Sonia Sennik: and Sonia.

John Stackhouse: Welcome to Disruptors x CDL: The Innovation Era.

Sonia Sennik: All right, John, let’s start light today. What’s the meaning of life?

John Stackhouse: Such an easy question to kick things off.

Sonia Sennik: Exactly. No small talk here, straight to the big existential dilemmas.

John Stackhouse: All right. If I had to take a swing at it, I think life is about experiences, seeing new places, meeting interesting people, and eating incredible food.

How about you? What’s your take?

Sonia Sennik: I think it’s connection. Finding people who get you, who make the weirdness of life feel a little less weird. Creating bonds, especially with your cat.

John Stackhouse: That’s insightful. And what may I ask is your cat’s name?

Sonia Sennik: It’s Salt.

John Stackhouse: I totally forgot. My bad. And, uh, what was the name of the street you grew up on?

Or perhaps your favorite teacher?

Sonia Sennik: This conversation is taking a turn

John Stackhouse: Maybe it’s because we’re not real.[00:01:00]

So Sonia, that was bizarre because that was not you and me talking. Those were deep fakes.

Sonia Sennik: So John, is this you right now?

Of course it’s me, but you may want to verify that.

Sonia Sennik: That’s exactly what your AI would say, John.

John Stackhouse: It’s remarkable that we’re suddenly in this age where maybe we have to prove who we are and verify who we are and also ask people, even those who we know really well, to also verify that it’s really them.

And this has become much more than what we used to call a parlor game. This is a growing source of international crime, of challenges to democracy, and even disruptions to our communities and society.

Sonia Sennik: Establishing trust is really difficult in a world where you can recreate someone’s voice, their image or their likeness in seconds.

I’m sure you heard of that story in Hong Kong recently. A bunch of folks thought they were on a zoom call with their chief financial officer who was directing them to send 25 million to an offshore bank account. They verified it [00:02:00] was him. They thought they were on the call with him. And of course, the money went walking out the door.

John Stackhouse: And I fear that sort of thing is happening probably on a daily basis, maybe at a smaller scale, but increasingly prevalent all over the world. And I think we have to anticipate that those challenges are going to get more intense. It’s not just money either. We may see in a likely spring election this year, foreign interference using deep fakes.

Unfortunately, we have two outstanding thinkers on all things deep fake and much more on this episode.

Sonia Sennik: Leaders in the emerging technology space who are looking to harness best in class technology to re establish trust in the systems we use every day, the conversations and transactions we do every hour.

John Stackhouse: Long time listeners may remember Shuman Ghosemajumder who was on the podcast in 2019 talking about what was then just this emerging idea of deepfakes. Shumann is one of the world’s leading experts in cybersecurity, fraud prevention, and AI [00:03:00] driven threats. He was Google’s global head of product trust and safety, and played a key role there in tackling some of the internet’s biggest fraud challenges.

Now, as the co-founder of Reckon, he’s at the forefront of using AI to combat AI driven fraud.

Sonia Sennik: We’re also joined by Ken Nickerson. Ken is an inventor, coder, entrepreneur, investor, and a veteran in the cyber security world. Ken was one of the earliest mentors at Creative Destruction Lab. He has spent years co-founding emerging technology companies.

Ken is also the co-founder of Sealed, an open source method to prove ownership of media.

John Stackhouse: Shuman, Ken, welcome to the podcast. Good to be here. Thank you. Shuman, let’s start with you because you were on Disruptors in 2019. We’re talking about deepfakes. What has changed in the last six years?

Shuman Ghosemajumder: Well, you might remember in 2019, we actually made a demo of you playing the role of Simon Cowell, uh, changing his face into your face. And it was [00:04:00] amazing that after three days of computation, one of my engineers was able to generate something that looked halfway decent, but it was actually pretty poor quality. And so I think that the big thing that’s changed in the last many years is the. Ability of the technology to be able to create deep fakes that are hyper realistic in a very short amount of time and really democratize this technology so that anyone can use it and to be able to use it across many different types of media.

So, being able to take two seconds of somebody’s voice and clone it absolutely realistically. Being able to translate their words into a completely different language and then clone their voice so that you can match it up and make it look like they’re actually speaking in another language in their own accent.

These are things that were just theoretical science fiction five, six years ago, and now they’re technologies that are being used by people [00:05:00] all over the world. And if you can think out six years. Where do you think we’ll be? There’s this, uh, great quote from William Gibson that the future is already here.

It’s just not evenly distributed. So there was the ability for folks who had enough computing power, who had enough skill and, you know, had enough talent to be able to create highly realistic deep fakes six years ago, or even before that. But it was really painstaking work. And now what’s happened is that it’s really easy for folks without GPU power, without talent, without a skill to be able to, uh, do much higher quality work.

And we’re just going to see an extension of that six years from now, where it’s going to be built into all kinds of different tools that we have built into different products, and it’s going to. Change the way that we think about content generation in ways that are currently difficult to imagine, but we know it’s going to become more ubiquitous.

So an example of this is every single time [00:06:00] Apple or Google launch a new phone, they’re now talking about AI capabilities that allow you to be able to modify that image in ways that would have been inconceivable 10 years ago.

John Stackhouse: Ken you’ve been watching this and we’ve been talking about this for years? I wonder if you can tell our listeners a bit about your work with someone who is definitely not fake, Margaret Atwood because it’s a fascinating window into this challenge.

Ken Nickerson: Yes, so I’ll keep it as shallow as possible When I had a breakfast a couple of years ago with Ms. Atwood, I asked her what her biggest worry was, and we were both speaking at a conference, and she was concerned that people were taking the cover of the artwork from her books, and possibly her text, and using them for the artwork.

so called AI, uh, you know, content generation. And, uh, you know, it bothered me. And I already had an idea for a project I had thought about a few years earlier. And I hired a summer student and built it. And it’s publicly available in open source. It’s called sealed. [00:07:00] ch. The thing about deep fake versus deep real versus real versus fake.

is that it’s really hard to prove a negative. It’s known as an NP hard problem. NPS can be a really hard problem to figure out something’s fake. But you can prove that something’s real. And so a concept actually came from the Musée d’Orsay in Paris. I was there about 13 years earlier, where on a kind of a private tour underground there, I found out that the way they ensured the art was by taking The frame off and photographing the edges.

So I took that old 100 year old technology and applied it with using a fairly modern programming language called rust and making it open source. So anyone could take an image of video, a text or an audio, run it through sealed. Compile it on their own. So full, full disclosure and trust, but be able to then prove beyond the shadow of a doubt in many, many court cases now that they were the original owners of that content.

And so if you flip the problem on its head, what you could do is make it so that all browsers. [00:08:00] Chat tools applications would have to see like HTTPS, like an SSL certificate, they would have to see proof that that is real versus trying to verify something is unreal, which is quite frankly, a really essentially an uncomputable problem.

Sonia Sennik: Shuman, many refer to AI as the ultimate fraud machine because it can do things, as you were mentioning through the list and examples that you gave us, it’s just an endless sea of opportunities to create, as Ken mentioned, things that are not real. What do you see for verification? How do you think about authentication or harnessing emerging technology to verify media or content?

Shuman Ghosemajumder: I think it’s critically important. I think that you are constantly looking for opportunities, like Ken was mentioning, to be able to authenticate identity, to be able to authenticate content, and you want to be able to Make that as implicit as possible in [00:09:00] every single communication and every single type of content that you’re consuming.

The challenge is that we have this entire back catalog of the entire internet that was built without any of that. We have this entire back catalog of all of human civilization that was built without any of that. And so how do you. Harmonize those two things. How do you take all of the images and videos that have existed historically and verify that something really is a true historical record and not something that was fake?

Because now with generative AI, we can show a behind the scenes video that demonstrates how the moon landing was faked. If we wanted, like we could create like a 60 minute documentary that. Films inside of NASA from the, the viewer’s point of view, how the moon landing was faked. And that’s going to look like it’s completely realistic.

And then if someone asks, well, what’s the, uh, watermark that shows that this is a [00:10:00] real video? You say, well, it was filmed in the 1960s. We don’t have a watermark. How do you know what’s real and what’s not in terms of any kind of content that is excluded from the ability to be authenticated that way?

Sonia Sennik: Traditional verifications and authentication methods just really aren’t keeping up. From your experience working with small businesses, medium businesses, and large enterprise, what would you say is the biggest blind spot that needs to be addressed right now?

Ken Nickerson: Yeah, so the way that things are done today, obviously in a digital world, they’re computed.

And so we have things like certs, certificates, we have things called CRC, cycle redundancy checks, and whether it’s quantum or Racks of hundreds of thousands of GPUs. There is the potential for abuse by essentially reverse engineering a photo, putting it back together with fake information or a video or whatever, and then re [00:11:00] CRCing it so that it looks authentic.

And so the computational challenge to authenticity is quite severe. And so my guess is that there’ll be an analog component to the future of authenticity. And by analog, things that become you know, more in line with nature that become harder to compute just using raw horsepower of computation, the ability to reverse engineer and create these fakes is accelerating.

You’ll soon be able to do it on your phone. Certainly people do it today with filters on any of the social media tools. Finding a method that is incomputable for verifying authenticity is the problem that needs to be solved. The folks like Adobe and Leica in particular, the camera company Leica, they and a large consortium have gotten together to create something called content credentials.

There’s an API and software. But you know, the reality is anything that can be computed can probably be reversed. And so I’m looking for solutions beyond the kind of current standards for [00:12:00] authenticity.

John Stackhouse: Ken, this is a really interesting idea that computation may not be sufficient and you’re looking for something in nature.

Take us a bit deeper into that and whether it’s even possible to capture non digital solutions in a digital universe.

Ken Nickerson: Yeah, so there’s kind of cheating ways, leaving out information that can’t be computed no matter how much horsepower you have. Think about cropping a photo. So say you took a photo and it’s Sonia and I standing shaking hands, but I have a knife over my head and it’s a wide angle shot and you crop it out.

So it’s just us smiling and shaking hands. And there’s a bunch of famous perception images like that. The point is the cropping has changed the narrative and it’s left information out. And therefore it has literally changed the story of the image. It’s leaving out information because the outside of that frame could not be computed.

And that’s basically how Sealed works. If you look beyond that in the analog realm, there’s things you [00:13:00] can do that are very hard to reverse. So they’re not based on pure math. So for example, you could sequence someone’s DNA. And if you do sequence your DNA, it’s about a 512 megabyte file. And then you could say, here’s an offset from the start of that file.

And here’s the first six DNA strands. Now tell me the next 20. These are not things that can be computed. They’re hidden information.

Sonia Sennik: So Shuman, just to pivot to your latest venture, what is unique about Reckon’s approach to tackling AI driven fraud?

Shuman Ghosemajumder: Well, I think that you were alluding to it before in terms of how we’ve called AI the ultimate fraud machine. So what we have embarked upon as an industry in terms of how we’re trying to realize the dream of artificial general intelligence is not An extension of the types of AI that [00:14:00] we had in the 1990s and earlier, where we’re trying to teach machines how to reason, but instead taking things like large language models, which allow us to simulate what realistic reasoning machines would actually produce.

And so we know some of the drawbacks of that, that sometimes the large language models will hallucinate and they’ll come up with answers that are completely wrong. However, what they’re always doing is generating answers that look highly plausible to the viewer. And so, that’s the case for image generation models, for audio generation models.

It’s not actually generating a true sample of someone’s voice or a true image of that person, but it is generating something that can look highly plausible to the viewer. Who is consuming it? So on one hand, you’ve got legitimate enterprise who is trying to take generative AI and solve the problems of hallucinations and [00:15:00] errors that are introduced by that approach.

And then they discover in certain cases that if they actually hand the keys over in terms of decision making to content that is coming from a generative model, then it could lead to disastrous results when that model hallucinates. But there’s another side to this, which is that cyber criminals have been looking for a way to be able to automate their operations for the last 20 years, and they’ve been succeeding at greater and greater levels in terms of being able to have different federated groups of cyber criminals who specialize in different aspects of cybercrime.

A cyber attack in order to be able to create the cybercriminal equivalent of the open source ecosystem, where they can collaborate together to create more sophisticated attacks than any cybercriminal could individually. But there was always a last mile problem, if you want to call it that, that cybercriminals had where there were certain operations that still required humans.

And now with generative AI, what they’ve discovered [00:16:00] is that they can understand natural language for the first time. They can generate realistic audio and video for the very first time. And unlike the case of legitimate enterprise struggling with the limitations of generative AI as far as hallucinations are concerned, for cybercriminals, none of that is a problem.

Because essentially when you’re engaged in fraud, everything is a hallucination. And so now with generative AI, something that generates output that’s plausible to their victims, cybercriminals are adopting this at massive scale. And so this is what we’re focused on. How do you deal with that problem of cybercriminals being able to create more realistic fraud than we’ve ever seen before, and to be able to distribute that at scale?

And as we were discussing, the problem is much greater than just being able to identify that the content is AI generated. The problem extends to identity and being able to verify that someone is actually who they claim to be.

Sonia Sennik: Ken, do [00:17:00] you agree with the overview of how large language models or today’s latest and greatest version of AI is being harnessed by cybercriminals?

And is there a fix for deepfakes?

Ken Nickerson: Yeah, so anyone with an agenda is going to find a tool to meet that agenda. It just so happens this tool is sharper than the last one. But the question on identity is a little different. On identity, you can follow that trail. And so the key things in identity that I look for, you know, and I’ve talked with this all time is just, do you have authority?

Do you have accountability? And then lastly, is there an audit? There’s lots of methods of doing that in a large, massive scale. Certainly the blockchain is one interesting aspect, but I think the reality is going to be that whether we like it or not, there’s always an agenda. I think we could easily see a time by the end of this decade There’ll be some form of identity to log on to the internet to begin with.

And so that truth chain that’ll [00:18:00] start to be formed will start with your ability to get on. So, so I don’t think the tools of making things more sophisticated and more believable are going to go away. I think they’re actually going to get incredibly aggressive over the next 12 to 24 months, but the ability to trace it back to the source may become more possible.

You can prove something’s true or not, but not something’s fake or not. But you may be able to discover the trail that led to that fake. And there’s some hope for that, I would say.

Sonia Sennik: Shuman, earlier in our conversation, we mentioned the term zero trust. For listeners who aren’t familiar with the encryption space or the cybersecurity space, can you explain the concept of zero trust and why it’s really useful for transactions?

Shuman Ghosemajumder: Sure. What it refers to is the idea that you shouldn’t just have an authentication mechanism, like asking someone for a password, and then give that person or account the ability to do whatever they [00:19:00] want because you fully trust them.

The idea of zero trust is that you never Provide absolute trust, but are constantly looking at the behavior that occurs post authentication or post whatever transaction is some kind of dividing point, and you look for signs of fraud or abuse that might not have been evident Just in that authentication step just because somebody provides a password doesn’t necessarily mean that they’re the rightful holder of that password just because somebody has a token doesn’t necessarily mean that they should have access to that token And because of that you have to constantly analyze their behavior

Sonia Sennik: So, simply put, Zero Trust means every time I speak to Ken, Ken has to prove to me he’s Ken, and I have to prove to Ken I’m Sonia.

Shuman Ghosemajumder: Yeah, absolutely. And it basically never ends. So, at the beginning of that conversation that you have with Ken, you first have to decide whether or not you’ve contacted the real Ken. [00:20:00] And he has to decide whether or not he’s contacted the real Sonia, and then maybe you exchange some information to be able to give yourselves a greater sense of trust, but there’s never any point at which you fully trust, because there might be something that the canon quotation marks says 10 minutes into the conversation that makes you think, hold on a second, I thought it was Ken, but maybe this is just the next level technology representation of a synthetic version of Ken, and it fooled me in the first few steps.

That’s really what Zero Trust is all about, in terms of being able to constantly look for signs that there may be a new sophisticated technology that eluded your previous ability to detect it.

Sonia Sennik: So Ken, 24/7 authentication, what does it look like?

Ken Nickerson: The key thing is that we’re moving into this kind of digital twin world.

You know, we’ve over many decades have developed tools for trust in the analog world. And those tools, we jerry rigged them a little bit for the digital world, you know, what’s the [00:21:00] password and stuff like that. But we’re on a process of discovery. You know, we have to redefine what it means to live half your life in the analog world, half your life in the digital world.

What protocols exist? A handshake. Oh, they got a pulse and they’re right in front of me. The analog world. I guess I can trust Sonia. She’s in front of me. The digital world. What are the models I can use for establishing trust, and not just at the start of the call, but if I were with, say, a sophisticated agency, I would allow the call to be established and then cut in seamlessly during the call, and you wouldn’t even realize it.

So pass the protocol. And so how do you continuously requalify trust in a digital world? I suspect it’ll look like something like very peer to peer where whether we have an agent process based on seconds, then every few moments While we’re in conversation, trying to be social in a digital setting, it will re establish that we both exist.

And there’s a lot of ways to do that. One would be, we’re in this call right [00:22:00] now. Maybe a three letter agency has already replaced me. And you’re going to go, that doesn’t sound like Kat. It’s a physical act. So an analog act, participating in the digital world to reestablish a bridge of trust between analog and digital.

Uh, one model that I worked on years ago, after reading a book of all things, a science fiction book, was that we’d all start smoking, because the calculations for the smoke would be just so expensive that, that nobody could afford to replicate smoking in a video call. You probably wouldn’t spend a hundred thousand dollars to replicate the smoke coming out of my mouth.

Shuman Ghosemajumder: I think science fiction points the way. I think that, uh, uh, it’s really been, uh, science fiction authors who have thought very deeply about future societies that have technology that isn’t available to us yet. And what we’re trending towards in terms of being able to authenticate that someone is human, for instance, which is a problem that I worked on in my previous company and at Google before that, is the [00:23:00] Voight Kampff test from, uh, Blade Runner.

Analyzing someone’s reactions to different questions and asking them to, uh, tell you about their mother and, you know, all the different ways that humans would respond differently than what we think a simulated human might do. So, an example of this is, uh, CAPTCHA. CAPTCHA stands for Completely Automated Public Turing Test to Tell Computers and Humans Apart.

So, this is something that has been trying to establish humanness by being able to discover any mechanical system, essentially, that can’t pass a Turing test. But the problem is that we now have generative AI that’s capable of effectively passing most of those Turing tests that we’ve conceived of. And so CAPTCHA today is now doing the exact opposite of what it was intended to do.

It’s become a huge impediment for real humans who can no longer identify whether or not, you know, that looks like a bicycle [00:24:00] or that looks like the edge of a car in the image that I’m trying to identify. But for machine learning based optical character recognition and other capture solving mechanisms, cybercriminals have no problem at all being able to solve those captions.

John Stackhouse: So you guys mentioned science fiction. My mind’s also going to old spy novels and spy movies and the John le Carre conceits and devices to masquerade people. I’m wondering how much this is going to require us to change as people. Maybe we become more distrusting or maybe we just become more astute in observation.

Ken Nickerson: You know, in the 1980s, I forget where I was, but I was at some research place, and I got my first piece of spam, and I answered it very politely. Dear spam. Oh, I’m sorry, you’ve got the wrong guy, if I can help you. And then you get the second one, you’re like, ah, yeah. So I would say kids are [00:25:00] far more astute than we are online.

I mean, their perception of the world is, you know, both analog and digital. They’re very comfortable in a digital space. GPT and LLMs doing fake images, two years ago I could have told you right away, today it’s getting harder, by the end of this year, I’ve got to be honest, I’m not sure I’ll be able to tell you what’s real or what’s fake, I don’t expect to be able to.

And so I’m going to have to just accept that’s the worldview. Kids are going to come up with their own models for that discovery. Uh, I think far sooner than us, maybe they’ll have to teach us just like they had to teach us how to reset the clock from 12 on VCRs when, you know, we were kids.

Shuman Ghosemajumder: I totally agree.

I think that what is changing in society from generation to generation is the expectation of how much technological change you’re going to experience in your lifetime. So, a hundred years ago, your expectation was that you’re not going to experience a whole lot of technological change in your lifetime.

Whereas now everyone expects that the technology that we use on a day to day basis is going to look very [00:26:00] different 10 years from now than it does today. And so if you’re born into that, if you’re generation alpha or generation beta, you’re expecting artificial intelligence changing. Every aspect of your job or your life on a pretty frequent basis, and you’re constantly learning and adjusting to that, but there is an adjustment period there.

There is that period where you have to come up to speed. And so one of the differences with younger generations versus older generations is that. Nothing has generally happened to them at that point in their life that has made them that paranoid yet. And so when you look at the stats, and when I talk to IT departments at universities, for instance, what they consistently say is that Gen Z falls for scams at a much greater rate than their boomer grandparents do.

Which is astonishing when you consider how otherwise technologically sophisticated they are.

Ken Nickerson: If you go back to the analog world, when I was a kid, there [00:27:00] were, you know, we knew that on the walk home from school, we knew the bully kids houses and we didn’t walk by those. We took different routes. And so you developed what’s then known as a street savvy.

The equivalent has to happen in the digital world. It’s the same world just flipped upside down. You know, we’re through the looking glass. We have to develop that digital savviness. I doubt anyone on this call or probably a large majority of your listeners will develop that to any real sophisticated level, but their kids or grandkids will immediately.

And I think that’s a good thing. It changes us, but I don’t think it’s a change for the worse. I think it brings back critical thinking and situational awareness in the digital sphere that just quite frankly doesn’t exist for the vast majority of us today.

John Stackhouse: So we started this conversation with some pretty dire outlooks, and I’m sensing a bit more positivity from you both.

Are you more hopeful about where this is taking us?

Shuman Ghosemajumder: Absolutely. I think that to expand upon what Ken was saying, I think that people [00:28:00] are capable of evolving and societies are capable of evolving in a way that allows them to be able to protect themselves more effectively without making life a drag where you have to be paranoid and scared all the time.

I think that there are many instances of society going through difficult times and emerging stronger as a result of that. And I think that right now, there are a whole bunch of new technologies that are challenging the way that we think about the information that we consume and are challenging the way that we think about how much we can trust different communications.

But this is one of the reasons that we’ve started our company, because we think that technology has a role to play in terms of being able to address those problems while allowing society to actually be a lot more positive. And so I think that we’re going to discover exactly how those types of solutions integrate into every aspect of how we live our lives in the coming years.

And it’s going to allow us to be [00:29:00] able to, uh, be more positive in the future.

Ken Nickerson: Whether it’s digital or analog, hope can be demonstrated every night when you set your alarm clock for the next morning. So, we are a hopeful species by default. It takes a lot to squeeze hope out of someone. And these are new tools and new worlds to discover.

I am super hopeful, especially in the way of education. If I had to pick the one thing that I’m the most excited about with this evolution of digital twin and VR and XR and AI is a hope that there’s going to be just a total sea change in the education. I really think that any average 10 year old in 2040 will have twice the IQ that I could ever hope to aspire to because they’ve not only learned something, but they’re going to have literally the experience of walking through Shakespeare’s Macbeth and being one of the assassins or um, Uh, flying an airplane through the Alps.

I’m super excited. I, I don’t know if I’ll [00:30:00] live long enough for that, but I genuinely think we’re at a step function potential. I think this next step function is actually evolving us rapidly now to kind of like a human 2.0 and any kid born 20, 30 or after I have nothing but massive hopes for what they have the capacity to become.

John Stackhouse: That was very deep and not fake. Thanks for being on the podcast.

Shuman Ghosemajumder: That’s fine.

Ken Nickerson: Take care.

John Stackhouse: Sonia, I didn’t imagine we would end that podcast on some very strong notes of hope.

Sonia Sennik: I think Ken and Shuman were speaking to this evolution of computation, an evolution of how we use our technology, and actually building a safer world for the next generations and beyond.

John Stackhouse: I guess if there’s a message though in it, that safer world, especially the safer digital world, ain’t gonna happen on its own. It’s not gonna program itself. Humans are going to have to program it and continue to reprogram it with [00:31:00] principles and direction that avoids those horrific traps that we described at the beginning of the episode.

Sonia Sennik: And what an opportunity for creativity, innovation, and tackling challenging problems in a totally new way. I think it’s going to take a lot of different types of people to solve this problem.

John Stackhouse: Well, maybe that’s a good note to wrap up with and offer a truly human, non fake goodbye. Trusted and verified.

I’m John Stackhouse, and this is Disruptors, an RBC podcast.

Sonia Sennik: And I’m Sonia Sennik. Thanks for listening.

John Stackhouse: Talk to you soon.

John Stackhouse: Sonia, it feels like we’re under attack.

Sonia Sennik: I know John, three fights in nine seconds.

John Stackhouse: That used to be the Canadian way, and I had flashbacks to the Big Bad Bruins, maybe the wrong reference point, of the 1970s during that moment. And maybe Canadians, whether you like hockey fighting or not, need to reclaim a bit more of that elbows up spirit.

Sonia Sennik: I think they did in that moment, because I don’t know if you could hear or feel the roar of the crowd through the TV screen, but I could.

John Stackhouse: Yeah, that was a good old fashioned hockey game moment. And what a series it was. It felt like Canada regained a bit of our spirit. And I think we’re going to need more of that in the years ahead as we confront a very different North America, and frankly a very different world that’s going to be, dare I say, more bruising.

Sonia Sennik: Definitely a more bruising world, John. [00:01:00] So what happens next? Our Canadian government is scrambling to come up with an adequate strategy to address this looming trade war. We’re sort of in the in between right now as we wait to see the results of the ongoing trade negotiations.

John Stackhouse: And you hear this from various people, but it’s true, we can’t control Donald Trump, we can’t control the United States.

And this is a moment where we have to reflect on what we can control. And our economic productivity is one of those things. It’s been a simmering national crisis for years, and now it’s full on. If we want to export to different parts of the world, if we want to produce a bit more for ourselves rather than depend on the United States, well, we gotta get game on productivity in every sector.

Sonia Sennik: But just like in hockey John, we have to play it face off to face off. Forget what happened in the last play and just think about the next one.

John Stackhouse: And one of the things I’ve been reflecting on is the lack of focus on the digital economy. Of course, there’s a lot of concern about the auto sector, about steel and aluminum, about energy.[00:02:00]

Those are all critical, but there’s been barely a whisper about the digital economy, which is where millions of Canadians earn their livelihoods. And it’s an opportunity for growth and productivity in addition to what we can do in those other sectors.

Sonia Sennik: John, there’s a ton we can learn from countries like Estonia.

I know they have a population of less than two million people. They start with their citizens learning how to code at age five. All of their identification is digital. They can do their taxes in less than 15 minutes. Their health care records are available to them. It is truly an aspirational system that they have there.

And, you know, they’re a fraction the size of Canada, which presents its own challenges. There’s a lot that can be said about having that vision of the future, which they started decades ago, understanding that having a digital first economy was essential.

John Stackhouse: And what Estonia figured out, and there’s lots of others in this category, is that you don’t need a big population to scale.

It’s the story of Singapore, of Taiwan, of [00:03:00] Israel. This is an age when small countries can actually excel and even overtake much bigger populations using the power of digital technologies to get that scale. And that’s a moment for Canada. We’re 40 million, which actually is a pretty decent number, but using digital platforms, including the ones we’ll talk about today.

Can help us compete in the world as if we were 400 million people. That’s the power of 10x

Sonia Sennik: You may not need a large population John but what you definitely need is an openness to change and a change management process People who are excited about saying yes to new opportunities and new ways of doing things

John Stackhouse: and today we’re joined by someone who I think is one of the great thinkers about all things economy But especially the digital economy Daniel Debow.

Sonia Sennik: Daniel has been at the forefront of Canadian tech and innovation for years.

He founded several companies, one that exited to Salesforce and one that exited to Shopify. He’s also been a mentor at Creative Destruction Lab from the very beginning. Daniel, welcome to the podcast.

Daniel Debow: Thanks for having me.

John Stackhouse: [00:04:00] Daniel, let’s start with a bit of your own background. Walk us through the companies you’ve created and maybe tell us something that you learned in the experience.

Daniel Debow: Sure. Background is Canadian, went to Western, traveled as a consultant to the States, went to U of T. And, and then I was involved, I’ve been involved sort of as an employee in co-founding three companies. David Ausip, David Stein brought me on their team at Workbrain that was sold to Infor. Another was a company called Ripple with David Stein.

We sold that to Salesforce. Another called Helpful with Farhan Thawar and we sold that to Shopify where I worked for six years. And then in parallel, been involved as a volunteer in a bunch of different places. One, as you mentioned, was one of the founding fellows at CDL and really engaged in the early days.

Very active annual investor in a lot of the sort of brand name tech companies in the country. I taught a class in public policy and innovation and sort of exponential technology at U of T Law School with Ben Allery, another CDL founder. And I’m on the board of Loblaws. in Canada. And [00:05:00] separately, I’m really into music.

And so my wife and I’ve built with some partners, something called Bonfire Collective, which is creating spaces for artists to play. And then from that, we also have, um, with some other partners, we’ve built something called 42 Communities, which is a real estate development firm that does creative spaces.

I think the biggest lesson that I’ve learned along the entire journey is obliquity, which means, uh, the idea that if you try too hard to get to a very specific goal, it often doesn’t work, but if you kind of do the indirect meandering way, oftentimes things work out in a really positive way. And that seems to be my life.

I feel like a bit Forrest Gumpian, to be honest, and sort of just wandering around, trying to have fun and learn things. And it seems to have worked out pretty well.

John Stackhouse: Well, obliquity may be a great message for this discussion because we’re going to talk about how Canada can get at some of these epic challenges that we’re facing.

Daniel, with that in mind, tell us about your latest creation, Build Canada.

Daniel Debow: Well first, it’s not my creation. It is a volunteer [00:06:00] group of amazing folks who’ve come together around an idea. You have all these great builders in Canada, people who have built companies in various industries, whether it’s real estate, technology, healthcare, what have you.

And they have good ideas, in particular about how to grow the Canadian economy. And so we have this group of people who know a lot about how to grow businesses, but there’s a gap and the gap is the way that they talk, the time that they can commit, the energy that they have doesn’t match up with what policymakers or politicians need.

What those folks need is often detailed policy memos. They need to know the context, the reasons, the messaging. They need to know specifics like what law, what rule, what statute needs to get changed in order to affect this change. And so the mismatches you have great business people who are like tweeting into the wilderness or yelling into a chat room or maybe even writing an op ed.

But then you’ve got the recipients of those messages saying this is not enough. It’s not specific, detailed, or actionable. And so that was the idea behind Build Canada. [00:07:00] Get a bunch of people together who knew how to build. products and then get people who know a lot about public policy to advise them on creating this output, the product, which is a detailed, specific and actionable policy memo.

And so that’s what we did. We took, I just saw all these, um, great business people who had good ideas, these builders. And so we said, how about instead of 10 hours of your time to write a detailed memo or hiring a lobbyist? How about. Spend an hour with us. We’ll take the core of your idea. We’ll distill it down with this team and with LLMs.

I should be clear, like, we’re using an LLM pipeline to help do a lot of this research and analysis really fast and then getting it checked by humans who’ve actually done the job. And then that’ll allow us to put a platform together where we can put it on X and then put it on the internet and it’s gonna get attention.

And that’s exactly what’s happened. So, that’s our little obliquity story and that’s a little bit about what Build Canada is.

John Stackhouse: Take us deeper into the problem that you’re trying to solve here, because this has been a theme for years, [00:08:00] decades, actually, that Canada has been underperforming, certainly on productivity, but we’re in 2025, and it’s a lot more acute.

Daniel Debow: Look, I mean, there’s a specific problem which is, hey, we need to grow, and many, many people have talked about, like, things we need to do to become a more growth oriented, export oriented, competitive society. No question. The change has been coming, and for those of us who have been paying attention, it’s been extremely obvious.

I mean, I think the folks over at CDL have known for a long time. Ten years ago, I was lucky to be the host and MC of the first conference on machine learning and business and how this was going to change the world. And that is exactly what we’re living through right now. Now you can compound on top of that geopolitical changes, changes in the States.

And I think the big sort of moment of why now is that they’re starting to come home. People are starting to recognize that this is creating an intractable gap between the, the lifestyle, the freedom, the sovereignty, the nature of what it means to be [00:09:00] Canadian. And so as a result, like the big underlying why is we need to move away from, well, we’ll make an incremental change.

I think we need to be recognizing that there are some major changes to society that’s going to require in some cases, painful choices, it requires prioritization and focus. And if we do that as a collective, then we can be a very, very prosperous country, probably the richest country in the world. But if we choose to simply ignore it and try to say, we’re just not going to change.

And everybody is allowed to block this change. I think that might last for a little bit of time. I mean, we can just borrow more money. But eventually that situation becomes structurally untenable. And I think Canadians are feeling it, right? You can look at satisfaction with government. You can look at housing.

You can look at affordability. You can look at access to health care. Satisfaction is low with the deal that used to exist. And so that’s the thing, we need to fix that so that Canadians feel great about their country, that they’re contributing, they’re happy, that [00:10:00] people want to build, because that’s what drives the prosperity that makes the Canada that I think we all deserve, we all want to have.

Sonia Sennik: And so Daniel, you’re saying we need to fix that. I’m curious about the group of folks involved with Build Canada. What makes them believe that these activities can support the changes that you see are needed?

Daniel Debow: So I think there’s probably three mechanisms. The first mechanism is Uh, we call it maybe shifting the Overton window.

And the Overton window is this concept about ideas that are publicly acceptable or okay to talk about. Right? And we haven’t written a memo about this, but I’m just going to pick on it. But like milk and, uh, egg supply boards was like untouchable. Like you just can’t talk about them. That’s never going to change.

So I think one of the goals is to simply put out a bold ideas that understandably are going to make some people uncomfortable. And that’s okay because this isn’t like a secret plan. This is like publish on the internet and people should debate it and discuss it. But then you’re shifting the conversation towards.

Real change that of like things that have to get done. The [00:11:00] second goal is that we’re in this moment. You know, what’s the phrase about bankruptcy? It happens very slowly and then very suddenly like you sort of have stasis and then there’s this friction or this outside force that occurs. That’s like okay.

Now we got to change So I think we’re in a moment like that, and I think in particular, I think that there are policies being created by the change candidates, either the change in liberal leadership or the change of government entirely, and I think they’re open to new ideas, new ideas that, uh, gain some traction.

The third element is if you combine, hey, the conversation changes and people are willing to be open to change, I think engagement with the ideas, people engaging and saying, well, this idea that you have about like health, the idea that was proposed about like health care data portability, like that’s just an idea that should happen.

Maybe now is the time we should do it. So I think getting public discussion about these ideas happening, yeah. Moves the Overton window of people’s availability and it makes [00:12:00] the politicians available and open to the idea of like, Hey, maybe this is a policy that should be considered as we’re changing.

And I think there’s going to be change coming. That’s the mechanism.

John Stackhouse: What would be two or three changes you’d want to see fairly quickly?

Daniel Debow: So first thing, this isn’t about me, Daniel Debow. I’m not the one like, this is not my group. This is my thing. I want to really state that it’s important. What we’ve created is a platform, but some of the things that some of the builders want to see, let me go through.

So, Mike Litt, great entrepreneur. He talks a lot about changing the narrative around Canada and using the money that we spend on heritage programs and cultural programs to also talk about hey, this is a country of builders. And I think that’s actually a really important point that, that if we need people to feel it is an aspirational Canadian value to go off and build a company, I’m not just talking a tech company and CDL, I mean like a landscape business, a retail store, an online store, like those are things that people should aspire to.

Mike [00:13:00] Serbinis, another CDL, mentor has an idea about healthcare data portability and that this single action would lower the cost of health care, improve quality, improve wait times, reduce errors. That’s a pretty good idea. And there’s more coming. We’re going to have stuff on energy, on housing.

And what’s neat is it’s not just the tech entrepreneurs as builders have seen what we’re doing. They’re coming and saying, Hey, I’m in the oil patch. I would like to have my policy. I’m in the housing business. I want to talk about that. And that’s fantastic. People who build this country. As entrepreneurs sharing their ideas.

Sonia Sennik: I’d love for you to speak a little bit about the difference between what this initiative seeks to achieve here in Canada versus what many folks may be seeing in the news about unelected tech entrepreneurs in the United States getting heavily involved in operating government. I think it’s two very distinct approaches, and I’d just love for you to speak a little more about that.

Daniel Debow: Well, first thing is we’re not working for any party. Okay. This is a [00:14:00] nonpartisan activity. And I can tell you that both liberals and conservatives are reading and critiquing and giving feedback on this stuff. Then the people who are contributing support, both parties have supported both parties. So it’s nonpartisan.

The second is we’re not working for anybody. This is independent, right? Neither party has asked us to go do this. The third is, this is transparent. This is not like in a secret room. I mean, literally, we’re publishing papers. They’re not like drive by tweets and like fact free. These are like 10, 15 page detailed policy papers.

Now you might disagree with them, but they’re substantive. And, um, you know, one of the critiques people have come to me, they’re all, how are you going to go implement it? Are you going to go do this? I’m like, that’s not what anyone here signed up for in any way. The idea was to change the conversation, open the Overton window, get some provocative and bold ideas out there from builders, and then share them in a way that everyone can see, and then every party can choose to take some or all or none of these ideas.

John Stackhouse: Daniel, how much of this [00:15:00] was driven by the capital gains fight last year? That really cut deeply and personally for a lot of tech founders, a lot of Canadians beyond technology, but I was interested to see the response from the tech community, which was visceral, and it wasn’t just about the net cost of that.

It was about the signaling that came with that.

Daniel Debow: I think the short answer is, I don’t think it was that much, but I think what you’re talking about is the proverbial straw that broke a camel’s back. There’s just so many things over and over that send a signal, and this is what I was mentioning, why I like the story we tell about Canada.

My candid concern is the next Hundreds of thousands of young students who are aspirational who have not heard a message that going to build a company is a patriotic Canadian thing. And in fact, it’s consistent with the heritage of the country being builders, the giver culture, like let’s go give her.

And that [00:16:00] is Canadian. Let’s go make something happen. That is not a message. I don’t think that has been like strongly prioritized as the key message of what we should be telling the country. And so, yeah, the capital gains thing was sort of maybe another signal. of kind of a disdain of this group of people that they’re inherently selfish, inherently bad, they’re not helping, and they’re just not giving their fair share of what they’re doing.

I didn’t think it was a smart policy move. I wasn’t personally upset. There’s a lot of charts have been people’s dissatisfaction, and especially among young people. But you know, the one chart that I think if there were one thing, it’s not the capital gains one. It was the divergence in GDP per capita and GDP between the United States and Canada.

And you can put the line. Anywhere you want, but it’s very clear that we have diverged significantly in the wealth that we have for Canadians. And I think that chart, I saw that get passed around a lot. Kind of people saying like, you know, what the hell, what is going on here? This is not a good situation.

That’s not a trend that is [00:17:00] sustainable. You have to have wealth to redistribute it, right? Like someone has to create the jobs and the capital and pay the taxes because it’s not sustainable to print money and borrow money forever. You have to have an underlying economic base. And so I think that’s the catalyst trigger was like this awareness of we are not in the right direction economically.

And what is going on?

John Stackhouse: What Daniel do you think we need to come to grips with beyond the narrative, beyond the ambition right here in 2025 to get us back on that growth trajectory?

Daniel Debow: Probably a few things, you know, Roger Martin, former Dean of Rotman, and he was actually the Dean when CDL got started, wrote a great piece this morning.

And at the end of it, he said, like, yeah, just to be clear, it doesn’t mean I agree with what’s happening, but I’m just describing what it is. And the first step is to accept the facts. Right. So I think we’re like going through the stages of grief here, you know, first anger, then bargaining, then you get to acceptance.

[00:18:00] And I think the like, then three fights in nine seconds. Yes, exactly. Yeah. And it’s, you know, it’s good. It’s good for people to wake up and remember we have a country and to be proud about it and you have to fight for it, right. It didn’t come for free. So that’s, that, that’s maybe point two, but the first point, right.

Is you have to accept that the situation has changed the rules of the game. The rules of global trade have changed. And I think we have a desire to be like, well, we’re just going to go back. And oh, by the way, it’s just one orange dude who made all this happen. And I would prefer personally to think of that orange dude as a symptom of a whole bunch of underlying changes in the economy, driven by technology and trade and geopolitics, less of the cause.

So I think, point one, we have to accept that the world that we were living in, what got us here to be this amazing country, is not going to get us there in the next 50 years, because the world is different. There are massive other geopolitical competitors, you know, China, India, Africa, huge new demands for resources.

These things are [00:19:00] happening, and it’s changing our world. We are not going back to where we were, no matter how much we want to go back. The second is, Economics is the study of choices under scarcity. That’s the definition of economics. And we’ve forgotten the scarcity part, right? Which means you cannot say yes to everything.

You have to say no to a lot of stuff in order to be able to say yes to some things. You also have to maybe give up things that you really, really like. So as Canadians, we have had an ability for interest groups to block change. This interest group won’t like it. This regional group won’t like it. This set of unions won’t like it.

And so, they die. They just don’t happen. The public service won’t like this thing. It’s a well known economic problem. It’s the holdup problem. And I think we’ve become prey to that holdup problem for a bunch of reasons, but we have to move past it so that we can make some hard choices. The third one are some of the ideas that are coming out from this group and not just this group.

But we have to recognize that like growth is good for [00:20:00] everyone, right? Growth is good for the country. This doesn’t mean that we should become like a robber baron state where like we don’t have a social safety net. In fact, personally, I would prefer that we divert a lot of the corporate support and welfare and programs and incentives to individual support.

So that people as individuals have a very strong safety net. But we’re totally fine with businesses. failing and collapsing because that drives again, creative destruction drives some Turian creative destruction. Like companies grow, companies go as long as the people are okay, right? We have to become as a society more comfortable with more volatility in businesses.

And the way I think we should do that is redirect a lot to individuals so that they are capable of handling the volatility that the world is going to throw at us, like the world is going to throw this at us. We cannot become rigid. So this is this idea of resiliency. Resiliency often happens when you fail or when you break things.

And so if you don’t want any change and you want stasis, you [00:21:00] actually become a rigid society.

John Stackhouse: In some ways, Daniel, you’re getting at the founding concept of our country, which is peace, order, and good government. Do we need to change our mindset from a bit of that stability origin motto to something a bit more, some people may see as risky, some people may see as ambitious.

Some people may see as more materialistic. Is that the sort of conversation Canadians need to confront?

Daniel Debow: Yeah, I mean, I just don’t think it has to be as black and white. That’s the first point. Like, I do think that has to happen. Also, by the way, prior to POGG, Peace, Order, and Good Government, you had United Empire loyalists, right?

Like the loyalists were lit like Ontario. Southern Ontario was populated by people who were like, we don’t like this crazy revolution idea. We like the king. We’re coming up here, right? So like, do I think we have to whole hog flip that over? No. I think we have to think about how do we express peace order and good government in the right way.

So I would argue good government is an effective government. And I’ll tell you, since [00:22:00] we started Bill Canada, I’ve gotten texts and notes from very senior government officials. One of them said something to me that shocked me. He said, It’s one thing for government to be inefficient. Government will always be inefficient because it’s got like reserve powers.

Like you’ve got, you know, fire trucks waiting around for a fire to happen. You’ve got extra mass waiting for COVID to happen again. That’s inefficient. But what we’re becoming is ineffective. The direct quote was, the Canadian government cannot always affect the lawful orders of a minister. Like they just can’t do it.

That’s a problem, right? That’s not good government. That’s bad government, right? And so we have to get to a place where we have super efficient, highly productive, extremely good government services that are delivered to people in a way that they’re like, this is great. I appreciate that. Less than 14 percent of Canadians feel that they’re getting value from the federal government in the services that are being delivered.

That’s not POGG, that’s the opposite of that. So it’s not about abandoning who we are as Canadians. It’s remembering who we are as Canadians. That good government means efficient. It means effective. We have to get people to a place where [00:23:00] we accept that the world is rapidly changing and our approach to dampening those shocks is not the approach that we used to use.

We have to think about our own and we have to do this in a way that maintains sovereignty for Canada, right? Like, so it’s all wonderful to say open up banking, open up airlines, open up everything for global competition, competition inside the country. If the net effect of that is a complete hollowing out of major Canadian companies, then that’s not success.

We need to think about how we can look to say the Dutch or the Swedes that have built massive global export brands all around the planet and they’re still able to maintain their sovereignty, you know, Canada. Hasn’t done that as well. And we have to ask ourselves why and how we can get to that place.

Sonia Sennik: I think the theme of a lot of what you’re saying is objective setting, prioritization, being adaptable, buildings and bridges, they’re made to bend in the wind, they’re made to sway with the changing weather around them. And so [00:24:00] how do we build these structures in a way that will last, but also be able to withstand anything that goes on around our country and the structures there?

Daniel Debow: Yeah. And like, also be open to changes in the way we set it up. You know, the. POGG powers comes in our constitution where we have the Dominion Act and, and they were separate, you know, and, you know, we talk about interprovincial trade barriers today. Some of them are explicit, right? Some of them are like, you can’t sell booze in our province, you can’t export our milk, but most of them are just inadvertent.

They are a function of the fact that we distributed powers to the provinces and they all set up their own regulatory framework for different areas, whether it’s nursing or healthcare or trucking, and they just have different standards. It wasn’t intentional to block trade, but, so this is the point. We have to say like, okay, this thing that we had, the way we separated powers, the way we set it up, it doesn’t work anymore in the modern economy.

We have to be open to changing those things rather than zealously protecting the prerogatives that were written in stone. A long time ago,

John Stackhouse: [00:25:00] Daniel, just as we move to close, what’s the one message you have to especially younger Canadians who want to build their own companies, but also want to build communities and maybe by extension, the country.

Daniel Debow: Get out of your chat rooms, get off social media, go do something. We talked a bunch about CDL. CDL was Ajay and a few other folks getting together and saying, you know what? He saw this problem that we had all this great R and D coming out of U of T in particular, but it wasn’t being turned into companies.

And he said, I’m just going to fix this. And he did, and he enlisted people with this great idea, and he was unflappable, and also extremely adaptive. Like, we kept changing how we ran it and what we were trying to do to set it up so that it would grow and be fantastic. It wasn’t set in stone. It was like, we tried something, didn’t work, let’s try something different.

And we just kept learning along the way. That’s my message to young Canadians, is that you are able to make change happen. By the way, you’re also able to make change happen by being a builder. Go [00:26:00] off and build the company you want. It’s never been easier. Despite all this talk about barriers and regulations, it’s true.

But technology, as part of the change, has also been coming along to make it easier to start. I encourage people to try it. Even if you fail, you’ll learn a lot. And most importantly, you are being Canadian in the most amazing and true way to being Canadian if you pick up that task and start a company.

You’re building the country.

Sonia Sennik: For the record, we’re still iterating and changing at the Creator Destruction Lab. We’re still learning things.

Daniel Debow: Well, because I think actually this is the point built deep into the DNA of that organization and the mindset of how it was built is that nothing is set in stone.

We can always change it. If this is the way we used to do it, we can do it differently because the situation changes. Let’s adapt so that we can learn and then move quickly forward. And virtually every organization that is succeeding in the world today, and you can just look at it, go look up on, you know, your favorite AI or Google.

The number of companies on the S& P 500 who are [00:27:00] on the S& P 500, 50 years ago. Go do the same thing in Canada. And what you will find is shocking. And that tells us something about what we need to do to change in our country. Let’s adapt. It’s a great message.

Sonia Sennik: Thank you so much for sharing your insights and for the work you’re doing with the Build Canada group.

Daniel Debow: A pleasure. Thanks for having me on and thanks for the questions.

John Stackhouse: Sonia, what an exhilarating and challenging conversation. Daniel mentioned Mike Serbinis, a veteran of the Disruptors podcast, who is one of Canada’s great founders, building a company now called League. So we asked Mike why he had joined Build Canada.

Mike Serbinis: I’ve always been a builder. From the first cloud companies to eBooks, to transforming healthcare.

And that includes country building in Canada from theoretical physics at perimeter AI at vector and startups at CDL. After a near decade of falling productivity, Canada could be doing so much better. We need builders to get to work, [00:28:00] to build a better, stronger Canada. And so I jumped at the chance to support Build Canada with my first idea of freeing healthcare data to enable better outcomes for all Canadians.

Sonia Sennik: That’s Mike Serbinis, CEO and founder of League and co-founder of Kobo. And here’s Lucy Hargreaves, a former political staffer who is now VP of Corporate Affairs and Policy at Patch, a carbon removal startup.

Lucy Hargreaves: For me, it’s about scaling bold policy ideas that drive economic growth. Canada has so much potential, but we really need to shift from a default no to finding more ways to say yes to ambitious policies.

I love that this initiative brings together talented founders, policymakers, and industry leaders to move the needle, not just talk about it. The energy, the connections, and the real impact we can all create together is what makes this really so exciting for me.

Sonia Sennik: John, what a conversation about the future of Canada.

John Stackhouse: It left me both excited and nervous about where we’re going as a country, and [00:29:00] maybe you need that for a bit of that obliquity mindset that Daniel mentioned. We have a lot to come to grips with, and it’s not just about our narrative. There’s some serious choices that we have to make as a country. And as Daniel was talking, I was reflecting on one of his co creators of Build Canada who said to me once in a private conversation that one of the most expensive decisions you can make, maybe in any part of life, but certainly as a builder, is yes, Because when you say yes, you are eliminating all sorts of other choices.

It’s an opportunity cost. And as a country, we have to think hard about what we’re saying yes to when it crowds out those other opportunities. Of course, we have to say yes to the opportunities before us and pursue them aggressively. But we’re gonna have to make some choices as a country. And I think Canadians may finally, collectively, be coming to grips with that.

Sonia Sennik: If there’s one thing I’ve learned, as Canadians, we are always better when we work together. [00:30:00] I’m thinking of something like our CDL Rapid Screening Consortium that we built during COVID. We were the only country to stitch together a nationwide rapid testing program. And that all started with just a handful of people and companies that believed it was possible.

We can create incredible opportunities for our country when we link arms and build in the same direction.

John Stackhouse: A country of builders. What a great ambition. This is Disruptors, an RBC podcast. I’m John Stackhouse.

Sonia Sennik: And I’m Sonia Sennik.

John Stackhouse: Thanks for listening.

John Stackhouse: [00:00:00] Hi, it’s John here,

Sonia Sennik: Along with Sonia Sennik.

John Stackhouse: Welcome back to Disruptors x CDL: The Innovation Era.

Sonia, today we’re talking about ag tech, which is short for agriculture technology, but that’s a mouthful, speaking of food. And ag tech has never been more important. We’re a big food producer as a country, and most of us as consumers don’t really appreciate how much technology, especially cutting edge new technologies, go into our food system.

Sonia Sennik: Thinking about the term AgriFood, we have a CDL stream called AgriFood, and what I learned over the last few years of running it is it means everything, from the seed planted for something to grow, all the way through to the system to consume it, and then manage the waste. It is everything. So I love systems design, as we’ve chatted about in our various episodes.

The concept of the AgriFood system in Canada is really exciting.

John Stackhouse: And yet, as much as Canada [00:01:00] is a leader in food production, I think we’re one of the top five food producers in the world. But we’re a bit of a laggard when it comes to ag tech. In fact, ag tech, even in the rankings of tech, is lagging. And we need to change that.

Canadians have had a wake up call this winter with the trade war now underway with the United States and the message from President Trump that maybe the United States doesn’t need anything that we produce. That’s actually not true. Americans do need a lot of our food. They need a lot of other things too, but would be in dire straits if they didn’t have our food and potash and fertilizer and lots of other things.

As we come to grips with perhaps a bit more of a harsher world and not just here in North America, we really need to up our game in all sectors, but particularly agriculture, where in some ways we have the most opportunity. But we’re going to need a lot more of that ag tech to do it more efficiently, to do it with more innovation, and to increase the value of what we produce for the world.

But Sonia, before [00:02:00] we get deeper into some of these questions, let’s start with a food question and the one that we’ve often used on this podcast, known as the breakfast question. How did you start your day?

Sonia Sennik: With Starbucks, John.

John Stackhouse: So you weren’t boycotting American Starbucks?

Sonia Sennik: Oh no, with Tim Hortons, John, can I take it back?

John Stackhouse: You can take it back. Although I heard of someone who boycotted Starbucks on Sunday and then when Canada got the 30 day extension on Monday said, look at the effect we had.

Sonia Sennik: Yeah, really impactful with that one latte. But I did enjoy a breakfast sandwich and a latte this morning. And do

John Stackhouse: you know

Sonia Sennik: where those came from?

A barista named Todd.

John Stackhouse: Oh, I mean, who grew them? And you probably don’t, because none of us know where we got our food

Sonia Sennik: from. What about you, John? What did you have for breakfast? And please, I mean, is it going to be muesli and something very healthy? And that’s fine if it is. No,

John Stackhouse: no, but I did have berries. Not really sure where they came from though.

And that’s a really interesting question in [00:03:00] ag tech and agriculture generally, because berries, a lot of them come from Peru and California, but as Canada thinks about what we can produce for the world and how we do this more efficiently. We actually can grow a lot more berries if we use more of the technologies that we’re going to hear about on this episode.

Sonia Sennik: John, did you catch any of the Grammys last weekend?

John Stackhouse: I actually got clips of it on YouTube, but I didn’t watch it beginning to end.

Sonia Sennik: So I think AgriFood and food is on the top of everyone’s mind because in Trevor Noah’s opening monologue, he made a joke about the increasing cost of maple syrup. So. John, how can Canada feed the

John Stackhouse: world?

That’s actually one of the great opportunities for the next quarter century. The rock star of the Canadian economy has been agriculture. In terms of the amount that we produce and sell to the world, it’s grown 5x and we’re doing it with fewer people because we’re using more technology. But we also have to realize that the rest of the world is getting better [00:04:00] at all of this.

I’ve always been impressed with how much Canada exports in agriculture. But when my colleague, Lisa Ashton, who’s going to join us shortly, started to dig into the numbers, it was startling to see how much market share Canada’s losing in different parts of the world. So it’s more competitive out there, which is a good thing.

And we, in turn, have to take that as a market signal that we need to up our game too. And we’re going to hear from two other guests, Evan Fraser and Alison Sunstrum, on the role that technology and innovation can play in getting us back to the front of the pack.

Sonia Sennik: But first, in the coming weeks, RBC will publish a new report on this topic.

And we asked Agriculture Policy Lead, Lisa Ashton, what are the key takeaways from this report?

Lisa Ashton: What I found most surprising is that Canada, while it’s still a leader in agriculture and food exports, it’s actually fallen from 5th to 7th place from the early 2000s to 2023. This has actually brought material losses to Canada’s [00:05:00] economy.

Equaling 23 billion if we didn’t lose share in some of our key agricultural food products globally. But there is lots of potential within the sector as someone that grew up on a farm in southwestern ontario I was exposed to the innovation that is coming out of Canada’s agricultural sector that really led to the mechanization And the improvements in productivity in the early 2000s but now that productivity is It’s slowing on an annual growth basis, and we’re seeing emerging economies like Brazil or Argentina start to eat up our share of global AgriFood exports.

But if we were to focus on one key thing moving forward, it would really come from the infrastructure development in our rural IT. When you look at farmers in Saskatchewan and Manitoba, they have less than 50 percent of 5G coverage within the province, and that is truly holding them back from participating in the [00:06:00] digital economy.

So moving that forward would really unlock Canada’s potential to grow as an AgriFood export powerhouse.

John Stackhouse: You can find more of Lisa’s work at rbc. com slash Thought Leadership or follow us on LinkedIn. We’re now excited to have on the podcast two of Canada’s top thinkers on ag tech, Evan Fraser and Alison Sunstrum.

I’ve known Evan for at least a decade. In fact, long time listeners will remember him. on the pod talking about his book, Dinner on Mars. He’s a well known policy influencer and Canadian researcher at the University of Guelph and the director of the Aral Food Institute.

Sonia Sennik: And we’re joined by Alison Sunstrum.

She started our AgriFood stream at CDL-Rockies in Calgary. She had a vision for the importance of driving innovators and tech towards the agriculture industry in Canada. And she has been central to expanding it around the world. Also, John, Alison started in as an innovator herself, [00:07:00] building grow safe systems out of her garage, where she started with this idea of, could we start using data to track cows?

John Stackhouse: So we’ve got dinner on Mars and farming in the garage. Be a great conversation. Evan and Alison, welcome to the podcast. Hey, thanks, John. Thanks, John. Evan, you and I were just together at a food summit that the Aral Food Institute put on with ag leaders from Mexico, the United States, and Canada, scheduled before the Trump tariff announcements, but very, very timely.

And you and I did a keynote conversation on what we’re up against in this brave and scary new world. I wonder if you can give our listeners a sense of the role of innovation for ag producers in taking on this challenging, but also exciting new world.

Evan Fraser: My feeling is very strong that, Ag is on the cusp of a massive technological transformation that the same technologies that gave us internet are changing what [00:08:00] we eat and how we produce what we eat, how the food that we eat gets to us, and that that is about to go through a major change.

Technologies such as controlled environment agriculture that allows farmers to produce more food year round closer to the consumer I mean, we’re not there yet, but the potential is there to be quite transformative and to be honest the threat of a less integrated north america The threat of border tariffs, the threat of it being harder, not easier to move food across borders, I think just increases the temple at which innovation is going to happen in this space and is going to push investors like Alison, it’s going to push policymakers like the people we interact with, John, on a daily basis, it’s going to push them to be really interested in doing whatever they can to bring food closer to home.

Evan, where would you say Canada’s at on the global table? Super question. I mean, Canada is a net food exporter. We have a food trade surplus. Most of that is prairie related products. Beef, canola, wheat, crops that come from big farms in the [00:09:00] prairies are what we mostly export. What we mostly import, however, is the fruits and vegetables.

And because of Winter. I mean, we have winter, which means we can’t do fruits and vegetables close at home most of the year. So I think where innovation is going to perhaps play the biggest role in terms of the issues kicked up by the trade tariff war or the potential of a trade tariff war is really the fruits and vegetables and the broad area of perhaps controlled environment agriculture.

So when you think back, Ontario didn’t really have a big greenhouse sector 25 or 30 years ago. Now we have one of the world’s largest producing year round tomatoes and cucumbers, peppers, and increasing strawberries, which is really interesting for someone who grew up on a traditional strawberry farm, quite close to consumers.

Still embedded in international supply chains, of course, but still much more local.

Sonia Sennik: To go with a positivity sandwich approach, can we maybe learn a little bit, Allison, from you about what does Canada do really well?

Alison Sunstrum: One of the things that I think that we can do is think differently. [00:10:00] There’s a lot of things that we can do internally that many, many folks are talking about, like removing the restrictions between interprovincial borders and a number of things, but I’m going to give you examples from the CDL lab.

One of the packaging solutions that we saw in the lab a few years ago was a company called Ixon. And Ixon’s technology allows perishable foods like meat to be stored at room temperature for up to two years. This cuts refrigeration costs, makes distribution to remote or underserved areas more viable. I didn’t invest in this one, but if you think about it, if you could actually disrupt the cold chain, keep products on the shelf longer, this would enable us to react to a number of different trade issues, a number of different barriers.

And that’s the kind of technology that I really love. I love those things that think about how we can do differently [00:11:00] rather than responding to really counterproductive trade. Idiocy, and think about technology as a way to solve some of our problems.

John Stackhouse: Allison, that sounds all well and good, but I think as we all know, finding capital for ag tech has been a bit of a challenge.

Sonja, you and I were talking about this before the recording. I don’t quite get it. What, Sonja, are you seeing as the kind of frictions?

Sonia Sennik: I see incredible innovators in our stream, but the bar to invest in our early stage AgriFood companies seems to be higher than in some of our other streams. Is that a lack of a familiarity from our investor community with ag tech?

Why might there be a bit of a higher bar or a longer cycle before an investment is made?

Alison Sunstrum: You know, I’m actually going to take a bit of exception to that. I would say that the majority of people who invest look for really, really quick wins. And those people that look and like their capital preserved, but understand [00:12:00] that good solutions take a little longer.

I think those are our investors. I also think that we don’t understand the huge opportunity that Canada has in agriculture and technology to drive the industry. I did a quick back of the napkin, uh, calculation when I was speaking on a panel with John recently. And I looked at the fact that the Netherlands, which is a country that you can put into Nova Scotia, is four times more productive than we are.

Economically productive, output productive, you name it. So that’s a bit of challenge. The other thing that I would say is, you know, there’s a bit of correctness to what you say. Agriculture is driven by a number of things that are challenging. We’re hit by climate, we’re hit by a number of things that we can’t control.

So the risk in agriculture is high. I think that if investors understood this and we looked at new strategies, you’re [00:13:00] right, we’ve got to find a way to fund investment in agriculture.

Evan Fraser: If I could jump in here, I mean, one of the things that Netherlands does, I think, and Allison, you and I have talked about this at length, first of all, an agricultural product or two key components of agriculture are two of the top tier priority areas of the economy for the Dutch government.

So it is extremely high on the, on the radar of the government in the Netherlands. They have explicitly brought that triple helix together and the triple helix that they talk about is business, the academy and government together to focus on agriculture. They’ve done that. operationally, things like creating data sharing pools in order to make sure that they make better use than say Canada does of its data sharing environment.

So there’s a whole bunch of sort of tactical things and also cultural things that the Dutch do remember winters after World War II where there was hunger and starvation in that country. So from a cultural level through a policy level. They have seriously prioritized agriculture, and as a result, they way punch above their weight, whereas Canada, [00:14:00] alas, we don’t have those characteristics, perhaps, I would argue that we punch probably below our weight.

John Stackhouse: What should Canada choose, or at least think about choosing, if we could only focus on a few areas of ag tech?

Alison Sunstrum: We would focus on a bias to act, to deploy, and to take on new technology. I say that first and foremost because, um, picking a technology, the big enchilada in every technology is AI, robotics and AI, automation and AI, analytics and AI.

We as a country. We researched AI, we developed AI in our institutions. So let’s not lose this opportunity in agriculture. Let’s make sure that we can deploy AI to be more productive. So that’s the big one. [00:15:00] But the second one is let’s also think about actually taking up our technology. That’s the most important.

We have a tech debt in this country across all our industries. If you want to see where we’re winning, go to the Conference Board of Canada, look at the Innovation Report Card for Canada. It’s a better one. It’s still a D rating. But you take a look at that report card and you’ll see we must be spending more on bringing technology into our businesses.

Sonia Sennik: Evan, do you agree that adoption is critical here?

Evan Fraser: To John’s point, normally when someone says, what kind of tech do you want us to choose? The expected answer is something like, oh, we should double down on row crops or double down on some sort of commodity. And I think Allison’s Completely right in that.

She’s saying there is underlying sort of foundational technologies, robotics, data and artificial intelligence. And I would say genomics are the sort of the three and we should be as a country embracing the application [00:16:00] of those three foundational technologies in as wide a range of applications across Canada’s AgriFood sector as possible.

A commodity specific approach is not the right approach. We want to take a foundational technology approach of genomics AI data and robotics and drive those and I’m not going to presuppose what great idea some Third year computer science student in waterloo is going to have like I just want them to work and use those tools in agriculture And that’s where I think we’ll see the strengths

Sonia Sennik: We’re hearing the term precision farming a lot.

Would you say that the items that you listed there and the technological advances, is that the umbrella of precision farming? And do you have any examples of where companies are doing precision farming really well?

Alison Sunstrum: So precision farming is a term that came out of the internet of things, and it’s really looking at sensors connected to the internet, bringing information back, and then trying to optimize production through a precision format.

[00:17:00] That’s old tech. And so what I want to see is I want to see us pushing that envelope, next generation Predictive farming. I want to be predictive and I want to be automated. You cannot be automated if you are not able to predict when you should be going out in the field, when you should be responding with new products.

So from my sort of theorem, as I looked at the original days of data was kind of historical benchmarking data. Then we moved into a kind of real time data format. Then we started thinking about how could we mitigate risk and how could we increase profitability if we could actually predict, mitigate that risk very quickly before it happened, hopefully.

And so we’re now in this phase with AI and all types of technology that we can be predicting and responding sometimes before an occurrence.

Sonia Sennik: Evan, you co-authored [00:18:00] the book Dinner on Mars, which I learned was not, in fact, a dinner of Mars bars. It’s difficult to talk about the AgriFood industry without thinking about climate change.

Assuming that the atmosphere on Mars would be very different than this one on Earth, what do you think is the most pressing problem we need to solve related to agriculture and climate change?

Evan Fraser: There’s two ways of answering that question, and you asked me for one, I’m going to give you two. One is the, what’s called mitigation.

So, developing farming systems that don’t emit very many greenhouse gas emissions. Indeed, I think agriculture and forestry, as the two biological based parts of the economy we’ve got, have the potential to not only reduce greenhouse gas emissions, but also ultimately absorb them and be what we might call net negative.

As things grow carbon dioxide is pulled out of the atmosphere and ultimately can be transferred into the soil where it can be stored A lot of complicated science there But whatever we can do to reduce carbon emissions or greenhouse gas emissions and [00:19:00] tie them up in biological matter such as the soil Is I would say one of the two key priorities and we can do that using ranges of technologies often called regenerative farming, better livestock management, all sorts of things.

The other thing is we need to adapt to climate change. We’re not going to be able to mitigate our way out of this problem. We are going to have to adapt to changing environmental conditions and that means investing in agricultural systems such as drought tolerant seeds or heat tolerant cattle, dairy cows.

That will allow us to continue to produce as the earth warms up. So there’s a strong mitigation agenda and a strong adaptation agenda and technology is going to play a role in both.

Alison Sunstrum: I’m going to act as devil’s advocate here if I can to Evan, please. I think we only started talking about adaptation because we couldn’t figure out how to mitigate.

And so from my perspective, I really want us to focus on those technologies. That have the potential to change this [00:20:00] crisis point we’re in, and I generally don’t talk about crisis, but I have to tell you the economic cost of climate change is massive. If we look at what happened in Canada in 2024, by September, we had already had 7.

7 billion in insured damages from climate impact. It’s affecting our food supply, it’s affecting everything. So, we have to be looking at those technologies that can transform food systems sustainably. And we got to think about it really seriously. It’s not something that we can leave off the shelf.

John Stackhouse: And Evan, you’re trying to do something about this.

You’ve got a pretty ambitious new initiative out of the University of Guelph that’s aimed at helping, especially the next gen of innovators and entrepreneurs in ag tech, do something about this. Can you tell us more about it?

Evan Fraser: So, very happy that the federal government has awarded a national network that is led by the [00:21:00] University of Guelph but also includes Dr.

Lenore Newman from the University of Fraser Valley as co-chair to stand up something called Sustainable Food Systems for Canada. And the logic there is that many great innovation ideas, great entrepreneurs, whether they’re social innovators or have a commercial idea, they crash out because they’re not quite ready for something like Creative Destruction Lab.

They’re even too early for that. So what Lenore and I brainstormed was that there is a gap in Canada’s innovation landscape, specifically with regard to ag and food innovation, where really, really early stage pre incubator, pre accelerator stage ideas need some help and mentoring to get. Further along the pathway towards launching a viable company so that they can then stand up at a creative destruction lab session and have the right kind of pitch and the right kind of narrative.

So what we’ve created is sustainable food systems for Canada. It involves all of Canada’s ag and veterinary medicine schools, a number of colleges, a number of indigenous communities from the north. And we’re going to try to [00:22:00] create a training program based on micro credentials around ag and innovation.

A mentorship program specifically geared to help feed into the creative destruction lab and the bio enterprise type incubator accelerators. And what we’re calling a collision space, basically a place for a community to form around AgriFood at a national scale. Because unlike aerospace or automotive, we don’t sort of have a club or a place to gather as a community as often as we’d like.

And so we’re going to try to address that as well.

Sonia Sennik: Farming for Creative Destruction Lab. I love it, Evan. That’s a good point. I like that.

Allison, when people think of food technologies or agriculture, they may have a very dated view of what this looks like. In an effort to attract and continue to build world class talent in the AgriFood industry in Canada, what do you think Canadians need to know about the exciting opportunity here?

Alison Sunstrum: [00:23:00] Sonia, I love the farming for CDL Ag. I think that’s great, but I also like the thought that the farm team is not just from a traditional agricultural university background. Some of the best companies we get in CDL Ag come from every other stream, space stream, ocean stream, you name it, because agriculture really crosses the border of every type of technology.

And so the initiative that Evan and Lenore have started, I’ve just been their best cheerleader as they’ve gone through to get started. But I also think that we have to look at the fact that even within our own academic institutions, we have to say, Hey, do you know what a big opportunity that agriculture actually is?

And there’s some companies who were pivots from the energy stream and pivots from the space stream that are just driving massive change. One’s [00:24:00] actually creating phycocyanin through cyanobacteria. Which was a big part of dinner on Mars. So, we’re looking at future foods and future technologies and although we all think of agriculture like my granddad on a tractor plowing up a field, it’s not like that.

It’s in the lab. It’s in space. It’s in the soil.

Sonia Sennik: Evan, what should we get excited about in the opportunity to innovate in our AgriFood industry?

Evan Fraser: To pick up on what Allison just said. The farmer of the future is as likely to wear a lab coat, live in a city, work in a group that includes data scientists and marketers and whatnot, as they are likely to drive a tractor on their own in a rural countryside.

And we also need to do a better job of linking our conversations with technology back into the lived experiences of the producers. Both things are true. On one hand, we have this extraordinarily exciting explosion of innovation that is touching down [00:25:00] on all these different disciplines and these different departments and these different ways of life.

And as a university professor, I spend a lot of time connecting with young people to try to get them excited about this. And we also have to be doing a better job of grounding our innovations in the lived experiences of farmers. In other words, solving problems that today’s farmers already have. And so there has to be both approaches.

There has to be a innovator to farmer and farmer to innovator kind of emphasis. And there has to be a outreach into new disciplines in order to get young people from all walks of life excited about feeding the future and making money at the same time.

John Stackhouse: Evan, you’re reminding me of a report we did a number of years ago called Farmer 4.0 that looked at the digital farmer of the future and you and your team at Guelph were really helpful in putting that together and also communicating that across the country. How do you think we’ve done over the last few years on getting to Farmer 4.0? And what do you think would be the key changes and investments that we can make?

Evan Fraser: One of the things that I really like that I took [00:26:00] away from Farmer 4.0 is that the farmer of the future needs a good grounding in traditional ag science disciplines. So we’re not going to neglect soil science and animal husbandry and all that sort of traditional agronomic work. And they need a really good grounding in the STEM disciplines.

And we need to do a better job, a much better job of teaching young people the foundational skills, active listening, project management, group work, conflict resolution, oral and written communication. And that’s a lot to pile into a curriculum for an undergraduate, if we’re talking about a formal undergraduate, but we have to be doing those things.

I think we’re doing better, but we’re not doing anywhere near as good as we should be trying to do those three things simultaneously at the same time as we’re reaching out to the traditional farm community.

Alison Sunstrum: Actually, Evan, I think we’re doing good as it relates to the farm. I don’t think we’re doing as well in terms of policy, financing, driving that change.

So what you’re talking about on the farm can actually happen. I think we need [00:27:00] innovation to create transformative solutions. We need investment to scale and deploy the solutions. We need a robust climate policy to guide and incentivize change and collaboration to ensure equity and shared opportunity.

So. These are the elements that needed to draw systemic shifts on farm. Sure. But also, we have to be driving that change everywhere.

Sonia Sennik: So well said. Allison and Evan, thank you so much for joining the podcast. This was a delicious conversation.

John Stackhouse: Thank you.

Sonia Sennik: Thanks.

John Stackhouse: Sonia, this conversation has been a great reminder of how so much in our world always comes down to food.

Without food, we don’t survive. And it’s important to realize that technology and innovation, which often are described in non earthy terms. really can make a difference to the earth and the food that it produces, as well as the water and so many other ingredients, quite literally, that go [00:28:00] into what helps us all thrive.

My mind’s going back to one of our first questions. What did you have for breakfast? And the berries that I got to eat. And thinking to Evan’s point about how we can grow those berries in our country, in winter, in controlled environments. Yes, we already do. But we can do that at scale, not just to feed ourselves, but if we do it well, help feed a lot of the world as well.

Sonia Sennik: I was struck by how Evan and Alison were so aligned on the farmer of the future, John. So that farmer who’s making those breakfasts we’re eating or food that’s coming to our table. Being an interdisciplinary spread of data scientists, folks with soils background, agriculture background, AI and robotics that the future of agriculture and farming is really at a transition point and Canada has an opportunity to capture this inflection point and grow our agriculture industry.

John Stackhouse: I think the message is let’s make farmer 4.0 a national hero. As well as a national ambition for future generations. [00:29:00] This has been Disruptors and CDL, the Innovation Era. I’m John Stackhouse.

Sonia Sennik: And I’m Sonia Sennik.

John Stackhouse: Be sure to subscribe, leave a review, and join us next time as we continue exploring the groundbreaking ideas shaping Canada’s economy and beyond.

Talk to you soon.

John Stackhouse: [00:00:00] Hi, it’s John here. Welcome back to Disruptors x CDL: The Innovation Era.

Sonia Sennik: I’m Sonia Sennik, the CEO at Creative Destruction Lab. John, I hear you’re in Davos for the World Economic Forum.

John Stackhouse: That’s right, Sonia. And it’s actually pretty late at night here, but it’s been an incredible week from Donald Trump’s diatribe, where he went against pretty much everyone in the world and laid out his plans for America first.

to some of the most fascinating discussions about artificial intelligence and where the world’s leading scientists and technologists are taking us in 2025.

Sonia Sennik: It sounds like an absolute whirlwind. Where should we start?

John Stackhouse: Well, let’s start with the mood and the mood after that Trump speech, which was heard around the world.

We keep hearing Donald Trump talk about the golden age and judging from a lot of executives, as well as investors here in Davos, there’s a lot of gold being made. The confidence in the U S economy [00:01:00] for this year is extraordinary. And the belief in Silicon Valley and especially AI is breathtaking. There is conviction right now, like I’ve rarely seen, and it’s going to drive a lot of markets and opportunities this year.

Sonia Sennik: So that’s the United States. I’m so curious, given you are in the room, 50 percent of all communication is body language. How is everybody else reacting during that virtual address from President Trump?

John Stackhouse: The room was packed. Hundreds and hundreds of people fighting over chairs. In fact, I saw Al Gore trying to find a spare chair and Christine Lagarde wrestling for one, but the mood was somewhat restrained.

Now, remember, a lot of people in the audience are European, and Trump didn’t have a lot of nice things to say about Europe. And then when he went after things like DEI, which he calls nonsense, You could hear the gas in the room. I suspect he didn’t pick it up, but tellingly there was no standing ovation.

And in fact, the applause was, I’d say polite.

Sonia Sennik: Well, politeness, this is something we’re great at here in Canada. I [00:02:00] am curious about how you feel that speech impacts our country.

John Stackhouse: Well, that was the headline, certainly for Canadians. He went after so many aspects of Canada and had nothing good to say, which is kind of remarkable because he goes after lots of countries and lots of regions.

But usually slips in a compliment, he’ll say something like, I love the Europeans after he’s trash talked Europe for five minutes. None of that for Canada. It was also interesting that his attack on Canada was unprompted. In fact, it came during an answer to a question about banking regulation. So I don’t know how Canadian lumber exports popped to the top of his mind when he was thinking about what’s next for the SEC.

But it’s a signal to Canada that we are top of mind and it’s not necessarily in a positive way. Now that said, he also spoke enthusiastically about a lot of things that Canada will be involved in. Energy, certainly, and his desire for energy dominance will include Canada, not just oil and gas, but [00:03:00] electricity and a lot of renewables directly and indirectly.

He also talked about the enormous demand for energy from data centers, from artificial intelligence, from cryptocurrency, which his administration is very enthusiastic about. All that crunching of data is going to have to take place somewhere, and as we’ve talked about on a previous podcast with Alberta’s Technology and Innovation Minister, Nate Gloobish, Alberta has a very ambitious plan that seems like it would fit in fairly well with the Trump administration’s view of where North America is going in the next half decade.

Sonia Sennik: And I’m sure you ran into the Canadian contingent from our government.

John Stackhouse: There was no one there from the Canadian government, Sonia. It was astonishing. Uh, even the investment agency that is mandated to drum up investment for Canada had no presence here and they used to be very visible. Say what you like about WEF, but every major investor in the world pretty much is here.

Sovereign wealth funds, big institutional investors, [00:04:00] pension funds from every corner of the world are here and they’re here to do business. So businesses from around the world are also here along with their governments. According that investment, and there was a real absence of Canada, and it was noted by more than the Canadians,

Sonia Sennik: there wasn’t a booth, a little flag, some decorative pens,

John Stackhouse: not even a cup of hot chocolate.

And by the way, it seemed everyone and their dog was offering hot chocolate on the main street. The Qataris, the Indians, even Meta had a fancy hot chocolate booth that had a lineup down the street, but no Canadians.

Sonia Sennik: No one does hot chocolate better than us, John.

John Stackhouse: Well, we got to prove it.

Sonia Sennik: One of the things that President Trump pushed for was NATO countries to increase defense spending to 5 percent of GDP.

Now just a couple months ago, Canada committed to meet NATO’s military spending target of 2 percent of GDP by 2032. And last year in 2024, for reference, Canada’s defense spending was about 1.3 percent of GDP. How do you [00:05:00] think leaders reacted to this push?

John Stackhouse: Well, I think a lot of countries are thinking very hard about how to increase defense spending, which is usually harder than it sounds.

Procurement number one is incredibly difficult. And then there’s the politics of it. Governments in Europe as well as North America are running deficits, in some places very big deficits. And they have demands for health care and education and other claims on the public purse. So doubling, in some cases, defense spending is going to be a tough sell.

Now, there’s also an opportunity to broaden what we mean by defense spending. And since this podcast is about technology and disruption, that’s where the conversation’s going. Cyber defenses, something Canada is actually very good at, is becoming a meaningful part of military strategies and artificial intelligence, which we’re going to talk about a lot more through the episode, is becoming more and more central to defense strategies everywhere.

It was interesting to hear the Ukrainians, including President Zelensky, talk about how advanced their technology is, [00:06:00] especially drones, which we’ve all read about and probably seen videos of. A lot of those drones are driven by artificial intelligence. And I was shocked to listen to a discussion between a couple of military experts about how the Russians and Ukrainians are learning from each other day by day, week by week during this war.

By capturing drones and other devices, tearing them apart and copying them, and then advancing their own technologies. This may sound inhuman when we’re talking about tens of thousands of people whose lives have been lost during this conflict. and all the suffering that is going on and unfortunately will go on.

But it’s important to note about our own defenses and it’s getting to be a more challenging world. So we will need more defenses to think that technology and innovation are going to be an important part of that. And those can lead to important civilian benefits as well.

Sonia Sennik: Well, John, there’s been this evolving conversation around the concept of dual use technology.

There’s so many different applications for emerging tech, software, hardware. [00:07:00] We’re living in a world where that term is becoming a little bit meaningless because almost everything could be considered dual use technology. For many of our listeners, their only interaction with a drone may be for photography, taking pictures of leaves changing color in the fall.

John Stackhouse: Yeah, this was a hot debate and whether these technologies and particularly AI are going to benefit democracies more or autocracies more. And it could go either way. We’ve never seen autocracies and I’d include China, Iran and Russia in that category with more technological might. And the ability to scale that technology.

And as we know, technology is all about scale. A wise person at Davos made, I thought, a profound comment reflecting on the history of autocracies and dictatorships, having always to rely on the will of the people. Throughout history, even in some of the greatest dictators. Have fallen to the uprising of people when their basic needs were not being met.

That’s starting to change with [00:08:00] technology. And you think of what AI can do when it can persuade at scale an entire population, when it can bring surveillance technology at scale 24 seven in everyone’s lives. That could make autocracies more powerful than we’ve ever known. On the flip side, democracies can also get better and better with these technologies.

Think of what AI can do to our public service. All the frustration that all of us have with the delivery of public services, private services too, but the frustration with government can be reduced, perhaps profoundly, with AI. When we talk about those budget challenges of healthcare. Well, AI is there ready to be deployed at scale to help us not only deliver better service and improve all of our health outcomes, but save money as well.

So it’s an incredible race that unfortunately is about more than technology. It may well determine the direction of where society goes. In the rest of the century,

Sonia Sennik: John, for sure. This world where lightweight technologies have the potential to make [00:09:00] massive changes totally transforms the calculus. And I like what you said about AI adoption and public service would love to see more and more productivity through some of those tools

with interest rates still being a major concern around the world. How did you find global leaders were framing the relationship between economic stability and the ability to drive forward with innovation? Debt financing is critical in the early stages of developing any new research and technology to be able to go to market.

And so a low interest rate environment is very friendly to those brave entrepreneurs that are going to take a risk on something that’s never been built before. In an environment where those interest rates don’t exist, you may find creative, ambitious people a little less incentivized to take that leap.

Was there a conversation about that with the global leaders that you were with in Davos?

John Stackhouse: Yes, and add to that A lot [00:10:00] of concern about regulation, like that was one of the topics of the week is regulation. And certainly Donald Trump has declared war on regulation in the U. S. We’ll see how far he gets in trying to reduce it.

Every new leader seems to want to cut red tape and then discovers that there’s more red tape than they ever imagined and there’s always some vested interest in preserving it. That said, I think government leaders everywhere are looking at the United States and then looking in the mirror. And saying, Hmm, maybe we got to do a lot more than we said we would do.

And we got to be faster at it. The Europeans, I think, are still in a bit of shock from the Trump election. And we’re really humbled by that finger wagging that he gave them. But they also said, you know what? We need this wake up call. We’ve got everything here in Europe. We’ve got skills. We’ve got talent.

We’ve got savings. Apparently they’ve got hot chocolate and they’ve got hot chocolate, but they don’t have technology to the level that they should have. And they know that, and they know that young technologists are leaving [00:11:00] Europe in droves are coming to the United States or coming to Canada. To start their businesses and they also know that their regulatory environment can be hostile to tech companies.

Trump made that very clear. He said, you pick on our tech companies, Apple and Google, you take them to court and you find them billions of dollars. Well, I consider that a tax and you know what he means when he says that he’s going to tax back. But it’s a signal to governments to maybe step back and let business be business and, uh, invent, create, fight each other and, uh, see where that, uh, leads, maybe have a bit of creative destruction as creative destruction lab inspires, but let those spirits thrive, not just in financial markets, but in technology and in science and in inventing.

All the great things that we’ve talked about on previous podcasts

Sonia Sennik: And really for an innovation ecosystem to thrive. You really need a mosaic of all different types of stakeholders pulling together. We see that through our partnership with our European CDL sites, [00:12:00] CDL Paris at SSA Paris, CDL Berlin at ESMT Berlin and CDL Estonia at the University of Tartu.

It’s incredible to see the community’s commitment to building their ecosystem and building connections all around the world. You’ve pointed to global shifts in trade policy as one of the top risks that you see. What changes do you think will shape the trade order over the next decade, and are we here in Canada doing enough to stay competitive?

John Stackhouse: No to the last question, and we have to treat this moment as a reckoning as well, not just in our relations with the United States, but in how we manage our own economy, in how we create those ecosystems, but let them thrive and in how we look to compete with every part of the world. The United States, in some ways, is a category of one.

It has size and scale and diversity across its economy that allows it to do things its own way, whether the world wants to play ball with it and trade with it or not. The U. S. can afford [00:13:00] to build walls, but it’s not going to build impermeable walls. It’s going to trade with all parts of the world, but it’s doing so from a position of strength and therefore will probably get stronger as a result.

Smaller countries like Canada have got to be nimbler, more creative, more dynamic. Think a bit more like Israel or Singapore in seeking opportunities. I was interested to hear the president of Singapore speak to these themes and he said, you know what, as a small country, you figure out pretty early how to make yourself useful to all sorts of other countries.

And I think Canada needs to wake up every morning and see how can we be useful, not just to the United States, but to all sorts of countries. We’ve got the resources, we’ve got the people, we’ve got our own dynamism. We just need to be more ambitious and more aware of the risks that are coming at us. And also celebrate our own successes.

It’s really interesting to hear Americans at this time celebrate themselves, leads to a lot of eye rolling. It was funny to hear Kristalina Georgieva, who runs the International Monetary [00:14:00] Fund this week, say that as a European, she grew up listening to her parents applaud something by saying. Well, that was pretty good.

So they never said it was great. It was a, that was pretty good. Then I watched an American walk down a few steps and they get a standing ovation. That got a good laugh from the crowd and recognition that, yeah, Americans sometimes overdo it, but they celebrate success. And that tends to lead to more success.

Sonia Sennik: John, you mentioned that this could be a bit of a moment of reckoning for Canada. What do you think is the most important thing for our country right now?

John Stackhouse: I think we need to come to grips with what we are excellent at. And what we can continue to be excellent at in a very competitive and increasingly competitive world.

And then secondly, map that against what our allies and partners need and are going to need in the years ahead. I was reflecting at Davos this week on Justin Trudeau’s First trip [00:15:00] to the World Economic Forum, where he made that infamous comment about Canada being a resourceful nation rather than being a resource nation.

And that was unfortunate because we’re both. And now the conversation sparked by Trump’s desire for energy dominance is very focused on resources and how can we supply energy, oil and gas, for instance, to the United States. Let’s think about the resourcefulness. That allows us to do that. The remarkable engineering talent in the oil and gas sector and in the electricity sector and in the fusion sector that can work with equally great talent in the United States and elsewhere.

To Canada’s advantage, how do we think about a remarkable talent in space? There was extraordinary conversation that I hope we can get into about the space economy and the new space race that is underway. We had a great episode with Chris Hadfield a few months ago on that, Sonia, and. There’s an opportunity there for Canada to differentiate [00:16:00] ourselves.

We’re the brain economy, which is thriving. We have many of the world’s great neuroscientists in Canada, as well as brain entrepreneurs. And there’s billions of dollars at play there. We can take advantage of that, and also take advantage of our abundance of natural resources. That’s always been the Canadian way, that balance.

But we need to have an honest look in the mirror. And assess what we’re good at, what we’re great at, and what we can lead with in this new age of competition.

Sonia Sennik: So what needs to change is how we approach the world with what we have to offer and identify with that ourselves. A friend of the podcast and colleague of ours, Professor Janice Stein.

Made the suggestion that we need to establish a quiet confidence in our strategic assets. Would you agree, John?

John Stackhouse: Yeah, I mean, you can be loudly confident or quietly confident. I think at the end of the day, it doesn’t matter as long as you perform and deliver. And that’s been one of Canada’s challenges in recent years.

We have been talking more than doing. And the world has noticed that say [00:17:00] do gap. We have not been executing to the degree that we said we would. And we’re now into a new show me period where we’re going to have to show the United States, but others, including ourselves, that we can deliver on time, on budget, and at a quality that we know we can, but we just got to do it.

Sonia Sennik: Listening to you, John, I’m thinking about the Olympics. It’s one thing to say, I want to go to the Olympics. It’s quite another to get there and then win a gold medal. Right now, Canada can adapt that own the podium mindset, which works so well for our athletes and maybe apply it to our business and industries.

John Stackhouse: Well, the Olympics is a good reference because we all celebrate the individual successes at the Olympics. But if you’ve ever been to or studied the Olympics, you know, the great athletes, even the individual performers show up with a team. And we have to do more of that as Canadians. And I don’t mean in the traditional flag waving big mission team Canada efforts, but just in strategically bringing together the right people [00:18:00] at the right time to connect with the right audiences.

That’s kind of like game day performance thinking. That’s the sort of attitude we need to have in Canada. And it was interesting at Davos to see countries. Be surprised, Mongolia, which has a really interesting economic ambition underway, showing up with the right collection of technologists, entrepreneurs, governments to say, Hey, we’ve got some game here as Mongolians, do you want to come check it out?

India was the same. I had a great conversation with our friend Raquel Urtizan from Wabi, the autonomous vehicle company. They will have autonomous driving trucks on highways in Texas this year and will be expanding beyond that. And that’s just the start of what Raquel and the hundreds of people on our team in Toronto are building towards.

And that’s the Canadian advantage. Canadian entrepreneurs with Canadian resources. Taking advantage of the U. S. market, doing that with a team behind them, that ecosystem, [00:19:00] including the great communities at the University of Toronto and Creative Destruction Lab that have allowed Raquel to do what she’s doing with Wabi.

Other great Canadian companies like Cohere, also here telling and selling their story. How, as Canadians, do we get behind that a bit more strategically? They don’t need big parades down the main street of Davos, but they need that combination of right people, right time, right audience to seal the deal.

Sonia Sennik: It’s all about the team behind the team. And I’m thinking of those pictures we’ve all seen of our incredible Hockey Canada teams winning the gold medal, whether it’s the men’s or the women’s team. As soon as they’re on the ice getting their medals, you see a flood of more people than the number of players and athletes on the team join them in that photo from physios to managers to logistics to truck drivers to the equipment team.

And when you think of that in terms of what it takes to create a thriving global business. You know, your country coming together behind you is an essential part of that. And I think there’s a [00:20:00] real theme of collaboration and celebration that I’m hearing, John, that folks were reacting to at Davos.

John Stackhouse: Yeah.

I’m glad you mentioned those words because I had written three words down and that was celebrate, cooperate, and compete. Those were consistent themes through the week at Davos. How do we celebrate whether it’s scientists or businesses or public servants? How do we collaborate, bringing people together to do more than they do on their own?

And then how do you create the right environment to have that competition, which we need to create hockey teams, to create companies, to create great technologies.

Sonia Sennik: I’m sure some of the folks listening who may spend time reading the latest headlines or scrolling through their app of choice have picked up on some signals of geopolitical fragmentation. And one of the many benefits of an interconnected world is the open sharing of ideas and talent across borders.

As you said. you know, celebrate, collaborate and compete. [00:21:00] John, after spending five days in Davos, what is your sense of the risks related to geopolitical pressures?

John Stackhouse: Well, they’re significant. I think everyone is realizing we are moving into a new era of history and what we have all perhaps taken for granted over the last 50 years is not going to be there over the next decade and probably decades beyond that.

We don’t know where the world is going, but it won’t be as global as it was. Most of us I’ve traveled the world for decades without having to think too much about it. But I’m old enough to have gone to a country called East Germany. And I still vividly remember going through the wall from West Germany to East Germany and feeling like I was on another planet.

It was a different system altogether. And we’re now moving into this era where we may have multiple systems in the world, like we’ve had in ages past. But that leads to inefficiencies, it leads to frictions in the world, leads to greater tensions, [00:22:00] and it leads to uncertainty. Which becomes iced into risk models.

So all the entrepreneurs listening will have to pay a bit more because of that uncertainty. We all pay for that uncertainty, whether we know it or not.

Sonia Sennik: We may be seeing more fragmentation and fracturing here on planet Earth while simultaneously heading to outer space more than ever. So orbiting back to one of our previous episodes, the dramatic drop in cost of accessing lower Earth orbit has unlocked new opportunities for space technologies to benefit humanity.

How was that economic transformation discussed? And where do you see the greatest near term opportunities with the space economy?

John Stackhouse: Two words. Launch pads. Maybe that’s one word hyphenated. Not sure. But whether it’s one word or two words, launch pads are hot. I didn’t realize that there is a scarcity and could be a significant scarcity of launch pads.

One of the best parts of Davos is there are dinners [00:23:00] that bring together the most interesting people you could ever imagine. And one night I got to go have dinner with the heads of space agencies from around the world, the India Space Agency, European Space Agency, Americans, Chinese, It was fascinating, as we discussed on that podcast, Sonia, to hear about the billions of dollars of venture capital money that is going into the space economy and all the private sector firms.

Of course, we know about Blue Origin and SpaceX, but around the world, there are more and more private sector entrepreneurs developing very ambitious space enterprises, both in low orbit and going to the moon, probably in big numbers before too long. And then we can all remember that comment by Donald Trump during his inauguration speech about planting the American flag on Mars.

That just highlights the ambition that I got to see from around the world, but there’s limited capacity, so there could be a supply demand imbalance. There was something like 140 orbital [00:24:00] space launches last year, and the people I had dinner with said, we’re going to be pretty soon seeing 100 orbital launches a week, and we have to start preparing for that.

And there are not enough launch pads on the planet for that. So interesting signal of both the demand to come and the opportunity.

Sonia Sennik: And we can’t leave this episode without me asking you about artificial intelligence and how it was discussed. You witnessed some really creative applications of AI at Davos.

Tell us more.

John Stackhouse: Yeah, I mean, what’s going on in robotics is incredible. I mean, we all have interacted with robots, but robot technology and especially the AI component is starting to really accelerate. So in just a few years, we’re going to see and touch and work with robots in all sorts of interesting ways.

But one of the most remarkable. Applications of AI And robotics was being carried out by a Canadian artist, Suquin Chung, who was born in Toronto, now lives in the U. [00:25:00] K. And she has trained a robot using sensory devices that read her brainwaves and train the robot to paint like her and develop creative patterns like her.

So I watched her. paint on a large canvas with a robot beside her. It was like watching two artists interact, except the robot was developing its own creative style and instinct based on the brain waves literally that were coming from her. Amazing to see the art, but what she is working towards is training the robot to be a creator when she’s gone.

It boggles the mind.

Sonia Sennik: The saying, art is timeless, hers may be truly infinite.

John Stackhouse: Think of what that can do for all sorts of other things in the world. I met a neuroscientist who’s developing ways of doing brain surgery without having to do the surgery, just like we do now with hearts. You don’t need to cut someone open to treat the heart.

He’s now doing this with the brain and [00:26:00] using AI to make it safer and also more sophisticated and more affordable because these procedures can be very, very costly.

Sonia Sennik: You know, John, in 2021, we started our CDL Neurostream, uh, this program supports founders pursuing commercializable opportunities in neuroscience.

And we’ve really learned from our neuro room that there’s a huge shift towards developing non invasive brain technologies. As you mentioned, an example is Augmental. One of our alumni developed smart mouthwear that allows you to control your phone, computer or tablet hands free. So this is especially useful for people living with paralysis.

It’s really exciting to think about how these technologies can be enabling to so many people around the world.

John Stackhouse: I think we’ve got a future episode there, Sonia, so let’s, follow up on that idea. I mean, this is all remarkable stuff and it sounds like sci fi, but it’s not sci fi. This stuff is happening in our world today and it’s going to scale.

very quickly through the rest of the decade, and could lead to very positive outcomes for society if we manage it [00:27:00] well. And that was one of the most important points at Davos this week, is how are we going to manage technology to ensure that it’s safe, to ensure that we are working towards the objectives that it was created for.

But also, How are we all going to work with and coexist with technology, be it software or those robots, because that is the future that’s coming at us very fast. This idea of cohabitation, it was Mark Benioff, the CEO of Salesforce, who said to a room full of business leaders, we will be the last generation of CEOs to manage a human only workforce.

He said, my successor is going to have to manage a human workforce and a digital workforce. And we’re only starting to figure out how to do that. Not just from a technology point of view, but from an organizational behavior point of view. How do you build teams of agents to work with teams of humans and teams of agents [00:28:00] to work with other teams of agents and collaborate with the humans?

Sonia Sennik: We’ve been cooperating with machines for centuries. What’s novel about this moment in time is our conversation about agency between humans and machines. I think more to come in future episodes on that one.

John Stackhouse: Someone should be concerned about, but I hope Sonia, people can reflect also on how much there is to be hopeful about.

If we do things right, there are incredible opportunities in the world right now. Amazing innovations in science and technology here on earth, under the oceans. and out there in space. So it actually is a great time to be alive despite all the risks that we see around us and the fears that we rightly talk about.

Let’s not forget about the opportunities as well that can overcome those fears.

Sonia Sennik: This has been an amazing discussion John, thank you so much for reflecting on your time at Davos and get home safe.

John Stackhouse: Sonia, thank you. Looking forward to being with you in the studio for our next episode. For now, this is Disruptors, an RBC [00:29:00] podcast.

I’m John Stackhouse.

Sonia Sennik: And I’m Sonia Sennik. Be sure to subscribe, leave a review, and join us next time as we continue exploring the groundbreaking ideas shaping Canada’s economy and beyond.

John Stackhouse: Talk to you soon. If you want to read more about this year’s World Economic Forum, check out our new report, Davos 2025, at thoughtleadership.rbc.com. Or follow me on LinkedIn.

John Stackhouse: And Sonia, welcome to 2025. Happy New Year.

Sonia Sennik: Hey John, a very happy Y2K. 25 to you. How were your holidays?

John Stackhouse: They were ChatGPT pretty good. In fact, they almost went sideways because of ChatGPT. I tried to lay out an itinerary and got a very good plan. But for the wrong year. I’ll blame myself for being a substandard prompt engineer. How about you?

Sonia Sennik: Mine was, I would say, a light touch digital holiday season. Mostly Mission Impossible movies.

John Stackhouse: Those holidays are often the best, the kinds where we get to unplug. Unfortunately, unplugging is not a big trend in society right now, and that’s going to have a lot of consequences. I’m excited to be talking in this episode about the power struggle, as we called it in a recent report that’s coming from all [00:01:00] those ChatGPT queries and so much more. We’re going to need a lot more power, a lot more juice, a lot more electricity. I was struck by one fun fact over the holidays that one, okay. ChatGPT query uses about 10 times as much power as a typical Google search.

Sonia Sennik: Absolutely, John. As our reliance on computational power grows and grows, so does the demand for sustainable energy solutions. And part of that is data centers. To use AI models, requires computation. In order to have massive amounts of computation, you need massive amounts of energy. It’s front of mind right now for policymakers and world leaders alike.

John Stackhouse: That’s both exciting and a little bit concerning. I’ve read that simple training models are taking on more and more power. And in fact, the power used to train ChatGPT 4 versus 3 is up 5x. If you just think of two prompts that many of us might have done, those would be equivalent to powering your [00:02:00] iPhone overnight. So think of the power that’s going to be needed when all of us are doing that hundreds or maybe thousands of times a year.

There’s already a bit of a gold rush on to power all those data centers. Our research shows that there are 15 gigawatts of data center projects in application in Canada, which would produce the same amount of electricity that’s consumed in a year by 10 million homes. It’s a daunting challenge, but also a huge opportunity for Canada.

We have all the energy sources that are needed, whether renewables to power much of the world’s data center economy

Sonia Sennik: As intelligence increasingly relies on electricity, how can Canada innovate to meet the growing energy demands sustainably? So today we’re exploring how startups and policymakers are balancing this equation, meeting the rising energy demands without compromising sustainability.

John Stackhouse: We’ve got a new report out from the RBC Climate Action Institute called Climate Action 2025. It’s our [00:03:00] annual assessment of how Canada is doing on the journey to net zero. The report is full of amazing and interesting data. But one of the points I wanted to highlight here is a section that we call the “Idea of the Year”.

And our Idea of the Year is electricity. We have an opportunity and a need to invest significantly right now in our electricity capacity, because while we’re feeling the pinch today, think of what it could be like in the 2030s. Here’s one of the authors of the report, Shaz Merwat, who’s the energy policy lead in the Climate Action Institute.

John Stackhouse: We asked Shaz what the biggest challenge is in getting all this done.

Shaz Merwat: The key theme of this year’s report is really around electricity, and the key challenge there is really just growing the grid. Up until before this mad AI gold rush, we really were focused on greening the grid, getting off coal, to switch to renewables.

But AI has changed that. AI is a substantial draw of power. We’re talking a [00:04:00] tripling in load demand from here to 2050, all within a rate regulated return sector. So not only are you trying to meet that demand growth, but you’re also trying to keep electricity affordable to the average consumer throughout that entire journey.

That’s the challenge.

John Stackhouse: Sonia, listening to Shaz, what do you think the biggest opportunity is for us this year?

Sonia Sennik: It’s going to sound like an answer I give often, John, but innovation. The opportunity to evolve how we think about producing electricity, delivering it, and creating the data centers of the future.

Sonia Sennik: And Alberta’s Minister of Innovation, Nate Glubish. We’ll explore with him how policy and industry can work together to support Canada’s leadership in this space.

John Stackhouse: Minister, welcome to the podcast.

Nate Glubish: Thanks for having me.

John Stackhouse: It’s remarkable to think back to 2024 and all that evolved rather quickly on the AI front.

John Stackhouse: And Alberta was often leading the conversation, particularly when it came to data centers. Kevin O’Leary had [00:05:00] that eye popping announcement of the $70 billion opportunity. But you’re also laying out a pretty ambitious innovation strategy for Alberta in what we might call the data economy of the future.

Maybe give us a quick sense of where you think Alberta can be going out a decade.

Nate Glubish: Well, in a nutshell, we want Alberta to be one of the most innovative jurisdictions in all of Canada and one of the most innovative in the world. And we know we can do it. We’ve been investing in AI research long before it was cool.

It started 20 years ago with the foundation of the predecessor for the Alberta Machine Intelligence Institute when we recruited global superstar, Rich Sutton, and built a team around him and gave him resources. And lo and behold, 20 years later, Alberta is known around the world as one of the top five research jurisdictions for AI.

John Stackhouse: Data centers are increasingly a key part of that. Where’s the advantage for Alberta?

Nate Glubish: We know that there are going [00:06:00] to be hundreds of billions of dollars of investment made over the next five to 10 years across North America alone to build out more data center computational infrastructure. And we believe that Alberta can play a significant role in helping to meet that need.

We released Alberta’s data center strategy at the end of 2024 to send a signal to the world that we intend to be one of the destinations of choice for this infrastructure. And we’re happy to work with anybody, whether you’re an investor, developer, a user of AI technologies. We want to work with you to help make sure that you get the compute infrastructure you need built.

Sonia Sennik: How do you see our position globally? What are the key points you’re driving home with regards to how we can really lead in data centers?

Nate Glubish: Well, I’ve been traveling all over the world to talk about AI data centers and to promote Alberta’s vision. And what I hear, no matter who I talk to, it’s the same. The two most important factors are access to electricity at scale and [00:07:00] speed to market.

So, Alberta has a lot of unique advantages that can hit home on each of those two points. First of all, we are blessed with an abundance of natural resources. We have some of the largest natural gas reserves on planet Earth. And we have world class expertise that knows how to develop it responsibly. Any new AI compute infrastructure is going to require net new power generation built right alongside of it.

And so one of the things that’s unique about Alberta is that we already have a regulatory framework that contemplates the locating of power generation resources right next to the industrial load. We’ve been doing it in the oil sands for decades. We can work with industry to say, well, if you want to build a natural gas fired power plant right beside a data center so that you have all of the power that you need right on site and you don’t need billions of dollars of transmission infrastructure and distribution infrastructure, this is one of the only places on Earth where you can do that.

So we’re going to work with industry to make Alberta the easiest place to get [00:08:00] to construction of this new infrastructure.

Sonia Sennik: How soon do you think it’ll be before we see a carbon captured natural gas-powered data center in Alberta?

Nate Glubish: So Alberta is also a world leader in carbon capture technology. We have millions and millions of tons of carbon that has already been captured and sequestered underground. This is some technology that’s been pioneered over the last 10 years by Alberta companies and about Alberta researchers and innovators.

Nate Glubish: And so if there’s any place on planet earth where it makes sense to build a natural gas fired power plant that is net zero with carbon capture, it’s in Alberta. What we’re seeing right now initially is again, speed to market is the most important thing. So folks are focusing on how do I get the natural gas power approved under construction and in the queue so that we can get up and running right now.

Let’s keep the carbon capture as an option later. And once we get the project up and running, once it’s cash flowing, once the power is [00:09:00] powering a data center, which is now creating a value-added tools and services that the world needs and is paying for, then they can invest in the crime and capture. So we’re optimistic that this is possible and that there’s no better place in Alberta to do it.

John Stackhouse: Now, I don’t need to remind you or any of our listeners. It’s obviously 2025 and we’re into a new era, certainly in terms of our relationship with the United States. And there’s going to be a lot on the table this year. How are you thinking about the dynamics between Canada and the United States in the years ahead, in terms of the data economy and all that you’ve been talking about here?

Nate Glubish: I think over the last several months, as we’ve seen, President-elect Trump talk about some of his plans when he takes office later in January.

Of course, this is a pivotal moment for Canada. We’re facing the threat of tariffs. So, what our approach in Alberta has been generally is to say, look, Canada has always been a great partner to the US. We [00:10:00] supply millions of barrels a day of oil and gas to American markets. And then they go and they refine it and they turn it into value added products and they export those all around the world.

So, we are enablers of enormous job creation and wealth creation in the US we’re good partners in that. And we want to continue being good partners in that.

And so we want to send that signal to President-elect Trump and his administration that we’re here to be good partners with you. We bring a lot to the table. You rely on a lot of these things. It helps to create jobs and wealth and drive investment in the US. And it also benefits Alberta. It’s a win win. Let’s not rock the boat here.

And let’s talk about data centers specifically. Look at the NASDAQ. What are the top companies on the NASDAQ? What is the lion’s share of the market cap of the stock market in the US?

It’s all of the big tech companies. And their biggest threat to being able to continue growing and to realizing their fullest opportunity is access to electricity at scale in order to power the data center infrastructure that they are going to [00:11:00] need. Texas can’t do it all, Oklahoma can’t do it all, Ohio can’t do it all, and Alberta can’t do it all.

But together we can do it, and Alberta needs to be a significant part in that equation. So our message to the US is let us help you solve this problem. It’s a once in a lifetime problem, but it’s a once in a lifetime opportunity. We’re here and ready to help, ready to scale, ready to power your hyperscalers and to power all of the innovative companies in North America that need this technology.

We’re here to help so let’s work together.

Sonia Sennik: Minister, I wonder how Canada can take this opportunity to really set the bar for world class data centers. How can we innovate on the cooling technology, the robotics, the design, everything that goes into building the data centers of the future? How do you see attracting and inspiring researchers and innovators and creatives to come together to rally around us building best in class facilities?

Nate Glubish: Well, I think that was an underlying motivation behind Alberta releasing our AI [00:12:00] data center strategy in December is to send that signal to the entire world to say, we aim to be one of the most exciting places in the world for the development of this technology and for the construction of this infrastructure.

The folks who are going to be innovating and creating the new tools and the new technologies that will bring about next generation advances in AI data center technologies, whether it be cooling, processing, load management, whatever it might be, they’re going to want to be located close to large installations at scale, which is why the Wonder Valley project, we haven’t really got into the details on that one just yet, but that’s why this one is such an important opportunity for Alberta.

Imagine if the largest data center complex in the entire world is located in Alberta. Of course, companies who are developing next generation technologies that that will go into these installations are going to want to be close to the biggest and the best. And hopefully as we continue getting more and more folks up to speed on all of the advantages we have, all the infrastructure that we intend to, to see [00:13:00] developed that the folks who want to play a role in the next generation of these technologies, will see Alberta and and see Canada as a logical home for them.

John Stackhouse: Minister, tell us a bit more about the Wonder Valley project and also what you are hoping it leads to.

Nate Glubish: I got to give a lot of credit to the municipal district of Greenview. Long before data centers were in the public consciousness, they got together and said, you know what, we want to be entrepreneurial. We’ve got a lot of land. We’ve got a lot of expertise. We got a lot of infrastructure. We know that we could be a destination for large industrial projects at scale. We don’t know what kind of projects they’re going to be. Perhaps there’ll be oil and gas related, but we know that we can be a host to this.

So what do we need to do to make our municipality attractive? And so they got to work in basically saying, well, what are all of the approvals in this large parcel of industrial zoned land that we have that we could actually [00:14:00] go on spec and get done so that as long as some kind of future infrastructure project fit within these goalposts.

That we could say, oh, approvals are already done. Consultations are already done. We’ve done all the legwork. We saved you years and years of time. And so that’s exactly what they did.

And so now fast forward to today, they didn’t know it was going to be a data center. But once those dots got connected, it just made perfect sense.

So Kevin O’Leary and his team have said: Okay, well, if we’ve got a lot of these approvals in place, what do we need to do? We need to build the power generation. We need to source the gas. And then we need to get the data center up and running. So, the vision for this project is it’s going to be an off grid project.

They’re going to build their own power generation. They’re going to build in their own redundancy. The natural gas from the region will be brought into site. It’ll be converted to electricity on site. The electricity will be fed into the AI data center on site. And, the economies of scale of being able to do it that way, where you don’t need all the transmission and distribution infrastructure, and you’re located right next to the [00:15:00] gas, allow for them to have natural gas fired power at extremely low cost, which is making this a very attractive play for them.

Nate Glubish: So their plan right now is to build the first, I think, one and a half gigawatts of power generation, and that’s what they’re working right now on lining up the investment for. And they’re hard at work on all the engineering and building the partnerships with the natural gas players, building partnerships with first nations in the region, working with the municipality, etc.

Nate Glubish: Once they’re able to get the natural gas power generation in construction, that will be the signal that the hyperscalers and all of the other customers for the AI compute infrastructure are going to look at and say, you just started talking about this, and now you’ve got one and a half gigawatts of power underway, and it’s going to be ready in a year and a half to two years.

Nate Glubish: This is a game changer. And you’re also talking about scaling this to between five and seven gigawatts of power on this single site. So it’s very exciting. It has the potential to be up to $70 billion of investment into Alberta. [00:16:00] It would lead to the largest data center installation in the entire planet.

John Stackhouse: You kicked off the conversation, Minister, talking about Alberta’s journey in AI, which goes back decades, and frankly, we at RBC have been lucky to be part of that. You are more than the Minister of Data Centres, you’re the Minister of Technology and Innovation. I wonder, as we wrap up, if you can give us a sense of where you see Alberta in the years ahead in the innovation space beyond data centers?

Nate Glubish: Sure. Well, one of the biggest opportunities for Alberta to really make its mark and send a signal to the world that this is a really exciting jurisdiction, i f you work in technology, if you use AI, if you’re excited about the possibilities of this, that Alberta would be the place for you to call home. Or at least a place for you to invest or to expand.

And that is for the use of AI inside of government. So. We’ve recruited a new Deputy Dinister in my department. His name’s [00:17:00] Janet Golford. Uh, it comes to us from FinTrac from the federal government. He was their head of AI and he actually has expertise in building AI technologies. He did it in the private sector before with his own business.

Nate Glubish: He’s done it in government at the federal government level and now is helping to support my vision to use more technology in government. And I’ll give you one example. So we all like to complain about procurement in government. It takes forever. It’s painful. Like for us to procure anything, it takes at least seven months.

Nate Glubish: So, imagine a world where we could get the folks who need to procure something in government together and say, what do you need? Let’s just talk it through. Okay. Let’s upload all of that stuff into a procurement GPT engine that we’ve built. That’s secure. It’s on a private server. It’s, it’s all in house.

Okay. And have it automatically parse all of that and then put it into a trade agreement, compliant RFP and make it super easy so that in minutes, instead of months, you can actually design your RFP. And then on the flip side, working with the folks who want to bid on doing work with the [00:18:00] government, have a GPT platform and portal that they can go through and say, link your website, upload all of your documents, all of your PDFs, all of your marketing materials, upload all of your white papers, anything you’ve published about what, what you’re offering.

Nate Glubish: Okay. And it’ll automatically parse this and match it to the RFP. And then in minutes, give you an assessment to say, okay, we think this is what you’re proposing to bid on and how you’re proposing to do it. So that then it literally in minutes, you could apply to an RFP. Our vision is to say, how do we go from seven months to seven days?

And maybe even overshoot that and get shorter. How do we use AI? Use these new tools? They’re not the tools of tomorrow. They’re the tools of today. And that’s one out of dozens of examples that I could give you of ways that we’re looking to harness AI to improve how we do business as a government. And our hope is that as folks start to see more of this, get off the ground, that they’ll say, wow, Alberta is an exciting place to be, I got to spend some more time there.

John Stackhouse: You’ve got the energy, you’ve got the infrastructure, you’ve got the people. And as you’re laying out [00:19:00] here, you’ve got the ambition. I hope we can have you back to talk about how Alberta is racing ahead in this exciting new age, happy to come back anytime. Thanks for having me.

Sonia Sennik: Thank you so much Minister for your time.

Sonia Sennik: Now we’re thrilled to be joined by Doug Beach, CDL-Rockies mentor and chair of Eavor Technologies. Doug is here to discuss how advanced geothermal energy solutions could reshape how we power our intelligence. Doug, welcome to the podcast.

Doug Beach: I’m really happy to be here. Thanks a lot.

Sonia Sennik: So electricity has always been important. But why does it matter now more than ever?

Doug Beach: Well, I think the key thing on top of everybody’s mind is the consumption of data processing and the incredible demand or increase in demand that’s driving at the increment. So we’ve got energy and everything, and now we have even more demand coming rapidly.

Doug Beach: And the stability of the supply of the energy is so incredibly important relative to the information processing demand. And so [00:20:00] that’s, that’s another societal rub that will have to be met.

John Stackhouse: So, Doug, we’re talking about data centers as if they’re kind of the new, new thing. And of course, they’ve been around for decades. Give us some insight into why in 2025, the energy demands of the information age, which is what data centers are all about, may be different.

Doug Beach: Well, I think the obvious one is just the explosion of AI and the ubiquity of the availability of AI in that large language models offered by so many participants right now mean that you’ve democratized access.

So you’ve got all manner of people trying to do all manner of things experimentally right now. And it’s driving a lot of demand that we don’t necessarily know the value of yet. And, all the participants are in a bit of an arms race in order to meet that demand. And so, being available 24/7, 365, stably, and fitting in around all the other [00:21:00] streaming demand and other such entertainment demand I would call it is just incredibly important. People will not accept latency and disruption.

Sonia Sennik: The foundation of our evolving intelligence economy is energy, no doubt. And Doug, you spend a lot of time working with CDL Alumni company, Eavor Technologies, where they’re advancing closed loop geothermal technology. How does a company like Eavor fit into this puzzle?

Doug Beach: Eavor fits into it in several interesting ways, particularly in the local dimension of Canada. We’re starting out as essentially an export technology. So we’re creating a technology that will enable energy development almost anywhere on the planet. And it’s going to necessarily be cheaper at places that tend to have more heat.

We’re starting in places that have energy security problems primarily and that have higher prices. So the beginning parts, as you can see, Eavor is scaling in [00:22:00] Europe and targeting those spaces, Japan, and others. Eavor is developing additional technologies that will advance this further and ultimately allow the development of energy even into Canada, but that will still be a little bit of time down the road.

Doug Beach: One of the interesting things that is happening inside of Alberta relative to the development of advanced geothermal technologies is a focus on developing drilling technologies and Eavor is working in Alberta with the Alberta government to develop a technical specialization capability within the province that we’ll advance drilling for, certainly forever, but for other geothermal technologies, other commodity development technologies too.

Sonia Sennik: What barriers would you say, Doug, are the most significant as a company like Eavor scales?

Doug Beach: Generally speaking, you know, the first thing that was important ever was not having to [00:23:00] reinvent the wheel. So, being able to go to places that had regulations and governance that dealt with the production of geothermal energy and property rights around geothermal energy and all of the things that have already developed around other industries, hybrid, hydrocarbon industries and stuff, how do you own what comes from the space then where you’re developing it?

And how do you know that there’s longevity around that? And how do you manage those processes? What is the process for permitting and ownership of rights to permit? And then consistent treatment among the technologies that solar, wind, hydrocarbon, and geothermal are all competing on a consistent playing field?

Those are the things you may need to look for. The rest of it is energy markets, and those are well developed.

John Stackhouse: Doug, there are some people who will hear this and think, is this the best use of scarce [00:24:00] energy resources to essentially power the processing of data to enable Americans to do their ChatGPT queries and ship it to Canada to process and ship back. Shouldn’t we be using our strategic advantage in energy for something a little higher value? What do you say to them?

Doug Beach: Well, a couple of things. One, the market will sort that out. And so to the extent that a dear resources being mispriced right now, ultimately, that’s going to draw on margins inside of the people who are providing LLMs and that kind of stuff. They will ultimately have to, to drive their own market discovery process, at least internally, if not externally, to the extent that they decide to develop their own energy, which a lot of them are doing.

If you look at the deal that Microsoft did with regard to Constellation Energy and the restart of Three Mile Island. So, if you look at [00:25:00] those kind of considerations, you can recognize that the value of this dependability, predictability, clean, and the premium that they’re willing to put on it.

And so, bridging to another concept, and that is this could be a moonshot opportunity in certain ways where the value of all that certainty to these participants means that they may bring on additional resources of energy based on values that they have.

Doug Beach: Only they presently see and that directionally should unload the system relative to other demand. So, to the extent that nobody else was looking at bringing on Three Mile Island or bringing on an Eavorloop installation or an SMR or additional hydro in remote northern Canada. potentially that can be anchored by this kind of base demand to go with that new base supply and [00:26:00] potentially offer an overhang of additional capacity. I think it actually can change the entire supply demand setup.

John Stackhouse: There’s another view out there that data centers are essentially another version of warehouses for the information age, kind of low value. And yet they can be very sophisticated and there may be an opportunity here for Canada to become a world leader in all that goes into data centers. Are you seeing a Canadian advantage emerging in the data center economy and how do we both keep that and build on it?

Doug Beach: Yes, I see some really interesting things going on. Another colleague, uh, inside of CDL is actually working with a group of people to potentially develop a string of data centers in Alberta that would ultimately consume natural gas, I believe, and deliver CO2 into the developed environment and deliver CO2 sequestration facilities in the region.

And one of the big advantages that Canada offers is we’re cooler, [00:27:00] and, in so many ways, but in terms of energy wise, we’re, we’re cooler in terms of temperature. And that’s creating an opportunity to create a clean information supply that. It’s kind of a unique offering based on the resources that Alberta has, but I think that model could be done in Canada and other places using their local energy capabilities.

And that’s moving faster than, for example, Eavorloops will be developed in Canada, sadly on the one hand, but happily on the other.

Sonia Sennik: Doug, thank you so much for your time. This was awesome.

Doug Beach: I really appreciated giving it a go.

John Stackhouse: Sonia, when we started this episode, I was feeling a little bit guilt stricken. About all the power that would be required for some of my frivolous wanderings into the world of generative AI, not to mention all the serious work going on in that space. But having listened to Nate [00:28:00] and Doug, I see the opportunity here, for Canada particularly to not just develop the energy sources for the digital economy and for an age of gen AI that we’re already well into. There’s also an opportunity to build whole new approaches to innovation right across the economy.

Sonia Sennik: Absolutely, John. And that saying goes, history doesn’t repeat, but it often rhymes. And I’m thinking about how when we started our open pit mines in Canada, we naturally placed our smelters and refinery right nearby.

We had innovators in that space, building new processes and engineering systems that had never existed before. Listening to Minister Glubish talk about how the opportunity to create these data centres right next door to limit the transmission costs and complexity in transmitting electricity to these incredible energy sources, I had flashes of the comparison to where we’ve seen ourselves before here in Canada.

[00:29:00] And now we have an opportunity, as you mentioned, to build an innovation ecosystem around this to create truly best in class data centers and energy production facilities, attracting talent from all over the world to Canada to build on this.

So how can we engage with innovators and creators that are developing robotics, cooling systems, energy delivery, design efficiency for data centers? I’m excited to see the applicants we get into Creative Destruction Lab this year in and around this amazing challenge and opportunity.

John Stackhouse: It’s a new age for data centers and all that goes into them, and Canada can lead the way.

John Stackhouse: Sonia, thanks for the conversation.

Sonia Sennik: Thanks, John, and a big thanks to Minister Glubish and Doug for joining us today.

Be sure to subscribe, leave a review, and join us next time as we continue exploring the groundbreaking ideas shaping Canada’s economy and beyond.

John Stackhouse: This is Disruptors and CDL, the Innovation Era.

John Stackhouse: I’m John Stackhouse.

Sonia Sennik: And I’m Sonia Sennik.

John Stackhouse: Talk to you [00:30:00] soon.

Sonia Sennik: John, it feels like just yesterday we were recording the teaser for this series. Now Canada is nine Taylor Swift concerts older and seven episodes into this season of Disruptor’s The Innovation Era.

John Stackhouse: We didn’t convince Taylor Swift to add another era to her tour. The innovation era, that is, but we did cover a lot of ground from the rise of AI and the biotech boom to the bold frontier of commercial space and the EV revolution.

It’s been a whirlwind, but Sonia, I have to ask any personal favorites from the season?

Sonia Sennik: That’s definitely a tough one, but I’d have to say the space economy episodes were otherworldly. There’s something so thrilling about [00:01:00] imagining Canada as a leader in commercializing the final frontier. And listening to Commander Hadfield talk about the opportunity we have with exploring the moon, with advanced technologies and robotics, it just sparked curiosity and imagination in the best way.

John Stackhouse: And to add to that, the entrepreneurs we got to talk to who are adding real economic value to space exploration right here from Canada. I also loved the episode on how AI is transforming education. There’s so much fear out there about what things like chat GPT may do to our ability to learn. And yet we were able to hear from education pioneers, Janice Stein and John Baker, among them, about how generative AI may create the best days yet for learning.

Sonia Sennik: Absolutely, and a one to one tool that can enable personalized learning, leaving time for teachers and educators to spend time in relationship, getting to know their students, and supporting them I loved how the theme of that episode ended up circling around this idea of generative AI and AI as [00:02:00] tools that complement the need for connection and the relationship between the teacher and the student and peers in shared learning environments.

And that was a really unexpected gem out of that conversation. And now as we close out the year, we’re going to take a step back and look at the big picture, the trends that shaped 2024 and the ones we’re keeping our eyes on for 2025.

John Stackhouse: That’s right, Sonia. Joining us for this conversation. is someone who knows the Canadian innovation landscape better than almost anyone else.

Sean Silcoff is the Globe and Mail’s technology reporter and a widely respected speaker and author on all the big tech stories in this country. He’s been tracking the ups and downs of tech this year, and he always brings such sharp insights. Sean, welcome to the podcast. Thanks for having me on. It’s great to be in conversation with you, especially about the extraordinary year that we’ve just had, and probably an even more extraordinary one that lies ahead.

Sean, I want to start first with a simple question about what in your mind is [00:03:00] the tech story of 2024.

Sean Silcoff: Well, I think it’s probably the election of Donald Trump. I don’t think we can deny that particularly considering he has Elon Musk and Peter Thiel in his corner. Of course, two of the giants of tech both came out of the PayPal mafia.

It’s probably pointless to discuss Elon Musk. He’s at the moment anyway, Donald Trump’s right hand person. He’s going to be leading this Doge experiment. And of course, as a business person, Elon Musk made headlines all over the place. SpaceX capturing that rocket on the way down. Probably one of the most significant things in any industry or science of the year.

There’s no denying that. Continued evolution of the EV business. And there’s perennial questions about Tesla and, uh, of course X and people leaving X, what X has become the fact that all the people leaving X seems to have made blue sky a big thing. So we’ll see. So I think maybe that actually makes Elon Musk the tech [00:04:00] story of the year, but.

I think Donald Trump, we don’t know what is going to come with his election. Of course, on the Canadian side, we’re waiting for all kinds of tariffs, but I think looking ahead, there’s big questions like, will he ban Tik Tok? You’ve got all these efforts underway. DOJ, the FTC are really going after big tech.

It’s not just Tik Tok. It’s also Meta. It’s Amazon. It’s Google. And I guess the question is, what does Trump do? Does he continue that? Does he keep Lina Khan? Does he fire her at the FTC? So I think where this is all going is probably one of the biggest questions.

John Stackhouse: You’re making me think, Sean, of an old adage that in the next decade, Washington is going to take over Silicon Valley, unless Silicon Valley takes over Washington, that may be playing out right before us.

I’m fascinated all year, but especially now, just to look at. Tech valuations through this year, the total asset value of Silicon Valley is probably bigger than the district of Columbia right now. [00:05:00]

Sean Silcoff: Yeah, no, it’s incredible. And it wasn’t long ago that tech was important, big and valuable, but now it’s really central to everything.

And I think this election and the people behind Trump and Vance point to that. Now, if we look at Canada, this is kind of the year of the comeback. I’ll give you a few examples, wealth simple, you know, a year, two years ago, we were writing about how they were laying people off, how their valuation was being slashed.

They weren’t growing. Well, this year they’re back up to $5 billion valuation. This is one of the most successful years a Canadian tech company has ever had. A few other examples is a company called Clutch. We were writing about them. Being a death store, you know, maybe a year or two ago. Well, they cut deeply.

Their revenues are back up ahead of where they were. A company called D2L, the old Desire2Learn. It was, I think, the last company to go public in 2021. Share price crashed. Well, it’s now trading above its issue price for the first time in three years. Even quantum [00:06:00] computing, I mean, D-Wave, which, you know, the very first quantum company to go public.

Of course, CDL people will know about D-Wave. Suddenly, its share price is spiking along with every other quantum company out there. It’s almost like a meme stock. The other thing I would say, and I think we’ll talk about this later in the podcast, is one of the big stories of the year in Canada is the very cranky mood of the ecosystem.

People are really not in a great state of mind. I think the whole capital gains tax really left a sour taste in the mouth of a lot of people. Valuations are still down. It’s still a very difficult fundraising environment. A lot of companies that were public have gone private because they just couldn’t get the good valuations.

And there’s a lot of people who are threatening to move away from Canada. They’ve kind of had it here. So they say they don’t want to come back until they see some sea change in the government and the government’s attitude toward tech, toward productivity, toward prosperity. So I think there’s a lot of anxious people in the ecosystem who’d like to [00:07:00] see the channel change.

Sonia Sennik: Folks must be throwing their opinions at you all the time with regards to, you know, what is the problem here and how can we fix it? What would you say is the most commonly cited reason for the perceived issues that we’re having here in the Canadian tech ecosystem?

Sean Silcoff: I think a lot of Canadians would say this, and I think it’s even more extreme in the tech community.

The Trudeau government is tired and needs to be put out of its misery is what you hear from a lot of Canadians. But I would say that that is an extremely highly held view. opinion among tech people. You can’t find a person in tech who doesn’t want to see the back of this government. And I mean, the super clusters kind of came.

Nobody really talks about it. Nobody’s very excited about it. The AI strategy, a lot of people would argue, we wrote a piece about this last year of the scene is. Not really doubling down on the things that mattered in [00:08:00] terms of building prosperity. You sort of need a whole of government approach and a prosperity agenda to wealth creation.

And I think a lot of people are frankly disappointed in a government that came out strong and said, you know, we’re the innovation government. It just hasn’t delivered on a lot of the promises.

John Stackhouse: Sonia, is that the kind of mood you’re hearing at CDL? Is tech become the kind of cranky pants of our land?

Sonia Sennik: I don’t know if they’re an Oscar or a Cookie Monster but I’d say that there’s a lot of conversation about talent and how we have just the incredible talent based researchers, and that’s fantastic. But in order to scale large commercializable businesses, as you know, you need folks that understand how to execute and be truly operationally excellent to build sustainable businesses that can last decades and innovate and dynamically change with the times.

And so I’d say in a marketplace like the United States, where you have thousands of people who have run [00:09:00] companies over 500 or whatever it may be. That pool is just smaller here. So how do we continue to attract those folks that can be a complement to our great research community and help us build these companies, these internationally relevant and significant companies in Canada?

I’d say the tone is very much on how can we execute better? How can we be operationally excellent? How can we inspire and motivate? I think John, you and I discussed, it’s not a lack of ambition and big goals. The pathway between having an idea and bringing it to life is execution and operational excellence.

A lot of conversation is around sharpening that here.

John Stackhouse: Can I seize on that word, ambition? Because Harley Finkelstein, who we all know from Shopify, stirred the pot by saying Canadian tech. Doesn’t have enough ambition, Sean. What’s your take on that?

Sean Silcoff: Well, I just spent the better part of the year putting together a story to refute that.

I’ve been collecting the names of companies that have hit a hundred million or [00:10:00] more in revenue in Canada for some time. And I started to think early this year, you know, it’s an awful lot. Let’s try and find out how many there are. And it was a lot larger than I thought it might be. I thought it might be 20 or 30.

When I started out, I hit 71 and I know there’s more. These are real large companies. There’s the new term. It’s not unicorn. Now it’s a centaur, the idea that, you know, sent its play on words, sort of a hundred million in annual recurring revenue. And you have to remember how far this ecosystem has come.

When I started writing about this stuff, 13 years ago, Nortel was dead. BlackBerry was on the way down and the companies were small. They were undercapitalized. They were being picked off by foreign acquisitors. Tech was like 1. 6 percent of the index. And what I found with the story, which was very refreshing is there’s a ton of these companies.

They’re doing really well. They’ve got optionality. If even a fraction of that 71 that I did found goes public, we’re going to see a transformative effect on the public markets. We’re doing pretty well. It’s [00:11:00] hard to be next to the world’s largest economy. And, you know, if you compare us not to the United States, but to Britain or France or Germany or Norway or big successful economies, I think you’d find we’re doing pretty well, even Israel, which of course is a tech powerhouse.

And sometimes I think, well, we need to be a little bit patient and a little less cranky, and to stand back and realize and celebrate what we do have. And that was the point of the article. Fortunately, it’s been very well received and well read. And I hope it helps to change the narrative a little bit and maybe give people pause next time they say, Oh, to hell with Canada.

I’m going to move to the States where I can do what I want and create unlimited wealth for myself and, and just be happy. We need to be more of an Ernie. Yes.

John Stackhouse: So interesting and fair comments about the liberal record polls suggest that we will see a Polly of government in 2025 and probably one with a strong mandate, Sean, what’s your read of the conservative party’s view of technology and what they have to say.[00:12:00]

Sean Silcoff: Well, you know, of course they’ve been sticking closely to their talking points, which seems to have worked well for them, you know, axe the tax, build the homes, their slogans. They haven’t really said much about tech, except they seem to be very pro unleashing the competitiveness of entrepreneurs and getting out of the way and that sort of thing.

I don’t think we’ve yet seen what their platform is, but let’s not forget it was the conservatives who gave us two major policies that really set the stage for the comeback of the tech scene. One of them was section 116 change to the tax code that made it a lot easier for foreign venture capitalists to invest in Canada.

And that really unleashed a lot of investment here. And then, you know, we talk about the Vicky program, the venture capital catalyst initiative. That was actually a conservative program, a different name, venture capital action plan. So. Conservatives have authored some successful programs that have helped the innovation landscape and, you know, Poilievre was part of that government.

I know that [00:13:00] he’s got quite a few senior tech leaders in the country speaking to him on a regular basis. So, I know he’s hearing their concerns. It would be nice. If this was a pro entrepreneur, pro business building, pro prosperity election, and if all the parties had robust programs to bring into it, conservatives, liberals, NDP, whoever, I have no doubt there’s going to be something in the Poilievre platform about this.

But he’s kept that fairly close to the vest so far. So it’d be nice to see whatever change is coming happen as soon as possible.

Sonia Sennik: Sean, I’m curious, you, of course, wrote your incredible book about RIM at their peak, losing the signal, and what they missed when they were at that top of the mountain. Sitting here in December 2024, What might some of the big tech companies today be missing?

Sean Silcoff: Oh, that’s a great question. I like this concept [00:14:00] of the hidden defect.

You’ve heard the term core competence, right? It’s, it’s sort of a thousand types of books written about this subject core. The what’s your core competence. And I like the, uh, the question, what’s your core incompetence? You know, what’s the hidden defect inside your company? What’s the thing you can’t even see that if it suddenly shows up on the horizon could, uh, upend you completely.

Okay. How are you constantly looking to tear yourself apart and put yourself back together? Jeff Bezos did this in 2003 for the first time, I think in 2003, the revenues growth dropped below 30%. And he said, Oh my God, we like, how do we find the digital versions of everything we sell and how do we get into that business?

And the amazing thing about that is Amazon. It wasn’t even a 10 year old company. It was probably one of the most innovative companies in the world. And this small group he put together to try and figure out how to go after digital markets. They couldn’t get anyone in the rest of the company to join that group.

Think about that. Like already people were entrenched in their ways in a nine year old [00:15:00] innovative company like Amazon. Well, we’re selling books, you know, we’re selling videos, we’re selling DVDs. This is the business that we’re in. And so even the most innovative companies, this kind of incumbency, this sort of comfort can settle in.

And the only way to overcome that is to just make everyone uncomfortable all the time. It probably isn’t going to get you the best employee engagement scores necessarily, but I mean, this is what success is built off, right?

John Stackhouse: 2024 was a very big year for AI and even greater expectations for AI in 25. How confident are you that the AI rocket ship is going to continue to soar through the year ahead?

Sean Silcoff: Well, adoption of AI is continuing. KPMG I think just came out with a survey that showed the number of Canadians using generative AI in their jobs is, is nearly 50%. That’s more than double a year earlier. A lot of companies are testing it out. They’re going from pilots to putting [00:16:00] into production. The technology is getting better and better.

I think there’s still some reticence on the part of companies, consumer facing companies to. Letter rip with the chatbots, you know, nobody wants a LLM fueled, uh, chatbot to, to say something that’s just untrue or weird to customers. And I think there’s questions about whether this big promise of AI is actually going to deliver real productivity gains.

I mean, so far the people using AI in their jobs say, well, it’s creating more work, but it’s not necessarily cutting my workload in half. I think we need to see a real strides made in, in the LLMs. Like this whole hallucination problem. I don’t, I don’t know how you get around that. I mean, Sonny, maybe you have some better ideas, but I think there’s been a big bill of goods that’s been sold.

I think also AI has to solve this enormous power usage problem. I don’t know if they make processors more effective or suddenly we bring nuclear power online and that’s not going to be suddenly either. I see some real constraints to the growth. For [00:17:00] men. The moment you start to see that maybe it’s not an infinite horizon, there’s probably going to be a giant pullback and a huge sell off in some of these stocks.

I don’t know what it means for Nvidia, but maybe we’re going to have a little bit of a hangover, an AI hangover in 2025. What do you think?

Sonia Sennik: So I’d offer that I think we’re only going to see more of it, the move from large language models to small language models, where you have the ability to control the inputs and effectively create more trust in the content that’s in those smaller fit for purpose models.

So I think we’re going to see a big increase in that. Also in 2025, a lot of people will be talking about agentic AI, this idea of orchestrating tasks. So right now, you know, let’s say John wants to go implement a model. He’ll pick model one for one task, pick model two for another task, pick model three for another task and so on.

This idea of orchestration and the coordination of tasks. which model to use when and for what purpose. [00:18:00] That’s going to be an evolution we’re going to see in 2025 where I think it’s going to become even more profoundly powerful. And your point about people feeling like there’s changes on the margins, that’s likely very true for existing processes.

I think businesses are going to start thinking, how do we transform the way we function, that now in a world where AI is available to us, we would design our processes completely differently. So being able to clear the deck and have blue sky thinking with this new impactful tool available to us, what would we do differently?

So, the adoption rate is something we’d love to see increase. I mean, CDL has something called our Putting AI to Work program, where we work with enterprises on their journey to adopt AI. The purpose of the program is to build the muscle within the enterprise of how to identify great use cases, and how then to apply craftsmanship and thoughtfulness to where and how you use these tools, because it very much is a [00:19:00] fit for purpose environment.

A lot of times we can fall into the conversation of, well, we can sprinkle AI on that, or just add AI to this, as in just add water, the Betty Crocker version. And I think we’re going to see a lot more conversation around agentic AI, as well as enterprises being very thoughtful about specific use cases that have process changes within their organization and enable those process changes.

Sean Silcoff: I agree with all of that. I think. Where AI is now is kind of like where the internet was in ’97, ’98, you know, amazing new technology, human imagination probably had not caught up to where the technology could take us or how we could use it. Web pages were very static. You couldn’t really do much e commerce.

There wasn’t much in the way of embedded video, but you knew that there was immense potential here. And then, you know, it probably took five to 10 years, maybe even more for things to fully catch up. So there’s no question, you know, the technology is going to get better. There are amazing things you can do with [00:20:00] it, but I think.

As long as there’s this mismatch between all the money that’s going into AI and the output on the other side that matches it, if you can’t see the return from all this investments in AI, I think that’s the hiccups I talk about. And certainly, I mean, the dot com bust was terrible. A lot of value was destroyed, but just look at the internet economy now.

I mean, you don’t call it the internet, it’s the economy, like the entire world, pretty much a big portion of the world runs through the internet. That was the dream, that was the hope in 98 when people were really streaming onto the internet for the first time in large numbers. And, and I have a feeling that we’re going to see something very similar to that in AI.

Sonia Sennik: Exactly. I think the term AI enabled will become obsolete.

John Stackhouse: So a couple of other crystal ball questions. One is crypto. Is ’25 going to be the year of crypto? [00:21:00]

Sean Silcoff: You know, I have such a hard time with crypto. It’s like, it’s, I still see it as a solution looking for a problem.

John Stackhouse: But we’re now going to see a U. S. government administration that is. Hyper enthusiastic about crypto.

Maybe that doesn’t do anything for that fundamental challenge of it possibly being a solution looking for a problem, but that’s going to focus a lot of resources and perhaps even regulatory space for more innovation with crypto.

Sean Silcoff: Well, you know, if, if they can take all the, uh, the complications out of Ethereum network, for example, so that you don’t have to have one entity in one country, another entity in another country, you know, People not allowed to buy and sell the stuff in, in certain countries that opens up a whole world of possibility.

I mean, I think being able to build business processes onto the blockchain is interesting given how much the price of the thing goes up and down. It’s still the plaything of speculators and. You’re right. I don’t think we’ve ever seen an [00:22:00] administration that seems to be as dedicated to making the strides towards bringing legitimacy and modernization to this interesting emerging area of technology.

Ask me in a year. I really don’t know what to expect. I mean, if it just makes it easier to trade Bitcoin and that’s it, well. It’s just going to make things a little crazier, but you know, there’s a lot of potential in these technologies and it would be nice to see more dedication to making it easier to use, to experiment with and, and to build business processes onto these blockchains.

It’s not much of an answer, but I think that was Sean saying best wishes and warmest regards to crypto.

Sonia Sennik: Thank you.

John Stackhouse: I’m curious what we all think are going to be the most interesting companies and trends to watch in 2025. Sonia, maybe you can kick it off.

Sonia Sennik: Yeah, something at the core of what we’re experiencing right now is trust.

I think what you can trust, how do we establish verification and trust in this very dynamic and ever changing [00:23:00] world? We’re going to have more conversations about the concept of trust, whether it’s the information that you’re reading, whether or not AI can manipulate an article that I read differently than the way John reads it.

Who you’re interacting with on the other side of a digital transaction or communication. I see a big conversation and lots of technological advancements around trust. And then, of course, that leads into dual use technologies. So the concept of dual use, what does that mean? What does that mean in a world where almost anything can be considered dual use?

I see 2025 being a year where we’re really thinking about those questions and where innovations are needed to evolve us into this world of an increased space of trust.

John Stackhouse: Sean, what, uh, what’s top of mind for you looking at the year ahead?

Sean Silcoff: Well, I’ll tell you the thing I would like to see, and I don’t think we will see it sadly, a huge focus on trying to protect kids from being sucked even further into their smartphones and toxic social media sites.

Kind [00:24:00] of an all hands on deck approach to a banning smartphone use in school, keeping kids off social media. I think there’s some hope there. I just wish this was a top of mind focus because as a mental health crisis everywhere, frankly, and I think social media excessive use of smartphones is probably at the heart of it.

And I think it’s one of our biggest crises right now. Financially, I think we’re going to, we’ve seen a lot of secondaries this year, which is the secondary has kind of replaced the IPO and the big M and a transaction. I think we’re going to see a lot of that because until the markets roar back, I mean, this year, Clio did a $900 million secondary that’s bigger than almost every tech IPO ever in Canada.

I think we’re going to see some more big stuff like that. And I think that’s kind of holding the line until the markets open up more for that kind of financing.

John Stackhouse: So you’re not seeing next year being a year for IPOs. Not yet.

Sean Silcoff: I think we’re heading toward them maybe toward the [00:25:00] back half of 2025. I mean, the economy is doing its work.

It’s slowed down, unfortunately, but that has meant that inflation has come down. Interest rates are coming down. This is the moment when things start to kind of turn up. It may not feel like that for a lot of Canadians, for a lot of. A lot of people in the global economy, but this is the moment when you start to see a more optimistic horizon.

John Stackhouse: We’ve talked mostly about software. One of the things I’m thinking about for the year ahead is hardware and particularly military technology. We’re going to see a lot more money going into defense, both in the United States, but also here in Canada and Europe. You hear a lot about NATO commitments and that’s one important part of it.

But a lot of that spending it’s yes, of course, for warships and icebreakers and maybe submarines, but a lot of it is going to go for technology. We’re seeing that with the dronification of our border and all that will go with that, which is going to be fascinating to watch a lot of opportunity there for innovators, for entrepreneurs.

Big customers [00:26:00] there in defense departments, but also a lot of concerns for society to think through in terms of surveillance, in terms of the possible dual use of these technologies and particularly civilian applications. We’ll see. Concerning times, great opportunities come with that, but something we all need to remain alert to.

Sean Silcoff: Right. We’ve all been worried about, , AI, , Skynet, Terminator stuff, but I think the new tech boogeyman is going to be the drone, the armed drone. We’re already seeing stories about it. It’s kind of freaky, especially if these things can fly under radar and do a lot of damage. It raises a lot of interesting and troubling questions.

John Stackhouse: I think warfare has always been a catalyst of technology and I’m not defending war, but it’s, I think it’s a fair observation and we’re starting to see some extraordinary tech advancements in both the Ukraine war and what’s going on. In the Middle East and over the next few years, we’ll probably see more of that to come.

Sean, it’s been great to [00:27:00] have you on the podcast.

Sonia Sennik: Thanks, Sean.

Sean Silcoff: Thank you for the invitation. Really enjoyed this.

Sonia Sennik: Thanks so much for joining us today. And special thank you to Sean for sharing his thoughts and insights on the tech landscape in Canada.

John Stackhouse: If you’re interested in how disruptive technology, and especially AI, will continue to shape our world from the opportunities to the challenges, stay tuned for more episodes in 2025.

Sonia Sennik: As always, you can find us on Spotify, Apple Podcasts, or wherever you listen. And if you liked what you heard, be sure to subscribe, leave a review, and tell us what topics you want us to explore next.

John Stackhouse: This has been Disruptors, an RBC podcast. I’m John Stackhouse.

Sonia Sennik: And I’m Sonia Sennik.

John Stackhouse: Thanks for listening.

Talk to you soon.