Evidence of meeting #45 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was health.
A recording is available from Parliament.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
I want to thank Eleanor Fast as well for some of those good questions.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. McTeague.
Thank you, Eleanor.
We'll go to Madame Brunelle.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Thank you, Mr. Chair.
Good morning, madam, gentlemen. Thank you for coming before the committee.
We are very interested in the auto sector, which is your area. You are on everyone's mind at the moment, mostly because of the price of gasoline, which is a concern for us, and because of the massive layoffs at GM.
As well, for science and technology, automobile engineering and research are not priority research areas here. In places like Europe, for example, they are much further ahead; they have had small cars for a long time. It is taking a long time to develop electric or hydrogen cars. Research takes time, it seems. So, you can perhaps see my question coming.
Do we lack vision in Canada? Are we investing too little in automobile research? Does the industry stand in the way of new products?
You also told us just now that there are 400 different car models. Why is research not sufficiently developed to come up with small cars and especially to get Canadians to accept them? Do you have a lot of work to do, a responsibility to fulfill in automobile research?
Chief Executive Officer and Scientific Director, AUTO21 Network of Centres of Excellence, Auto 21 Inc.
Thank you very much for the question.
Yes, indeed, we are working on energy-efficient solutions for the automobile. One of the most important ways of decreasing the energy consumption of a car is to decrease the weight of a car. AUTO21 has a very large portfolio of work on lightweight materials. Much of it is actually happening in Quebec. So we are very much working on those kinds of issues.
I won't be commenting on the current events of the auto sector--that's really not the role of a research organization, in my view--but one thing that needs to be appreciated is that the auto industry is a very large global, integrated industry. It's important to realize that there really isn't a boundary around Canada where a different set of rules applies. First of all, we're not a large enough consumer of automobiles to do that. Canada produces between 2.3 million and 2.8 million cars per year. We buy around 1.6 million cars per year. So we actually produce far more vehicles and parts here than we consume.
In addition, about 85% of what we make is exported. A large number of the cars that are bought here are not made in Canada, and a large number of the cars that are made in Canada are exported elsewhere, chiefly to the United States.
The automotive market is very integrated. What we have tried to do in AUTO21 is work with our industry partners to find R and D mandates for Canadian researchers that leverage our skills and our capabilities with their needs. We've been very successful at doing that. Some kinds of research will probably never be done in Canada--when they're being done elsewhere, it doesn't make sense to duplicate--but the products of those research activities will come to the Canadian market when the market demands them.
The other thing to appreciate about the auto industry, I would say, is that a lot of the market forces that you see today are the result of extremely rapid changes. Just to give you some perspective, when we put the AUTO21 proposal together in the fall of 2000, the price of oil was $21 a barrel. It was $23 a barrel when the 9/11 attacks took place. It's $135 a barrel now. It's six times as much. That's a massive increase. In fact, it's gone up by 60% in just a few months.
I'm not defending them, but there's no way the auto industry could meaningfully respond to a change that's this rapid. You just couldn't do that. It costs several billion dollars to develop a new kind of car, so the production capacity and the types of vehicles being made will always lag whenever there's a massive change, and a rapid change, like that.
I hope I've answered your question.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Yes, your answer was very good. Your point of view is very interesting. It is not that we lack vision, clearly, it is that things have evolved much too rapidly.
Mr. Julius, you will have the opportunity to speak at your leisure. It will be fine. In your brief, you mention a more effective deployment of health care resources. You rightly said that you would be shocked if health care costs can go down. Then add the aging population. There will be more and more calls on the system. There are a number of needs, whether for medical personnel or for new technologies to reduce the length of hospital stays. That is what you are saying. You are saying that new technologies should allow us to better use our scarce resources, to reduce hospital stays, to allow self-treatment, and so on.
I think that view is extremely important. It seems to me that we have been talking about it for years. We can see that there are more and more day surgeries, and the situation seems to be improving.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Do you think that we invest enough in Canada that we can expect really spectacular advances in this area?
Bloc
Chair, Research Canada: An Alliance for Health Discovery
At this juncture I would not recommend investing more money without a plan and a framework within which to invest that money. I think that's the challenge we have been enjoying over the last decade.
Investments into the health research enterprise over the last 15 years in Canada have been in the tens of billions of dollars, and they have brought us to a juncture where we are out of balance. We have some of the brightest faculties and brightest minds in the world working in our research enterprise, and we have some of the finest infrastructure on the globe with which to execute our research. I don't want to use an auto analogy, but we're in these magnificent research enterprises, we're all driving Ferraris, and when we drive up to the gas station there is no gas. Operating dollars are critical.
I would like the opportunity to make another point. When we read many documents emanating from the Government of Canada that look at research and development investment in the health research enterprise, they talk about universities where teaching and research eventually occur. I think it's important for this committee to appreciate that close to 80% of health research actually happens at hospital-based research enterprises. Virtually 100% of clinical research education happens at research-intensive hospitals, and about 80% of those in graduate post-secondary education in health research--tomorrow's research--are trained in research-intensive hospitals.
The scientists--
Conservative
The Chair Conservative James Rajotte
Mr. Julius, I'm sorry, we're way over time. I apologize for that.
Chair, Research Canada: An Alliance for Health Discovery
Can I just finish the sentence, Mr. Chair?
Chair, Research Canada: An Alliance for Health Discovery
The scientists at research-intensive hospitals are paid for by philanthropy.
Conservative
Conservative
Colin Carrie Conservative Oshawa, ON
Thank you very much, Mr. Chair.
My question today is for Mr. Frise.
I want to say how pleased I am to have you here today. With all the work I've done with the auto industry in the last four years, I've been very impressed with AUTO21 and your leadership in AUTO21. We hear a lot about commercialization and innovation, but from the statistics I have on the number of research projects you're doing and the actual patents and copyrights you've filed, you're actually doing it. As an example for other institutions, you're getting the job done.
In your opinion, how can Canada develop a culture of innovation? When you're answering, I'd like you to take a couple of things into account. We've heard about intellectual property. Could you comment on federal scientists working in federal labs? If they're doing research and they come up with an innovative project, who should control the IP? Sometimes it's 100% government, sometimes it's 100% scientists, and sometimes it's 50-50.
In our last budget we brought up $250 million for the automotive innovation fund. Are we on the right track? You mentioned how other countries in Europe do it. Could you give us a comment? We really want to put in policies that are going to get the job done even better than we're doing now.
Chief Executive Officer and Scientific Director, AUTO21 Network of Centres of Excellence, Auto 21 Inc.
Thank you very much, Mr. Carrie.
In a nutshell, when we started AUTO21, we took a very straightforward view. I'm an engineer. I believe in simple models because they generally work best. We as a group—there were a large number of industry people, including some folks from General Motors and the other OEMs, the major parts companies, as well as Canada's leading universities—took an approach right off the bat that the role of a university is to create knowledge and educate people. Universities don't make cars. They don't make car parts. Neither does the National Research Council or any other government public science organization. Industry's job is to take new knowledge and turn it into a product that should create jobs and wealth for the country.
Essentially, if people stick to their knitting, which is an old English Canadian expression that means you do your work that you're intended to do and I'll do my work that I'm intended to do, the whole enterprise can move ahead well. That's what, frankly, I see in countries that have a more successful innovation system.
It's absolutely the norm in the United Kingdom, Germany, France, Sweden, Norway, Denmark, places like that, for people at universities to be working on applied projects with industrial partners. It's just the norm--not in every discipline and not all the time, but for the large majority, it's generally how they do it. So they know they're working on the right things, they know the knowledge they're going to create has a path to the market—in AUTO21 we call that a knowledge receptor—and they know that the students who graduate from those programs will likely be able to find jobs, because they'll have already worked on industrially relevant problems and they'll be the people who have the knowledge.
That's how our model works, and we build those knowledge receptors right into the projects at the very outset in the proposal stage.
There was an article in The Globe and Mail last week about how the social sciences and humanities folks had a huge conference in Vancouver on how their work can become more relevant. AUTO21 has a very large component of SSHRC researchers and we're very proud of their work. The knowledge receptors for our vehicle-related crime project were the Winnipeg police force and the RCMP, and our research has actually cut auto theft in Winnipeg by, I think, up to 50% now, over the course of 2007.
The point is that university academic research and government research can be very useful and very strategically important to the country if everybody figures out a good model.
Who owns the IP? AUTO21 does not take an ownership position on IP. We don't own the IP. There are enough fingers in that pie already. The inventors should own the IP. But I think it's important to remember that it's not so important who owns IP; it's who gets to use it and under what circumstances and under what arrangements. So we have taken a very hands-off approach to the IP generation. The universities work it out with their industrial partners, and that has created no problems for seven and a half years. We have never spent a nickel on an IP lawyer, and I think that's the best way to have it.
As you point out, we've filed 39 patents, quite a number of licence negotiations are under way, and a number of licences have been granted. I just got an e-mail, while walking here today, from one of our researchers at UBC who said that his industrial partner just put another $200,000 into his project. So this works.
In regard to the $250 million fund, it's hard for me to comment directly on that one, because that is the fund that will be directed to industry, and over five years. I think it's a really good start. It's the right kind of thing to do, because it will help our factories become more flexible, become more energy efficient, and hopefully become safer places to work—not that they're not safe now, because the auto plant of today is a very good place to work—and they will address the value proposition as well. So they will hit the four vectors that I think we need to hit.
I'd also like to thank you for your input to our work. You've been very helpful to AUTO21. We really appreciate having such a knowledgeable and committed person in the government to help us. So thank you very much.
Conservative
Peggy Nash NDP Parkdale—High Park, ON
Thank you.
Thank you to all the witnesses for your presentations.
Mr. Frise, I want to follow up with you. You have described the global nature of the auto industry, which is absolutely true. There's production all over the world. I'd like you to address the issue of industrial R and D. While we have many auto parts producers based in Canada, all the major auto companies, except ZENN, are based outside of Canada. So head office decisions are made in Seoul, Japan, Detroit, or elsewhere.
In your view, what impact does that have on the industrial research, whether it's fuel efficiency or new production methods, the fact that these companies are based elsewhere?
Chief Executive Officer and Scientific Director, AUTO21 Network of Centres of Excellence, Auto 21 Inc.
I think that's a very good question, Ms. Nash. In my experience and in my view, the auto companies are really global enterprises and they go wherever they can find the best knowledge. That's why Canadian researchers have developed such a strong reputation in certain kinds of technologies and certain kinds of research. In my experience, the auto companies don't pay too much attention to national boundaries on issues like that; at least, most of them don't. They just seek the best possible knowledge.
I think the key thing to do is to make sure our best people have the best possible tools available so they have the strongest capability, and that will bring work here.
NDP
Peggy Nash NDP Parkdale—High Park, ON
But that's not the case today. For the most part, the auto industry does not do most of its R and D here.
Chief Executive Officer and Scientific Director, AUTO21 Network of Centres of Excellence, Auto 21 Inc.
They don't do most of their R and D here, but they certainly do some here. I think they've recognized that there are certain researchers with certain capabilities that are very strong, and they put work where they can get the best work done.