I appreciate the opportunity to speak. As was mentioned, the president of the company was supposed to be here, but he is laid up with the flu, so on short notice, I got parachuted in here. So bear with me if I'm not as polished as these fine gentlemen here as far as speaking is concerned.
I want to focus fairly narrowly on one of the challenges we face, which is commercialization. Flexxaire is a small to mid-sized company, with 35 employees. We have a product that we manufacture. It's an innovative product that we developed here in Alberta. We ship worldwide, but our biggest market is the United States. The product is a variable-pitch fan, used on heavy equipment. Caterpillar is probably our biggest customer, but we ship to John Deere and a lot of small OEMs and end-users.
We have faced a lot of challenges. Some were mentioned, as far as the U.S. dollar and the strengthening of the Canadian dollar are concerned, but I want to focus specifically on commercialization for small companies, and I want to compare it to the support that you get during the R and D portion of product development.
I think the government realized years ago that R and D is an expensive endeavour, and it's a high-risk endeavour. It's key to developing new products here in Canada, so the government stepped up and partnered with companies in order to encourage this activity. A couple of ways they have done it is with IRAP and the SR and ED program, to help support and encourage the R and D activity.
Once a product is developed, that support stops—prematurely, I believe—because you have gone from the phase of the R and D portion to the commercialization. The commercialization, getting the product to market, is in a lot of ways very similar to the R and D. It's a heavy investment. It's higher risk. You believe there's a market, but you have to invest fairly heavily. A lot of times, the lack of support between the R and D portion and revenue generating leads to companies not investing appropriately in that portion.
I'll use our company as an example. We developed a new product for a new industry that we hadn't been in, the oil and gas industry. Our products are mostly shipped into the forestry industry. We used the R and D support to develop this new product. We came up with a great product. When it came to commercialization, we didn't know that we wanted to hire a salesperson specifically to target this, so we added it to the rest of our product line. That commercialization phase has stretched out and it hasn't taken root as quickly as it should have.
A solution to this would be to extend the R and D type of funding into the commercialization phase. That would be partnering with companies for marketing efforts, for maybe hiring personnel, for attending trade shows, especially in the international arena. It's quite costly to do that. Again, this is an area where you don't have revenue coming in, so businesses tend to avoid the risk, or they're a little bit risk-averse to that in small companies when resources are tight.
The other issue that was mentioned is patenting, protecting the product. Especially when you're in a world market, it's quite important to protect the product. If all the money has gone into investing in developing this product and then during the commercialization, if the product is not protected, somebody picks it up in another country, then that investment has been for naught.
Basically, how I see the government's role, so far, is to invest and partner with the companies on the R and D portion of the product, and as a partner, they expect a return on investment. That return on investment is once the product gets to market and generates revenue. So continue that support during the commercialization phase. I think it falls right in line with the spirit of the R and D program.
I like to suggest you step up to provide support for the commercialization, for getting the product to market, supporting us as we try to open up the markets in other countries, and also supporting us as we're patenting. It's quite expensive to get patents issued for products in North America, but if you're dealing globally, then you have to get patents in these other countries. And, follow through with partnering with us, because you want the return on investment, you want the product to get to market quickly, and you want that product protected, so we can continue to generate revenue. Follow through with the investment you've already made in the R and D portion.