Thank you, Mr. Chair.
My greetings to the members of the committee as you undertake your important annual deliberations.
I'll dispense with the 101. You have our final submission from August about Polytechnics Canada and our members.
Polytechnics Canada suggests that the urgent priorities you must consider are the talent needs of our employers and the innovation needs of Canadian firms.
The five targeted solutions we propose are designed to link the benefits of the polytechnic model of applied education to the persistent challenges of innovation and of skills. The talent I refer to is the people who innovate, make high-value products, deliver high-quality services for the country, and work at jobs that will stay here. Currently, federal programs are doing a poor job of supporting these people. The firms I refer to are the 1.1 million small and mid-size firms in all industrial sectors, with an average of six to seven employees, who need encouragement to grow, to commercialize products and services, and who are underperforming when it comes to global competition.
Many of the challenges of mismatched skills and innovation lag emerge from policies and programs that exclude these people and businesses from access to important government support, either through benign neglect or outdated assumptions and, frankly, models that no longer work.
Let me list a few of these broken models and suggest the fixes. That basic research alone will get you innovation is a broken model. Canada does a poor job of commercializing the results of billions of dollars invested in basic research each year. The current 20-year-old model of academic-industry partnerships pushes ideas onto the private sector—whether they have asked for them or not—in hopes that industry will be able to turn them into commercial successes. Yet the payoffs are elusive. The next budget needs a laser-like focus on business innovation.
The first fix is to invest in the sole program in the granting council suite that addresses market pull, solving industry-identified problems: the college and community innovation program administered by NSERC. It is bursting at the seams. The very modestly funded program cannot keep up with demand from industry for applied research solutions that colleges provide. A modest $15 million increase in CCIP's budget will enable the program to meet the backlog of demand from SMEs forced to put innovation on hold because the program ran out of annual funding.
A second fix for innovation is the national voucher program for late-stage commercialization support at approved R and D service providers. SMEs are cash-strapped. The SR and ED tax credit doesn't cover late-stage applied research. Investors won't open their wallets unless there is a guaranteed return. Commercialization vouchers require companies to put a skin in the game, leverage that contribution to get the R and D project done on an accelerated timeline, and get the innovations to market where customers with cash in hand are waiting. It works in Alberta and in other provinces as well. It is used by the Dutch and the Australians. A national version with national definitions, but delivered regionally, will help Canada bridge the commercialization gap. The OECD recommends this.
Now to turn to skills. The brain drain is no longer the problem. It's yesterday's fight that today's programs are still trying to win. Critical concerns abound about the complex labour market conditions facing new entrants to the labour force—chiefly, the low completion rate for mature learners enrolled in our apprenticeship programs and the lack of connection to the work world for graduates of general arts and science university programs.
The fix? We need to develop the same sense of urgency for the skills shortage that we had for the brain drain of the nineties. The mistake back then was leaving skilled trades people on the sidelines when all the investments were targeted at post-secondary attainment and building top talent. As we advocated last year, we need to treat apprentices as post-secondary learners, not employees, and provide them with access to the same supports that other students receive.
There are three specific fixes: adjust the terms of the Canada student loans program; offer tax credits to companies willing to see an apprentice through to completion of their certification; and ensure that procurement projects award points to firms that maintain registered apprentices as part of their teams.
Finally, the bias that BA degrees are the purview of the university sector alone needs to be broken. Today, 144 bachelor degrees are on offer by the entire college sector. Those students should be eligible for the same support as other undergraduates, be it through granting council research awards or international scholarships.
Some of you have inquired about the German model of post-secondary education and training. Features of that German approach to talent development that are relevant to our considerations are a highly differentiated education sector that is responsive to the needs of industry and an economy that values practical experience and instruction and respects applied education. As with Germany, Canada needs a manufacturing culture built on engaging a wider pool of talent for innovation.
I look forward to your questions. Thank you.