Industry Committee on Dec. 2nd, 2009

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

And IRAP does use that program to....

[Pat Mortimer]

Our youth program is fully subscribed very early because what we do is help companies access whatever resources there are, wherever they are. We then put them in contact with other programs, such as MITACS and NSERC, where they can get those resources.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I was checking with the clerk. I think our tour was back in the spring before last, so we're talking a year and a half ago. At that particular point in time, we found that there was still a gap between research and bringing it to the marketplace. Have you closed that gap? Are you working on those things, or is that not in your area?

[Pierre Coulombe]

The work we do at the NRC, as I mentioned before, is primarily designed to make sure the technology we are developing is indeed transferred to industry as quickly as we can. We do that in various ways.

Regarding the broad problem of commercialization, obviously it involves many more players than the NRC—the universities, the colleges, industry itself. From what we can control, which is our own environment at the NRC, we work very hard to make sure that our research programs deliver results industry can use.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair. I'd like to pass my time on to my colleague.

[The Vice-Chair, Liberal, Anthony Rota]

You have a minute and a half left.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

I think it's just enough for this question.

We had some good witnesses last week, and I'd asked some questions because I was involved in a meeting at McMaster University where we were talking about building centres of commercialization. The Fraunhofer Institute in the United States was mentioned. The one particular concern they had was that for the emerging research and innovative technology that was coming from the university, the biggest gap is from that classroom to the shop floor and bridging it to commercialization. In fact, one of the witnesses said that one of the things we need to do is have an incubator to produce serial entrepreneurs, these people who are gifted at being able to understand how researchers think and yet at the same time being able to take the technology and put it on the street.

It's particularly even more of a concern with the fact that the number that was mentioned earlier...I believe it was that about 70% of our business, at least SMEs, is in the services area. For us to take this technology and capitalize on the whole value chain all the way through I think is important.

I'm just wondering if any of the witnesses have any thoughts on that. How can we encourage and maybe increase the talent pool of serial entrepreneurs so that we can capitalize more on our own homegrown research from some very world-class universities, like McMaster, which is in the riding I represent, so that we can keep all the business here, and the jobs, and of course the notoriety that goes along with both?

[Pierre Coulombe]

One thing I also mentioned in my brief remarks is that all across the country, NRC operates 15 what we call industrial partnership facilities. They are indeed incubators. We now have about 136 companies, which are all start-ups that may result from work performed at the NRC, a spinoff from NRC, or it could also be a spinoff from a university where we are located.

What we are offering is access to space and interaction and access to the human capital we have, fancy equipment that a small start-up cannot afford, and also advisers through the IRAP ITA. We are doing just that across the country. The success rate is measured by how quickly companies are leaving those incubators, because they are growing. Last year we had about 13 or 14 of those companies that decided to leave our facility, and they rented larger spaces in their community. This is one example of how we are making sure that we offer companies, and specifically start-ups, access to space where they can commercialize their technologies with our support.

[The Vice-Chair, Liberal, Anthony Rota]

Thank you very much.

Now we'll continue with Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Automotive Partnership Canada was created in April, and around $150 million was supposed to go for automotive innovation. I'm just wondering how many projects have been approved in this file.

[Pierre Coulombe]

The NRC is not managing this program. I can tell you what we do in the auto sector, but it's not a matter of project approvals. Industry Canada is managing these partnerships.

[Coleen Volk]

It is managed by our department. I'm sorry, I don't have those facts with me, but we could get back to you with that information.

[Brian Masse, NDP, Windsor West, ON]

Yes. Could you get back to me on that? I'm just curious about that one. It seemed to be a rather good program, but I just haven't seen any results come out of it yet. I'd appreciate that.

[Coleen Volk]

I'd be happy to get you some.

[Brian Masse, NDP, Windsor West, ON]

Okay.

Sorry I got that one mixed up, but maybe you can talk us through your success rates here a little bit too. There are very bold assertions here--you say within this year--with regard to the economic action plan and the additional $200 million. So within less than a year, according to your documents here, we've had 455 new graduates, and they go into 376 firms--I'm assuming, employed--within less than a year. Maybe you can explain how that works, because that's a rather rapid turnaround in results.

[Pat Mortimer]

When we provide this cost-shared funding for the companies and the funding for the youth, we fund salaries only. We fund the cost to them of the highly skilled people they need, the engineers and the researchers to work in their programs. That means that when we approve money, we know exactly how many positions. We may even know the names of the people they are hiring. So it's very easy for us to count and keep track of how many jobs we are creating with this money.

[Brian Masse, NDP, Windsor West, ON]

With the 1,200, you just count them up, but 4,536 jobs?

[Pat Mortimer]

In approving the contribution agreement, and when we approve the amount of funding, the company pays the salary for a certain number of people. When they invoice us, it's for the salary costs of those people. We are counting the number of people they are hiring to do this research.

[Brian Masse, NDP, Windsor West, ON]

So there are 4,500 people that we're paying salaries for. How long does that go on, and what's the retention rate? I used to work as a job developer on behalf of persons with disabilities and youth at risk. What is the duration of the subsidy, and what's the success rate beyond closure?

[Pat Mortimer]

For the youth program, it can be six months, it can be a year. We find that over 90% of the youth we help stay with the company. It's very high. In many cases, it's one of their earliest employees, so they end up staying with them and growing with the company. We have followed up, and it's over 90% retention.

[Brian Masse, NDP, Windsor West, ON]

That's a good number. That's what we had in my program, actually.

How long is the subsidy for and how much does it amount to?

[Pat Mortimer]

It can be a year. With the new funding, it's $30,000 to the company.

[Brian Masse, NDP, Windsor West, ON]

Are there cases in which the company will increase the salary? Will they make any additional contributions?

[Pat Mortimer]

Yes, that's just our share. They can top it up if there are market forces or particular areas of expertise. If you're hiring a new graduate, a PhD versus someone recently out of a community college, there may be a difference. We expect them to contribute somewhat to the salary. That's the top-up factor.

[Brian Masse, NDP, Windsor West, ON]

Lastly, I want to go to the previous statistics for similar programs. I'm referring to the 1,360 over the next two years, the 1,000 new post-secondary graduates. Are we paying for those salaries too?