Evidence of meeting #49 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.
Vice-President, Technology, Mirego Inc.
There are really two aspects to it. The first one—
Vice-President, Technology, Mirego Inc.
That is part of my comment.
Our true comment is that often the problem we find in innovation is that we're redefining something that's either not defined or that exists in physical form and that we try to make digital, and the same rules don't apply. Copyright is a big example of that.
The other aspect is giving the means for us and our clients to be able to innovate, being able to take risks and share in the success and to be there to support our clients and us in cases when we fail. It hasn't happened yet, but you never know.
Those are really the things we're looking at.
Liberal
Judy Sgro Liberal York West, ON
Mr. Stuart, it's the same idea. What can we do as MPs to help you in your success and help you to further growth in Canada and employment as well?
President and Chief Executive Officer, Isowater Corporation
There are two areas there, in general terms, as I discussed today. This ecosystem for entrepreneurial businesses, particularly those focused on disruptive technologies, which take time to commercialize and must have eyes on a global market, cannot just look at domestic markets. But we want in Canada to have prosperity, so we have a role for government to ensure all these things. It really is very important to be cross-departmental. We need EDC, which I believe is under Finance. We need, of course, the Department of Industry. We also need International Trade.
We need to cooperate with the provinces in their programs. We need to have intellectual property arrangements that are right. We need entrepreneurs to have incentives to be able to take risks.
We need to cherish failure. We can't be so afraid of failure that we can't take any risks because it might fail. If some things don't fail, then we're not pushing the edge enough. We need to embrace this.
We need to recognize that we're not America. In a way our biggest risk, I feel, is that Canada in the eyes of America can be simply seen as off-balance-sheet research and development. All our great programs and things that we worked so hard in Canada to bring forward are off-balance-sheet research. The capital will come in and take the idea away and then it's on balance sheet, but partially or all out of Canada. We need to recognize that and we need successes in Canada to refill the coffers of successes.
In my particular case with my company, we're focused very much on the evolution of Atomic Energy of Canada Limited, going through Canadian Nuclear Laboratories as a transition to a government-owned but corporately operated enterprise. The ability for Industry Canada and these other programs and for the Chalk River laboratories to be part of this ecosystem is a tremendous opportunity for Canada and Canadian firms. It's particularly dear to our heart and soul to succeed.
That means we need to have patience and support and the encouragement of processes to move technology and know-how out from Canadian Nuclear Laboratories into the markets, both nuclear and non-nuclear. It's Canada's best research and development organization, with 3,000 scientists and engineers. If we don't champion this in a way that can benefit all Canadians, we'll really miss something in Canada. It's just a rock-solid base and a pillar, as I said, of disruptive technology.
President and Chief Executive Officer, Isowater Corporation
In the last three years, I think we kind of.... About five years ago we started our collaboration with Atomic Energy of Canada. There was before the restructuring, and then there's now during the restructuring. The restructuring has supported us in the type of thing we're doing. Instead of Natural Resources Canada funnelling money straight down to the AECL structure to support commercial operations of CANDU reactors, it's still supporting CANDU but we're bringing real money in to the sides, going back up, and reducing the burden. If things change and we're cut off from access to this through this transformation, then we're in jeopardy. As I say, we're kind of like the canary in the coal mine, in that sense.
I remember meeting with the President of the Treasury Board a few years ago. I explained to Minister Clement that I'm here to try to put money into the treasury, not to take it out, and to really get funds into Atomic Energy of Canada, reducing the burden on Natural Resources Canada, because there's so much depth in technology and expertise at Chalk River. That is a real asset to Canada. We need to convert that into basically the pillar of disruptive technology in Canada and make sure that all our programs, such as Industry Canada's, are there to support enterprises like ours, and that rules are set up that we can still approach them after the transition.
Conservative
Liberal
Conservative
Mark Warawa Conservative Langley, BC
Thank you to the witnesses for being here.
I'd like to focus on energy. A couple of you have mentioned energy. I think Mr. Stuart talked about hydrogen fuels in the past. That has its applications, but in the vision, it maybe did not transform industry to the extent that the vision suggested it might. It has some very good applications now that are being used.
With regard to battery storage and moving to electric vehicles, how do you see...? Mr. Stuart touched on what's next and thinking out of the box. Where do you see transformative technologies that become disruptive when they actually are put to use? Where do you see us going? What's next in energy and waste management?
Any of you, what are your comments?
President and Chief Executive Officer, Isowater Corporation
Would you like to go first?
Executive Director, National Institute for Nanotechnology, National Research Council of Canada
We work not only with the energy sector as it exists now, but also in thinking about other sources of alternative energy. It goes hand in hand with things that take a long time to develop, which may be there as alternatives co-existing with the energy sources we now have.
There is a very large opportunity in the area of biomaterials. The sort of research we do in nanotechnology is intimately linked with materials. As we look at materials, we ask how we can do a better job at mimicking nature and how we can use biomaterials, materials that are designed so that they work like biological materials. Biomaterials often have the advantage of being degradable and they're not toxic. It's an opportunity for Canada, which is rich in resources, to help the forestry industry for example, and the materials there. Among the materials in nanotechnology, we worry about nanocrystalline cellulose. How is that a new material? How is it going to affect medicine? Could we use it as a material in automotive and aerospace applications, and so on? It's a new material system that can help sectors in which Canada does very well.
As I said, we take the approach of looking at materials from a perspective of toxicity, degradability, environmental impact, and the life cycle of the materials. In many of the comments that were made, I think social licence to use....
With disruptive technologies we also have to think about the impact on our society and whether it is something we wish to have in our future. We've had to address that with nanotechnology because as we decrease the scale to the atomic scale, the same material could be non-toxic at large scales and become toxic at certain scales. We have to understand the toxicity aspect. We have to understand whether this is something we want in our environment. If I make a device, if I make a new sensor, what's the impact on the environment when it degrades in the eco-centre?
With disruptive technologies also come these other aspects. From Industry Canada's perspective, it means a collaboration between NSERC, SSHRC, and CIHR. Often disruptive technologies leverage different disciplines. There are engineers working with biologists, physicists, chemists and social scientists. That's the approach for disruptive technologies, so that, for a very good technology, we won't get to the end point and say that we'll never get acceptance for that and we should have worried about that from the very start. That I think is an aspect of disruptive technologies that we have to support.
President and Chief Executive Officer, Isowater Corporation
To add to that I'd like to quickly reference a book by the Canadian Academy of Engineering called Canada: Becoming a Sustainable Energy Powerhouse. It discussed nine big ideas, projects that Canada should pursue with mission-oriented leadership. In the 1950s and 1960s Canada would take on one such project a year. Now it seems we try to cancel one project per year.
I think the way these large projects connect to the very small elements of disruptive technologies is today large projects, be it a pipeline, an oil sands, power in the Northwest Territories or power in Newfoundland, these projects often will use components that are disruptive technologies, and they will help create sustainable large-scale projects. Many of these are in the energy sector. I think Canada also needs to look at big projects where disruptive technologies can be a part, and this will help us.
Going back to hydrogen and things like that and what's next, the role of hydrogen is now very well defined, much more than it was 15 or 20 years ago, both in understanding where gasoline hybrid electric technology can get us, and where pure battery electric can go. There's a very clear path now where hydrogen fuel cells or internal combustion engines can really make a difference.
It will decarbonize the car. If decarbonizing must go ahead, it will allow that to be done on the ground where fuel is being produced, and it will make practical vehicles that get refilled in a few minutes and have a range similar to that of a gasoline car.
I think that role for mass transportation for hydrogen vehicles is clear. As you said, there are many other very higher value-added applications for hydrogen technologies today, and I'm really excited about that.
I'm not involved in the field directly today, but I'm more optimistic than I've been in 15 years in the innovative capacity of Canada, that the cost of the technologies, the development in the marketplace has moved so far forward from 15 years ago when my previous business was developing innovative ways to fuel vehicles in your driveway, or at the bus depot in Vancouver, or whatever.
This stuff is now certified, endorsed by so many large corporations, and once a week or once a month one of the major car companies releases all their patents on such technologies, in other words to create the ecosystem again of sufficient parts suppliers getting mass-scale production, and bringing them down.
I think Canada should revisit its hydrogen focus that we had many years ago—it petered out—because I think right now these value-added applications you're talking about are going forward in the short term, but I also see the hydrogen car coming forward irreversibly, and I think Canada's very well positioned to exploit that and be a leader.
Conservative
The Chair Conservative David Sweet
Thank you, Mr. Stuart and Mr. Warawa.
Now we'll move to Ms. Nash, for eight minutes.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Thank you to our witnesses for being here today.
I'd like to pick up on something you raised earlier, Mr. Stuart. You talked about that opinion piece written by Mr. Balsillie a while back in The Globe and Mail. He talked about Canada not getting its innovation infrastructure right. He talked a lot about IP, and he made a number of recommendations. One of them was for sovereign patent pools to help SMEs especially and that Canada had fallen behind other jurisdictions on this.
In your experience, would that be helpful, or is it something you have felt has been lacking and Canada should address?
President and Chief Executive Officer, Isowater Corporation
Mr. Balsillie is extremely knowledgeable, and that's why referencing his article covers a great deal of scope within a very few moments. I think I would take everything he says quite seriously.
I found the patent issues really interesting and how trade agreements are set up. The Americans have it together. They really understand how to corner the industries, how to make things to benefit Americans. We need to examine how we can counter that to the extent we can, recognizing they are very powerful and they have a lead on this collaborative thinking of how to make their industry strong.
As I pointed out, I think that would be one of the ecosystem ingredients that we really need to get together on to make a great success of our country.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Several witnesses have talked about the importance of post-secondary education, of investing in innovation, making moneys available. Mr. Balsillie, in his article, quoted an American at a conference he was attending who said, “I don't worry about small innovators.” It's as though the lead time, all of the risk, is being taken here or in another country, but when they get to a certain size, that's when they move in and purchase.
How do we, in your experience, foster a situation where if we are investing as we are in post-secondary education, we are investing in innovation, and as many witnesses including yourselves have said, failure is a big part of this.... If you're taking the risk both publicly and privately, how do we better reap the rewards and not have a situation where those start-ups get grabbed by the bigger fish, usually in another country? Do you have any thoughts on that?
President and Chief Executive Officer, Isowater Corporation
Yes. It's a very good point and it's absolutely what I referred to earlier. To America we are off-balance-sheet R and D, and when it looks good then we become on their balance sheet and many of us move to the United States. I think this is a really important thing to address. I'm not the first person to say that. It's been something we've talked about in Canada for many decades and I think there's a....
I go to Boston quite a bit in my business now into the life science industry, and I just find it amazing, the contrast. I live in the Collingwood area on a farm and when I drive to Toronto, I always come into Toronto and I see all these warehouses and these trains with Chinese-delivered cargo going into distribution centres for consumption. I don't see industry in the surroundings of Ontario. I go to Boston and I see industrial parks, technology innovation parks, where I go around a corner and there's a lovely treed area, a beautiful suburban area in outer Boston, where there are eight buildings. Each of them has two or three highly innovative, in the case of Boston, typically life sciences companies, but quite a lot. You go into their boardrooms and you see 10 or 15 patents along a wall, and over on this side of the boardroom you see the various plaques of the venture capital companies that are funding that particular enterprise. The system is successful. It breeds success. It's very difficult for Canada to compete against that, but we must try. We must do better. It's that sucking sound to the U.S. I think it's very hard to compete with that level of innovation.
Demonstrating our technology in Canada is really important and certainly pilot and prototype.... My companies in the past deployed a strategy where we would work with our government support, perhaps with Natural Resources Canada, helping us de-risk things. We tried to develop the intellectual property in Canada. Then we'd collaborate with the U.S. Department of Energy, where they have deeper pockets, to do demonstrations in the United States. We'd avoid like the plague trying to create new intellectual property on those contracts, because if you're a foreign entity demonstrating something in the U.S., then the U.S. has a right to license to a U.S. firm. There are strategies like that where we can work with Canada and still benefit from the U.S., but try to keep our knowledge and expertise in Canada.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Continuing along that line, and I'm happy to have other witnesses come in on that, what are some of the key factors that lead to that success?
For example, does the national origin of a company make a difference? In other words, do domestic companies tend to do more R and D and innovation and then development here in Canada, or is national origin of a company irrelevant? Are there things like patent pools—people have talked about an innovation box—for developing patents? Are these things important? How do you prevent the smaller companies from getting picked off?
It doesn't always happen. We have the Bombardiers of the world, which are global success stories. We have BlackBerry, which has been a phenomenal success. But we also have the Nortels, which came and went.
How do we create more of these success stories, and are they by necessity Canadian or can foreign companies have that same kind of success?
President and Chief Executive Officer, Isowater Corporation
I think we need foreign investment.
In the number of ventures I have developed, there has always been some Canadian support and leverage with some of our government programs to advance a prototype. As we got close to something that visibly looked like a product and could be brought to market, it was U.S., Austrian, or Hong Kong funding that came in and gave us that lift up.
As far as I am concerned, we're missing that element in our capital. It's foreign nations and foreign investors. I get excited when I have foreign strategic partners on the phone with me because I know they're serious. Yet at the same time, I need to protect my Canadian base and my resources.
I think with filling in that gap we need bigger risk takers. We can't be a nation of greatness without taking risk.