Industry Committee on May 27th, 2008

[The Chair, Conservative, James Rajotte]

I will ask members and the witnesses to take their seats, please.

I apologize. We are starting a couple of minutes late. We were delayed at the last tour we had today.

Pursuant to Standing Order 108(2), this is the 40th meeting of the Standing Committee on Industry, Science and Technology. This is the western part of the national tour we're doing with respect to our study on science and technology across Canada.

We had a very good session this morning, with some very interesting tours and discussions about science and technology policy.

We have two panels this afternoon. The first panel is running for an hour and 15 minutes. It's a very short time period, but we have to catch a flight to Saskatoon tonight.

The first panel is composed of three organizations. First of all, from the National Research Council of Canada, we have the director general, Mr. Ian Smith, with the Institute for Biodiagnostics; secondly, we have the vice-president of life sciences, Mr. Roman Szumski.

From the second organization, the University of Manitoba, from TRLabs Manitoba operations, we have the director, Len Dacombe. The third organization is the Winnipeg Regional Health Authority, and we have Mr. Harry Schulz, the chief innovation officer for the Health Sciences Centre.

Welcome to all of you, gentlemen.

We have five minutes for each organization, and then we will go to questions from members. I believe we'll be starting with Mr. Smith.

You can begin at any time, Mr. Smith.

[Ian Smith, Director General, Institute for Biodiagnostics, National Research Council Canada]

Good afternoon, ladies and gentlemen. Thank you for having me here today.

It is a great pleasure to be with you today.

For nearly a century, NRC has excelled at putting science at work for Canada, advancing knowledge, generating technological solutions for Canadian industry, creating wealth, and improving the quality of life of Canadians and others around the world.

You have already interviewed our president, so to some extent you've heard some of this. This is just a very short introduction to NRC. NRC plays a leading role in creating Canada's future. We bring together key stakeholders based on a national and international network of research and technology partners, including universities, governments, and the private sector.

Our institute, the NRC Institute for Biodiagnostics, which we shall call NRC-IBD, was established here in 1992 as part of that network. It is a leading research centre for the development and application of tools for medical diagnosis and an integral element of the local innovation system.

Our impact on Canada extends beyond Winnipeg to satellite laboratories in Calgary and Halifax. Currently we have about 150 researchers and staff. Affiliated collaborators and students are engaged in about $11.3 million worth of research and development and in technology transfer. Since 1997 we have created seven technology spinoff companies, and I will tell you about them in a moment.

Along with our NRC partners--IRAP and the Canadian Institute for Scientific and Technical Information--we work directly with small and medium enterprises and entrepreneurs. We bring research strengths and business expertise to bear on their market-driven challenges and opportunities, and thus we enhance their competitiveness.

We have recently constructed an industrial partnership facility in Winnipeg to accommodate a greater number of entrepreneurs and early stage technology companies, providing them with access to NRC's programming and services that can significantly enhance their success.

I would like to take a few moments to tell you about our research in the area of medical devices, why it is important to NRC and to Canada overall, and how we are helping to create a competitive advantage for Canada through science and technology.

From a business entrepreneurial perspective, Canada faces an annual trade deficit for medical devices of approximately $2 billion per year. Canada is a net importer of medical imaging instruments and peripherals from major multinational corporations. Certainly these corporations will continue to play a significant role in the global medical imaging market. However, NRC-IBD's research and development in technologies and techniques has led to the creation of several very successful imaging-based medical device companies that export their products to other countries, thereby reducing the trade deficit and benefiting both patients and Canada's economy.

For example, Winnipeg-based IMRIS, an NRC spinoff company, incorporates NRC technology into interoperative MRI systems, many of which have been installed in hospitals in North America and abroad, including China and India. IMRIS has a market capitalization of $100 million and employs about 120 highly qualified people here in Winnipeg. In 2007, IMRIS created the largest initial public offering of any Canadian medical device company in the history of the Toronto Stock Exchange--$40 million.

Another of our medical device companies, Novadaq Technologies, makes a camera system that validates cardiac bypass procedures--heart bypasses. They currently employ over 75 people and have a market capitalization of nearly $100 million. In 2005, they succeeded in the third-largest Canadian medical device offering on the Toronto Stock Exchange--$25 million.

From a knowledge perspective, NRC-IBC is developing new methods to help detect, monitor, and treat disease, bringing social and economic benefits to Canada. The technologies we have developed help reduce the invasiveness of surgical procedures, improve the effectiveness of treatment and therapy, and limit the complications of surgery--factors that are central to the well-being of Canadians and others around the world.

From a people perspective, our research programs employ internationally recognized researchers. We collaborate with universities and technical colleges to train scientists and researchers each year. We increase the supply of highly qualified and globally connected science and technology graduates with experience in knowledge commercialization, thus enabling them to succeed in today's global market.

Our collaborations with hospitals in Calgary, Winnipeg, Toronto, Halifax, and other Canadian cities help translate our discoveries into clinical practice. For example, our collaboration with the Ross Tilley Burn Centre at Sunnybrook Hospital in Toronto is noteworthy. NRC-IBD is developing a device that assists surgeons in determining the depth of a burn. By doing so, we are helping to decide upon the appropriate treatment, which improves the patients' outcomes and reduces costs. This product will soon be commercialized.

By implementing the Government of Canada's science and technology strategy, mobilizing S and T to Canada's advantage, NRC's Institute for Biodiagnostics is well-placed to serve many R and D needs of the Canadian high-tech industry. We are creating knowledge, value, and a highly skilled workforce, and we are contributing to improving the health of Canadians through earlier diagnosis of disease and less-invasive therapy.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Smith, for your presentation.

We'll now go to Mr. Dacombe, please.

[Len Dacombe, Director, TRLabs Manitoba Operations, University of Manitoba]

Thank you for the privilege of addressing you this afternoon. I would just like to clarify that I am not speaking on behalf of the University of Manitoba, although they are a valued partner in our organization. I am speaking on behalf of TRLabs.

I wish I had more than five minutes to discuss the topic of science and technology in relation to health and biotechnology. I will, however, take this opportunity to focus on a key requirement, which I and the organization I represent consider to be paramount to ensuring the continued growth and success of our country in the fields of science and technology as they relate to health and biotechnology.

I would first like to differentiate between the terms “science” and “technology”. Scientific research provides scientific information and theories for the explanation of the nature and properties of the world around us. Science, therefore, represents the body of knowledge we accumulate. Technology, on the other hand, is the vehicle that leverages our scientific knowledge and generates benefits for the citizens of our country. Successful technology requires a process called innovation. Innovation represents the successful exploitation of science in a practical way, and innovation requires a cultural paradigm for it to occur.

The three primary participants in the innovation process have traditionally been the research institutions--primarily our universities--the governments, both provincial and federal, and industry. These entities represent three distinct cultures. The research community represents a culture in which ideas are formed and possibilities are investigated. Industry, on the other hand, represents the culture in which economic development is the key focus. Revenues, profits, investments, technology development, and risk-taking are the key elements of a strong economy. A strong economy provides high levels of employment, regional competitiveness, and productivity, which ultimately leads to the enhanced prosperity of a region and an appealing quality of life. Government represents the culture that must not only support and embrace the research culture and the culture of industry, but must also create an environment of collaboration between the two. Innovation can occur only in a methodical and deliberate way in a collaborative environment.

Canada has a long history of strategic developments and innovations. Examples include insulin, the light bulb, the G-suit, the telephone, the TV camera, the wireless radio, the a.m. radio, the electric oven, the electric wheelchair, and the cardiac pacemaker, invented right here in Manitoba. For Canada to continue to contribute world-class innovations to the world in which we live requires a focused effort to maintain and enhance the collaboration between these different and diverse cultures. TRLabs has a 22-year history of serving as a catalyst, fueling collaborations between universities, governments, and industry.

Organizations like TRLabs need to be supported because they live and breathe at the intersection of these three cultures. We facilitate the innovative process by taking ideas and possibilities and making them realities. We bring the idea generators and the idea implementers together.

Unlocking Canadian intellectual property or ideas and creating innovation require a focus and a deliberate effort. Targeted innovation is required to enhance health care in Canada. This means that in the areas such as e-health R and D, there is a fundamental requirement to have the users--including regional health authorities and proactive clinicians--the researchers, and industry working in a collaborative environment to first identify the real needs and to then create the required targeted innovations by validating, disseminating, and translating the technologies into the day-to-day operating environments in the health care sector.

True collaboration, as I have described, would result in strategic improvements to the Canadian health care system, which would ultimately impact every member of Canadian society in a positive way. It would also create opportunities through which Canadian inventions and advancements could be leveraged globally to impact society in general, creating economic growth for the Canadian economy. However, small and medium-sized enterprises--SMEs as we call them--are currently at a disadvantage when considering innovation in the health care sector. Great ideas and valuable innovations are most often not pursued because there are no mechanisms to validate their overall functionality in the very diverse and complex health care environment. As a result, many health-related innovations from SMEs never see the light of day in the country where they were conceived, or, worse yet, they may be shelved permanently.

Canada's tradition of creating groundbreaking innovations must continue, but in order to do so it must be actively fuelled and become even more deliberate. TRLabs, for example, has already reorganized and refocused its research program to include the specific thrust in health applications and technologies. TRLabs also fully embraces SMEs in our partnership model, and we are in a unique position to assist an SME's entrance into the health innovation space.

Investing in information and communication technologies, or ICP as we call it, should also be considered as strategic, because we can no longer look at ICP as a sector unto itself, but rather as a strategic vehicle or catalyst that allows all industry sectors, including health care and biotechnology, to introduce strategic advancements. Innovation in ICP will positively impact the grassroots of Canadian society across all sectors.

I would like to leave you with five recommendations to consider.

First, we must foster and support collaborative partnerships between industry, government, university, and research institutions wherever possible. It is at this intersection where creativity becomes a reality. New ideas must be successfully exploited so they can become innovations.

Second, we must continue to invest in proven entities that generate new innovations. We cannot afford to invest in reinventing the wheel. We must push the envelope and introduce new innovations through collaborative partnerships. Funding for these entities should not only keep pace with inflation, but should be increased based on valid innovation performance metrics.

Third, we must continue fostering strategic R and D investments in information and communication technologies. Technological investments in ICP will directly fuel innovations across all economic sectors, including manufacturing, aerospace, biotechnology, health, transportation, etc.

Fourth, we must encourage increased industry participation in the Canadian R and D process and consider it as a key metric in the analysis and decision-making process that determines the allocation of Canada's R and D spending. Companies willing to innovate will fuel economic growth and create a strong and agile Canadian economy. We cannot afford to have ideas left on the shelf.

Fifth, we must consider leveraging vendor-neutral, not-for-profit research entities like TRLabs in the creation of innovation centres, which would provide SMEs with an environment to test, validate, and certify that their innovations related to health care will successfully integrate into the existing health care operational environment. This will not only benefit the SMEs, but also the local economies and the health care sector by providing a valid strategic option.

Again I would like to express my appreciation to the committee for being asked to participate today.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Dacombe.

We'll go now to Mr. Schulz, please.

[Harry Schulz, Chief Innovation Officer, Health Sciences Centre, Winnipeg Regional Health Authority]

Hello, everyone.

My title is chief innovation officer of the Winnipeg Health Authority. I'm based at the Health Sciences Centre, our community's largest hospital.

You folks just visited St. Boniface Hospital this morning. I spent 17 years of my life in Ray's riding, working as part of the core team putting up those two institutes. They're founded on an entrepreneurial model of pulling funds together, both for capital and operating expenses.

I also was co-founder of two venture capital funds in town and several spinoff companies that have come from them. My current project ties to the L5L project that you saw this morning in our presentation.

This picture I'm showing here is of the new Siemens Institute for Advanced Medicine that's being built at the front door of the Health Sciences Centre. This is a $200 million project being built with soft money. It is 80,000 square feet and will focus on the neurosciences, surgery of the future, advanced imaging, and simulation. The project contains a retail concourse and a 17-story hotel.

The naming rights of this institute were sold to Siemens AG, one of the largest multinationals in the world. In return, Siemens is putting research programs inside of the institute. The facility will be Siemens pure: when you flick a light switch, it will be a Siemens light switch; when you look at an MR scanner, it will be a Siemens MR scanner.

In return for having such an exclusive environment focused on one vendor, we will do proprietary research in ways that conventional collaborations would not normally take place.

The hotel made a contribution towards the institute in return for affiliation with our community's largest teaching hospital. To give you a sense of the business traffic that's affiliated with it, the NML that you visited this morning generates 25,000 hotel room nights a year just by itself—not counting the teaching hospital. How could I capture some of that volume for our campus? So the hotel is not just a place for guests to stay, but the intention is also to have revenue generation to help feed the indirect costs of the research institute.

The project you just saw is for $200 million. It will have a $30-million-a-year operating budget, with roughly 300 staff, and the majority of that funding will come from soft sources.

A third partnership we have in the institute is with the spinoff company that the National Research Council has launched, IMRIS. It makes an interoperative MR scanner that slides on a ceiling track through the OR and lets the surgeon take pictures during the surgery. This is the country's only IPO this year on the technology side. We're proud to be a showplace for this technology in a clinical setting.

We are also engaged in a very active partnership with CAE, the Quebec-based aircraft simulation company, with one entire floor of the institute focusing on CAE's diversification into the field of medical simulation. The first stage of product development from that will be the development of a new generation of medical mannequin. With medical mannequins, you can literally have babies simulate heart attacks. These are very, very sophisticated robotic devices, but they all come tied to a control room. Well, the new generation of medical mannequin that we're going to be creating with CAE is a completely self-contained unit that will allow people to go all the way from the ambulance to the emergency ward to surgery, up to the patient's bedroom.

We'll also be involved in the development of a virtual reality surgical trainer. Can we rehearse your surgery the day before we do it? How solid does that tumour feel? What does Harry Schulz's tumour exactly look like? What is it touching against? Let's both rehearse that procedure the day before and train students who are in the institute, and let's advance its integration with other types of devices.

The third part is a skills assessment unit in support of surgical training. Say we have a surgeon who's 75 years old. Can he still hit the button? My dad takes his driver's licence over again when he's 80, but we don't make our medical people do that.

So the notion of diversifying a big company like CAE into the medical field, taking advantage of the movement towards patient safety, is another very large project we're doing.

Now the last piece I want to leave with you is the relationship between the L5L project and the things you're seeing inside this new institute. The federal lab can never be as nimble because of the rules the federal bureaucracy is required to live under, with all kinds of very, very stiff things that are done under the mantle of accountability—but we're the marketplace. The Siemens Institute has operating rooms. They just look like the regular operating rooms that you and I might have surgery in tomorrow, but we're doing device development and we're working on prototypes.

Could we be using those ORs in the context of training for infection control? Maybe CAE is the contractor that's delivering that mission-critical training in an OR. You open up a patient who has a certain type of disease, an in-hospital infection that no one anticipated. Okay, team, react to that circumstance.

So that's the interrelationship with the OR of the future; we are also building a ward-of-the-future development in there. If one of those people you saw in a space suit today got a hole in it, where would we put them? Would they go into a regular hospital containment ward? Or might we have a special ward inside this new institute that is specially designed with the materials we were talking about, the infection control aspect that we were talking about today, new materials to have special kind of housing for those things?

The third element is the entrepreneurial side that I hope you picked up from my presentation. I'll bet you that in all of your hearings today and on your journeys, you aren't going to find people who are peddling retail to support research, or hotel rooms or taverns. This would be a novel approach, pulling together all sources of income I can find to make sure the institute has a long-term viability to it, that it's not just based on serendipitous research grants.

The last element is that we're looking at a large-scale real estate development north of William Avenue that will extensively move into the field in P3 development of both health care and research facilities to leverage on top of the business base of Manitoba's largest hospitals.

I know the committee is here principally on the issue of commercialization, and I have many suggestions on that, but I'll leave that for the question and answer period.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Schulz, for your presentation.

We will go to questions from members. Just for the information of our witnesses here today, members have either five or six minutes, so it's a very short period. I know, typically, they have an awful lot of questions, so please keep your answers as brief as possible. If they do direct their question to one individual and someone else wants to answer, just indicate that to me and I will try to get your answer as well.

We're going to start with Mr. Simard....

Mr. McTeague.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Chair, I will exercise the privilege of turning it over to Mr. Simard, but I just want to say how much of a privilege it is that we're here today. We've learned a lot this morning, Mr. Chair.

I also want to point out that while it is the place where I was born, more importantly, we wouldn't be here had it not been for the efforts of Mr. Simard, so I gladly defer to Mr. Simard.

[Raymond Simard, Liberal, Saint Boniface, MB]

Thank you very much, Mr. Chair. I'd like to thank all the witnesses for being here this afternoon.

One of the troubling things we've heard this morning at the University of Manitoba is that over the past years Canada has been successfully raising approximately $4 billion a year for venture capital, but last year it was closer to $1 billion. If that continues, we're in big trouble. I wonder if I could get some comments in terms of how we turn that around, whether it's tax credits or something else.

Second, how are smaller cities affected by that? I know most of that money, whatever it is, whether it's the smaller amount of $1 billion, goes to the larger cities like Toronto or Montreal. So can you tell us what the challenges are in a city like Winnipeg when it comes to venture capital?

[Harry Schulz]

Access to capital is the number one issue in this country for venture capital spinoffs. It's not confined to small places, but it's most seen in small places. If we had a cure for cancer on a lab bench in this city today, there would be virtually no place to go, storefront-wise, to find it.

We also know there's a relationship between venture capital sources and places where the money is spent. If you put all the coloured-pin dots on the map of Canada where sources of venture capital exist today and show proximity of the deals they do, there's a geographical relationship. So communities like Winnipeg and Saskatoon certainly have deficits.

My comment is that it's the number one issue. It means that patient technologies like biotech, which have long cash trails, long maturities, will drop in favour relative to medical devices, which have shorter times to market. There is no way to raise that money now.

I would encourage mechanisms to incent venture capital pools to be set. They shouldn't be run by the feds; they should be run by the private sector, but there should be mechanisms to incent those things to happen. I know labour-based pools have fallen out of favour, but there are other mechanisms. Tax credits solely are not enough.

We badly, badly need access to those pools, because biotech activity in this country, from coast to coast, has fallen for lack of capital.

[Ian Smith]

One of the things we've tried to do here in Winnipeg is to attract the pension funds. There is something of the order of $2 billion worth of pension funds in Manitoba. Most of them are invested in parking lots and apartment blocks. When we ask why they don't take a little more risk, they say, one, they don't understand it, therefore they don't want to participate; and, two, it's too risky. So we've been suggesting they form a consortium of pension funds and each put in 0.5% of their funds to hire some analysts. Four analysts, who would make intelligent suggestions as to investments of moderate risk, are now working for the consortium so they can start to win on their investment and thus have a much greater return.

Unfortunately, just about the time we were succeeding with that, the Crocus Investment Fund went into difficulties, and the venture capital community went to the right very hard. We're going to go back to this when this problem has quietened down a little bit, because it is a giant source of money. As you know, in Ontario, OMERS--and there are several of these very large pension funds--is getting very good returns. CalPERS in California is another one—California public employees' retirement system.

I think that's an untapped source, but it requires a positive action on somebody's part. And it might well be some sort of government-backed...let's call it insurance, for lack of a better word, to minimize the risk for these folks, at least at the beginning, so they can see it's really worthwhile. They'll not only increase their return, but they're doing something for their community besides just keeping a solid investment.

[Raymond Simard, Liberal, Saint Boniface, MB]

I understand the pension funds are not only invested in parking lots, but over 95% of the Manitoba pension funds are invested outside Manitoba. That is a huge issue as well.

Could we speak about WD, Western Economic Diversification, for a few minutes. It's one of the tools we have at our disposal. If I'm not mistaken, WD was the lead on the first centre we built, in St. Boniface. They kicked in $5 million. Mr. Asper, a private citizen, put in his $5 million, and then the foundation gave $10 million, or something like that. I may be wrong in my numbers, but seeing that WD is one of the tools at our disposal, is it doing what it's supposed to do in the whole technology field? Is it initiating ideas?

[Harry Schulz]

Are you asking me?

[Raymond Simard, Liberal, Saint Boniface, MB]

I'm asking anybody.

[Len Dacombe]

I can speak to some of that.

WD provides the funds from the federal government for TRLabs, so we are very pleased to be working with WD, and that's a key thing. Can they do more? Probably. Can everybody do more? Probably.

This comment is not related to the venture capital comment. And I agree with Harry that tax credits cannot do it alone. But if you look at the analysis of who is taking advantage of the scientific research and experimental development tax credit, the percentages are pretty low in the industry. If a company took advantage of those kinds of things, they would create their own venture capital to work on development of innovation.

So I think something needs to be done to encourage companies to take advantage of those things, whether it's better education, in terms of how to access that program or how to take advantage of it, but it's not nearly taken advantage of as much as it should be.

[The Chair, Conservative, James Rajotte]

Thirty seconds.

[Raymond Simard, Liberal, Saint Boniface, MB]

Mr. Dacombe, you were speaking about SMEs having a hard time having their products penetrate the market. Is that because of the lack of resources? Is that because venture capitalists are not looking at SMEs, they're too much of a risk? Why is that, exactly?

[Len Dacombe]

In some cases. The health care sector, for example, is a very, very complex legacy environment, so for a small and medium-sized enterprise to come in and ask if their product will fit with these five different databases and these five different applications, software elements the health care system uses, it's too big for them to tackle. That's why if we had innovation centres where they could have a test bed to work on their innovation and say there's a place for it to fit, then we could create new innovations locally and leverage that to improve our health care system.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Simard.

We're going to Madame Brunelle.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon. It is a pleasure to meet you, especially because you are playing such an essential role in view of the aging of the population. Since that is something that I am not going to avoid, I am very happy for you to keep doing your research.

Mr. Dacombe, you said that there must be major investment, that innovation is essential. Industries must work together and your fourth recommendation is to encourage industry participation in research and development. You tell us about the contribution that your group, TRLabs, could make.

Can you talk to us about that a little more? Do industries work together well? Do companies invest enough? That is a problem we have heard about. Does business invest in research enough or do they constantly rely on government to do that?

[Len Dacombe]

I must apologize. I had a problem with the innovation for the first little part.

But to answer your second part, at TRLabs, for example, we have a very wide array of industry-sponsoring organizations participating with us. We leverage the expertise of the universities we partner with as well, in Alberta, Saskatchewan, and Manitoba. Those companies are taking advantage of the bright minds the universities are generating, and through that they are developing technologies and then taking it to the next step of innovation. One of our outputs is also high-quality people.

To answer the question of whether industry is investing enough in development and innovation, it's certainly not only the government's role to fund that directly, but I think the role of government is to be a catalyst. That means scientific research, experimental development, and tax credits. I already made a comment that not enough companies are taking advantage of that existing resource, and some of them are fairly large companies. That in itself would create internal venture funding for some companies to be able to take advantage and reinvest in development of new products and services.

TRLabs is a very successful model. We've been around for 22 years. We're going to continue to do that, but it's always a struggle. The intersection of those cultures is a very interesting place to live.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

That leads me right to a second question, Mr. Schulz. You said that you had suggestions about commercialization. We are aware how important this is. It is a major challenge. We have heard a lot about it at this committee.

Could you tell us a little about the solutions you have in mind?

[Harry Schulz]

I mentioned before that access to capital is a huge issue. Dr. Smith's comment about potential government guarantees for some portion of the risk that might reduce the risk adversity, I think is a good suggestion.

A second comment I would make is that whenever the federal government wants to do something to promote venture capital, it looks at BDO. I am not a supporter of that. BDO's activities in this city are nominal. From our perspective, it doesn't solve very much.

In terms of commercialization, many of the inducements that happen at an academic level take the form of matching funds. The mechanisms for matching funds are not something I support either. From our perspective, we're a very vibrant technology community. But we can count the number of biotech and medical device companies on the fingers of two hands, so that reduces the number of players we can work with.

If you live in downtown Toronto, a much larger city, there's an infinitely greater number of marriages that are possible. There is a geographic relationship that exists between science organizations and commercializers. We don't have the same critical mass. When you give a matching grant related to product development or industry relationships to the University of Toronto, it's not nearly the same kind of challenge as it is in Halifax, where there may not be the same number of partners. It's harder to do. So I'm not a proponent of matching funds.

As a hospital, we are often at a disadvantage to our university partners, which are usually the recipients predominantly of the granting council. Funding goes directly to a university. If hospitals participate, they receive it via a university. We're very often forced to work through conduits. Again, if you saw my presentation, I feel we can be a little more nimble and responsive to partners we want to work with in industry if we don't have to work through intermediaries.

The discussion this morning around the Waterloo scenario, free intellectual property, has tremendous potential to get us away from the bureaucracy surrounding IP. With all due respect to many of my colleagues, grown men weep in getting IP licences from the federal government.

The NRC here in the city--Dr. Smith's shop--has a reputation for being one of the most nimble shops in the country. It has a tremendous reputation. But there are many, many other government departments, and that would include the one you saw this morning at the Public Health Agency, where getting a patent licence is not an insignificant exercise. Many industry partners have to work very long and hard to do that.

Those comments about freedom of intellectual property are something that should be addressed by the committee.

[The Chair, Conservative, James Rajotte]

Thank you, Madame Brunelle.

Mr. Szumski, you wanted to comment.

[Roman Szumski, Vice-President, Life Sciences, National Research Council Canada]

Yes. I'm Roman Szumski from the National Research Council, previously an executive with a health and life sciences company called MDS Inc., which included a $1 billion venture capital under management under MDS Capital Corp.

I want to agree with one of the comments Harry made with the VC that is starting to come back. People in the industry believe we're going to start to see a return of venture capital in the country. However, they're likely to take their first steps in the medical device space rather than the biotechnology space, given the shorter timeframe to return.

The other aspect that is required, aside from the mechanisms that my colleagues at the table here have described so far, is that the technology development in Canada needs to be in a more mature state before it becomes of interest to the venture capitalists. Very often, what we see is simply too early and it requires too much time. I can tell you from the perspective of the experience I've had previously, being associated with a venture capital firm, you find that the state of affairs, for example, in the U.S. is that there is a significant larger amount of money invested in a technology before they first approach the VC. In Canada we tend to be a bit immature. That's another aspect and another angle we need to think about.