Evidence of meeting #37 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 companies.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Avvey Peters  Vice-President, External Relations, Communitech
  • Clément Fortin  President and Chief Executive Officer, Consortium for Research and Innovation in Aerospace in Québec
  • David Harris Kolada  Vice-President, Corporate and Market Development, Sustainable Development Technology Canada
  • Rob Annan  Director, Policy, Research and Evaluation, MITACS

9:30 a.m.

Conservative

The Chair David Sweet

Thank you very much, Mr. Kolada and Madame LeBlanc

Now we'll go on to Mr. Albrecht for seven minutes.

9:30 a.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

Thank you, Mr. Chair.

First of all, I think it's pretty obvious that the common theme coming through here is collaboration: collaboration among you as partners and also between industry and the post-secondary institutions.

I'm from the Waterloo region as well. With my colleague, Peter Braid, I'm very proud to have worked with maybe all of you, or almost all of you—I haven't met Mr. Fortin.

Communitech has a great record in the Waterloo region, and one of the things I would like Ms. Peters and Mr. Kolada to comment on is the whole issue of IP as it relates to the university. The University of Waterloo has a regime that is a little different as it relates to intellectual property protection. You've given us the example of Desire2Learn. We know about RIM and the fact that these companies were started by students before they graduated.

There's some support for the idea that because of the freedom of intellectual property ownership following the producer, it would create more opportunities for commercialization, yet I noticed that in Mr. Kolada's comments he said that universities have “inconsistent” IP licensing. He went on to say that it creates some challenges.

Ms. Peters, could you just comment on your experience working in an incubator setting with many emerging high-tech companies, a number of them coming from the University of Waterloo and that regime, and how, in your view, that has affected commercialization? Maybe Mr. Kolada could comment from the other perspective. We had witnesses here—I believe last week—who commented on the fact that there are some areas internationally where there is a common IP regime across the university spectrum, and I don't see that happening quickly here.

I just wondered if you could follow up on those points. Thanks.

9:35 a.m.

Vice-President, External Relations, Communitech

Avvey Peters

Sure, and thank you for the question.

I think you're absolutely right. Every Canadian university has its own method of IP ownership, its own policy. The University of Waterloo's policy is a creator-owned policy, which is quite different from other university IP policies.

The challenge I think goes to the theme that I think we've been exploring. Collaboration is really the key, and finding ways to reduce the hurdles for effective collaboration is the important piece, so organizations like Mitacs that can broker those good, solid partnerships between a business and a university and help make those connections are good ways to advance IP. The collaborative model that Monsieur Fortin has described again is a great way to do that.

I think the challenge that many universities have in thinking about IP and in negotiating agreements with industry partners is that if you're making a complex product—a BlackBerry, for example—the number of individual patents and licensing agreements for all of the parts and all of the software...it's a very complex item. The number of agreements with individual patent owners would be quite complex.

What often happens, especially if you are a smaller company, is that you're faced with this very challenging landscape of how many agreements, how many university partners, how many individual researchers, and what other industry collaborators need to be negotiated with, so is it worth it, how quickly can it be done, and how much is it going to cost? Those are the things that I think are top of mind for companies.

9:35 a.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

Mr. Kolada, could you comment on the fact that the inconsistent IP rules across the university spectrum are, in your view—at least I think I heard you say—a detriment to you, and on whether or not you think it would be wise for universities to come together and try to have a common approach?

9:35 a.m.

Vice-President, Corporate and Market Development, Sustainable Development Technology Canada

David Harris Kolada

Certainly, and thanks for the question.

To clarify, this view comes from our portfolio companies, the SMEs that are trying to commercialize these technologies. Of course, we work very collaboratively with universities—they are members of our consortia—and we encourage that going forward.

What we hear about is how complex and difficult it is for the entrepreneurs. It seems that every time it's a one-off, so while we agree that it would be very difficult, given the history, to sort of standardize and harmonize the procedures across Canadian universities, efforts to make it simpler and more efficient, I think, could be implemented on a case-by-case basis, and we would encourage that.

Part of that, potentially, is around the incentives, around the tech transfer offices within the universities. It's sort of like a “no one got fired for buying IBM” type of thing. Similarly, no one got fired for putting the can on a potential technology that didn't get spun out.

If it does get spun out and the university doesn't get their fair share, and it ends up being a big winner, then it looks as though someone hasn't done their job properly. If there were more of an incentive to get these technologies spun out more effectively so that there was a portfolio approach—if there were some winners and some losers, and that was part of the accepted procedure—maybe these could happen a bit more efficiently and there could be a bit more volume, because, as I think Rob mentioned, sometimes by the time you get these things spun out and patented, the market's moved by.

9:40 a.m.

Conservative

Harold Albrecht Kitchener—Conestoga, ON

Do I have another minute or two?

I'll just go on to Mr. Annan, then, with regard to Mitacs.

You indicated that your partnerships have grown. I think you said you went from 18 in 2007 to 2,000 in 2012. That's an amazing record of growth. Have you seen a corresponding increase in the number of IP applications, and then, more importantly, in actual examples of commercialization?

I know that's probably going to follow the growth of your partnerships by a few years, but are you seeing the corresponding movement as well?

9:40 a.m.

Director, Policy, Research and Evaluation, MITACS

Rob Annan

Thanks for the question.

Yes, absolutely, we are seeing it. You point out rightly that there is a bit of a delay. We are very much still a research organization, so we don't tend to work very close to the commercialization end. We're really more in the middle, not right at the very early discovery end, so we're seeing things sort of moving through the pipe as we move forward.

There are certainly examples where bringing in researchers.... For instance, we had a small company in Ontario—SideStix, I think it's called—that was developing prosthetic devices to assist with walking, and they really needed just to do some quality control research on some of the materials they were using in order to put some of the final pieces together for that commercial application. That was completed and rolled out.

What we often see, as I said in my presentation, is that companies have intellectual property that needs some expertise, perhaps, not to develop brand-new IP but maybe to refine it or to get more information around it. That's a key part of that commercialization process, but it isn't necessarily geared towards the creation of brand-new IP. We're certainly seeing commercialization happening through our companies. There's no doubt.

9:40 a.m.

Conservative

The Chair David Sweet

Thank you, Mr. Albrecht.

We now go to Mr. Regan for seven minutes.

9:40 a.m.

Liberal

Geoff Regan Halifax West, NS

Thank you, Mr. Chairman.

Thank you to the witnesses for coming today. It's nice to have you with us.

Let me start with Ms. Peters.

I'm interested in your comment about the State of Israel, which, as you say, has standard agreements. Could you elaborate on how those work and whether you think that's a model Canada should follow? I presume it's legislated in Israel if it's required, obviously, that everybody supply everyone. Are there problems with that “one size fits all” approach?

9:40 a.m.

Vice-President, External Relations, Communitech

Avvey Peters

I don't know all of the details, but my understanding is that this standard agreement is for state research centres that are receiving funding from government and partnering with industry, so part of the condition for receiving that funding is that the industry-academic collaboration agreement is standardized; it makes the process more efficient, and everyone has the same common understanding going into this kind of relationship as to what will happen.

It removes that speed barrier, if you will.

9:40 a.m.

Liberal

Geoff Regan Halifax West, NS

Thank you.

Mr. Fortin, would there be any problems if we had that kind of system in Canada? Should that kind of system be limited to government research centres? Are there any obstacles to collaboration that should be removed?

9:40 a.m.

President and Chief Executive Officer, Consortium for Research and Innovation in Aerospace in Québec

Clément Fortin

There wouldn't be any problem with applying that kind of system if a large part of the money came from the government. We receive 75% of our funding from governments: 25% from the provincial government, and 50% from the federal government. The agreement works very well and it is unique. It transcends the intellectual property policies of universities. There are 20 or 30 universities participating, and they all agree. It is sometimes difficult when they are new.

If a significant amount came from the government and a generic agreement set out the principles, we would work with that. If an entrepreneur wanted to obtain funding, it would be up to him to develop his own agreement. I have been an entrepreneur, and I can imagine that you can develop your own agreement. You can be more flexible. I think the generic agreement could work in the majority of cases.

9:40 a.m.

Liberal

Geoff Regan Halifax West, NS

Mr. Kolada, you talked about the valley of death. We heard previously that it's an area where there's a lack of support for the development of new technology and start-ups. Do you see impediments at that stage that are problematic? Are there things government does or doesn't do that need to change?

9:45 a.m.

Vice-President, Corporate and Market Development, Sustainable Development Technology Canada

David Harris Kolada

Yes, it's fraught with a number of issues.

The principal issue is really just a matter of the risk/reward at that stage from an investment perspective and also from a customer adoption perspective.

Taking the customer's perspective for a moment, the risks from deploying a technology that has not been, in their view, sufficiently proven or de-risked are so great that they could jeopardize their business or people's lives. For example, in a wastewater treatment plant, a clean water drinking plant, or a multi-billion dollar facility where something gets implemented that has not been correctly scaled up, the loss, potentially, of business and opportunity would be massive. That's a big obstacle to adoption.

The key issue there is being able to get it demonstrated to the point where these issues are identified and worked out prior to commercialization. That takes money. There's no two ways around it for these capital-intensive industrial technologies.

Where the government can play a role, as I mentioned earlier, is in being a guinea pig, in some cases. They could use the assets the government owns to demonstrate in a controlled environment, and get some of these bugs worked out and the scalability issues addressed. If it's a lighting technology in some of the built environments, such as in some of the buildings the government owns, for example, it doesn't necessarily mean writing a cheque. But it could mean utilizing their assets in a novel way.

From an investment perspective, the venture capital community, which is the prime funder at these early and mid stages.... Certainly with clean tech, which is the perspective we bring, it's very difficult to make money in this valley of death stage. The amount of time between when they invest and when they can see an exit is long. And the amount of money required to get to that next valuation point and a potential exit is high. To the extent capital can be brought to bear, such as SDTC, in a situation where you're doing that de-risking and are providing the private sector some capital that matches theirs—it's a partnering process as opposed to just throwing money at things, which may or may not work—we find it to be very effective. In fact, we think it's a model that could be replicated in other high-capital-intensive industries beyond clean tech.

9:45 a.m.

Liberal

Geoff Regan Halifax West, NS

You don't seem to be saying that government should be choosing the winners in terms of investing, at that stage, with dollars.

May I ask whether you think it's a difficulty for government to choose among the different technologies, or choose the winners, in the sense of saying that these are the ones we're going to partner with to try things in government? Would the list be endless? Obviously, it's much broader than lighting. There are some things that perhaps government couldn't be a guinea pig for, but in choosing to be a guinea pig, aren't there times when we have to kind of choose and say that we think this one is going to succeed and that one isn't?