A B.C.-based company could end up revolutionizing diabetes treatment and that is a reason why B.C. put up almost $24 million to keep it in B.C. rather than lose it to Denmark.

But this investment is also raising questions about government interference in the free market and regional equity. 

Minister of Jobs and Economic Development Brenda Bailey announced B.C.'s investment into Aspect Biosystems July 10, with the federal government putting up another $49 million into its research into implantable, cell-based therapies to replace or repair biological functions such as the release of insulin. Overall, Aspect's work has an estimated value of almost $200 million. 

"Aspect is essentially making (what) could be Insulin 2.0," Bailey said.

If Aspect's clinical trials succeed to the point of coming to market, their cell-based therapies would eliminate the need for insulin injections, she added.

"So it's a very attractive company, if they are successful, and we think they will (be). It has the opportunity to completely revolutionize how people living with diabetes manage their diabetes and many other diseases as well."

Novo Nordisk, maker of popular weight-losing drugs Ozempic and Wegovy, has heavily invested in Aspect as part of its portfolio of diabetes-treating pharmaceuticals, Bailey said.

"So it would be attractive for Novo Disk to say, 'we would like you to move to Denmark.' But we are very fortunate that the leadership of Aspect is very interested in staying at in British Columbia." 

Bailey added that Aspect emerged out of UBC.

"They are part of the ecosystem that we are developing here and they have chosen not to move to Denmark and negotiated the ability to stay in British Columbia," Bailey said. "But we do know that the investment our government made was an important part of that." 

Looming behind B.C.'s move is the larger question of whether it is appropriate to use public funds to support a private company rather than let market forces play out. 

Bailey said in a global economy, companies can always move to areas where the costs are lower and B.C. has had a history of losing its best discoveries, its best scientists to other places before realizing their potential.

"This is what we are fighting against and making an investment into a company ensures that it stays here and continues to grow here," she said. 

Noting that B.C.'s economy is similar to that of Ireland, Bailey added that that country has used its tax system to build one of the largest life-sciences and pharmaceutical sectors in the world.

"It's never really true that the market is just the market," she said. 

Other examples abound. They include the European Union's Green New Deal and the Inflation Reduction Act in the United States — policies backed by hundreds of billions to achieve certain economic outcomes.

Some economists and politicians have criticized these strategies because they do not think government should be in the business of picking 'winners' and 'losers', with the inherent risk of public funds being wasted and not available for other uses. Bailey does not see it that way.

"So the market to some degree would already know that we are growing companies here," she said. "I don't think we are picking winners or losers as much as we are putting our finger on the scale a little bit. It's not a reduction of market economics." 

She also said that both the provincial and federal government go through a great deal of due diligence to protect the investment of taxpayers.

"So there's a tremendous amount of work to make sure that we're properly spending taxpayers' dollars and that money is going to benefit us in British Columbia." 

The investment into Aspect as part of the provincial life-sciences sector is not the first of its kind. Last year, the provincial government announced $75 million toward the creation of a new campus by Abcellera, another Vancouver-based biotech company. But these investments raise not just questions about economic theory, but also the prospect of already prosperous parts of B.C. receiving additional boosts. 

Bailey said the life-science sector is also growing elsewhere, pointing to Greater Victoria as an emerging hub. She also pointed to Kelowna as an emerging centre in the tech sector.

"So it is not just a Vancouver story," she said. 

More broadly, investments of this sort stoke economic development for the broader benefit of the public purse, making resources available for investments elsewhere. 

"But it is also about that these technologies will help British Columbians' health," she said.