Industry Committee on Oct. 23rd, 2012

[The Chair, Conservative, David Sweet]

I call the meeting to order.

Good morning, ladies and gentlemen.

Good morning everyone.

Welcome to the 43rd meeting of the Standing Committee on Industry, Science, and Technology.

Because the clocks are a little bit all over the place, we will go by BlackBerry time, which says it is now time for the meeting to start.

Go ahead, Madame LeBlanc.

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

I wanted to make sure that for the week of November 20 our meetings will be televised, as they usually are for a public meeting. This is the week we have the ministers with us. It's usually a televised meeting, anyway.

[The Chair, Conservative, David Sweet]

We will certainly do our best. There are only a couple rooms available. Depending on what is available, we will do it.

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

If we could make the arrangements, that would be great. That's why I wanted to point it out before we start. Thank you.

[The Chair, Conservative, David Sweet]

Now we will move on to introducing our panel of witnesses today.

We have quite an entourage with us. First, from Canada's Research-Based Pharmaceutical Companies, we have Brigitte Nolet, who is a director of government relations and health policy, special division. She is from Hoffmann-La Roche Limited. We also have Declan Hamill, chief of staff and vice-president, legal affairs. From TEC Edmonton, we have Chris Lumb, chief executive officer. From Genome Canada, we have Pierre Meulien, president and chief executive officer. From Research In Motion, we have Morgan Elliot, director of government relations, and Robert Guay, director, intellectual property operations.

I will begin in the order we have before us. From Rx&D, Brigitte Nolet, please go ahead.

[Brigitte Nolet, Director, Government Relations and Health Policy, Specialty Division, Hoffmann-La Roche Limited, Canada's Research-Based Pharmaceutical Companies (Rx&D)]

Thank you very much, Mr. Chair and honourable members.

On behalf of Canada's Research-Based Pharmaceutical Companies—Rx&D—thank you for the opportunity to appear before you today. As you have heard, Declan and I are here representing Rx&D.

To start, Hoffmann-La Roche Limited is a member of Rx&D. We have Canadian operations in Mississauga and Laval. I am here before you today as the acting chair of Rx&D's intellectual property protection committee.

New medicines and vaccines represent some of the most advanced, safe and effective treatments available to help Canadians live longer, better and more productive lives. Our medicines also ease the burden on the health care system by avoiding more costly hospitalizations and invasive procedures.

The innovative pharmaceutical sector is a key player in Canada's knowledge-based economy. We account for some 46,000 well-paying direct and indirect jobs in Canada. Last year alone, we invested $1.3 billion in research and development and we contributed $3 billion to the economy. One of the drivers of business investment, commercialization, and prosperity is a country's intellectual property, or IP, regime. This holds true for sectors from aerospace to resource development, from information technology to the innovative pharmaceutical sector.

A globally competitive IP regime supports other policy efforts as well, such as tax policy, regulatory efficiency, and investing in research capacity such as universities, hospitals, and clinicians. A key aspect for success in Canada is a predictable and reliable business climate. IP protection is key to creating this stability.

Right now, Canada has a unique opportunity to conclude the Canada-EU comprehensive economic and trade agreement, CETA, and make necessary improvements to harmonize our life sciences IP regime with European levels.

Specifically, we believe the federal government should do the following: one, create an effective right of appeal for innovators in patent invalidity proceedings—it's a simple matter of fairness; two, improve our data protection regulations from eight to 10 years, an incremental but important change; and three, implement patent term restoration, which already exists in every other OECD nation except New Zealand, Mexico, and Canada.

These improvements would make Canada's IP regime more stable and predictable.

A few weeks ago, this committee heard that there was no link between strong intellectual property and pharmaceutical research and development. We fundamentally disagree. The facts state otherwise.

In 1987, pharmaceutical investment in Canada was just $93 million. A year later, Bill C-22 improved the Patent Act, and along with amendments in Bill C-91 a few years later, here is what happened: over the ensuing 25 years, innovative pharmaceutical company investment in Canada grew from $93 million to $1.3 billion, an increase of 1,500%.

Despite an increasingly challenging and uncompetitive environment, we honoured our commitment to Canada. In fact, Rx&D members are the largest private sector investors in health research in Canada, proudly investing more than $20 billion over the last two decades.

To be fair, we acknowledge that our member investments, while averaging $1 billion every year, have declined over the past few years.

This is due in part to other countries surpassing Canada's IP regime. As a consequence, the global pool of life science investments is migrating elsewhere. Other nations, both developed and developing, can also boast of their business climates and top-flight scientific talent. In a fiercely competitive environment, Canada must keep pace. Harmonizing our IP regime to European levels will be the catalyst that helps to halt and reverse this trend.

Mr. Chair, allow me to acknowledge the IP changes that the federal government made to Canada's data protection regime in 2006. These changes played an important role to enable Hoffmann-La Roche to attract and win a $190 million investment last year. This investment will yield a new global pharmaceutical development site in Mississauga, one of six such global clinical trial sites for the Roche group, and 200 high-skilled jobs.

These changes also resulted in Rx&D members submitting 25 new medicines in Canada over the last five years, which would not have occurred without effective data protection.

As for concerns that these IP changes could impact provincial drug budgets, I would note that the provinces have every tool at their disposal today to manage them. Furthermore, Europe has stronger IP protection than Canada, yet EU countries, on average, spend less on health care as a percent of GDP compared to Canada, while benefiting from better access to innovative medicines.

Mr. Chair, you've heard a lot about intellectual property in the context of policy tools and investment levels, but I'd like to conclude by telling you what we think IP means for Canadians.

Over 75% of our investments go to clinical trials that benefit patients. Today there are more than 3,000 clinical trials under way across Canada. These trials are helping Canadians drawn from every background, region, and riding. These are your constituents.

In our Living Proof campaign, copies of which have been circulated to you this morning, Canadians are telling stories about the positive impact of innovative medicines on their lives.

Tannis Charles, 46, from Winnipeg, was the first participant in a global clinical trial for a new rheumatoid arthritis medicine, and her symptoms are now In remission.

Bill MacPhee, 50, from Fort Erie, uses our medicines daily to manage his schizophrenia, a condition he has been living with for 26 years.

Ron Hansen, 69, in Toronto, uses innovative medicines for his COPD, which is a severe respiratory condition.

Today millions of Canadians are managing diseases such as diabetes, cancer, HIV/AIDS, or hypertension, just to name a few, and they are managing them with the appropriate use of innovative medicines and vaccines.

Strong pharmaceutical IP can increase our national wealth, but it is also critical to sustain and improve our national health. In our industry, intellectual property is the cornerstone of encouraging health research. The stronger it is, the stronger will be Canada's ability to innovate and bring new therapies to improve the lives of Canadian patients.

Thank you very much. We would now be pleased to answer your questions.

[The Chair, Conservative, David Sweet]

Thank you very much, Madam Nolet.

Now we go on to TEC Edmonton. Mr. Lumb, you have seven minutes, please.

[Chris Lumb, Chief Executive Officer, TEC Edmonton]

Thank you very much. I appreciate having the opportunity to come and speak with you.

My name is Chris Lumb, and I'm the CEO of TEC Edmonton, which is a joint venture between the University of Alberta and the City of Edmonton. I'm speaking to you predominantly as a representative of the University of Alberta, but also as a representative of institutes and institutions that universities create.

I have a simple message, and it's based on experience. I'm going to give you the message and give you a couple of examples of why I believe it's supported.

The message is that intellectual property policy is not as important as the leadership of the institutions that manage intellectual property. Therefore, when creating legislation and policies, I would strongly suggest that you bias towards actions that support strong leadership as opposed to getting into the details of which particular IP regime is better or worse, because, if you look at the numbers and the facts, there really isn't a single better or worse IP regime.

I'm going to give you a little bit of background on TEC Edmonton and why it exists, because it's got context for this. The organization I run was created about six years ago, and it came out of three fundamental ideas.

One is that universities generate negligible revenue for intellectual property royalties, at a little over $50 million per year for all Canadian universities, versus tens of billions of research dollars of expenditure in universities overall, so it's just not material to universities. The University of Alberta recognized that some number of years ago.

Also, in many cases university intellectual property by itself is too immature and comes too early to fully commercialize.

Universities also recognize the growing importance of their role as drivers of commerce in the economy.

The University of Alberta's response to that was to partner with the City of Calgary to create a joint venture organization called TEC Edmonton, which I run. It is, at this time, pretty much unique in Canada. In one independent organization, it does four things. One, it manages the intellectual property assets of the university. Second, it's got a business advisory and accelerator service to provide advice to early-stage companies, whether they come from the university or not. Third, it runs an incubator, which serves university and non-university companies. Fourth, it carries on a variety of training and entrepreneur development activities.

What makes that unique is that most universities don't give their IP assets to an independent organization that they don't fully control. The goals in setting it up TEC Edmonton were to focus on creating more spinoffs and on licensing locally and regionally in preference to licensing internationally, on the basis that if the university could license locally, it would create more spinoffs. It wouldn't really be forgoing any licence revenue because universities don't generate very much anyway, but in the long run it would create more new economic activity in the region, and that would link the university to the region better. That was the goal.

There were a couple of good outcomes, and I'd like to highlight two of them. One is from the institutional point of view and one is from the community economic development point of view.

I'll start with the institutional. I was just invited to speak here three or four days ago, so I don't have material translated to hand out, but I'll give you the numbers, and we can get them to the committee later.

One of the measures of commercial success of universities is the creation of spinoffs that are still operational. If you look back over time, if a university created a spinoff and it died a year later, that's not really as effective as if it's still in existence over a number of years. That's a measure that is gathered by most institutions around North America.

The University of Alberta ranks in the top 10, somewhere between eight and nine, depending on the year you measure it, of all institutions in North America. There are several hundred research intensive-based institutions in North America, and the University of Alberta ranks in the top 10. In addition, the University of Toronto ranks in the top 10, and UBC ranks in the top 10 as well. Those happen to be, perhaps with the exception of McGill, the three largest research-based universities in the country: Toronto, Alberta, UBC. All three rank in the top 10 of North America for creation of sustainable spinoffs. Interestingly enough, they all have different intellectual property policies. Actually, the University of Alberta and UBC are inventor-owned. The University of Toronto is institution-owned. Waterloo, which is completely inventor-owned, with no involvement from the institution whatsoever, doesn't rank on this scale.

What it says to me is that there isn't a right answer. You can't say that institution-owned is better or inventor-owned is better. What really matters is what the leadership of the institution has done to foster a culture of commercialization within the institution. Within that, pretty much any IP regime can work. That's one of the pieces of evidence I put before you.

The second is results of an organization like TEC Edmonton, which are broader than simply university-based. We did a survey last year of 74 companies we worked with. We expected to see decent numbers in terms of growth of economic activity. Those 74 companies generated $75 million of revenue, raised $27 million in new capital, spent $17 million on R and D, and grew collectively by 25%. That compares with Industry Canada data that says that the typical growth rate of organizations as early-stage technology companies is 10%.

If our survey showed 25% and the typical growth rate is 10%, the conclusion I draw from that is that whether it's TEC Edmonton or any kind of accelerator, young companies that access support networks, such as those provided by institutions and organizations like ours, do better. They grow faster. That makes sense because they're accessing networks, financing, expertise, and all sorts of different things. It says that the role of universities to support these kinds of organizations—accelerator organizations, business support organizations, IP commercialization organizations—is very important, because it does actually make a difference.

Another interesting fact that came out of the survey is that of the job growth that we saw, which was a growth of about 25%. It went from 600 jobs to 750 jobs across these 75 companies. It was spread across a number of companies and a number of sectors. There's no one winning sector; there's no single, big company that generates all that. That, too, is consistent with data that comes from U.S. entrepreneurship studies.

There are two outcomes: one, Canadian universities in general do well; two, these support organizations do well. My conclusion, then, is that leadership matters, and the action that you can take is to support things like Tri-Council funding that fosters commercialization-type behaviours in universities.

As well—and this is perhaps a little self-serving—I believe you should consider having regional organizations such as Western Economic Diversification support tech transfer offices that behave in the way that you want to see them behave.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Lumb.

Now we'll move on to Genome Canada, with Pierre Meulien.

[Pierre Meulien, President and Chief Executive Officer, Genome Canada]

Good morning, Mr. Chair and committee members.

I am going to give my presentation in English, but I would be pleased to answer any questions in French, if you like.

Mr. Chairman, on behalf of Genome Canada, I'm pleased to tell you about our priorities and activities and offer some thoughts on Canada's intellectual property regime, especially in regard to the field of genomics-based research, development, and commercialization.

Genome Canada is a not-for-profit corporation dedicated to developing and applying genomics that create economic wealth and social benefit for Canadians. We work in partnership with our six regional genome centres and with government, academia, and industry. This network is the Canadian Genomics Enterprise. We invest in and manage large-scale research and translate discoveries into commercial opportunities, new technologies, applications, and solutions in key life science sectors of the economy. Those sectors include health, agriculture, environment, energy, mining, fisheries, and forestry.

We continue to consider the economic, ethical, environmental, legal, social, and other challenges and opportunities related to genomics research and development. We do this to provide understanding that speeds the acceptance and uptake of innovations into society. Since the year 2000, fulfilling our mandate has resulted in $1 billion committed by the Government of Canada. In turn, this has leveraged a further $1 billion in co-funding over the same period.

Our achievements include a strong focus on commercialization. Since our inception, more than 20 SMEs have been created or enhanced; more than 200 patent applications filed, with 52 patents issued; and more than 20 commercial licence agreements negotiated with the private sector. In all our endeavours, our funded researchers and partners are encouraged to use their best efforts to ensure intellectual property is exploited to maximize the benefits for Canada and Canadians. This means both economic and social benefits.

Considering the role of intellectual property protection in the field of genomics begins with the clear understanding of how our innovation system works.

Innovation is a process. It's a complex one and has increasingly become a collaborative venture. Its key element is translation, which is moving from idea to invention, invention to product, and from product to business. Innovation frequently involves public sector funders, university-based researchers, and private sector entrepreneurs working together in teams and consortia.

These teams often cross national boundaries and operate often in a so-called “precompetitive” modus operandi. For innovation to flourish in such a complex environment, a number of policies and practices must be in place, and intellectual property protection is one of them. Intellectual property protection always involves creating a balance between protecting the economic rights of creators and providing public access to their inventions.

In today's world, IP protection is one of the keys to innovation, which drives productivity, and as a result has become an important competitive tool between national economies. Countries with strong IP protection attract the most entrepreneurial researchers and the kinds of investments that lead to jobs, products, and markets. Countries with weaker IP regimes often see those benefits go elsewhere.

We need Canada to have a level playing field to encourage investment from elsewhere. The more level the playing field is for intellectual property protection, the more freely capital, ideas, and skilled knowledge workers will flow.

In addition, we must work harder to encourage more homegrown intellectual property development and exploitation. That's a complex undertaking involving much more than IP issues. It also touches venture capital, innovation models, risk management, and a whole lot more.

Intellectual property rights entice entrepreneurial researchers and inventors to take risks in the expectation of economic rewards in their quest to develop new drugs, better diagnostic tests, more resilient crops, and so on. In the field of genomics, where large data sets are produced and stored, the balance between sharing this data openly and protecting potential value is critical in harnessing the value of publicly funded research.

Increasingly, members of the collective research community opt to place results of their work in the public domain. This provides all interested parties with fundamental knowledge and enables others to continue research that truly can benefit the world community and improve commercial prospects.

That is the approach taken by the Structural Genomics Consortium, for example, of which Genome Canada is a foundational funder. The SGC is one of the largest-ever public-private research partnerships, representing more than 200 scientists working in labs ranging from university labs to some of the largest pharmaceutical labs in the world, all of whom openly share their early-stage results. The goal is to speed novel and effective drug discovery by identifying suitable molecular targets in a high throughput mode. The result is a new approach to intellectual property rights that allows drug makers and university scientists to share risks and reduce costs at a stage of research deemed precompetitive by the stakeholders.

In this manner, the speed of knowledge creation is maximized, and the companies involved compete further down the value chain.

Genome Canada recently published a brief entitled “Moving Beyond Commercialization: Strategies to Maximize the Economic and Social Impact of Genomics Research”. I have a few copies here if people are interested.

The authors are leading experts in intellectual property, technology transfer, and public policy. They argue that commercial success alone is inadequate to measure intangible assets such as the scientific knowledge, entrepreneurial experience, and industry collaboration that are necessary ingredients for economic growth. The point is that as important as intellectual property protection is in creating a supportive framework for genomics research and innovation, it is just one element of that framework.

To this end, we have been in ongoing discussions with the Government of Canada seeking financial support for multi-year programming. Specifically, we are seeking up front a federal commitment of $440 million to support four years of genomics-based research and development. Because of our ability to leverage federal funding through partners and transform discovery into real benefits, this would lead to a net investment for Canada of $1.2 billion in genomics research and development over the next four years. That's a 1:2 leverage of federal dollars.

This long-term, stable, effective, multi-year funding is essential to underscore Canada's commitment to an emerging bioeconomy and to show how genomics innovation can preserve and create jobs, boost productivity, and develop value-added products and markets.

Thank you, Mr. Chairman, for your attention.

[The Chair, Conservative, David Sweet]

Thank you very much, Dr. Meulien.

Now we go on to Research In Motion.

Mr. Elliott, will you be doing the opening remarks? You have seven minutes.

[Morgan Elliott, Director, Government Relations, Research In Motion]

Mr. Chair and honourable members, good morning, and thank you for the invitation to appear before the committee.

RIM is a proud Canadian company, founded in 1984, and our first BlackBerry was introduced in 1999, creating a whole new way to communicate. Our products spawned a global smart phone industry that is now estimated to be worth more than $200 billion annually. In addition to our Canadian headquarters in Waterloo, we have other operations and R and D facilities in various Canadian locations and across the globe.

RIM has been transitioning our company and we've been laser-focused on delivering our new BlackBerry 10 platform and associated products. We're on track to launch in the first quarter of next year and we've seen great support for our existing BlackBerry products across the globe. The momentum is strong and building for BlackBerry 10.

This past quarter, when many speculated we wouldn't, we grew our customers to 80 million users worldwide. We have a strong foundation operating in 178 countries, working closely with more than 600 telecommunication carriers. We have no debt on our books and we have a cash balance in excess of $2 billion.

With this backdrop, we are preparing to introduce the world to BlackBerry 10, an innovation that will usher in a new era of mobile communications and mobile computing. This innovation has been supported by a huge effort of more than $1.5 billion annually in R and D, spent primarily here in Canada, but also in places like the U.S., the U.K., and elsewhere.

Innovation, intellectual property, and the IP regime in Canada, but also globally, are of critical importance for our business. In these brief opening remarks, we'd like to underscore one very fundamental point: while innovation may lead to intellectual property rights such as patents and copyrights that need to be protected in a well-functioning IP regime, a solid IP regime does not necessarily lead to innovation or innovative companies or high-quality jobs. Above all, we have to keep our eye on ensuring that we foster and sustain innovative, globally competitive Canadian-based companies.

Early in our corporate history, RIM was assisted greatly by the policies of both the federal and provincial governments, whether it was IRAP, TPC funding, tax credits derived from the SR and ED program, or the provincial co-op tax incentive programs. Public sector support played a key role in our success. Our competitors also benefit from a variety of similar supports where they do their R and D, because world economies want this work and all the benefits that come with it.

We believe that Canada's key programs in support of innovation and commercialization, particularly for the ICT sector, have to be nimble to ensure that they can address changing business models and changing global economic environments.

If we were limited to recommending just one action you take forward to strengthen the foundation for innovative companies in Canada and jobs in Canada, it would be to ensure that we maintain the right competitive incentives for investing in R and D here in Canada.

There have been numerous studies on the need to see a better ROI on government support in this area, and we concur with this need. Some good initiatives have been announced to strengthen the program supports for innovative-based SMEs and to generate more venture capital funding, and we agree with those, but the job is not done, and many of our larger innovation-based companies remain concerned about the ongoing competitiveness of Canada's tax incentives and programs to attract and support R and D. The Canadian Manufacturers and Exporters and others have done a good job of highlighting these issues lately, and we recommend their recent reports to you.

First, we need to ensure that Canada fosters R and D, innovative global companies, and jobs, and then we need to support those with a strong intellectual property regime.

As an innovation-based company, RIM develops proprietary software, physical products, and services on a daily business. As a result, we have a substantial portfolio of intellectual property rights in Canada and elsewhere. We were granted approximately 6,000 mobile patents by the U.S. patent office and European patent office between 1995 and 2012. In 2010 alone, we filed for over 1,000 patents with the United States patent office and filed hundreds of patents in other international jurisdictions, including the Canadian patent office.

We view the IP system as a larger piece of the global puzzle. While the Canadian IPR system is generally well crafted, it must be balanced and supported in a manner that promotes innovation within the marketplace and guards against the kinds of abuses we've seen in other countries, where IPR often acts as an obstacle to innovation rather than a catalyst.

We also agree with others who have appeared before you that Canada can do more to adopt the best international practices for patent examination to increase patent examination quality and efficiency while reducing time to patent.

Finally, there are steps to take to leverage Canada's very substantial investments in public sector R and D.

RIM is passionate about nurturing new talent and technologies at the academic level, and we have first-hand experience in building and maintaining strategic partnerships with academic institutions globally, through support for university research and educational outreach activities.

There are several models that post-secondary institutions follow in commercialization, and of course we're particularly supportive of the University of Waterloo model, which I think you heard about previously. We can leverage our university students and turn them into the next generation of innovators. Co-op programs are a great asset in Canada. We'd love to answer questions about those and how RIM has benefited from co-op.

We believe that a federal tax credit that is offered to companies who employ co-op students could further accelerate commercialization models and an understanding of how business innovates. RIM also believes that companies should have access to, and be able to license, technology created in government laboratories and institutions. There is no value added and no opportunities if intellectual property sits on a shelf.

In conclusion, let me sum up by saying that the Canadian digital economy is reliant upon innovation and requires modern, competitive public policies, programs, and incentives. This is essential if we are to ensure further development of existing Canadian companies as well as lay the foundation for the future companies yet to be launched.

We do need a strong IP regime. While we believe that the Canadian IPR system is generally well crafted, as I noted earlier, we also see that there are opportunities to strengthen it. We are conscious of the delicacy of this task. New laws or polices that may be good for one company may harm another. A policy that is good for one industry might be harmful to another. This area is very complex, and we appreciate the committee's time in talking to us so that together we can help identify potential pitfalls.

Thank you for the opportunity to appear. We welcome your questions.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Elliott.

We have a minister on the front bench, who I'm certain will be humbled by the fact that he's in good company with Research In Motion—focused like a laser.

[Voices]

Oh, oh!

[The Chair, Conservative, David Sweet]

With that in mind, we'll move on to my colleague Mr. Carmichael for seven minutes.

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

Thank you, Chair.

Thank you to all our witnesses for joining us today. We appreciate your taking time from your busy schedules.

For those of you who have had an opportunity to take a look at what we've been doing in this study, it's a study that we take very seriously, obviously, and it's one I believe is very important to the future of this country.

To set the stage for today's questions, Dr. Meulien and Madame Nolet, could you talk a bit about Canada specifically?

I read a lot early in the discussions, and the testimony from witnesses has been that Canada is the second place of registration for patents. I got the impression early on that from an IP development perspective, we aren't a leader, although I've heard a lot of testimony over the past month or so that maybe we're better than we've given ourselves credit for.

Could you talk to the baseline of where Canada sits globally today? We want to take patents and IP to commercialization, and obviously, Dr. Meulien, we're going beyond that now, but let's just start with taking it to commercialization.

How does Canada fare globally, and are there hurdles? As well, are we doing things right that we should be acknowledging as we complete our report?

[Dr. Pierre Meulien]

Thank you.

This is a great question. I think that patents are not an end in themselves. Using patents as a measure of success of how we're doing in terms of commercializing research is not a good measure. As some people have already said, you can file a lot of patents, but if they just sit on the shelf, they're of no good to anyone.

I think the question is this: is the patent and intellectual property regime in Canada okay? It's probably okay, but we do need to make a level playing field, and I would encourage Canada to harmonize with the European system as much as it can, because I think it does in fact invite investment in terms of big companies coming in.

However, the issue I'm most interested in is how it affects the innovation piece, and that goes well beyond patents. We can have a patent, but if investment comes from the U.S. to take that intellectual property and create a company out of it, the first thing that's going to happen—and it has, and in some of our own companies that we have created—is that the company will be asked to go south of the border. We have to create an environment in which that does not happen, or happens less. There can be value in that, but it's not maximizing the value.

We need to create an innovation continuum that allows the intellectual property created in our academic institutions to remain in Canada and for Canadian companies to be created around that piece of intellectual property or, better still, to pool with others and create innovation and commercialization around that.

So how are we doing? We know that Canada has a problem with innovation. We're not creating the value, the new companies that we should be creating, and far too much of our intellectual property is going south of the border, with companies being created down there.

Now, that's a complex area for discussion, because it involves the VC mentality in Canada. We're risk-averse in Canada relative to others. Our VC community is not a specialized community; it's a generalist community. We need to change that. Also, we need to support the entrepreneur type of mentality in Canada, which is much more mature south of the border and in many other countries.

I think that patents are not an end in themselves. I think we need to look at the broader picture and nurture that innovation continuum, which currently is problematic in Canada.

[Brigitte Nolet]

I would echo some of Dr. Meulien's comments. We believe very strongly in the potential of Canada. In large part, we in our industry are Canadians who are going out into our global networks and advocating and promoting to bring investments back to Canada. We advocate for Canada.

For us, there are a number of factors that we have to consider when we are building our business case to bring an investment to the country. Intellectual property is an important piece. I would agree that our system is okay; it's just not great, and it has remained relatively unchanged for the past 25 years.

Therefore, when you're looking at the climate, the key for our industry, as I said, is a stable and predictable business climate. You're looking at a variety of different factors. You're looking at the regulatory system. Is it stable? Is it predictable? You're looking at taxation policy. You're looking at the talent pool. You're looking at the links between teaching hospitals and academic institutions. Also, you are looking at the intellectual property system.

For us, it's about trying to understand where we want our system to go, and not 10 years ago, but where we want it to be in 10 years from now and in 25 years from now. Where do we want health research to be? We've heard a lot about its potential. I think the key is that we have this opportunity in our discussions with Europe to really be able to modernize and to make some strategic amendments that will help bring us into that future of health research.

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

That's terrific. Thank you.

Do I still have time?

[The Chair, Conservative, David Sweet]

You have about 30 seconds.

[Voices]

Oh, oh!

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

Thank you for your answers.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Carmichael.

We'll now go on to Madame LeBlanc pour sept minutes.

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

Thank you very much, Mr. Chair.

I want to thank the witnesses for their very informative presentations.

I am the member for La Salle-Émard, in the southwestern part of Montreal. A number of businesses have shut down in the greater Montreal area, including some pharmaceutical research centres. So some high-paying jobs have disappeared in the past few years, and I find that very troubling.

I think you mentioned this: Canada seems to have lost its appeal as a leading site for research and development, especially in the pharmaceutical sector. You hinted at this. But could you tell us what led to these closures and what we can do to attract researchers once again? And yet, we aren't lacking in talent. What's more, things are stable on the political and economic fronts. What is going on?

[Brigitte Nolet]

You're right, the industry has gone through some changes in recent months, and jobs have been lost.

But there is another point I would like to get across. We believe in Canada's and Quebec's potential. We want to invest more and we want to do that in Canada. Even though we have seen job losses, we have also seen investments being made in Quebec.

I would like to draw your attention to an initiative announced by Eli Lilly. The company is partnering with Teralys Capital to set up a new investment model in Quebec, which will really target the early stages of drug development.

I would also point to Roche Canada's designation of the Montreal Heart Institute as its hub for translational medicine studying cardiometabolic disease. That represents a major investment.

As you mentioned, we can make changes. Numerous factors are at play. We believe the government could make strategic changes to improve the country's intellectual property regime and its ability to attract researchers. That means improvements to the right of appeal, data protection and patent restoration. Such measures could enhance Canada's ability to compete for investments.