Thank you very much for the opportunity to speak to you today.
I apologize for not getting any written material out. I just got off a plane from India and I'm really not sure what time zone I'm in, so essentially I'd just like to share a few thoughts with you.
First of all, I'll share a little bit about the organization. I know that you're coming over to our place this afternoon to have a look. We were founded in 1975 as a research institute, so we're not a commercial entity. We were founded as a partnership of the four western provinces. Alberta provided the actual buildings, Saskatchewan the land, and all of the provinces a little bit of operating funding. That's opposite to today: trying to get two provinces today to agree on anything is nigh on impossible. You talk about innovation; if you go back to 1975, I think you'll see some really innovative ways of doing things.
To make a long story short, the organization focuses on the livestock sector, specifically on infectious disease, and that's what I'm going to talk about. Anything I say won't go beyond that particular topic.
We've been relatively successful in terms of product development and the number of vaccines on the Canadian market coming out of our organization, virtually all of which were world firsts. These are not me-too products. These are high-risk types of things that can be picked up by Canadian industry. We've spun off four different companies, the latest of which is one of the new centres of excellence in commercialization and research focused on vaccines.
Finally, as was brought up earlier, very clearly our biggest product as part of a public sector institution is information. There's extension work. There are technical groups that serve the livestock industry, the swine and beef sectors specifically, and we are expanding that aspect. It has been a very successful organization over the last 35 years.
I'll switch to infectious disease for a second. Infectious diseases are still important. I think we lose track of that. If you look at the biggest threat to the livestock industry in this country, you'll see that it is in fact infectious disease. Look at that single case of BSE in 2003. We all know what happened with that. It's only now that we're actually starting to get back to the 2002 levels, eight years later. That's what it took to recover. Although the published figure says it cost $6.5 billion, it's probably more likely around $50 billion. It was an incredible risk to the industry.
We see it in the poultry industry. I don't know how many times avian flu has caused the mass killing of birds in the Fraser Valley and elsewhere across the country.
We saw it with swine flu a year and a half ago, and we all know what happened in the human sector: the story that hasn't been told is what it did to the swine industry and what it did to food processors like Maple Leaf Foods. Export markets disappeared.
We're facing a trade issue today. It's not necessarily the day-to-day disease losses, although they are important; the trade markets are the issue. How do we get around that problem from a research perspective? It's difficult.
We need to be proactive in our approaches. As a country, we tend to be reactive. We wait until something happens and then we see what we can do about it. That's not good enough in the industry if we want to be competitive.
You hear a lot about innovation. Innovation is a word that I'm pretty much convinced nobody understands--or maybe I don't understand it, and everyone else does.
Innovation is not the same as excellence. All of the programs we have set up deal with excellence, as they should, but if we want to encourage innovation, we must realize that innovation is transformative in nature. This means new markets and new ways of doing things, rather than the same old same-old. We should reward excellence, but if we want to encourage true innovation in this country, we have to do it a little bit differently, such as the way Bill Gates did it when he set up his funding program in vaccines six years ago. He funded things that were crazy, but that's what you have to do. You can't go through the regular systems.
What else do we need? We need infrastructure in this country. I think we're doing a passable job at it. I know that within the next week and a half we are completing construction of a $140 million infectious disease facility on campus at the University of Saskatchewan. The problem we face is that we have this wonderful piece of infrastructure there--it's the best in the world--but how do we operate it? We fall down when it comes to the operation of these facilities. We have to do it through partnerships. It's the only way it's going to happen.
We have a number of funding programs that I think are very good. The problem we face as researchers and research organizations is the way they're administered. If you want to talk about innovation, take the AgriFlexibility program. It's a great program in the sense that the public is involved and the private sector is involved, but you can't wait over a year to get a decision on something. It can't happen. This is a problem with the bureaucracy. I could go through a number of those programs, not only within Agriculture Canada, but in Industry Canada, Foreign Affairs, and a variety of others. We need to be nimble. If we're not nimble, innovation is not going to happen, and at the end of the day industry will suffer.
We need to really work on the partnerships. Mr. Cross talked about the value of federal research organizations, and I concur 100% with what he said. The National Research Council in the vaccine field is a jewel, a real jewel. This is an organization that has a culture of research. They understand it. The problem begins when the private sector organizations try to interact with a federal agency, and I'll speak here about one of our companies, PREVENT. When it tries to interact with a federal agency, we're still in this 1970's mindset that the crown owns everything. It doesn't work that way. We need to form true partnerships in order to move this forward.
The last thing I'd like to say is this: over the last five years or so, in the infectious disease field in the biotechnology sector we've seen incredible consolidation occurring, and there really aren't any Canadian companies active in the sector. They're all multinationals. A lot of people look at that as being a threat, an issue. I look at it as an opportunity. We need to get biotechnology moving again in the animal infectious disease sector. I think there are some real opportunities that need investment. Again, it doesn't need handouts; it needs an investment.
A study done for the Government of Saskatchewan about 10 years ago suggests that an investment in the infectious disease field for the livestock sector gives a return on investment of about twentyfold. In this case it was a $60 million investment; it returned about $1.2 billion over a 10-year window in the province of Saskatchewan. If my pension fund had done that well, I would not be speaking to you today. It's an incredible return on investment. It doesn't matter what type it is or what your target is; the smallpox vaccine for humans returned $27 for every patient who was immunized.
These are incredibly powerful technologies, but we have to harness them and we have to get manufacturing back into Canada. If we continue to develop the intellectual property.... We're masters of that in this country: in the vaccine field, we outdo any other country per capita, but it all gets exported either to the U.S. or to Europe, and we buy the products back. It can't continue to happen that way.
With that, I'll end.