Government Operations Committee on Dec. 10th, 2013

[Pablo Sobrino]

It was not being done in this way. This program's objective is to encourage the private sector to propose innovations to the government.

I explain this program in public hearings by saying that the innovator presents their idea to me for evaluation. Then I determine whether the idea is suitable or whether it can be improved. This program follows a pattern that is sort of the opposite of the usual practice. In the government, needs are assessed and innovations are found to meet those needs.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

And a competition is launched.

[Pablo Sobrino]

Exactly. In this case, the competition consists in inviting innovators to submit new ideas to us.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Who launches the competition?

[Pablo Sobrino]

Our department, Public Works and Government Services Canada, does. This is our program, and we take care of the supply. So the funding comes from Public Works and Government Services Canada.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Okay.

Unless I am mistaken, that is added to the military budget.

[Pablo Sobrino]

No. We buy the innovation. We could transfer it to the military if they want, but we receive the funding.

I do not buy any goods. These salaries are part of my budget. However, in my supply budget, I sometimes have goods valued at $150,000. Those are innovations we have purchased.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

There are four components, in addition to the military one.

Can you tell me how priority areas are selected?

[Pablo Sobrino]

In 2010, when the program was created, the following four components were established: the environment, health, security and accessibility. At least that is what I think they were. Mr. Jenkins' study indicated that, in the sector involving innovations in security, the demand for prioritizing military projects was strong. Therefore, the department proposed not to transfer funds already intended for innovation within the four components, but rather to add resources to facilitate innovation in that sector. Mr. Jenkins supported that idea.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

The program was implemented through budget 2010. It was said that there were some shortcomings in the innovation pre-commercialization stage.

Is that still the case?

[Pablo Sobrino]

Yes. In Canada, many small and medium-sized businesses have difficulty going from invention to commercialization. That gap is still there, and that is why the program exists.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mrs. Day. Your time is up.

Mr. Cannan, you have five minutes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Again, thanks to our witnesses.

Like my colleague Mr. Trottier, I was here for the report.

Let me just try to clarify, first of all, the rationale for changing the name. You mentioned something about commercialization. Maybe you could clarify the thought process that went with the name change.

[Pablo Sobrino]

On the name changes and the original name, it was called the Canadian innovation commercialization program. As for what that did, businesses that came to apply often asked us if the program would help them in marketing, in raising investment funds and things like that. There are other programs in government that do that kind of work, and it really is about commercializing.

Our program really operates in the pre-commercialization phase, between the invention and actually getting to that point. We realized this fairly early on in the program, so that was one of the main motivators to recommend that we change the name of the program to remove the word “commercialization”. There were many versions that went forward, but “Build in Canada innovation” is trying to describe what the program really is, which is innovations built in Canada that we access, or that they're able to access.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

It's very similar to a program that the United States has been using for several years, is it not?

[Pablo Sobrino]

Yes. They have the small business innovation program there. It's on a different scale. They are a much bigger program, but yes, it's the same idea.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

It's the same concept?

[Pablo Sobrino]

Yes, the same concept.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

In your opening comments, you referred to Mr. Jenkins. That's Tom Jenkins, who chaired the report “Canada First: Leveraging Defence Procurement Through Key Industrial Capabilities”, presented in February of this year. I've met with some of the manufacturers who are on the Hill today and were here yesterday, and what has been alluded to is that Canada has been really good at universities and R and D, but we haven't taken the concepts to commercialization, that we have trouble with that.

When you are working with these innovators, which defence.... I have companies called ArmorWorks and Kelowna Flightcraft in aviation. They are not normally known for.... I mean, they're conservative in nature, and there's nothing wrong with that, by all means, but the fact is that when it comes to defence, they don't necessarily want to be the leading edge. Is this R and D program helping to take that edge out of defence, so that they can help commercialize with the assistance of the federal government?

[Pablo Sobrino]

That's precisely it. Some of those companies have applied to our innovation program, and they are taking their invention or innovation and through this program are getting government to buy it, test it for them, and prove it. That takes them over the hump from invention to having a commercially viable product. That's what we hope is the outcome.

The other thing I might add for the members is that for many of these R and D programs, we expect that innovations will have a fairly high failure rate. It is the nature of innovation that among the successes there are some failures, partly because of the interests that we have in this and also the level of screening that we're doing with both the IRAP evaluators from the National Research Council as well as the private sector committee. We're having good success in identifying winners. It's too early to tell if that's an ongoing thing, but we're seeing very good results out of the program that way.

[Desmond Gray]

I'd just like to add one thing and use real world examples, because I think they're very instructive of how these things take place. Referring to the earlier question about DND, we had a company that brought forward an innovation. It was a company called 2G Robotics. Their innovation was the ULS-100, which essentially is an underwater laser scanner. This was brought in. DND sponsored it through Defence Research and Development Canada.

It was very interesting. They brought in this product. Initially it didn't perform according to the specifications, but of course the process is that we just don't fail it. We work with them. They come back again. They tweak their product. That's what this kind of thing does. It allows you to refine the product, bring it back, and make it work. That's the goal.

What was very interesting in this case is that they did bring it forward. This product was brought over for the Costa Concordia, which as you know foundered off the coast of Italy, and this product has been used to scan and help with the salvage of that ship. This technology was regarded as leading edge for this work.

These activities may be directed to one area, but they get picked up in other areas. Even the process of engaging these companies not only gives them recognition, but also enables them to improve their product.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

That's a great success story. Thank you very much.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Cannan.

Mr. Byrne, you have the floor for five minutes.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Mr. Chair.

Thank you, gentlemen, for appearing before us.

I can't help but think there's a certain element of déjà vu though in the notion of this program. The Government of Canada has had an unsolicited proposals program for decades, hasn't it?

[Pablo Sobrino]

We don't do unsolicited proposals any more. [Inaudible--Editor]...just the introduction to the trade agreements.