Typically, if it is in collaboration with private sector (i.e. a company is providing the funding), said company will retain the intellectual property produced

Typically, if it is in collaboration with private sector (i.e. a company is providing the funding), said company will retain the intellectual property produced by the research. If it is government funds, university (itself a government organization) will have partial ownership of the intellectual property. So the government pays for research, the researcher does research. The researcher and the government (via university) own the fruits of the research together. It is also notable that in Canada (almost?) all large research universities are public institutions: University of Toronto, McGill, Queen's, University of British Columbia, University of Alberta, etc. I imagine the calculus would have been different if the university was itself a private corporation.