Industry Committee on May 28th, 2008

[Richard Florizone]

The brief answer would be no. What I found in talking to Ottawa, and in discussing with other people, is that there has been a point of confusion around this. I would say that most of the people you talk to recognize that the original target was around 25% industrial utilization. It seems that in certain pockets people had the expectation that the facility would be full cost recovery.

[Bruce Stanton, Conservative, Simcoe North, ON]

I think you said this morning they're producing about 15% on the revenue side, even though it's 25% of the beam time.

[Richard Florizone]

That's right. So I think on those original targets, two things happened. One is that the overall revenue required has grown as the facility has been—if I could put it bluntly—a victim of its own success. In the most recent CFI round, three beam lines went forward for funding; all three were successful, 100% successful. But once you have that, you have to expand the building and you have expanded operating costs for that peer-reviewed very excellent science that's ongoing.

So that growth has added to the operating cost. As well on the industrial side, I think it has taken longer to get us where we need to go—the 25% goal. I guess the other point I was making was about the goal. Depending on who you talk to, I think most people recognize there was sort of a 25% goal. I don't know how the misunderstanding was created, but there was an expectation, among pockets, that the majority of the funding would come from industry. If you look at other synchrotrons, our goal is already at least three times what others have achieved.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you.

To Mr. Meldrum, will SaskTel be participating in the advanced wireless spectrum auction that was just announced this week?

[John Meldrum]

Yes, we are one of the bidders.

[Bruce Stanton, Conservative, Simcoe North, ON]

Very good. So will we have SaskTel services in other parts of Canada, outside of Saskatchewan?

[John Meldrum]

It is a public record that to this point we have not bid outside of Saskatchewan.

[Bruce Stanton, Conservative, Simcoe North, ON]

I picked up on your thoughts around the fact that you didn't believe the private sector had the capability of rolling out. In fact I was quite surprised that only 15% of Saskatchewan people don't have access to high-speed. I would consider that actually not too bad, really, on balance with the rest of the country. I think that's a remarkable achievement; I wish you well with that.

Although I'm encouraged to hear you're having discussions with the province and you're interested in talking to the federal government, I think there's a sense that certainly open competition is going to move us most of the way we need to go there.

To Mr. McCulloch, you actually mentioned that the CFI is getting some support directed your way for certain projects. We heard in previous testimony that one of the ways better collaboration and clustering is happening is that, when an application is put to one of the granting councils, for example, it involves multiple players.

Seeing as you introduced the notion today that in fact the college community has the ability to do that applied science component, has that been explored with some other potential partners: how you could in fact work together with other applicants for the university community, for example, to take a piece of the projects that are going and being funded by the granting councils? Is that an area that's been explored?

[Dr. Robert McCulloch]

Mr. Stanton, again, I don't want to overplay this. I mean, this is new for colleges to be getting into this. From our institutional perspective, we just applied for NSERC eligibility, and we're delighted that the doors are starting to open up.

We're working on a CFI proposal and we have a number of partners from the province, including the Saskatchewan Research Council, a couple of people from university, and other partners like the Canadian Home Builders' Association. So to be very crisp, the first proposal we're looking at is a building sciences institute.

Our goal would be to get involved. We want to get in as partners. We can build on the expertise that's out there. And it's also been fun, frankly, to challenge our folks to get into this. We have a high-quality program, a nice program, in architectural sciences at our Palliser Campus. But it's new for our team to be getting into granting applications, etc. So we're looking to partner. That's the simple answer.

We'll continue in that direction. If there could be some targeted support in which colleges or institutes would serve as the principal investigator, that would give our teams a boost. It would give people some confidence as they're applying. We're realistic about what the opportunities are.

[The Chair, Conservative, James Rajotte]

Mr. McTeague.

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

Thank you, panellists, for being here. It's been a very important and eye-opening experience for us.

I'm seeing in your comments an underlying theme that you cannot be successful in a knowledge-based economy without support from the government. I also take it that there are very few successful nations that aren't trying to back their winners or discover new ones for tomorrow.

You seem to have the best of all possible outcomes. Energy prices are high. Agricultural products are in high demand. Metals, minerals are also in high demand. I'm wondering if this is both a gift and a potential problem down the road. If the bubble were to bust in one of those areas, how much are you doing as organizations, institutions, to help diversify Saskatchewan so it doesn't falter in the future?

You have new companies, new ideas, partnerships with the private sector. How much effort is being made to allow them enough capital, enough interest, to commercialize what they're doing and maintain their presence in your province, as opposed to being gobbled up by another country or corporation, leaving all of you destitute after many years of research and effort?

[Doug Gill, Managing Director, Industry Liaison Office, University of Saskatchewan]

One thing that's happening—it's the result of a lot of varied research at the university—is that technologies are getting out into the market and helping to diversify the province's economy. I'll give you a couple of examples. Twenty years ago, there were very few pulses grown on the prairies. Now Saskatchewan is the largest producer of pulse crops in the world, and we're higher than any province in Canada. We export most of that around the world and contribute a great deal. Some parts of agriculture might go in the tank, but other parts might still be in good shape. This is an example of how we've diversified in the agricultural area.

We've all heard about biofuels, like biodiesel and bioethanol. And indeed, the university is very active in these research areas. We have technology that we're in the process of commercializing in both these areas, and I believe that this will also help to diversify the province's economy.

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

If there are new discoveries that emanate from your university, what does the university request in the way of licensing and fees? When an innovator uses your labs, finds something interesting that can be patented and later commercialized, what is the structure at your university for these kinds of discoveries or breakthroughs?

[Doug Gill]

Typically, if a university professor, a graduate student, or a post-doctoral fellow invents something new, the university has a policy in which the university owns the intellectual property. My office is responsible for sifting the wheat from the chaff, for commercializing the good stuff, investing in it. At the end of the day, when we bring in some commercialization revenues, we share it 50-50 with the inventors.

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

Thank you, Mr. Gill.

To Mr. Meldrum, let's say a new company comes up with the latest in technology and it's very small. Will SaskTel partner with such a small company, recognizing, of course, that you are still very much a government telephone company? Are there restrictions? Are there problems? Are there challenges? Is there a requirement right up front that if you see something that's new and innovative, you'll have to perhaps farm it off to a company that is not government-owned? Or is it something that you've been involved with in the past in terms of advancing, outside of the reach of your own company?

[John Meldrum]

We have pursued matters on our own, and are currently in the process of introducing a product called LifeStat, which we developed. It's an electronic remote monitoring of health for individuals using the cellphone and a secure system. We're going to market that right across Canada. We're going to go through dealers.

At times we'll do it ourselves. At times, in the past, we've done it with partners.

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

Thank you, Chair.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Carrie, please.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

I want to thank the witnesses for being here today.

Mr. McCulloch, I was quite pleased by and interested in some of your comments when you were saying the government is finally starting to work with community colleges as far as some of the research dollars are concerned. I come from Oshawa, where GM is undergoing some challenges right now. Many of my constituents have phoned me in the last few weeks saying, you know, when the Government of Canada invests my tax dollars, we want to make sure that they stabilize jobs. It relates to the economic spinoffs. If someone's having a hard time getting a job, they're not going to be paying taxes, etc., to fund the science.

I was wondering, would you say there's a bias with the Government of Canada, or has there been one in the past, with regard to university versus colleges--for investments or big science--versus applied sciences?

[Dr. Robert McCulloch]

I need to go on record here. I worked for 25 years in the university sector, so quite frankly I love the system. But I do believe there's been a bias across the country. There has been a pressure of not forcing people, but encouraging them, to look to university as a first choice. What we try to talk about, and what I think is healthy when we talk to students and even retired workers, is that there are lots of choices. We're really proud that in the last survey, 97% of our graduates were employed within six months. Our population is adult learners.

To answer your question, I think there's been a general societal bias. Some of the funding has been directed that way. I'm sure you heard that from Mr. Knight, from ACCC. Our facility here in Saskatoon, our Kelsey campus, was the largest technical institute in the Commonwealth when it was built in the late sixties. There hasn't been a thing done to that facility since the late sixties. So we've been neglected and we need to upgrade. It's like the infrastructure across the country.

I hope that answers your question. A balance is what we would like to see.

[Colin Carrie, Conservative, Oshawa, ON]

How do you like the way the government funds big science versus applied science?

[Dr. Robert McCulloch]

Well, that's my point. Even when we talk about big science I hope that all of us are aware that to make big science work there are these key folks in the background who are doing the legwork. My research was in osteoporosis. Quite frankly, I could have dreamed of all sorts of great things, but if it wasn't for the technician measuring bone density, my work didn't go anywhere. That's what I would hope the panel would consider. It's the role that the technologists and lab folks are doing. We need big science in this country, but we need it across the sector.

In closing, the other day I heard retired General Dallaire comment that what was missing in the Canadian Armed Forces were not the big thinkers, but the technologists to adjust weapons. What he was saying is, I hope, parallel to what I just said. We need people who will apply the information and get things down to the “make them work” situation.

[Colin Carrie, Conservative, Oshawa, ON]

If you have specific recommendations, please feel free to give those to the committee.

Mr. Florizone, we talked a little this morning about how government should fund big science. I was going to ask you to be more specific. We didn't quite get an answer this morning. How big is your board and how many members or leaders in the business community do you have on your board?

I thought the light synchrotron facility was just wonderful. If I had that, as a businessman, I'd be trying to run it 24/7. Do you have people with experience in business to connect to the community to make sure that investment is going to be utilized? As I said, my constituents pay a lot of taxes into big science and they want to see those spinoffs. How many people on your board are from the business community?

[Richard Florizone]

Many of us on the board wear different hats. For example, I have a private sector background, so I have a partial hat, I suppose. But specifically on the board now there are about three members with that private sector experience.

I referred this morning to being chair of the governance and nominating committee for the CLS board. This challenge has been a topic of intense thought and debate for us. We have a goal. We've designed our board structure to be from 14 to 18 members, just in line with good governance—not too big, not too small.

Since we have had to pursue and have welcomed multiple partnerships with different provinces, many of our funding arrangements have come with requirements for board seats. So, for example, Alberta has two seats on the board. That's fantastic. B.C. has another member. This is all wonderful, and it's part of building partnerships. Speaking as chair of the governance and nominating committee, though, it creates a challenge in terms of attracting private sector participation. You have only a certain amount of latitude and you try to work through your partners to get the nominations.

That's probably not the main challenge, though. Believe me, I and the entire CLS board would welcome more senior-level engagement. I can tell you more about how we're accessing that senior-level engagement with industry in ways other than through the board, but with respect to the board, the way we've been successful—we talked about the two solitudes between industry and the university—is to continue to have that ambitious industrial target and build the team to pursue those targets, to build the partnerships. Once we've built those partnerships, they're then turned into the board-level relationships.

For example, this morning you've heard about the work we did with AREVA around mine tailings. Now we have the former CEO of AREVA on our board.

It's a lot of hard work, and attracting those senior executives onto the board is really one and the same issue as the industrial research and the relationship between the university and industry. There is a gulf there. We think labs such as the CLS and InterVac/VIDO are closing that gulf. We'll continue to work on it, but it's a tough problem.

As one of the other ways we're trying to engage senior leaders, we're saying that maybe it's easier to get CEOs if you don't try to drag them into the board where they're dealing with budgets and day-to-day things. So we've created a new body.

[The Chair, Conservative, James Rajotte]

I'm sorry, Mr. Florizone, we're way over time here.