Evidence of meeting #67 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was universities.
A recording is available from Parliament.
Vice-President, University Research, University of Waterloo, and U15 Group of Canadian Research Universities
Yes. Really, what you're trying to do is look at attracting early-stage investors if you're doing a start-up in that space.
On the other area that no one really has alluded to here yet, I'll say just very briefly that if you're starting to look at licensing technologies to large companies, it's a different game. I always say that there's licensing over here and then there's doing spin-off companies and start-ups. For a lot of technologies, especially when you look at drug discoveries or some of these areas where there's a huge amount of capital required up front for an idea, licensing is often a better way to go. Really, this type of activity that I'm talking about here is targeted to start-ups, not to licensing.
Liberal
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Thanks to all of you for your comments.
I've also noticed that there's some committee business here at 10:30. I don't know if we're sticking with that or not, but I have an outstanding motion, and if the intent is to discuss my motion in camera, then I won't be doing that today.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Okay.
I'd also like to point out for the Liberals across the way that my motion deals with the Investment Canada Act. Since we last discussed it, there have been numerous news articles and transactions that have taken place that prove we should be discussing the Investment Canada Act for the benefit of all Canadians. We'll see if they have the courage to do so.
I want to ask Ms. Hinzer a question first. It has to do with comments that Mr. Auger and Mr. Srinivasan made on standardization.
We're not critiquing universities and we're not criticizing universities. We're talking about making improvements or suggestions. Is there any valid point that there should be some streamlining and standardization taking place so that when businesses go to initiate, they don't have to deal with three different processes in one city, such as Ottawa? What do you think?
Associate Professor and Canada Research Chair in Photonic Nanostructures and Integrated Devices, University of Ottawa, School of Electrical Engineering and Computer Science, As an Individual
It would be great if that were the reality, but the minute you put in lawyers and you have companies, they all want to negotiate. Everybody wants to negotiate.
I'll give an example. In the U.S., the overhead is 52.3%. In Canada, it's usually around 20% to 40%. You have to remember that this overhead is not just for the legal fees, but to be able to do research and labs, and for the security of the university, your Internet connection, your heating and your plumbing in your labs, and just getting desks for your students. These overhead costs are the costs of doing research. It's like overhead in a company. Every company runs with an overhead. When we're talking about fees, these are fees in order to be able to run your university and to deliver on the projects with those companies.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Fair enough, but if we're having a negotiation, shouldn't they be pretty close, the overhead costs from universities...? Is it impossible? For us sitting here today in a small country like Canada—relative to the rest of the world—when we're looking at this study right here, do we start off saying that one of the things we can't do is streamline the negotiation process?
Associate Professor and Canada Research Chair in Photonic Nanostructures and Integrated Devices, University of Ottawa, School of Electrical Engineering and Computer Science, As an Individual
I'll just give you an idea of the part that is standard. The funding agencies give overhead to the academic institutions, and those are standardized. It's more on the negotiation per se between an R and D company and a university.
Yes, I agree with that statement. It would be better if it were standardized.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Okay.
Mr. Auger, thank you for taking the time today. One of the comments you made about paying for IP twice goes back to what Anand said that in a lot of ways the federal government's money goes into universities through transfer to the provinces, etc., and the Canadian taxpayers' dollars go in, yet professors in universities want the IP.
Maybe you don't want to go into specifics, but I want you to talk about the negotiations from the beginning, the struggle to find value, which you made in your comments, and also the frustration from having to pay twice for IP.
Chief Strategy Officer, Desire2Learn Incorporated
Typically, when we're working with universities, it will be under some sort of grant program. Those grant programs have requirements, usually to fund research within a university. A good part of the requirements is they require a commercialization partner, like a tech company like ours. Ultimately, the goal is to find commercial value out of research outcomes.
The problems arise in the funding models. Usually it's some sort of matching program. It might be dollar-for-dollar matching, based on the funds raised against government funds. Those funds typically come from companies like ours. When we are paying for half the cost of the program, we are investing our people time additionally to jointly do that research with the university.
At the end of the day, if we then have to pay the university for either a licence or the purchase of IP, since it's jointly arising IP, then to a large degree we feel we have already paid for that IP, either through our own dollars or through Canadian government dollars. Technically, we're paying for a licence or a purchase: it seems as if we're paying twice.
Liberal
The Chair Liberal Dan Ruimy
Sorry, we're out of time.
We're going to move to Mr. Sheehan. You have five minutes.
Liberal
Terry Sheehan Liberal Sault Ste. Marie, ON
Thank you very much to all our presenters.
A couple of presenters mentioned the importance of involving young Canadians in research and development, and the asset they can become in tech transfer, not-for-profits, or in SMEs. The federal program has internship programs of up to about a year, 90% for non-profit and about 50% for SMEs.
Perhaps if the people who were commenting about the value of those internship programs could comment on that, that would be great. I think Karin mentioned something about the youth.
Associate Professor and Canada Research Chair in Photonic Nanostructures and Integrated Devices, University of Ottawa, School of Electrical Engineering and Computer Science, As an Individual
Thank you, Mr. Sheehan.
Internships are extremely important. Yes, the Government of Canada has always had internships. I did internships for the Government of Canada in the early 1990s. In my opinion, there are not enough. I know we have a lot, but we don't have enough.
Students come knocking on my door almost every day. I try to work at the university, and my door is open. I try to direct them toward the funding scheme that can help them the most, but there are not enough of them. Young people looking for opportunities need experience.
Liberal
Terry Sheehan Liberal Sault Ste. Marie, ON
That's excellent.
Does anybody else wish to comment? I don't know if someone online mentioned internships.
Go ahead, George.
Vice-President, University Research, University of Waterloo, and U15 Group of Canadian Research Universities
If you take a look at the program run by Mitacs, which is specifically directed toward graduate education—I won't declare a conflict, but I was on the board of Mitacs at one point—it aspires to do 10,000 placements a year of master's and Ph.D. students working in the private sector for experience.
At the University of Waterloo, we do 20,000 undergraduate co-op placements a year in our co-op program. It's paid employment by the private sector. It's a vastly transformational opportunity for students when they go out on these work terms.
In this IP space and with respect to graduate education, master's and Ph.D.s., I think the trick to a lot of commercialization activity is those internships or those periods of time. Remember, the first comment I made in my presentation had to do with highly skilled employees. We produce them, but we have to have an effective way to get them into the private sector. Those internships achieve that goal.
Liberal
Terry Sheehan Liberal Sault Ste. Marie, ON
Agreed. One thing too is that in northern Ontario, where I'm from, in rural Canada, there are programs in place where some of those internships can be extended 24 months in an exceptional case, but to small cities and first nations. In your opinion, if we broadened it especially for rural Canada, with a lot of the good research that's going in forestry and mining and out on the oceans and whatnot, and we extended that to the private sector for 24 months and made it more generous—I like the fact that you said “more”, and it's on record—how would that be as a recommendation? Do you think that would help out in rural Canada?
Associate Professor and Canada Research Chair in Photonic Nanostructures and Integrated Devices, University of Ottawa, School of Electrical Engineering and Computer Science, As an Individual
Yes. The companies that I work with like internships. The basic internship is four to six months. Mitacs is six months. Companies like one-year internships more. This is more the model from Germany, where you're doing an apprenticeship. It doesn't feel like a burden. People want to have you there. In the first few months you're there, you're learning the ropes. If you're only there for four months, you're pretty much learning the ropes and not contributing that much. The longer you are there, the more you contribute. The more you integrate in that community, the more you want to want to stay there and work there. For regions that is extremely important.
Co-Founder and Managing Director, Association of University Research Parks Canada
Dawn can go first, and then I'd like to talk.
Associate Vice-President, Research and Innovation, George Brown College, and Polytechnics Canada
Thank you.
The Mitacs program has been open to only university students so far. There is a fantastic opportunity, with the 10,000 new internships, to open that up to college and polytechnic students as well. As I mentioned, we worked on over 500 projects in the last 10 years with mostly small businesses. Many of those small businesses would love to work with a polytechnic intern on R and D after they have worked on an applied research project with us.
There is a huge opportunity there for the Mitacs program. There was some opening up in the federal budget language around it being open to colleges and polytechnics.
Liberal
The Chair Liberal Dan Ruimy
Thank you. That's about all the time we have for that.
We'll move to Mr. Nuttall.
You have five minutes.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Thank you, Mr. Chair.
I'd like to thank all of our presenters for being here today and for answering our questions.
I'd like to take this in a bit of a different direction. One of the interesting things we're able to do as parliamentarians is to travel to other countries, learn what they're doing and what they're doing differently, identify the successes and failures, and perhaps bring those lessons back. One of the trips I was able to go on that I found the most intriguing was a trip to Israel. On that trip to Israel, I learned a few things that I'd had no idea about. Number one was that in terms of start-up tech companies...the most densely populated in the world, Tel Aviv is blowing up. We had about a five-hour presentation during which they explained how this was all started and how they managed to keep their IP and grow it into businesses, etc. It was really about the alignment of government priorities with the private sector.
Now, we don't have all the things that they have going on. Security is a major export for them. We have the U.S. beside us, not countries that believe we shouldn't exist, so there are some definite differences.
I'm wondering if you could give me any examples of where you have seen the prioritization, or the government has demonstrated the prioritization, of what we already have as our major assets in Canada in terms of leveraging them. We have huge natural resources, whether it's oil...northern Ontario, or northern Quebec. How can we use the assets we have to develop better policy for IP and to develop better synchronization between those natural resource sectors and IP entrepreneurs as they grow and take those things to market?
Vice-President, University Research, University of Waterloo, and U15 Group of Canadian Research Universities
Perhaps I could make a comment with respect to Israel. It's true that Israel has a very integrated chain. The University of Waterloo has partnerships with three universities in Israel. We have partnerships around accelerators and incubators, both to get some opportunity for Canadian companies from Waterloo and Israel and to bring some Israeli companies over here to look at opportunities.
One thing you have to remember about Israel is that the level of funding that is put into each of those new start-ups is, frankly, amazing. You form a company, and the chain of resources that you can rely on, all the way from early stage through venture all the way up, is quite consistent.
In some ways they have the same problem that we have. They lack large multinationals. You can get a company up to $300 million U.S., but then trying to grow it above that is a very similar type of problem in Israel to what it is here.
I think it's fair to say that, in terms of natural resources and activity in Canada, the area where I see most of the opportunity is in clean tech. It has to do with effectively developing processes and commodities that are marketable worldwide in terms of industrial cleanup. The other one has to do with the forest industry and areas of nanocellulose activity in that space, where we probably have a pretty good opportunity now and have an opportunity to move forward.
I don't know if that answers your question.
