Industry Committee on June 4th, 2015

[Patrick Horgan]

I have a point of view, of course. Our company was there at the very beginning of Silicon Valley, and I have good friends whom I deal with every day who are in Almaden and other of our labs there as well. But I compete pretty aggressively with them, as a Canadian, to win more missions here. I won't say that in my corporation side; I'm sure you're taking notes but this is in camera for that. That is the way we have to think of ourselves as Canadians.

I've been a global player. I've been growing things in emerging geographies for half of my career. When I came back to Canada, probably seven years ago, and now that I have this responsibility, we've learned some techniques. One of the things I would say is that we are truly Canadian in our approach. We're quite modest and we know how to say sorry a lot. We actually have some competitive advantages that your son may not...and by the way, in the environment, that's an intelligent choice. Not everyone understands the environment but it is starting to grow, and there are more and more cases of young generation people out of the University of Waterloo or with the other incubators across the country. We don't speak about it enough.

I've noticed even in this city many of our officials quickly go to discussion about great success stories they've seen in Silicon Valley. I think, “Really? Couldn't you come up with some lexicon that talks about the great things that are going on here in Canada, started from here in Canada?” All of us, regardless of our role in the country, need to start thinking like they've been doing for so long in Silicon Valley, which is, “we're the best.” I would say that's the most important lead they have on us, because we have all the other ingredients and more to help us build that here.

I agree that you can't tell a young person where they should go next, but if they knew about all the possibilities here, the international nature of how we work in Canada, and the global nature of how we work, they wouldn't have to go somewhere else to find it. They could find it here, and from this space do things around the world, and lead around the world.

We're going to continue on the theme of doing that, just as my little competition within my little company, by building the ecosystem here on these dimensions that are new. They're not old. By the way, California has no edge on us on the dimensions of some of the things that we've talked about.

If we get it together here faster, we can win. I am totally convinced of that.

[Judy Sgro, Liberal, York West, ON]

What do we need to do to get it together?

[Patrick Horgan]

We have to have more willingness. The open data question was one.... There are ways of protecting data, and you start with that. Once you do that, open it up.

Stop thinking that you have to protect everything. It's almost like the same thing on free trade. You could put blocks on borders, but I think we're all past that, and we're thinking that the best way to be a global player is to have open access and open free trade. It is the same at the data layer. We have to put protection on it. We have to learn how to do it properly. Once we do that though, we have to open it up. We have to get to step one, and then quickly to step two, to say how do we now build the ecosystems and those key ingredients so that people can really lift up.

There are a number of ways like that, but there's a central theme that can be built upon from the central government, of course.

[Judy Sgro, Liberal, York West, ON]

Ms. Sullivan, again I have to tell you how impressed I am with the University of Waterloo. I have visited and have seen a lot of what is going on. Just to hear you speak today about the number of women in those programs and all of the other issues demonstrates that you're right on top of all of this. I can hear it in your voice and in the comments that you make.

I'd like to give you a moment for some comments, please.

[Dr. Pearl Sullivan]

Thank you for your kind words, Ms. Sgro. I really appreciate them.

First of all, I love education and I love students. I think I represent thousands of academics who feel the same way. But I have to echo what Patrick just mentioned, that open data is really about sharing things.

What is unique about Waterloo is that it was founded 57 years ago with a very unusual IP policy. Whatever you think of on campus, you own it. The dean has no control over what you want to do, which is very nice.

Most of our students start companies in their second year of engineering. I believe the fact that we have 500 engineering companies in the Waterloo region hiring thousands of people is due to the IP policy and core education. When students go out to work for four months in a company, they see what the needs and the technology gaps are, and then they come back and they start a company.

What is very important for us is to support them. The early innovation is happening. We have to support and to incubate them while in school—it's very important—and teach them a little bit about business, because they are taking risks while they're studying.

The IP policy is important. They must own it. What we're doing in engineering school is we're supporting them all the way past graduation. Next week is convocation. We have 1,200 engineers graduating and we probably are in touch with all of them. If they want to start a company, we offer the campus, labs, equipment, the library; they are open to them. We have started an entrepreneurship alumni program, which allows them to access anything on campus.

That's really important. The role of university does not end after you have received your diploma at convocation. You walk across that stage to get your diploma, but it doesn't end there. We have to help them past their graduation.

[Judy Sgro, Liberal, York West, ON]

I would like to say to Ms. Gagné and her partner today that listening to you was fascinating.

I want to congratulate you on that initiative. Who knows where all this is going? It was fascinating to hear about it. I'm sure that young woman is able to do a lot of things now that she couldn't before.

Congratulations to both of you on your initiatives.

[The Chair, Conservative, David Sweet]

Thank you very much.

Ms. Gallant is next, for eight minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

I'll go first of all to our individual witness today to ask about using the 3-D printer. How was it that you were able to get the ingredients for that 3-D printer to where they needed to be on Sunday?

[Claude Gagné]

First of all, I had access to the Internet through the e-NABLE network.

The first thing is the design. It's open source design, so it's available through Creative Commons. It has been developed in universities by teams of researchers. For me that was the first thing. Then, for buying the filament there are various suppliers, but again the e-NABLE network provided specifications on what kinds of materials could be used.

I also had access to local support. People who know about 3-D printing here in Ottawa helped me. In fact, this is not the work of an individual. It's the work of several individuals. I had a lot of help to produce parts of suitable quality and also for the assembly.

The University of Ottawa is building an ecosystem. What is fantastic is that it's open to the community. This is quite new. In the past, universities catered to students or to their own communities, but now there's an open university. That's good. We'd like to see more of it.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

The reason I ask is that it would be a good idea to emulate what has been done there and in libraries as well, but it's the nitty-gritty of how you get what you need to that library, and of the procurement process.

Mr. Horgan, you gave an example of a hospital participating in the uptake of technology. It's such a challenge just to have SMEs get their own website. Even if you plop $5,000 in front of them, they don't have the time or the interest and they don't see why they need to do it.

What can government do to foster an environment that would be conducive to accelerating the adoption of these five segments of disruptive technology that you described?

[Patrick Horgan]

You're right, especially if you choose a hospital as the start of your question. There are a number of great entrepreneurs who are making interesting...because of the Internet and the cloud services and mobile applications where patients can take their data with them and understand it. Yet there's a bit more of a block, I think, in Canada to allow for that than there is in the States, as an example. The examples we were using were from the States. I've been there as well, discovering what they're doing and trying to figure out how we could do it here.

There are many hospitals that are trying to break that paradigm as well. To the earlier question, they're looking for how they can bring down their health care costs, and if it's not an enabler, it'll be a derailment factor for the country, because we can't afford it. We have to think about doing things in a different way. Some hospital presidents and the hospitals I'm involved with—I'm on a board of one locally in Toronto—are completely open to thinking about new ways. The problem they often have is that there's a procurement network they have to break through and some other criteria they have to meet to do things. I understand that in a pharma world, believe me, the clinical trials, and the process of doing that, but in the world of medical devices, neuroscience, the areas where you can start to make discoveries very quickly at the rapid pace of the way we can do discovery in technology, those things can help us win. There's the recognition of those key areas that don't have all the strings attached, if you will, for the clinical trial period and so on. Many areas are disruptive in some nature, very proactive in ability for us to move ahead of the country in this precious asset that we have in health care. We're finding areas where we can do that. That's what I would encourage, to think of the whole thing not as one big claw, but of the areas where we can move forward very quickly.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Looking at businesses outside the government-funded sector, looking at the SMEs, at a previous meeting we also heard about the need to have an ecosystem/education such as those in Boston where they have a community of ecosystems.

We're told Canada is lacking the risk takers. The big money isn't here or if the big money is here, it's not willing to participate in one of these types of ecosystems. How could big government be incentivized in a way that taxpayers will not be seen as providing corporate welfare to big investors?

That question is for anyone to answer.

[Patrick Horgan]

I'll take a quick shot at that.

I think you need an ombudsman in the group. In other words, you need somebody, and with SOSCIP which we talked about earlier, the Ontario government placed the Ontario centres of excellence on the board. We encourage that. There are only two IBMers and there are 12 members of the board run by the university. If you have someone in the middle who's looking to make sure that this is all done the way it's said it's done better than it was intended to be done, then you protect everybody's interests and it is at the ground floor all the way through.

To the other point, we are starting to work together with Boston and other areas to give more access to tools to more small businesses so that not only do they get the tools as was described earlier, but they also get the mentorship in understanding how to take it to the next step and how to get past this gap.

I'm finding at the other end, and I'm talking about these small businesses that own their IP and now are starting off, we are getting the VC community, the Dragons' Den people, and others who are former Dragons' Den people, knocking on our doors and asking to see the 40 companies that we've launched. We said yes and we'll make sure that we set up an environment for that. They have the big money, but they just didn't think.... If you go to the early stages too much—there are too many percentages where this doesn't happen successfully—if you get to a stage where they understand they're working on something that's a world-leading prototype, the money will follow.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

We have two segments of society whose unemployment rate is accelerating. We have the 50-plus whose jobs are becoming obsolete, at least in part due to disruptive technologies. We also have our recent university graduates for whom these five types of disruptive technologies are first nature to them. They're graduating; they're $50,000 in debt, and they don't have the skills to match the jobs that the businesses are crying out to fill.

Perhaps this would be a question for our educators. Not everyone has the capacity to be an engineer. As I mentioned, they do have these disruptive technologies as first nature. They have an edge over somebody who perhaps has been working in the manufacturing sector and not using disruptive technologies. What could government, business, and educational communities be doing to better match these new skills that are going to be in the future to the people who are looking to work?

[The Chair, Conservative, David Sweet]

The job description of a chairman is the person who is willing to be a bad guy. I apologize. The time ran out on that. If you can think about that question, and then at somebody else's rotation if you can jam an answer in on that, it would be great.

Now to Madame Papillon, for huit minutes.

[Annick Papillon, NDP, Québec, QC]

Thank you, Mr. Chair.

My thanks to our witnesses for being here this morning.

I would like to start with Ms. Sullivan.

A number of experts said that it is difficult to connect university research with the needs of research and development companies. However, CEFRIO seems to have developed a level of expertise in the field. In your view, what solutions could Canada develop on a larger scale?

[Jacqueline Dubé]

Is your question for Ms. Sullivan?

[Annick Papillon, NDP, Québec, QC]

Yes, I will give you the floor afterwards, Ms. Dubé.

[Dr. Pearl Sullivan]

Thank you very much for the question.

First, I think the DNA of the University of Waterloo from day one has been that we were founded together with the industrial sector. One of our founding fathers was a businessman. I think it started that way, and with the co-op program we've always had strong links with industry.

For instance, we do research with the five automotive companies: GM, Ford, Toyota, Magna, and Honda. How is it possible all these companies will come to campus and not feel in any way that intellectual property will be threatened? I think it's because of what we have done. We protect information. We do the projects and they feel very safe. They're confident their knowledge is secure. I do think there's also a lot of shared work. I think a lot of results get deployed very quickly.

I think it's the agility of the environment. The professors and the students work very closely with industry. I think part of it is our IP policy and part of it is our co-op program. A lot of companies come to campus to hire students and also do research. Part of it is that is the culture of the university campus.

[Annick Papillon, NDP, Québec, QC]

Ms. Sullivan, must our universities provide better incentives to researchers for commercialization?

[Dr. Pearl Sullivan]

There is quite a bit being written about this. One of the reasons professors do not commercialize their research is the reward system. When they go up every year for promotion, or for merit review, they are judged based on their peer-reviewed journal publications, conference proceedings, and their teaching performance. Also, about 20% of their review is based on service. There is a perception that nowhere in the formula of 100% is commercialization considered.

We have a very similar review process at Waterloo. We don't give you extra marks for studying a company. We consider your patents, but I think it's the culture. We basically say to the professors with students, “If you want to commercialize, you go ahead and you do it. It's very important you make sure you teach your classes and you treat the students well.” I don't think we do anything differently in terms of a reward system. I think it's basically our ingrained culture that we encourage and foster our innovation and commercialization.

[Annick Papillon, NDP, Québec, QC]

Thank you.

Ms. Dubé, I see that you want to respond to those comments.

[Jacqueline Dubé]

I endorse Ms. Sullivan's comments. In large part, the reward system for researchers is related to publications. The CEFRIO model is very useful for the research done by university researchers who carry out projects on the ground. Since they keep the intellectual property of the research, they can publish. However, in practice, CEFRIO ensures that the “deliverables” are adopted, that the practices are implemented in companies and that they are generalized in companies, which can be demanding in that respect.

We work with university researchers every day. What interests them and what pays off for them is only the opportunity to publish new knowledge. The CEFRIO model is quite rare. The government had the idea 27 years ago. It allows us to act in all sectors now, primarily at the government's request, in SMEs where there is little understanding and knowledge about university research. We are therefore the link that gets the research done.

[Annick Papillon, NDP, Québec, QC]

I find that interesting. Since you are from my riding, I would like to take this opportunity to find out more about how CEFRIO is funded.

Do you receive money from federal programs? How can the federal government help you more?

[Jacqueline Dubé]

Right now, we have no financial support from the federal government. We have an operating subsidy from the Government of Quebec that equals 20% of our business. The various mandates that we receive can come from big private businesses or from the various departments of the government funding us.

We discuss with Canada Economic Development for Quebec Regions, since the Quebec government's latest budget recognized an approach called Carrefour de l'entreprise numérique. The Quebec government has just invested $3 million. We have presented the model, which is a very structured diagnostic and supportive approach for adopting digital technology and transforming company practices. I'm not sure whether we will have positive results, but the reception from Canada Economic Development for Quebec Regions was very good.