Industry Committee on Nov. 6th, 2014

[The Chair, Conservative, David Sweet]

Thank you, Mr. Daniel. It's not a question of procedure, but I stopped the clock.

Go ahead, Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Please, continue.

[Denis Martel]

In terms of the other countries, the Canadian rights are patented as Canadian rights, therefore a Canadian can apply for it or a foreigner. It has nothing to do with a Canadian company filing abroad. What we're trying to achieve here, by making those changes to accede to the Patent Law Treaty, is really to make it more friendly to Canadian applicants or foreigners who apply in Canada and make sure we align with other administrative requirements in other jurisdictions, which for companies that file in many jurisdictions are more familiar so it allows us to have a system that is familiar to all.

[Brian Masse, NDP, Windsor West, ON]

What will that translate to in terms of the Canadian economy? What is the predictable outcome from doing that, if you're moving into that compliance?

[Agnès Lajoie]

If I may talk about one of the benefits that we have under the PLT, it's that Canadian patents won't be invalidated on the basis that there have been administrative errors during the prosecution while an application is pending. For example, if a fee or a technicality is missed during the prosecution, this is not grounds for invalidating a patent in Canadian courts for companies that have a Canadian patent. I know it's a small example, but then again the PLT is really, as my colleague has mentioned, to harmonize administrative requirements that we have. I'm not sure that we can answer your questions very specifically, but there are definitely benefits here.

[Brian Masse, NDP, Windsor West, ON]

That's helpful. I can see in drug patenting, and stuff like that, where that could be particularly germane.

I'm going to move over to the BDC with my limited time that I have left. What type of investment, in terms of investment to other countries, are you missing right now? There's the presentation that you've been effective for Canadians, you've been profitable for Canadians, and you've been successful with Canadians. You're moving into a foreign investment portfolio now. What can Canadians expect to gain out of that foreign investment?

[Jean-René Halde]

The one thing that is being permitted under this change, if approved, is the ability for us to invest in a venture capital fund. That's really what we have in mind. It would be headquartered, let's say, and I'll use a very specific example of one that I have in mind, in Toronto. All the managing partners are headquartered in Toronto, but because they're trying to attract U.S. investors, they have chosen to incorporate in Delaware. Technically, at the present time, the only way we can actually invest is ask this fund to create a Canadian fund, have an exchange of shares, which only adds, candidly, to the cost, to the red tape, to the time, and really doesn't provide any more benefit. Obviously, the challenge would be to make sure that Canadians are involved. They're in Canada, they're focused in Canada, but it would enable us to participate in funds where foreigners are also involved.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Halde and Mr. Massey.

Now over to the Conservative side. Madam Gallant.

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

Thank you, Mr. Chairman.

I see from the BDC's website that the federal government funds programs to improve the environmental performance of businesses.

Does the BDC provide financing to wind farm companies in Ontario?

[Jean-René Halde]

That's a very specific question that, candidly, I wish I could answer, but we've got 30,000 clients and I'm afraid that I don't know if we do that. In terms of the environment generally, I can tell you that we're very careful. Every time we do lending, we'll make sure there's a phase one and a phase two, if we feel that's necessary. In terms of the normal kind of protection of the environment, the bank is very careful about that. I can tell you that I can think of one file that I'm aware of where we're involved in renewable energy in the form of storing electricity for the grid, a new concept in a small town north of Toronto. But whether or not we have lending to wind farms, I don't know. Unless it reaches a pretty big amount, I wouldn't see it.

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

Okay.

Quite apart from an ongoing study by Health Canada into the relationship between noise pollution from industrial wind turbines and the possible health implications for those living nearby are the financial effects and the impact in Ontario specifically. I'm not referring to any other province. We have these wind farms that are increasing the cost of power generation by 20%. But when a consumer actually gets their bill, by the time the added costs are in there, it's almost double. They call it delivery charges.

I'm particularly concerned at the federal level that we're not countering the efforts we're trying to make in terms of developing small and medium-sized businesses, because this is the greatest hurdle they have to climb right now. Their soaring expenses are as a consequence of hydro. In fact locally we just had a medium-density fibreboard plant open in Pembroke. The reason they had largely closed for over eight years was because they could not afford the electricity rate.

I really want to ensure that the BDC does not fund projects that work counter to the best interests and the viability of small businesses. It's even more important here, Mr. Chair, because one of the very first companies in Ontario to receive a contract for a wind farm was owned at the time by the president of the Liberal Party of Ontario. He received $475-million contract, and subsequently sold that for a $100-million profit to, among others, foreign entities.

The reason that's important federally, in addition to the financial devastation and the costs it's going to cause Canadian federal taxpayers, is that the people who were part of that contracting and Green Energy Act, and who took advantage and are costing businesses and individuals dearly in electricity, are now sitting advising the leader of the federal Liberal Party here in Ottawa. I just wanted to ensure that the BDC is not helping that along.

Why are amendments being made to the BDC to help businesses grow beyond the domestic market?

[Jean-René Halde]

Basically, as I mentioned earlier, we are really seeking three major amendments. The first one is the ability to lend directly to a subsidiary.

I'll give you a very simple example. Bombardier decides to move their plant to a foreign country. They're asking their Canadian suppliers to follow, which they have to do because if not, Bombardier is not going to keep them as suppliers. So we're trying to help that Canadian company establish in a foreign country.

At the present time, the only way we can lend—

[The Chair, Conservative, David Sweet]

Thank you. I'll have to leave it at that one example because our time is so short today. We may get back to you for the other two examples.

[Jean-René Halde]

I'm being cut off. Okay.

[The Chair, Conservative, David Sweet]

Sorry about that. That's my job.

Mr. McKay.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Chair, you'll be interested in knowing that due to the efforts of the Ontario government, Toronto has not had a smog day in two years, largely attributable to the elimination of coal-fired generation. There are other reasons, but that's one of the reasons. I personally hope you continue to have an environment file.

My question is first to the folks on the Industrial Design Act. There's a section in the act that is a morality clause. You can't register something that's contrary to public morality or order. However, the Patent Act does not have a parallel clause. I wonder how those two concepts are going to be reconciled.

[Denis Martel]

In answering this question I want to make sure that we understand what industrial design is. It's the registration of the visual features of a particular object. So it could be the shape of a bottle. It could be on shoes. For example, Nike has registered its design on running shoes. It's on the side, a particular pattern. So it has a visual appeal essentially.

The clause you're referring to in the bill is clause 104. Essentially it's a rework of a requirement that is in the current act, so it's not something that is being added; it's just a repackaging of the current requirements. I want to make clear that we're not doing this.

[John McKay, Liberal, Scarborough—Guildwood, ON]

For my own understanding, if there is something obscene, for want of a better term, I can't make a representation of that obscenity, but I could patent it?

[Denis Martel]

That's why I wanted to talk about the visual appealing, because on the patent we're talking about an invention, which in some ways is more abstract. It's not something visual; it's how things work together.

[John McKay, Liberal, Scarborough—Guildwood, ON]

So if it's inventive obscenity, that's good.

[Denis Martel]

The Patent Act is not about the use of the invention. You may have other legislation or regulations that would govern something, for example, that is environmentally damaging or things like that.

The Patent Act has requirements for the invention per se. Is it novel? Is it not obvious? Is it useful? Those are essentially used by the examiner to assess whether it's an invention.

You're further down the road to something that would be used by a person.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I'd dearly love to pursue that, because it seems to me that there's a huge contradiction there and I would think that any member of this committee would be interested in reconciling that contradiction so that we do actually put out a message in both pieces of legislation that matters pertaining to public morality are of serious concern, but the way we're rushed is the way we're rushed.

[Agnès Lajoie]

If you'd allow me to mention, up until late 1989 the Patent Act had restrictions. There was restricted patenting of an invention that has an illicit object in view. At the time when we amended the Patent Act in 1989, the legislator decided to remove this requirement, which was, to the best of my knowledge, never used and never challenged in court.

Again, as my colleague was mentioning, the criteria for assessment that the patent office uses really focus on the technical and on the contributions of an invention, which are novelty, obviousness, and of course utility.

[John McKay, Liberal, Scarborough—Guildwood, ON]

It seems contradictory to say that the Patent Act doesn't care about public morality but the Industrial Design Act does care about public morality.

Anyway, I'll leave it there because--

[The Chair, Conservative, David Sweet]

I appreciate that.

Now to Ms. Bateman.