Finance Committee on May 21st, 2021

[Ed Fast, Conservative, Abbotsford, BC]

Okay.

I just want to assure you, Ms. MacNaughton, that quite a number of us here on this call actually do support extending it beyond the 26 weeks. We believe there is a big gap there. Hopefully, over time we'll get the consensus in Parliament to be able to do that.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

Just to put your question to Minister Fox in perspective, Ed, a dredge is on site full time now. That's costing $1 million to $1.5 million a year. The port has to be moved, and it will cost $42 million to move that harbour.

We'll turn to Ms. Koutrakis, followed by Mr. Ste-Marie.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here this morning with us.

Firstly, Ms. MacNaughton, I can't begin to tell you how your story—yours and your husband's—really touched my heart. My mom went through breast cancer and I was the primary caregiver at the time, through her surgery, her radiation and her chemotherapy. Unfortunately, we lost her just a little over a year ago—strangely enough, not from breast cancer—but I can't even begin to imagine what a family goes through having to also worry about finances. Thank you for feeling safe enough to share your story here with us. I think I can speak for all of us in saying we understand and we're going to keep working hard to make sure that people who need the help through EI sick benefits will get the help.

My questions will be for Mr. Casey.

Mr. Casey, in BIOTECanada's response to budget 2021, you said that biotechnology innovation is “one of the identified key sectors set to drive the economic recovery for Canada.” Would you be able to expand a little and explain to this committee why you believe this to be the case?

[Andrew Casey]

Yes, definitely.

If you look across the country, it's an industry, as I indicated at the outset, that has clusters in every single province, usually built around universities or research institutes. It builds on the infrastructure we've already put in place and the investments that we've put into our universities.

As for the companies themselves, if you look across the country and take some examples, you have AbCellera, which had a fantastic IPO during the pandemic. You have Notch Therapeutics and Zymeworks, which are Vancouver companies. You have Repare in Montreal and Medicago in Quebec City. These are companies that, with these investments, as their technologies become more proven and get closer to being commercial, will be employing hundreds of people. We're talking about very skilled, highly paid jobs. We're talking about people who are coming out of our universities and colleges, technical colleges, with very significant skill sets—Ph.D.s in science. We've put all those investments into the STEM programs, and this is going to be the receptor capacity for those people.

When we talk about some of the jobs, we're talking about millions of dollars that are going into these companies. The technologies they're working on will eventually create large-scale companies. We'd like to create anchor companies in Canada where we have companies here in this country that are globally competitive.

You can take as an example RIM BlackBerry and look what that did for the Kitchener-Waterloo area. If you create some anchor companies in the space, the spinoffs and further investments will lead to a sort of fantastic cycle that just attracts more investment, attracts more people and grows.

The enormous potential the sector presents is just fantastic. Even during the pandemic, when times were tough, investment kept flowing and the companies kept growing.

[Annie Koutrakis, Liberal, Vimy, QC]

You also said in your testimony earlier that although the budget is friendly to the biotech industry, there are some gaps. Would you be able to elaborate a bit more on where the gaps are and what the federal government can do better?

[Andrew Casey]

The gaps we've seen.... The budget goes a long way to identifying those and starting to address them as well. Some of the primary gaps are always going to be the same for the sector, and there are two main ones.

One is investment capital and access to investment. It's very expensive to take an idea and commercialize it. In the case of health, vaccines and other therapeutics, you have to go through clinical trials, so you're talking anywhere from a billion dollars and 10 to 15 years in time. You require very specific types of investors: patient investors with great, deep knowledge. You need a lot of capital. If we look at some of the investments in these companies, we're talking about, say, an initial series A round of $85 million into Notch Therapeutics in Vancouver, just as an example. That's an early-stage company and it's getting $85 million.

Venture capital sort of moves around the world like a tourist. It looks for places to stay that it finds to be most attractive and the safest places to go, so we have to behave like a hotel would to attract tourists. You put chocolates on the pillows of your hotel, provide free Wi-Fi and breakfast, or whatever it is. Whatever we do as a country, if we're going to think of ourselves as a hotel, what is the chocolate on the pillow that we have to put out there to attract investors?

That's where you get into tax policy. That's where you get into IP issues. You have to have a jurisdiction that, from a regulatory standpoint, is welcoming to investors but also provides the opportunity for companies to grow. That's a huge part. Government obviously provides the hosting conditions.

The same goes for talent. Talent is roaming around the world, including our own very skilled Canadians who are going to go to places where the jobs are, so we have to make sure we are attracting as much talent as possible to allow these companies....

Those would be the two key areas, and I think the investments in the budget go a long way to addressing some of those and making us a more attractive jurisdiction from that standpoint.

[The Chair, Liberal, Wayne Easter]

This is your last question, Annie.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you.

We hear a lot about climate change and the environment. It of course is very important and is something that we really need to be putting a lot of effort and attention into. What role, in your opinion, can the biotech industry play in the fight against climate change?

[Andrew Casey]

Again, it's another really important area.

If you look at our membership, you see that we have industrial, environmental and agricultural biotech companies in our membership as well, and they're really providing solutions that address some of those exact challenges that you're talking about. We have a global population that's going to be going to eight billion, nine billion or 10 billion, depending on which projection you look at. It's putting enormous pressure on the planet.

We have to fundamentally change the way we live our lives, the way we grow and the way we manufacture, and biotechnology allows for that. We have companies that are doing environmental remediation; they're allowing other companies to adjust. You have car parts being made of soy products; that's the result of biotechnology. There are all sorts of fantastic solutions coming out of the Canadian biotech sector that are addressing those challenges.

In doing that, you have an enormous economic opportunity if you can be there first, but of course other jurisdictions recognize the economic importance of getting there, so we're competing with other countries to keep those companies but also attract the investment and the talent. The challenge is the exact same in that space as well.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thanks to all of you.

We are turning to Mr. Ste-Marie, who will be followed by Mr. Julian.

Go ahead, Gabriel.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Honourable Minister Fox, Ms. MacNaughton and Mr. Casey, good morning and thank you for joining us today. Thank you for your presentations as well.

Ms. MacNaughton, I too would like to express my deepest sympathies. Thank you for joining us today and for your very moving testimony.

As my colleague Ed Fast said, the committee is unanimously in favour of this measure. My party has actually put forward a motion in the House to increase the duration of sick leave to 50 weeks in order to properly cover all those battling all forms of cancer.

So we will continue to take the necessary steps to extend EI sick leave to 50 weeks to provide better coverage. You can count on us.

My first question is for the Honourable Minister Fox.

Minister Fox, could you comment on the situation at the port of Cap-aux-Meules, in the Îles-de-la-Madeleine? We know that the port had to close 37% of its capacity because of the deterioration of its infrastructure. The people of Cap-aux-Meules are particularly critical of the lack of plans to repair the wharf.

Are you also experiencing this type of situation in Prince Edward Island? What should the federal government do about it?

[Jamie Fox]

Thank you very much, Gabriel.

I only caught part of the question because I had to switch over for the translator.

It's the same type of problem that we're seeing over in our area too. I think that a long-term approach recognizing the age of our infrastructure is needed moving forward. Any money the federal government puts into the budget must be in comparison with the age of the infrastructure we're dealing with, if that answers the question....

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Yes, that answers my question. Thank you very much.

My next question is more general in nature.

What is your government's position on health care funding from Ottawa? In your opinion, is the federal government doing enough right now and is the current budget sufficient?

[Jamie Fox]

Thank you very much, Gabriel.

I wouldn't really be prepared to speak on that today. I think that would be best put forth to the health minister for the province. He would be the best person to deal with that. It wouldn't be fair for me to answer on behalf of the province or the premier's office on that matter today.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Okay.

From what I understand, there is a consensus among all the provincial governments to ask Ottawa to fund 35% instead of 22% of health care costs. The Prime Minister stated that he is open to the idea of talking to his counterparts, but only after the pandemic. From our perspective, the sooner the better, given that we are currently in a health crisis.

Thank you for your response. Would you like to add a comment?

[Jamie Fox]

No. That's fine.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Very well.

My next question is for Mr. Casey.

Mr. Casey, thank you for your presentation.

Given the current pandemic, do you feel it is important for Canada to redeploy vaccine production capacity?

[Andrew Casey]

There are a couple of parts to this answer. We have significant capacity in Canada to manufacture vaccines. There was a bit of a misunderstanding early on. We did not have the capacity to manufacture mRNA vaccines. Those were the first ones that came out, and that's a new technology. We did not have the capacity to manufacture those particular types of vaccines. The GSK plant in Quebec City and the Sanofi plant in Toronto both use traditional protein-based vaccines. You can't interchange them. They're two completely different technologies.

The Medicago facility in Quebec City uses a plant-based technology for vaccines. They're in phase two clinical trials right now. It looks very promising. They released their data earlier this week. It looks very good that they will have a COVID-19 vaccine probably later this summer or early fall, which is very encouraging news. They have a significant facility that the Government of Quebec and the federal government have invested in. That will be coming online as well this fall.

We still need to develop more. There will be COVID-32 and COVID-40 or whatever it is, and we have to prepare for that. I think what we need to do now is figure out where we need to fill gaps in the biomanufacturing capacity and look at different ways to do that so that we are ready for the next one.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you for your answer.

This is encouraging news. I can tell you that a member of my team is in the group of participants in the clinical trial for the Medicago vaccine. We hope that it will be available as soon as possible. It's certainly a source of pride for us.

Mr. Casey, if we look at the pharmaceutical industry in Quebec, not just the biotech industry, in the 1990s, there was a great synergy between Quebec and Ottawa policies, which really helped attract international players and develop expertise and talent.

Unfortunately, Ottawa gradually abandoned the measures to support the industry, and the five giants of the industry left Canada.

As you said, there are some appealing measures in the budget. In your opinion, should the federal government do more to rebuild an environment that will attract such players and redeploy all the expertise in Quebec and Canada?

[Andrew Casey]

That's a very important question. I think what also happened a decade or so ago was that the industry itself changed. They changed the way they developed drugs. It used to be that a Pfizer or GlaxoSmithKline or Merck or whatever it was would do everything in-house for itself. Now what happens is that they do some research and development internally, but mostly they go out to hunt and gather. They go and find companies elsewhere.

I'll use a really great example, given the COVID-19 situation. The vaccine that Pfizer has is a combination from a number of different companies. One is BioNTech out of Germany. The other part of the Pfizer vaccine that very few people know about is a company called Acuitas, which is a small Canadian biotech company in Vancouver. They develop the lipid envelope the mRNA code goes into and then goes into the body. Without the Acuitas technology, the Pfizer vaccine doesn't really work.

This is the new type of drug development that's taking place. We have to develop all these early-stage companies that then go into the bigger technologies. They will either be bought by the large pharmaceutical companies or they'll be large commercial companies themselves, depending on the type of technology they're developing. What we need to do is develop a new relationship with the large multinational companies, the early-stage companies and the government that recognizes this new approach to developing drugs. That requires everybody to come together and I think create a different pathway for regulatory approval but also for reimbursement in listings.

It's a very complex area to get into in this committee. I do think we need a recognition that this part of the world has changed. If we want to attract more manufacturing and more investment here, a new relationship is required from that standpoint.

It's a great question. Thank you.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you. That is very interesting.

[The Chair, Liberal, Wayne Easter]

We were considerably over, but we needed to hear the full answer. Thank you.

Mr. Julian is next, followed by Mr. Falk.

Mr. Julian, you have about six minutes.

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

Thanks very much, Mr. Chair.

I should signal that after my questioning of the witnesses I'm going to have to step out for a few minutes. My second round of two and a half minutes could go to Mr. Ste-Marie or Ms. May.

I'd like to thank all of our witnesses for coming forward. It was very interesting testimony, of course. We hope that you and your families are staying safe and healthy during this pandemic.

I'd like to start with you, Ms. MacNaughton.

Thank you so much for sharing your story and David's story with us. It certainly resonates. There is no doubt, as you've heard from a number of members of the committee, that your story is heartfelt, and I think we all understand the importance of that.

You have talked about the 26 weeks, and you've said that we should go beyond that. There will be an amendment coming up next week to this budget implementation act that would actually take the sickness leave to one year, a full year of supports for Canadians who are experiencing what you and David experienced.

How would you feel about having sick leave extended to a full year? We certainly have the resources in our country to provide those supports for a full year of EI sick leave. Would you support that measure?

[Kathy MacNaughton]

Definitely. When I first started David's Cause, I wanted 52 weeks, but I just thought I was asking for the stars. Sean and I worked with this and came up with the 26 weeks.

It was a good start. I didn't want it to finish there, but it was a good start. In the future, it will give people that much more support, but you can't put a time limit on this, because each individual is different. If David would have lived, it would have been three years, and we wouldn't have had financial help for three years. Definitely, 52 weeks I think would be much better than 26, but 26 is a great start.