does the country need to think about? When we look at the next few

Tom Jenkins: years, we are in a very, very competitive world and we shouldn’t make any apology for sticking up for ourselves. I think we should be buying Canadian, but we should be buying Canadian in a very competitive environment.

We, Canadians should demand the very best in the world [00:33:00] and demand that our Canadian suppliers do that, and that we create a competitive environment. In which we purchase Canadian goods and services and then use those goods and services to export to the world and to be able to turn around and export it.

We have to get out there. We have to change our attitude. We have to take more risk, put more capital to work and export. We used to do this, we used to do this in the 1950s. In the 1960s, after World War II Canada had a very strong place in the world and it executed all throughout the world. We can return to do that and be very welcome in the world, but it does require effort.

It does require a strong domestic base from which to do that. We’ve done it before. We can do it again.

John Stackhouse: What great messages for everyone get going. Embrace. Don’t be afraid. Help culture change [00:34:00] within your organization and get out there in the world. There’s nothing but opportunity ahead when you think like that.

Shannon and Tom, thank you for all your building with Open Text and for all your building for Canada. Thank you for being on disruptors.

Shannon Bell: Thank you, John.

Tom Jenkins: Thanks for having us.

John Stackhouse: What’s happening in Waterloo and across Canada’s data centre buildout isn’t just about racks and models. It’s about the information layer that keeps daily life running for decades. Secure communications help define this region to the world. The next chapter is bigger tech, sovereignty and proof that people can trust.

So personal data stays personal, and the switches for critical systems don’t sit in another country’s jurisdiction. Canada is in the midst of building a very different economy, new tools, new companies, new jobs. We need to safeguard it by setting the foundations here, run the rules in Canada, keep information in Canada, and keep a clear, [00:35:00] verifiable record of what our systems do across all the services that we rely on.

Build it here and we’ll hold the advantage that keeps on compounding trust. You’ve been listening to Disruptors, the Canada Project. Thanks for joining us on this journey across the country. And there’s more ahead. A link to Shannon and Tom’s new book, enterprise Artificial Intelligence Building: Trusted AI with Secure Data is in the show notes.

If you enjoyed this episode, please follow rate and leave us a review. It helps others discover the show. And if you wanna gain deeper insights into the ideas shaping Canadian business and the economy, visit rbc.com/thoughtleadership Join us next time as we meet more of the innovators and leaders helping Canada meet this moment boldly and on our terms.

I’m John Stackhouse. Thanks for [00:36:00] listen.

Beyond the Battery: Inside Quebec’s Mine-to-Refine Transformation

Jean Charest: For generations, Quebec has a helped to build Canada, whether it be through the forestry industry, lumber, agriculture, hydro, aluminum, aerospace, and culture. We’ve never been just a a resource economy. In fact, Canada’s very much a knowledge based economy, blessed with natural resources. But our challenge is to be actually more than that.

There’s a lot of demand for our natural resources. Now, critical minerals is probably top of the list, and the real challenge is, are we going to be just supplying them as a raw product or will we be building and making the finished products that the world needs?

John Stackhouse: That’s Jean Charest, former Premier of Quebec, and a longtime champion of building value added industries around this province’s natural resources.

He’s watched Quebec move from aluminum and hydro into a new chapter, critical minerals like graphite, lithium, and nickel. They’re the building blocks of a whole new economy centered around electric vehicles, grid batteries, and a lot of defense systems that Canada and our allies are going to rely on.

Jean Charest: The countries that will prosper in the future are the ones that are going to commit themselves to these added value products.

And that’s exactly where Canada is going. Not just as the builder, but also as a trusted partner for every one of our partners elsewhere in the world. And for Quebec, this is the choice that we have in front of us.

John Stackhouse: The opportunity here is enormous. As the world electrifies from cars and buses to data centers and defense, demand for battery materials is exploding.

The real danger is that we remain content to mine, rock and ship it overseas while other countries capture the jobs, the technology, and the leverage that come from refining.

I’m John Stackhouse. Welcome to Disruptors: The Canada Project. This season, we’re taking you on a journey across the country to meet some of the visionaries who are using technology to tackle our most urgent challenges. And in the process, sketch out a blueprint for a stronger, more competitive Canada.

Today’s destination, Quebec from the forest near Saint-Michel-des-Saints to the industrial hub of Bécancour. This is where Canada is trying to build something we’ve never really had before in graphite. A complete mind to anode supply chain at home. Now, if you’re not up on your battery terminology, the anode is the negative side of a battery, the part that stores and releases energy, and in most lithium ion batteries.

Today, that anode is made from highly processed graphite, whether it’s EV factories in Ontario and the US Midwest grid batteries that backup up clean power or high-end applications in defense and aerospace. All of them depend on secure supplies, a battery grade graphite. Yet for all the talk of energy transition, here’s something that may surprise you.

China currently refines more than 90% of the world’s graphite into battery anode material, export controls or political shocks there can ripple through automakers and grid operators everywhere. If Canada wants to be more resilient at home and more reliable abroad, we can’t just be the quarry. We have to be part of the refining backbone too.

In this episode, we meet Eric Desaulniers, founder and CEO of Nouveau Monde Graphite, or NMG. His company is trying to do something truly ambitious. Develop a new mine at Matawinie just north of Montreal, and link it to a refining plant at  Bécancour, down the St. Lawrence near Trois-Rivières. For customers looking for reliable supply outside of China.

The Federal government’s major projects office has now designated NMG’s phase two as a major project and plugged it into a new G7 critical minerals push. Canada is also backing it up with innovative offtake agreements designed to de-risk private investment. If all this works, Quebec won’t just get a mine, it will get to occupy the cornerstone of a more resilient allied supply chain and provide a new kind of economic engine.

Eric, you’ve, uh, been in the news of late Ottawa, has put  Matawinie and  Bécancour on the major projects list and tied you into a G7 critical minerals push with government trying to aggregate demand there. What exactly did you say yes to with all that?

Eric Desaulniers: I’m super fortunate to have the word  Matawinie and the word graphite being, uh, now very important in Canada.

Basically, we accepted the invitation of the Canadian government to be part of this major project office. We already started some construction activities, and in our case, in critical minerals. The important next big step is project financing, and we are collaborating with many different governmental bodies.

We have already the some investment from Canada Growth Fund that are a shareholder. We have letter of interest from Export Development Canada, letter of interest from Indian Infrastructure Bank on the debt side. And now the Canadian government becomes our customers with this strategic, uh, stockpiling. So we’re interacting with the public service, we’re interacting with NRCan.

So as you can understand, all those organization, and I’m not talking about the provincial level, uh, Investissement Québec, who’s a great shoulders since a long time. So having somebody like Dawn Farrell and their team who knows exactly the needs of a major project to get it to the finish line is very helpful.

John Stackhouse: That’s probably helpful for a lot of listeners who have heard about the Major Projects Office, but don’t know exactly what it does.

Sounds like in this case, it’s a bit of a concierge for you, helping you expedite working with different layers of government.

Eric Desaulniers: That’s how I see it personally. It’s a concierge for whatever the major project needs to get it across the line. In our case, it’s more about financing and other project, probably it’ll be more about regulation or or permitting.

But we also have an angle of discussing with all other J seven countries and allied countries because our production will go also to those countries. So there’s also this higher level of coordination that, you know, we need a government. To have a credible body alongside us to, to discuss with all those parties.

John Stackhouse: Eric, let’s step back and walk through this moment for critical minerals. Mining, of course, has been part of Canada since Canada was created. We’re pretty good at it, but suddenly there’s this intense focus, if I can put it that way, on critical minerals. What’s so critical about these minerals in terms of that redirection of our economy?

Eric Desaulniers: So we all know graphite these days for lithium ion battery, uh, being a huge market growing and it’s a market that historically was only in Asia, and now we wanna do those battery here. So we need to make big mines for lithium ion battery. So that’s one aspect of it. But in specifically graphite, there’s about 15 different applications.

A lot of those applications, it’s not big volumes that are justifying a mine by themselves. So critical minerals are minerals that are most of the time are used in small quantities. And there’s countries in Asia that can have the scale to accumulate the demand for those minerals to justify mines Here we are market driven, so we, we need to have enough of an economic, enough of a attractive project for capital markets to get it going.

So there’s a lot of those minerals, graphite, one of them, where the demand of the western world is big. But it’s not big enough to justify making mines to compete at the pricing level that the, uh, Chinese country are doing it, you know, so this is really for graphite specifically, it’s different. We have one mine since 36 years now, and before that mine, there was another one in Quebec, Canada.

So since a hundred years Canada is the only supplier of graphite of the G7 countries, and, uh, currently 80% of the market for concentrate of graphite comes from China and a hundred percent of the converted product led active and on material for batteries. Now the demand has grown at 106,000 ton per annum to fulfill the needs of the Western world, not only for lithium ion battery, but also for all the smaller volumes.

Application like polys, like thermoplastic, like foil for e-dissipation. A lot of defense application in their dual uses. But all markets that may be buy 10 tons a year, 25 tons a year, and we need to bundle all those 150 different customers who really need it, and if it doesn’t flow, there’s huge impact on our economy.

So that’s how I see critical minerals. It’s minerals that maybe won’t be financed by themself there, but need governmental intervention because if those minerals are not flowing, there’s a huge impact on our economy.

John Stackhouse: And it’s critical that you are doing the refining as well, is that correct?

Eric Desaulniers: Yeah, and that’s the second I would say big reason for working with the government is we have demonstrated we can build those verticals. We build the full vertical to Panasonic energy, a very, uh, sophisticated and, uh, company who know exactly the respect. So we have demonstrated that we can do that. Our goal is to work with the large defense contractor of the world. We wanna work with Canadian government and we want to be there proposing them carbon solution more than just a concentrate. It’s not a concentrate that goes in the submarine. It’s a, it’s a transform, uh, material for sure.

John Stackhouse: We’ve talked about why graphite is critical. The next question is how you turn that into real jobs and real assets in Quebec. For NMG, that means linking the mine and the refinery and rethinking how a mine is powered.

At  Matawinie, they’re working with Caterpillar on an innovative all electric mining fleet using Quebec Hydro to run the trucks shovels and crushers that used to run on diesel. So why is power so critical?

Eric Desaulniers: As we know, Quebec is one of the cheapest hydro, uh, and clean as well. In North America, it’s still 25% of our costs.

It’s an energy intensive process. We are developing our mining to be all electric with the solution provided by Caterpillar. So we’re optimizing the usage of this hydro to be carbon neutral. So having I’ll, I call it the four reason to buy in Canada. Great geology to start with, two hours away, we have a great industrial park in big and core with sheep, hydro, and all reagents and all the the right area to develop this safely.

And then we have the right talents and we have the customer now in our backyard who really need graphite and they really need to diversify from a single source in China.

John Stackhouse: And for those who aren’t familiar with  Bécancour, maybe you can put it on a map for us.

Eric Desaulniers: It’s between, uh, Montreal and Quebec City, so maybe Trois-Rivières was the second oldest city, uh, in Canada after Quebec City, I believe, or in Quebec anyway, and it’s, uh, right midway between the two on the South Shore, and that’s a large industrial park that was created around the nuclear plant of Gentilly that is now decommissioned. So there’s a huge industrial park.

There’s a second largest aluminum smelter operated by Alcoa and Rio Tinto, and we are right across the street from, from these guys. So we have already GM POSCO, that are quite active in the, in the area. We have Rio Tinto in the Quebec government through the naca, uh, lithium project, also in the park. And we’re the anode side uh, uh, we have bought our land in 2019 before. It all starts so much, much good entry point, much better entry point at the time. Yeah,

John Stackhouse: So we’ve got the rocks, we’ve got the electricity, uh, we’ve got the processing facility and ecosystem, and we’ve got the markets through the G7. We also have talent and that’s, uh, that’s critical as well. What kind of skills do you need today and what will you need going forward?

Eric Desaulniers: There are skills that we have and there’s skill that we need to build on and, and develop. So as I’ve mentioned, since a hundred years, Quebec is mining graphite. So to start with, we have hired a lot of people from that other mine that has experience in graphite.

So our CFO, our main, uh, processing people know upside down. Now to run this, the processing for graphite only is happening in China. We cannot build a commercial plant before having one. So now we are very active working thanks to our friend at Panasonic introducing us the right suppliers who build plant for them in Asia before going there, understanding how it works, and make sure our engineers that are learning the right way to operate at scale, active annual material plant.

We have a lot of expertise in leaching, we, the purification is a leaching plant, so Rio Tin two has a, has a similar thing in sore. So there’s an ecosystem we need to go take advantage of the smart people there, but not be, uh, too much arrogant. And we need to be humble. We have stuff to learn from Asia. We need to be there, have the right partner like Panasonic, who will guide us through that and make sure we, we make a success on everything we do.

Everybody at NMG, we’re 120. We have maybe 35 engineers. Everybody’s super happy to work close to home. You don’t need to do fly in, fly out, go work in Africa or something like that. So we are very fortunate. Me the first that I can go at Christmas at the mine site and all my kids are super happy and I can bring all my family. It’s fun to develop a project in Canada. So we need to take advantage of that.

John Stackhouse: If you stop the story there, it would be a great Quebec industrial play, but this isn’t just about one province. It’s about how Canada fits into an allied supply chain at a time when export controls and geopolitics are reshaping who gets what. So how does a hundred thousand ton mine in Quebec stack up against what China can offer?

Eric Desaulniers: Yeah, in China there’s many, many operations. So in flight graphite today, maybe it’s 1.5 million ton, uh, a year in the world. But if you, you follow the growth they have in China, even though they are 80% of the market today for concentrate, they are a net

importer of graphite, they import everything they can from Africa for their big refining machines. So they are, they are building so much capacity for, uh, active anode material that they need more graphite that they can produce inside the country. So that’s really the, the situation out there. So here our market, like two years ago, I sold twice the production of the mine.

Two years ago, it was all dedicated for lithium ion battery because we had customer like Panasonic Energy, General Motors that were quite aggressive securing, uh, locally, uh, graphite. Now, more recently, we, uh, revised this strategy before getting to FID and that’s where 55% of our production will go in lithium ion battery

now, allowing us to diversify in those very strategic and other markets, like I’ve mentioned before, uh, refractory bricks, like the bricks you put in the steel foundry that are, are, it’s still today the biggest market for natural graphite. And then all the other, uh, 15 application I was talking about secured by the Canadian government and G7 countries to make sure we have the time to develop those verticals to support, uh, very important things in our economy.

John Stackhouse: That’s gotta change the way you build and manage a company to be working so deeply with governments, not just the Canadian government, but as you say, allied governments across the, uh, the G7.

Walk us through how your marketing and distribution strategy changes now that you’re so, uh, connected through the G7.

Eric Desaulniers: When you work with the credible shareholder to start with, from the private sector, it helps a lot. So, for instance, we have Mitsui as a shareholder, uh, since, uh, working with us since 2018.

So that’s a good example. Uh, you know, we have Panasonic now, but we are a pre-revenue company. We don’t have a long history like Rio Tinto of building mines and a big, big cash flow. So we need to bring partners on board to be very effective at the, at selling our message to the government. I think that’s the first step for, for Rio.

John Stackhouse: Longer term, when you think about allocating supply, you’ve got some pretty powerful, uh, and I’m assuming competing interests there. How are you thinking through whether your graphite goes to, uh, defense procure, the Pentagon being the biggest or an electronics manufacturer like Panasonic?

Eric Desaulniers: Yeah, so we have two things.

Uh, I would say three different things In our marketing strategy, we have long term offtake agreement. That’s what we have with Panasonic Energy. We need to deliver those 13,000 ton of active and old material. They require 25,000 ton of concentrate. So that’s about a quarter of the mine that is long-term full vertical that we do with Panasonic.

We have, uh, another off takes like, uh, with Traxxis. Traxxis is um, an established trading house who will represent us with a list of about 12 exclusive customer in the refractory markets. Then we have the Kenyan government and we built a similar structure with the Kenyan government where we have an offtake for a, for a certain volume at a fixed price for North American, uh, pricing.

And now what the government did is really to make, uh, the right instrument to get us. Going and construction so we can, uh, play ball the same way the market is working today, instead of asking to 150 different people to do long-term agreement. And in exchange of that, they will ask, uh, too much discount.

So it’s not good for a company so. The government is bridging and making an instrument that, quite frankly, at the end of the day, I think they will make money on because we will share 50 50 the upside, if we sell at a higher price in the, in the future, the company need to reimburse the loss before, uh, before getting a 50% of, uh, of profit.

So I think it’s a fair deal where taxpayer, at the end of the day, will most likely make, uh, a little bit of money.

John Stackhouse: So just to clarify that point, ’cause it’s really important, the taxpayer still has a risk on the downside, and that’s fine. You’re investing in a venture and an economic opportunity if you’re the government of Canada, but it’s mitigated by the company’s share of the losses.

Is that correct?

Eric Desaulniers: Yes, that’s one mitigation point. And the other mitigation point is the fact that since, uh, as I’ve mentioned 36 years, we have history for pricing. We have, uh, we know very well the customers, so there’s also this, we are not the, the fixed price given, it’s the current market price that is very much depleted by our friend in China.

So it’s a good starting point to start this instrument. So, the downside is protected by, uh, the government, otherwise, we would not be able to get going into construction. The bank won’t borrow us the money. However, as long as there’s no accumulated loss on the instrument, we will share 50 50 the upside.

John Stackhouse: This is a really good illustration of the new age that Canada and others are in. Uh, as you’ve been indicating, China has market dominance globally, both on the supply and in some ways on the demand side. So it can drive the market, it can flood the market if it wants, not just in, uh, graphite or lithium, but, uh, lots of other critical minerals, which has made it really hard for free market.

Mining operators around the world because it takes years or decades to get a payoff for the millions that it takes to build a a mine. And if you’ve got that price volatility, it gets pretty queasy. Uh, or it makes investors pretty, uh, pretty, pretty queasy. Now you’ve got this security of demand and pricing through these off takes and government supports that gives your investors, that kind of security so they can make these, uh, commitments. Exactly. Kind of a new, a new way of mining and mining finance in Canada.

Eric Desaulniers: I’m dreaming of a Canadian critical mineral exchange. Uh, that’s something in the future that could be very, uh, very interesting.

John Stackhouse: Take us deeper there. What’s needed for a Canadian critical minerals exchange?

Eric Desaulniers: How mining is financed, usually it’s true hedgings true futures. Because there is a, a liquid market given by the London Metal Exchange. Basically, you know, you have a gold price, everybody knows gold, that people play gold and in critical minerals, that’s a challenge. It’s all opaque. Driving, more visibility on pricing for everyone, we’ll help finance those critical minerals. This is what we asked the government said, gentlemen, you can finance all the project, but that’s not the goal. The goal is to attract private capitals in this and to attract private capitals, we need to have certainty on pricing and the right instrument. That not only, uh, the, the capital market will like, but also the debtor and also the, the taxpayer.

So not an instrument that, uh, government will lose money and subsidize to lead this process. So I think we found the right spot.

John Stackhouse: The G7, as you’ve referenced, is a really important and powerful counterweight to China in global markets, particularly for that security of demand. So the G7 is Canada, the US, some key Europeans, Germany, Britain, France, Italy, and of course Japan.

You’ve got deep ties with Japan that sounds like they are continuing to be constructive. The big question obviously in the G7 right now is the G1. It’s the United States and how cooperative it will be if it will do what’s in its interest, and then maybe take a different path if it’s not in its interest.

How are you thinking through that strategic uncertainty within the G7.

Eric Desaulniers: I think you, you raised a valid challenge. You know, we need to make sure we have instruments and we have dedication that will survive election, you know, and, and survive momentum in, in each of these democracy. We see the US government being very active now, very supportive.

They understand that they are in trouble if those critical minerals are not coming. So we have very positive discussion with the US government now that we have, under the leadership of Canada, made this instrument. US government made other deals. I think it’ll be very beneficial for both side of the the border to do a deal on critical minerals.

We’re neighbor at the end of the day. This is something that we’re looking forward to do in the near future. Continue our conversation with the US government alongside Japan and European countries.

John Stackhouse: As you said earlier, graphite is also essential to a lot of, uh, defense products, maybe aerospace stationary storage for batteries as well.

It’s not just EVs No. But over the next decade, how much is graphite an EV story still, or when will it become a non EV story?

Eric Desaulniers: Two years ago, we were 90% plus going in either EV or power storage, but anything lithium ion battery related, now we’re more going 55% of our production and that that I think will be the firm deal getting into construction.

So I think it’s a good ratio, 55 in batteries. 20 in refractory bricks and 25 in other strategic markets that are providing the best return. But those strategic market will require us to develop a value added product, as we will announce shortly. But there’s, not only concentrate, you can do expandable graphite, expanded graphite, graphene, all those different product because it’s, uh, as I’ve mentioned, 15 different strategic application, a lot of it defense related, that you need to work hard with your customer to do the right transformation.

So we will need this 25% remaining. A lot of work, a lot of value is there, and now the instrument from the government give us the time to develop these verticals. We are in Canada, we’re lucky, we have the, the, the smart engineers, the smart PhD, the right laboratory, the, the right, uh, security of supply. So the, the defense contractor need to buy locally.

It’s not like an option. They need to come and, and buy here. So we need to take advantage of that, but we need to work with them to do the, a useful product, not only concentrate, and we can do it. That’s the Canadian advantage. In Quebec, uh, we are fortunate with the geology, so I like to say we have the right geology, the right tools, like cheap hydroelectricity and the right talents to be very cost effective in this market.

We have the best graphite in the world in the ground. Probably the five best deposit in North America are located in Quebec, thanks to the Greenville Province, and we’re fortunate to have that.

John Stackhouse: What a great picture you’re painting of today and the, uh, the horizon that we’re looking at. Maybe Eric, as we wrap up, I can ask you to take us over the horizon.

It is, let’s say 2035, what’s the opportunity for Quebec and for Canada if we get all this right?

Eric Desaulniers: I thought when I started the company 2011 was, uh, was very far. It’s not that far away. So for a mining project, uh, 2035, in 10 years, we will be fully operating. And we will be like, the meta mine will be in the phase of probably of growth, potentially thinking about, uh, increasing capacity.

Because the goal is really to develop a lot of different verticals. So for our specific project, the main thing we need to develop is the, the growth in r and d, making sure we, uh, work with our customer developing new materials and explore all possibilities of graphene, for instance. That is at the end of the day, graphite transform product.

So this is really something that captivate our r and d team and myself to not only, uh, stay in the current market of active anode material and concentrate in what we know, but keep developing solutions using carbon that are useful for a lot of different things in our economy.

John Stackhouse: Wonderful. Well, Eric, congratulations on all that you’ve got going. It’s, uh, impressive and exciting for the company and for Quebec, but really important to where Canada is going.

Eric Desaulniers: Thank you for having me, John. Looking forward to keeping in touch and we’re super proud to

develop this project for Canada.

John Stackhouse: To build a more resilient economy and meet the demands of our allies. We’re going to need more people like Eric. Leaders who are willing to rethink old systems and take Canada beyond mining and shipping. But as Jean Charest reminds us, this isn’t just about one project or one province. It’s about building the industrial backbone, the power lines, refineries skills, and financing mechanisms that turn critical minerals into long-term prosperity.

We simply can’t keep planning our resource strategy, one mine at a time or one export deal at a time. We need to think like builders, not just exporters. Because the next frontier for Canada isn’t only in the rock under our feet, it’s in the systems that refine it here and connect us to a fast changing and increasingly uncertain world.

The opportunity for NMG and frankly for Canada isn’t just mining and technology, it’s global strategy. Canada has a unique advantage, clean power, trusted institutions, engineering talent, and a resource base that the world needs. The challenge. And yes, that opportunity is to turn all this into a durable edge.

So when our partners look for a reliable and critical supply, they think Canada. I’m John Stackhouse and you’ve been listening to Disruptors, the Canada Project, an RBC podcast. If you wanna hear the whole series, please subscribe wherever you get your podcasts and give us a five star rating that will help others find these stories and share them.

And if you wanna learn more about the Canada Project, head over to rbc.com/thought leadership. Join us next time as we continue our journey across the country in search of the innovators and leaders who’re helping Canada meet this moment boldly with their eyes fixed on the future and their feet firmly on Canadian ground.