Industry Committee on Nov. 16th, 2011
Evidence of meeting #13 for Industry, Science and Technology in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was canarie.
A recording is available from Parliament.
On the agenda
MPs speaking
Also speaking
- Kirkland Morris Vice-President, Enterprise Strategy, Interac Association
- Jim Roche President and Chief Execuive Officer, CANARIE Inc.
- Diane Brisebois President and Chief Executive Officer, Retail Council of Canada
- Terry Campbell President and Chief Executive Officer, Canadian Bankers Association
- Harry Sharma Policy Analyst, CANARIE Inc.
- David Revell Senior Vice-President, Business Support and Strategic Initiatives, Canadian Imperial Bank of Commerce, Canadian Bankers Association
5:05 p.m.
President and Chief Execuive Officer, CANARIE Inc.
Every university and the vast majority of the colleges--but not every college--are members of the CANARIE network, yes. It's connected to the CANARIE network.
5:05 p.m.
Conservative
Peter Braid Kitchener—Waterloo, ON
I'm curious whether the CANARIE research-related Internet has spurred any innovation in the commercial Internet.
5:05 p.m.
President and Chief Execuive Officer, CANARIE Inc.
That's a great question. The answer is absolutely it has. When CANARIE was started in 1993 the commercial Internet was just getting started and CANARIE actually acted as a test bed for the development of new technologies that were ultimately deployed in the commercial Internet in a production network. Over the last 18 years CANARIE's network has become more of a production network in support of research and education. But what we've recently done is allocated a portion of our network for this kind of experimentation, to continue the evolution of next-generation technologies and the commercialization of those technologies in the commercial Internet.
5:05 p.m.
Conservative
Peter Braid Kitchener—Waterloo, ON
Thank you.
A question for the CBA: Mr. Campbell, in your presentation you talked about the importance of updating technology to ensure that transactions are safe and secure. Can you just bring us up to date on what the latest version of this technology is? How has that evolved in the last couple of years? How rapid is the evolution?
5:10 p.m.
President and Chief Executive Officer, Canadian Bankers Association
5:10 p.m.
David Revell Senior Vice-President, Business Support and Strategic Initiatives, Canadian Imperial Bank of Commerce, Canadian Bankers Association
Sure, I can cut in on that.
In terms of security, the current generation of technology is basically chip and PIN. That's a standard of security. And the question is how do we actually extend chip and PIN functionality through all the other channels? When we talk about mobile payments and the state of the art, we talk about NFC, near field communications, and being able to do payments off your phone, etc. In behind it is the same type of state-of-the-art security of chip and PIN.
5:10 p.m.
Conservative
Peter Braid Kitchener—Waterloo, ON
Could you bring us up to date, then, on what the current status or what the current state of the technology is? How would you describe it in terms of bit technology or security?
5:10 p.m.
President and Chief Executive Officer, Canadian Bankers Association
Maybe Dave could help me out here, but the main focus is what the banks have been building over time. And it's where we are now, and we want to extend that. It's called defence in depth. That's the strategy, and it's a layered approach on security. What it is, you have both the front end and the back end.
You can ramp up the front end, and they're getting progressively more sophisticated, based on the risk--that is, the assessment. You could have simple identification in a password or you could ramp that up. You could have machine tagging, for instance. If an online request came in and it's not from the machine that you normally use, that prompts a series of questions, questions about what you know or what you have. If they, in turn, then assess that there is risk beyond that, they might introduce things like tokens, a separate little piece of hardware that adds an additional multi-factor security. So there's a lot of front-end stuff.
The back-end stuff.... You've seen this yourself, and this gets progressively more sophisticated every day. If somehow a bad guy can actually penetrate that and try to commit a fraud, you have what they call heuristic systems that check your behaviour. If your behaviour is out of sync, they will send up a flag, geographical flags, transaction limits. These are all very dynamic and they're moving. The idea is to try to get that security throughout the system as well.
5:10 p.m.
Conservative
5:10 p.m.
Conservative
5:10 p.m.
Conservative
5:10 p.m.
Conservative
November 16th, 2011 / 5:10 p.m.
NDP
Hélène LeBlanc LaSalle—Émard, QC
Good afternoon. I want to thank all the witnesses for waiting for us. Your patience is appreciated. I also want to thank you for your presentations, which were quite informative.
Everything often comes back to the same problem: the apparent difficulty in adopting new technologies. Things have come a long way, with the advent of Interac technology, electronic payments and so forth. But the fact remains that small businesses appear to be having trouble adopting new technologies.
I would like to hear your opinion on that. What obstacles do small and medium-sized businesses face when adopting new technologies? Do the obstacles stem from cost, skilled labour or existing policies?
I would like to hear from Ms. Brisebois first, and then Mr. Roche.
5:10 p.m.
President and Chief Executive Officer, Retail Council of Canada
Thank you, Ms. LeBlanc.
Actually, you already mentioned the obstacles. Usually, the problem has to do with money, especially a lack thereof. The budgets that small and medium-sized businesses have at their disposal are limited, especially in retail. We are talking about a margin of 3% or less. In grocery stores, it is around 1%. So there is very little money in the bank, so to speak, to invest in new technologies that have a very high level of risk attached.
The second challenge is what is known as economies of scale. It costs businesses that are a lot smaller a lot more.
The third obstacle has to do with labour. It is hard to find people who want to work for a small business, especially in the area of technology. Most university graduates want to work for big international companies.
Those are the three biggest challenges that small merchants face today.
5:15 p.m.
President and Chief Execuive Officer, CANARIE Inc.
With regard to adoption of ICT technologies, information and communication technologies, in small and medium-sized companies, one of the big barriers is lack of sophistication in understanding the technologies themselves. Larger organizations will have dedicated departments with chief information officers who can help the organizations identify and adopt new technologies. Smaller organizations tend to employ more generalists, who don't have the sophistication in understanding the technology. Canada lags behind many other OECD countries, including the U.S., in the use of ICT technologies in our businesses.
That gap has been widening over the last few years. CANARIE has taken a step to try to help smaller companies understand newer technologies like cloud computing by allowing companies to use the CANARIE network and CANARIE facilities and to learn from CANARIE experts so that they can adopt these technologies more readily in their business.