Industry Committee on June 4th, 2015

[Patrick Horgan]

Yes, but let's take advantage of where we do that. We do it far more in Canada than we do in other countries, frankly, for some of the ratios that were being applied here.

I was trying to get it to $100 per employee, Madam Dubé. We're at some $35,000 per employee on our R and D spent. You're right that we are a little bit unique, but I think in a way we are dragging others too; we are hearing of other investments coming into Canada. By the way, even Silicon Valley companies, many small ones, are now coming to us and saying, “Why are you there in Canada?” And, “Gee, I hear you have running water. We don't have that in California.”

[Voices]

Oh, oh!

[Patrick Horgan]

By the way, to get an engineer in Silicon Valley right now the price is three times that it is in Ontario or the rest of Canada, and the cost of living is four times as high there.

We have some competitive advantages here. I think we not only just have to be our Canadian selves—and I've been a worldwide employee for a long time, and I'm very Canadian—but we also have to say we can do it here and start to create those opportunities and those ecosystems to drive success.

[Joe Daniel, Conservative, Don Valley East, ON]

Madam Dubé, do you have any comments?

[Jacqueline Dubé]

Yes, absolutely.

You are wondering whether we will always have to adjust and how we will be able to do so. I would say that individuals adjust fairly quickly to what they need. Businesses have no system to transform work processes. Sufficient thought has not been given to transforming professional practices. Digital technology is not used enough in Canada.

Canada-wide studies were done to see whether companies, such as SMEs, buy enough customer management systems. The answer is yes, but the problem has to do with how they are used. Their use is not effective and, all too often, companies struggle to determine the size of the system that they really need. They invest a lot of money, get discouraged and give up, which is unfortunate.

The Government of Quebec is asking us to regularly assess the digital skills in some companies. Employees have digital skills as individuals, but in the workplace, they must automate and transform their work. For the rest of our lives, we will have to do that with all systems. In education, for example, not every student needs to have an iPad or computer to improve their digital learning ability. It is a mistake to want to equip everyone, but teachers need to take a different pedagogical approach. Therein lies the problem. In our daily lives, the transformation is not enough.

I am very familiar with the Government of Quebec, but I know that the Government of Canada has good tax measures to encourage technology development. The fundamental question is whether companies, be they private or public, make optimal use of the technology. The answer is no. The gap is now widening. Canada's situation is becoming worse every year in these sectors in terms of adopting the technology because it does not make sufficient effort in this area.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

Dr. Sullivan, do you have any comments?

[Dr. Pearl Sullivan]

I think we all know that we cannot tell our children where to go. What we need to do is to incent our young people to stay home.

I think that critical ecosystems which are highly differentiated are very important because of the geography of this country. In my view we have a system, and in engineering we have three levels of huge engagement: the major companies, the small and medium-sized businesses, and the start-up community.

The start-up community should look to and work with all of IBM, Toyota, GM, and Magna equally to be part of this non-linear process, because for the deployment of disruptive technology, first you have to develop it and then deploy it. There is a chain of events that's highly non-linear and very complex.

If we put them all in the same ecosystem, they learn from each other and they can have a common platform to build off each other, and they complement each other. The new products and services will come from the complementary connection.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

Madam Gagné, do you have any comments?

[Claude Gagné]

I think the government could do a lot to develop a culture of innovation here in Canada. In fact, it starts very early. It starts with young children.

Young children should have access in their community to tools that enable them to make prototypes, make toys, whatever, and for this we need, of course, at least some minimal infrastructure. Whether it's in public libraries, in community centres, in tool libraries, or wherever, it needs to be accessible, and the more accessible it is, I think, the more Canadians will embrace these new disruptive technologies.

[The Chair, Conservative, David Sweet]

Thank you, Madam Gagné.

Thank you, Mr. Daniel.

Ms. Liu, the floor is yours for eight minutes.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Chair.

My first question is for you, Ms. Dubé. Your presentation was very interesting. I would simply like to know whether you think open data plays an important role in disruptive technology and whether the federal government should play a role by developing a national strategy or taking a concerted approach in terms of the availability of open data.

[Jacqueline Dubé]

You are absolutely right. Open data is essential. The important part is to find out which data must be released and how they can be used. We must measure how they are used, what return on investment that can produce and how that can change our society.

For example, I can tell you that we are doing a study for the Quebec Treasury Board measuring the impact of open data and figuring out whether only society will use them, or whether the data will be open between departments. We have also done it for cities in Quebec, again at the Treasury Board's request. Open data will change the way we do things because they contain information that, if we use it intelligently, can lead to very disruptive technologies and software that are also very productive for society.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Yes. In the discussions I have had about open data, I found that it had tremendous potential, but also a number of challenges, especially since there is no real communication between the databases of the provinces.

In your view, should the federal government play a coordinating role?

[Jacqueline Dubé]

I am sure that the federal government has a role and a responsibility to support all the provinces so that they interconnect their ways of doing things and develop a common approach with the necessary algorithms to go find the data, without there being a new initiative or experiment in each place. Yes, the federal government could play a major role in that sense.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

The next question is for Ms. Sullivan from the University of Waterloo.

You say in your presentation that curiosity-driven research is essential. Would you have any recommendations for the federal government regarding finding a balance in terms of funding curiosity-driven research and industry-oriented research? Do you think there should be federal funding specifically towards discovery research?

[Dr. Pearl Sullivan]

NSERC has been very important for scientists, engineers and mathematicians in this country. There is a core program called the discovery grants program which is absolutely important.

They're not large in a sense; they are about $20,000 to $50,000 for each professor, but they allow you to seed big blue items, big-vision items, and the things that professors who are interested in pursuing, they can pursue. I do think it is a program that all professors across the country will agree we need to expand. There are collaborative research and partnership programs, a swath of them, many of them. They are also very important, because they engage companies, and because of those programs we have engaged over 1,000 companies. We know that every time a new program comes along, NRC, NSERC, Mitacs, all of them are working very hard to try to connect industry with the university. All the officers on the ground are really working hard trying to make it happen. I do think that there is still a fear of risk. These things are very important as enablers, and it will take time, but with time you can overcome the fear of risk.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

I think it's important, because we've heard from other stakeholders how important the discovery grants program has been and we've seen over the past few years a lack of investment in this program. I think on the NDP side, we'd certainly be in favour of reinvesting in discovery research.

Moving on to another subject, the status of women committee is actually doing a study on women in STEM, which is really an interesting topic. Although your presentation didn't touch on this, many witnesses in the status of women committee noted that in order to encourage women to enter engineering, it's really important to portray it as a helping career, so really to further educate those who would go into those careers.

How do you think we could encourage women to be part of innovation ecosystems? How could we further encourage them to create future disrupters? Do you have any recommendations, either for industry or for government, in terms of increasing the participation of women?

[Dr. Pearl Sullivan]

That is a very important question, so thank you.

About six years ago we started a portfolio in the dean's office. The associate dean for outreach, Professor Mary Wells, has been working on a program for seven or eight years now on how to improve gender representation in technology. One thing we've done is we've collected data. We run a program called engineering science quest, in which 2,000 students from all over Ontario come to campus to learn about technology, starting from wee young all the way to grade 12. What we've learned is that girls are very excited up to grade 7, but in grades 8, 9 and 10 something happens. I don't know if it's hormones, but something happens.

We've also learned that physics is the showstopper. I think physics teachers are extremely important. All the schools in Ontario require students to take science, which includes some physics, but they do not necessarily enrol in physics classes at grades 11 and 12. In most universities in Canada, you cannot really enrol in an engineering program without physics. Physics needs good teachers. Physics needs a lot of support. Mathematics is not the showstopper. In fact, female students are topping a lot of the mathematics competitions.

I do think it takes years. After six or seven years of effort.... She's also the Ontario Network of Women in Engineering chair, and is helping all the schools of engineering in Ontario to promote engineer education. For the first time at the University of Waterloo, the first-year entrance class is 27% female. The limit, I believe, is 33%, simply because of the physics enrolments. We launched a biomedical engineering program last fall for which we had 900 applicants for 50 seats. We turned away hundreds of very strong female candidates, so it's a tough situation. We have to keep working at it.

[The Chair, Conservative, David Sweet]

Thank you very much, Ms. Sullivan and Ms. Liu.

Now to Mr. Warawa, for eight minutes.

[Mark Warawa, Conservative, Langley, BC]

Thank you, witnesses, for being here. It is very interesting. I was looking forward to today. It's a high quality of testimony we've heard.

We are in a time of change, and it's happening very quickly. Madam Dubé showed us those pictures at the elections of the pope, and after eight years the use of smartphones. What a difference. Change will happen, whether or not we want it to.

Mr. Horgan, you said that your have disrupted yourselves, referring to IBM, and you found it to be very successful. Business has to do that. When we were in Hawaii years ago, there was the Kodak hula show. There is no Kodak hula show anymore, because they didn't adapt to change. IBM has and has done it very successfully, creating a great business enterprise in Canada, benefiting Canada with jobs and investment, lots of investment.

A year and a half ago I was on a flight and I was talking to an IBM employee who talked about Watson and the diagnostic use of supercomputers. Maybe a year before that my GP had computers in his medical practice office and everything was done digitally. When you went for an X-ray, a blood test, or whatever, the information, the X-ray or whatever, got to the doctor almost immediately. So the timeframes....

Now, we have one of the best health care systems in the world. It's not perfect. There never is enough money to do everything, so we have to use the limited resources we have, provincially, federally and locally, smarter. My question for all of you is: how do we use the limited resources that we have smarter?

I believe all levels of government realize that we have to invest, we have to partner, and we do. How do we do it smarter?

Mr. Horgan, maybe you could start. I think we have great potential in that we have IBM in Canada. We have one of the best medical systems, but how is this going to change? In the meeting I had on a flight a year and a half ago, the IBM employee was so proud and was bragging that there was a test where they had Watson diagnosing treatment, as opposed to doctors' human diagnoses. The success rate for Watson was...well, as you said, they can even diagnose much quicker, know what's coming down. How is this going to change our medical system?

[Patrick Horgan]

That's an excellent question, and it actually has a very big application for the public sector to think about. To give you an updated version of that, we are now very heavily invested in oncology in this cognitive computing we call Watson. I was with one of the federal ministers in our labs in New York—unfortunately, it was in New York, but we'll have it in Canada soon—where we were looking at an oncology patient. What it does is it looks at thousands and thousands of medical records, including the individual's, but also all applicable cases, and it asks what the best outcome would be for the patient. They think about the patient when they do it.

It has a ranking of diagnoses that you could use. The doctor does the diagnosis in the end, but the interesting thing is that the third best diagnosis and treatment, which was the most conservative, was full radiation and full chemo. That was the third best according to Watson, 55%. There was a 90% and an 85%. With hybrid versions where the patient does not lose her hair—the patient was a young mother—she has better outcomes. Actually, the best part is that, at the end it cites out of all those millions of medical records that they're looking at the exact trusted cases to explain why it says this.

The doctor can decide whether that's what they want or not. By the way, it does it in three seconds. It doesn't do it in years. It does it very, very quickly and prevents many other invasive tests of other types that patients generally have to deal with.

I'll give you one other example for disruptive purposes. We put it out in a competition to a bunch of universities. U of T came in second in the competition about two months ago, and they actually applied it to the legal system. The legal system wasn't what we were thinking about, so this is an example of where we said to put it out in front of people and see what people will do. They took 20 years of family case law, put it out, and asked Watson to look at the case against all of the 20 years of Ontario family case law and come up with the right precedents for that case. Of course, doing it very, very quickly, it had five relevant cases, the killer cases, where now the lawyer has to convince a judge.

The interesting thing is that it now disrupts the whole legal system. It's not a thousand-person law firm that wins; a two-person law firm or a one-person law firm can actually get the same information. By the way, it takes months and months and months out of that legal system, if you will, and all of the discovery and so on. You can think about this for policy use and other things that we can talk about at length.

I'll just come back to your point. We're very proud of it because it is something that is there, but when it sits in a back room, it's not useful. Bringing it out and actually having it apply to things that are really important, that's what we're up to. Canada can lead, maybe because of our footprint, but actually because we have a point of view to build this in this collaborative way.

[Mark Warawa, Conservative, Langley, BC]

Does anyone else want to comment on how do we use our limited resources smarter so that we can help?

[Jacqueline Dubé]

Take health for example. Canada has a great health care system. It is very expensive and, with the demographic changes, the cost will not go down.

In some provinces in Canada and in the U.S., the approach being increasingly used is that citizens are placed at the centre of managing their health. They become more proactive. That is done with the help of what we call a “personal health record” on an iPad. People learn to manage their health information, such as a diagnosis, and they always bring the digital information to health professionals.

In the U.S., Kaiser Permanente has 15,000 doctors. This non-profit organization has 8.8 million patients. Systematically, exchanges are done digitally. The patient data are transmitted directly on a daily basis, for things such as sugar levels and blood pressure. That makes it possible to significantly reduce doctor appointments and hospitalizations. This is a global trend that can allow the health care system to survive. Ours is excellent, but it's a matter of placing individuals at the centre of management with the help of the digital tools.

Other provinces have already bought the necessary tools and are in the process of implementing them. We are carrying out experiments in Quebec.

[The Chair, Conservative, David Sweet]

Thank you very much. That's about all the time we have.

Now Madam Sgro, for eight minutes.

[Judy Sgro, Liberal, York West, ON]

I certainly welcome all of the witnesses. This continues to be a fascinating study, and I think we're all learning an immense amount about the different initiatives and what's going on.

Mr. Horgan, given the fact that IBM operates in a lot of countries and is no doubt, as we're talking about today, in partnership with many bright people around the world, do you have any unique insights on how Canada might move itself forward faster?

I think I mentioned to you in a previous meeting that my own son is now in Silicon Valley, a great sadness to me. There just wasn't enough to keep him here. He's just one, but he tells me that 75% of the people he's working with in Silicon Valley come from here. I'm afraid they're never going to come back. They'll all stay there because there's a bigger investment, less adversity to risk, and so on. I want them to come back here.

What do we need to do as a country? SOSCIP is a great initiative, but are we 20 years behind? Is it going to take us that long? We can't wait that long, because we'll have too many of our young people being displaced.