Finance Committee on Nov. 7th, 2013

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

I appreciate your recommendations on that.

[The Chair, Conservative, James Rajotte]

You have 10 seconds left if you want to make a final comment.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Well, let me just throw something out and perhaps someone else can pick it up at a later point.

It seems that in a globally competitive marketplace, one of the key factors around innovation is energy efficiency and reducing our carbon footprint. I'm interested especially in forestry products.

I know you've done quite a bit of work on that, and aerospace, and I'm wondering how we are using that as really a competitive edge for Canada.

[The Chair, Conservative, James Rajotte]

We'll have to return to that in a later round. Thank you, Ms. Nash.

Mr. Saxton, please.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you, Chair.

Thanks to our witnesses for being here today.

My first questions will be for Catherine Cobden from the Forest Products Association of Canada.

As a member of Parliament from British Columbia, you can imagine how important the forest industry is to me and to my constituents. I just want to mention to you a question that I am frequently asked, namely why are we still exporting so many raw logs? Why have we not gone up to the higher value-added exports?

So I want to ask you, what is industry doing to raise the value of our exports? And are government programs such as IFIT and FIBRE helping in this regard?

[Catherine Cobden]

Yes, absolutely. Let me just say that the whole essence of our transformation agenda is to extract more value from every tree we harvest.

Now, there has been a bit of a unique situation with the mountain pine beetle scenario in British Columbia and raw log exports, but that should stay unique and should never become the norm.

So absolutely, to get more value from every tree we harvest, the IFIT program fundamentally does that. It improves our long-term competitive position. It's a terrific solution for that problem.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Historically the forest industry has been heavily dependent on one market, the United States. I know that in recent years an effort has been made to expand those markets. Perhaps you could share with me what industry is doing to expand the markets for our wood products and also what government programs have assisted in this regard.

We do have six new trade offices in China, and two in India. Is this helping in those efforts?

[Catherine Cobden]

Listen, this is a tremendous area of effort, and we are so grateful. What we've managed to accomplish together in partnership is that basically the forest industry is now Canada's largest exporter to China. Our competitive jurisdictions are looking at the successes that we've blazed together and are asking themselves how we have managed to penetrate a rather difficult market.

And by the way, in terms of those efforts, with the return of the U.S. housing market, there is no sense whatsoever of abandoning the China market. This is absolutely the future direction of the industry and we need to keep going.

As well, with regard to the work on India, by the way, we're further behind in terms of the timeline, but I think we're at the stage we were ten years ago on China. We need to continue to pursue it.

Thank you very much for that question.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

In your introduction, you mentioned the industry's success in leveraging public dollars with private dollars for the IFIT program.

I'm interested to know how successful you have been at leveraging public dollars in the FIBRE network.

Just for our viewers, “FIBRE” stands for Forest Innovation by Research and Education. I love these acronyms.

[Catherine Cobden]

Yes, sorry about the acronym.

FIBRE is a collective of university professors from across the country. Essentially they are using NSERC funding—actually it's multi-council funding—to support the industry's transformation agenda through the pure R and D phase.

If you look it as a funnel, we have a lot of idea generation, which we critically need. We need to outpace our competitors on new ways to use trees, just to touch on your earlier point about value added. That's what the university network is doing for us. I can't tell you the significant number of innovations that have come out of this—I have a long, long, long list—but I'd be happy to provide the backup material for this.

I was at a meeting yesterday with about ten of those professors, who are just so committed to this; it's truly remarkable.

[Andrew Saxton, Conservative, North Vancouver, BC]

Have you been successful at matching or leveraging public dollars?

[Catherine Cobden]

So yes, they have to bring in industry partners, and they in fact want to do, and need to do, more. I note that NSERC has made some additional changes in this regard.

Listen, we're not looking for things that don't require industry commitment. We truly believe that a sector-based innovation system gets you the long-term productivity and essentially gets you the competitive edge that you need when you are, like us, competing in a global marketplace.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

I have a very quick question for my friend Gilles Patry from the Canada Foundation for Innovation.

Gilles, one of the priorities of our government is obviously to bring innovation from the lab, from the research centre, into the marketplace, to commercialize that innovation. In your submission to us, you mentioned methods to bring together cross-sector organizations into partnerships.

Can you explain how that would help to commercialize innovation?

[The Chair, Conservative, James Rajotte]

A very brief response, please.

[Gilles Patry]

Yes, absolutely.

We've invested in research infrastructure over the time and these facilities are essentially open for business, as I've indicated. The idea is to try to bring in the private sector to use the facilities that are located within universities and colleges, to benefit from the expertise that is there, the people, number one, but also the facilities that they would not be able to develop or build by themselves. We're seeing a tremendous uptake of that. There's about $1 billion a year that's being spent in universities and colleges by the private sector having access to the people and to the infrastructure that has been provided.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Thank you, Mr. Saxton.

I wanted one clarification, as chair. Ms. Cobden, you mentioned the exports to China. Was that by monetary value?

[Catherine Cobden]

Yes.

I'm trying to remember the metrics I've got. I have several different metrics that I can provide to the committee, but yes, definitely.

[The Chair, Conservative, James Rajotte]

If you can provide that—

[Catherine Cobden]

Yes, I will. Absolutely, for sure.

[The Chair, Conservative, James Rajotte]

—to our analysts, we'd appreciate it very much.

[Catherine Cobden]

I'd be happy to do that.

[The Chair, Conservative, James Rajotte]

Okay, thank you very much.

Mr. Hsu, please, for your five-minute round.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Thank you very much, Mr. Chair.

My first question is a pretty straightforward one for Mr. Julius. It's about your recommendation number two, to replace the 18% of Tri-Council direct support to calculate the indirect cost support for large institutions and the 90% for small institutions by a flat 45% of the Tri-Council funding to everybody.

How much is that going to cost?

[Dr. Michael Julius]

To be absolutely clear, more money is going to be required. It is the direct relationship between where the indirect dollars flow to where the research is being done, which is the ask. Even if we kept everything stable financially, the larger institutions would benefit. We basically have to decide what the indirect cost program is about. Is it an indirect cost program, or is it also a capacity-building program?

[Ted Hsu, Liberal, Kingston and the Islands, ON]

In that case maybe I could rephrase my question.