Finance Committee on Nov. 5th, 2009

[Ted Menzies, Conservative, Macleod, AB]

Very quickly, I would have a little trouble explaining to my constituents why we would be giving a tax benefit to American citizens.

[Dave Walker]

The only tax benefit you're giving to Americans is that you're levelling the playing field between the Americans and the Canadians, and the Americans would not have to pay capital gains, as Canadians don't now on ecological gifts. You have to remember this property would be coming back into Canada, at no cost other than this capital gains tax, because the tax credit on the value of the property will actually be looked after in the U.S. system.

It will be the U.S. government that will actually be subsidizing--if you call tax credits subsidizing--to have this land brought back into Canada under Canadian ownership and preserved.

[Ted Menzies, Conservative, Macleod, AB]

Thank you.

[The Chair, Liberal, John McCallum]

We'll go to Mr. McCallum, please.

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

I want to thank each and every one of you for being here this morning.

As one who has spent twice as many years in academia as in politics, I'd like to focus first on our academic guests.

I certainly have long believed that funding of research and innovation is crucial, not only for its own sake but for economic reasons, particularly in our current circumstances, when many of the jobs are not going to come back and we have to create the new jobs for tomorrow.

I might say in passing that I think this is in contrast with the government's attitude, which is actually to cut funding for granting councils. I think that is a somewhat Neanderthal attitude.

First I would like to ask a question to Madam Fortier.

Ms. Fortier, you stressed the importance of agility, not just excellence, but also agility.

I wonder if you could expand on how your agency or research in general in Canada can be more agile. I think that in Canada, being much smaller than the U.S., we have certain disadvantages, but maybe we could capitalize on our smallness by being more agile.

Could you expand on that a little bit?

[Dr. Suzanne Fortier]

Yes. Thank you very much for the question. I'll start with the context.

We are truly in a global race in science and innovation, and being able to seize exceptional opportunities just in time is enormously important.

I'll mention two things that we've done to increase our agility, to give you an example. In our discovery grants program, which is our program to support basic research, we've introduced a component that is called accelerators. So when people make or are on the verge of making a breakthrough in their research, something that will truly transform their areas, their fields, we can put money in their hands right then so that they can really move faster to make a bigger impact for our country with these discoveries.

The other thing is that in our partnerships with industry, it's enormously important that we increase our agility. We had very extensive consultation when we launched our initiative in the car industry with our colleagues from SSHRC/CRSH, CFI and RC. The industry told us, “We need to come to you when we are ready, when we need you, not on schedules that are imposed by you.”

At NSERC, at the moment, we have several avenues for just-in-time responding to industry, in particular our industrial research chairs. No schedule is imposed by NSERC; people come when they're ready.

Our collaborative research and development grants work like that as well.

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

Thank you.

If I have time, I'll ask Mr. Gaffield if SSHRC is also agile.

First I'd like to turn to Mr. Halpin. I might agree with your proposal, but I do have one question. Right now we fund research according to whether it's science or social science or health. We do it by discipline across the country. What you're asking is to do it geographically, a special research fund of $350 million, I think, for Atlantic Canada, as opposed to Atlantic Canada getting its research funding by the various disciplines.

My question is, why would we want to do it geographically? Is there a problem for Atlantic Canada in getting enough money from the granting agencies?

[Peter Halpin]

No. On the contrary, I think our universities are very competitive when competing for funding from the national granting councils. However, I think it was your government that created the Atlantic Innovation Fund, if I'm not mistaken, which has been very successful in our region. What we're strongly suggesting is that that's been a great initiative that can be further built upon by a very specific university-led research-based investment in the region.

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

Thank you.

I think I have one minute, so I'll give the last word to Mr. Gaffield.

As a former dean of arts, I have particular sympathy for SSHRC, which in the current context perhaps has to justify itself more than the others. I would ask you to explain to the committee, in just a few words, the fundamental reasons you think the funding of social sciences and research—

[The Chair, Liberal, John McCallum]

You've got about 30 seconds.

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

—is good for the economy.

[Dr. Chad Gaffield]

It's so interesting. All the questions discussed so far today—monetary policy, global engagement for trade, regulation of a sector's railroad, public policy for petroleum, behavioural change, wearing hockey helmets, encadrement des jeunes—are fields that we're actively studying and contributing to.

[The Chair, Liberal, John McCallum]

Thank you, Mr. McCallum.

Monsieur Roy, s'il vous plaît.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

I would like to come back to you, Mr. Gaffield. You said something I found a bit surprising. You said that companies preferred to hire people trained in the humanities because of their open-mindedness and knowledge—perhaps I should not put it that way.

[Dr. Chad Gaffield]

In a number of sectors, we have seen that once a product reaches the end of the development line, a relationship has to be established between that product's use and society, culture or an idea of some sort. That means developing a design that attracts customers and adopting uses that meet their needs. More and more with new technologies, it is the use of those technologies that counts. That is the reason BlackBerrys are able to be sold or some other software, for instance. In a world with such diverse societies, you have to understand how a product will be used in a given society.

The trick is to put the technology together with a good analysis of the society where that technology will be used.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

You answered my question.

We have repeatedly heard witnesses talk about the disconnect between knowledge at the basic research level and the application of that knowledge to achieve tangible results in business.

Your three agencies are very committed. I am very familiar with the Canadian Institutes of Health Research because I worked in the health sector for a long time.

Do you have programs designed to apply your research in a concrete manner, so that a company could use it to make and launch a product? That is true for universities, as well.

[Dr. Suzanne Fortier]

We work with 1,500 businesses that invest $140 million annually in our programs. We have a wide range of partnerships in every industry. I will give you some examples.

We invested in a network supported by the Quebec dairy industry on bovine mastitis, which is a major challenge in producing good quality cheese. RIM is investing in research on large-scale transactions, which are now being done at the network level.

The oil sands industry, for instance, put together a consortium to support a number of research projects aimed at reducing its environmental impact. We also have partnerships with the auto industry and the environmental sector. Canada's industries are making intellectual and financial contributions.

The challenge facing us today is to do a better job of engaging small and medium-sized businesses because they have problems specific to them and do not have nearly as much time to establish partnerships. That is why we are launching a new strategy. This is going to be a major focus for us in the future.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

We had a problem in my riding. An SME wanted to launch a product and had to go to Iceland for the necessary research, because it could not be done here. That was just a comment.

Thank you.

[The Chair, Liberal, John McCallum]

Merci, monsieur Roy.

We'll go to Mr. Kramp, please.

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

Thank you, Chair, and welcome to all. I'll try to get through a number of questions as quickly as I can.

First, Mr. Walker, the area I represent is eastern Ontario, so I'm well familiar now with land banking. Our forestry industry, quite frankly, is a responsible steward of the land. Yet we find that there's immediate conflict between a number of your thoughts and theirs as far as actually using the land effectively to harvest product and your desire to prioritize that land for land banking. How can you reconcile those differences?

[Dave Walker]

First of all, it's not for land banking. We call what you're referring to “working landscapes”, and whether they are agricultural or woodlot, they are an allowable use on much of the land the land trusts have. As I say, it's all done under managed forests. It's all done in an environmentally sensitive way. It is being done in eastern Ontario and in other areas as well.

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

So they can cohabit. Thank you very kindly.

Mr. Halpin, certainly I applaud your work. You brought a costed strategic plan with a definite ask. It's great to have a presentation to this committee that's not just open-ended. It actually has a want and an ask that we can refer or not.

With regard to the scientific community presenters here, how would your ask tie into or complement or compete with funding requests from the various presenters?

[Peter Halpin]

I don't think it would compete at all. All our universities compete for funding from the national granting councils and have had great success doing so. That's based on the quality of their work and their competitiveness. What we're proposing is to build on something that already exists, which is the Atlantic Innovation Fund. That's a fund the federal government created and has funded for a number of years quite successfully. What we're talking about is taking that concept and building on it in perhaps a more specific way so that universities and university-led research initiatives would play a central role. But it's not all about universities. It's all about our ability to partner successfully with business to ensure that we are improving productivity and improving competitiveness in the region.

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

Do you partner with ACOA?

[Peter Halpin]

Absolutely. ACOA is a very strong supporter of our universities in Atlantic Canada.