Industry and Technology Committee on Nov. 24th, 2025

[Ludovic Soucisse]

I thank the member for his question.

Innovation generates productivity, productivity gains and growth. Among the challenges in innovation is the time it takes to implement a collaboration, a research and development project or an innovation project. It is important to be able to create mechanisms or initiatives that will create…. Few SMEs have research and development centres, unlike many large companies. The latter are well structured in terms of research, development and innovation. SMEs, especially those with fewer than 50 employees, are obviously less so. If we want to reach out to them, we need to go where there are strengths in economic and civil society to support them. College centres for technology transfer, or CCTTs, are among the organizations that work very well with SMEs on short programs, short contracts of two, three, four or six months, and that transfer intellectual property. That said, in a larger-scale collaboration, the sharing of intellectual property and the duration of an innovation will be among the challenges to be addressed.

So, if we realize that a crisis is looming and that we will need to increase productivity over the next two or three years, we must invest in the strengths of our ecosystem and in more technical or applied collaboration. This is a positive factor for both small and large companies.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

Are there any programs you would recommend in Canada? The Canadian government uses the Mitacs program, for example, which helps bring research-based innovations to businesses. Can you recommend any other programs?

[Ludovic Soucisse]

The Mitacs program is also talent-based.

I can let my colleague, Nancy Déziel, executive director of the National Center for Electrochemistry and Environmental Technologies, or CNETE, tell you about the programs.

[Nancy Déziel, Chairman of the Board of Directors, Réseau des CCTT]

Actually, the programs used are mainly interactive visits by the National Research Council of Canada Industrial Research Assistance Program, or NRCC-IRAP. They are very popular with small and medium enterprises, or SMEs, that have about 100 or more people. SMEs, as well as Canada’s colleges, widely use applied research and development programs by the Natural Sciences and Engineering Research Council of Canada, or NSERC. These programs help optimize what our universities develop, make it industrializable, validate the technology, bring it up to scale, transfer it to the company, help with factory-level implementation, launch a new process or produce a new product, and train staff to support them as they implement it.

That means many steps occur between what comes out of universities and what businesses can implement. The college centres for the transfer of technologies, or CCTTs, as well as Canada’s colleges, are there to do it.

[Karim Bardeesy, Liberal, Taiaiako'n—Parkdale—High Park, ON]

I see.

Are there any policies intended to attract even more intellectual property, especially to universities?

[Nancy Déziel]

The truth is that SMEs are reluctant to use patents. It’s important to note that the CCTTs announced 240 inventions this year, which is the equivalent of very large universities, and they sold them to the market. However, most SMEs feel unable to defend their patent when it’s copied, be it nationally or internationally. That's why they ask us to work under the seal of trade secrecy. It means a portion of the numbers on innovation that reach you are underestimated.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Bardeesy.

Mr. Ste‑Marie, the floor is yours for six minutes.

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

Thank you, Mr. Chair.

I welcome and thank all the witnesses.

My questions are for the representatives of the college centres for the transfer of technologies, or CCTTs.

Hello, Mr. Déziel and Mr. Soucisse. Thank you for being here.

With your presentation, we understand how much CCTTs help boost SMEs’ productivity. Could they do more? In short, what is the potential capacity for CCTTs?

Thank you.

[Ludovic Soucisse]

CCTTs could do so much more. I would say that, due to various other government decisions and the current market’s slight contraction, we could almost double their potential in 12 months, especially given their ecosystem’s maturity, thanks to good programs and targeted investments in collaborative programs. Our centres are just waiting to be called upon to do more for SMEs and the economy’s strategic sectors.

However, we must remain aware that this capacity is not simply a matter of their willingness. We must also take market realities into account. One of the government’s levers is to create one-off programs or initiatives to stimulate collaboration between SMEs.

[The Chair, Liberal, Ben Carr]

Mr. Ste‑Marie and Mr. Soucisse, I’m sorry, please wait a moment. An MP says he cannot hear the interpretation. We will find a solution.

Mr. Guglielmin, I’m doing a little test to see if it’s working. Yes? Okay.

I’m sorry, Mr. Soucisse, you may continue.

[Ludovic Soucisse]

Thank you very much.

I was saying that it’s not just up to CCTTs to wait for something miraculous to happen. They’re entirely ready to do more. They have to deal with the current context, which is challenging on a fiscal and budgetary level, as well as on an economic level, so businesses hesitate to invest.

That means boosting business investment is going to take targeted programs. The Natural Sciences and Engineering Research Council of Canada, or NSERC, had a program specifically targeting co‑operation between businesses and Canada’s colleges, including college centres for the transfer of technologies, in Quebec. However, the last federal budget didn’t renew its funding envelope of $108 million over three years. It should be put back on the table, not only to ensure the CCTTs survival and that of its infrastructure, but also to improve the ability of organizations and companies to work together.

There’s also everything to do with defence. The federal government is rolling out a huge industrial defence strategy, which will spread into the provinces. It’s important to make room for applied research centres and promote consistency between businesses, as well as to work on products or services that add value to the industrial sector’s global supply chain.

When tariffs or macroeconomic situations hit industries hard, they need support through initiatives that help them be more innovative. CCTTs are there to support businesses who need an overhaul or need to create new products and services. There are all kinds of ways to get there. It’s a dance between both levels of government, which also provide funding for these centres and initiatives. However, it’s clear we can do more.

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

I see, thank you.

So, you act as a driving force for innovation and research, and you could potentially double your output, but you’re telling us that the last budget cut your $108 million funding envelope.

Do you think the federal government recognizes the real value of the role CCTTs play?

[Ludovic Soucisse]

I think the focus was on different things in the last budget. The college centres for the transfer of technologies, and small and medium businesses in particular, would be very happy to see that $108 million funding envelope renewed. There’s no doubt about it.

The important thing is to set up relevant policies, depending on the context. NSERC’s program, funded with $108 million over three years, was a pandemic response. We think it’s still relevant, given the restructuring and crises with our most important trading partner. We would therefore be very pleased to see this program renewed.

Of course, room must be made for applied research and colleges, which are SMEs’ most important associates. They work more with Canada’s colleges, including CCTTs, than with universities, because working with them is easier and faster. Furthermore, the collaborative intellectual property model suits their reality better. In short, the more programs suit this reality, the better it is for everyone.

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

Thank you very much.

You talked about the potential opportunities available to college centres for the transfer of technology, or CCTTs, in relation to the defence industrial strategy. AI is another area of interest. In 30 seconds, can you reiterate the importance of CCTTs to both of those sectors?

[Ludovic Soucisse]

Yes. I spent five years at Mila, so I'm very familiar with the AI sector. Clearly, it's all about talent. Small and medium-sized businesses need to do a better job of building their capacity to incorporate AI in their operations. One of the challenges all sectors and all businesses, but especially small and medium-sized ones, are going to face will be scaling up and upgrading employee skills in terms of the capabilities AI offers. Fully understanding them hinges on training.

CCTTs are definitely equipped to work with businesses in Quebec to provide training and help them understand how AI can support their processes and procedures. Colleges can do the same for businesses in the rest of Canada. AI is one of the keys to tomorrow's productivity. Anyone who isn't working on that is already too late. None of the strategies that have been put forward focus much on that, but the potential is there.

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

Thank you very much.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Colleagues, before we go to Mr. Guglielmin for five minutes, we're tracking quite a bit over the time at the moment. As of right now, just so both sides are aware, we'll be cutting the final two. I'll keep an eye on the clock, but let's make sure everybody tries to do their best to keep to the allotted time, please.

Mr. Guglielmin, you have five minutes.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you, Chair.

Mr. Dias, you said that Canada faces a productivity emergency, high debts and capital flight. You've also said that the government's economic footprint “is at a 30-year high, at the same time as we face a productivity emergency”, suggesting that it might be “time for a change in philosophy.” Earlier this month, McKinsey had similar findings. They said that the general government gross debt has climbed to about 107% of GDP, with debt charges now a top-five line item in public spending.

Mr. Dias, do you think we have a debt problem in Canada?

[Richard Dias]

That's a very difficult question.

Canada is and should be one of the richest countries in the world. We have enormous oil reserves. We have enormous natural resources. I think what we have done really is squander a lot of that. When you ask if we have a debt problem, I think we have an interest payment problem. It's an increasingly large share of our revenues. I think we mostly have a spending problem. I'm not sure if we have a debt problem necessarily, if that makes sense.

There's some nuance to that question, as I think any economist would suggest.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Yes, that's helpful.

The federal government's budget came out recently, and it says the deficit will be $78 billion. Do you think it will remain $78 billion, or is it likely to be higher?

[Richard Dias]

No, sir. That deficit projection is based on some relatively rosy, albeit normal, forecasts for growth. The problem is that those interest payments, and more importantly the revenue payments that sort of underpin those interest payments as a percentage of GDP or as debt, are based on those rosy forecasts. If anything goes wrong or whatever, you'll have a situation where the revenues won't be as strong as they are suggested in the budget, and the debt and therefore the interest payments will necessarily rise rather quickly.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

What are the consequences if the Liberal government blows past its fiscal anchor of a declining debt-to-GDP ratio?

[Richard Dias]

I think in general what it means is that on the margin—again, everything is at the margin, which is where we live as economists, and I think that's what we should be focused on—it will mean basically higher interest rates and higher inflation. That is not to say there aren't other things that may happen at the exact same time that will pull down on inflation. For example, if there's lower aggregate demand because of a recession, you might have a situation where deficits rise substantially and you have weaker inflation.

The issue is not necessarily how much revenue the federal government is collecting. We know that, as a percentage of GDP, it's at a 25-year high, at about 15%. The issue is where that money is being allocated. I would submit to you that in the current budget's own admission, an 8.1% increase in program spending was not necessarily as effective as I think it could have been, as demonstrated by having zero productivity growth over the last 10 years.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

You've also warned that young Canadians are being gaslit about the economy, and that even if the U.S. tariffs were to vanish tomorrow, we'd still have structural problems, for instance low productivity, high indebtedness and heavy foreign ownership of our bonds. The Bank of Canada, as we heard here, now directly links the Canadian affordability crisis to productivity growth.

Can you explain what it means when you say Canadians are being gaslit about the economy? What do you see as the real drivers of our productivity stagnation and capital flight?

[Richard Dias]

I think two things can be true at the exact same time, and we have a hard time sometimes holding two opinions that may seem contradictory but are in fact complementary.

Donald Trump's protectionism is completely unjustified, and I want to make that very clear. However, virtually every single problem that Canada is dealing with is a structural problem that has been entrenched for years. What's really important is that we need to be focused on the big picture. Donald Trump won't be president forever. Trade relations will normalize. However, things that we've discussed in this meeting and others will not necessarily go away, such as the deficit issue, housing affordability, productivity emergency and the chronic lack of business investment, which is what I think is fundamentally the real issue underpinning all of these productivity conversations.

I mean, all of that was true when the Bank of Canada's senior deputy governor, Carolyn Rogers, wrote what I think is probably the most important speech in Canadian economic history, about the fact that we are suffering a productivity emergency. Mr. Vincent basically reiterated all of her suggestions as to how we can fix it.

As for the focus on Donald Trump, maybe it's a pyrrhic victory on his part, because if we can coalesce around how to solve these problems, when he disappears, Canada can be repositioned, at least philosophically, to do the right things.