Evidence of meeting #49 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.
A video is available from Parliament.
12:10 p.m.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I'm going to switch to Mr. Casey.
We were looking at the amendment that the National Research Council is putting into this budget in regard to production. Have you seen that yet?
12:10 p.m.
President and Chief Executive Officer, BIOTECanada
I haven't seen the amendment, but I'm familiar with their facility and what they're trying to do.
12:10 p.m.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I'm wondering why you think the cap was there in the first place. Are we not concerned that they're going to be competing with private companies when it comes to production?
12:10 p.m.
President and Chief Executive Officer, BIOTECanada
What is the cap that you're referring to? Is it the production cap?
12:10 p.m.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
There's a cap on how much they can produce. I don't remember the exact wording.
12:15 p.m.
President and Chief Executive Officer, BIOTECanada
I would suspect that cap is based on their capacity rather than the competition. No, I don't think that the global industry is fearful the NRC is going to move them out of the space.
I think the investments in the NRC facility are absolutely fundamental because that's a good example, as I said earlier, of a way of creating capacity to address the next challenge. Also, in between, it would really support the growth of companies in innovation, science and research in this country. I think what that investment represents is really important.
12:15 p.m.
Liberal
The Chair Liberal Wayne Easter
Thank you.
I'm sorry, Tamara. We are over by a minute.
Mr. Fragiskatos is next. I'm not sure whether Mr. Barrett is still here or whether Mr. Kelly is going. Somebody give me a signal.
Mr. Fragiskatos.
May 21st, 2021 / 12:15 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank you, Chair. Thank you to the witnesses.
Ms. MacNaughton, every colleague has acknowledged your efforts. Let me just echo what they have said. It's really moving to be here today to have the privilege to listen to you articulate what you have done. It is a clear example of what constituents can do when they work with their member of Parliament to create meaningful change. Thank you very much for all your efforts.
Mr. Chair, small craft harbours have been mentioned. The infrastructure gap has been mentioned. I don't have a question for Mr. Fox, but it is for my Conservative colleagues. I think they would be wise if they looked at the record of the previous government from 2006 to 2015 if they want to understand the root causes of any infrastructure gap that could exist on small craft harbours. That's just a point of clarification and advice and help for my Conservative colleagues who were asking about that today.
Mr. Casey, it's really interesting testimony. Thank you very much for appearing. I heard you on a podcast recently as well. I know you're quite active in this space and I hope it continues. I think that Canada is well suited and this government is only going to benefit when we have people like you sharing advice on what we need to do in this country.
There was an op-ed written very recently in The Globe and Mail by Chris Albinson, the incoming CEO of Communitech in Waterloo. Let me just read a couple of excerpts from it to get your thoughts. There were some things in it that really surprised me. I knew that we were doing well in Canada as far as tech was concerned, but we are very well positioned in this country, as the op-ed articulates.
He said the following:
In terms of return on invested capital, Canada is now the third-most productive tech ecosystem on the planet after Silicon Valley and China, and is closing the gap as those two rivals turn inward and stagnate.
The other thing that stood out was this quote:
When you throw in our strong advantage in the next wave of technology (think artificial intelligence, machine learning, quantum computing, 5G, medtech, advanced manufacturing), our relative cost advantage, and parity in access to markets and capital, it’s easy to see why Canada is poised to dominate.
He uses the word “dominate” there—not just “do well” but really dominate the global landscape.
Do you agree with this perspective? Could you expand on anything that stands out to you from what I just read? Is there anything there that you think we would benefit from, as a committee, by exploring more?
12:15 p.m.
President and Chief Executive Officer, BIOTECanada
There's no question. The other tech sectors I can't speak to, but certainly in the biotech sector it's the same landscape. We have everything we need. We have fantastic science, fantastic research and great universities. We're developing phenomenal companies, but as I said earlier, all of these are inherently mobile. They can go wherever they need to go to commercialize. It's very easy for them to pack up and move. Little things like tax incentives in Texas, or wherever it would be, would be able to attract them down there. We have to keep the pedal to the metal, or whatever analogy you want to use for this, if we're going to stay competitive and keep those companies here.
However, there's no question that we are punching well above our weight, certainly in the creation of companies and the growth of companies. Where we are falling behind is in creating those anchor companies, where we take them across the finish line. That is a key objective. Because once we get there, as you would know from your area in southwestern Ontario, that's the thing. You create hubs and then more come and it just becomes a self-fulfilling prophecy. If you look at Cambridge in Boston, there's a classic example where they built it there around the universities. It's a thriving hub and that's what we need to do in Canada.
12:15 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
My time is very limited, sir.
On the last point here, certainly the op-ed focused on tech in general. I know your area of expertise is biotech, but I think there's a great deal of overlap.
You, I think in a response to Ms. Koutrakis, talked about IP and tax policy, and you've mentioned tax incentives here again. Could you delve into that a bit more? I know it's unfair because those are big areas and I'm not giving you much time, but it seems that those would be maybe the two key areas, if I've understood you right, we can focus on and really benefit from if we make some changes in those areas.
12:20 p.m.
President and Chief Executive Officer, BIOTECanada
Yes, but also be careful. If you look at the TRIPS waiver, which has been in the news lately, there's a classic example of something that feels good, that feels like it's going to address a problem but I would argue that it won't. The reality is that's a really significant threat to a lot of our companies because it's essentially sending out the message that, look, if whatever you're working on becomes so valuable to the world that we all need it, we're just going to take it from you. That then becomes a disincentive to investors, so we have to be very careful about how we look at the treatment of IP. IP, at its very core, is essentially the asset. It's the mine. It's the forest. It's whatever other industry you want to use as an analogy. IP is the core of that company, so we have to really be careful of how we treat intellectual property in this country.
With tax incentives, finding different ways to commercialize.... The patent box would be good. The SR and ED tax credit is one of the best tools that we have in this country, but other countries are looking at it and going, “Hey, we can do better”. If you look at Australia, they're trying to get ahead of us. We have to keep it as competitive as possible with other jurisdictions so that they don't get ahead of us.
12:20 p.m.
Liberal
The Chair Liberal Wayne Easter
Thank you, both.
We'll split the last eight minutes, with four minutes for the official opposition and four minutes for the government.
Who wants to take it?
Mr. Fast, I see you want to go. Go ahead.
12:20 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
First, this is just a point of order, Mr. Chair. Mr. Fragiskatos quoted a number of individuals. I'm assuming he was quoting from a document or documents. Normally if that happens, we would ask that member to table those documents. Would that be appropriate in this case?
12:20 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Mr. Chair, if I could, on that point of order, the document is an op-ed from The Globe and Mail. I know Mr. Fast reads The Globe and Mail, and I'm sure he reads the National Post and—
12:20 p.m.
Liberal
12:20 p.m.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
—and his colleagues will read Rebel News, but I'm glad to provide the clerk any link to the op-ed that I read from. That's not a problem.
12:20 p.m.
Liberal
12:20 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Sure. Mr. Fragiskatos shouldn't presume that I read The Globe and Mail.
12:20 p.m.
Conservative
12:20 p.m.
Liberal
12:20 p.m.
Conservative
Ed Fast Conservative Abbotsford, BC
Thank you, Mr. Chair.
I want to ask a question of Mr. Casey.
You've come across as a bit of a cheerleader for the government on its innovation policy, but you also mentioned RIM and we just happen to have had Jim Balsillie here yesterday, who had quite a different perspective on the state of how we approach innovation in Canada. He was talking about innovation writ large, and you're focused on biotech.
However, he did mention the dramatic shift that has happened from a tangibles economy to the intangibles economy, which you just touched upon, and I was waiting for you to touch upon that. I'm going to ask you to expand on that a bit and also to comment specifically on the absence of patent box legislation in Canada. By the way, I've also met with AbCellera representatives. They highlighted the fact that they're being encouraged to move out of Canada because we don't foster an environment in Canada that would keep our start-ups in Canada. Our commercialization is appalling.
Therefore, could you comment broadly on how we address the issue of a new economy and how we specifically implement policies that are going to keep our start-ups in Canada?
12:20 p.m.
President and Chief Executive Officer, BIOTECanada
That has to be at least a significant objective, because we put in all those investment dollars and we use tax credits and all, which are basically funded by the taxpayers. You create this fantastic collection of companies, and then if you allow them all to go, we miss out on the real commercial benefits of having those companies grow and become large commercial companies.
My reference to RIM really was more about what it did for the local community in southwestern Ontario, in that once it was up and at its peak, it just created more entrepreneurs, more investment and became a self-fulfilling prophecy.
Just on the patent box, to talk about that at bit, that's an ability to take your IP and earn some dollars off it while you're not yet commercial and to have those dollars taxed at a lower level. This is not something crazy. It has been done in other jurisdictions quite effectively, such as the U.K., which has a life sciences strategy. I think that's probably where I would go with this—to ask how we connect all of this.
We do everything in silos. We do pricing and reimbursement in a silo. We do investment in a silo. We do R and D in a silo. We have universities and talent, but is it all connected? The health and biosciences economic strategy table did a really good job of laying out all the assets we have and has identified a need for a cohesive way to bring it all together so that it is all connected and is truly an ecosystem. Like any ecosystem, such as a coral reef, every piece of it has to be healthy, alive and vibrant if the whole coral reef is going to be healthy. That's what we need right now.
We have all these great investments. We have the infrastructure. We have the talent. We have all the companies. Now we need to connect it all with a coordinated life sciences strategy, not only at the federal level but one that ties into all that's being done at the provincial level as well. There are provinces that are equally pursuing the investment area, the tax area and the talent area, so how do we bring it all together?
That would be my advice. If we're going to do this, if we're going to create companies that are anchor companies in Canada, let's do it through a strategy.