Evidence of meeting #45 for Industry, Science and Technology in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was research.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Graham Carr  Vice-President, Research and Graduate Studies, Concordia University
Hossein Rahnama  Director, Research and Innovation, Ryerson University
Xavier-Henri Hervé  Director, District 3 Innovation Centre, Concordia University
Vincent Martin  Professor , Canada Research Chair in Microbial Genomics and Engineering, Biology, Concordia University
Sylvie Bourassa  Executive Director, Government Relations, Concordia University

11:50 a.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Thank you to our witnesses this morning.

As my colleague said, it's a fascinating and energetic topic.

As I listened to you, I hear two very much good news stories. Yes, I heard the discussion of Silicon Valley, and some of the slippage across the border, where some of these other markets are perhaps drawing some of our creative talent.

Maybe, Dr. Carr, you could just comment briefly. Are we playing catch-up or are we in fact at the forefront? I'm hearing some incredible stories here this morning. It sounds to me like, with some focus and some reapplication of energy and direction, we have a great opportunity here.

May 12th, 2015 / 11:55 a.m.

Vice-President, Research and Graduate Studies, Concordia University

Dr. Graham Carr

I agree we have a great opportunity. Are we playing catch-up? Silicon Valley is Silicon Valley, and we don't have a comparator for that, so yes, we're playing catch-up, but maybe that's not the realistic point of comparison.

Montreal is a city that, next to Boston, produces more graduates on an annual basis than any other place in North America. There's an incredible intensification of talent in Montreal. Toronto has huge talent. But it's not just the big urban centres that have the talent. Other places have talent as well. I think it's really a matter of unleashing that talent. We have a lot of things going for us. There's very high-quality research taking place in Canada. The university system across the board is of excellent quality, which isn't necessarily the case in the United States and in other areas.

I think what we're lacking a little bit is the appetite and the incentivization to capitalize on some of these risk-taking opportunities. That's a team sport. That's not just universities. That's universities and government. That's universities and industry. That's universities and the public and the not-for-profit sector as well.

11:55 a.m.

Conservative

John Carmichael Conservative Don Valley West, ON

I would agree with you on that. I heard that story, just a couple of years ago, on some of the studies this committee has generated, and talking about the valley of death. A lot of the different elements of getting to a place of commercialization is very challenging.

We talk about some of the VC models that are out there. Coming from an entrepreneurial background, I've seen VC models whose risk profiles can be very challenging. I tend to empathize with the concept of how we get that money to the right source. Is it funding more for outcome? I think that's interesting.

Mr. Hervé, you have a business background and now you've stepped into this world of innovation and creativity. Obviously, your energy is self-explanatory. I'm curious what you found coming from a business background, where all of a sudden you've come into this place that's unleashed and the future is just so bright. How do you deal with it every day? What do you do?

11:55 a.m.

Director, District 3 Innovation Centre, Concordia University

Xavier-Henri Hervé

The first and most important thing that I do is I realize that I don't know. Probably the most important thing that happened to me in that context personally is I realized that I didn't know what I didn't know. We can have a really lengthy conversation about this over a beer one day if you want, but it's a complicated conversation.

To go back to your point about the money, I believe there's an infinite amount of money on the planet in terms of investment money. They're not finding the good enough investment. The reason for this is that there are places like DMZ and places that I've learned to meet, like ours, which are adopting methods, for instance, in project management, simple things such as something called scrumming. There are methods called the lean start-up. There's product marketing. I can go on with the names of the methods. None of these methods are used in big corporations, and when they pretend to use them, they usually have a twisted version of them, very frankly. These are very ground up, base, methods. They're very organic methods. It's just a different way to think.

I have two answers to your question, one of which is we need to do a better job at making these start-ups ready to be invested in. The problem is not the investors. The problem is we don't have companies that are ready to be invested in. The corporate guys, I completely agree, are not helping us to scale this up, because they should be the ones giving customers. The government has a start-up buying program, for God's sake, and none of the corporations do. They don't have a local buying program. Your federal government has a program for buying innovations. No corporations have that. They should be getting half the tax credits when they don't do that and they should get double the tax credits when they do it, for example. It's a simple model. Right now they're getting tax credits not for innovation, but for perpetual product development. I took advantage of it, very frankly, but it's not innovation.

11:55 a.m.

Professor , Canada Research Chair in Microbial Genomics and Engineering, Biology, Concordia University

Vincent Martin

Maybe I could speak to that for just two seconds.

Noon

Conservative

John Carmichael Conservative Don Valley West, ON

Yes, please. I was coming to you next.

Noon

Professor , Canada Research Chair in Microbial Genomics and Engineering, Biology, Concordia University

Vincent Martin

I went through the process as well. I came from Silicon Valley, where I started our company, and what was over there that's not here is that environment to get you ready. The minute we were talking about a start-up, all of a sudden we had all these serial entrepreneurs. These people with a lot of experience, who had done this before, were just coming to us. They all want a piece of it, and they all tell you they know how to do it. Some of them certainly did, and some of them didn't, but just the fact that there was a support group there saying, “don't do this; do that”, or “talk to this individual”, or “go to that group” was worth a lot.

Noon

Conservative

John Carmichael Conservative Don Valley West, ON

Could you give us a snapshot of the cellulosic biofuel project you've been engaged in? Perhaps you could do that briefly, as I know we have time constraints.

Noon

Professor , Canada Research Chair in Microbial Genomics and Engineering, Biology, Concordia University

Vincent Martin

It's pretty simple but complicated at the same time. If you look at nature, nature has figured out a way to degrade wood. If we didn't have that, we'd have wood up to our ears and above. It does that in a very slow process. It takes a long time to decay a piece of wood, and when it does that, it doesn't produce anything of value; it produces CO2.

We know what the organisms, enzymes, and individual parts of that process of degradation are and we can capture them. The problem there is to bring all these pieces together to degrade the cellulose and once you degrade the cellulose to simple sugars, like table sugar, to turn that into a fuel or a chemical.

We know how to do this. Now all we have to do is beat petroleum. It's really an efficiency problem, not a process problem.

Noon

Conservative

John Carmichael Conservative Don Valley West, ON

Is there a marriage of the two, when you talk about petroleum and biofuel?

Noon

Professor , Canada Research Chair in Microbial Genomics and Engineering, Biology, Concordia University

Vincent Martin

Yes, there's no doubt about it. I tell this to people all the time. I am part of the BioFuelNet program here that is funded by the federal government. My company, Amyris, went through that, actually. It was a biofuel company to begin with.

Then you realize that all you are trying to do.... The worst business model is to sell your product as cheaply as possible. That's difficult to do, but you have to realize that on your way from a fuel, which is the cheapest thing we can pull out of the ground, to the raw barrel of petroleum that comes out of the ground, there are all sorts of high-value paths and molecules you can capture on the way over.

This is really what we are doing. We are capturing value as we are going up. As our process gets better and improves, we get to the fuel molecule. We will get there.

Noon

Conservative

John Carmichael Conservative Don Valley West, ON

Thank you.

Noon

Conservative

The Chair Conservative David Sweet

Thank you very much.

One of the things that would serve the committee very well.... You mentioned a model of incentivizing companies by either limiting or not limiting their tax credit, or maybe even amplifying their tax credit based on how many SMEs they get involved in, in their R and D, production, or whatever. It would probably be helpful for the committee if you could submit a brief document in that regard that brings it from concept to a little bit of pragmatism.

Ms. Papillon, the floor is yours. You have seven minutes.

Did I get it right?

Noon

NDP

Annick Papillon NDP Québec, QC

That's great.

Thank you, Mr. Chair.

I have here an article that was published in the Globe and Mail this week. I feel that it will be very useful for us. The title is:

“Canadians can innovate, but we’re not equipped to win”. The article states:

We have a long way to go, however. The University of Toronto’s commercialization office states that it is “in a class with the likes of MIT and Stanford.” But Stanford has generated $1.3-billion (U.S.) in royalties for itself and the Massachusetts Institute of Technology issued 288 U.S. patents last year alone; U of T generates annual licensed IP income of less than $3-million (Canadian) and averages eight U.S. patents a year. Statistics Canada reports that in 2009, just $10-million was netted by all Canadian universities for their licences and IP. Even when accounting for universities that have open IP policies, this is a trivial amount by global standards.

What could we do to improve our performance versus the U.S. universities?

Noon

Professor , Canada Research Chair in Microbial Genomics and Engineering, Biology, Concordia University

Vincent Martin

I need to speak to that, because I lived that. I came out of UC Berkeley, and I can tell you that everybody I worked with and everybody in the laboratories wanted to start a company. They all wanted to be entrepreneurs. Very few of them were actually thinking about being an academic and becoming a university professor.

That's really where it starts. You don't see that very often in academic environments in Canada. As much as I try to replicate that, it's in the culture. It's ingrained in the way they do it.

All you really have to do, and this is how they do it at Stanford, etc., is capture that energy and that desire. As Xavier said, they get him ready, coach him, and then unleash him on VCs, and it just goes crazy. It is just that environment they manage to generate and create. That's the solution.

To me it's in-my-face simple. To recreate that environment in our Canadian institutions, we need places like the Digital Media Zone and District 3.

Noon

Vice-President, Research and Graduate Studies, Concordia University

Dr. Graham Carr

Perhaps I could jump in.

I think we have a challenge in Canadian universities, even in American universities, in the way we train highly qualified personnel researchers at the graduate level. For a long time we've had a default model of training people with advanced degrees on the assumption that they're going to give in to the academy and become professors and researchers. Statistically, only about 20% of Ph.D.s who complete their program are going to end up teaching in a university context.

One of the things we need to do is to begin modifying the training regimen because we need those highly qualified people, but we need them not just in the academy, we need them across the spectrum of economic activities. What we need to be doing in universities is modifying our advanced training programs to show students there are multiple pathways, such as the pathways that could capture the excitement that Vince was talking about at Berkeley.

12:05 p.m.

Director, District 3 Innovation Centre, Concordia University

Xavier-Henri Hervé

There is a vocabulary, and it's 100% what they just said.

I can tell you the researchers in their brain frame right now see District 3 as a competitive place. Do you know why? Because the graduate students that they want to produce papers are no longer producing papers, but they're staying until 10 o'clock at night in my lab playing with brain computer interface machines. What's the problem here? That's basic, the most core example I can give you. I would go even further than what Graham said. The people who need that exponential technology, when you're talking about microfluidics, which means putting a whole lab on a chip this big, you can't explain this to a corporate guy who is 55 years old. I'm sorry, but he's just not programmed to understand it. You have to let the young guy do it on his own.

12:05 p.m.

Conservative

The Chair Conservative David Sweet

This is the toughest decision I have to make, but I'm compelled to because we have votes.

Your testimony has been very good. I can tell just by the way my colleagues have been enthused.

We need to go and vote, but if there is anything else that you feel can make a contribution, and I already mentioned the one document that would be great to get from you—

12:05 p.m.

Conservative

Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB

Because they've got incredible innovators working in the Digital Media Zone and D3, could you send us the names of the top two from each place who we might be interested in hearing from directly through the witness testimony that we have?

12:05 p.m.

Conservative

The Chair Conservative David Sweet

Maybe we could squeeze them in as witnesses before we rise for the summer.

Colleagues, thank you very much. Witnesses, please don't feel that the existence of democracy has any bearing on how much we enjoyed your testimonies.

The meeting is adjourned.