Thank you, Mr. Chairman and members of the committee.
We appreciate the opportunity to be here today, especially as today is the national biotechnology awareness day in Ottawa, where over 40 executives from our industry are in town meeting with public officials.
Joining me today in the audience are: Dr. Ali Tehrani, president and CEO of Zymeworks, an exciting, early-stage biotechnology company from Vancouver, and Dr. Paul Wotton, president and CEO of Topigen, a remarkable clinical-stage biotech company from Montreal, developing treatments for unmet needs.
In my remarks today I would like to focus on a number of key issues before touching on our industry's recommendations. The key points I'd like to leave with you at the end of my presentation are the following: 1) biotechnology is dramatically changing almost every aspect of our day-to-day life; 2) Canada is a world leader in this important field; 3) many Canadians already depend on the biotech sector for high-wage, high-skilled jobs.
The potential for future employment and economic activity is very great. Finally, as good as things are, we can't stop to pat ourselves on the back. International competition is ferocious, and if Canada doesn't adapt to new realities, we risk losing an industry as companies look elsewhere for growth.
Let me take those in order. First, there are few industries that touch so many facets of our lives, and if you think that's hyperbole, consider this: thanks to biotechnology, we have crops that grow without the use of pesticides, that can flourish in arid soil, and that can provide added nutrients to a global population. Over 90% of canola varieties planted in Canada, for example, are biotech varieties. Canadian farmers grow 14 million acres of biotech crops each year, the fourth largest amount in the world.
Fuels produced as a result of biotechnology research are helping to address the global climate change crisis by reducing greenhouse gas emissions and allowing us to tap renewable resources. Even our auto industry is benefiting from the use of biotech products as a source for materials.
Advances in biomedical research are contributing to the development of effective treatments for unmet medical needs or new vaccines to prevent diseases. Where there has been no hope, our industry is bringing care.
So considering the growing importance of the sector, it's fortunate for all Canadians that our country is a world leader. We have almost 500 companies spending around $2 billion annually in R and D. The sector generates $4 billion in annual revenue and involves over 200,000 high-quality jobs in every region of the country. While this is very promising, many Canadian firms face important challenges to continued growth at a time when we are about to capture the value of the early research investments.
Mr. Chairman, the problem is very serious. In the study conducted earlier this year with PricewaterhouseCoopers, it was revealed that almost half of the firms based in Canada were planning to move all or part of their businesses out of the country. The primary challenge to this science-based industry is attracting capital and growing in a market that supports the technology. Canadians are looking to the federal government for leadership here.
Earlier this month, Polaris surveyed 1,200 Canadians on their views on biotechnology, and 80% of those Canadians agreed that the federal government should find ways to help support the Canadian biotech companies develop new products. Remarkably or not, we agree, and we recommend the following.
With regard to the SR and ED tax credit program, a very competitive program for our country, our association is recommending that the government increase the annual R and D expenditure limit for refundable credits from $2 million to $10 million. This tax credit program was launched in 1985, and since that time there has been no change in the expenditure limit. The higher limit would help reflect the increases in research costs that have occurred in the last 21 years. We also recommend that the Canadian-controlled private corporation restriction on these refundable credits be removed for the emerging companies. These changes will provide much needed capital for companies to extend their development programs or even start new ones in Canada.
Last year, we asked this committee for our tax system to be changed to recognize the corporate entities known as limited liability corporations. We understand work has begun on this. The problem is, it hasn't been completed, and we would ask for work to be completed. This will open the door for millions of dollars in U.S. venture capital investments into Canadian companies. We would also welcome the government exploring the concept of extending flow-through shares for tax losses to our larger public companies conducting Canadian R and D, again to generate a new infusion of capital.
Finally, I want to stress the importance of the adoption of new biotech products by our Canadian health and agricultural systems. Recently, important new vaccines for diseases like cervical cancer, infant dysentery, and meningitis have been approved for sale in Canada but are not currently available through the public immunization programs. To bring the benefits of these ground-breaking treatments, we recommend the government continue its investment in its public immunization strategy and to increase that investment by $100 million a year.
Mr. Chairman, we have done very well, but we cannot build success with yesterday's tools. This concludes my remarks.