Canada's research policy over the past three decades has steered national science toward industrial innovation. Yet, the outcomes of this policy orientation are debatable. Macro-level indicators continue to show weak performance in firm innovation, and there is also evidence that this policy stance has had material effects on science at the meso and micro levels. If so much public investment has gone into harnessing university-industry collaborations for a substantial period of time, why has Canada not seen an uptick in innovative activity? To address this puzzle, we turned our gaze to the policy machinery that promotes academic-industrial collaboration. We carried out case studies of two long-standing federal programs supporting research and development activities between universities and industry. Both programs are administered by the Natural Sciences and Engineering Research Council of Canada (NSERC), Canada's largest funder of natural sciences and engineering research. Drawing from multiple sources of data, we find that underneath the apparently successful implementation of these programs lies a misalignment between micro- and meso-level incentives for collaboration, and macro-level policy goals related to technological innovation and economic renewal. Our article makes two main contributions. First, it calls into question the escalating federal investments in university-industry partnership programs, as long as their ability to meet operational milestones remains the main source of evaluation. Second, it demonstrates the relevance and need for the literature to go beyond a focus on narrow technical questions at the micro level, and address broader questions about the purpose, goals, and beneficiaries of university-industry collaboration policy.