Industry Committee on April 12th, 2016

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

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

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

I have some questions about cost recovery.

When did Statistics Canada get into cost recovery?

[Wayne Smith]

We got into cost recovery.... Well, I guess we've always been in cost recovery to some extent. It became a significant factor in the mid-eighties. There was a census in 1986 that was cancelled and then reinstated. At Statistics Canada, as part of the reinstatement package, we were asked to generate a much larger amount of money from the sale of our products and services. Prices rose by 300% to 400% on our standard products, and we started instituting licensing procedures, so that if anyone bought our product, they could use it themselves, but they couldn't re-disseminate it.

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

Does cost recovery guide some of the things you decide to study?

[Wayne Smith]

Let me be clear. The cost recovery I was talking about is a thing of the past. The pricing of our products and services, the restrictions on re-dissemination, that's all gone. Our standard product is free. Our data's free on the Internet. Anybody can take it. Anybody can re-disseminate it.

Every year we generate about $100 million in revenue through providing statistical services to other organizations, primarily federal government departments. Employment and Social Development Canada and Health Canada are examples of major clients of ours that ask us to carry out large surveys on their behalf.

In that domain, it's mainly a client-driven business. It's one of the issues that arise when people are concerned about surveys that have disappeared. In some cases a department has come to us and said they want to pay for a survey. We do the survey. Then they decide they don't really need it anymore, and the survey stops.That's one of the reasons that happens.

About one-fifth of our total production today, every year, is funded by other departments, primarily federal government departments, sometimes the provinces, sometimes the private sector, but very little. The buyer calls the tune, not in setting the standards, our professional standards, but in choosing what data's going to be collected.

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

If we were going to compare that with other jurisdictions, other countries that may or may not have cost recovery, is there any benefit or competitive advantage that their companies or industries, or even their governments, might obtain if they weren't subject to that?

[Wayne Smith]

No, actually, they envy us. The other countries come to look at our system and say they wish they had what we have.

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

Which? Statistics departments of other countries, or the—

[Wayne Smith]

The statistics agencies of other countries have said it's an issue for them because they can't take money and carry out statistical work. In some cases it doesn't happen, in which case it's a loss to everybody. The society doesn't get the data. In other cases, the survey may be carried out by an academic or private sector survey firm, but the data is held by the department that paid for it and not made public. The department benefits but the rest of the public doesn't.

We require that any data we collect, any survey we do, has to be made fully public. Everything we do becomes available to everybody to use in the wake of our completing the work.

The reality in Canada is that, although it's not quite true in other countries, there are very few organizations, provinces, territories, universities, almost none, that are able to carry out large-scale surveys. Even the private sector firms increasingly don't have that capacity anymore. In Canada the alternatives to Statistics Canada are relatively few.

That's not true in the United States, where there's a very dynamic industry operating out of universities notably and some private sector firms. There's something similar in the U.K., but other countries, like Australia and New Zealand, are more like us.

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

Mr. Pinto, you said that out of 3,500 companies about 27% are related to industry. In 30 seconds, what's the benefit that comes out of that, your researchers working with companies?

[Dr. B. Mario Pinto]

There is a dynamic equilibrium between the academy and the industrial sector. Very often an industrial problem poses a challenge that a university researcher happens to be working on. That sometimes happens over coffee, believe it or not. They're able to provide very deep insight and solve a problem.

Conversely, a university researcher may have a wonderful discovery but is unsure of how it should be developed. Perhaps he doesn't even recognize how it should be developed. Having an industrial partner seize upon that invention will lead to innovation. My ideal model, of course, is co-location.

I see I'm out of time.

[The Chair, Liberal, Dan Ruimy]

Yes, you're out of time. Thank you very much.

We're going to go to Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

I'd like to share a little bit of my time with Mr. Lobb. However, I usually talk too much, so I'll try to make it quick, and perhaps we can deal with some of the issues.

In respect of the graphene discovery you spoke about, with the revolutionary nanomaterials, I was in Edmonton at the U of A when the machine came in there. I'm not sure whether or not it was found there, but I'm curious about where your collaboration takes place. It's not just in Canada. There are other things done in other universities around the world. I'm curious about where that came from. I'm also curious about who reports these scientific discoveries to the public and when this reporting takes place.

[Dr. B. Mario Pinto]

These are interesting questions.

I cannot tell you exactly which particular industry the academic collaborator would partner with, but they are free to choose who they partner with. At the moment we are wrestling with the whole issue of whether we will allow international industrial partners, for a variety of reasons, as you might expect. For the moment we've restricted it to Canadian partners. I think, though, in view of my previous comments on going global, we will have to consider the other 95% of the knowledge out there to effectively exploit our discoveries.

When do we disclose? As soon as we fund a particular project, that particular material is available, but perhaps not the exact details because of intellectual property considerations. It is left up to the particular university and researcher to file patents, to protect that IP, etc. We don't intervene with a heavy hand at that point.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

The other question I have is for both organizations. Has the minister met with the department heads and given any written direction as to what the agenda is going to be over the next four years?

Perhaps Mr. Pinto could go first, and then Mr. Smith, because I do have another question for you.

[Dr. B. Mario Pinto]

Yes, in my case Minister Bains has met with the portfolio heads, and I have had several meetings with Minister Duncan as well.

[Wayne Smith]

Well, I've certainly met with Minister Bains and Minister Duncan as well. I think most of what we've discussed is what's contained in the mandate letters that everyone has seen, in terms of where Statistics Canada is going.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

For my last question, and I don't want to get into a lot of details here, I was curious about what Mr. Masse was talking about regarding Statistics Canada and information going to other areas. There seemed to be a bit of a debate there. I wonder if you could state what the rules are and what you follow as far as the security of Canadian information is concerned.

[Wayne Smith]

Under Canada's Statistics Act, any information acquired by Statistics Canada under that act is strictly confidential. It cannot be demanded by the courts or the police. Anybody who's going to be in contact with that information has to be sworn under the Statistics Act. They're subject to jail terms and financial penalties in addition, obviously, to being fired if they were to willfully or negligently disseminate that information.

As Mr. Masse pointed out, at one time we looked at using an external firm on our site under our supervision. In the process, we ultimately backed out of that; it did not happen. We've completely taken over the operations that the firm used to do. In 2011 and in the current census, there's no outsourcing to a private sector company. In 2016 the only organization involved in our operations for the census or for any of our other collection operations is Shared Services Canada.

[The Chair, Liberal, Dan Ruimy]

Mr. Lobb.

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

I'll wait until the next round.

[The Chair, Liberal, Dan Ruimy]

Thank you very much. We will take that extra time and bank it to the end.

We are going to Mr. Arya, for five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

In my first round I will limit my questions to Mr. Smith.

Mr. Smith, I have three questions. We have only five minutes, so I'll just ask all three. You can choose to answer one or all three.

You mentioned a formal protection in law of the statistics office. I would like you to elaborate on that, if possible.

You also mentioned the lack of willingness by households to participate in the surveys you conduct is a matter of concern. What are you doing to mitigate that?

My major concern is the different numbers I get from different agencies. For example, the number from the University of Ottawa for high-tech employment in Ottawa is 68,000. From Statistics Canada, it's 42,000. That's a big difference. While I can understand the difference may be in how you define “high-tech sector”, even then the difference is huge.

Looking at only Statistics Canada numbers for Ottawa, in 2014 your number was 64,000, and it crashed in 2015 to 40,000. That is a significant difference, which we know is not at the street level. From the University of Ottawa the number has been quite constant and slightly increasing during the last several years.

Why is there that difference?

[Wayne Smith]

As you intuited, one of the problems is definition. It's an abiding frustration of mine that there is a standard classification of industries and, of course, it doesn't really correspond to evolving trends in industrial production. Everybody makes up their own and defines them themselves, and so we have variations on what is high tech, what is biotech, what is clean tech, and if you add them all up, particularly the ones that are promoted by the trade associations, you wind up with 500% of the Canadian economy, because people add in different things.

[Chandra Arya, Liberal, Nepean, ON]

I hear you.