Evidence of meeting #52 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

Robert Walker  President and Chief Executive Officer, Canadian Nuclear Laboratories
Karna Gupta  President and Chief Executive Officer, Information Technology Association of Canada
Jean-Marie De Koninck  Special Advisor of the scientific director, Mitacs
Walter Di Bartolomeo  Vice-President, Engineering, Pratt & Whitney Canada
Robert Annan  Chief Research Officer, Research and Policy, Mitacs
Kelly Hutchinson  Vice-President, Government Relations and Policy, Information Technology Association of Canada

12:15 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Thank you, Chair.

Thank you to our witnesses for appearing today. It's a fascinating discussion. Primary school...?

12:15 p.m.

Special Advisor of the scientific director, Mitacs

12:15 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

It's amazing.

I'd like to start with Pratt & Whitney and Mr. Di Bartolomeo. I wonder if you could just give us a quick look at CARIC, the consortium for aerospace research. It's a year since the funding began. We are in the first year. Are we seeing anything on the horizon that's going to assist us on some of today's discussion?

12:15 p.m.

Vice-President, Engineering, Pratt & Whitney Canada

Walter Di Bartolomeo

Yes. April 2014 was the inauguration. Had you asked me at that point if we would be this far advanced, I would have not believed it. We have subscribed all the projects we expected to do in its first year of operation. It's pan-Canadian in terms of the pull. There was some concern that it would Quebec-centric. That is not the case. For the level of projects, I would say that the demonstrator programs being proposed at the level supported by CARIC are really leveraging, and one of the concepts is to build on small and medium-sized enterprises.

I would say certainly that success from a project perspective really was there as part of the Emerson report: go out and create a collaboration framework across Canada. The basis of that is education. It's using the universities to go and do work, but for the value of Canada. In other words, it's for something that at a point in time may succeed, and if it succeeds, it will be commercialized, recognizing that often success is surrounded by failure and that some of the best learning we have is actually embedded in failure.

Finally, I would say that it's been one year beyond our expectations in terms of what we've been able to accomplish, certainly in terms of pulling on small and medium-sized enterprises with the support of the larger OEMs. Also, the talent that's being pulled and supported is very strong, with some things that probably in five to seven years, I would say, will see the light of day in terms of market potential.

12:15 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

That's excellent. That's good news.

You spoke briefly about the new turboprop engine. Clearly, when you start talking about a 35% improved fuel consumption or a reduction, I have to think that's disruptive to an industry.

Can you speak to some of what is happening at Pratt & Whitney and in the industry that would take us to that level? Also, are there parts of the development of an engine of that nature that would be subject to new technology—you mentioned some of the components—such as 3-D printing and some different elements that might help you achieve your goals to create such an impact?

12:15 p.m.

Vice-President, Engineering, Pratt & Whitney Canada

Walter Di Bartolomeo

I would say that on the basic physics, we haven't developed new physics. I would say that the capability to manufacture components using some of the newer technologies allows us to actually put into practice some of the things I've been dreaming about for the last 10 or 15 years. If at a point in time when this 35% better engine is on the table and you were to go and look at it, you would be surprised at how non-spectacular some of these things are.

But that ability to go and manufacture it, the ability to build it as an overall system in a different means and to take the technology we've developed over the last 10 or 15 years from a combustion perspective and from an aerodynamics perspective, that starts to materialize into a product that will be very disruptive for us. As you know, 35% is not a small number, but by the same token I would say that it's the continued and continuous development and the willingness to fail, supported in partnership with the Canadian government, the Quebec government, and the Ontario government, that allow us to go and do that.

Fundamentally, manufacturing technologies like 3-D printing are allowing us to develop some of these things, as are the new materials, lightweight materials, and just the computing power that allows us to go and analyze things to a level that we couldn't have done 15 or 20 years ago. I think there's a convergence that allows us to leverage that.

12:15 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

If you've been reading some of the minutes of these meetings, some of our witnesses and guests have taken exception to the constant reference to “disruptive technology”. They've used the term “transformative technology” or “transformative changes” to industry. Clearly that is one; it's very impressive.

Mr. Gupta and Ms. Hutchinson, maybe I could swing over to you for a minute. I'd like to ask you about online commerce presenting complexities for securing customers, enterprise, and government communication, all of which call for security techniques. Obviously that's your background, so that's an area I'd be curious to hear your opinion on.

What can government do to foster and capitalize on the opportunities related to the adoption of e-commerce, and how can industry associations like ITAC—I know we've talked about this at previous committee appearances—support these investments so that they're done in a safe way for both business and consumer?

12:20 p.m.

President and Chief Executive Officer, Information Technology Association of Canada

Karna Gupta

I think first we need to understand what the situation is today in the Canadian market. In the Canadian market, most of the time you see that small and medium-sized businesses are not using online tools as much as they should in order to grow. That is a statement of fact. If you go look at eBay or others, from their statistical point of view, they will say they're not using it.

Why are they not using it? The underlying economics are not supportive of it. To give you an example, if I'm south of the border and I order some goods from any store, the goods will show up the next day at the price I clicked on my screen. At that price, at my door, they will appear. If I do that sitting in my home today, they will be double the cost with shipping and everything else.

The economics do not support it. Fundamentally, the business model for online trade in Canada is not exactly where it needs to be. That needs a little bit of work.

The second part is privacy and security. That needs a much deeper discussion in terms of what gets disclosed. This is really a policy instrument that government, with industry, needs to develop in terms of what is getting disclosed from consumers and users on the platform. When we talk about data on a platform, it's not necessarily residing here. The moment your computer is connected to a wire, it is reachable from anywhere in the world. We live in a day of false security that everything is resident here. It isn't.

I think the policy instruments need a lot more work. I don't think any study has been done, or government has any work getting done, on what type of data people should put up in online trade. There is a lot of trepidation on the part of users to use the e-commerce platform. Economics aside, they don't want to put data up online. That's holding a lot of the consumption back. People do shopping online but they don't buy because they have to put in some data and information.

This is where some of the policy discussions become very important—what we expect our citizens to put in, how we manage it, and where it resides. On that part, I don't think we have a good answer yet.

12:20 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Thank you.

Briefly, on your IoT white paper, I may have missed it in your presentation, but what's the timing on that? When can we expect it?

June 16th, 2015 / 12:20 p.m.

President and Chief Executive Officer, Information Technology Association of Canada

Karna Gupta

It will be a living document. You'll see the first one probably within the next couple of weeks. It will be mostly around a call to action on what the issues are and what needs to happen. Then we'll probably convene some of the experts to put together some of the major issues we need to address.

The first one will probably come out more as a call to action around IoT: what it means, what the implications are, what some of the potential business models are, and what the issues are and how to address them. It will be more of a call to action.

12:20 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

I'm running out of time now, and I had another question for Mitacs.

Mr. Annan, talk to me briefly about the silos again, the funding silos that you talked about. We have a few seconds left.

12:20 p.m.

Chief Research Officer, Research and Policy, Mitacs

Robert Annan

Coming out of World War II, there was a sense that science and research had the potential to transform society in positive ways. There was the creation of a lot of funding agencies here, and in the States and Europe, that were designed to promote basic research or applied research and to have these things exist effectively independently. We're still living with the aftershocks of that.

I think there's a recognition of that within the community. Last week actually, we signed a sort of memorandum of understanding with NSERC, to make sure we're coordinating and collaborating, because we all have the same essential participation base: Canadian researchers at universities, Canadian companies engaged in research. We're all geared toward the same sorts of outcomes, which are innovation and research, and so on.

I think that collectively the community is trying to find ways to work together. I think the government can maybe accelerate that process by encouraging cross-sector collaboration, but looking at mechanisms in order to do a better job of coordinating the pieces or prevent duplication and overlap.

I know those are areas that have been a focus for the government for some time. They were areas that have been identified, for instance, in the Jenkins report on industrial R and D, which came out a couple of years ago. Anything in that regard is likely going to yield positive effects.

12:25 p.m.

Conservative

The Chair Conservative David Sweet

Thank you very much, Mr. Carmichael.

Now on to Madam Papillon for nine minutes.

12:25 p.m.

NDP

Annick Papillon NDP Québec, QC

Thank you, Mr. Chair.

My thanks to the witnesses for joining us today. It's really nice to hear from you.

I have several questions to ask, so I will try to be brief, while touching on all the topics I want to discuss.

There is a lot of talk about the perennial issue of balance between basic research and applied research. As we know, we need applied research because it is a key component of science.

I would like to take the time to quote David Robinson, executive director of the Canadian Association of University Teachers. He said the following:

When it comes to supporting university-based research, the federal government has an unbalanced approach. [...] The government continues to miss the fact that real innovation and scientific advancements are driven by long-term basic research, not short-term market demands.

Do you think more investments are needed in basic research? If so, how should those investments be made? I would also like you to talk about the role of education and basic research in stimulating innovation.

I saw our guests smiling.

12:25 p.m.

Special Advisor of the scientific director, Mitacs

Dr. Jean-Marie De Koninck

I will start.

The federal government supports both avenues—basic research and applied research. I personally do basic research, and I receive assistance from NSERC for my research in mathematics.

I think the message we need to send, as Rob said a little earlier, is that the two should not be put at odds. Basic research fuels applied research, which challenges the people doing basic research to identify new results that can then be applied. Those two worlds can coexist.

However, it is true that, in an economically focused society like ours, quick and immediate economic impacts are sought. So there is a tendency to provide more support for applied research. We need to be conscious of that and constantly bring research managers into line. We need to support both types of research and not put them at odds.

12:25 p.m.

Chief Research Officer, Research and Policy, Mitacs

Robert Annan

Sorry, but I will answer in English, as I am a bit nervous.

I'm not comfortable necessarily commenting on how this specific government is achieving that balance. I will say, though, generally speaking, that this is a difficulty around the world—and it's true in the United States and in Europe—regarding how you balance the support for basic research with the view towards kind of planting seeds for long-term harvesting, and how you reap the rewards of those investments from the past.

Achieving that balance is difficult. There isn't good research. There isn't good evidence as to what kind of balance is maybe the most productive, either from a research output perspective, social output perspective, or an economic output perspective. It is an ongoing challenge.

I think it's one whereby it may be possible to have a rethink more generally about this idea that I mentioned before about silos. If we think about either making an investment in basic research or making an investment in applied research, you necessarily set up a competition. What I think we want to be doing is funding good ideas that span the spectrum. Then, at some point you get into the areas around commercialization and so on, which to my mind moves past where you're looking at R and D, in the university ecosystem anyway. Those are different sorts of discussions.

When it comes to applied and basic research, fighting one against the other isn't the most productive mechanism. If we can find new ways of funding good ideas, then I think we'll be making good steps forward.

12:30 p.m.

NDP

Annick Papillon NDP Québec, QC

Could you tell us about some worthwhile models?

I have here the Mitacs record for 2013. According to what you told us earlier, you are now working in collaboration with 60 universities. But those 60 universities probably all have their own way of doing things. I see that, in 2013, the Université Laval was not one of your partners. However, the INRS was. That is a good model, especially when it comes to basic and applied research.

I was wondering whether the Université Laval is one of your partners now and, if not, why.

At the INRS, professors and researchers are often veritable jacks of all trades, as are the institute's students I know. You used the expression “back and forth” earlier. That aspect could be inspirational and useful.

12:30 p.m.

Special Advisor of the scientific director, Mitacs

Dr. Jean-Marie De Koninck

Concerning the Université Laval, the question should be put to the rector. Be that as it may, the Université Laval is a Mitacs partner, but not financially. The provincial government cuts are not conducive to financial participation in that regard. We still benefit from all Mitacs programs. In that sense, we can say that the Université Laval is a Mitacs partner.

12:30 p.m.

Chief Research Officer, Research and Policy, Mitacs

Robert Annan

Certainly, as you mentioned, we work with 60 universities; a lot of different models are happening. Our model is more or less standard in how we work with students. They spend half their time with companies, half their time with the university. While in some cases, like INRS, a lot of this hands-on work is already happening, we're also working with theoretical departments at the University of Toronto, where there isn't that hands-on work but the students are still working with companies. This model is being imported into different places.

Furthermore, we're working with universities a lot in development of new curriculum, and Walter was talking about the idea of engagement of industry in curriculum building. Obviously, some universities chafe at this idea that they'll have curriculum dictated to them. That's such an old and outdated model. Now companies like Pratt & Whitney Canada and others are looking to build collaborative relationships when it comes to curriculum building. We've worked now with 10 different universities on building new applied master's programs where students do internships as part of the degree program, as part of their requirements. The university retains the overall management of curriculum but now companies are taking the students as interns and are participating directly, including financially, in support of these students.

It's a very healthy relationship that is much more of a partnership than a contractual relationship.

12:30 p.m.

Vice-President, Engineering, Pratt & Whitney Canada

Walter Di Bartolomeo

I would like to add something.

As a result of the Emerson Report, the federal government established steps. It also talked about CARIC, which supports basic technology and research. The technology demonstrators program supports medium development technologies. On the other hand, the Strategic Aerospace and Defence Initiative is really focused on commercialization and development.

Ultimately, industry tries to resolve problems. We may be talking about an extension of existing knowledge, but in many cases, that knowledge does not exist. As a result, we have to develop basic research. For the industry, the goal of that research is to resolve applied problems. It's not really very esoteric.

We cannot always expand on something that already exists. We need basic research. We believe that, in the aerospace industry, methodologies and programs supported by the government already exist, and we want that to continue.

12:30 p.m.

NDP

Annick Papillon NDP Québec, QC

Okay.

12:30 p.m.

Conservative

The Chair Conservative David Sweet

Thank you, Ms. Papillon.

Now we'll move on to Mr. Daniel for nine minutes.

12:30 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

Thank you, Chair, and thank you, witnesses, for being here.

It's certainly been a very interesting discussion.

I'd like to pick up on one of the points that I think some of you have already raised. It's to do with small businesses and IP. I think we've invested a lot of money into research and a number of good ideas are sitting on the shelf without being promoted, etc. Some very intelligent Ph.D.s having raised that.

How can this government do something to assist small and medium-sized business in protecting their IP and making sure that their IP is protected, because that's a fundamental step in their progressing to getting into bigger companies and bigger organizations, etc. How can industries like Bombardier and some of the bigger companies assist some small companies in going through this process of getting the IP established so they can move forward?

Maybe we can start with Madam Hutchinson, since you're government relations.

12:35 p.m.

Kelly Hutchinson Vice-President, Government Relations and Policy, Information Technology Association of Canada

From an IP perspective, you're right in speaking to the collaboration between industries. If you're working, uniting large and small companies is really the first step in being able to help them bridge that gap and get over that hurdle when it comes to challenges.

When it comes to this particular subject matter of IP and small businesses, I would have to hand this over to Mr. Gupta for a response. But thank you very much for asking me a question on my first attendance at one of these meetings and on my birthday.

12:35 p.m.

President and Chief Executive Officer, Information Technology Association of Canada

Karna Gupta

Intellectual property is the most valuable asset the company would have. We need to have an IP regime that is not only on par with the global scale but in fact better. You can look at any small Canadian company, and I'll use myself as an example. I used to be CEO of Certicom. I had 500 intellectual properties filed globally. My last filing used to be Canada just because the regime here took much longer to get it processed and IP-protected.

Enforcing is also very critical. If you cannot enforce IP, it is absolutely useless. The courts and the practices need to be up to snuff at a global standard to make sure that our companies can in fact enforce the intellectual property they have. I would submit to you that most Canadian small companies, when they take a larger company to court on IP infringement, actually do so in the United States because often the courts move a lot faster there.

Things are changing. I think we have had this discussion before in a different panel. I think things are improving and the government is paying a lot more attention, but intellectual property is the most critical asset for our companies.