Evidence of meeting #36 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 technology.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Ian Hargreaves  Professor, Digital Economy, Cardiff University, As an Individual
  • Erica Fraser  Manager, Technology Commercialization, Engineering/Sciences, Industry Liaison and Innovation, Dalhousie University
  • Lianne Ing  Vice-President, Bubble Technology Industries Inc.
  • Marc-André Gagnon  Assistant Professor, School of Public Policy and Administration, Carleton University, As an Individual

10:20 a.m.

Vice-President, Bubble Technology Industries Inc.

Lianne Ing

As I said, I think IRAP has done quite a good job in terms of holding a lot of information sessions and trying to expand their coverage.

In the U.S., there is SBIR, a small-business program, which is geared directly towards providing funding for small businesses in order to spur innovation. That program has been very successful, in the sense that they actually have separate calls for proposals. They have very prevalent awareness among the business community about the advantages available to small businesses.

The U.S. government also has incentive programs that try to encourage large companies to use small businesses when they're executing large contracts. The use of small business is actually added to the evaluation of a proposal in the U.S., so that certainly helps.

10:20 a.m.

Conservative

Phil McColeman Brant, ON

That would perhaps help IRAP to drill down to the smaller companies and give them more incentive to advance their technologies.

10:20 a.m.

Vice-President, Bubble Technology Industries Inc.

10:20 a.m.

Conservative

Phil McColeman Brant, ON

Good.

I have a question on the SR&ED side of things—also involved with the industry committee—and your comment that stifling innovation perhaps is one of the redirections. SR&ED is obviously offered to a lot of companies. A lot of companies that take advantage of SR&ED find it's very useful for their business models. But a lot of other companies use it just as a business model and don't really produce some of the technologies, the innovations, some of the things that are meant through the SR&ED tax credits.

I wonder if you could comment on that. How could we perhaps do a hybrid SR&ED, or something like that, where we could combine the best results of SR&ED but also eliminate some of the lesser uses of SR&ED that are almost part of a subsidy?

10:20 a.m.

Vice-President, Bubble Technology Industries Inc.

Lianne Ing

If you look at the model for our company, I think the SR&ED program has been very beneficial, in the sense that it has allowed us to conduct company-funded R and D, which then qualifies for SR&ED tax credits. We conduct that R and D typically to set up for development of new technology through contracts—not subsidies, but contracts—and often those contracts are performed not only for the Government of Canada but for other governments. In those cases we're bringing revenue into the country in the performance of those R and D programs.

When I spoke previously about some of the suggestions on how to change the model for SR&ED—trying to emphasize more commercialization—the real concern is that if we get into a situation where there is a group somewhere that is trying to define the strategic priorities for research, there is no possible way for them to really know across the country what the most promising technologies are for a range of small and medium-sized enterprises.

The smartest people in the world could sit down in a room and they're not going to be able to accurately predict breakthrough technology that could be the next multi-million-dollar technology for the company. From our perspective, it makes sense to try to provide programs that will encourage promising commercial technologies, but not to try to define what those technologies are by sector.

10:20 a.m.

Conservative

The Chair David Sweet

Thank you very much, Madam Ing and Mr. McColeman.

Ms. Leblanc, you have five minutes.

June 12th, 2012 / 10:20 a.m.

NDP

Hélène LeBlanc LaSalle—Émard, QC

Thank you, Mr. Chair.

Mr. Gagnon, I would like to quickly go back to what we were saying earlier. The free-trade agreement with the European Union is in the process of being negotiated. In Canada, data protection is valid for eight years. As part of the negotiations, the European Union would like the period to be extended to 10 years now.

Does that meet the WTO requirements or does it go beyond the requirements? What will the impact be on Canada if we agree to extend the data protection period, as the European Union wants?

10:20 a.m.

Assistant Professor, School of Public Policy and Administration, Carleton University, As an Individual

Dr. Marc-André Gagnon

In terms of data protection, we fully comply with the TRIPS agreement. Extending data protection seeks to encourage companies to do research and clinical trials on already existing drugs to see whether or not they could be used for other purposes.

I personally think that it would make sense for us to somewhat extend the data protection period. The major difference between the European Union and Canada is that, in Canada, we often confuse data protection and data secrecy. Health Canada always requires data secrecy on all clinical data it obtains, which is unacceptable. That prevents other researchers from having access to clinical data that are available. And in many cases, those data have been obtained through massive public funding. I don't have a problem with protecting data for intellectual property so that another company does not market something else, but I think that making them secret to prevent researchers from having access to them is unacceptable.

10:25 a.m.

NDP

Hélène LeBlanc LaSalle—Émard, QC

You said that public research could complement private research. Could you elaborate on that and provide us with some examples?

10:25 a.m.

Assistant Professor, School of Public Policy and Administration, Carleton University, As an Individual

Dr. Marc-André Gagnon

Private research is highly based on coming up with selling points for pharmaceutical products rather than on clinical research that makes it possible to fully understand the safety of those products. When data secrecy is imposed, and the data are produced by companies and then published in medical journals, the data that are going to be published are carefully selected. The trend is to opt for those data that better support the sales pitch they want to make to doctors.

Right now, more than 85% of basic research is currently funded by the public. So it is essentially public, but it is geared towards commercialization by large corporations.

In terms of clinical research, the major public trials carried out in the United States by the National Institutes of Health have largely made it possible to have an objective and neutral idea of the benefits of a product as opposed to its risks. Sometimes, major clinical trials can set things straight in terms of whether a product is actually good or not.

10:25 a.m.

NDP

Hélène LeBlanc LaSalle—Émard, QC

To continue along the lines of our study and the pharmaceutical sector in particular, how can we develop policies that will lead to the implementation of intellectual property standards, which in turn will generate more innovation in the pharmaceutical sector?

10:25 a.m.

Conservative

The Chair David Sweet

Make it very brief.

10:25 a.m.

Assistant Professor, School of Public Policy and Administration, Carleton University, As an Individual

Dr. Marc-André Gagnon

In my view, having patent policies does not mean more innovation. We currently have an institutionalized corporate welfare system. So what I am trying to show is that patent policies are not necessarily the best tool to improve therapeutic innovation.

In terms of policies, we can set up patents and other innovation policies. There is something simple right now that England or the United Kingdom is trying out. It is called value-based pricing, meaning that you agree to pay for a drug based on its therapeutic innovation. So you will pay for innovation, for the results on health, not for the commercialized product.

In my view, that would be a great way to encourage innovation. You bring us innovation, we will pay for it; you bring us something insignificant, we are not going to pay for that.

10:25 a.m.

Conservative

The Chair David Sweet

Thank you, Mr. Gagnon.

Thank you, Madame LeBlanc.

Now we'll go to Mr. Lake, for five minutes.

10:25 a.m.

Conservative

Mike Lake Edmonton—Mill Woods—Beaumont, AB

Thank you, Mr. Chair.

Thank you to all the witnesses today.

I'm going to zero in, Ms. Ing, if I could, on your reference to SR&ED and your reference to concerns you have about shipping costs to direct funding mechanisms of some sort. But one of the things that was interesting was that you seemed to have had a really good experience with IRAP.

I would note that in the most recent budget, the budget we're going to be voting on for hours and hours over this week, one of the measures we've taken is to modify SR&ED. We have maintained significant portions of it but have modified some of it. Part of that transition, in terms of the dollars, has been to double the IRAP program, for example. I think what you're saying is that you like that program, because it's available to everybody. It doesn't pick one sector over another. It's available to everybody. I don't know if you want to elaborate a little bit more on that.