Thank you very much for inviting us, committee members.
UBC is a leading Canadian research university, routinely placing among the top two or three university recipients for the CFI and tri-council funding. Internationally, UBC is ranked in the top 40 research universities worldwide by three independent rating organizations. UBC is a research and patent powerhouse that attracts leading scholars from around the world.
To effectively support basic and applied science and technology research, the federal government must strike a funding balance between support of research talent for the direct costs and indirect costs of research, or ICRs, and the research infrastructure. To increase funding to any one of these research pillars without a commensurate increase in others is equivalent to supplying funds for a new building but not for the staff or the resources to operate it.
Increases to direct costs of research proposed in the fiscal year 2008 federal budget do not include a commensurate increase in ICR. The tri-council funding increased by $80 million, but the ICR only by $15 million. The accepted value right now is 25% of the tri-council amounts, so 25% of $80 million is $20 million. Similarly, funding for Genome Canada has doubled--the FY 2008 increase of $140 million to defray $280 million in direct costs--yet there is no funding to defray the $70 million in ICRs.
At UBC the most critical research funding needs are for support of scholarly talent and the ICR issue. UBC's immediate priority is to attract more domestic and international graduate students to address training gaps in key industries--for instance, geology, or drug research and development. Canada trails the U.S. in training doctoral students, however, by about 25%. The Vanier scholarships that are coming are an important step in attracting scholars, but there must be an accompanying increase in ICR funding to have a sustained impact in research and industry.
The 25% of tri-council funding currently apportioned to defray the indirect cost of research, which is essential to meet operating costs, is only half the U.S. average of 50%. So UBC endorses the AUCC's proposal to increase tri-council funding of ICR to 40%.
There is a continued need to fund the full cost of basic research at an appropriate level, including ICR. UBC strongly believes that basic research underlies all patents and technology transfers. I'll give you two cases to illustrate the benefits of funding basic research, one of which was mentioned earlier.
NSERC provided funding for Professor David Dolphin's basic chemistry research program that was subsequently found to be relevant to the treatment of age-related macular degeneration, the leading cause of blindness in people over 55. The resultant drug, Visudyne, has been used to treat more than 500,000 people in 70 countries since 2000, and is the largest-selling ophthalmology product ever launched. The spinoff company, QLT, has generated over $70 million in income to UBC, at a 2% royalty rate, based on $3.5 billion in cumulative sales.
The second example coming up is Galvanox. It's a promising new copper-leaching process that is nearing its first commercial field test. This technology dramatically reduces pollution and emissions during the on-site refining of concentrated copper. The first licence will be issued to a B.C.-based copper mining company. Galvanox began as a mathematical modelling exercise in basic research.
Encouraging industry partnerships is vital to supporting higher education and commercialization. A proven means of engaging industry is to establish affiliate programs, such as the 50 extant at Stanford University right now. These programs build a community of interest by cross-pollinating students with companies, research with existing problems, and non-research performers with established research players. This in turn produces industry-savvy S and T students and graduates, guarantees continued exposure to and training in new methods and techniques, provides exposure to international practices, and increases domestic business expenditures in R and D.
Meaningful exchanges can occur by establishing affiliate programs that focus on niche technology sectors and applications. This narrows the scope of industry stakeholders to five to twenty local, national, and transnational companies.
In conclusion, UBC has produced a cumulative total of 129 spinoff companies, 95% of which are B.C.-based. They have collectively generated over $4 billion in sales and over 40,000 employment years, or roughly 2,000 jobs for highly qualified personnel per year.
Thank you.