Industry Committee on May 6th, 2008

[Pierre Coulombe]

That is an interesting question, sir.

The NRC enters into different types of contracts with the Canadian industry. There are fee-for-service payment arrangements where industry officials approach us, use our infrastructures and then leave. There are also research projects that are carried out with industry people. In such cases, we share the risk and often, the technology developed, with the industry.

Improving the competitive position of Canadian companies is of paramount importance to us. Much of what we do for Canadian industry is confidential, in that it provides a clear competitive advantage to the industry. When we work with large companies, we transfer technology to them. When these companies find success after collaborating with the NRC, the Canadian economy benefits in general by virtue of the more competitive market position that these companies enjoy. These companies go on to hire people, turn a profit and pay taxes which flow back into the government's coffers.

[Robert Vincent, Bloc, Shefford, QC]

Have you ever followed up with one of these companies that may have taken your technology and your research and then gone and manufactured its products elsewhere? The profits you alluded to may have found their way to other countries. Is that what happens? Of course, the research could have been so advanced that while the technology may have benefited others in addition to Canadians, the money input remains in Canada.

[Pierre Coulombe]

That's an important question. Consider the example of nuclear energy in Canada. This goes back a ways. Nuclear energy technologies were developed by the NRC in the late 1940s. This led to the creation of Atomic Energy of Canada Limited in 1952. Today, AECL posts sales of about $5 billion or $6 billion a year, the bulk of which are made in Canada. A great many Canadian companies are developing the nuclear sector. This technology stems from research done by the NRC during the 1940s and 1950s. Today, AECL continues to conduct research activities at its Chalk River facility in Ontario. This is one example of an industrial sector that started out with nothing, but today, is one of Canada's top performers. I could give you other similar examples as well.

[Robert Vincent, Bloc, Shefford, QC]

Conversely, can you give us some examples of technologies that were developed by the NRC but put into production elsewhere? Are you aware of any such cases?

[Pierre Coulombe]

Once the NRC has obtained a license for certain technologies, it must always contend with a so-called Canada clause governing technology use in Canada. Obviously, technology is a global phenomenon and it cannot easily be contained at the border. In order to move forward, companies must invest elsewhere. They must obtain from other countries technology that is compatible with Canadian technology. Therefore, it is rather difficult for us to say to companies that they cannot develop technology anywhere else but in Canada. The reality is that in order to develop a final product, companies must often combine several different technologies.

[Robert Vincent, Bloc, Shefford, QC]

There is a difference between developing something in Canada, and producing something in Canada. Let me be clear about this. My question related to production. I want to know if you have ever developed a product, only to have a company turn around and have the product manufactured elsewhere to increase its profit margin. I want to know if the technology developed by our scientists with the tax dollars of Canadians and Quebeckers is ever taken elsewhere for production purposes.

[Pierre Coulombe]

Very quickly let me tell you about IMRIS, a company working in the field of magnetic resonance imaging that was created by the NRC in Winnipeg. When the company was first founded several years ago, it had only a handful of employees and its sales were almost non-existent. Today, sales of magnetic resonance imaging systems, all of which are manufactured in Winnipeg, total $60 million.These systems are manufactured and integrated in Winnipeg.

[The Chair, Conservative, James Rajotte]

Thank you, gentlemen.

We'll go to Mr. Carrie, please.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

Thank you very much to the witnesses for being here today.

I'd like to ask a question of Mr. Corbett. In your opening statement, you said that:

“Canada needs a national science adviser to bring science issues directly to the public agenda.

You also stated:

Government must engage the scientific community as a whole, including the government's own scientists and the professional institute which represents them, if it wishes to strengthen scientists' roles in national S and T policy formulation and improve public science's innovation capacity.

We did have a national science adviser, and there were basically no resources for that office, no reporting structure, and no accountability, and as a result, there were no results.

Now, we have something called STIC, and I don't know if you're aware of the mandate of STIC, but you ask for a national foresight program. I was wondering if you could explain to members how your plan would be different from what's already happening with STIC and the regular state-of-the-nation report.

[Gary Corbett]

First of all, STIC is another committee. There have been many committees over the years—CSTA is one, and I can name any number—that have looked at the state of science in Canada for the last 10 to 15 years. Committees are bureaucratic and, by their nature, will be slower. But Canada must move more quickly, and there's a better communication process with the national science adviser. That particular science adviser was, in your own words, ineffective because the position needs to report directly to Parliament. That's what we said in our opening brief: the position needs to report to Parliament, not to the Prime Minister.

[Colin Carrie, Conservative, Oshawa, ON]

But wouldn't that create another bureaucracy? He has to have people working for him and liaising with all of the different people you think they should be liaising with. Why wouldn't STIC be able to do the same thing? Why would it have to be the way you've suggested?

[Gary Corbett]

Well, I think if you look at what other countries are doing, they have national science advisers with that mandate, and Canada should be looking at what's happening in other countries before it maybe makes decisions about having just another committee, STIC, for example.

I will point out, by the way, that PIPSC held an international science policy symposium in September, and we plan on doing it again.

[Colin Carrie, Conservative, Oshawa, ON]

When the Canadian Council of Academies was working to create the government's S and T strategy, what did PIPSC offer? What was your contribution to that?

[Gary Corbett]

We weren't asked to contribute, I don't believe, but our science members certainly deal with it every day. We would love to have been asked.

[Colin Carrie, Conservative, Oshawa, ON]

Many groups did make submissions. Were you were unaware of it?

[Gary Corbett]

I don't know exactly, but I will answer it this way: the panel who looked at moving the laboratories did consult with us, and we had an hour with them. So somebody is asking questions of us, because we do represent the scientists who work in science-based departments and agencies.

[Colin Carrie, Conservative, Oshawa, ON]

Okay, good.

I'd like to talk to Dr. Coulombe for a minute. We hear a lot about commercialization and how there's a gap in commercialization. I was wondering how the NRC is leveraging basic research with universities and private companies to commercialize innovative ideas and intellectual property. Could you explain what we're doing there?

[Pierre Coulombe]

Thank you for your question, Mr. Carrie.

Mr. Chairman, the NRC has been and is still very active in the area of commercialization. We have two broad programs. The first one is IRAP, which directly supports private companies in moving to changes in innovation by either using technology they acquire from abroad by licensing or allowing them to develop their technologies in order to transfer those things to products that get to the marketplace. That's one angle we use to do it, and we do it quite well on that front.

As well, all the research programs we have are obviously targeting goals. NRC is not entertaining research programs that don't fit any particular goals. So the goal can be long-term, medium-term, or short-term, but all our programs are focusing on goals. And the goal is to support Canadian industry, roughly speaking, and to support the needs of governments. We are doing quite a bit of work for the various departments of the federal government.

We are very well aware, and we do that by aggressively licensing our technologies to the private sector, trying to identify key Canadian companies that can use the technology rapidly and move that technology into products.

When we're not able to do that--it's possible that for some technology we don't have any significant receptor capacity--we try to create companies out of our own employees that will have the business skills to take that technology and move it into the marketplace. And over the last 10 years, NRC has created more than 67 companies. These are SMEs like the one I mentioned, IMRIS, which is out of Winnipeg. Today it is quite a successful company in the field of MRI technology for surgical groups, so it's one of the unique companies in that area.

But we have others. Some are very successful. In creating spinoffs, we have to recognize that marketing time is going to be longer because we have to create a company; we've got to interact with venture capital in Canada, so we have to find management skills to run that company; and most of the time you also have to complete the development of the technologies, because there is a difference between the technology, as you know, and the product. A lot of work needs to be done.

We do that. We do that by interacting with the BDC communities, by working quite a bit with BDC, the Business Development Bank of Canada, therefore supporting each other and trying to identify the best opportunities, like the initiative we launched on nanotechnologies, which was announced last week, where BDC is a key partner. And we wanted BDC in that equation because we wanted them to be very much aware of the potential R and D opportunities that can result from those five projects that have been funded by $15 million coming from NSERC and NRC. Therefore, with BDC very much connected to the forefront of knowledge in this particular area, they are very well aware of the opportunities and most likely very well aware of any spinoff opportunities there might be. We know about that because we were part of those at the table, evaluating those proposals.

That's how we try to make sure that commercialization is taking place within our own walls.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Carrie.

We'll go to Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

Good morning to the witnesses.

Mr. Corbett, I want to start with you. You said in your presentation that big science projects need large-scale investments, long-term commitments, government science leadership, and in-house capacity to succeed. And then you talked about your view of the lack of commitment, and also a real challenge in terms of demographic changes. What do you think Canada needs to do to address these specifically? I'm thinking about the labour market piece of it.

[Gary Corbett]

Certainly Canada has some critical decisions to make. But I want to focus on the different aspects of public science.

The private sector is required, government is required, and universities are required. It has got out of balance since program review. I know that right now in our federal government laboratories their inability to hire is related to no commitment by the government to long-term funding. There are sunset programs and terms rather than long-term funding.

A-base funding has to be put back into the mix so managers in the labs can hire people over the long term, and that would include university students who are ready to take the jobs.

[Peggy Nash, NDP, Parkdale—High Park, ON]

So if I understand you, then, because it's just a short-term commitment, people don't see job security there. What would be the advantage for someone going and working as a government scientist as opposed to a private sector scientist or a university scientist?

[Gary Corbett]

Well, that's an excellent question. There are three different drivers. University is longer term, about learning. The private sector is about making a dollar, let's face it. Government is really about public good and the delivery of service to Canadians and the protection of Canadians.

[Peggy Nash, NDP, Parkdale—High Park, ON]

So you feel the public good is suffering because of a lack of long-term funding commitment?

[Gary Corbett]

Absolutely we feel that way. We feel that if students and the population out there in the workforce understood the commitment that some of the scientists make to the everyday life of Canadians, this would be a calling--absolutely--to young scientists to come and join the federal government.