Evidence of meeting #102 for Agriculture and Agri-Food in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was metzler.
A recording is available from Parliament.
Liberal
Pierre Breton Liberal Shefford, QC
If I understand you correctly, you are afraid of having to disclose information that could also be useful to your competitors.
Senior Vice-President, Government and Industry Relations, Maple Leaf Foods Inc.
That's right.
Chief Executive Officer, API Labs Inc.
Yes, thank you. Basically, we have also noticed what Mr. McAlpine mentioned. We've worked with the University of Lethbridge. We've been in consultation with the University of Saskatchewan as well on projects. Effectively, there is that very squishy space, I guess you would say, where you have to be very careful about what's being disclosed, because it is a competitive industry across the board. You definitely want to....
I think the brain power our universities have is excellent and gives great opportunities for collaboration, but the problem is—well, I don't know if it's a problem—that, from an industry perspective, they're always wanting to publish papers. The intellectual property that's created within that framework has to be identified and secured before those things happen. It can work, but there has to be collaboration, and there has to be an understanding.
As for the understanding, in the experience we've had where the situation has worked the best, those parameters were established before the project began.
Liberal
The Chair Liberal Pat Finnigan
Thank you, Mr. Breton.
Thanks, Mr. Metzler.
I think, if everybody agrees, we're going to attempt to do the full second round, which would take us to 4:52, roughly. Is everybody okay with that? We'll have about 35 minutes to do our business. Are we okay with that? I will hold you to your time, so be prepared.
Our next questioner will be Mr. Peschisolido for six minutes.
Liberal
Joe Peschisolido Liberal Steveston—Richmond East, BC
Mr. Chair, thank you.
Witnesses, thanks for coming. This was helpful to me because it wasn't all “rah-rah”. You are actually saying there are some problems; there are some issues; there are some impediments.
I'd like to follow up Mr. MacGregor's questioning of Mr. Metzler.
Perhaps you can continue. You were talking about funding coming from Agriculture but the regulations being under Health Canada.
Liberal
Joe Peschisolido Liberal Steveston—Richmond East, BC
If there were problems, I think you were implying or were about to state that you'd leave and go somewhere else.
Liberal
Joe Peschisolido Liberal Steveston—Richmond East, BC
Maybe you can elaborate a little bit about how you would deal with the problems. You're dealing with them from the private sector side, and you're trying to get some funding and have a market. We deal with it from the government side. If you were a guy in the government from both Health and Agriculture, what would you do to facilitate things, to make it easier?
Chief Executive Officer, API Labs Inc.
There's a bit of an issue when you're dealing with a food crop and it's under the purview of Health Canada. We're effectively the dolphin in the tuna net here. I can understand if they're after the pharmaceutical aspect of it and they want to control that. That makes sense. Then for us, because of the lack of regulations that separate the two industries, we're in a situation now of having to provide the information to them to gain an answer. I've been told several times by department officials, “Well, Mr. Metzler, we only look at this through a very narrow lens.” Their lens is basically from a risk perspective. They're not seeing the agricultural or the economic benefit because, in their opinion, that's not included in their decision-making process. That makes it very difficult when you're trying to build a business based on agricultural products in a Health Canada atmosphere.
Liberal
Joe Peschisolido Liberal Steveston—Richmond East, BC
You were talking about your experience or what you see in Europe. I believe it was in France.
Liberal
Joe Peschisolido Liberal Steveston—Richmond East, BC
We're in the process, hopefully, of finalizing our deal with the European Union. What can we learn from France and the European Union?
Chief Executive Officer, API Labs Inc.
I think that having less regulation in areas where it's not needed is a wiser approach than having more regulation. One great saying is, “Why let a bad policy get in the way of a good idea?” That's how I feel some days, that we have this great idea but we have this bad policy, so we'll continue to enforce the bad policy to stop the great idea. That's not innovation.
We need to look at how we move this forward in a way to create those opportunities. If you look at what Europe has done, a lot of times they say that until it becomes a concern or a risk, why would we even have our fingers in that pie? If we could have that adapted, that would be great. Maybe that's idealistic—it probably is—but for us to move forward, I think that if we had Agriculture at the table when these decisions are being made so that both sides would be represented, we'd be in a much better place.
Liberal
Joe Peschisolido Liberal Steveston—Richmond East, BC
Okay.
Mr. Wallener, I too say congratulations. Obviously Mr. MacGregor has, perhaps, a deeper connection to you.
I was intrigued while going through your information. You're on four continents, yet you were talking about the importance of $70,000. That's a kind of disconnect, where you look at this and think, “Wow, this is a huge company doing phenomenal things”, yet you were talking about the importance of $70,000.
Liberal
Chief Executive Officer, EIO Diagnostics
Sure. Someone once said that a mosquito is the most powerful weapon in the world because all it has to do is sit there by your ear and buzz and eventually you will go nuts. It's not just the number of zeroes in a number. It's the timing. In that case, at that point in time, we were at a really delicate point. We'd had strong offers: “Please come here and stay here”, and because we had that $70,000, we could say no. We knew we had that backstop, and by being able to say no.... This is a roomful of politicians, and you know that sometimes your strongest tool in a negotiation is the willingness to walk away.
We would not actually have walked away. I do have a tendency to bluff, but we said no, and by saying no, in our industry there is something called FOMO, fear of missing out, so we started creating this impression that, “Wow, they're able to say no. We have to be part of this”. Therefore, that $70,000, while it is a small number, cascaded. When IRAP came in—and we have an additional relationship with the Ministry of Agriculture in B.C., which I'm not quite at liberty to talk about—that gave us, at the next stage of our evolution, another means to say no. We could say that it would our terms, or no.
We were able to leverage all of that into private investment with minimal strings attached, though there are never no strings attached.
Liberal
Joe Peschisolido Liberal Steveston—Richmond East, BC
Mr. Wallener, just like Mr. Metzler, you talked about other examples or jurisdictions. I believe you mentioned Australia and Portugal. What could we learn from them, both as a government and in terms of helping the private sector?
Chief Executive Officer, EIO Diagnostics
For me, the most important thing to keep in mind is that if you look at a map, there are borders everywhere. When you are in a business, especially something that is everywhere, like food or agriculture, those borders don't really mean that much and people will cross them if the rules on one side of the border are problematic and less problematic on the other side.
Liberal
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much, Mr. Chair.
Thank you to our witnesses today. Certainly we have the start-ups, as well as companies that are already established but are just waiting their turn on the Health Canada regulations, and that have certainly been around for a long time and are innovative, like Maple Leaf Foods. It's great to have this type of cross-section in the agricultural community.
I want to talk more about the competitiveness theme. Some of the discussions have focused on how much research dollars are available that we can match, and how we have this problem of Canadians actually investing on their own. Having gone to Germany a year or so ago, one thing they talked about was the fact that Canadians, as far as taxpayers are concerned, have allocated the same amount in terms of GDP per capita as Germany has done, but that we can't get others to invest with us. That is sort of the discussion, Mr. Wallener, that you were talking about: how do we get Canadians there—and we do see folks coming in from the U.S. taking a look.
I've mentioned at other times where I think this is coming from and the reasons for it. Part of it is that sometimes in Canada we have companies that say, “If we can bump this up to $4 million or $10 million, then maybe we'll take a look at some of the offers we have from other countries”. You mentioned, Mr. Wallener, that this becomes one of those issues of concern, that you'll go out there and get investors who will come in to be part of it, and then all of a sudden there is that added pressure.
How do you feel that we can address this? How can we ensure that we have more Canadian content in this, and is there some sort of protection that would be important for small start-up Canadian companies?
Chief Executive Officer, EIO Diagnostics
That's a big question. This is obviously coming from my personal perspective. If there were some way to shift some of the abundant support from the federal government from later stage to earlier stage, that would help. Especially if you're more technology focused, once you get to that core team of anywhere from five to 10 people, that starts to become an object that's difficult to move—not impossible, not super difficult, but it gives you a chance. Like there's a nucleus there that is frustrating to move. Vancouver and Silicon Valley aren't that far away physically but they are a long way apart culturally. If you can keep that first step, then you have a much better chance of retaining the long term.
I would also point out that when we lose college graduates, that is an enormous sunk cost that has just left the building, and it doesn't generally come back for a long time. So yes, I would move support from later in the business development to earlier—not all of it, because these gentlemen could also use some support. I don't want to take everything away. On one of the last slides I actually walked through an example of what the dollar amounts would be to perpetually seed another generation of young companies, but there has to be a willingness to understand that 90% of them are not going to make it. If you're used to thinking in terms of a cost, that could be a problem.