Mr. Chair, ladies and gentlemen, thank you for inviting me to appear before the committee.
My name is Martin Lavoie, and I represent Canadian Manufacturers and Exporters. We are Canada's largest trade and industry association, representing nearly 10,000 companies across the country.
The manufacturing sector is going through tremendous change because of advances in what are known as “disruptive” technologies, but what I will call “advanced manufacturing” in my speech, because that is the term we use in our sector.
In our sector there are five main categories of disruptive technologies: additive technologies, more commonly known as 3D printing; robotics; automation; connected objects, or what we call the “Internet of things”; and new materials, including new nanotechnology applications.
First of all, I'd like to congratulate the Minister of Science and Technology, Minister Holder, for including advanced manufacturing in the science and technology policy back in December. I think it's a great vision. It's a recognition that advanced manufacturing is not only part of disruptive technologies but actually driving the innovation agenda in Canada.
Why do we call those technologies “disruptive”? First of all, they represent nothing less than a fundamental shift in the paradigm of fabrication. Take, for example, additive technologies. You're basically going from a subtractive method of fabrication to an additive method of fabrication. Right there is a major shift in the way you think about product development. More importantly, it not only changes the way you make things but also the way you design things, because 3-D printing allows you to design parts, components, or products that you would not be able to fabricate under traditional methods, such as cutting, drilling, or CNC machining.
They're also disruptive because they are reviving industries in Canada and elsewhere that we thought were pretty much gone forever. The best example I can talk about is probably printable electronics and their applications and what we call the “smart” textile industry. How many millions of people in Canada worked in the textile and apparel industry in the past? Ten years ago, who would have invested in an apparel facility in Canada? Now we're seeing, with those integrated sensors and smart textiles, a lot of entrepreneurs going around with new business ideas that have a lot of potential here because of this technology. In one way, it's disruptive not only because of the method of fabrication but also because it's reviving industries that we thought were gone.
I would like to congratulate the National Research Council for making the printable electronics flagship program a reality in Canada. I think it's a great vision. This is certainly an area where Canada can be leading globally.
There's a third reason why they're disruptive, and it has much more impact than what I just talked about. They've really changed the way we look at economic development and entrepreneurship. ln recent years we've seen the emergence of what we call the “maker movement”. It's pretty much a cultural transformation where people now have access to affordable means of production. The maker movement is a cultural movement, but concretely, they get implemented through what we call “makerspaces”. Makerspaces are physical locations where you put a lot of advanced manufacturing equipment such as 3-D printing, laser cutters, electronic boards, water jets, or whatever. People buy a membership, and they can use the facility to access the machines and maybe prototype new products.
More importantly, it also allows those makers to get together with other makers and do co-development of products. A lot of the people you see on Dragon's Den, for example, are members of makerspaces from across Canada. I looked at how many makerspaces we have, and I found about 50 in Canada. The most well known is AssentWorks located in Winnipeg.
I don't know if anyone here is from Winnipeg. If you ever have a chance to visit them, I strongly recommend that you do so.
Concretely, the maker movement here in Ottawa offers a very good example of how disruptive technology such as 3-D printing can actually fuel entrepreneurship. In 2012, grade 9 students from Ashbury College in Ottawa started their own 3-D printing business in a science class from an idea that they had to build customized iPhone cases for their friends. After developing a business plan, the students got seed funding from their school's entrepreneurial competition, which allowed them to purchase a small 3-D printer. They set up their business making customized iPhone cases for their friends, and they were selling them through the Internet. They were 16 years old. That makes me think about how disruptive it could be if every 16-year-old kid in this country had access to a makerspace in their high school. It would be totally disruptive.
ln conclusion, I would like to point out a couple of policies that we may want to talk about during this meeting that are actually affecting the adoption of those disruptive technologies, especially within SMEs. As I said earlier, the recognition of advanced manufacturing in the science and technology strategy was a good thing. However, something that has hurt the capacity to adapt those technologies is the elimination of capital expenditures under the scientific research and experimental tax credit. This elimination took place earlier this year, in January. When I talk to the people who actually sell the 3-D printers or sell advanced pieces of equipment, they tell me it's eliminating an argument for them to actually accelerate the adoption of those technologies, especially within SMEs.
We'd like to congratulate the leader of the NDP for making the commitment to look at how we could reintroduce a tax credit for the capital expenditure in advanced manufacturing. I invite all parties to look at ways in which we could develop a tax structure that would actually accelerate the adoption of those technologies. It doesn't have to be through the SR and ED program. It could be through another tax structure.
Thank you very much. I look forward to your questions.