Industry Committee on Oct. 2nd, 2012

[Mike Wallace, Conservative, Burlington, ON]

I have 20 seconds.

I'll comment, and maybe you can respond.

Some countries have fully refundable money and some have non-refundable money. One is a gift, in my view. There's a tremendous amount of risk in investing in R and D and IP, because maybe 30% of it materializes into something that's commercialized. Should the taxpayer not get some sense of security that it's refundable?

[The Chair, Conservative, David Sweet]

We'll have to leave that as a rhetorical question for now, Mr. Wallace. If somebody can jam in that answer along the way, then so be it.

We'll move along to Madame LeBlanc. I believe you're going to split your five minutes with Mr. Harris.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

That is correct.

Currently, the defence industry is worried. The Government of Canada seems to be testing the aircraft in the United States. Does this close the door on Canadian companies?

[Maryse Harvey]

I am not sure what you are referring to. I did not know that the aircraft had to be tested outside Canada. Could you please tell us more about that?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

I don't have more information, but does it not say in the contract that the F-35s will be tested in the United States?

[Maryse Harvey]

It is possible, but we have not heard of any concerns.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

You have not heard of any concerns like that?

[Maryse Harvey]

No, we have not.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

I will give the floor to my colleague.

[Dan Harris, NDP, Scarborough Southwest, ON]

I have four minutes. That is more time than I thought.

I am concerned about the RADARSAT program. The technology is Canadian and the program can bring solutions to a number of problems in space, as well as address a number of Canadian needs. Unfortunately, no funding for the program was listed in the last budget.

Ms. Boily and Ms. Harvey, could you comment on what happens when the government says that still supports a program like RADARSAT, but the funding is not there? What happens with those types of programs?

[Maryse Harvey]

When a program is announced, there is no question that companies in the space industry have to get ready to deliver some of the production when they receive the mandate to do so. If the funding does not come, those companies will have to make some internal decisions to reflect the reality. That means that, if there is no transfer of money, there will be too many employees and they will have to be laid off. That is our concern in those cases.

[Dan Harris, NDP, Scarborough Southwest, ON]

Okay, thank you.

Of course I know COM DEV is involved in the RADARSAT Constellation Mission project directly. Has COM DEV made any plans with regard to making do without the funds, perhaps out of the existing funds that COM DEV has received, I believe as a subcontractor? When do those funds run out?

[Tony Stajcer]

I'm not directly involved in the project itself and how the funds are allocated. I understand there are some funds still, but I echo Maryse's comments that it is difficult when you have large government procurement. You staff up, and if the funds are of a sudden put on hold or delayed, you have to make business decisions. That's really all I can say on that.

[Maryse Harvey]

If I may add something, this stresses the importance for government to have a longer-term strategy towards space and the capabilities that are needed in Canada and have to be developed, because our companies need to be able to know in advance and plan according to what these priorities will be. This is a perfect example of a situation in which we could have used a little bit more coordination right off the bat.

[Dan Harris, NDP, Scarborough Southwest, ON]

Great. I certainly agree, and if the decision were up to us, I think the funds would have been in the last budget, because that kind of program has all kinds of benefits from coast to coast to coast in many different areas.

With respect to that type of funding and the intellectual property, since we're talking about IP, do any of you have an idea about how much investment in intellectual property is actually in that program? Of course, this is already the third generation of this program, so it has been going on for a long time.

[Tony Stajcer]

I can comment that we're making advances in signal processing technology that goes on board, so you can actually get maybe better resolution, more data, better pictures of ships and so on, and better determination of the scene you're looking at.

There have been advancements, but it's not the only technology in the world. Europeans have many SAR radar satellites. We believe we are competitive on the world scale on that, but I would say that over time many hundred millions of dollars have been invested in that technology.

[Dan Harris, NDP, Scarborough Southwest, ON]

I'm sorry. I want to cut you off very quickly. Has there been—

[The Chair, Conservative, David Sweet]

Mr. Harris, we're over time. Sorry.

Go ahead, Mr. Lake, for five minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thanks, Mr. Chair.

Mr. Stajcer, I'm just going to continue on the theme you've talked about throughout your presentation, and that's the different approaches universities across the country have towards IP. I had the chance during the summer to actually meet with some of these universities and experience first-hand those exact discussions.

Could you highlight why you think the universities have such different approaches to IP?

[Tony Stajcer]

I think it's a policy at the top level. For example, at the University of Waterloo the IP is owned by the researcher or researchers, and in this case it could be Ph.D. students as well. Other universities that I've dealt with, such as York, have a central office I deal with. The University of Waterloo does have an IP office as well that helps the researchers come to terms with industry and helps them to negotiate, but it still depends on the individual person, so I have to go through the office down to the researchers. They have to accept that, but I'm not sure that the university or the researchers have necessarily done so. It's more about education, as I said.

I think they have to understand. As I lay out some of what happens to the IP and how is it going to get to the market, they start to realize that this is really only the beginning of the investment period and that other layers of IP have to get layered onto that to actually make it into the commercial world. Therefore, I think part of it is education.

Part of it is that the inventors themselves want to hang onto that IP. They think it's very valuable. We do want to encourage the profs, the researchers, to actually drive that innovation and have the confidence they are developing some new technology. We do want to do that, but as I've stated, some of the research that we've seen is outdated.

I think industry needs to participate more in the direction of NSERC-type research funding. Researchers and industry have different objectives. Some of the researchers want to publish papers, want to be seen as experts in the world by making sure they get their ideas out there by publishing books and so on. They're not necessarily interested in commercializing the IP.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Where I was going with that question is one would presume the universities have a reason for having the specific approach to IP that they have. Therefore, if someone dictated to them that they had to do it a certain way, one would also presume that the majority of universities wouldn't be already doing it that way, and they would probably be reluctant to go down that road.

[Karen Mazurkewich]

I think it has a lot to do with the sector. If Waterloo is software, that is something that goes to market quickly, so it makes sense for the IP to be residing with software. If you are dealing with pharma, MaRS Innovation has said they're only dealing with someone when the university and not the professors owns the patent, because they cannot take this and develop it and then have these issues.

Why do universities have different policies? It's because they have different sectors that they are dealing with. Tony and I are saying that's fine. I don't think you are going to get complete unification across universities.

What we want is more flexibility in the agreements so that there is better recognition of not paying out on milestone payments or on moneys up front, etc. There needs to be a change across the board in the culture of thinking, so as to have more flexibility in the legal arrangements.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Tony, when you are making a decision to work with the university, what drives that decision?

[Tony Stajcer]

We look at whether there is a renowned expertise in the university in the area and direction that we're going.

In this case, we're a microwave equipment supplier to the satellite industry, so we look at where the university has built up an area of expertise. Are they renowned for that area? We will tend to invest in that area because it's then likely to result in something.

One of the first starting points is when I sponsor a chair. NSERC actually has a blanket statement that whether it's a chair or a collaborative project, all the IP belongs to the university. As a starting point, I think I would start with NSERC, to have the flexibility to have maybe a couple of models that you could follow, depending on the industry.

That would start the universities off with.... They always say, “That's the NSERC model. We have to have the IP.” That's their response, so I think NSERC has driven some of the behaviour of universities.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Stajcer and Mr. Lake.

Finally, we have Mr. Regan, for five minutes.