Thank you very much. It's an honour and a pleasure to be here.
In my brief, which I'll be referring to in my testimony today, I introduce the AUTO21 network of centres of excellence, which is one of over 20 networks of centres of excellence funded by the Canadian federal government in areas such as manufacturing and engineering topics, health issues, and natural resources issues. I'm going to talk today about the importance of the NCE program to Canada, and in particular AUTO21, and also about what I feel are some issues around Canada's innovation system, which in my view bear a look from the standpoint of improving our ability to compete in the world.
In terms of the socio-economic context, the auto industry, as I'm sure you're well aware, is Canada's largest manufacturing sector. I've given some statistics on the first page of my brief, which I think will fill in some useful numbers for people who may not be familiar with the auto sector.
It's a very dynamic sector. Virtually every statistic to do with the auto sector is huge, and Canada, frankly, is a big player in the auto sector. Since 2000 we have gone from the number five auto-making nation in the world to number eight, but we actually make more cars and trucks now than we did then, by a small number, so we're not losing in terms of absolute production. But we are dropping in position, and that's as a result of the rise of other economies such as China. In that respect, I'd like to really support what the previous speaker said. We have to compete in the world. It's terribly dynamic and things change very fast.
One of the key statistics in page 1 is the amount of overcapacity. If members will note, there is a capacity to produce about 80 million light vehicles in the world per year, but only about 62 million to 64 million are produced, so there is a significant amount of overcapacity. In fact, the amount of overcapacity just about exactly matches the amount of capacity that North America possesses in vehicle assembly, so we need to fight for every automotive job and every automotive piece of output everywhere we can, and Canada has to do that on the basis of innovation. As I point out on page 2 of my brief, we cannot do it by being cheap. We have to do it by being fast, agile, high quality, reliable, and innovative.
I'd just like to move to a general statement about the role of university and public sector research organizations.
It's my view that the role of universities and public sector research organizations is to create new knowledge, to advance the state of the art in a wide range of fields, and to educate people to enhance their employability and stimulate their creative energies. Universities do not make cars and do not make auto parts, and I think it's really important, as we hopefully begin a systematic look at Canada's innovation system, to make sure that everybody is carrying out their role and sticking to their knitting.
AUTO21, I hope people would agree, has been a very good investment for the people of Canada. It's an effective and efficient public-private partnership in every sense of the word. The board of directors is led by...and a majority of the directors are from the private sector, from auto industry companies of one level or another. These are committed, very senior level executives who give a lot of time and energy to governing AUTO21 in an effective and efficient fashion, fully within the boundaries of the rules of the NCE program.
One of the most exciting things about networks of centres of excellence is that they allow a very seamless crossing of disciplinary lines. It's very important, I think, to appreciate how important it is to put the right people to work on the right problems. Not all problems can be solved by people in just one discipline. In fact, some of the most vexing problems really require a multi-disciplinary approach.
For instance, in a vehicle safety issue that we worked on recently, we have a team of nurses, physicians, engineers, physiotherapists, human kinetics people, and some sociologists. I think it's really important that this can take place. Under the usual system of funding in Canada, it's not easy for people who span that breadth of discipline to work together, because the funding councils tend to have relatively rigid mandates. They certainly try hard to break out of that, but I think AUTO21 and organizations like it have an agility that is very useful in attacking those kinds of problems.
That really brings me to the core of my message to the committee. I think there are three issues I would ask the committee to consider, and I hope to elicit your support on these.
The first one I would suggest is probably a regulatory change or something like that, and that's the elimination of the 14-year NCE sunset clause. The way the networks of centres of excellence program is structured in Canada--and it was a Canadian invention in the late eighties--their first mandate is for seven years, and they're able to apply for one more seven-year term.
Let me say at the very outset, and I'll probably say it again, that I do not believe in entitlement, by any stretch of the imagination. AUTO21 has no objection whatsoever to a searching, rigorous, and thorough review of our operations, including a demonstration by us of the value we create for the taxpayers' investment. At the same time, in my view, it makes no sense to work hard to create a good program with value and buy-in from the user sector--the industry--that creates a great educational opportunity for young Canadians and then shut it down because a certain number of years have passed. I just don't think that make sense. Yet that is the way the program is designed now. I think this is a flaw.
In my paper, on pages 4 and 5, I bring out the example of the Australian collaborative research centres program, which was modelled on the Canadian NCE program. In fact, one of their newest collaborative research centres in Australia is the AutoCRC, which is modelled directly on AUTO21. It says that right in their proposal. The Australian program permits networks to continue to apply for successive terms. These are granted, as long as the user sector continues to back it. As long as the user sector is committed--and I mean financially committed too--to leveraging the public sector funding, then the government remains committed. That has enabled Australia to make research progress and contributions and, more importantly, to support their economically key sectors to an extent, in my view, that is way beyond what a country with a population of 21 million or 22 million would normally be able to do. I think it's because their program is designed systematically to succeed and create certain outcomes. I think that's something we really need to look at.
Again, I do not believe in entitlement. If AUTO21 stops working properly, stops creating value, and if the industry stops supporting it, I will be the first one to suggest that it be shut down.
The other thing I would like to talk about very briefly is the issue of collaboration and cooperation among the various research funding programs. I have some examples in my brief that I would draw your attention to. The way it is right now, you basically apply for equipment money from one source, and people support money from another source. Those two programs don't really communicate very well. I think that's a flaw. Again, we need a systematic approach here.
Finally, I feel programs that create value and work well should really have inflationary increases in their funding to allow them to remain current and competitive. Just as business has to compete worldwide, researchers have to compete worldwide for the best people, the best equipment, and the best ideas. I think Canada has done a great deal of work over the last number of years in supporting research and innovation, but I think there's a lot more to be done.
I would urge the committee at this juncture to call for a systematic review of how all the programs work and how they interlock, to try to ensure that things happen in a way that makes sense.
I think I'm out of time. Thank you very much.