Finance Committee on Oct. 17th, 2017

[Tom Kmiec, Conservative, Calgary Shepard, AB]

This is not something I know enough about in this region. Are there any other large-scale industrial energy projects that are moving ahead and are actually being built in the region, or was energy east the only one that was being put forward?

[Glenn Davis]

It's kind of a unique circumstance. There are major projects in Newfoundland and Labrador. There's the Muskrat Falls development, a huge megaproject that is also facing a certain amount of controversy because it has run into significant cost overruns. There are environmental aspects of mercury toxicity in building hydroelectric dams.

To the point, there is no magic solution to the energy needs of Atlantic Canadians and Canadians in general. We just need to have the dialogue and set the rules, because companies are not going to come to Canada any more to look at these opportunities, or go through a regulatory process that has no end to it or no set conditions for approval or rejection.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Have you received any feedback from other large employers, or those who may be seeking approval for a large-scale industrial project of any type, not just energy now but who now look at things like the energy east cancellation and NEB expanding its scope all unto its own? Are they saying Canada or this region might not be the place to invest? Are you hearing that from your membership as well and from potential foreign investors?

[Glenn Davis]

I have to defer. I cannot tell you that I have heard any of those rumours. I'm not sure if the local chambers would have experienced that either. Would anybody else want to comment?

[The Chair, Liberal, Wayne Easter]

There's also the Fundy tidal project, which is fairly huge.

On that topic of changing scenarios on regulatory requirements, environmental reviews, or whatever, we had a lot of discussion at our hearings out west, as well. The tax issue is another one. I guess the key question we have to look at is how governments can implement policy in a way that doesn't change the conditions that are already in existence for projects that are already planned.

I don't know how we get there. I don't know how we can make a recommendation on it, but I think we must because it does affect investment substantially.

Mr. Boulerice.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you very much, Mr. Chair.

Thank you very much for being here today. There are many of you at that end of the table and I hope you are comfortable.

I'll start with you, Ms. Foster.

Your presentation was quite troubling. You said that Canada is lagging behind in international research. It is not even in the top 30 countries, which is quite worrisome. Investments in constant dollars have also decreased. I think this shows a lack of vision on the part of successive governments, particularly with respect to basic research, which is often the poor cousin of research because it requires long-term investment. However, let us remember that without basic research, there would be no microwaves, no cellphones and no lasers. Of course, there would be no nuclear industry either.

With the way governments work, applied research is often trendier because they want to show results every four years, at election time.

How are funds allocated between applied research and basic research? According to your members, in what direction should we be headed?

[Pamela Foster]

The fundamental science review looked at the appropriate balance, and they took an ecosystem approach. Applied, obviously, it has great value and brings a lot to the country, so what's the best ecosystem? How do you have everything thrive across the ecosystem?

It talked about a ratio of investments in applied versus basic, a seventy-thirty ratio. Again, it's not hard and fast, but it's a ratio that through the best research and evidence shows the most thriving ecosystem. To make up for that, they called for the number they are asking in the report, which we're welcoming. It's an increase of $485 million over four years in investigator-led research.

Part of the analogy is that you plant how many trees to get the fruit? I think John Polanyi who you all may know won the Nobel Prize for chemistry in 1986, put it this way when he said, “the edifice of innovation cannot be built on a foundation subject to neglect.” It is about that balance and moving it toward the bigger balance within the research ecosystem to have the marketplace innovations we've seen, the commercialization components, but also the knowledge generation.

The last part on this is that the discovery research, the “blue sky” research as you called it, isn't only obviously beneficial for a market. It's also beneficial for our other challenges we face to innovate both in policy and practice to understand what's happening when we're looking at reconciliation, mass migration, thriving cultural industries, etc. All of these things require fundamental blue-sky research. That's fundamental science.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you very much.

I will now turn to Ms. Hunter and Ms. Greaves.

Ladies, your presentation was also a little troubling. I am always amazed that a rich country like Canada has such a hard time making sure that teenagers, young adults and adults learn to read and write properly. This is a challenge across the country, including in my riding, where many groups are working on the issue.

I want to talk more specifically about the funding models that governments use. In your daily work, what is the difference between project-based and mission-based funding? How does the funding model affect your organization's ability to provide services to adults?

[Jinny Greaves, Incoming Executive Director, P.E.I. Literacy Alliance, Atlantic Partnership for Literacy and Essential Skills]

Thank you for your question.

Project-based funding is great when it works. When it's not predictable, when we have to wait almost three years for it to come, we are losing important staff, who take with them much knowledge, many skills, and networking. That diminishes our capacity to continue with our programs to meet the needs of Canadians.

We do get other funding from other sources, such as businesses and foundations, and they all tend to be project-based as well. That creates a situation where we're waiting between projects, and if there is a dip or we don't have funding for six months, what do we do in that time? How do we pay the bills? How do we keep our knowledgeable staff there? How do we keep our programs going that are currently running? How do we keep the training and the professional development and all those things in place?

In fact, last year our outgoing executive director was here, Amanda Beazley, and she has since moved on because we couldn't offer her permanent employment. She took with her a huge knowledge of the literacy field, and it's a huge loss for our organization. That's what's happening I think with all Atlantic literacy organizations. We can't keep the people we need to keep there to lead the literacy....

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you.

[Jayne Hunter]

One other thing is that project-based funding doesn't cover the entire cost of the project. The organization and other partners always have to contribute as well, so it's taking away from our organizational capacity and resources to put into specific projects.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you very much.

I don't understand how you had to wait and work for three years to receive an answer about a project. I think that's completely unacceptable.

Ms. Amyot and Mr. Bureaux, you talked a lot about investment in innovation. We have a government that uses the word “innovation” almost as often as the term “middle class”. We all agree on innovation. Having said that, could you briefly remind us how our investments in innovation can be a springboard for our ability to create jobs and keep our jobs? In fact, it does not take much.

[Denise Amyot]

That's an excellent question.

In my answer, I will focus on the applied research under way right now.

When funding goes to applied research, it always affects students, in our case. That's the first thing. This means that students learn to work with the private sector, or with non-governmental organizations (NGOs), since there is also social innovation. As a result, they acquire skills and abilities that they would not have acquired otherwise. Often, they are employed because the person whom they dealt with for applied research wants them to work within the organization.

Last year, we helped 6,300 small and medium-sized businesses that did not have the capacity to do research or the best practices to go about it. They have been able to create new products and services that have, in fact, created new jobs.

Let me give you a few examples from Quebec, because you are from Quebec, specifically from Rosemont, if I remember correctly.

For example, a French company recently moved to Shawinigan precisely because of the Centre national en électrochimie et en technologies environnementales (CNETE), which is affiliated with Collège Shawinigan and does applied research. That will create 300 jobs in Shawinigan. I don't know whether you have been to Shawinigan before, but 300 jobs in that city make a big difference.

I have a number of other examples, but I will give the floor to my colleague Mr. Bureaux, who will give you some examples from Nova Scotia.

In short, when you invest in applied research in colleges, you are really investing in concrete jobs at the end of the day.

[The Chair, Liberal, Wayne Easter]

Mr. Bureaux, go ahead.

[Don Bureaux]

Thank you again for a great question.

I want to pick up on a couple of points before I give another couple of examples. I agree with Pam that there is a balance that we have to strike in Canada where, as you say, there is blue sky research and there is applied research, which are both very important. I would argue, though, that the time horizon for applied research is short. If we're able to create in the minds of our students a sense of inquiry that they're able to take to the workplace, that lasts for many years beyond just four years. That's what we hear back from the private sector partners that we work with. They want to hire not only a bundle of skills but a bundle of problem-solving abilities. That sense of inquiry that's gained through applied research development is a lifelong skill that helps the economy in Canada.

The second thing when we think about researchers is that there are big-I research and small-i research. The big-I research would be something that large corporations would develop and would have a dramatic effect on the economy, but there are thousands of examples of small-i innovation happening in the country.

That's what we're finding throughout rural Canada. Local volunteer fire departments are benefiting from small-i innovations, for example. One of our students was a volunteer firefighter. One of his biggest and most saddest moments was arriving at a car accident and having to wait literally hours before a car could be removed or lifted safely, because it had to be secured. He invented a special jack that could secure a hydraulic jack, secure a vehicle within minutes, and allow for the quick removal of the injured parties involved. He has now taken that product and patented it and is selling it around the world. There's an example of a small-i innovation. That individual now has gone on and taken that platform of technology and used it in different areas.

I think we need to look beyond just the ends of our noses in terms of the benefits of applied research.

[The Chair, Liberal, Wayne Easter]

We are substantially over the time.

Mr. Fergus.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Mr. Chair.

I would like to continue along the same lines as my colleague Mr. Boulerice, because I think there is a common thread in all your testimony, perhaps with the exception of Mr. Burke's.

Mr. Burke, I am sure that my colleague will ask you a question.

This common thread is the importance of having the necessary skills to learn. But you have to start by learning how to read and write. That's important and that's where I want to start.

Ms. Hunter, we have received your written submission, but you did not read it in its entirety. There was something on the first page. Can you tell all the members of the committee how much you are asking for to fund your activities in all the Atlantic provinces?

[Jayne Hunter]

There are four provinces that we want to cover. In Newfoundland, of course, they have lost their literacy coalition. There is no leader in that province currently at our college level. For New Brunswick, P.E.I., and Nova Scotia, we're asking for $600,000 per year. That's a hundred and—

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Can you repeat that amount?

[Jayne Hunter]

It's very small. In fact, we worked it out in the budget. It's 0.00018% of the projected expenditures from last year. When I sit here, I think, maybe if we would ask for more, we'd be taken more seriously.

[Voices]

Oh, oh!

[Jayne Hunter]

Maybe what we're telling you is too small. If we were asking for $100 million to $200 million to fix the problems of literacy, it would be....

[The Chair, Liberal, Wayne Easter]

We only need a money tree. You heard all the requests here today.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

The ability to read and write is the foundation of a well-functioning and educated society. Without that ability, we cannot send the young and not so young to colleges and universities; we cannot create companies with a trained workforce that will make its way to the chambers of commerce; and we cannot have employees in every industry. That is the foundation. So, congratulations! Duly noted.

Ms. Amyot and Mr. Bureaux, I am very familiar with the tremendous work that you do across the country. I have visited many of your institutions across the country, including yours, in Dartmouth, on the other side of the harbour. You are asking for more of the funding to go to research.

Do you also support the Naylor report? What changes would you like to see?

[Denise Amyot]

From the outset, we were very clear about the Naylor report, which involved pure, basic research.