Evidence of meeting #31 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was strategy.
A recording is available from Parliament.
Noon
Conservative
The Chair Conservative James Rajotte
Thank you.
Merci, Monsieur Vincent.
We'll go to Monsieur Arthur.
Noon
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
Thank you, Mr. Chair.
Good morning, Mr. Dicerni. Let me ask you a somewhat naive question. I am going to try to complete my education using your skill.
You eloquently told us that Canada's international efforts to encourage research and development are “Olympic level”. That was the expression you used.
At the same time, according to what you and Mr. Stewart told us, our private sector is not making the same effort, is not so dynamic. In the United States, if Boeing had waited for government handouts in order to get the Boeing 747 off the ground, you would be flying in a DC-3 in a few minutes.
How is it that the Government of Canada has made the necessary effort yet our industries, whose future depends on their viability and their long-term research and development, are incapable of making the same effort?
How do you explain that contradiction?
12:05 p.m.
Deputy Minister, Department of Industry
I invite you to consult our strategy document. You will see that it is the reason why we committed to giving the council the mandate to determine once and for all whether economic or cultural factors are at work, or whether it is the absence of partnerships between the private sector and the universities and the resulting lack of communication.
These are the trails that we have asked the council to follow to find out once and for all why the private sector in Canada does less research and development than the other OECD countries.
I have suggested hypotheses, but I have no answers, We are waiting to see what the report brings.
12:05 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
Mr. Stewart, you explain where you want to go, you explain how you want to get there, but you're not very clear on where we're starting from.
Has all this strategy been started out of a clear inventory of our strengths and weaknesses in Canada at this time? In what is Canada absolutely the best in the world and in what should we invest to stay the best in the world? In what fields is Canada lagging behind and needing to work harder? Do we have a clear understanding of our strengths and weaknesses as far as science and technology development is concerned?
12:05 p.m.
Deputy Minister, Department of Industry
The council's study began with an examination of our strengths and our weaknesses. That is our starting point. It was a major ground-level review. They held consultations all across the country.
If we have the opportunity to come back to the committee, we will send it to you beforehand and we can discuss it in more detail.
Is Peter Nicholson coming to your committee?
12:05 p.m.
Conservative
The Chair Conservative James Rajotte
Actually, Peter Nicholson and Howard Alper were supposed to be here today, but they were unavailable for today, so they will be appearing later on.
12:05 p.m.
Deputy Minister, Department of Industry
The president of the council, Mr. Nicholson, coordinated the preparation of the study that provided us with a starting point.
I would suggest that you get a copy of the study before he appears before the committee. You could then explore the question with him in greater depth.
12:05 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Arthur.
We'll go to Mr. Eyking, and then I have some questions.
Mr. Dicerni, I just want to point out that it is 12:10. I don't want you to miss your flight.
April 10th, 2008 / 12:05 p.m.
Deputy Minister, Department of Industry
No, no. It's fine.
12:05 p.m.
Conservative
12:05 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Thank you, Mr. Chair, and I thank the guests for coming here today.
I am from the Atlantic Canada region. Being from that region, I was interested when you mentioned that a lot of assistance or help from your department goes to ACOA.
12:10 p.m.
Deputy Minister, Department of Industry
No, I am sorry. Let me correct that. We work with ACOA, which has, I believe, a dedicated innovation fund that they work with, with provincial governments.
12:10 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
That's fine, but at the end of the day we are talking about the overall country, and we know we have to help industries to be competitive on a global scale, whether it is delivered through our regional development or directly to industry.
Often we find in Atlantic Canada that because the assistance comes through ACOA, it is often viewed through the media and sometimes through this present government as a bit of corporate welfare. Do you have any rough figures from your department across Canada for the different regions, such as the Quebec region, the Ontario region, the western region, and the Atlantic region? There are different regions that have different assistance toward their industries. Is there a bit of a breakdown overall to show if each region is getting fair treatment?
I know it goes to ACOA, but often back home we would say...Ontario would get it through a different venue--maybe the auto sector, or whatever--and people wouldn't look at it as corporate welfare but as an investment in the global economy. Sometimes at home we're viewed differently.
Does your department ever look at how we are doing overall for the whole country and how we are helping industries in these regions to prepare for the economies of whatever? Is there a breakdown in each region on how it is being rolled out, from the government's perspective?
12:10 p.m.
Deputy Minister, Department of Industry
There are two or three points. One is that much of this expenditure through the granting councils or CFI is done as a result of peer review by third parties. It is not Iain or I or the minister who at the end of the day picks this university or that university to receive an award of one sort or another.
Second, I mention ACOA because they're the only regional development agency that has a specific innovation fund. Quebec does not have it, WED does not have it, and FedNor does not have it, so we work with them and with the provincial governments to see the areas to which we could bring a greater focus of support.
Third, the NRC, which is a major wing of the government, does have a number of initiatives and investments of an S and T nature that they support--Memorial University and P.E.I. and so forth.
I think it's hard to determine what is “fair share” in this area, in part because it is driven through third-party review based on peer assessment. I am hesitant to say yes, they are getting a fair share, because at times in other jobs I've been in, the only way they get their fair share is if you work it out to 140%.
12:10 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
I think my question is revealing that it's not just how much share each region gets; sometimes it's how it's perceived it is delivered. Our vehicle in Atlantic Canada is ACOA, which sometimes is perceived as corporate welfare, whereas in other regions it's perceived as maybe a necessary investment in the economy.
12:10 p.m.
Deputy Minister, Department of Industry
But it is not exclusively through ACOA.
When the granting councils come and appear before you, you may wish to ask the president of NSERC, the president of CIHR, or the president of SSHRC. They are also investing in a number of universities in eastern Canada. I would not want to leave the impression that the government's involvement in the Atlantic community is just through the ACOA innovation fund; the other instruments are also involved.
12:10 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Just on those things you're talking about, like the university chairs and so on, do you have a bit of an allotment for different regions? Or do you just have a competitive basis right across the country, and whoever has the best proposal or whatever...because we often hear that some universities in central Canada really load up compared to Atlantic Canada?
12:15 p.m.
Director General, Portfolio and Coordination Branch, Department of Industry
If you think about the Canada research chairs program, which is funding 2,000 researchers across the country, there is a special allocation that is a leg-up for small universities, for small research-performing universities.
I think, for instance, NSCAD, in Halifax, ended up with a chair, I believe, through that process. So there is an element of that there.
12:15 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Eyking.
I'm going to finish as the chair with a couple of questions. I want to thank you two gentlemen for coming in.
I have a series of questions, but I want to put two to you that have been put to me by a number of people.
First of all, with respect to the R and D tax credit, you mention the size of the program and the generous nature of the program, and I think it's an excellent program. One of the things that has been brought to me--and I want to bring it to you--is this. A company like CAE, a flagship Canadian company based in Montreal, says that one of their challenges is that they perform research that is eligible for the SR and ED tax credit, but perhaps because of the fiscal situation they find--one year or a particular number of years later--that they cannot actually monetize the tax credit. So they find it difficult. That's why they and others have called, before this committee, for making these credits refundable--100% refundable, 50%, 20%--to some extent to allow them to actually use these credits that they are in fact, in their view, eligible for. That's the first question.
The second one is with respect to the ongoing operational costs of big science projects. In the last month I was at the synchrotron in Saskatoon, which was very appreciative of the recent funding in the recent budget and the ongoing funding that's happened from governments over the years. The way they describe it is there's a lot of investment through CFI and others in the infrastructure; there's a lot of investment in human capital through the granting councils. In terms of the operational costs of the facility itself on an ongoing basis, one of the questions I ask is, “Do you need CFI expanded, or do you need perhaps another program to address this?” It's different from the indirect costs, so they'll probably be appearing, or we may in fact go out to that facility as a committee. But that's a second challenge.
I know it's a challenge, and perhaps it's two comments and two suggestions as to what we should be looking at. If either or both of you have any comments on either one of those issues, I'd certainly appreciate it.
12:15 p.m.
Deputy Minister, Department of Industry
On the issue of the tax credit, I would be remiss if I did not mention how much I'm sure officials in the Department of Finance would love to come and talk about tax policy. It's a purview that they understandably claim a fair degree of monopolistic oversight on, and they do not welcome comments from line departments in how they structure tax policy, because it has to be looked at as a whole.
12:15 p.m.
Conservative
