Finance Committee on Sept. 28th, 2009

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. Mohamed.

You may want to actually pass around the laptop to members, if you want them to get a sense of it. I don't know how many of them have actually seen it.

We'll now go to Mr. Nilson from Vancouver Island University.

[Ralph Nilson, President and Vice-Chancellor, Vancouver Island University]

Thank you very much for the opportunity to address the standing committee. I bring regrets from our chancellor, Chief Shawn Atleo, who is unable to be with us today. We had hoped he could be, but it's not possible.

I'd also like to thank the Government of Canada for the knowledge infrastructure funds that we and other institutions across the country have received. As an example, one of the projects that we've invested in is a new facility that we're building on our Duncan campus. When you look at the issues we have in our brief, one of the keys is that 18% of the population at that particular campus is aboriginal; we are serving the Cowichan bands and various other communities on that part of the island.

Just so you have a bit of an understanding, Vancouver Island University is a new university. We are one of the institutions in British Columbia that was a university college, and in September last year we became a full university. Prior to that we had 73 years of history in the mid-island, and for 20 years we were giving out university degrees. So it's not new that we're granting university degrees, as we've been doing it for 20 years.

We take very, very serious responsibility for our role in mid-Vancouver Island in economic and social development within the communities we serve. So it's a very, very important part of what we do.

The issues we're addressing in our submission concern the changing economy. When we look at the resource-based economy on Vancouver Island and up and down the coast, there's been some critical change. We know the forest industry has changed dramatically. We know, indeed, that fishing and harvesting protein from the sea has changed dramatically. We know there are a variety of changes at hand that impact directly on both provincial and federal jurisdictions. As those resource-based industries change, they displace a lot of people. We're a regional institution that provides support for people in that transition. We are an open-access institution, and it's very important that we address the opportunities for people to come in and address that change in their lives.

We're also very strongly focused on capacity building in first nations communities. We have 51 first nations communities on Vancouver Island. We serve communities up and down the coast and provide support for them. We have the largest head count of aboriginal students of any university in British Columbia. Even though we're about one-eighth the size of UBC, our head count of first nations students is dramatically larger. It's because we provide an environment for them to excel and to be successful. It is a very important issue for us.

The third piece we're very involved in as a coastal institution is looking at ocean management, particularly as it relates to harvesting protein from the sea. Our real strength is in shellfish research, but we have a strong partnership with DFO and look at all of the challenges that exist in harvesting protein from the sea and how we, as a regional institution, can provide supports to help guide that dialogue in a way that moves it forward, rather than some of the challenges that I know exist with the political pitfalls that arise when dealing with provincial and federal jurisdictions. As a regional institution with a strong relationship with DFO, I think we have a part to play and a place to work.

So our recommendations are threefold. The first one is looking at first nations funding for post-secondary education. We know there's a real need there; we know there's a real challenge there. We think we can provide and develop the kinds of models that are going to be successful for first nations in building capacity in their communities, and that's done through small regional institutions that are close to home communities and provide the kind of cultural support that's necessary. This is a model that we can work with other institutions across the country. It's not just something that's going to focus on Vancouver Island.

We also recognize that regional universities, especially when located in resource-based communities where industries are changing, are a place of innovation. We are a place of change that can provide the kinds of supports that will help the economy and help us understand what the next economic drivers are going to be in those communities, especially at the regional and rural levels. We have a role to play.

The third one is the opportunity to engage with DFO in a way that allows us to look at and address this evolving issue on the coast of harvesting protein from the sea and the whole responsibility we have in ocean management as it relates to that. I think we have a role to play in having a dialogue and in providing direction and leadership.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We thank all of you for your presentations.

We'll now go to questions from members, starting with Mr. McCallum for seven minutes.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair, and thank you all for joining us this morning.

I'd like to focus on two themes that I think are critical for the jobs of tomorrow, which some of you have advanced, where I think you'll find a big difference between our view and the government's view. One of these areas is the role of research and innovation in science in creating the jobs of tomorrow. The second one is the importance of the Pacific gateway and trade with China; we can't put all of our eggs in one basket, and we really think Canada's destiny lies increasingly with Asia. Some of you have touched on that.

If I may begin with the first theme, this is principally for Mr. Lockyer and Mr. Nilson, I think. We believe that to create the jobs of tomorrow, government has to be heavily involved in science, in research, in innovation, because many of the jobs lost today will not come back. It's true that with new ideas and innovation in science and research, Canada must work to create these future jobs. On the government side, they've actually cut funding for science and research-granting councils, so there you see a pretty stark contrast.

To Mr. Lockyer, you're seeking quite a lot of money, approximately $300 million. So I have two questions. Have you, other than coming here today, had conversations with the industry department, and what are the prospects for that? Second, in terms of the isotope crisis, you described a short-, a medium-, and a long-term plan. Have you been in discussion with government on that? What kind of reaction have you had to that plan?

[Dr. Nigel Lockyer]

The answer is that we have met with a number of people in Industry Canada. We met with Minister Clement to discuss our proposal. We met with senior civil servants in NRCan to discuss the isotope proposal. So there is interest in what we're doing.

I think, as I said, we presented it as a choice that you can invest in reactors. But first of all, let me say that I think we should be in the business of medical isotopes. Canada has a long history here and is recognized around the world as being engaged in this type of activity. It's not only business, but also research and health care. It has many facets.

[John McCallum, Liberal, Markham—Unionville, ON]

Do you think there's a moral dimension as well, if we just walk away from it at a time when there's a supply deficiency?

[Dr. Nigel Lockyer]

Well, I've interpreted the government's position as saying that we are not going to subsidize isotopes for the rest of the world. I would like them to say that we are going to worry about isotopes in Canada, and that's what we're trying to address.

There are two aspects to that. One is that we've offered a solution that provides moly-99 and other isotopes for Canadians. It's also a business at the same time; we build and sell accelerators in Canada, and we see it as a growing business. So that's what we've offered them.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. Nilson, I've spent twice as much time as a university professor in economics as I have in politics, and I've been struck by the importance of regional universities to their communities. The little “UQs” in Quebec, for example, are central to the future of their communities. So if we're going to have policies that favour new activities and jobs in regions and not just in the big cities, then I think your proposal is really important. I really subscribe to your first recommendation, where you call for “The creation of a funding program by the Federal Government that supports core operating funding for research centres at regional universities, where the economic and social benefits of the applied research can be clearly demonstrated.” For example, in places like Chicoutimi, I notice that the universities are central to their future, and often the outlook for traditional jobs in those areas is not very good.

I guess my question to you is, are you guys banding together in some way to have a united front? I know the big universities such as the University of Toronto and McGill try to hog all of the money, saying they're excellent and you're not. I've been there. Are the smaller universities based in the regions trying to act in a concerted fashion in this area? If not, I think it would be a good idea.

[Ralph Nilson]

There are a couple of things I want to respond to.

First of all, I'm a firm believer in the big universities doing what they're doing. It is very, very important for us as a nation to have that strength of the large research universities pushing the agenda the way they are; but we also have to recognize that the regional universities have a real responsibility on the ground in doing things that can't necessarily be done. So thank you for that support.

I just want to give you an example of our shellfish work. Shellfish farmers who have a lease on the B.C. coast are lucky if they make thirty grand a year. They have no R and D capacity. We're building a shellfish research field station where we are the R and D. We also work with first nations, helping them learn and understand. We have a whole program up and down the coast, training managers in first nations communities in shellfish, helping them with R and D as well as the little shellfish farmers.

We are talking about across the country. We're just starting conversations now with other small regional universities that have large aboriginal populations. I'm getting into conversation, for example, right now with Nipissing University, and Cape Breton University, etc. So there is a discussion, but there is not a concerted, well-organized discussion at this point.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you. I think I have pretty well run out of time, but I was going to ask a question on China. It is my impression that Stephen Harper, never having visited China as Prime Minister, and having poked China in the eye repeatedly, has cost us in terms of approved destination status for tourists in Canada, and in other ways.

I was going to ask, but I don't know if there is time, about this in terms of the Pacific gateway. I'm all in favour of increased trade with the Asia-Pacific region. How much money approximately would this second phase of the gateway investment cost?

[The Chair, Conservative, James Rajotte]

Okay, be very brief.

[Robin Silvester]

The two specific items we've raised as fundamental to the development of the Vancouver gateway, the New Westminster rail bridge and the river training infrastructure, are $100 million to $150 million each. But we've had some dialogue with Transport Canada in a lot more detail about those numbers.

[John McCallum, Liberal, Markham—Unionville, ON]

So that's $200 million to $300 million in total.

[The Chair, Conservative, James Rajotte]

Okay, thank you for those non-partisan questions, Mr. McCallum.

[Voices]

Oh, oh!

[The Chair, Conservative, James Rajotte]

We'll go to Monsieur Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

Good morning to all the witnesses.

I have a question for Mr. Krusel, from the Prince Rupert Port Authority. You have shown us a very impressive situation, in which significant government investments have yielded positive results. Now you are saying that we need to go farther. To my mind, the government is there to support and stimulate an organization. With such great results, you must surely be making more profit now.

Why should the government continue to invest there instead of in another industry in another region? The investments were successful, but we also have to think of others. I have a bit of trouble seeing why we should again invest in the same area, when several other industries are also in need of investment.

[Don Krusel]

Thank you.

First, I'd like to add to the previous question on the $300 million for the Pacific gateway. That's the Vancouver portion of the Pacific gateway. Our portion would add about $300 million onto that as well. That's just to clarify.

To your question about profitability and the continued investment in the project, really what we are talking about is a different project that builds on the first. This graph illustrates the opening of a container facility. Canada now requires on the northern gateway through Prince Rupert an integrated logistics park that services both this container facility and also all of the exporters and importers throughout western Canada who need facilities in this gateway to help them grow their export and import business.

I'll use the analogy of a shopping mall where there are a lot of retailers who want to locate their retail facilities in one location but it requires a large piece of infrastructure. Not any one of, or a couple, of those retailers can put the resources together to create the foundation for that kind of development. What is required is a very large investment, like $200 million, for a logistics park to create the foundation. It will create $1.4 billion of private sector investment. There will be private sector investment, but it requires the foundation to be created to assist that.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Since I do not have a lot of time, I will move on to another witness.

My second question is for Mr. Lockyer. You mentioned isotopes. Earlier, Mr. McCallum asked you if you had spoken with the Department of Industry. My question has more to do with the medical aspect.

Have you proposed your measures to Health Canada? Is there evidence to back up replacing what currently exists? Does the medical community recognize what you are proposing to be as effective as what was produced at Chalk River?

[Dr. Nigel Lockyer]

That's a good question.

The answer is, yes, we work with Health Canada also. We are going through a process. Actually, there's the process that we go through with our five-year plan through the National Research Council, Industry Canada, and so on. There's a memorandum to cabinet that will be going forward in the next month that contains the accelerator that would be used to make these isotopes. The fact is we collaborate with MDS Nordion as our partner. It's been a 30-year manufacturing partnership with MDS Nordion.

We already produce 15% of Canada's medical isotopes. We're proposing that we produce the rest. We would do that with accelerators. We've had an international study of that published. It was funded by NRCan and it supports the approach we're taking. It's really now a decision, I think. The technology is there, and it requires much less of an infrastructure investment than in a reactor.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

You are talking about the short term, the medium term and the long term. Can you define short term and medium term? Are we talking months or years before we are able to meet all of Canada's isotope production needs?

[Dr. Nigel Lockyer]

Short term means less than two years. It's probably about a year in the case of the short term because we have to make modifications to existing cyclotrons in Canada. It's no major infrastructure investment at all. It's really a few tests to demonstrate something we believe we know how to do and then transfer that around. That's the short term. It's one to two years.

In the medium term we would do our demonstration in 2012, then pass that over to the private sector, and you would be part of the supply chain by 2015--a complete transfer to the private sector.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Laforest.

Mr. Kramp, you have the floor.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you very much, Chair. Welcome to all.

Ms. Mohamed, I am absolutely thrilled with your proposal. I think it's a caring proposal that certainly starts to deal with one of the areas of serious concern we are facing as a nation.

I just have a couple of questions dealing with it. When you say One Laptop Per Child, what age group are you primarily thinking of for this pilot program?