Once again, Canada seems to see its future as a branch-plant economy. This time it is in the digital world, where we are turning to Big Tech from abroad rather than working to build a Canadian advantage to exploit our talent and research.

The latest example is the federal government gift of $40 million to Nokia to help establish a 5G research lab in Montreal. It will join a growing list of foreign companies taking advantage of Canada’s talent and our university-based research to develop intellectual property here for their corporate parents abroad.

A much more significant example of this is the push to appoint Sidewalk Labs, a New York subsidiary of Alphabet/Google, to play a leading role in the development of more than 800 acres on the Toronto Waterfront as a smart, sustainable and liveable city within a city – rather than develop a Canadian-led project that would build the skills, capabilities and technologies of Canadian companies.

This matters because what’s at stake is the role Canada will play in one of the great growth industries of the 21st century – smart and sustainable urbanization. It is an opportunity that matters because Canada needs to develop new capabilities and industries for the global marketplace if it is to create middle-class jobs and sustain its standard of living.

A Master Innovation and Development Plan, if signed with Waterfront Toronto later this year, would effectively give Sidewalk Labs a tight grip over building a smart and sustainable city district on Toronto’s waterfront. Sidewalk Toronto would be an operating subsidiary. But the major decisions and core knowledge and expertise – the corporate brain – would reside in its New York head office where it would be used to pursue contracts around the world.

The convergence of many new technologies – for example, 5G and artificial intelligence, the Internet of Things, autonomous vehicles, energy-efficient buildings and carbon-free systems – will create huge opportunities to transform our cities, making them smart, sustainable, more affordable, healthier and more liveable. Developing the systems, technologies and engineering and design is also one of the world’s great economic opportunities.

The number of people residing in cities is expected to reach 6.3 billion by 2050, compared to 3.6 billion in 2010. How we design these cities to meet soaring needs for clean water and sanitation, mobility, affordable housing, efficient and low-carbon energy, and liveability represents one of the great challenges of this century. McKinsey’s Global Institute has estimated that its Emerging 440 cities around the world would need to double annual infrastructure investments from US$10 trillion to US$20 trillion by 2025. Digital technologies will play a key role.

But why does this project have to be managed by a U.S. company that will capture and own the learning experience, the accumulated knowledge and much of the intellectual property? Why can we not create a Canadian-led enterprise or consortium to capture the benefits for Canada?

Sidewalk Labs has already used major U.S. and British urban design, engineering, urban planning, architectural, traffic management, water and even healthcare firms in bidding for the Toronto project.

There was a Canadian alternative to Sidewalk Labs which was rejected by Waterfront Toronto. Led by Peter Gilgan, the owner of Mattamy Homes, and which included OMERS and Manulife Financial, its bid was quickly thrown together in the extraordinarily narrow window of six weeks that Waterfront Toronto gave would-be bidders.  Sidewalk Labs, however, had been working on its bid for months, in close consultation with Waterfront Toronto. So the initial choice of Sidewalk Labs was never really in doubt.

Potentially, there are many Canadian companies that could collectively build a Canadian advantage. They should be given the chance to show what they could do.

One example is the Smart Cities Sandbox, a consortium of companies seeking ways to create a Canadian advantage in urban development and smart technologies – it’s led by IBI Group, a Canadian urban engineering and design company that operates around the world and which helped the Indian city of Bhubaneswar win that country’s smart cities challenge. IBI has teamed up with construction giant Ellis-Don, property developer Slate Asset Management, Ontario Power Generation and Pelmorex Corp. to form its sandbox. Its technical partners are Microsoft and its Azure cloud system and the Ontario Centres of Excellence, which is helping identify start-ups that have smart city potential.

In the meantime, a team of Canadian companies, led by Mike Monteith of ThoughtWire, has established a non-profit called Innovative Cities and is working to establish a smart cities cluster to develop, test, commercialize and scale up smart cities’ innovation. Among the companies are Miovision, Mappedin, Sightline Innovations, ThinkOn, Urban Living Futures and Ember Advisory.  And BlackBerry is another Canadian company with smart city potential.

If the political will is there, it’s not too late to build a Canadian advantage by putting together a Canadian-led consortium that will help us develop future-oriented technologies and companies to meet a looming world need. Yes we can.

David Crane can be reached at crane@interlog.com.