Finance Committee on Oct. 7th, 2014

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Specifically, yes.

[Martin Beaulieu]

In the biotechnology sector specifically, health applications are especially promising. Traditionally, many applications focused on cosmetics. But more and more applications are emerging in the area of nutrition and a lot more pharmaceutical research is being carried out.

That's why I mentioned the challenges associated with clinical trials earlier. Researchers are seeing very positive results at the in vitro or animal stage, but the challenge they ultimately have to overcome is gathering the clinical evidence. And that is where we need to be more effective and efficient in terms of the number of clinical trials that can be done on certain marine-based products.

Keep in mind that new products very rarely emerge from pharmaceutical R and D owing to all the regulatory barriers. And marine-based products probably represent the family of molecules most likely to produce positive clinical results.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

That is also the direction R and D tends to take in the U.S. and the European Union, in particular.

[Martin Beaulieu]

It's a global trend.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Very well.

In your recommendations, you don't ask for money. But some of them are quite appealing, especially the one on R and D.

What you are asking the government is to "reconsider the parameters involved in the financial support application processes and the credits for research and innovation, both for businesses and for institutions, in order to reduce the burden of identifying and renewing funding for all sector organizations and businesses."

In your view, what are the barriers that make a review of that nature necessary?

[Martin Beaulieu]

I'll answer your question in part, and then I'll ask Ms. Plourde to round out the answer. As the director of a research centre, the question speaks to her daily reality.

As someone in charge of coordinating economic development in a region that is home to numerous research facilities, I see executive directors spending a considerable amount of time putting the funding they have received in place and turning their focus to the next funding request shortly thereafter. They might dedicate a year or a year and a half of their time in a three-year funding cycle to the funding renewal process alone.

A research facility's executive director is a precious resource. Not only are they skilled researchers, but they are also experts in team management and business development. The more time they spend on funding applications, the harder it is for them to seek out international markets, where they can market the fruits of their research, for instance.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

You rely heavily on funding from Canada Economic Development for Quebec Regions.

Is the situation you're describing the same across all the country's regions?

[Martin Beaulieu]

Having managed projects in Quebec and the Maritimes, I can tell you that there are some differences, though not significant ones. What I would say is it's easier to bring projects to fruition in regions outside Quebec. That said, however, I don't have any specific examples in mind.

Looking at the projects carried out under the ACCORD strategy I mentioned earlier, I would say that, empirically speaking, of a total budget of $14 million for a research project, the Government of Quebec provided about $2.5 million and Economic Development Canada provided around the same.

In terms of coordinated initiatives, Economic Development Canada's contribution is quite considerable and very much appreciated.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

What recommendation would you give the federal government in order to make Canada a leader in the blue economy, marine biotechnology and sectors of the future?

[Martin Beaulieu]

In addition to supporting the existing structures, it would be to help us build networks, which could then submit development projects that put our research findings into application. That would also provide an interface with the end user, those responsible for application, be it at the industry or institution level. Basically, the recommendation would be to support the building of networks such as these, a bit like what they do in Europe and the U.S., as I mentioned earlier.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Caron.

We'll go to you, please, Mr. Saxton, for your round.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Chair.

Thanks to our witnesses for being here this evening.

My first questions will be for the Canadian Manufacturers and Exporters and Mr. Myers.

Mr. Myers, as you know, our government's trade agenda has already made Canada one of the most open and globally engaged countries in the world, most notably with the recent signing of the comprehensive economic and trade agreement with the European Union, which will open up 500 million new consumers for Canadian businesses.

Can you explain how this CETA with the European Union and other trade agreements that our government has engaged in will help Canadian businesses, primarily manufacturers and exporters?

[Jayson Myers]

Thank you very much for the question.

I think our comprehensive economic and trade agreement with Europe is a real game-changer, and it's for Canada's advantage here. Very shortly, we will be the only country in the world with access not only to the European market but to the American market, without a lot of the hindrances and trade obstacles that stand in the way. It's not only tariffs. The reality of international business today is built on partnerships. It's built on investment that flows back and forth. It's built on the ability to move people within companies to get fast product approvals to take advantage of large infrastructure procurement markets.

In particular, even in manufacturing, the money is made in service, engineering and design, and technology. In my mind, that's where CETA focuses. I have nothing but the best to say for our negotiators on this agreement. I think it's a fantastic agreement.

What we're doing to follow up, though, is working with the European Commission. We've become the Canadian hub of something called the Enterprise Europe Network. We're calling this the Enterprise Canada Network. We've been working on it for about a year. It's set up with other organizations to identify opportunities for technology partnerships between Canadian companies and European companies. In just over a year, we've concluded 63 technology partnership agreements already, so it's a tremendous opportunity, I think.

In the field of technology, in marine sciences, which is a very large part of this, the importance in Europe is to get in at the product development stage. We're not going to be doing business with Europe on product lines that are already developed. It's about getting in at the early stages of product development, leveraging European technology to grow businesses in Canada and North America, and taking part in supply chains through European companies to do business not only in Europe or North America, but perhaps even in China. In my mind, this agreement just makes all of that a lot easier.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

In addition to bringing down trade barriers internationally, our government is also focused on bringing down trade barriers that still exist within the provinces, within Canada. How will it benefit Canadian manufacturers and exporters once we bring down those interprovincial trade barriers?

[Jayson Myers]

This is also extremely important. My fear is that we may have freer trade between Canada and Europe than we will within Canada itself, particularly in areas of transportation standards, moving people across the country; the restrictions we have on apprentices, for example, moving from one province to the other and recognition of professional certifications. All of these are extremely important.

The one area where I think we should be focused on, because it covers so many issues, is regulatory cooperation. We have a regulatory cooperation initiative with the United States, which is very important, but I think we need to replicate that across the provinces. In my mind, the federal government has a leadership role, and it's one I would imagine the entire business community in Canada would be very, very supportive of: eliminating the unnecessary regulatory compliance obstacles to moving product and people across this country.

[Andrew Saxton, Conservative, North Vancouver, BC]

That's in addition to cutting red tape, which is what we've been tackling very aggressively.

[Jayson Myers]

In manufacturing, everybody is focusing on delivering customer value and eliminating all of the processes that don't add value. That, to me, is what regulation should be about: delivering the outcomes—the health, safety, environmental performance—and doing that in the least costly, the least complicated way possible. It's removing all of the complicated compliance requirements that don't add anything to the outcomes.

I'm amazed. When I go into a room of business people and I ask how many have a NEXUS card, a lot of hands go up. Then I ask how many people who have a NEXUS card have been drawn into secondary inspection. It's amazing how many hands go up. The reason is because inspectors in the United States are now inspecting to see if you're compliant with NEXUS, with a system that is supposed to speed up because you have security clearance.

In my mind, that's a perfect example. Why do we need this? It's not adding to greater security here; it's simply putting in place another set of compliance requirements that are totally unnecessary. It's apparent in many, many other areas of regulation, and that's exactly the type of thing we should be looking to eliminate.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you very much.

Chair, how much time do I have?

[The Chair, Conservative, James Rajotte]

You have about 30 seconds.

[Andrew Saxton, Conservative, North Vancouver, BC]

Very quickly, to Co-operatives and Mutuals Canada, you've asked for $50 million in investment from the federal government in your fund.

My question is, what sort of investment is this intended to be? Also, you mentioned that cooperatives are very successful and stable. If that's the case, why do you need the federal government to help out?

[Shawn Murphy]

We're looking for the development of this fund to help with the innovation side. Cooperatives are formed when there's a need within a community, within a region, within a group of people. When these individuals set up, there will come a time when they hopefully would like to expand, to grow. But there are a lot of barriers that they face. They can't get traditional forms of lending from traditional banks, or even credit unions for that matter.

Therefore, if they want to innovate and grow, these barriers continue to present themselves. We would like to have a stand-alone fund designed for cooperatives. It's primarily for SMEs, for the smaller and medium-sized cooperatives, to give them a hand to move on.

[The Chair, Conservative, James Rajotte]

I apologize for interrupting, but, again, we can't go over the member's time. We have to be fair to certain members. We will come back to that point.

Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you.

Mr. Myers, would an EI premium holiday for new hires help your members create jobs?

[Jayson Myers]

When companies are looking at creating jobs, they're especially looking at the total expense of employment. A reduction in premiums tied to job creation, I think is a very useful policy measure.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much.

For Ms. Atkinson and Mr. Myers, have recent changes—I'm saying in the last couple of years—to the SR and ED program had a negative impact on investment in research and commercialization for your members?