Government Operations Committee on Dec. 10th, 2013

[Pablo Sobrino]

The pilot project has undergone a formative evaluation. That is an initial evaluation. The results will be posted on the website of the Department of Public Works and Government Services over the next few weeks. The evaluation found that the program supported the government's mandates and priorities, and that it seemed to be effective.

Another evaluation will need to be conducted in two years' time to confirm the program's results. We are currently following up with the companies that received contracts to determine what the results of our purchases are—for instance, whether the companies' capabilities have been increased.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

As for the evaluation of innovators' proposals, the National Research Council of Canada has an evaluation team, and there is also an innovation selection committee. It is said that the members of that team come from the private sector.

Are they all from the private sector? Who appoints them? Are there any women among the team members?

[Pablo Sobrino]

We appoint the members of the committee, which is made up of three people from the department—the government—and eight people from the private sector. We also have some additional members from the university world. Those are entrepreneurs-in-residence. They are professors from the University of Waterloo, the University of Ottawa, the University of Manitoba and the École de technologie supérieure. So the committee has representatives from a number of universities.

In the past, all the committee members were from the private sector. Now, the committee is made up of professors, entrepreneurs and government representatives.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you.

I assume that the list is public and can be consulted.

Mr. Komarnicki, you have five minutes.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Thank you. I have a couple of questions.

Number one, this program is a point of entry of sorts into the federal government and a calling card for potential contracts with third parties. Have you done any analysis in terms of how successful the program has been to having access to third parties by individual people who have gone through the program, either by number of people they've been able to employ or by income they have generated after they're out of the program, I guess, because the success would depend on that, and that's sort of the essence of the program?

[Pablo Sobrino]

That's exactly it. The evidence is starting to show that we have to go through the evaluation process, but I will say anecdotally that at this point there are a number of companies that have gone from an innovation, having successfully tested it with us, to sales and exports abroad, which is the biggest driver for growth, and those companies are starting to be successful.

Part of our evaluation is to go out to those companies after one year and, I believe, three years, to see what has happened.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

So you haven't done that analysis?

[Pablo Sobrino]

We are not far enough into the program to do it.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

As for numbers of people, do you have any sense at all?

[Pablo Sobrino]

We're seeing growth. We're seeing that these companies are now hiring people and manufacturing and scaling up their products.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Maybe following up on Mr. Byrne's question and probably from a different angle, the essence of your program is that you have small and medium-sized businesses with a product they can't yet take to third parties because they haven't gone through the testing and viability, if you want to call it that. Is it then difficult for small and medium-sized businesses to have the facility and perhaps the cashflow and the capital to do what government already can do through various departments? Is that the essence of your program?

[Pablo Sobrino]

The essence or most important thing in the program is fundamentally to get the first sale, because the thing that helps you most in marketing is that you have actually sold to your government. For many entrepreneurs, when they go abroad, the very first question that a government or a large company will ask them is whether their own government has ever bought any of these.

If you can say yes, they've bought one, then you have a foot in the door. So that's one of the first things we do.

The second thing we do is to make sure their product is actually viable. That is the piece they need to get venture capital and other forms of investment to actually be able to scale up their products.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

The point is that they don't have to incur the costs of going through that process, because you provide it to them if they're successful?

[Pablo Sobrino]

That's right. But one of the gaps—and this is the gap we're trying to fill—is that first buy by the government. That is the most difficult thing to do, and that's what this is for, to facilitate that first buy. It's—

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Go ahead.

[Pablo Sobrino]

It's called a reference buy, so you're able to refer to the fact that the government has bought this product and around the world that's what's expected first.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

When I was listening to you, you were saying that people have existing product or existing inventions that they don't know what to do with yet, or they hope they can find something to do with them, and these are the types of people who would come into your program through a proposal and who would use the benefits of your facility. Does the program actually get people to invent with a view to targeting the program to products that haven't yet existed?

[Pablo Sobrino]

No, the program is really about taking your invention and seeing whether you're ready to do it and whether the government can test it for you.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

So you haven't seen people saying now that you have the program, let's—

[Pablo Sobrino]

—do some inventions—

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

—so we can use the facility and the resources you have to augment our business, because it doesn't cost us to do that?

[Pablo Sobrino]

I suspect that is probably happening. As the program gets better known, people who have ideas may pursue them in order to participate in the program, but you do have to take your product and do quite a bit of work to get it to a rating of level seven. That means you have to invest; you have to invent; your proof of concept has to be done; you actually have to have a product ready to go, etc.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

I have one quick question and then I'll finish.

[The Chair, NDP, Pierre-Luc Dusseault]

Please be brief.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

What is the difference in dollars between going through the process on my own and going through the facility for your program?