Industry Committee on March 5th, 2014

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

I just want to say one thing and then I'm going to be sharing my time with Mike.

First of all, you're looking at new graduates and then foreign temporary workers when you have a pool of talent that I think you're completely overlooking. We have our military who use simulators when they're deployed. They play video games, so they're users as well as designers of software. They have top talent in programming and they have the maturity. Many soldiers join in their late teens. They put in 10 years by the time they're in their thirties, and they're looking for something new to do. Even with a full pension at 20 years, people are looking at something to do in their forties. In some cases, they're probably fully trained and just don't know about you.

We also have soldiers who are medically releasing, and the government pays them to learn a new career. There are other people who are being medically released not because there is anything wrong with their capabilities but because we have a rule that in order to be in the military you have to be deployable. These people just cannot do that. They're still very capable in doing their jobs; they just can't be sent overseas.

My belief is that they don't know about all these opportunities that you're referring to. It probably wouldn't be a bad idea to contact the military unit that is in charge of the joint personnel support unit. That's where the people who are transitioning out or trying to get better to go back into the military reside. Maybe even propose working toward a partnership with the military. We have Helmets to Hardhats. Yours could be the war games to video games. They truly do understand the different aspects of what you've described you're looking for, and perhaps you can work towards a software game or program that would help heal the soldiers suffering from operational stress injuries.

Thank you.

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

Thank you, Mr. Chair.

I'll continue on that. I had a couple of different places to go with questions, but in regard to underutilized resources in terms of skills and talents, one of the areas that the government has been focused on is people with disabilities.

I have an 18-year-old son with autism, as most of the members around the table know. There are particular skill sets that line up with the IT industry particularly, but also the creative arts side of things lines up very well with high-functioning people with autism. It's very tough for them to get through interview processes sometimes, though, and deal with some of the social aspects of employment. I wonder if the industry as a whole has considered looking at that as an option for solving some of the labour issues. I recognize that's not going to help you with the experience side of things, obviously, if you're looking for people who are experienced in the industry. As you grapple with retention issues, some of the employees of the companies themselves right now...that's maybe where your experienced pool comes in, but you're going to need people to replace them as they move up too, as the industry continues to grow....

I throw that out as a option.

We have a panel that's federally funded that is actually working with employers specifically to increase the job prospects of people with disabilities. I'm sure they would very much welcome the opportunity to meet with you and talk about your industry and the opportunities that exist within it.

I don't really need you to respond to that unless you have anything to say to that.

[Jayson Hilchie]

It's definitely something we can discuss at our next board meeting with our members and look into the information, and give that to them. I don't know what our individual members have done with respect to that. It's not an issue that I'm necessarily educated on. It's certainly something we can bring to the forefront at our next meeting.

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

It's something that I've had the opportunity to talk to individual employers within your organization about as well. I'd be glad to connect with you offline at some point.

[Jayson Hilchie]

Yes, sure.

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

We just put $11.4 million in the budget into one initiative that's specifically autism-related, and another $15 million into another vocational training program, which is more broad based, to do with people with disabilities. I think those would be interesting programs for you to connect with, for sure.

To wrap up, we've covered a lot of ground today. To carry on with Brian's line of questioning, we talk a lot about challenges and how we address challenges, but where is the industry going? I know that's a tough question for an industry that evolves so quickly, and is evolving so quickly. In the short term, we have probably a pretty good idea of where the industry is going. Where is it going in the long term? What do we need to be ready for?

[Jayson Hilchie]

That's a great question.

Probably the most honest answer is that a lot of people don't know. The industry today looks a lot different than it did six months ago. Six months ago, a number of investor relations individuals, pundits, and critics would have said that the console video game industry was dead and that the industry's future lay in mobile devices, in telephones and hand-held devices. Others would have said it lay in PCs, home television—smart TVs—and such things.

I think I read yesterday, however, that the PlayStation 4 has already sold seven million units in a couple of months, and the Xbox One is close behind at around five million units. The manufacturers of those console boxes are having a hard time keeping up with production to meet demand. To me it looks as though the console industry is quite alive and well.

What you're going to see is a mix between games going to mobile devices and new experiences, and going to a lot of traditional models, such as consoles that have more of an online and multiplayer experience. The Internet has really changed video games. You no longer have to play by yourself; you can play with a lot of people in your home because of the Internet.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Hilchie and Mr. Lavoie.

That's all the time we have right now. We need a couple of minutes to transition to our next witnesses. We have bells in a very short period of time.

On behalf of the committee, thank you very much for your testimony. We greatly appreciate it.

We'll suspend for three minutes, ladies and gentlemen, and then we'll come back with the officials in public.

[The Chair, Conservative, David Sweet]

Ladies and gentlemen, we'll continue now with our meeting on supplementary estimates.

We have before us from the Department of Industry Robert Dunlop, assistant deputy minister for the science and innovation sector. We have from the Natural Sciences and Engineering Research Council of Canada, Janet Walden, chief operating officer; and from the Social Sciences and Humanities Research Council of Canada, Ursula Gobel, director of the communications division. We also have Gail McLellan, director general of finance branch at the National Research Council of Canada.

How many of you have opening remarks?

Mr. Dunlop? Okay, go ahead; then we'll move to our rounds of questioning.

[Robert Dunlop, Assistant Deputy Minister, Science and Innovation Sector, Department of Industry]

Thank you very much, Mr. Chair, and thank you, committee members. It's our pleasure to be here today to answer any questions you may have on science, technology, and innovation issues relating to the supplementary estimates (C), which you are currently examining.

I thought I might highlight a few of the programs that are involved in the main supplementary (C) transactions, by way of an introduction. The centres of excellence for commercialization and research program, or CECR, bridges the gap between innovation and commercialization. The program matches clusters of research expertise with the business community to share knowledge and resources to bring innovations to markets faster.

Created in 2007, the CECR program invests $30 million a year in Canadian innovation. The program is managed by NSERC in collaboration with the other two granting councils, and funds are appropriated to the three granting councils on the basis of competition results.

With supps (C), the subject of today's investigation, we are moving funds to NSERC and SSHRC according to the disciplines that were successful in the competitions. As a result of the latest competition, NSERC is requesting $6.1 million to support centres with activities in its disciplines, and SSHRC is requesting $2.8 million.

The business-led networks of centres of excellence program, sometimes known as the BL-NCE, funds large-scale collaborative research networks that bring academic and other research expertise to bear on specific R&D and commercialization challenges identified by an industrial sector. The BL-NCE program was created in 2007 and was made permanent in the 2012 federal budget, with annual funding of $12 million.

The BL-NCE program is administered by NSERC but managed on a tri-council basis. Funds for the program are appropriated annually to the three granting councils on the basis of their estimated shares, and then following competitions, adjustments are made between the three councils to reflect the actual results in each discipline. In these Supps C transactions, NSERC is transferring $1.4 million to CIHR and $238,000 to SSHRC on the basis of the latest competition.

The college and community innovation program supports applied research and collaborations that facilitate commercialization, as well as technology transfer, adaptation, and adoption of new technologies. It was designed to increase innovation at the community and/or regional level by enabling Canadian colleges to increase their capacity to work with local companies, particularly SMEs. The budget of CCI, in economic action plan 2013, was increased to $50 million a year.

CCI is administered by NSERC in collaboration with the other two granting councils. Funds for this program are appropriated annually to NSERC, and then further distributed to CIHR and SSHRC on the basis of competition results in those disciplines. In this case, $43,000 is being transferred to SSHRC to support two projects in the social sciences and humanities.

As part of the youth employment strategy, NRC-IRAP delivers an internship program to innovative SMEs, providing them with up to $30,000 to hire interns—who are post-secondary graduates—for a period of six to twelve months. These graduates work on innovative projects within an SME, and may participate in the research, development, and commercialization of technologies. The total budget of the NRC-IRAP youth employment program for 2013-14 is $5 million, with an additional $1.44 million provided through supplementary estimates (C).

Mr. Chair, with that brief opening remark on the main elements, we would be happy to take any questions from members of the committee.

[The Chair, Conservative, David Sweet]

My math goes we'll do five, six, five, and four. We'll be beginning with the Conservative Party.

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

Thanks, Mr. Chair, and thanks to the witnesses for coming.

Mr. Dunlop, this one is for you.

Our government has made a historic commitment to post-secondary research institutions in, of course, this last federal budget to secure our leadership in various fields of research that will have long-term economic benefit for Canada.

The Canada first research excellence fund will invest $1.5 billion over 10 years, beginning in 2014-15.

Can you tell the committee how the funding will be allocated over the years, and how the investment will benefit our universities, colleges, and polytechnics, and what the process might look like for determining the successful applicants?

[Robert Dunlop]

Thank you, Mr. Chair, for that question.

Yes, this is a very significant new initiative, providing $1.5 billion over the next 10 years to address the desire of Canadian universities and colleges to really move to the next level in terms of international competitiveness.

The budget announced a series of parameters, or criteria, that the ultimate program design is to meet, and Minister Rickford is now beginning work on the finer elements of the design of the program.

The critical elements here are that it will be allocated on a competitive basis; it is open to all post-secondary institutions, universities, and colleges; and it is to have an impact on areas of economic importance. We've already begun discussions with some of the main university groups, but within those parameters and with the idea that this is to have a major impact on the presence of Canadian post-secondary institutions on the world stage. Those are the parameters that Minister Rickford and officials will be working with.

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

The budget also provided the largest one-time increase to granting council funding in over a decade. I think it was $46 million per year on an ongoing basis to boost Canada's discovery and applied research while strengthening our knowledge economy and creating jobs.

I'm just wondering if the reps from NSERC and SSHRC could tell the committee how these new investments will be used by their respective councils?

[Janet Walden, Chief Operating Officer, Natural Sciences and Engineering Research Council of Canada]

Thank you for the question.

From the perspective of the Natural Sciences and Engineering Research Council, the increase to our base budget was $15 million per year.

Those funds will be directed towards discovery-based research.

[Ursula Gobel, Director, Communications Division, Social Sciences and Humanities Research Council of Canada]

For the Social Sciences and Humanities Research Council, the increase was $7 million to our base budget, and that will be directed to our three programs of talent, insight, and connection. We're determining now the proportion across those three, but it will support research excellence and be peer reviewed, of course.

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

The granting councils provide a lot of support to undergraduate, graduate, and postgraduate students in Canada to ensure our country attracts, maintains, and retains the top research talent in the world.

I'm wondering if the two of you, again, would be able to tell us how many students and researchers are supported by the councils each year?

[Janet Walden]

From the NSERC perspective, we're currently funding approximately 10,000 researchers and 30,000 students, both annually. About half of those students are supported through our people thrust, which is focused on scholarships and fellowships.

The other half of those students are supported through grants, which means that through the discovery grants program, through our innovation-based programs, there is significant support of students.

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

Actually, I have just a minute left. I had a question written down here, but I'm just going to ask something for anybody who is listening to this. There are four or five people who actually listen to these things and follow. Can you tell us what NSERC's focus is and what SSHRC's focus is? If there are three granting councils, many people wouldn't really understand the differences among the three. Two of them are under industry.

Could you take 30 seconds each to explain this?

[Janet Walden]

NSERC, the Natural Sciences and Engineering Research Council, one of three federal granting agencies, supports research in post-secondary institutions in the sciences and engineering, including supporting students and researchers through thrusts that are people-oriented, discovery-research-based, and innovation-research-based, which means the full spectrum of research from very fundamental work right through to application into the economy.

[Ursula Gobel]

The Social Sciences and Humanities Research Council supports students, scholars, and emerging scholars through its three programs in the disciplines of social sciences and humanities, which cover in fact 30 disciplines across campuses. Within our program architecture we support, tremendously, the knowledge mobilization to ensure that the research and the insights that are derived through the support that we provide really get into the hands of those communities, individuals, and businesses that can benefit from that research. That knowledge mobilization entity is critical within all of our support. In addition, within the Social Sciences and Humanities Research Council, we have oversight for the three tri-council programs, which we can speak to if you're interested.

[The Chair, Conservative, David Sweet]

Thanks, Ms. Gobel.

We now go to Monsieur Côté for six minutes.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair

I would like to thank the witnesses for being here.

We don't have much time, so I'll go quickly.

The Parliamentary Budget Officer released a report on the supplementary estimates that we are studying today. This is a general comment on these supplementary estimates. He wrote:

Parliamentarians may wish to clarify why the Government was unable to fulfill its spending commitments in the current year and seek guidance regarding when these investments will be made.

Does the Parliamentary Budget Officer's observation apply to the estimates we are studying here concerning the industry and research centres?

[Robert Dunlop]

To be honest, I'm not aware of the content of the report that was published today. So it is really difficult for us to answer the question. We can study it, but it's really difficult for us to answer this question right now.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

You could give the committee your answer at a later date. Very well, thank you.

In the last budget, the government launched the first research excellence fund, which will be in place as of the 2014-2015 fiscal year. I had a question about that. Are there already amounts in supplementary estimates (C) that are assigned to the first research excellence fund? If so, could you specify which?