Life Sciences Ontario Releases New Report Calling for Urgent Action to Bridge Critical Funding Gap Threatening Ontario's Innovation Leadership

Life Sciences Ontario (LSO), in partnership with Shift Health, today released a comprehensive report highlighting the urgent need for targeted intervention to address the critical seed-stage funding gap that threatens Ontario's position as a global life sciences leader.

The report, "Catalyzing Ontario's Life Sciences Economy," reveals that while Ontario's life sciences sector is a cornerstone of its innovation economy, contributing over $58 billion to GDP and employing over 90,000 highly skilled workers, other provinces and jurisdictions are outpacing Ontario. Without action, Ontario risks losing its competitive edge, as early-stage companies, their intellectual property, and their talent migrate to more supportive markets in the U.S. and beyond.

The current geopolitical and economic environment presents both unprecedented challenges and opportunities for Ontario's life sciences sector. Global supply chain disruptions, shifting international partnerships, and increased focus on domestic innovation capacity have created a need for Canadian sovereignty, especially in critical technologies and therapeutics. Strengthening Ontario's life sciences ecosystem is not just an economic opportunity, but a strategic necessity.

"Ontario has built an incredible foundation in life sciences research and innovation, but we're at a critical crossroads," said Jason Field, President and CEO of Life Sciences Ontario. "Supporting early-stage life sciences companies drives a ripple effect, benefiting universities, research institutions, health systems, and supply chains across Ontario."

Dr. Field emphasized the importance of building on existing government commitments: "We recognize and applaud the significant investments the Ontario government has already made in our sector," referring to the Ontario government's recent $146 million commitment to Phase 2 of the life sciences strategy. "However, our research shows that targeted de-risking mechanisms for seed-stage companies are critical to ensuring these investments translate into lasting economic impact and job creation."

The report highlights that the "funding desert" challenge is particularly acute for life sciences startups given higher risks in product development, significant R&D costs, stringent regulatory requirements and a comparatively longer path to market. The early stages of company development are too risky for private capital alone, requiring government intervention through bespoke solutions tailored to Ontario's unique needs.

"Ontario stands at a unique and urgent moment to cement its global life sciences leadership," said Ryan Wiley, President of Shift Health. "We have the infrastructure, talent, and innovation capacity – what we need now is the strategic investment to bridge the funding gap and ensure Ontario's life sciences companies can scale and thrive on the global stage."

The report outlines specific solutions including direct seed fund investments, modernized tax incentives for angel investors, and policy reforms designed specifically for life sciences startups' unique requirements.

As Ontario aims to reach 85,000 high-value life sciences jobs by 2030 – a 25% increase from 2020 –now is the time to act decisively, bridging the funding gap and unlocking the full potential of our life sciences ecosystem.

To access the full report and detailed recommendations, visit https://lifesciencesontario.ca/advocacy/catalyzing-ontarios-life-sciences-economy-the-case-for-improved-access-to-risk-capital-for-ontario-smes/

About Life Sciences Ontario

Life Sciences Ontario (LSO) is a member-funded, not-for-profit organization with a legacy of more than 35 years advancing the success of Ontario’s life sciences sector. LSO collaborates with government, academia, industry, and other life sciences organizations in Ontario and across Canada to promote and encourage commercial success throughout the sector. LSO is an effective conduit for delivering policy options to governments and is dedicated to promoting Ontario’s life sciences sector internationally. For more information, please visit our website.

About Shift Health

Shift Health is a leading strategy and advisory consultancy for the health research and innovation ecosystem. Working with governments, academia, industry, not-for-profits, healthcare providers and patient partners across the globe, Shift Health brings more than a quarter century of experience building connections and helping clients create the future of healthcare. Shift Health is distinguished by its people. Scientists by training, Shift Health’s team embodies a science mindset, translating rigorous evidence into sharp insights and customized solutions that inform decision-making and drive action. For more information, please visit our website.

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