Finance Committee on Oct. 16th, 2018

[Warren Wall]

I think it's getting very close. I think we're almost there.

It hasn't stopped the supercluster from moving forward. As a group of organizations, we have established an entity that's moving forward. We've already selected the first projects that will move forward as soon as funding is available. We will move very quickly once that agreement is signed.

[The Chair, Liberal, Wayne Easter]

You'll have to end it there.

Mr. Julian, the floor is yours.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much.

This has been very interesting testimony. It will be very helpful, I think, for our pre-budget report.

I'll go to you first, Mr. Biggs, just so that I understand what you said in your presentation.

You talked about the pipeline purchase. I think we've been hearing a lot of that across the country. People are concerned about the $15-billion cost. You also raised the overall economic cost of climate change. If I got the figures correctly, you said that moving from a 1.5° increase in global temperatures to 1.8° would cost the Canadian economy $150 billion a year. That's 10% of GDP. Is that correct in terms of what the economic impacts are of climate change?

[Sven Biggs]

The study looks at the impact on growth of GDP, not GDP as a whole, so it is less than 10% of GDP. It's a measure of slowing down the growth in the economy.

Personally, I think the methodology that the study used was very conservative. I would note that it's based on an older IPCC report, not the most recent one that just came out. If that study were run again, I think you'd find more dire numbers.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

What would be the figure, though? For our pre-budget report, rather than talking in percentages, it would be better to quote the actual cost in terms of billions of dollars. Do you have that figure available, or is that something you could provide to the committee?

[Sven Biggs]

I could provide that to the committee at a later date. We'd have to do some math and figure out where we expect the GDP growth to be, going forward.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Okay. I think that would be very helpful for the committee. If you could provide it to us in the next week or so, that would be wonderful.

Mr. Brownell and Mr. Wall, thank you very much for coming all the way over from Burnaby—coming overseas to Victoria. It was very good of you.

I note that you said you currently have no customers in Canada. You also said that the final contribution agreement is being negotiated now. It looks like four or five months, but it seems to be coming together. I would add my voice in terms of anything we can do as a committee to push that to a conclusion.

Do you think the fact that you have no customers in Canada is linked to our very poor performance in terms of R and D funding? We're last among major industrialized countries in terms of public funding for R and D. We're last in terms of the number of patents that come from Canada. We're second to last in terms of the number of doctorates we produce. Is the fact that you don't have clients from Canada linked to that chronic underfunding in terms of research and development in Canada?

[Vern Brownell]

I think it is. I think it's also related to the fact that with regard to the researchers we tend to fund, a lot of it is theoretical and not practical in nature. Certainly those sorts of researchers are of paramount importance, but what we're asking for is more funding of applied methods.

For instance, we can use this computational capability in bioinformatics, in all of those application areas that we talked about for practical researchers who are looking at problems like that. Rather than just focusing on quantum computing and developing the actual physics behind quantum computing, it's about moving it more into a practical form of research.

However, I agree with your premise, certainly.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Mr. Wall, do you have anything to add to that?

[Warren Wall]

Mr. Brownell mentioned funding, and there is a fair amount of funding of quantum computing in Canada. Most of it goes to IQC in Waterloo, which is great. We strongly support the work they are doing in those areas. It's very much at the theoretical and early device level, though, so we do need to expand the role of government in supporting application research.

I would say that in the case of industry, we don't see the big industries in Canada that we have seen in the U.S. that are interested in taking the risk to develop quantum computing. It does cost money. It does take time and effort to invest in those particular areas, so we see companies like Lockheed Martin, Google and the U.S. government investing in those areas in order to do the research, and we don't see that investment happening in companies in Canada.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much.

I'd like to move now to Mr. Ariganello and Mr. Adem.

You both mentioned issues around the precariousness of work and disrupted jobs. In both cases, you spoke to the fact that we have real gaps in terms of policies and programs.

In terms of precarious work, Mr. Ariganello, providing public support, public pharmacare and public pensions and making sure that even somebody who is in a precarious work environment gets these supports makes a big difference in terms of our competitiveness internationally, because those employees, if they're well supported by public policies, can have long careers and contribute to the Canadian economy.

What do you think we need to change in terms of public supports for those who are experiencing precarious work so that there is in place a really effective social safety net?

[Anthony Ariganello]

I believe that money has been spent in the past on traditional training programs, but that is really changing dramatically because of the disruptive change with respect to technology, and specifically artificial intelligence. It's here and it's coming, and the speed of change is just immense.

Traditional training mechanisms aren't really the solution going forward. Government really needs to be aware of what needs to change. How do we equip the population, specifically those who are going to be affected by change, especially the unskilled labour force? How do we equip them to effectively do different jobs?

When we speak about robotics specifically, or bots in this case, there are going to be new roles at play, trainers and influencers who essentially teach machines how to build empathy and emotional intelligence and be aware of certain dynamics with respect to ensuring there is no bias when machines are essentially deciding on someone's credit rating, whether they get a loan, and so on.

These robotics, if we want to call them that, need to have individuals who are better skilled to be able to do those jobs, so I think we need to spend. I believe that government needs to really push the boundaries and ensure that we equip tomorrow's population with better tools and skills to be able to do those jobs. Studies have shown that if we don't, the loss in productivity for Canada could be anywhere from $6 billion to $18 billion annually if we really don't get moving quickly with respect to the disruptive change that is coming. That is going to be a toll on the Canadian economy if we're not aware of that.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you.

[The Chair, Liberal, Wayne Easter]

I'm sorry. We're a little over time—

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Can he answer? I just wanted to make sure Mr. Adem could answer the same question.

[The Chair, Liberal, Wayne Easter]

Certainly. Go ahead.

[Alejandro Adem]

I'd like to echo what my colleague said. The point here for us is we have thousands of students entering universities and colleges, and what kind of future are they going to have if they are not learning the skills that companies will expect?

Companies are no longer really training employees. They expect them to be work-ready. A description of appropriate skills for the upcoming decade or decades is quite a challenge to get, and our model works based on the marketplace. All our projects are based on market demand, so they are constantly changing as companies change and start using new technology.

The fact that our projects are focused on a deliverable, which is tied into things like commercialization, makes it what we call the kind of teaching that cannot be done in a classroom, and that has an impact on the life of the student, on the company and on the whole framework of the economy in Canada.

[The Chair, Liberal, Wayne Easter]

Thank you all.

Before I go to Mr. McLeod, it was you, Mr. Wall, who said that you don't see people taking the risk in order to do the research in Canada. Why not? What's the reason for that?

I looked at your submission and I think you're asking for $50 million over five years. I think you indicated the U.S. is spending $1.275 billion. That's a huge difference. Can we do the same thing with $50 million? Why is that happening? Why are we not producing more risk-takers, because we have to get there?

[Vern Brownell]

I think part of it is the U.S. is home to global companies like Google, for instance, a customer of ours, and NASA, and organizations of that kind that had the scale and risk appetite for getting involved in technology very early.

I think our economy, our industry and our commercial customers, potential customers, need to have partnerships to help them share that risk. They don't have the resources that a Google does. Another customer of ours is Los Alamos National Lab, the folks who invented computing back in the 1940s. They have the scale and the reach, and they're actually providing access to researchers in the U.S. outside of those institutions.

What we want to do is create an ability for Canadian researchers, and even folks who are early within the commercial side, to have access to quantum computing so they could start to look at how they can apply it to their businesses. That's something that I think the United States, because of the scale, does a little bit more naturally.

Another example is Volkswagen, which is a customer of ours. They are probably the largest industrial company in the world. They have the resources to look at the earliest technologies. We need to somehow arm our Canadian companies to be able to do that.

AI is a good example as well. We do a lot of work with AI. We have leadership positions in both AI and quantum computing. Without these kinds of investments, I think they'll tend to move south of the border and elsewhere in the world.

[The Chair, Liberal, Wayne Easter]

That, I think, is helpful.

Go ahead, Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you to all the presenters here today for some very interesting topics.

My first question is to the Chartered Professionals in Human Resources. I appreciated very much your presentation flagging the different areas that need consideration and further investment in the area of human capital. It's something that I, as a member of Parliament and in other capacities in my life, really put a lot of energy on, because I think it's the way forward for many people in the north.

I represent the Northwest Territories. In the north, it's something that we really need. I represent a riding that is over half indigenous, so we have a lot of challenges in many different areas, and we talk about education as being our way forward, and investing in human capital. We talk about it in the same breath.

Of course, we have now many indigenous governments that are being formed and taking control of their destiny. They are also looking at investing in education and human capital, but we're finding that investing in post-secondary or traditional types of training doesn't work as well as it might because of the many challenges that are still in our communities, where a large number of people are still struggling with addictions. We have a cultural disconnect with some of our practices. We have the residential school legacy, and our elders still strongly promote that our young people try to live their traditional life and know the skills of living on the land.

Many of the indigenous governments focused on post-secondary education. Now they're starting to realize that we have to start as soon as the young girls are pregnant or they're going to be living a lifestyle that is not going to allow the baby to be healthy. We have to focus on the young people. It's a different path that the indigenous people have to focus on to try to get our young people into the world where they can deal with the new lifestyle that is out there for them.

I heard you talk about indigenous Canadians and about training for them. I was just wondering if you can talk a little bit about what you see and if there's anything different that is being targeted to this population of people.

[Anthony Ariganello]

From a CPHR Canada standpoint, we believe that a lot more needs to be done there. As you well know, the population of the indigenous community is growing at a rate 40% higher than that of the rest of Canada, and specifically in certain geographical areas. More importantly, unemployment rates are nearly double the average in Canada.

We feel, and I think you touched upon this in your commentary, that improved labour market information and improved data overall are necessary. I think there are a lot of unknowns there. You touched on that in discussing where we need to provide more data, more information, more substance.

The federal government should be investing in this area to be able to gather more data and information and be able to use that research and essentially put together some key public policies to assist the indigenous community. It's a shame that we're not at par, and I think we should be in Canada; it's extremely important. That is an area we focused on to ensure that all Canadians live prosperous and healthy lives, and with respect to employment specifically, that we all have opportunities.

[Michael McLeod, Liberal, Northwest Territories, NT]

You also talked about online freelancing. I'm not sure if I totally understood what you were talking about.

[Anthony Ariganello]

You've probably heard of the term “gig economy”. Essentially, the workforce is changing. You have individuals today who want to work on their own time and when they want. I take Uber as an example. People will work when they choose.

Similarly, computer analysts work from home more and more. Telecommuting is the way of the future. It's a big deal here in British Columbia, more so than in the east. I recognize that, but it's the evolution, it's the future, it's what people expect going forward. We call them online workers, but essentially they're not in a brick and mortar building every day. They may not have the same protection mechanisms or social benefits that your traditional employee will have. I believe the federal government needs to keep an eye on that, because of course we don't want do disenfranchise that up-and-coming employment group.

[Michael McLeod, Liberal, Northwest Territories, NT]

Stand.earth, thank you for the presentation. I think there was a strong message there. We certainly have to be aware of what's happening around us in the disasters and the wildfires, and many of us in the Northwest Territories and across the north are constantly challenged by the practices in the south that are coming over the borders into the north.

I know for a long time we've been dealing with contaminants in the air and acid rain, the type of things that are happening to some of our rivers, and yet we in the north have few greenhouse gas emissions. It's almost not even on the radar, except when it comes to power generation.

Almost all our communities are diesel-powered, and our options are limited. We can't look at solar because we have long periods of darkness. We are looking at wind turbines, but up to now everything we've tried in wind turbines.... The ice buildup and the remoteness are challenging, and we can't accommodate the cost. We provide power subsidies to all our residents in the north. I wouldn't mind hearing what you think is the solution for us in the north. If we did what you suggested and removed all fuel subsidies, we'd have some real challenges. What we have to pay to live in the north is a real incentive for us to reduce our greenhouse gas emissions. I think that's why you see where it's at. Development is also virtually untouched for the most part.