TEL AVIV — Last week’s trip to Israel by Ontario Premier Dalton McGuinty and a delegation of MPPs and Ontario life sciences sector representatives – the premier’s first visit to the Holy Land – left many asking why international co-operation with Israel has become such a priority for Ontario.

The premier offered some answers.

“Israel punches well above its weight in the world economy,” McGuinty said while touring the country last week. “Israel produces more scientific papers per capita in the world, has the highest number of PhDs per capita in the world, the highest number of physicians per capita, and is first in the world for R&D investment as a percentage of GDP. Now that is one solid record of achievement.”

Canadian-born Alan Feld, managing partner at Vintage Investment Partners in Herzliya Pituach, who spoke at an Ontario-Israel business session at the David Intercontinental Hotel on the Israeli venture capital market, added a few more reasons.

According to Feld, 43 of the 50 largest high tech companies in the world have R&D centres in Israel, and life sciences take the greatest percentage of venture capital funds. In 2009, 24 per cent of Israeli venture capital investment went to the sector, along with 34 per cent of non-domestic venture capital investment. Israel is also the No. 1 one producer of medical device patents in the world.

The Israeli government has also put in place several incentives for international co-operation in the life sciences field, including a capital-matching program for later-stage firms, and significant tax incentives for foreign partners under the Law of Encouragement of Capital Investment.

McGuinty added one more reason: Israel’s expertise in commercialization. This is a major area of priority for the province, whose Ministry of Research and Innovation recently launched a $161-million life sciences commercialization strategy.

“As Martin Luther King once said, Israel is one of the great outposts of democracy in the world and a marvelous example of what can be done,” McGuinty said. “One of the ways that Israel acts upon those values is through a commitment to curing disease, and building a stronger economy at the same time.

“In Israel and in Ontario, we both understand that investing in scientific research is not enough. We also have to support the evolution of that new knowledge into new products, new services, new jobs and new economic growth,” he said, adding: “Here in Israel, the Technion and the Weizmann Institute are places known both for breakthroughs in science and for their enlightened approach to discovery, innovation and commercialization.”

On the other hand, Ontario also has a lot to offer Israel. In 2004, 2006 and 2008, Ontario ranked as the lowest-cost environment for life science companies of all G8 countries. According to Sandra Pupatello, Ontario’s minister of economic development and trade, the province’s latest research and development tax credits make spending $100 on life sciences R&D in Ontario more like spending $40.

At the same time, Export Development Canada (EDC) makes significant investments in Israeli companies that find Canadian partners.

Ontario has North America’s third-largest life sciences sector, generating more than $15 billion in revenue every year. The province’s scientific breakthroughs have included the pacemaker; the artificial cornea; the discovery of genes for Alzheimer’s, cystic fibrosis and breast cancer, and the very first discovery of stem cells.

Ontario is home to 900 life sciences companies; 25 research and academic hospitals employing 10,000 scientists and researchers; six medical schools, and 40 institutions of higher learning that annually produce some 9,300 graduates in biotech, biochemistry, biology, chemical engineering, chemistry and other related fields.

Ontario is also home to the Medical and Related Sciences (MARS) high-tech incubator in Toronto, which has developed 65 companies, including 21 in the life sciences. Toronto also hosts the data centre for the International Cancer Genome Consortium.

“Israeli companies tend to be focused on the U.S. market, but there is a lot of opportunity to create a deeper connection between Ontario and Israel-based companies and universities,” said Feld, who immigrated to Israel from Toronto.

Besides the practical connections between their respective life science industries, McGuinty sees other significant connections between Israel and Ontario.  

“Life sciences are a priority that we share in Ontario, but it is not the only similarity,” he said. “I could show you a map of Canada and point to the Atlantic region, to the east, where they have offshore oil. I could point to western Canada, where they too are a major producer of oil. I could point to the arctic in the north, where there is oil under the ice. Ontario sits in the middle of all these oil-producing regions. But we have none. Does that sound familiar? When [former Israeli prime minister] Golda Meir said that Moses took [the Jews] 40 years in the desert and stopped in the one spot in the Middle East that has no oil, we in Ontario understand exactly how that feels.

“In both cases, it has led us to the same inescapable conclusion. We need to invest in our people. We need to enhance their knowledge, develop their skills and nurture their creativity,” continues McGuinty, noting that this conclusion has produced in Israel the highest rate of university degrees per capita in the world, and in Ontario one of the highest rates of post-secondary education and the most highly educated workforce in North America.

According to McGuinty, the analogous Israeli-Ontarian pursuit of the life sciences is not only reflective of a mutual desire to generate revenues, it’s also indicative of a shared moral purpose.

“This adventure in life sciences has a moral purpose. It’s not just a matter of generating wealth or creating jobs. It’s a matter of curing people, and surely that is a sweet spot for us as a people,” he said. “Each of the delegates who have joined us share compassion for improving lives.

“Israel and Ontario do well in the life sciences on their own,” McGuinty said. “But we could do even better working together.

“Together we could create even more good jobs for our people and help cure even more illness around the world. I am sure that each of us, Israel and Ontario, can continue to do well on our own. But I also know for sure that we can do even better together. Ontario and Israel. Israel and Ontario. Smart together. Strong together. Let’s come together. Let’s lift each other up. Together let’s reach higher than we ever have before.”