Finance Committee on Sept. 26th, 2006

[Pierre Paquette, Bloc, Joliette, QC]

No, it is because you were talking softly and I could not really hear you. Go ahead.

[Ian Rutherford]

Even at the global level, if you look at the investment in research and development in Canada as a proportion of gross national product, we're running at around 2% and decreasing. We reached a peak in 2001, I think, whereas countries like Sweden and our competitors are up at around 4%. Even at the overall level, we're still not where we should be, so we cannot afford to reduce investment in the universities and in the academic sector. We have to maintain that. It's keeping pace with inflation, but barely.

The real problem is in the private sector. We have proposed a number of measures that would encourage the commercialization of intellectual property developed in research and development. That will feed back into itself. Once companies succeed, they start pumping money back into the research and development side. RIM, the producer of the BlackBerry, is a very good example of that. We need more of those companies. There have been a number of good recommendations made for providing a better investment climate so companies can succeed. The key is venture capital and so-called angel capital.

We don't have enough people in this country willing to invest their private funds in risky ventures. Somehow or other we need to change that.

[Peter Brenders]

I'd like to echo those points. I guess the question is, what are you looking at in terms of success, and what's your measurement of success? Speaking on behalf of the industry, Canada has been, in the biotechnology sector, quite successful, historically. We have almost 500 companies, 70% of which are spinouts from the early research, whether it was NRC research, university-based research, or otherwise.

The challenge for further growth is to actually see all the products that should come out. There are many on the market today, but we don't see them all because they just become part of everyday life. It is very much what we said in our recommendation. How do we get more capital to help finish the job, to really capture the value? Research in biotechnology takes eight to twelve years, from early concept to actually bringing it to market, and hundreds of millions of dollars. Angel investors are nice for getting started, but where things start to break down is where our granting councils or other areas simply can't come up with the next round of financing. Companies like our colleagues here today from Topigen, for example, will be looking for probably $30 million or $40 million in their next round of funding. That's beyond Canadian VC, especially our risk-averse venture capital market. We need access to foreign, direct investment in our companies to make sure they stay here. They're going to find that money because the technology is that good. The challenge for us is that they grow that company in Canada, in Montreal, not in San Diego.

[Pierre Paquette, Bloc, Joliette, QC]

Do I have a bit of time left?

[The Chair, Conservative, Brian Pallister]

No. Thank you, sir. That is all.

We'll proceed now with Madame Ablonczy. You have seven minutes.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you, Mr. Chair.

Thank you to all the presenters. I know you spent a lot of time on your briefs, and they're very helpful to us. I just have some quick questions.

First of all, Mr. Brown, I want you to know that not only do we appreciate the colleges and the small community learning centres that have filled a huge niche in our society, but we know that you do need more recognition in the overall emphasis on skills training. In particular, as you well know, there's a growing appetite, a thirst, in this country for the skilled trades and for technical training. I wonder if you could just inform the committee a little bit more about how your organization and the members of your organization are working to fill that growing need.

[Gerald Brown]

Our institutions...as I mentioned earlier, there are 150 of them spread out across roughly 1,000 communities. They look at probably four ways in which we respond to those particular needs.

First of all, as community colleges, we're very much focused on the needs of the community. In a particular community you will find a lot of the programming reflecting exactly what that community is all about. If you happen to be in Sudbury, you're probably looking at mining; if you happen to be in Olds, you're looking at agriculture; if you're looking at one of the coasts, then you're probably looking at the fishery. You'll see the institution is very focused on responding to needs, and that's what community is all about.

The second cornerstone of the way in which we respond to that is that we're very focused on the learner, looking at many ways in which we can respond to the needs of our learners, learners who need to bridge or do some prior learning assessment, or looking at different steps. Many of our institutions are increasingly becoming the place where university grads come for the applied education they've been taking at the university level.

A third dimension is the fact that we're very connected with industry. All our programs have an industry advisory program, so none of our programs are offered without advisory committees helping us define and determine the need for the industry so that the 1.5 million students who walk through our door this morning have one specific goal, to get the skills they need to get a job. We can do that if we work closely with our industries and are responsive to our communities.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Good. Thank you. That was a great answer and very helpful.

I want to talk to Mr. Davis and Mr. Lalonde about maternity care. Of course, I think all of us were aghast to hear from you that Canada's ranking in this area has slipped significantly. I wonder if you can tell us why this is so, because sometimes if you know why something is happening you have a better chance of getting a good solution.

[Dr. André Lalonde, Executive Vice-President, Society of Obstetricians and Gynaecologists of Canada]

Thank you very much for your question.

I think we were seeing this coming in Canada because of the lack of investment in human resources, and no strategy in human resources, particularly in this field. You recall we reduced the medical schools; the number of graduates, the number of specialists, has not increased across Canada. Coming here today, I realize about 350 hospitals in Canada have to provide emergency obstetrical care 24 hours a day, 365 days a year, and our resources are short.

Our large universities are taking about 60% of this workforce. We've added Task Force Two: A Physician Human Resource Strategy for Canada, the task force run by the Royal College of Physicians and Surgeons and the CMA. All of them could not provide the answers in our field, because our field is a very specialized field, obstetrics. There is no waiting time for obstetrics. Every delivery is an emergency, and you can't say, I'm sorry, we're going to list you for next week.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

I have to finish my golf game.

[Dr. André Lalonde]

Right.

We're having huge staffing problems, and women are having to travel further and further to get obstetrical services. We think a national birthing strategy is the right place to start. If we start looking at child problems and adolescent problems, where do they come from? They come because we don't have a good policy supporting pregnant women in this country. The leadership of the federal government is important, because you have a role in terms of human resources, and you also have a role for access in the Canada Health Act.

We are here today in two positions, but we have worked very closely with the midwives, the nurses, the family physicians, and the rural physicians. We have just terminated two years of study. We're ready to move forward, but there is no place we can fit.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

We're fortunate to have such passionate advocates in this area.

Ms. Watts, I was interested in your recommendation that income splitting be allowed among families. One of my colleagues is working on income splitting for seniors, but you're talking specifically about families. I wonder if you or your organization had any projected costs of such a measure.

[Diane Watts]

No, we don't. But we recognize there is an unfairness there, a discrimination, and we would like that corrected.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Okay.

I will have to look into that a little bit more.

I wanted to ask the group for science and engineering a question. You've done so much work to promote Canadian efforts in this area. As you well know, there is a huge competition globally for this kind of innovation, this kind of knowledge-based product. Could you expand on some examples for the committee of exactly why this is so important for Canada in the context of the global economy and global competitiveness?

[The Chair, Conservative, Brian Pallister]

You have approximately a minute to respond, sir.

[Ian Rutherford]

It is clear that if a country is going to succeed, it is going to have to succeed on the basis of its brain power and its productivity and innovation, rather than through selling its natural resources. We understand what has to be done. We have to have well-trained people and we have to have people who are able to turn their training into products we can sell on the world market.

Lots of countries in the world have realized this. Even countries as small as Iceland or Finland have recognized it for many years and have put in place programs that encourage those things to happen. You're saying that Finland, for example, dominates the cell phone manufacturing business. I'm not sure what the payoff has been for Iceland. We all know what has happened with the economies in the Far East, starting with Japan. Now it's happening with Korea, and China is coming along. They've all recognized the principle that you need to support knowledge and innovation, and that if you do that, you can turn it into competitiveness. It's really a very simple formula.

[The Chair, Conservative, Brian Pallister]

Thank you, Mr. Rutherford.

We're continuing now with the second round--no, we will continue with the first round. How could I possibly...?

Madam Wasylycia-Leis, you have seven minutes.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you.

I want to start with college education, because that fits so much in terms of the scheme of building a more competitive and productive society. You have identified the key obstacle to doing that, which is lack of a workforce trained and qualified to deal with the needs of tomorrow's economy.

I would think, though I don't want to put words in your mouth, that you would probably be looking for more than simple recognition from this government. After all these years, you must be looking for a direct transfer of funds for college education. I know the waiting lists are astronomical. They are in Winnipeg. We have youth who are interested, but we can't keep up with the demand. What we've had instead is cutbacks from the Liberals and now platitudes from the Conservatives. We just yesterday got confirmation that the whole surplus of $13.2 billion has gone against the debt. Now, nobody is opposed to paying down the debt, but at the expense of what?

Wouldn't a couple of billion dollars of that have helped meet the needs you're talking about? Further, how do you square the government's platitude with its cutbacks yesterday of $17 million out of literacy, money out of youth employment, money out of skills development, and so on?

[The Chair, Conservative, Brian Pallister]

I believe the question was whether a couple of billion dollars would be of help.

[Gerald Brown]

The short answer is yes.

[Voices]

Oh, oh!

[Gerald Brown]

Actually, I would be remiss to try to respond to your last question, simply because I haven't had the opportunity to look at the real impact of those cuts. Rather than just read the headlines in the paper, I would prefer to have the opportunity to see what the impact is.

On your two questions, if you look at our brief, it talks, as we have been talking for a number of years, about the urgency of replenishing the money that had been cut from the social transfer budget, but in it we have also said that it's really important that the transfer for post-secondary education and skills be a dedicated one--that it would actually be seen, and that the paper trail sees it, going into the provinces.

In my world, I would of course ideally like to see it go directly to colleges, but I do recognize the role the provinces have in post-secondary education. That is an important dynamic that must exist, so for us that's an important element, but we have always spoken about replenishing the cuts and making it a dedicated transfer.

When the opportunity occurs, as it did a few moments ago, to talk about research, there we are talking about a dedicated transfer. We recognize the important role that has at the university level. In fact, I want to recognize the role NSERC has had in trying to help us reach some of the challenges we have with community-based research for small and medium-sized businesses, but the reality is that it is a huge lobby effort, and the time has come to look for new partners, to reach out to new partners; we think that being inside a dedicated research fund for colleges working with small and medium-sized businesses in a community is the way to go.

Thank you.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you very much.

If you want to look for the cutbacks, it's under the category of “value for money”, where they take $70 million out of refocusing workplace skills strategy, $42 million out of industrial programs, and so on. So I'll just leave you with that.

I have to say to Diane Watts that your description of a feminist made me cringe a bit because I consider myself a feminist. I was reminded of what my son said when he was nine years old. He was confronted in the schoolyard by some kids who were bullying someone else and accusing her of being a feminist, or they were talking about feminists and saying that feminists kill their children and divorce their husbands. My son stood up. He was nine at the time, and he's seventeen now. He stood up and said that feminists are people who stick up for women's rights.

I think that is what we have to focus on, giving choices and opportunities for women to be who they are and to achieve their full potential.

I wanted to ask Mr. Lalonde and Mr. Davis, who have clearly understood the importance of using the gender analysis, this question. Looking at problems through the lens of women, what do you see? Why is it important? Why do we have women's programs through Status of Women Canada? Why do we need more focus on the health field.

[Diane Watts]

I'd like to correct an assumption that you've made about our organization. Perhaps they can answer later on.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

All right.