Evidence of meeting #46 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 technology.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Colin McKay  Head, Public Policy and Government Relations, Google Canada
Martin Lavoie  Director, Innovation and Tax Policy, Canadian Manufacturers and Exporters
Wendy Cukier  Vice-President, Research and Innovation, Ryerson University

12:30 p.m.

Liberal

Judy Sgro Liberal York West, ON

It should be both of them, without question.

Going back to you, Mr. Lavoie, I thought it was really interesting to hear you talk about the makerspaces and how that really came together independent of government. Could you elaborate a little more? I thought it was quite fascinating.

12:30 p.m.

Director, Innovation and Tax Policy, Canadian Manufacturers and Exporters

Martin Lavoie

To give you a bit of background, a makerspace is actually a derivative of what we used to call the “hackerspace”, which was a bunch of people, and if you've seen the Facebook movie, they get into the basement, they drink beer, and they try to get into a government website. The one who wins gets a job.

It's this same idea of sharing knowledge and skills and accessing the means of production to develop something without necessarily owning the property of anything. I always think that if I were a philosopher, I would say that it's the discussion that Karl Marx and Adam Smith would have if they were to have a beer together at the Royal Oak. It's about developing a business without owning the means of production. It's completely changing the paradigm.

Going back to your question about entrepreneurship, what is interesting is that what we see a lot of these days is makerspaces in high schools. It's as simple as that. Give them the means. I've seen these kids at the University of Ottawa makerspace who were eight years old and doing the engineering summer camp. They were printing little Minecraft figurines with the printers. They were fascinated. Kids love to make things. We all do. When we were kids, we loved to build things. They just loved it. They learn to design, to scan, and to use their creativity.

It seems to me that it's the first step before I teach them about entrepreneurship. You don't really teach it. You give an ambition. You inspire someone.

12:30 p.m.

Conservative

The Chair Conservative David Sweet

Thank you, Mr. Lavoie. I'm sorry, but the time is always moving forward.

Mr. Daniel, you have six minutes.

12:30 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

Thank you, Chair.

Thank you, everybody, for being here.

I'll ask various questions. I'm going to start with Mr. McKay.

I'm really just trying to better understand looking forward in terms of disruptive technologies. What criteria do you use? Why have you invested in automated cars versus thorium for developing power? Why have you decided that? Are there set criteria that you're using? What are they? Even Google has limits, right?

12:30 p.m.

Head, Public Policy and Government Relations, Google Canada

Colin McKay

Funnily enough, we have invested in alternative methods of generating power.

For us, particularly when we're talking about transformational technologies, it really comes from this point of view: do we see an element of the science and the ability of the science to develop and to address a truly fundamental problem for society? As I said, that's one part of the company. It's the ambition to take the resources, which thankfully we have available to us, and focus them on those large-scale problems, knowing that we have the employees that have both the skill sets and the interest in tackling those problems.

Importantly—and it feeds back to our earlier conversation—this also reinforces among our employees and our corporate culture that we're willing to take risks and we're willing to invest in these sorts of moonshots.

12:30 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

Hopefully you get a big return out of it when some of these technologies develop, so that's also a fairly motivating factor, I would have thought.

12:30 p.m.

Head, Public Policy and Government Relations, Google Canada

12:30 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

Mr. Lavoie, I have a question for you. You gave us the example of 3-D printing, which is fantastic. It's a local technology, etc. But my question to you is from a manufacturing point of view. Is that technology actually going to change the way manufacturing is done?

In other words, is it going to take that low-cost labour element out of it so that some of these jobs now will actually be good jobs here in Canada that we can actually develop and expand? Are there any other technologies that are doing that sort of thing in manufacturing?

12:30 p.m.

Director, Innovation and Tax Policy, Canadian Manufacturers and Exporters

Martin Lavoie

I do not believe that any of these technologies will kill jobs. What's killing jobs in this country, I'll be quite honest with you—

12:30 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

Will it create jobs?

12:30 p.m.

Director, Innovation and Tax Policy, Canadian Manufacturers and Exporters

Martin Lavoie

It will create jobs. It will create opportunities for new things that don't exist right now.

What's killing jobs in this country is low productivity. I was telling Wendy that here we fabricate 45 dollars' worth of goods in one hour of work. In the U.S., it's $60. That is killing jobs. The 3-D printing and automation are not the problem. They are the solution to that productivity problem.

It's also the solution to our demographic problem, because we have a reverse pyramid here, where a lot of people are retiring. Also, I think we have a big education gap in this country, right? That is exploding in our faces right now, because people don't have the advanced mathematics for the 80% of manufacturing jobs that out there right now. They cannot access manufacturing anymore, which wasn't the case 25 years ago. You could work in a pulp mill or in a sawmill. You didn't need that much education. It's totally the opposite today.

All of this is a solution, not a problem. For example, 3-D printing is going to change manufacturing when you have more materials that can be used on a printer. Think, for example, of all the inventory you need to carry in a country for, let's say, spare parts or automotive parts. Let's say you go to the dealership because you need new brake pads. They don't have them. They have to order them, and then they come in the next day. That's a lot of time and a lot of resources. I can envision a future where you're just going to print them on demand when you need them.

So it's going to create—

12:35 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

That's kind of where I was heading with that. You normally print it on demand, but now you're printing it here in Canada to make that product that you want, like some of these drones, etc.

12:35 p.m.

Director, Innovation and Tax Policy, Canadian Manufacturers and Exporters

Martin Lavoie

When you think of the mass production system of economics, it's totally irrelevant for 3-D printing right now. There are three things that 3-D printing is based on: complexity, low volume of production, and mobility of production, as I said.

12:35 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

But there are disruptive technologies, such as inkjet printing of organic components, which some people are doing here.

I'm just trying to get the break point, where the jobs will start flowing back here because the technology is here. You won't need that cheap labour cost elsewhere, because it's being done by machines more. As a result we will actually generate skilled jobs in Canada, and that should increase.

12:35 p.m.

Director, Innovation and Tax Policy, Canadian Manufacturers and Exporters

Martin Lavoie

When is it going to happen? That's the question I cannot answer.

12:35 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

I was hoping you could, but it's certainly interesting from that perspective.

Obviously, you're also making big decisions about which folks you're going to actually support in terms of development at Ryerson in the DMZ. What criteria do you use to actually determine which pieces should be done?

12:35 p.m.

Prof. Wendy Cukier

It's a good question because we have different criteria. In our learning zones, the principal criterion is student learning opportunity. So whether they succeed, fail, or make a lot of money or not, we run a program that's funded by the province called Summer Company. They get $3,000 to start a business in the summer. As long as they go through the process, they're fine and we give them the money, and that's because of the learning opportunity.

When we get into, for example, our accelerator-incubator for digital technology and gaming, which is funded through CAIP, the criteria are job creation and successful businesses. The criteria there are really applied by external business people working with experts in the field, based on predicting if this is a good business that will create jobs.

It depends on which program and which part of the university. Some are education and some are jobs. In some cases, it's return on investment for the institution.

12:35 p.m.

Conservative

The Chair Conservative David Sweet

Thank you very much.

Ms. Papillon, you have six minutes.

12:35 p.m.

NDP

Annick Papillon NDP Québec, QC

Thank you very much, Mr. Chair.

As you know, Canada is the only developed country with an intellectual property deficit. That means that we spend more buying other countries' technology than the rest of the world does buying ours.

In a recent article I brought to this committee, the author, Jim Balsillie, criticized the fact that Canada has no intellectual property strategy. The European Union has a sophisticated system for protecting intellectual property. Obviously that is part of the Canada-Europe Comprehensive Economic and Trade Agreement, which ensures prosperity for Europe's pharmaceutical industry.

Do you think that Canada still has a way to go when it comes to protecting our businesses' intellectual property? I think you will all have something to say about that.

12:35 p.m.

Head, Public Policy and Government Relations, Google Canada

Colin McKay

I will start, but I will continue in English.

12:35 p.m.

NDP

Annick Papillon NDP Québec, QC

Okay.

12:35 p.m.

Head, Public Policy and Government Relations, Google Canada

Colin McKay

I think I've read the article that you're referring to by Mr. Balsillie and he raises some important points, especially about start-up companies and their capacity to tackle intellectual property, particularly patent challenges, as they look in the international market.

My response to that article would be that we're talking about capacity building for entrepreneurs and innovators, and their ability to understand intellectual property provisions and to protect their innovations on a global scale. We're not necessarily looking for national mechanisms to create an intellectual property inventory. It's more that in the same way that we need to educate them on entrepreneurship, risk-taking, and growing their business from SMEs to larger exporters, we need to give them the tools so they understand their intellectual property rights and have the ability to exercise them globally.

I would actually say that from our experience within the high-tech sector, there's a danger in concentrating on intellectual property as a physical value and a token of economic success, because it can often become a brake on innovation when it's exercised in the wrong way. There needs to be a flexible and responsive patent system that provides the opportunity for innovation by small and large companies alike.

12:40 p.m.

NDP

Annick Papillon NDP Québec, QC

Mr. Lavoie, what do you have to say about this?

12:40 p.m.

Director, Innovation and Tax Policy, Canadian Manufacturers and Exporters

Martin Lavoie

I do not think it is a question of having more or less. It is about achieving a balance.

As Mr. McKay said, it is important for a company that invented something to protect its market for a certain number of years. That is true in the pharmaceutical sector. If companies do not make money, they will not make new drugs.

At the same time, we want less expensive generic drugs. Where is the balance? Are we talking about 10 years, 12 years or 15 years? I hear from both sides in the manufacturing sector. Some people feel strongly that everything should have intellectual property protection. However, many representatives of SMEs tell me that it is not worth the trouble. In any event, technological change happens so quickly that even if I have protection for 20 years, in five years I am going to have to innovate because my product will not last 20 years. Technology life cycles are not long enough.

I hear both sides, and I am not sure whether more or less is needed. I think we need to strike a balance between the two.

Think about 3D printers. The first patents for 3D printers date from 1982 or 1984. Things exploded when the patents expired, because everyone could use them and create different applications. We need a little bit of both.

12:40 p.m.

NDP

Annick Papillon NDP Québec, QC

Is it a good strategy to set that aside for a while and tell ourselves that it is constantly changing in any event? It may be necessary to constantly update it as much as possible, knowing that we will not always be completely up to date and that the strategy will always have to be improved. Can we not start now? Do we not run the risk of falling behind other countries?