Industry Committee on June 20th, 2017

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

We've heard a lot that the best way to move technology, or whatever, is to have that flow, to let students do that.

Do you have other suggestions along the line of how we could encourage that flow?

[Bert van den Berg]

Again, the next-biggest way of doing that is through collaboration. The more we can do to enable companies to access and collaborate with researchers, the better we're going to transfer the knowledge and expertise at universities and colleges. It's about collaboration more than it is about licensing of patents.

[Dr. Ted Hewitt]

May I add to that?

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Go ahead, please.

[Dr. Ted Hewitt]

One other piece of data we know is that the value of post-secondary research collaboratively with industry is over $1 billion a year. This number is many times the amount realized through licensing and royalties. This is an excellent vehicle, in fact, to involve students and researchers in research projects in which they're interested.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Instead of just saying to a company, “I have a patent. Here it is, written down on a piece of paper. I'll hand it to you. Please go and figure it out”, it's helpful to have the person who might have worked on it or who knows a bit about it move over to the industry.

[Bert van den Berg]

I think that's essential. Typically we have eight students involved in a collaborative project.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You have eight students per project.

[Bert van den Berg]

Yes, per project, and one in three companies actually hires somebody from the project.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

As you said, that flow is critical to making it happen. We have to have that. It's not just saying, “I have a piece of paper here. Go figure it out or read the manual.”

[Bert van den Berg]

That doesn't work. As a researcher, I've experience that.

A patent is like a publication. It attracts the attention of companies. These people might have expertise, but what they want is not actually the patent; they want some version, some modification, or some adaptation.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

They want the know-how.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Lobb for seven minutes.

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

Thanks very much.

To start, I have one question for both of you on the last topic. The $1 billion in combined collaborative investment for this is obviously a smaller percentage than the overall investment that governments make in research.

There's a good return when you have business and academia vis-à-vis government dollars to focus on a project and make something happen with it, but the majority of the money is in, I would say, other. Is that correct?

[Bert van den Berg]

The majority of the money is in training. It's again that you're training the next generation who will actually have the expertise and go to companies and help them innovate.

[Dr. Ted Hewitt]

I'm sorry, but just to clarify, if you're talking about federal investments in research per se, which is in the order of $3 billion, or maybe more if you include the investments in infrastructure through CFI, then yes, that's the lion's share. Then also count provincial investments, and I gave you the figure for industry investments in collaborative research with post-secondary.

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

We're putting billions in every year. If the government is putting in billions, and maybe you won't get your return the first, second, or third year, or maybe it will take 10 years, should the government look at getting a return of every dollar it invests? What are your thoughts?

[Dr. Ted Hewitt]

If one takes the narrow view that a dollar invested has to produce a dollar in patentable IP or commercializable products, I don't think that's going to work. The overall question is, is our investment in fundamental science paying off in broad terms with respect to creating economic activity in a huge economy that is many times that investment? That's only a tiny portion of the total GDP of Canada. From my perspective, as president of SSHRC, I look at whether it is the kind of society that enables and enlightens citizenry who can participate in the further development of prosperity in the country and in the elimination or treatment of some of the serious ills that affect other countries.

It's a broader question and very difficult to measure in terms of what those investments return. Sometimes I say that if you want to know what those investments return, stop funding it. I'm not suggesting that, but look at other countries where those investment aren't made and ask yourself if you want to live there.

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

I asked the Canadian universities that were at the last meeting whether there is a general guideline we as members of Parliament can use when we have constituents saying, “You've invested $3 billion or $4 billion a year in research; how much of that actually goes to the researchers and their work, how much goes to fancy buildings and big administration, and how much actually goes to the people who are doing the work?” What kind of numbers are we looking at?

[Bert van den Berg]

About 20% of the $1 billion or the $3 billion dollars together goes to funding the indirect costs of research, on average, to universities. The smaller institutions get a higher fraction, but on average, it's about 20%.

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

Is that a number that we should be satisfied with in Canada? How does that compare to Europe, the U.S., Japan, etc.?

[Bert van den Berg]

As you heard in previous testimony, other countries actually have a higher rate.

The government has funded increasingly strategic—that is, grouped—research activity. “Grouped” means organized. It takes more effort to organize activity than to go off and individually explore all sorts of directions, so there is some benefit to be had from these higher overhead costs in terms of strategically investing. It's a philosophical question, but certainly Canada is not overspending on the indirect costs. We're spending very high amounts on the direct research.

[Dr. Ted Hewitt]

My understanding was that you were also asking about where the money goes, in terms of where the investments go. Is that correct?

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

No, I just want to make sure that as members of Parliament we should be satisfied that the money's actually going to researchers and not administrators.

[Dr. Ted Hewitt]

In our estimation, across the councils it's fairly standard. Most of the money, 70%, goes to people. The researchers are paid through the university, but they hire students and research assistants, so these are big investments in communities.

In London, Ontario, the $100 million or so that comes in from the Tri-Council and CFI is invested in people and in jobs in that community, and then we see the benefit of that in what's produced in the research. With regard to the indirect costs, now we're talking about equipment, but also people, because that's maintenance, utilities, and all the things that are required to keep the research moving. It's a people enterprise, at the end of the day, if you take the equipment out of the equation.