Thank you for the opportunity to speak to the committee, Mr. Chairman.
We're here today because we believe universities have a vital role to play in improving Canada's productivity and helping Canadians compete and prosper in a highly competitive world.
Over the past two decades, Canada has transformed itself from an economy that is heavily based on resource extraction and export to an increasingly knowledge-based economy. Today, many Canadians are employed in traditional industries that are using knowledge and technology to add value and increase productivity, while others are employed in newly emerging, knowledge-intensive industries that did not exist 20 years ago. Across the economy, Canadians are working with new knowledge and technologies to be more productive and competitive.
Investments in higher education and research will be a key driver for future productivity gains in Canada. Research generates the new knowledge that a highly skilled work force can transform into new products and processes.
Currently more than one third of the research conducted in Canada is done at Canadian universities. A thriving university research enterprise is a platform for other sectors, including the private sector, to launch research efforts. More than $5 billion worth of research was conducted in Canadian universities for the private sector in the last decade. It is clear that, given the structure of the Canadian economy, universities play a uniquely important role in this country's overall research effort.
University research also ensures that all regions of the country can experience the benefits of knowledge creation and application. Over the past decade, only the university sector increased its research performance in all provinces and regions, with federal investments in university research playing an important catalytic role in this regard.
University research now accounts for between 27 and 71 per cent of all research performed in each province.
The investments made in recent years by successive provincial and federal governments and universities themselves have turned Canada from a country at risk of experiencing a major brain drain to one that's benefiting from a brain gain. This success story is happening because these investments have been made in each of the four key areas that make excellent university research possible.
The first is ideas. The federal research granting councils fund research projects that generate new ideas, insights, understandings, and applications.
The second is people. The Canada research chairs program, the Canada graduate scholarships, and individual graduate support programs administered by the three federal research granting councils provide support to attract, retain, and develop highly qualified researchers.
The third is infrastructure, and you heard from CFI earlier. The Canada Foundation for Innovation, as well as Industry Canada through its support of CANARIE, funds state-of-the-art infrastructure--the buildings, the equipment, the networks--that is critical to conduct research.
Finally, there's institutional support, the indirect costs program that supports the institutions that provide researchers.
In the last federal budget the government made welcome investments in all of those four pillars--a $40 million increase to the granting councils, a $40 million increase for the indirect costs of research, a $20 million annual investment in the leader's opportunity fund through CFI, as well as an increase in the value of graduate scholarships by making those scholarships tax exempt.
The point I want to make, Mr. Chairman, is that Canada is among the world leaders in university research, but our position is fragile. Our competitors in the G8 and newly emerging competitors like China and India are investing in research in the global race to attract talent and high-paying jobs. Canada must produce more highly qualified graduates to meet labour market demands and to meet the need for replacing the retiring baby boom workers.
Universities are prepared to do their part, expanding their research efforts, producing the highly qualified graduates with the employment-related research skills and creating more networks that bring people together. Universities are also prepared to continue to account for the results of the research investments that have been made. These are key elements of increasing Canada's productivity that will ensure that all Canadians can continue to benefit from the high quality of life that we have in this country.
Thank you, Mr. Chair.