Industry Committee on May 1st, 2018

[Kirsty Duncan, Liberal, Etobicoke North, ON]

You've asked a lot about this. I'll answer very briefly. We've brought back the UCASS survey. We've put in place equity and diversity requirements for our Canada excellence research chairs and our Canada research chairs, and we want to do more. We're going to put in place the well-known, well-respected Athena SWAN program. There was $15 million in the budget to put this in place, and we're looking forward to moving forward with it so that we have equity and diversity at our institutions.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

That's excellent.

You also had talked about how, in delving into a lot more about truth and reconciliation, science research can be a part of that, and again, I go back to Algoma University. It was a former residential school. I toured it recently. I saw the research. They're applying for research chairs, but they're also trying to involve indigenous components. Can you comment on what you see going forward, and how that might happen?

[The Chair, Liberal, Dan Ruimy]

Sorry, you'll have to keep it tight. You have 30 seconds.

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Terry, thank you for asking this.

We're doing it in government science. We've been working on how we bring western science and ways of knowing together, how do we include ways of knowing. Then in this budget, we received $3.8 million for the granting councils to work with indigenous peoples to develop a research strategy that will better support our Inuit, Métis, our first nations researchers.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Masse, take us home for the final two minutes, please.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Thank you, Madam Minister.

Again, one of the things I'd like to talk about is Canada catching up with the world with regard to medical testing using animals. There's a growing body of evidence that 95% of those that have used animal testing for drugs have not led to successful rates. There are questions as to how efficient the drug testing is and whether or not Canada's scientific community should play a role in pushing non-animal testing. How do you feel about having a centre for alternatives to animal testing?

Have you considered, and are there currently any plans to look at how we can be innovators and advance that issue, or is the government not interested in that right now?

[Kirsty Duncan, Liberal, Etobicoke North, ON]

I'm well aware of the research you mentioned from the University of Windsor. It's where I used to teach. I think we've talked about this before. I think other members of Parliament have asked about this. As you know the way things work in research is that there's a peer-review process. Canada has a world-renowned peer-review process, and the researchers could apply for different areas.

I'm pleased to tell you we have a 25% increase to the granting councils in this budget. It's going to open up new areas. There's $275 million for a new multidisciplinary, multinational risky research fund. There's $210 million for Canada research chairs, so with this large investment, there are many more opportunities for our researchers. What we saw in the past, and what we were hearing from the granting councils, was that there was good research, but it couldn't get funded. There simply wasn't the money. Now because there is the money, that research will get funded and I can't wait to see what our researchers do next. I think they're going to undertake research we can't even begin to imagine.

[The Chair, Liberal, Dan Ruimy]

On that note, we are done.

Thank you very much, Minister, for being here with us today.

We are going to suspend for a very quick two minutes while we change the players around. Then we'll come back.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Welcome back, everybody.

We are going to continue for the second hour. We have the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, as well as John Knubley, Deputy Minister.

We want to make sure that we get all the time we can, so Minister, you have up to 10 minutes.

[Navdeep Bains, Liberal, Minister of Innovation]

Thank you very much, Chair.

It's great to be back. It's great to see a lot of familiar faces, some new faces as well.

Thank you very much for this opportunity.

I appreciate the opportunity to meet with you on the occasion of the tabling of the 2018-19 main estimates.

It is my intention to share with this committee the details of the continued implementation of our government's innovation and skills plan, which we've discussed in several of our budgets.

Chair, my comments will be brief to allow maximum time for questions. I know you said up to 10 minutes, but I will do my best to take less than that so we have a fulsome discussion.

However, before I do that, I'd like to thank this committee once again for its report on intellectual property and technology transfer. As you saw last week, when I announced our government's first national IP strategy, which is a huge point of pride, it reflected the recommendations, and you were instrumental in driving those initiatives home. I thank you for your leadership.

I would be happy to discuss our strategy in more detail during the Q&A session.

As for our innovation and skills plan, it is already providing a better life for middle-class Canadians from coast to coast to coast. We are well on our way to accomplishing our goals. Our economy has been growing at a rate of more than 3%, so GDP is doing really well relative to previous decades.

Our economy is the fastest growing economy in the G7.

But we can't be complacent. We must continue to make investments. We need to be strategic, we need to be smart, and we need to be thoughtful. From day one, jobs have been a priority for me and for our government.

Since we formed the government, in 2015, the Canadian economy has seen more than 600,000 jobs created. Our unemployment rate right now is at 5.8%, so clearly we're headed in the right direction.

Naturally, we want to continue to build on that momentum. That's why I'm here today to discuss the proposed budget allocation of $7.8 billion in the 2018-19 time period across the ISED portfolio and to answer any questions you may have. In doing so, I am seeking approval for spending to continue advancing our government's innovation and skills plan—again, it's a multi-year plan—including the priorities announced in budget 2017.

One of the centrepieces of our innovation and skills plan that received funding, or that was allocated in the 2017 budget, was the supercluster initiative. In February we revealed the five successful proposals that link together business, academia, and non-profit society to come together to supercharge our economy. The framework for partnership is there. Now it's up to innovators to bring those partners together and put their plans into action, and I look forward to seeing what each supercluster does in the coming months and years.

The strategic innovation fund, which was also announced in budget 2017, is another tool intended to stimulate innovation.

This fund will help Canadian innovators build in areas of economic strength, expand the role of Canadian firms and regional and global supply chains, attract investments, and create new, good-quality middle-class jobs.

Since its launch in 2017, Canada's innovative industries have responded positively to the strategic innovation fund. For example, hundreds of applications have been received through this new single-window program. We will put departmental resources to good use to allow SIF, the strategic innovation fund, to accelerate technology transfer and commercialization in sectors ranging from aerospace, defence, and automotive to agri-food and clean tech. Really, again, it's to diversify our economy and to look at the areas of high growth.

I'd like to highlight a couple of other important measures that are ensuring Canada's place in the digital economy.

I'm referring to the CanCode and connect to innovate initiatives. Through CanCode, we're teaching coding and other digital skills, and this is really a point of pride for me as a father of two young girls. One million kids from kindergarten to grade 12 will learn how to code in the next two years, and we will also help train more than 60,000 teachers on how to incorporate new technology in the classroom.

Of course, none of this is possible without access to high-speed Internet service. That's why we are funding the connect to innovate program, which helps bridge the digital divide in rural and remote communities across Canada. This is a matter of fairness and a matter of equality. This is a really essential part in the new digital economy.

Canada's success in the digital economy also depends on leveraging our diverse talent and providing opportunities for all to participate in investing in digital skills, and infrastructure, we believe, will help achieve this.

Finally, among the many 2017 measures I'm talking about here today, let me draw your attention to the innovative solutions Canada program. Under this program, 20 federal departments and agencies will challenge small and medium-sized Canadian companies to solve real departmental problems. These are challenges the government is facing. They're going to go out and put them out in a very open and transparent way. This program will support the scale-up and growth of Canada's innovators and entrepreneurs by having the federal government act as a first customer, to be that marquee customer.

In return, the government will have access to the latest and most innovative products and services. This is aimed squarely at innovators, and we are confident it will help smaller companies become successful global players as well.

Our government's investments under the innovation and skills plan ensure that Canada will sustain its leadership position as one of the world's best places to live and to do business.

They will help sustain a world-class workforce in cutting-edge infrastructure, and they will attract investment and opportunities from around the world.

Once again, I thank this esteemed committee for this opportunity to speak and share some of my thoughts, and I look forward to any questions you may have.

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you very much, Minister.

We're going to move right to Ms. Ng. You have seven minutes.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Minister, it is so wonderful to have you here to talk to us about the investments being made in innovation, as part of the estimates process.

I want to talk about the innovation superclusters initiative. There's a particular one that's a bit close to me. That's the advanced manufacturing supercluster. That bid was done out of the area I represent, and it included a lot of partners. It included the City of Markham, the Regional Municipality of York, ventureLAB, York University, Seneca College, and many industry partners such as Celestica, Magna, Canvass Analytics, Peytec, SterileCare, and ChipCare. I'm really pleased that their bid was successful and they will receive funding through the advanced manufacturing supercluster.

It really does represent a wonderful economic opportunity because of the concentration of companies that are here, from start-ups to scale-ups to SMEs to multinationals. They work and operate in a place that really is an ecosystem.

With that, could you talk to us about the superclusters? I've just highlighted the one, but can you talk to us about the five superclusters, how they were chosen, and the government investment in the superclusters initiative?

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

Thank you very much for your question and your leadership in this area. I know Markham is really a hub of innovation. There are a lot of great companies there, and many of them are participating in this particular initiative, as you mentioned, in the supercluster initiative, the advanced manufacturing one, more specifically.

Now, just to take a step back, we decided as a government that we wanted to unlock more money for research and development. We wanted better quality jobs. We wanted to see more economic growth. We decided that, rather than being prescriptive, we would create an open and transparent process led by businesses. The idea was that they would put forward competitive bids and proposals and ideas of how they'd work with smaller companies, large companies, academic institutions, and not-for-profits, to get us those desired outcomes.

Again, if someone asks me what a supercluster is, I'll say it's a job magnet. It's really about good-quality jobs. It's creating an ecosystem. Also as you mentioned, this was a very competitive process, and ultimately, we selected five. We avoided what we call the “peanut butter” approach. We wanted to be very strategic, we wanted to be very deliberate, and we wanted to have impact.

By selecting up to five—we determined five ultimately based on the criteria—we felt this would allow them to really compete, not only within Canada but globally as well. We have the digital supercluster out of British Columbia, one out of the Prairie provinces around protein and adding value to protein products, obviously the advanced manufacturing initiative that you talked about in Ontario, the artificial intelligence supply chain initiative, and then, of course, the oceans supercluster in the Atlantic Canada region.

This represents the fact that innovation takes place across the country, but fundamentally, the key metrics and take-aways are that this, at minimum, would generate billions of dollars of economic activity and tens of thousands of jobs over the coming years. This has been validated by third party experts. We also engaged government experts. We also had an expert panel, so we're very confident that this is an economic policy that will give us those desired outcomes.

Specifically in advanced manufacturing, it's about platforms. How can additive manufacturing—3-D printing, for example—and robotics help so many different aspects of our economy? It's not focused on aero or auto exclusively. These platforms like artificial intelligence or digital platforms, for instance, have a profound impact across the entire economy. I would say we have to be careful that this isn't a regional strategy. This is really about platforms that are going to be deployed and benefit the entire Canadian economy from coast to coast to coast.

[Mary Ng, Liberal, Markham—Thornhill, ON]

That's great.

Can you talk to us about the—

[The Chair, Liberal, Dan Ruimy]

Sorry, can I just jump in for one moment, please?

Is there somebody playing music on this side? We're hearing music. It's interfering, and we've had a couple of complaints already, so please stop. Thank you.

You can go ahead.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Can you talk to us about the investment dollars in superclusters?

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

It's a significant investment. It's $950 million. We wanted to get, at minimum, dollar-for-dollar leverage out of the private sector. I can tell you that the private sector has stepped up in a big way. They exceeded that expectation with more than a dollar-for-dollar investment. The investment is well over $2 billion, from government but also from, more importantly, the private sector.

As I mentioned earlier, the objective is to unlock cash on balance sheets for more research and development. If we want our companies to succeed and grow, they need to bet on new emerging technology, on new solutions. They need to think five, 10, and 15 years down the road. We feel that we've created not only that incentive but also that ecosystem. It's really about helping the small businesses scale up as well. This isn't a play about big businesses. This is really about the ecosystem that would benefit a lot of start-ups and companies that are scaling up.

For us, if you look at our innovation and skills plan, that's really our focus: How can we help Canadian companies scale and grow? Our ambition is not only Canada. We also have global ambition. We want these companies to succeed internationally as well. That's why we made such a significant investment of $950 million.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you.

I'll switch this up a little bit and talk about the innovative solutions Canada program. Thank you for sharing with us the budget investments in innovative solutions Canada. It's great, because the government being the first customer for a lot of start-ups is something that will give these start-ups the leg they need for greater access into the marketplace, particularly if the government becomes their first customer.

Can you talk to us about how the innovative solutions Canada program might support under-represented groups? We have a lot of start-ups that cover that waterfront. How is the government going to help there?

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

This is a program designed to help companies scale up. It's government acting as a marquee customer, making a bet on emerging Canadian technology, and validating that technology, so that when they go abroad, particularly as companies of diverse backgrounds, they can succeed not only in Canada but globally as well.

Hopefully, in the next round we'll get a chance to elaborate on that.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We'll move on to Ms. Rempel.

You have seven minutes.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Thank you, Mr. Chair.

Minister, for the period covered by these estimates, what's the total amount of direct grants and contributions made to for-profit enterprises by all of the departments within your signing authority?

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

Based on the amounts we have here in the 2018-19 estimates, the total portfolio amount is $7.8 billion. Are you specifically looking for grants?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Grants and contributions made to for-profit enterprises.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

Not the companies that are non-profit, but the for-profit.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Right.