Industry Committee on June 10th, 2008

[Dr. Peter Frise]

Sure. One of the best metal-forming research groups in the world is at the University of Waterloo. One of the best diesel engine research groups in the world is at the University of Windsor. The auto theft project at the University of Manitoba is a very strong group of researchers who have a much stronger understanding of youth auto crime than is generally the case in social science research around the world. Some of the vehicle telecommunications work at the University of Sherbrooke, at the University of British Columbia, is really top notch, and people recognize that around the world.

So I think we need to build on those strengths.

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

Yes, last week we were in Vancouver and we saw the hydrogen fuel cell production out there, which of course has attracted investment by the auto industry.

What would you recommend to this committee and to the federal government to attract more investment in auto? Something top of mind these days is certainly fuel efficiency. Is there something in particular that we should be recommending to attract more investment?

[Dr. Peter Frise]

Well, again, I think it's important that we recognize the scale of the auto industry and the kind of investment that is going to actually make an impact. If I may, to be candid, the general scale of Canadian research activities on this kind of thing is actually pretty small beans on the world scale. So ramping up the scale would be very helpful, making sure that our efforts are well informed, making sure we build the best possible connection to the automotive sector, recognizing what kind of work makes sense to do here and what kind of work is just not going to happen here, and then finding the best possible people who have that capability and making sure they have what they need to do it.

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

One of the recommendations we had last week was that the country should develop a national hydrogen strategy in terms of hydrogen fuel cells. They're working on a hydrogen highway as a demonstration project for the Olympics. Do you think that's something worth pursuing and making recommendation on by this committee?

[Dr. Peter Frise]

The technical problems around hydrogen are daunting. They're being worked on in many locales around the world. I think Canada has a contribution to make on that score, and I think that many of our efforts to date have been laudable. I must admit that it's going to be a very long-term battle. There's a lot of ground to cover before we're there.

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

Thank you.

Do I have any more time?

I'll ask a big question and see who wants to answer. It's around the balance between basic research that may take decades and the practical application of research. You are all here talking about specific commercialization and networks of excellence, but I'd like your views on the balance today and what the balance should be between big research, basic research, which may not have a commercial application ever, or maybe in decades, and the commercial application of research.

Does anybody want to answer that?

[The Chair, Conservative, James Rajotte]

Mr. Yada.

[Dr. Rickey Yada]

That's a challenge, Ms. Nash.

What we've tried to do is identify opportunities for our researchers. As you know, researchers' first passion is research. To be honest, some of them wouldn't know a good idea if it hit them on the head. It really needs us to identify those opportunities. You can do good fundamental research, but I think you need to have a target in mind. Even if you can't identify that specific target, as long as you're moving toward that goal I think you can support that good fundamental research.

The worst thing we can do, I think, in networks of centres of excellence--Peter, I'd like to hear your comments--is support research that is really curiosity-driven, kind of science for science's sake. There are funding agencies that do that kind of thing. Networks of centres of excellence are different in that they are targeted. They have that onerous goal of actually having applications.

So I think that's how I would do it. We try to do workshops with our students and our researchers to identify those opportunities and discuss issues such as intellectual property, the steps you need to do when you spin out a company, and things like that.

[The Chair, Conservative, James Rajotte]

I'm sorry, Mr. Yada.

I'll just explain to all the witnesses--I thought this was clear--that each member has an allotted amount of time. If some members don't get to ask questions, I'm the one who gets an earful. I'm trying to get everybody on the list here.

Thank you, Ms. Nash.

We'll go to Mr. Simard, please.

[Raymond Simard, Liberal, Saint Boniface, MB]

Thank you very much, Mr. Chair.

Thank you for being here this afternoon.

Mr. Chair, one topic that has come up is the fact that Canada is a branch plant economy. I'm not sure if we'll have witnesses in to talk to us about that, but the impact of that on our innovation agenda and our research agenda might be interesting.

To Mr. Frise and Mr. Julius, I think both of you spoke to Canada's weaknesses in investment and innovation.

Mr. Julius, you spoke about our developing a new strategy on research. Some of the witnesses have recommended to us that we pick six or seven winning sectors, if you will, and focus on them and support them all the way through.

I'm wondering if you like that idea. And if you do, what happens to numbers eight and nine?

[Dr. Michael Julius]

I think we have to build on where we already have capacity. And I think you've nutted it; we find ourselves in a situation where we are a mile wide and an inch deep and, as a consequence, not making hay in any arena.

Discovery research is the pipeline. All of the good stuff we already have on board has been out-licensed everywhere else. If Canada has the pretense of evolving into a knowledge-based society, it is fundamentally based in discovery with no known potential application. It is the fabric of the culture. It is what has taken over Singapore. It is what has taken over Israel. It is where Ireland is going at this juncture as well.

So I quite agree; I think Canada's innovation system has to be put in place. I hope I'm not misunderstood: it is the framework that is critical, and that framework can be applied to any arena once we decide on the arenas that eventually we have capacity in. Health research is one.

[Dr. Peter Frise]

Thank you very much for the question, Mr. Simard.

I'm going to say something a little bit controversial that will probably have me under attack: I'm not sure we need more money in the innovation system; I think we need to target what we do more carefully.

Essentially, Canada's innovation system is a responsive system. I'm being a bit colloquial here, but they simply wait until a proposal comes in and then they evaluate that proposal. If it gets a good peer review, then it may be funded.

What I've seen from other countries is that they sit down and say, okay, what's important for our country? What really counts? Where do the jobs come from? Where does the wealth come from? How does our country get along in the world? I call that the pie chart method. They do a pie chart--I'm being simplistic, and I recognize that--of where the jobs are and where the GDP in the country comes from. Then they overlay that with a pie chart of where their innovation system is.

In my respectful submission, our pie charts don't match very well. I think one of the reasons the Canadian private sector doesn't invest in innovation is that they don't get the help they need. It's one of the reasons why our country....

I'm looking at the S and T strategy, and it says right on page 25 that Canada has a relatively poor performance in high-quality patents, in investment in machinery and equipment, and so on--all the things this committee is about. Last year you did a big study on the manufacturing industry. I think that's--

[Raymond Simard, Liberal, Saint Boniface, MB]

Thank you for the comments.

Mr. Frise, you indicated that things evolve very rapidly, and it's hard to keep up with it. But how do we make sure that our industry is going in the right direction? For instance, when Japan is exploring the hybrid and the Prius and Yaris and we're developing SUVs, it seems to me that these people had it figured out 10 years ago, and we're starting to look at this stuff now. How do we make sure our people are focusing on the right things?

[Dr. Peter Frise]

Well, I guess you have to define who “our people” are. I'm not in charge of what they develop. Each of the auto companies has its own particular market strategy and the products they believe are going to sell well for them. That's not something I can really affect.

I think what's important is that we recognize which way the world is trending, and the auto industry will follow those trends. Then we need to make sure our best researchers have the capabilities to make contributions towards those trends. Again, they are safety, energy, value, and flexibility.

[Raymond Simard, Liberal, Saint Boniface, MB]

Mr. McKee, I have one quick question for you.

You indicated that you would match $10 million of the government's $25 million. Is that new money or is that money you're already spending?

[Andrew McKee]

That's new money dedicated to clinical trials. We are already spending, based on last year, $8 million a year on research in Canada, but with this new clinical trials network, we expect there to be additional moneys coming into that.

[Raymond Simard, Liberal, Saint Boniface, MB]

It's additional moneys.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Simard.

We'll go to Mr. Stanton.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Good afternoon, witnesses. Those were excellent presentations. There's a lot of material there to contemplate.

I want to direct my first question to Mr. McKee.

On the whole issue and study of juvenile diabetes, over the last almost 40 years you've spent almost $1.2 billion on research for various projects. How much of that $1.2 billion was from the public sector?

[Andrew McKee]

I might ask Mr. Hindle to help with that. He has a better context for what some of the U.S. research spending has been.

[Robert Hindle, Board Member, Juvenile Diabetes Research Foundation]

The figure you're talking about is the JDRF spending on research?

[Bruce Stanton, Conservative, Simcoe North, ON]

Yes, I mean global spending.

[Robert Hindle]

None of it is from the public sector.

[Bruce Stanton, Conservative, Simcoe North, ON]

Okay, good.

There's been obviously a lot of work done. Do you have any indication of where we are? What's the status of this analysis now? Do you see a light at the end of the tunnel? Are we getting closer? Where does the project sit right now?

[Andrew McKee]

Research into curing chronic disease is obviously a very challenging area. Probably the best example I can give of progress towards a cure for a disease is the very nature of clinical trials. Clinical trials obviously are evidence of the progress towards commercialization of a cure, therapy, or drug, or whatever the case may be. In 2002, JDRF was funding three clinical trials globally. As of last year, we're funding 42 clinical trials globally, each of which is now approaching phase two or phase three of the clinical trials network. So there's great hope and opportunity there that we are moving towards a cure for the disease. When exactly that will occur, I can't say.