Industry Committee on March 10th, 2016

[Maxime Bernier, Conservative, Beauce, QC]

Since you are a public agency interested in research, do you think your work or the funding you provide in support of research might be slightly influenced by politics?

Do you think that might have an impact and that the goal is less to promote economic freedom or other things like that? Perhaps this is a more philosophical question.

[Dr. Ted Hewitt]

I would say that’s not the case at all. At any rate, researchers choose their areas, their research topics in co-operation with industry. That’s the way things work and I must admit that this is not a concern for me.

There is a peer review process in place, which works very well around the world. These are best practices that SSHRC and other Canadian agencies can use.

[Maxime Bernier, Conservative, Beauce, QC]

Speaking of best practices, I would imagine that some international organizations operate like you. I assume that sometimes you have international meetings with organizations whose mission is the same as yours.

Do your work methods or their efficiency enable you to be competitive?

[Dr. Ted Hewitt]

Absolutely. I would say that we are the best in the world. In addition, our administrative expenses are not high at all. They actually represent 6% of our total costs. As I mentioned earlier, about 95% of our funding goes to researchers.

[Maxime Bernier, Conservative, Beauce, QC]

Has the new Liberal government provided you with a mandate letter or new guidelines?

[Dr. Ted Hewitt]

Not yet. We are waiting for the budget.

[Maxime Bernier, Conservative, Beauce, QC]

As are we.

[The Chair, Liberal, Dan Ruimy]

One second.

[Maxime Bernier, Conservative, Beauce, QC]

May I just ask you a question, Mr. Chair?

Do you know when the minister will be with us?

[The Chair, Liberal, Dan Ruimy]

Yes, I have a date. We'll talk about it afterwards. Thank you.

Thank you, Mr. Bernier.

Mr. Masse, the floor is now yours.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you to our guests for being here today.

I know there has been a lot of discussion over a number of years, and we've had to push back against budget cuts in the past and ensure that there's adequate funding. Then there very important issues related to moving patents and work to manufacturing, especially in our country where we have a very poor record of moving patents, and I'm not blaming you.

However, at the same time, I'm also very concerned about all research just being done with the private sector and trying to look for outcomes first and foremost, versus exploratory research work. I say this because if you look at history, a lot of the inventions that have changed our lives have been accidents. They've been from projects where the aim was to achieve a certain result X, but then these other things emerged from of them. There are all kinds of examples of that out there.

Speak to me a little bit about that element. Here I would say that I think you occupy a unique space on this that others don't, and there is tremendous added value for pure research without a derivative at the end of the day. I'd like to hear a little bit about that.

[Dr. Ted Hewitt]

I would go on the record as saying that we share your concern. Our mandate is to fund research and training in social sciences and humanities in Canada and to provide advice to government. Our view is that this is best applied to research that's further upstream in terms of the development of novel ideas and approaches. That doesn't mean we don't fund more applied research, or research that results in patents or copyrights or other forms of protection, but we are, through our own practices and our own regulations, silent on how that will be applied properly by the researchers themselves and by the universities or the colleges where they work.

We have an interest, and we've done research, in areas around commercialization and IP transfer. I'd be happy to talk further about that, about some of the work that is being done on clusters and incubation. I myself am doing some work currently on open innovation versus more closed models.

That's the beauty of SSHRC, in a sense. We are the agency that's funded in fact to reflect on some of the practices and some of the priorities and some of the policies that you're referring to in your comments that would direct or otherwise assist the movement of intellectual property into the private sector. I'll just repeat that, fundamentally, our view is that our role is best served by funding more open research at the upper end.

One anecdote I'll give you, which I've repeated many times, is based on a study that was done a few years ago. Looking at the first page of patent applications in the U.S., and looking at the citations to previous research on the first page of patent applications—I don't know how many they looked at in this research, maybe 5,000—70% of the citations came from U.S. publicly funded institutions. In other words, basic science was driving the innovation that was subsequently put forward for protection.

So we have an absolutely critical role to play in the front end of this process.

[Brian Masse, NDP, Windsor West, ON]

You know, that's just it; often this is overlooked, but they're like building blocks. Other types of work get done later, but if we have it all derived from just trying to create a better widget X, that's fine for certain research where we want to move it along. I guess what has been bothering me is the fact that often with those innovations, and the investment Canadians make through SR and ED tax credits for the private sector, they end up being manufactured somewhere else. It's sometimes in competition with Canadian businesses out there.

I would like it if you could come back at some point in time with some good examples. I think we need to do that to reinforce the case that there are some alternatives out there and there are some new things that just kind of happen.

Go ahead.

[Dr. Ted Hewitt]

You've raised an interesting point, and I just want to pick up on it a little bit. It's one I've mentioned often. That is, some of the research that's done in the upper end of the spectrum doesn't always result in new products and in technological advances, particularly in our areas. This economy in Canada is about 70% to 75% services—financial services, banking services, insurance, and so forth—yet all of the research that's done that eventually finds its way into those industries or into those endeavours is not counted. It will only now be counted by Statistics Canada.

The other piece of this is that as far as the SR and ED credit goes, none of that research is eligible for SR and ED financing: none of it. Yet one could argue that this is a pretty critical part of our economy.

This is the case we're trying to make, that a lot of the research we fund may not find itself in a new product. It might find itself in a new process. It might find itself in a new financial product or a new way of thinking about how to organize and commercialize in the service sector, not to mention the contributions it makes to policy. If you're saving a dollar, you're generating a dollar for the people of Canada. I really don't want folks to forget that. That's part of the innovation question as well. So I thank you for raising that.

[Brian Masse, NDP, Windsor West, ON]

Do I have any time left?

[The Chair, Liberal, Dan Ruimy]

You have one minute.

[Brian Masse, NDP, Windsor West, ON]

When you're looking at supporting different universities and programs, do you have a pan-Canadian approach in making sure that nobody is left behind, so to speak? Do you work within the expertise of some of those universities to try to see what they can do versus others? I know we have different boutique universities related to the development of different products, education being the most important, obviously.

[Dr. Ted Hewitt]

I'll have to answer by saying yes and no—in a way. The first part of the answer is that we are an agency that supports all Canadian researchers in the post-secondary sector. We have competitions that are open to all researchers and students. The applications will come from anywhere and everywhere in Canada. After the fact, from the analyses we've done, the distribution is roughly proportional to population. So it pretty much turns out that way.

As far as the principles of excellence and peer review and selection go, we're pretty blind to where things come from. It pretty much works out, and it demonstrates really the strength of research and scientific endeavour right across this country.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Now we will go to Mr. Jowhari.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Good afternoon, Dr. Hewitt and colleagues. Thank you for taking the time to be with us.

As an engineer and a businessman, I'm always interested in emerging technology as well as the applied side of that technology, with a special focus on creating jobs and the impact that it has on the economic growth.

Having said that, I had the opportunity to look at your presentation from last year, which I believe was on Thursday, May 7. As I'm a person who is interested in the emerging technology, one thing jumped out at me. I'll quote so I'm not misrepresenting what was said. You said:

...emerging technology and how best to take advantage of it is the subject of a knowledge synthesis grant opportunity that SSHRC will be launching this fall.

That was the fall of 2015. You said that this “funding opportunity will help our state of knowledge about”, one, “emerging technology”, two, identifying “gaps in our knowledge”, and three, “the most promising policies and practices related to” that. To that extent, I have five questions that I will bombard you with, and then you can answer them.

First, of the $340 million that you have in your budget, how much have you allocated to this grant program and what sector specifically is being focused on?

Second, what “emerging technology” has been identified so far?

Third, what are the “gaps in knowledge” that were identified?

Fourth, what are the related “policies and practices” identified that needed to be look at?

Lastly, as a businessman, for every dollar that was invested in this emerging technology, what do you anticipate or what does the research anticipate will help create jobs and have an impact on the GDP?

Take it on.

[Dr. Ted Hewitt]

Yes, I'm good, but I'm not that good. I think I got a few of the questions, so if you wouldn't mind, as we go along...?

[Majid Jowhari, Liberal, Richmond Hill, ON]

That's okay. Do you want to start with the first one?

[Dr. Ted Hewitt]

Yes. I'll start and everyone will help me.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Sure.

[Dr. Ted Hewitt]

To be clear, the program is now in place. It's part of a broader endeavour that SSHRC undertook through a broad consultation process starting about two years ago. It was called “Imagining Canada's Future”. The sole objective of this program was to help identify, with the help of Canadians and researchers, the public, and people in government and elsewhere, what would be the real research challenges in the coming 10, 20, 30, or 40 years. We identified a whole range of these.

Through this process, at the end of the day we said there were six.

Emerging technologies is one. It's pretty obvious. As you know, we all carry these things with us and they're giving us a lot of help, but they're also bringing a lot of challenges with them in terms of technology.

Another was mechanisms and new ways of teaching and learning. I think we all have opinions about how well our post-secondary schools are doing—and even our primary and secondary schools—in helping to instruct students.

Another that we heard again and again was aboriginal people and aboriginal communities. What are the challenges? How do we work together? How do we bring communities together to help them prosper, both on the aboriginal side and on the non-aboriginal side?

What are the challenges of big populations? As we grow and as we tend to consume more resources, how are we going to deal with this?

Where is Canada going in the world? Where are we going to be in 20 or 30 years? We're a major trading nation. Who will be our trading partners? Will we still be dependent on the United States in terms of trade?

The last one was in natural resources and energy.

That was the point of the exercise. The grants themselves are quite small. They were established in the range of about $25,000 to $50,000, I believe. The point was not to do the research to answer the question, but to do the research to tell us what's been done already and where the gaps are, because this is something that we need to know before we can go forward and start to really dig down on where we need to start working.

In that context, the amount that would be applied for the entire program would be minimal—in the order of $1 or $2 million out of discretionary funding that in fact for the most part comes under my control as president.

In terms of the impact of this, it's in a very early stage. Obviously the money is used, as in the case of all our grants, to fund student assistants and other types of research assistants directly. The rule of thumb is that about 75¢ out of every $1 in research and in our domain goes to people, and that creates employment.

But we're still so far upstream in terms of where we'll go that I cannot say to you that the impact of this will be the transformation of industries X, Y, and Z. What I can say to you is that as a result of this process—we've only done two so far and we're right in the middle of the emerging technology call—I'll be able to tell you that we now have a better idea of where the major challenge lies and where we should be committing dollars to learn more. Is it IT and bandwidth? Is it about teaching and learning with respect to new technologies? Or is it about workers and retraining of workers? We're going to have a much better idea of what that is when the process is completed.

I've probably left some things out.

Dominique, did you want to add anything?