Industry Committee on May 8th, 2012

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Do you think that you might table some preliminaries to this committee?

[Gary Goodyear, Conservative, Cambridge, ON]

That's a little bit into the future. To answer your question, we're looking at internal...like the Science, Technology and Innovation Council, which has 18 of the smartest people in Canada. Plus others are working with us.

But I'd be more than happy to hear what you have to say, Ted. Thanks.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Minister, and Mr. Hsu.

Now on to the second round of five minutes.

Madam Gallant, for five minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

Through you, to the minister, first of all, I'd like to comment on the direction the government has taken in the area of science, technology, and innovation. I'm very supportive of this, as are many of the businesses in my riding that are in science, research, development, and manufacturing.

Most recently, we had an announcement about Tyne Engineering. It's an engineering company that takes hydrogen and has experimented, using the facilities at Chalk River Laboratories, to build a passive autocatalytic recombiner and actually get it to the manufacturing stage. So the scientists at Chalk River wanted to find a way to take hydrogen out of the atmosphere because they wanted to minimize the risks of explosions. The scientists worked on that, and a manufacturing business from the outside saw that they were doing this and has actually spun that business out into a new business. So we do have the holy grail of science to manufacturing and the creation of jobs occurring right up there.

Another example of how the different policies implemented are working is the situation we had a number of years ago when the NRU was shut down for repairs. As a consequence of that, the scientists had to develop the tools necessary from scratch, to even take a look at the inside of the reactor, let alone how to fix it. Because of the tools they developed, they've been able to sell those on a larger scale to other countries whose reactors are now going through the exact same thing. Again, we have another example there of how we've been able to facilitate science from the bench all the way to the manufacturing stage.

Another example is the tracking of nuclear materials. I'm very pleased to say that a team of scientists developed a way to track nuclear material around the world in real time. That team of scientists has been recognized internationally for that work, a very practical use of that development.

Another example is muon tomography. Muons are subatomic particles. They can literally provide the ability to see through steel and concrete—X-ray vision, if you will, but not X-ray as a substance. That's another example of where we're at a stage where we're looking for a company that can take this to the next phase and market it throughout the world. We're almost there. We do have a company we're looking at.

There are also non-medical isotopes. Before 9/11 we were known for providing 95% of the world's medical isotopes, but we are also capable of producing non-medical isotopes. That's quite a revenue generator for the laboratory site. I know that we are looking at funding science that can generate its own revenues as well.

With regard to materials analysis, we had our Nobel prize winner there, Bertram Brockhouse. He developed neutron spectroscopy. That has developed into a business onsite where they can look at materials, like the blades from airline turbines, in a non-invasive way, and they can see the molecular structure and where there might be a fault in the blade.

There's the non-proliferation aspect as well. Back when the SALT Treaty was being implemented, we had Russia and the United States taking down their warheads. They put the fuel, the radioactive part, into an inert form, brought it to Chalk River and we made the warheads into fuel. It was more valuable to Russia as a fuel as opposed to a weapon. In terms of non-proliferation, they're doing very well, as well as exploring and manufacturing new ways of generating electricity.

What I wanted to tell you is that the investment in the business innovation program is alive and well. If you'd like to speak to that, I'd like to hear what you have to say.

[Gary Goodyear, Conservative, Cambridge, ON]

I can tell, Cheryl, that you have the same passion about science and technology and its ability to improve the quality of life of people all around the world as I do.

On a very high level we are number one in the G-7 in terms of our expenditures on post-secondary education as a percentage of our GDP. Where we're nowhere close to being number is in business expenditures on research, and the development of that research. We've spoken to that. The federal government has clearly....

Am I out of time?

[The Chair, Conservative, David Sweet]

I'm sorry, the preamble was long on that one, so—

[Gary Goodyear, Conservative, Cambridge, ON]

There you go.

[Some hon. members]

Oh, oh!

[Gary Goodyear, Conservative, Cambridge, ON]

There was passion.

[The Chair, Conservative, David Sweet]

Yes, we saw that demonstrated, as one of the best examples yet.

Mr. Harris, you have five minutes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you, Mr. Chair.

Thank you, Minister.

After that lengthy preamble, and certainly some great information about Canada's nuclear industry, I would like to remind the government that the next time they shut down the reactors for safety reasons, they should not push them back into service too fast, because good things can happen, and safety has to come first.

Following Mr. Hsu's questions about metrics just very quickly, you mentioned that both science and technology and FedDev are developing metrics. Do you have a timetable for this, and when can we expect to see what methodology is being used?

[Gary Goodyear, Conservative, Cambridge, ON]

There's really no timetable. We continue to work; programs evolve on their own. As you well know, the panel's report from Mr. Tom Jenkins on research and development in Canada has given the government a number of opportunities to improve how we incent businesses to do more research and development. As those programs evolve, metrics—again, as specific as we can make them—will be developed.

That said, I still want to remind Mr. Harris, if I can, that Canada is recognized as already having some of the highest metrics. Job numbers are the big thing that everybody wants to hear about: how many jobs? As you've heard many times, we have created more jobs, have more people working now, than we had pre-recession. We have the strongest economic growth of some of the industrialized nations. This is all good news.

But we have had areas and opportunities in which we could measure other things besides jobs. Those are the desires of our organization to see whether our ability to diversify a community's economy has actually worked. There will be a few more years of data collection before we start to analyze that data with the metrics that we develop.

I would like to say, too, if I can just quickly, on the isotope issue, that Canada is investing very heavily in next-generation isotopes for medical diagnostics and treatment. Funding for that has been in every budget, Mr. Harris, that your party has voted against. The next time we bring a budget forward that has the opportunity to improve the health of Canadians, you might want to vote for it.

[Dan Harris, NDP, Scarborough Southwest, ON]

With all due respect, Minister, I hope that the next time your government puts forward a budget, it won't contain everything but the kitchen sink and will actually focus on the budget itself.

Now, you mentioned—

[Gary Goodyear, Conservative, Cambridge, ON]

It doesn't contain the kitchen sink, so it's good to know you read it.

[Dan Harris, NDP, Scarborough Southwest, ON]

—that we're far from being in the lead in business development, but I see in the budget, of course, that community economic development is losing—

[Gary Goodyear, Conservative, Cambridge, ON]

I'm sorry, I didn't hear the last part. I apologize.

[Dan Harris, NDP, Scarborough Southwest, ON]

Oh, it was just that you mentioned that we're far from first in funding business development, but I see in the budget—

[Gary Goodyear, Conservative, Cambridge, ON]

That's actually not what I said. I said we were far from number one in business expenditures—business spending money on research and development.

[Dan Harris, NDP, Scarborough Southwest, ON]

Okay, thank you for the correction, but it doesn't change. In the budget, community economic development is losing $33 million, and of course, business development is losing $16 million in funds.

How are we supposed to encourage business to spend money when we're pulling money back?

[Gary Goodyear, Conservative, Cambridge, ON]

Actually, we're not pulling money back. This is reallocation. The funding available is exactly the same. Let me ask Dr. Archibald to explain again the transfer between, as programs changed.

[Dan Harris, NDP, Scarborough Southwest, ON]

Perhaps he could focus on why it's changing and what is being lost in terms of the business development and economic development.

[Dr. Bruce Archibald]

When we announced the new southern Ontario advantage initiatives, there were seven new initiatives. We needed to revisit our program activity architecture to make sure that they actually align with it. You'll notice in the main estimates that there is some realignment of the dollars.

For example, last year, in 2011-12, you'll notice that technology innovation was at zero; this year it's $51,040,000. That's just an example of programs that were previously attributed either to community economic development or to business development being realigned to more properly reflect what we're working on.

As far as the community economic development numbers go, in 2011-12 they included a number of programs that better fit into business development and technology innovation, so we realigned those dollars. When you look at the bottom line in terms of overall expenditures, it nets out as almost the same, other than for a reduction of $1.5 million. The actual activities per se in community economic development have not really changed dramatically; it's really just a realignment to better reflect the new program architecture.

[The Chair, Conservative, David Sweet]

Thank you,

Now we will move on to Mr. Lake for five minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Chair, I thank the minister and Mr. Archibald for coming today.

I'll just ask two questions. I was going to ask one, but Mr. Harris brought up an important contrast between the government and the opposition in his last question. I think what we see from the government side is a focus on eliminating the deficit and on its being a priority.

Could you speak to the benefits, in terms of our long-term ability to fund science and technology research and innovation in Canada, if we can ensure that we balance our budget in the short term—over the next few years—and why it is so important?

Secondly, I want you, if you could, to focus on the STEM initiative that you talked about and maybe elaborate a little on it. I have a 12-year-old daughter turning 13 next week who definitely has a real interest and a real strength in science and math. I've often talked to her about the potential that she could be an engineer.

Could you speak to what you're doing in that regard to foster this among our young people?

[Gary Goodyear, Conservative, Cambridge, ON]

Absolutely.

The budget this year focused on a promise that the government made during the election; that was to return to a balanced budget as quickly as possible. I think this budget finds that niche very well and at the same time supports science and technology yet again, as I mentioned, to the tune of $1.1 billion—not to mention $400 million for venture capital.

Obviously, having a good financial book is great for a country. It keeps our interest rates in position. We could have moved a little faster, but we see other countries that did that and then saw a ripple in their economic stability. We see countries that didn't do it fast enough and see them still struggling.

Canada, being in the strong position that it is, can support science and technology initiatives, while at the same time finding efficiencies in government spending, without reducing the effectiveness of the programs for the intended stakeholders. This is really the sweet spot that we're attempting to find.

The Youth STEM program was designed to help increase the fun and the awareness about science, technology, engineering, and mathematics in the kindergarten-to-grade-12 range, which as we all know is not federal jurisdiction. While we work with our provincial counterparts to encourage them to improve the teaching of our children in terms of innovation, risk mitigation, entrepreneurialism, and so on, we felt that it was absolutely necessary to develop a program that would go into that age group and encourage them to at least consider the opportunities those fields represent, and not just in finance. Obviously, there are a lot of Bill Gateses around the world and counterparts like them, but this is a very rewarding field in terms of the improvement of quality of life—literally the saving of lives around the world—and of course of creating jobs and prosperity at home.

For your daughter, Mr. Lake, I will suggest that there is a promo-science program for your province. It's not Youth STEM. It can be accessed through the Natural Sciences and Engineering Research Council. Youth STEM, as you're aware, is a FedDev southern Ontario program only.