Finance Committee on Oct. 21st, 2010

[Mike Wallace, Conservative, Burlington, ON]

Thank you very much. I'm going to share a few minutes with Mr. Hiebert.

Where to start? First of all, I just want to thank the presenters from the arts organization. It was a very reasonable approach today, I would say, and sometimes we don't always get that, and I'm going to get to that in a little bit.

The first question I have, though, is for my friends from the Canadian Clean Technology Coalition. Can you confirm for me that organizations that are in the thermosolar business would be part of your organization?

[Céline Bak]

They would be.

[Mike Wallace, Conservative, Burlington, ON]

When does your business industry become self-sustaining so that you don't need government funding?

[Céline Bak]

Thank you for the question.

The Canadian clean technology industry is made up of companies that today have an economic proposition. LED Roadway Lighting is a very good example of it. Clean technology includes companies that both increase the efficiency in the use of energy and give—

[Mike Wallace, Conservative, Burlington, ON]

That was not my question, ma'am.

When does your industry become self-sustainable, so that you're making money and don't need government money?

[Céline Bak]

Many of the companies in the industry are already.

[Mike Wallace, Conservative, Burlington, ON]

Okay. What are you asking for, then, today?

[Céline Bak]

We're asking you to take advantage of the technologies that actually enable government to be cheaper, better, and faster.

[Mike Wallace, Conservative, Burlington, ON]

I'll turn to your colleague from his own company, since he's put himself out here today.

If it's so efficient and effective, why isn't it an economic benefit for Canadian municipalities and provinces to buy your technology?

[Curtis Cartmill]

For us in particular, it's a very new technology that people need to try out, first of all, to see for themselves that it can save energy and lower maintenance costs and that there's definitely a pay-back cycle.

We developed a high-reliability product—I actually have it running at the side of the room, if you'd permit me to show it to you for a second—and we use high-quality components, for a 20-year design life.

[Mike Wallace, Conservative, Burlington, ON]

Other countries around the world are recognizing that; that is what you're saying—you're selling it to other countries. What is the difference between that customer and the customer domestically?

[Curtis Cartmill]

I would say for us in particular, we're such a new industry that people are still trying out the technology.

[Mike Wallace, Conservative, Burlington, ON]

The other point you made—

[Céline Bak]

May I respond?

[Mike Wallace, Conservative, Burlington, ON]

I have only a little time. I'm sorry, ma'am.

The other point you made was that other organizations are being bought by foreign investors. What I'm looking for is what we could do to make the Canadian investment climate better so that Canadians buy into Canadian technology instead of using tax dollars. Do you have any suggestions in that area?

[Céline Bak]

We know that Canadians are not necessarily early adopters of technology. I think we need to show leadership in the adoption of technology that enables government and other levels of government to be cheaper, better, and faster.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

I have one more question, and then....

How much time do I have left?

[The Chair, Conservative, James Rajotte]

You have three and a half minutes.

[Mike Wallace, Conservative, Burlington, ON]

Okay, it's 30 seconds, then.

Mr. Turk, we've seen each other for numerous years of your coming back here. Thank you for coming back. You're representing university teachers, isn't that correct?

Let me ask you: is comparing us with the United States—which is in really bad economic shape and they have no sense of where they're going on their deficit or their debt...? Is it wise to compare our spending with what they're doing south of the border, when they're in such financial trouble?

[James L. Turk]

Actually, it is. They recognize that to get out of the economic trouble they're in, they have to invest heavily in research, and they have targeted academic research as a key to their future. So I think it's actually a very apt comparison.

As well—we see this with young graduate students who complete their PhDs and are looking for places—the top students can find substantially more research support in the United States and often take positions in American universities, and we lose them precisely because we haven't funded our granting councils on a proportionate basis.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

[The Chair, Conservative, James Rajotte]

You have about two minutes.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

All right.

To continue the conversation with the Canadian Clean Technology Coalition, Ms. Bak, you stated in your presentation that Canadian companies are being sold before they reach their potential. I'm trying to understand this from the investor's perspective. What's the problem? That's a typical exit strategy for many companies that they're delighted to experience, and the shareholders even more so.

[Céline Bak]

And it should occur, and thank you for the question.

Investors look for vibrant domestic markets. Canadian companies typically have between 10% and 30% of the level of investment that globally competitive companies have in the U.S. and elsewhere.

I'll give you an example. A Canadian smart grid company has just raised $10 million and is competing against companies that have raised $100 million. We are really good at what we do, but it's hard to be ten times better.

If there is a more vibrant domestic market, investors will be more likely to invest in our companies. The level of investment that companies have is directly related to the growth they experience, and growth is directly related to the time at which they are bought. There's a time in which companies should be bought, and it's not when they reach $10 million, which is what's happening today.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

To restate an earlier question from my colleague, if the savings of using the technology are so great at LED and some of the other companies, why are the incentives needed?