Evidence of meeting #113 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Paula Sheppard  Chief Executive Officer, Newfoundland and Labrador Organization of Women Entrepreneurs
Mary Anderson  President, Women Business Enterprises Canada Council
Stephanie Fontaine  Vice-President, Women Business Enterprises Canada Council
Suhayya  Sue) Abu-Hakima (Co-Founder and Chief Executive Officer, Amika Mobile Corporation
David Long  Chief Executive Officer, SageTea Software
Paul Lem  Chief Executive Officer, Spartan Bioscience Inc.
Scott MacGregor  President, SageTea Software

12:40 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

No.

12:40 p.m.

President, SageTea Software

Scott MacGregor

It's one of the easier ones to respond to with government, and we spent, seriously, about $50,000 on advice to get it filled out properly.

12:40 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

That leads to my next question. It's for all of you.

We were hearing about how good the BCIP is. Have you looked at other countries whose programs we should perhaps take a look at? I imagine Israel has something similar, and the States. We hear it's a good program and we need to expand it, but do you have ideas from other gold standards to make it better?

12:40 p.m.

Chief Executive Officer, SageTea Software

David Long

When I was speaking at the BCIP conference in Toronto, the head of the BCIP program spoke. He told the audience that in the United States the government supports innovators from technology readiness level 1. For the BCIP program, you have to be at least at level 6 or 7. To put it in layman's terms, level 1 is basically an idea that could be just on a napkin—that's how far you've taken it. In the United States you can be only at that level, and they will fund you. They will take you all the way through to the end.

12:40 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

Do you agree that maybe the U.S. is a country we should take a look at, or is there a different country you think has a better program that we should look at?

12:40 p.m.

Chief Executive Officer, Spartan Bioscience Inc.

Paul Lem

With regard to the health care, life science, and biotech side, we notice that a lot of our competitors over the last 10 years have taken advantage of the U.S. SBIR grants. We've always been quite envious of that because, unlike you, Sue, I raised VC for my very first biotech company. On this one we raised it all—angel, strategic, bypass, VC—every one. It would have been helpful in the early days if there was some sort of SBIR-type program.

12:40 p.m.

Conservative

Kelly McCauley Conservative Edmonton West, AB

What does the acronym stand for?

12:40 p.m.

Dr. Suhayya (Sue) Abu-Hakima

Small business innovation research, maybe. They have several programs in the United States. Even in our world, which is public safety and security, they actually have.... I was just at a two-day thing down here where the Americans were talking about NIST being involved in it, and FirstNet, where they used the auction to raise $7 billion to build a public safety network. AT&T has come along and said they could use its $180-billion infrastructure for this network and get all the states involved. They're just doing more innovative stuff with respect to trying to leverage things. In this country, we could probably leverage the licences, as well, to do more.

12:40 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you.

Mr. Weir is next.

12:40 p.m.

NDP

Erin Weir NDP Regina—Lewvan, SK

We heard a bit about how Amika emerged out of the National Research Council. I'm curious about the origin of the other two companies and whether they have any roots in government agencies or federally funded research.

12:40 p.m.

Chief Executive Officer, SageTea Software

David Long

I initially worked as a consultant and a programmer here in Ottawa for about 10 years. My first job was working at Shirley's Bay in defence research. From there, I went on to work at Nortel. Then I worked on Wall Street at Merrill Lynch. At that point, I just had this “aha” moment when I realized that the job of programming software is repetitive and dull. Anything that is repetitive and dull is just begging to be automated. From there, I took what I was doing and came up with this idea that you could make apps from text. We raised about $3 million, and we created this prototype. That's how the company got started.

12:40 p.m.

NDP

Erin Weir NDP Regina—Lewvan, SK

What was it that brought you back to Ottawa? You had worked other places.

12:40 p.m.

Chief Executive Officer, SageTea Software

David Long

It was 9/11.

I was doing really well on Wall Street. Along with 6,000 other people at Merrill Lynch, I was laid off after 9/11. At the age of 30, I had to start my life over again, so I decided to start a business. From then to now was about 10 years' work.

12:40 p.m.

Chief Executive Officer, Spartan Bioscience Inc.

Paul Lem

I got into medical school here in Ottawa. When I graduated from medical school, I got the award for the person who skipped the most classes in medical school and still graduated. What I did all that time when I skipped class was spend time in the lab. I was always trying to invent stuff.

The guys over at the microbiology department of the Ottawa Hospital were very helpful. I ended up inventing some new way to do DNA testing. Then the University of Ottawa tech transfer office helped me commercialize that and raise venture capital. From the ashes of that company—as we shut it down—came Spartan Bioscience, which we started 12 years ago.

12:45 p.m.

NDP

Erin Weir NDP Regina—Lewvan, SK

In terms of BCIP, we've already mentioned the threshold of $500,000 for non-military innovation. I believe it's $1 million for military innovation. Do you think those thresholds are appropriate, or would you change that aspect of the program?

December 7th, 2017 / 12:45 p.m.

Chief Executive Officer, SageTea Software

David Long

I think they should be much more money, for sure.

The amount that we've spent.... I think most of the companies here would agree that we can easily spend that much. Maybe it has to be staged, but I've always come to the end of the budget, and the customers too, on every project on which we have wanted to do more. I can't tell you exactly how I think you should do that. However, I can tell you for sure that when we got to the end of our budget, the client was panting for more, and we just had to stop. That's why we needed to think really carefully about our next stage in procurement. That could be filled in much better.

12:45 p.m.

President, SageTea Software

Scott MacGregor

I think you can also say that under the BCIP rules, you could do three more sole-source contracts. I think that's something that could be looked at as well. I don't know who came up with the idea of three more contracts, and it has to be done in two years. Sometimes it can take a year to get a contract in place, if not more.

Maybe you could look at making it so that once you're in BCIP, you're in BCIP, and that you can continue for a longer period of time and in more contracts.

12:45 p.m.

Dr. Suhayya (Sue) Abu-Hakima

I want to say that the way we used it was a little bit different, perhaps, in what we focused on: getting this innovation into this department and getting them to test the heck out of it. Let's make it really useful for them. Let's make them really love it. Then let's make them take it on as a commercial product after that and pay support, and let's continue with them.

So far, two out of three of the ones that we did have stayed with the project. We're not sure about the third one yet, because it's not complete. The strategy has been different. We know that they're typically under the gun to do more. If there's a way to structure the licence so that they can continue with it and continue to pay support, then we can continue with them on the project.

12:45 p.m.

Chief Executive Officer, SageTea Software

David Long

Perhaps I could add to that for a moment.

What we found is that when it's BCIP money that's being spent, it's relatively easy to convince a department to be a test department, but the step then is that sometime during the year, they would then need to come up with their own funds from the department side, and that creates a financial conversation, and they would already have their plan for the year. Therefore, if there was some way that they could, during the year, allocate departmental funds if it were for a BCIP program, and if that could happen with the CFOs inside the departments, it would make answering that question easier.

They already have their budget planned for the year, and in the course of the year, if they then want to try to procure something else, the ship's already sailed, so they have to wait for the next budget cycle.

12:45 p.m.

NDP

Erin Weir NDP Regina—Lewvan, SK

Okay.

There have been some major IT projects in the federal government that haven't gone very well—the Phoenix pay system, Shared Services, the Canada.ca initiative—and one of the proposals that our committee has heard as a solution would be an agile approach to IT projects whereby you try to tackle them in smaller, bite-sized chunks and learn lessons from that and proceed accordingly. Is that an approach that you would endorse, and would you care to speak on it?

12:45 p.m.

Chief Executive Officer, SageTea Software

David Long

I would say that the private sector has already realized that this is pretty much how you have to do it, and I've worked in huge companies. The approach, then, for the people running an agile project is to prove to me, every day, why I should keep your project going. That's what “agile” means. When you get a team of people, and every day they come in, and by five o'clock they have to have shown the managers why they should be allowed to come back the next day, you get results. That's how “agile” works in the private sector, and I think that's what the government needs to do too.

12:45 p.m.

Dr. Suhayya (Sue) Abu-Hakima

We've been using agile software development for a number of years. Because of the company and the background and the fact that we were doing AI for so long, and the platform, we have to do rapid prototyping, rapid commercialization, rapid deployment. The word “rapid” really underlined it.

I don't know if this is the answer in the Phoenix debacle, if it's because they're using more of a waterfall model. I have no clue. I have no idea. I haven't looked closely enough as to why it's such a disaster.

I think one thing that we can say on the SME side, especially on the software side, is that we see the government spending a lot of big bucks on big projects, and I think what we're saying is that they should be taking some smaller projects on and perhaps growing them that way. Maybe they are too impatient, so it has to be all 250,000 civil servants at once or something. Maybe they don't have the luxury to do it in smaller pieces.

12:50 p.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you.

Our final intervention will be Mr. Drouin.

12:50 p.m.

Liberal

Francis Drouin Liberal Glengarry—Prescott—Russell, ON

Thank you, Mr. Chair.

I want to thank all the witnesses for being here.

Sue, Francis. Francis, Sue. We're good on a first name basis. I'll give you a shout-out. I know you were really involved with Startup Canada, which is an organization that my better half continues to be involved in and that I used to be involved in, but now can't, obviously.

It strikes me that for 17 years you've bid and were not successful. Have you ever gotten any feedback from the public works department or the organizations? Over 17 years the department of public works wouldn't have handled all of the procurements, but did you get any feedback as to why?

12:50 p.m.

Dr. Suhayya (Sue) Abu-Hakima

I don't think we always get the luxury of a debrief. Actually, I was talking recently to somebody from OSME, who was telling me that you always have the right to get a debrief, but when you're a small business, you have to understand that you have to not just pick your battles, but you have to go where the money is. One of the things that we clued in to early is that—and I clued in to this with my first start-up—you can't sell your first products in Canada. You have to go to the U.S. or abroad.

It would be nice to be able to sell it into the government. The BCIP is a bit of an anomaly there. With respect to debriefs, we can ask for them. We've had a couple of debriefs, and they tell us that we're extremely innovative, that we're the lead in terms of the features and the capabilities of the product, etc, but they end up going with someone else. Sometimes they go with American players and sometimes it's just larger Canadian players.