Industry Committee on June 19th, 2012

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

With SDTC, are you putting money towards the technology behind actually producing the hydrogen? With the nuclear reactor, for example, in the non-peak hours, when we have that extra electricity, Ontario consumers are paying Americans to take our excess energy.

Is SDTC involved at all in helping to fund the research to get the production online?

[David Harris Kolada]

I'm going to say generally no, although that is subject to going back and looking at our hydrogen portfolio in more detail. I believe the majority of our projects in hydrogen are related to applying technologies to specific industries, as opposed to generating hydrogen. One exception may be the case of Hydrogenics, which we've provided some funding to, which was the merger.... Stuart Energy was one of the historical companies behind that. A good chunk of their business is generating hydrogen, but we're backing the application of that technology to specific solutions that industry needs, such as energy storage for cell towers, so that instead of using diesel generator sets, there would be a hydrogen fuel cell to provide power when the grid is down, for example.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you.

[John Carmichael, Conservative, Don Valley West, ON]

Thanks. I'll be quick.

Just taking it down a different path, clearly the relationship between academia and industry is growing and thriving. We've had earlier testimony from a corporate perspective that boards of directors, for example, don't have the education, training, or knowledge to value IP in a corporation. Could you talk about M and As and some of the work that's going on in publicly traded markets now? Is there a deficit? Is there something we should be doing to ensure that director education is enhanced? Is it even a valuable part of the equation?

Would anybody like to answer?

[Clément Fortin]

From what I know of corporate boards, I think today they're very concerned about IP issues and so on. I think in Canada now we've moved quite a bit. It's down in the culture. When you get into operations and you get into product development and all the really technical things, the culture is different, and this is where we have to change. This is my perspective.

[David Harris Kolada]

I would offer that I think if you attract venture investment, the venture board members, who would typically be a significant part of your board, are very attuned to this issue, because it goes directly to the valuation of the company.

For companies that have not gone the venture route—which is fine, and many companies are just able to commercialize and succeed without venture capital—I think there is a gap. It's generally a question of building good boards, and the IP issue demonstrates that need to have good boards with independents whose members are qualified.

So I think generally having a higher standard for building an independent qualified board of directors for these independent companies is an important issue.

[The Chair, Conservative, David Sweet]

Thank you.

We now go to Mr. Harris.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you.

Mr. Kolada, I apologize for almost putting words in your mouth earlier.

[David Harris Kolada]

They were good words. They just weren't mine.

[Dan Harris, NDP, Scarborough Southwest, ON]

But following up, of course, we heard from you today about all the investments and the future of clean tech. That seems to fly in the face of what we oftentimes hear in other areas from the government or from certain industry areas, which really call clean tech or the environment a barrier to further economic development.

Would you agree or disagree with that statement?

[David Harris Kolada]

At SDTC, I think we've shown over 10 years that supporting technologies that are good for the economy and good for the environment is not a contradiction in terms. They're actually synergistic. If you're developing a technology that saves money, that takes something that's a waste stream and turns it into a valuable commodity and a revenue stream, that creates a very strong business case.

We look at only those technologies that have a very strong business case, those that the market is pulling through. We talked about push and pull. It's appropriate in an academic setting to have the pull and the push. But when you get to the stage where SDTC is playing, we're looking for market pull. If there isn't a strong market pull for something, we won't back it.

So there's a natural synergy, because we have the customer or a supply chain partner in our consortium putting money behind this technology and saying, “This is strategic to our business. We're going to put our money into it to make sure it gets to market.” Well, how is that bad for the economy? And at the same time, we have measurable benefits to the environment. It's a core part of our program. So everything we back, we believe has both attributes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Excellent. Thank you. I completely agree with that.

In one of your earlier statements you mentioned that governments, as well as Canadian business and industry, are perhaps slow adopters. Is there any particular reason why government perhaps isn't taking more of a leadership role in adopting clean tech to pave the way for the other sectors in Canada's economy?

[David Harris Kolada]

I said we're seeing the government taking an increasing role in this regard.

[Dan Harris, NDP, Scarborough Southwest, ON]

Increasing, but they're still lagging.

[David Harris Kolada]

We're very encouraged to see that. It's something we've been calling for, for a long time. We're very happy to see the progress that's been made.

[Dan Harris, NDP, Scarborough Southwest, ON]

There's always room for improvement.

[David Harris Kolada]

I think the chronic issue, frankly, is within industry. It's quite a shame, because if you look at clean tech, it's one of the areas where we have large anchor tenant companies in many of these sectors, whether it's in oil and gas, forestry, agriculture, or transportation; we have world-leading companies in each of those sectors headquartered in Canada. It's something you can't say for many other sectors.

The disappointing thing is they are slow to adopt, and it really is a cultural issue in terms of risk aversion.

[Dan Harris, NDP, Scarborough Southwest, ON]

I apologize. I'm glad you're wrapping up.

Mr. Fortin, I would really like to ask you some questions about MDA and RADARSAT, but I have unfortunately run out of time.

As such, Mr. Chair, I believe now would be the time to restart the debate on RADARSAT, in having MacDonald, Dettwiler and Industry Canada come to the committee to report as to what problems exist and why the program seems to be frozen in time.

We've heard time and again here from the government and from the parliamentary secretary that there is a commitment on their side. This debate was started nearly a month ago. We still have not seen any movement from industry or any public signs that funding is going to be allocated for the program.

In the context of Investment Canada and in the context of the IP study we're doing, this is a tangible area where a Canadian company has a lot of intellectual property and where we feel currently the government, through their inaction, is risking the health and the future well-being of that high-tech strategic asset, which was blocked from being sold to an American company to protect our interests.

I apologize to the witnesses for taking this opportunity to start this debate again, but this is a tangible area where we can have an impact, and as of yet we have not got agreement from the government side to bring MDA and Industry Canada, as well as, thanks to Mr. Regan, the industry minister, to come and explain what the delays are or to establish a timeline to see what we can do to move this program along.

[The Chair, Conservative, David Sweet]

Mr. Harris, your time is up on that. I need to move on to the next questioner now.

[Dan Harris, NDP, Scarborough Southwest, ON]

Yes, but I do believe I've just restarted debate on an existing motion.

[The Chair, Conservative, David Sweet]

No, we're in a regular meeting where we have time allocation for different questioners. The government has advised me they rest, so if Mr. Regan wants to give you his time...he has five minutes, and then our meeting is over.

[Geoff Regan, Liberal, Halifax West, NS]

I do have a couple of questions, but they may not take long. I'll finish quickly.

[Dan Harris, NDP, Scarborough Southwest, ON]

If you want to share your time, I appreciate it. Thank you.

[Geoff Regan, Liberal, Halifax West, NS]

We'll see what happens.

Thank you, Mr. Chairman.

Mr. Annan, you highlighted the speed at which technology is developed and becomes outdated these days.

In view of that, is the patent process itself obsolete? If not, what has to change?

[Rob Annan]

I'll preface this by saying this is outside my particular expertise. Our experience, at least at Mitacs, has been that the projects we're engaged in are relatively short term, so the projects tend to be somewhere like four to eight months. Often the research going on there doesn't generate enough long-term IP. Things move pretty quickly. The problem arises from the fact that the university, especially the student, wants to publish their work, often as a thesis or as a paper, so sometimes there are some conflicting timelines there. Once in a while we will have to delay a publication.

In terms of the overall future of IP in the tech-based...I suspect my colleagues, especially at Communitech, would be able to better answer that.