Industry Committee on June 15th, 2017

[Code Cubitt]

There are a few motivators I might propose.

One is I would think of technology transfer offices like miniature venture capital funds, if you will. They have a budget and they have clear milestones associated with what it is they do. It's not about bringing dollars into the university; it's about licensing out IP. I might tie remuneration to results. Perhaps there is equity. I get paid when I produce results; otherwise I don't get paid. Maybe in having a bit more of an industry slant on that you'll attract higher-quality technology transfer office personnel, and with a longer-term view to success. It's not this year's bonus one is after, it's five years from now when that IP produces huge royalties and then one really gets paid and there is an upside. Again, it's just taking a page from industry and applying it.

[Lloyd Longfield, Liberal, Guelph, ON]

I've spent most of my life in business. I was involved with setting up Innovation Guelph, and looking at how we mobilize innovation into our business community. Would that also go as far as saying that if you don't hit those goals, you don't get funded?

[Code Cubitt]

Yes, I think that's the feedback mechanism—

[Lloyd Longfield, Liberal, Guelph, ON]

Yes.

[Code Cubitt]

—whether it's implied or implicit.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

Mr. Musson, looking at the small business or the start-up network you work within, do you see this as an opportunity to have businesses drive superclusters versus it being another government program with lots of money looking to find a home? That is, the businesses would say, “No, this is what we need out of this and this is what we'll invest in if the government can support us.”

[Jeff Musson]

Yes, like my earlier comment, you can't force innovation, but if you bring smart people together and, as I always say, row the boat in the same direction, very innovative and cool things end up happening. As entrepreneurs you need that support system, especially at the beginning to get out of the starting gate. That support is financial, but non-financial, too, so with those superclusters the whole idea and the concept, and it's fair, is to bring experts and the entire community together for a greater good.

[Lloyd Longfield, Liberal, Guelph, ON]

It should be driven by business, not government—

[Jeff Musson]

Absolutely.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks.

Ms. Johnston, it's great to have you here.

Looking at the different streams of innovation, our science minister is saying research funding isn't innovation funding, it's research for research's sake; innovation may come out of it, but the primary purpose is pure science. On the separation of research funding from innovation funding, do you have a comment?

[Pari Johnston]

We put submissions in to both the innovation agenda and the science review, and very much tried to make those connections. We very much hope the broad ecosystem recognizes the continuum in the pipeline across.... You're right that much investment in discovery research is not going to lead to direct commercialization technology transfer, nor should it, because there are social outcomes, social innovations, and solutions to social problems that come out of university research as well, which we haven't talked too much about here, but those are part of knowledge transfer.

[Lloyd Longfield, Liberal, Guelph, ON]

They're very important.

[Pari Johnston]

We very much hope that the initiatives Minister Duncan is championing so well and the investments in budget 2017 and the innovation agenda are not siloed, and that there is a sense that investments in discovery research can and do lead to innovation outcomes—

[Lloyd Longfield, Liberal, Guelph, ON]

University-driven IP is coming out in one direction, which might have a set of parameters around it and separate agreements, compared to business-driven IP.

[Pari Johnston]

I want to go back as well. Investing in a healthy research ecosystem also ensures that our students are taught and given experiences in a research-enriched environment. That is also critical for creating innovative capacity and a culture of entrepreneurship and innovation. I think we've said a couple of times today, and I know many business leaders have, that the best knowledge transfer coming out of our institutions is our graduates. If we can find ways to ensure that they are being hired, that they are being given work-integrated learning opportunities, that they are being given research internships into our small, medium, and larger companies, that is going to be a very important part of our knowledge transfer.

[Lloyd Longfield, Liberal, Guelph, ON]

That could be another metric.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Lobb, for five minutes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thank you very much.

My first question is for Universities Canada. Billions go into research each and every year. I don't know that these numbers have been presented to the committee yet. I'm just wondering, if we look at the total amount that's invested each and every year, do you guys have a breakdown as to how much goes into overhead, how much goes into administration, etc., and how much actually goes into the actual research on the ground? Is there a breakdown that you could generally say—

[Pari Johnston]

Is that in terms of the research dollars going to Canadian universities, or is it their broader operating funds?

[Ben Lobb, Conservative, Huron—Bruce, ON]

The numbers we see from Statistics Canada and what have you, are $7 billion directly from the government into this. So, of the $7 billion that all governments invest, is $1 billion going to research or is $6.5 billion going to research and the rest is overhead? How does it break down?

[Pari Johnston]

We can certainly get back to you with the specific breakdown.

I will say that with respect to overhead and the institutional costs of research, in fact, Canada does not invest at the same levels as other countries do, so it was actually quite a strong recommendation from the science review panel that relative to other countries like the United States and the European Union, universities, particularly those that are larger research-intensive universities, which get a percentage of the institutional cost of research for every research grant dollar they get—

[Ben Lobb, Conservative, Huron—Bruce, ON]

—but you know what I mean. If you go to a charity, it will say that less than 10% goes to administration and 90% actually goes to helping the people or helping the cause. Does Universities Canada work on numbers like that so the government can say, “That's great. Most of the money goes to the people doing the work”?

[Pari Johnston]

Again, we're very happy to get back to you on the numbers.

Certainly I can say with confidence that the majority of the funding is going directly to the direct costs of research and the faculty and the graduate students who are leading that research. In fact, the government investment in the institutional costs or the overhead costs of research is actually very low relative to what other countries invest. In fact, part of the challenge we're finding is that to continue to drive the research agenda at Canadian universities, we're having to transfer funding from other parts of the institutions—the teaching and learning agenda—to support research, given the costs, particularly the costs of research that is highly capital intensive or highly expensive, if you look at certain fields.

[Ben Lobb, Conservative, Huron—Bruce, ON]

We had some comments at the last meeting we had that there's research being done—and I'm not trying to be critical here—at universities for which the solution is already there. They find they're working away in their little silo and there's already technology in the marketplace that's ahead of what they're doing.

Is that something that Canada tracks or the universities are tracking, trying to make sure that, of the money we're investing in research, we're not wasting that money right from the beginning?

[Pari Johnston]

Certainly, we don't have statistics at the national level, but what I can say is that all of our institutions have developed strategic research plans, and they are working to ensure that the faculty within their institutions, given of course that we support the principle of faculty driving their own curiosity-driven research, are broadly supported by the university in those thematic areas.

Many of our institutions have made important choices about where they're going to direct their strategic research dollars and where they're not being responsive to the needs in Canada and globally or to the signals from government.