Health Committee on May 21st, 2013

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Madam Chair. Again, it's another exciting round with witnesses. Each time I hear something, I don't know where to start.

We have heard about the challenges with technological innovation. I think you brought up how Canadians are living longer, and sometimes they are living longer with disabilities. I think around the table here we all have constituents who are struggling to stay in their houses. We have families struggling to help their parents and grandparents live with dignity.

I thought what I would do is start off by asking Geoff and Promise a question. I'm hearing from you that there seems to be a bit of a gap with our system now. We seem to have support for the big players, but you're saying there are a lot of these really small, on-the-ground players that might be helped. Do you have any statistics on return of investment when you invest in the big ones versus a lot of these smaller ones? There's always a limited amount of money, right? Let's say we're doing really well with the big guys, but we're not with the little guys. I'm curious. Do you have ideas or statistics on return on investment? How much money has been saved by some of these innovations? And I was wondering if you could give the committee an example of an innovation you have seen, because I know you are right in there with the engineering and stuff like this that has saved the system a lot of money.

[Dr. Geoff Fernie]

There are a lot of questions there, and they're all good questions. They really are good.

I'm not going to comment particularly on the return on investment in the larger sector. I do know that venture capital has run away, so I don't think it's been that spectacular. But among the small business sector, I think there are terrific opportunities, and there are companies that are succeeding. There are some that will fail, and that's the normal course of events; that's the culture you create.

As to the benefits to society, I can refer to various inventions that we've been involved in that have a social benefit as well as an economic benefit. For example, if you have a daughter who is thinking of going into health care, I would suggest you recommend she go into mining, because there will be a third less opportunity of her being injured as a result.

My team was largely responsible for introducing overhead powered lifts in hospitals, and we're still introducing a new invention to make this lifting totally effortless this year. It is a massive problem at home as well. Family members have very sore backs and give up, and people go into nursing homes and elsewhere because they can't cope at home.

There is money to be made there. There certainly is money to be saved there in the health care system.

My view is more that we need to be driving this through small business, through helping start-ups, through helping small and medium-sized entrepreneurs get into this game by doing it in a way that they can move quickly. They don't want to report and describe their projects in great detail to a national database generally. They want to move this month and stay ahead of the competition.

I think the SR and ED program is a spectacular success, despite all the criticisms that have been levelled at it. I think government and the bureaucracy have tried hard to make it work. It is still a bit of wordsmithing rather than real technology, which is why I'd like us to think about SBIR, or some other system, where there is review of the technological advantage and there is a lead through to procurement.

Dr. Paige recognized the ARTIC program in Ontario. Mine was the second project to be supported by that. The key was that of the 28 CEOs, 18 hospitals placed orders for our product. That's what allowed the company to launch.

So if we can be clever.... People will always quote GATT and NAFTA and stuff to us. They can't with Defence, by the way, and we do need better boots for the army, for example—really, seriously, we do. There are opportunities where we can cleverly work, government and bureaucracy together, with small business and drive that way into research to realistically get things done.

I hope I answered some of your questions.

[Colin Carrie, Conservative, Oshawa, ON]

Yes, there were a lot in there. I could keep going.

When you mentioned the eighth recommendation, you said:

Third, and most important, is a strong focus on strategically utilizing public procurement power to actively help small businesses find and secure early customers.

You just mentioned that example, but do you have other examples of how you could see the federal government maybe doing that strategically?

[Dr. Geoff Fernie]

Yes, I just mentioned one. We mentioned Defence. Our soldiers, I am told, are wearing boots that have come from the sixties—mukluks. They have wet, cold feet, and we're telling them they're going to defend the north. Surely, here in Canada, we should be developing and making boots for our soldiers. There are so many examples of opportunities like this.

Another one is that I think we've developed the best way of ensuring that caregivers wash their hands. In North America it costs 1,000 lives a week. Why not have our hospitals buy that? It seems like a pretty straightforward thing to do.

We have to be more aggressive, I think. Certainly in the States they're aware of international trade agreements, but also companies are being born out of NASA, out of Energy, out of Defense, and now out of Homeland Security. There are a lot of opportunities.

[Colin Carrie, Conservative, Oshawa, ON]

I've heard over and over that in Canada we are the Boy Scouts. We obey the “rules” so strictly sometimes that we don't get those opportunities.

We've heard from different witnesses that sometimes Canadian scientists really do have a lack of access to risk capital to commercialize their products. I know that in 2012 the government put out $400 million for the venture capital action plan.

I wonder, Xu, if you want to comment.

[The Chair, Conservative, Joy Smith]

You only have about 15 seconds.

Do you have a quick comment?

[Colin Carrie, Conservative, Oshawa, ON]

Okay.

Is that addressing that issue at all? Is it helping?

[Dr. Chris Paige]

It's helping, but there are still many more projects that need that early stage funding than we have access to.

[The Chair, Conservative, Joy Smith]

Thank you. That's very stimulating.

Welcome to our committee again, Mr. Pacetti. It's nice to have you here. You're on.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Ms. Chair.

Thank you to the witnesses coming forward. I'm not a usual member.

I have a few questions.

The first question would be to Chris and Chris. You talk about the national framework or mechanism, and you state three points. But I'm not sure I'm clear on this. At what point is money needed for innovation and at what point is money needed for infrastructure? Perhaps you can give some more information on that.

[Chris Power]

Perhaps I'll start, and my sidekick Chris might jump in.

It's safe to say we do need an infusion of cash or some investment in this particular area—infrastructure, in terms of the people on the ground with the expertise who can help with commercialization, with developing that whole thing. UHN is probably one organization that is fairly far along in its development, but if we look across the country, it's not equal in people's ability to have that kind of infrastructure in place to really move the commercialization to the next phase. Some of us are struggling hard on that front, learning from each other and sharing lots of things, of course.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Infrastructure would be a structure in place, not equipment or anything hard, visible, or tangible.

[Chris Power]

It would be both, actually, people with that knowledge to make it happen and also the capital equipment to move that forward.

Chris, do you want to jump in?

[Dr. Chris Paige]

As you probably know, hospitals actually can't spend their health budget on research, so we have to find funds from other sources to build the research laboratories, to equip them, to hire the scientists, engineers, and physicists, and to protect time for clinicians to work in those. That's where a lot of the innovation comes from. You need the infrastructure in order to have the innovation. Then, once you have innovation starting—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

But when you talk about infrastructure, the hospital facilities are already there. Is the equipment already there as well to conduct the research, or is equipment needed to conduct the research?

[Dr. Chris Paige]

Well, the hospital facility isn't there either—not to do the research. In some cases, you're right, if it's a clinical trial, the facility is there. But in many cases, you need additional diagnostic services, additional laboratory services, additional pharmacy services. You need all of this additional infrastructure to do the research, and that is not paid for by the health budget. That's a huge area where we rely on the federal government. This is where, as Dr. Fernie said, CFI has been critical, Canada research chairs have been critical, and CIHR. But still, they don't pay for the laboratories themselves; they don't pay for the people who work there.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Your recommendation would be that the government fund all of it.

[Dr. Chris Paige]

My recommendations have it being shared with other partners. But someone has to fund it.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Is there not matching federal funds available when the federal government provides money, depending on the program you're going to get?

[Dr. Chris Paige]

In some cases, like CFI, it's 40-40-20: 40% from the provinces, 40% from the federal government, and 20% from the institution. In other cases, like the research hospital fund, the provinces chose not to match that. In that case, the hospitals had to find the entire 60% match. So matching can be part of the equation, absolutely. But I think the federal government can play the key role of not getting into the health delivery side, which is provincial, but in the health innovation side, which allows us to actually, in the long run, give better health care cheaper, faster, and more effectively.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

That is fine, but you're still asking for provincial dollars. At what point do you draw the line? At what point do you say that the federal government is going to hand it over to the provincial government? The provincial government is always going to want to have a say or some type of control.

[Dr. Chris Paige]

My proposal, which I've written about, is that if we had these credentialled hospitals and they had the infrastructure, the provinces would start funding those because they would start saving money as these health innovations change the health budgets. I think that has to be seeded by the federal government. I would say the first five years of a program like that would come from the federal government, proof of principle that it's working, and then the provincial governments would fund after that.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

And take over the technologies and the innovation. Would you be able to resell that, or is it just the hospitals that would be the customers for that innovation?

[Dr. Chris Paige]

No. A lot of these things have huge commercial value. If you can de-risk it to the point where the private sector will take it, they have huge commercial value.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Where would the private sector be? Would it be outside the country or within the country?