Evidence of meeting #50 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 million.
A video is available from Parliament.
11:30 a.m.
Conservative
Mike Wallace Conservative Burlington, ON
So when we're monitoring it, we're monitoring that it's being used?
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
Yes.
11:30 a.m.
Conservative
Mike Wallace Conservative Burlington, ON
We're monitoring that what we've sold is actually being used by those proponents who bought it. Is that what we're doing with it?
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
We're monitoring who it's licensed to and whether there's going to be interference if new licences were to be given to other potential users. This IT system will allow us to make it more automatic and save money and time in terms of providing these licences, as well as more efficient in terms of finding out who has it and in what regions, so that we can become more effective in how we provide these licences in the future.
11:30 a.m.
Conservative
Mike Wallace Conservative Burlington, ON
I appreciate that. That's very good.
Another area that I have a question on is the funding for Genome Canada to sustain the laboratory services and support research projects. Again, we're seeing that in vote 10.
Genome Canada is here every year. They get funding from us every year. What are they doing differently that this had to be in the supplementary (B)s? Is there something that we did in the budgets that added this money? Why is it not in the main estimates?
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
In this case, you're referring to $3.8 million for Genome Canada?
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
It was part of $60 million to be delivered over five years by Genome Canada. This is year one, so it's the ramp-up. The authorities had to be provided, and they were not provided in time for the main estimates.
11:30 a.m.
Conservative
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
Yes.
11:30 a.m.
Conservative
Mike Wallace Conservative Burlington, ON
Because in which budget year was that announced? This current budget year?
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
It was 2012.
11:30 a.m.
Conservative
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
Right.
11:30 a.m.
Conservative
Mike Wallace Conservative Burlington, ON
Then, just for my education on this, there's a line here: “Reinvestment of royalties from intellectual property”. That tells me that we collect royalties on IP.
How does that happen? Do we own a bunch of IP as the Government of Canada? Is this a small amount? Is this a regular thing that happens? I don't know anything about this program. If you could....
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
Do you want me to clarify?
11:30 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
I'll clarify.
We already accessed $2.6 million in the supplementary (A)s. Now we're asking for $217,000.
There are two sources of intellectual property.
A third of this comes from a computer program called NUANS, which is a newly updated automated name search. It allows individuals and companies to actually compare a proposed corporate name when they want to incorporate: to check that no one else has used that name and that there are no trademarks associated with their name. We own the intellectual property for that IT system and those are the royalties paid in order to use that system.
The other third of the royalties that we collect comes from Communications Research Centre Canada, the CRC, which licenses IP emanating from their own researchers. Researchers can patent their own research, and then they license what they've patented to companies and individuals who want to use that research.
It's the sum of the two that make up the IP.
11:35 a.m.
Conservative
Mike Wallace Conservative Burlington, ON
Okay. That gets to my question. When the people who have done the research and have developed the intellectual property are, as in this case, government employees, it's the Government of Canada that owns that, not the individual. Is that what you're telling me? Because they're using our facilities, that IP is ours, and the Government of Canada is licensing somebody to actually sell it and pay a royalty to us...?
11:35 a.m.
Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
That's right. There is also an agreement between the researcher and the organization itself to provide a percentage of the royalty to the researcher himself or herself.
11:35 a.m.
Conservative
The Chair Conservative David Sweet
Thank you very much, Madam Bincoletto.
Mr. Wallace, thank you very much.
11:35 a.m.
Conservative
11:35 a.m.
Conservative
The Chair Conservative David Sweet
Seven minutes blasts by very fast. Thank you very much.
Ms. Leblanc, You have seven minutes.
11:35 a.m.
NDP
Hélène LeBlanc NDP LaSalle—Émard, QC
Thank you very much, Mr. Chair.
I wish to thank the ministers and public servants with them for being here. I thank them for explaining to us a very important aspect of the budget.
Mr. Paradis, I very much liked the fact that, in your presentation, you mentioned that one of the priorities was to strengthen the manufacturing sector. My question is about the SR&ED program. Recently there were some changes. The rate fell from 20% to 15%.
My question is also about the eligibility of capital expenditures. This has a big impact on the manufacturing sector. How can you reconcile the priority you set out with the changes made to the SR&ED program?
11:35 a.m.
Conservative
Christian Paradis Conservative Mégantic—L'Érable, QC
Thank you for your question.
First of all, we know that with the SR&ED program, Canada has practically the most generous plan in the world if you consider its population. We are among those who invest the most in terms of direct assistance in this area.
If we compare ourselves to other OECD countries, however, we see that we rank 18th with regard to private investment. So there is an obvious problem of return on investment compared to the investment made from public funds. This is why we asked Tom Jenkins and his group of experts to take a look at the issue. They produced a report and recommended that we make some adjustments. One of these adjustments was to review the tax credit for research and development. As I said, this measure was part of the 2012 budget.
As for the technical calculation, the Minister of Finance handles that aspect. However, the Jenkins report contains some other interesting conclusions. We continue to study and evaluate them.