Finance Committee on April 11th, 2024

[Neil Hetherington]

One of the challenges we have at the food bank is in summer months when individuals have more mouths at home to feed. If you look at a universal program, as was recently announced, it has the great possibility of making significant and permanent changes to food insecurity across the country.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

[Julie Dzerowicz, Liberal, Davenport, ON]

My questions are going to be directed to the Canadian Council of Innovators.

Nicholas and Laurent, I've worked for a while on this topic, so I want to get to all of the solutions as well.

What is your one recommendation? You talked about how we need to better support our research and development. What is the one thing we could do to encourage a partnership with the research dollars we give to Canadian innovators? What's the one recommendation you might have to do that?

[Nicholas Schiavo]

I'm happy to start, and Laurent, you can add if you'd like.

Canada does well when it comes to the research component. It's in development where we often fall down. In our report, I would say the most important recommendation is expanding eligibility for things like intellectual property and continuous development.

The theme of our report—you'll notice it's very purposefully titled—is “Getting Results”. What we are saying is that if we are spending $4 billion every year on the biggest innovation policy in our country, it should be focused on outcomes instead of inputs. Acknowledging intangible assets in the 21st century is integral to that. That being said, we make a series of recommendations.

Laurent, I don't know if you want to expand on that.

[Laurent Carbonneau, Director, Policy and Research, Council of Canadian Innovators]

I think that's a really good summary.

In the interest of keeping this concise, I'll note that we, in a very timely way, published our response to the patent box side of the consultation. We think an innovation box measure, which is a little more broadly constructed and includes more types of IP, is a really good way to complement our research input tax credit with something that explicitly looks at commercializing and provides more support and incentive to export, which is the critical thing to do for these scaling firms that need to operate in global markets.

[Julie Dzerowicz, Liberal, Davenport, ON]

I've had to educate myself on intellectual property and its importance. In my opinion, I don't think our economy in general or our population in general understands or appreciates the importance of patents and trademarks. I think if we did, there would be a lot more importance placed on them.

We don't have a culture of IP, so our businesses are not patenting or trademarking. Part of it is about what you said: We don't actually allow those expenses as part of any of our funding mechanisms.

What more can we do to educate people about the importance of patenting and trademarking their ideas? We need to be moving on creating this culture of IP.

[Nicholas Schiavo]

I'm happy to jump in there.

One organization that's seen success is the Innovation Asset Collective, or IAC. They're the voice of intellectual property in Canada. We'd love to see their mandate expanded beyond simply clean tech to cover other sectors and should ensure that they have the resources for that expanded mandate.

I'll also note that the government has launched programs like ExploreIP and ElevateIP, so I'll give credit where it's due. I think there's an awareness that we aren't exactly an IP nation, but we're taking some steps in the right direction.

As you say, there is always more to do.

[Julie Dzerowicz, Liberal, Davenport, ON]

On the clean-tech patent collective, I believe there's been a proposal put in place to expand it. Have you received any feedback on it? Has there been a response yet or are we still waiting?

[Nicholas Schiavo]

I'll be perfectly honest. I'm not aware so I'll have to go back to check.

I would love to check that out and follow up.

[Julie Dzerowicz, Liberal, Davenport, ON]

On your procurement point, this really frustrates me and I think you know that we've had conversations on procurement. We almost need to blow up the system. I don't know if you have one recommendation other than blowing up the whole procurement system.

Just so you know, it's not just you who would recommend it. It doesn't matter who we speak to. It's just an outdated, antiquated system, and right now we need it to benefit Canadian innovators and it's insane that we don't.

If you had a recommendation about what we can do to be more supportive of Canadian innovators with our procurement system as it exists right now, what would that be?

[Laurent Carbonneau]

We recently put out a report with six recommendations. I'll tackle the one that I think really hits at the core problem we identified, which is fundamentally one of culture and the institutional incentives and processes that are in place.

The main takeaway we heard from talking to lots of innovators is that the way government does procurement sets the risk that we do things as they currently exist—at zero. That's wrong. In the real world, they go bad. We've seen lots of examples over the last 15, 20 and 30 years.

We think changing culture is the most important part of this. We think there's a great model in Finland. They have a network of institutions within government that build expertise on how to procure innovation.

If I were to choose one takeaway from this report and one place to start, it would be that.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

We'll go to MP Ste-Marie.

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

Thank you, Mr. Chair.

First, I would like to thank the mayor and all the witnesses for being here and for their testimony. There has been a lot of very poignant testimony today. Time is limited, but we are taking notes, and we'll try to improve Bill C‑59.

My questions are for the representatives of the Union des municipalités du Québec.

Mr. Damphousse, hello again. My colleague Xavier Barsalou‑Duval also sends his regards.

I'll first talk about the gas tax program and Quebec's contribution. Since I was elected in 2015, this is the first time we've received so many copies of municipal resolutions sent to the government to say, as you mentioned, that the funds must be released and that an agreement must be reached quickly. Can you explain to us again the importance of taking action, and of doing so now?

[Martin Damphousse]

Let me go even further, Mr. Ste‑Marie: Of all the programs out there, be they federal, provincial or twinned like this one, it's by far the most popular with Quebec municipalities. I wouldn't be surprised to learn that it's the most popular of all the programs across Canada, because it's effective, it's proven and, above all, it's easily applicable to a priority issue: our underground infrastructure, which costs a fortune.

I've been mayor for 15 years, a little longer than you've been a member of Parliament, and this is the first time we've relied so heavily on these amounts. It's now spring, and work is due to start shortly. With the winters we have, it has to be done in the summer, and hardly later than early fall. So we're already in the process of inviting tenders for projects, when we don't even know if we're going to get the money or if there will be additional conditions, which there seems to be talk of. The clock is ticking, and it's becoming increasingly dramatic not to have the money. It's very worrisome.

So I'm calling on your federal government colleagues, as well as your colleagues from Quebec who are here: please come to an agreement as soon as possible.

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

Understood. We hope there will be positive announcements when the budget is presented on Tuesday. We'll continue to ask the minister about this.

In connection with that, the need for infrastructure, the limited time to do the work, and the glaring lack of housing, you pointed out that housing starts have decreased by 32% over the past year. So there's a housing crisis. In the announcements it made before presenting its budget, the government proposed a number of measures. I'd like you to explain how important it is to have quick access to funds for programs such as the gas tax program and Quebec's contribution once they are adopted and to have clear criteria.

[Martin Damphousse]

We'll continue to prioritize the Quebec gas tax and contribution program. New announcements have been made in recent days, weeks and months, including the famous $900 million earmarked for housing in Quebec. Unfortunately for Quebec municipalities, we have a unique characteristic, which you know very well, that is to say that we depend on an agreement between Quebec and the federal government to be reached in advance.

If memory serves, that $900 million for Quebec was part of a $3 billion investment. However, the file was delayed by six to 12 months, because we depended on the conclusion of that agreement. Again, we called on the both levels of government to come to an agreement. We were hearing from the Prime Minister of Canada, who said that it was delayed because of the municipalities, but we still didn't have access to the money.

The good news is that the provincial government decided to add $900 million. However, the red tape associated with the agreements between Quebec and Ottawa is slowing down our process. Add accountability measures, and it's even more complex. We've had enough. Please stop adding to it.

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

Yes, indeed. I would remind you that the $900 million in federal funding was voted on two years ago. There is a crisis and urgent need for action, but there are always delays.

As you said, municipalities are in the best position to determine the criteria for housing construction. If federal support comes with conditions or requirements, I imagine that will mean more delays, which is a cause for concern on your side. Is that correct?

[Martin Damphousse]

That is indeed a concern for us. The idea of imposing conditions on the addition of infrastructure for new housing is an interesting one. However, when it is announced that the deficit related to aging infrastructure is $45 billion in Quebec alone, the government should stop adding to it and instead repair what's already there.

One problem is adapting to climate change. In Quebec and in Canada, we have experienced it at breakneck speed. There are all kinds of problems, and they're not going to go away; on the contrary, they will accelerate.

Let's quickly repair our existing infrastructure and transform it to make it as resilient as possible. That will allow us to add housing. Very often, it's the old areas that will be transformed and densified. The pipes are there, but they need love, and therefore the investment.

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

Thank you.

You talked about the importance of supporting public transit. Can you give us more explanations on that point?

[Martin Damphousse]

Before Quebec presented its budget, all 53 mayors who make up the board of directors of the Union des municipalités de Québec had adopted a firm position calling for additional funding. We all want to reduce our greenhouse gas emissions, and we know that public transit is the only way to do that. However, we were very disappointed, since no additional money was added.

However, we also turn to the federal government, because this isn't exclusively a provincial responsibility. Indeed, it's a national challenge, and we want it to become a priority. If we want to reduce greenhouse gas emissions, we have to tackle transportation. So public transit can help a great deal in that regard.

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

That's very clear, thank you very much. In closing, do you have anything to add?

[Martin Damphousse]

Honestly, I think we've covered all the issues, and your questions were very relevant. Thank you.

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

We're committed to bringing your recommendations to the government. Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Damphousse and Mr. Ste‑Marie.

We'll now go to MP Davies. You'll be our last questioner for this panel.