Thank you, Mr. Chair and members of the committee.
I was going to take the opportunity today to speak with you on innovation and productivity from the point of view of both a university and a region where universities are key to R and D performance. Here, unlike in the rest of Canada, universities perform 65% of the research and development, while industry performs about one-third of the national average, at 18%. I'm also speaking from the point of view of a province in which we are making great strides in moving forward on this agenda, and of a university that is successful in its outreach to industry and in its generation of new ideas.
There are really five areas that I would like to focus on this morning. The first is that of innovative ideas, which we see as key to the whole area of productivity and of transferring new information into industry and business. At the present time, we have an excellent and world-recognized system of peer review of research proposals through requests for funding by the tri-council--that's NSERC, CIHR, and SSHRC--but across those councils, up to 50% of the proposals that have been recommended by this peer review process for funding are not funded because of insufficient funds. One of the key outcomes of this is lost opportunity costs. People have invested in preparing these proposals, and they've been judged on a national and international scale to be innovative, appropriate, and worth funding, but they're not funded. So I would encourage and see that increased funding to the councils as a key part of the innovation agenda.
I would also say that we need to maximize our innovation ideas and the use of them through infrastructure platforms. These would include, among other things, the indirect cost of research funding programs, which are key to allowing research in universities to self-fund, rather than to draw on the other areas of funding that come into the university, primarily tuition. The Canada Foundation for Innovation also plays a key role in supporting research and innovation across Canada. We should encourage the refunding and extension of that platform.
Also, I think in this area, linkages with industry, which are supported by these infrastructure platforms, are also key. Our key vehicle there is the Atlantic Innovation Fund. The University of Prince Edward Island at present leads seven AIF proposals, each of which is linked with industry and is charged with innovation and transfer of information and ideas.
I would also recognize that a key area for all of Canada is entrepreneurial challenge. I would encourage the establishment of Canada entrepreneurship chairs in universities, which could focus on developing excellence in, for example, design and product development, market research, business management of early stage companies, and best practices in the development and functioning of angel capital networks. It's information that we need, and it's expertise we need to develop. This could be further enhanced by providing fellowships and exchanges at all levels of trainees, undergraduate and graduate students, postgraduate researchers, and at the research levels that allow exchange between entrepreneurial enterprises and universities, with a focus on the development of entrepreneurial skills.
I also think it's important to continue to provide capital for the development of research. Innovative ideas are only a small part of the equation. Those need to be developed and proven before they can move forward. So it is key to keep the levels of funding to the existing programs, like NSERC's I2I program, CRC's proof of principle, and NRC's IRAP program.
I would also suggest that it would be useful to have a program for buying back university equity from early stage spinoffs that the university has invested in, in order that this funding could then be reallocated and reused for new spinoffs.
Finally, I, with many of my colleagues across the country, both in universities and in business, would encourage a review of the scientific research and experimental development tax credits, a program that's been in existence for twenty years and could be enhanced with some improvements.
Thank you.