Industry Committee on Oct. 3rd, 2016

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Thank you.

I'll be somewhat opportunistic—I am just sitting in today for Brian Masse—and talk about my riding in southeastern British Columbia. People come from all over the world to visit us. We have six downhill ski areas and over fifteen 18-hole golf courses. We're on the U.S. border and we're on the southern Trans-Canada Highway and CP rail line. What would it take to get a Quebec manufacturer of furniture to expand over to southeastern British Columbia—it's a serious question—and why wouldn't the institute relocate to southeastern British Columbia?

What does it take to get the industry going or to get an institute to come to your riding?

[Réjean Poitras]

I'm not sure we can move there—

[Voices]

Oh, oh!

[Réjean Poitras]

—although I'd love that, myself.

If we were to make an investment in another place, I think it would not be in another province. If we were to go somewhere else, it would probably be Mexico. We have assets in Quebec. If we cannot grow that, the next step is probably Mexico.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

And the institute?

[Michel Gérin]

The patent agent profession grew generally out of Ottawa first, because that's where the patent and trademark office was located. Before the Internet, everything was done on paper. You'd go to the office and search. Today the profession is across the country. We have many members in B.C., mostly in Vancouver, but some in Victoria as well, and so on.

The institute itself and its staff are located in Ottawa, and I don't think they're necessarily interested in moving. However, if we create a college of patent and trademark agents, this is a new organization. It's open as to where that office would be located, so it could be southern British Columbia.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

We look forward to seeing you in the riding.

[The Chair, Liberal, Dan Ruimy]

We'll jump to the next round. This time it will be six minutes.

Mr. Arya is up next, then Mr. Nuttall, then Mr. Stetski, and then we'll see what time is left after that.

Go ahead, Mr. Arya. You have six minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

Dr. Gérin, as you know, we have quite generous research and development funding here in Canada. We have SR and ED and we have IRAP. Mr. Astle can talk about the SADI program. For many of the companies, the combined incentive can go as high as 75% of the total R and D cost.

Your proposal to give other tax funds for the innovation box is quite interesting. The number you gave from the U.K. was that it saved $590 million. How much were the incremental sales due to this innovation box—that is, the sales that wouldn't actually have happened without this innovation box?

[Michel Gérin]

Sorry, I don't have that information. The report we had on the U.K. gave simply the statistics on its use.

In terms of other information I can give you, though, I looked up what Quebec budgeted for its innovation box starting in January. I think they expect that about $150 million will be their cost over five years in terms of tax income they lose, but this hasn't started yet, so—

[Chandra Arya, Liberal, Nepean, ON]

In the Quebec case, I know that their cost will be $150 million, but have they estimated how many incremental sales this innovation box is bringing in?

[Michel Gérin]

I have not seen it. I will admit that this is certainly an unknown part of the equation. The idea, of course, is that you're encouraging innovation, you're encouraging commercialization, in the hope that you're encouraging growth—

[Chandra Arya, Liberal, Nepean, ON]

I understand.

[Michel Gérin]

—but I haven't seen that number.

[Chandra Arya, Liberal, Nepean, ON]

Generally, out of the number of patents that are filed in Canada, what percentage comes from manufacturing companies?

[Michel Gérin]

I don't have that information. They may have it at the intellectual property office. We could look it up and get back to you.

[Chandra Arya, Liberal, Nepean, ON]

That's fine.

[The Chair, Liberal, Dan Ruimy]

If you do have that information, could you forward it to the clerk?

[Michel Gérin]

Yes.

[The Chair, Liberal, Dan Ruimy]

That would be helpful. Thank you.

[Michel Gérin]

Okay. We'd be happy to.

[Chandra Arya, Liberal, Nepean, ON]

Also, you mentioned pulling innovation out of the woodwork as a challenge. Can you briefly explain that? You are in a well-established company that has been commercializing quite a bit of innovation and R and D over a period of time.

[Jeffrey Astle]

Engineers like to do engineering work, and they don't recognize or necessarily understand until they've dealt with us a bit that part of the package of innovation is also to protect that innovation. It's taken some time, but we've worked closely with engineering to develop different ways to facilitate discussions with the engineers within different phases of an engine development program to help them understand what might be novel and what might be worthy of protection and to then have processes in place to get them to file—

[Chandra Arya, Liberal, Nepean, ON]

In this manufacturing study, we have been talking to many Canadian companies and various associations. One common theme we have heard is that there is a lack of talent in Canada in high-tech manufacturing or advanced manufacturing. What is your experience with that?

[Jeffrey Astle]

We have some very high-tech manufacturing capabilities. I know I've been working with those individuals just recently, and what they do is quite fascinating. I think there's more to be done going forward, possibly with 3-D manufacturing, for example. Some of these concepts are just coming into play.