Industry Committee on April 12th, 2016

[The Chair, Liberal, Dan Ruimy]

Good afternoon, everybody. Welcome to meeting number seven of the Standing Committee on Industry, Science and Technology.

Today, we have witnesses from Statistics Canada, Wayne Smith, chief statistician of Canada; and from the Natural Sciences and Engineering Research Council of Canada, Mario Pinto, president; Alfred Leblanc, vice-president, communications, corporate and international affairs; Pierre Charest, vice-president, research grants and scholarships directorate; and Patricia Sauvé-McCaun, vice-president, common administrative services directorate.

We're going to allow StatsCan to do its 10-minute presentation, and then, if it's okay with the committee, we'll proceed to the presentation by the Natural Sciences and Engineering Research Council. This way you can direct your questions to either party.

Without further ado, Mr. Smith, the floor is yours.

[Wayne Smith, Chief Statistician of Canada, Statistics Canada]

Mr. Chair, I would first like to thank you for the opportunity to speak to you today about Statistics Canada's priorities and challenges.

Statistics Canada is well known for regular publication every year of a wide range of high-quality economic, social, and environmental data, from gross domestic product to crime rates, from employment to inflation, from post-secondary graduations to field-crop production. These data support the decision-making of governments, business, unions, civil society, and even individual Canadians. Our stakeholders demand that data be both consistent and comparable over time, yet responsive to emerging needs. We work collaboratively with provincial and territorial governments, other stakeholders, and with international organizations and other national statistical offices to meet these challenges. For our most impactful data, we pre-announce publication dates and religiously meet them. Maintaining this continuous stream of decision data remains our major focus.

This year, of course, is a special year in the cycle of statistical production. It is the year in which we conduct the censuses of population and agriculture. For 2016, the census of population returns to a comprehensive and fully mandatory program. Exceptionally, one in four households will be asked to complete the long-form census. The 2016 program will make greater use of administrative data to reduce the burden on Canadians of responding. It will also make greater use of social media to promote the census. We hope and expect that this year about two-thirds of Canadian households will respond to the census via the Internet.

Another plus for the 2016 program is that we expect to release all data from the census of population about 10 months earlier than in previous censuses. The census of agriculture will also be conducted this year and hopes to make some significant gains in Internet response by farm operators.

As I mentioned, Statistics Canada's program must evolve to meet emerging needs. In recent budgets, we've been funded to introduce a triennial survey of household wealth, to generate new statistics to measure the stability of financial markets, to build a new comprehensive price index for new and resale housing, to measure the clean-tech sector, and to determine how best to measure the impact of foreign buyers on residential real estate markets.

Working jointly with other departments, Statistics Canada has made strides in labour market information, developing and implementing a new survey of job vacancies and wages, which has now begun publishing data. We have also fielded a pilot survey on children's health that will fill a significant gap in health data. The survey on job vacancies would not have been possible without direct funding from Employment and Social Development Canada, and the survey on child health would not have been possible without the assistance of Health Canada and the Public Health Agency of Canada.

Statistics Canada also works to increase its efficiency and reinvests savings in the statistical program. In the past year we invested in the expanded and improved statistics on the environment, on energy, and on globalization.

Rising to the challenge raised by the Auditor General in his May 2014 report, we have developed new techniques for estimating small area data, and we'll soon be applying these techniques to generate a wide variety of small area data on new subjects.

Beyond these success stories, there are still gaps where new partnerships and resources are needed to make progress. One example is the digital economy and innovation. Some work has been done on an ad hoc basis, but a more regular and consistent program is needed.

Academic researchers are pleading for Statistics Canada to resume conducting longitudinal surveys that follow children, youth, workers, immigrants, and seniors through time, as some policy questions can only be addressed in this way. Longitudinal surveys are, however, expensive and require time to yield their full potential. Better information about life-cycle transition, such as transitions from school to the labour market, or from work to retirement, and from early old age to the very advanced years of aging, are of particular interest to researchers and to policy-makers.

I mentioned efficiency earlier, and I'm pleased to be able to tell you that Statistics Canada has a permanent management process to seek out and exploit opportunities to improve the efficiency, robustness, and responsiveness of its systems and processes. These systems have been thoroughly overhauled over the past five years and have been improved on all three dimensions of efficiency, robustness, and responsiveness.

Despite budget reductions, as I mentioned above, the efficiency gains allowed us to expand the statistical program in critical areas, and to remove all charges for access to standard statistical products and all limitations on their redistribution by others.

Gains in responsiveness allowed the agency to develop and deploy the new job vacancy and wage survey in record time.

One particular strategic investment is being made into the further development of the use of administrative data and other non-traditional data sources, such as big data and satellite telemetry to replace or complement traditional survey research including, potentially, parts of the census. These techniques can reduce the cost of statistical production and reduce the burden on businesses and individuals while permitting data to be generated for very small geographic areas.

Equally important for the health of the statistical system over the past few years, Statistics Canada has identified each year, and program by program, investments required during the next 10 years to ensure the continuity and quality of its outputs. These are things such as system and survey redesign, implementation of new classification standards, and implementation of new international conceptual standards. These investments have been consolidated into a 10-year forward plan with a corresponding financial plan to ensure that the necessary financial resources will be available.

A final priority I'd like to mention is the government's commitment to reinforce the formal independence of Statistics Canada in law. While Canada's statistical system is much envied, one area of weakness that stands out among developed countries is the absence in law of formal protection of the national statistical office's independence. Canada has endorsed guidelines from the United Nations and the OECD that set out principles and recommendations in this regard. Statistics Canada is working on recommendations for consideration by the government that would follow international guidance and bring us in line with other developed countries.

Turning to challenges, the first one I would mention is a very positive one. The government's emphasis on evidence-based decision-making and monitoring of results is giving rise to what I have described as a tsunami of demand for Statistics Canada's services that will temporarily tax our capacity as we adjust to this new level of expectations, but adjust we will.

The second challenge at the forefront of our thoughts is the impact on data quality of declining household survey response rates. This is a phenomenon throughout the developed world for both public sector and private sector survey organizations. It reflects both greater difficulty in contacting households and the faster pace of modern lives which affects the willingness of Canadians to participate. We're tackling this issue through a combination of improved survey processes, new response channels, application of behavioural economic theory, improved survey design, and greater use of administrative data to displace or shorten surveys.

The final challenge that's very front of mind for us at the moment is the temporary decline in the effectiveness of our informatics support. Statistical agencies are essentially applications of informatics. Every stage requires intensive informatics to actually carry out the work. There has been some degradation in the level of support that we've been receiving, and we're working on this issue with our partners.

I believe I've pretty much exhausted my time, so I'd like to close by thanking you again for for this opportunity to address the committee on the work of Statistics Canada.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We will move to the Natural Sciences and Engineering Research Council of Canada.

[Dr. B. Mario Pinto, President, Natural Sciences and Engineering Research Council of Canada]

Thank you, Mr. Chair, and ladies and gentlemen of the committee.

My name is Mario Pinto. I am the president of the Natural Sciences and Engineering Research Council of Canada, also known as NSERC.

I am happy to be here today to talk to you about NSERC's role in growing Canada's prosperity and well-being.

NSERC invests over $1 billion each year in natural sciences and engineering research and innovation in Canada's post-secondary institutions—colleges, polytechnics, and universities. Our investments support over 30,000 science and engineering students, and 11,000 professors, world-leading researchers in their fields.

Our investments also enable partnerships that connect industry with discoveries and the people behind them. This ensures that discovery research is constantly being enriched by industry and market perspectives. We currently work with 3,550 companies. We are very confident in these investments. The OECD has stressed human capital as a basis for innovation and ranks Canada number one in the percentage of highly educated individuals in the workforce. These investments have never been so critical.

The world is in the midst of what some call the fourth industrial revolution, and Canada's success will largely depend on fully mobilizing Canada's discovery and innovation ecosystem. The hallmark of the present revolution? It is progressing faster than ever before at a scale and scope that is both unprecedented and unpredictable.

Powerful new technologies have emerged from fundamental science and are converging across physical, digital, and biological worlds. These enabling technologies are transforming economies, societies, and industries. Most examples are within NSERC's purview: energy storage, advanced robotics, the Internet of things, 3-D printing, next-generation genomics, automation of knowledge work, and advanced oil and gas exploration and recovery.

The impact will be felt across the whole of Canada's economy in agriculture, fisheries, forestry, oil and gas, transportation, construction, and manufacturing. All are being completely transformed. To use an example, graphene, a revolutionary nanomaterial 200 times stronger than steel, resulted from pure discovery research. We are already seeing the use of carbon fibre in the aerospace industry because of its lightweight qualities. Graphene, which is even lighter and stronger, could eventually replace all steel structures in aircraft, vastly improving fuel efficiency and range. The many industry applications of this breakthrough at reasonable cost will rely on further discovery research.

To effectively participate in the fourth industrial revolution, Canada needs scientists, engineers, and business leaders who are empowered by a research and innovation system that is adapted to this technological reality. Now is the time to embrace fresh thinking about how to pursue research and innovation activities. Today's research and innovation ecosystem is much more collaborative and non-linear than ever before. Done right, there is a very active dynamic linking discovery and innovation.

Discovery-based research, which draws on different thinking and uses a different lens, produces new firsts in knowledge, as well as new opportunities and inventions which are certainly of value to innovation. Innovation, which is attuned to market needs and opportunities, creates a new context for discovery research, and helps test and realize the value of inventions. In the process, it generates challenges that inspire further discovery research.

In a highly functioning, discovery-innovation dynamic, there is a constant back and forth of information and ideas. Many different players are involved, and with guidance they act in an integrated and purposeful way. For example, NSERC partnerships help SMEs increase their bandwidth, grow their intellectual property, and maximize their worth in global value chains.

I would now like to share a few comments about budget 2016.

We were very pleased to see an increase of $30 million a year to NSERC's discovery budget, which is ongoing. This will have a positive and much needed impact on our community. Budget 2016 also included other strategic investments that can be effectively leveraged by NSERC's discovery and innovation programs. These include enhanced funding for the Canadian Institutes of Health Research and the Social Sciences and Humanities Research Council, our sister agencies; two Canada excellence research chairs related to clean and sustainable technology; and welcome support for optics, genomics, stem cell research, drug development, theoretical physics, clean technologies, agriculture advances, electric grid technologies, and NRC's IRAP.

NSERC is also eager to participate in a variety of initiatives: in the federal government's new innovation networks and clusters to help high-impact firms reach their potential, with currently five regional offices that broker relationships between the local academic and industrial sectors; with Indigenous and Northern Affairs Canada on the effects of climate change in the Arctic; with the Minister of Science, who will have NSERC's full participation for the review of federal support for fundamental science; and with Minister Bains on the development of the innovation agenda.

I would like to mention some of the challenges we face.

Mastering the S and T revolution requires an empowered brain trust that can work across disciplines and borders. Our cutting-edge engineers and scientists must also have a global reach to access the 95% of S and T knowledge generated outside of Canada.

One of NSERC's most significant challenges is ensuring that Canadian researchers have the necessary funding to pursue discovery research that will yield benefits for Canadian society and our economy. Budget 2016 funding for NSERC will help address pressure that has been created by inflation, a broadening mandate to include the colleges and polytechnics, and a growing client base, a 30% increase since 2007. This is a good start. Other countries have been investing heavily, and Canada will need to do the same to remain competitive.

NSERC's new strategic plan, NSERC 2020, will help us mobilize Canada's discovery and innovation system and face today's technological reality. We will back bold ideas and the best talent, and connect communities to address Canada's biggest challenges and greatest opportunities.

We have been focusing on initiatives that will coalesce NSERC's diverse research expertise to work on such critical issues as R and D on the integration of renewable and clean energy sources into smart electricity grids. NSERC is keen to work with ISED and the Department of Natural Resources and the Department of Environment and Climate Change on these aspects.

NSERC is also looking to help support the next agricultural revolution: precision agriculture. We are looking forward to working with Agriculture and Agri-Food Canada on this initiative.

NSERC continues to invest in other strategic priority areas: aerospace, automotive, and high-tech manufacturing; forestry and wood products; fisheries and oceans; health and life sciences and technologies; and natural resources and energy. We are helping Canada's critical and crucial industries adapt and grow in the fourth industrial revolution.

Ladies and gentlemen, in summary, we are an organization with deep knowledge and connections to the academic world and with expertise and connections to industry as the result of thousands of partnerships with Canadian businesses. That is what makes us different, and that is one of the ways we provide value. We also provide rigorous quality assurance through expert peer review of projects, grants, and awards. In so doing, we de-risk R and D investments. We build the feedback loops from industry to academia to optimize technologies and help companies grow and participate in global value chains and trade in value-added to contribute to interconnected economies. We assemble pan-Canadian networks that bridge to international partners.

We are ready.

Thank you very much.

I will be happy to answer your questions.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We will begin with Mr. Longfield.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Mr. Chair.

Thank you, witnesses, for your tremendous presentations. I wish we had more than the few minutes we have to see what you're doing. You've touched on a number of areas that we're working on as a committee. We're looking at a manufacturing strategy for Canada that will include innovation. It will include using data and statistics as well as our research partners.

In other roles, I sit on the industry, science, and technology committee, which also has interactions with you, and I chair our national caucus for the government for post-secondary education and innovation, but enough about me. I'm very excited to have you here.

I'd like to start off by asking Dr. Pinto questions around the college and community innovation program. The planned spending is $40.7 million in 2016-17 and the polytechnics are a very important part of the innovation ecosystem. Looking at the vision going forward of where that money may be spent, and also in the new five-year strategic plan that NSERC has developed, what role will the polytechnics be playing in terms of moving forward with Canada's innovation agenda?

[Dr. B. Mario Pinto]

Thank you very much for the question.

We view this in the light of embracing diversity, and that is one of the foci in our strategic plan. We present an innovation ecosystem that embraces colleges, polytechnics, small universities, very large research-intensive universities, etc., and we attempt to tap into the best of the best in all of those sectors. That said, we have invested $47 million in 2015-16 in the CCI suite of programs. That's up from $28 million in 2010-11, a very good trajectory.

We do so by investing in applied R and D projects. We have a suite of programs, the engaged grants for colleges, applied research and development grants, college-university idea to innovation grants where we bring together colleges and universities and marry their expertise, and even industrial research chairs at colleges. These are all worthwhile investments. We fully intend to support those as we go forward, but with an integrated innovation agenda where we trade between partners, bring the universities together with industry, bring the universities together with colleges, polytechnics, and we have a combined ecosystem.

[Lloyd Longfield, Liberal, Guelph, ON]

Very good. I know that the funding for colleges has been less than that for universities, but the network is a different network, I realize.

I'm a mechanical engineering technologist, a college grad myself, and applied science is something that I'm hoping we can work together on.

Centres of excellence and commercialization and research will see their funding increase from $8.2 million in 2014-15 to $12.5 million in the coming year. Is the number of centres of excellence going to increase? We're looking at cluster development. Are the centres of excellence numbers going to increase, or are you going to be investing in particular centres of excellence? Do you have a detailed plan on that yet?

[Dr. B. Mario Pinto]

Our system is based on quality assurance and peer review. While it is true that we can put out specific calls in strategic areas, for centres or even for networks of centres of excellence, we leave it to the community to come together and to formulate their own ideas, and to come forward with the best possible ideas, and they compete. We insist on competition and we disfavour programs or projects that are funded outside our suite of programs, because that gives us quality assurance. It gives our industrial partners quality assurance and validates the projects. We intend to continue the calls for CECRs, centres of excellence for commercialization and research, in the future, depending on our budget allotments, but we will not target those areas necessarily.

[Lloyd Longfield, Liberal, Guelph, ON]

I'm from Guelph, so you could almost guess where that question was coming from.

I have one more question in terms of expenditures. I apologize to Mr. Smith for leaving him out of my questions, but I know there will be lots of questions for him coming from my colleagues and colleagues across the table.

What is the difference between the grants and scholarships programs with NSERC, the actual spending of $863 million last year, and the Canada graduate scholarships with spending of $42.5 million in 2014-15?

[Dr. B. Mario Pinto]

This is historical. At one time each of the councils had their independent graduate scholarship programs. Those were referred to as post-graduate scholarships: doctorate, post-graduate, and master's. In moving to a harmonized approach with our sister agencies, SSHRC and CIHR, we decided to generate a more prestigious scholarship, the Canada graduate scholarship, CGS, at the master's level, and CGS at the doctoral level. They have slightly higher monetary value, but they also aim to recruit a higher calibre of student. That program is proceeding extremely well. They have been devolved to the different universities, the CGS M, for example, and we are proceeding now to look at how we can tweak the system to ensure fairness for the smaller universities with respect to our quota system. But both programs are working extremely well.

[Lloyd Longfield, Liberal, Guelph, ON]

I'd love to see how it ties together with Statistics Canada. Would Statistics Canada be working with the graduate programs to see which sectors need the most help, or to try to evaluate the investment in research to see whether results are coming out?

[Wayne Smith]

We don't have a specific program intended to do that, but we do produce a range of data that can be used for those purposes. There are specific projects that we could potentially carry on with NSERC to carry out a more in-depth evaluation.

[Lloyd Longfield, Liberal, Guelph, ON]

It seems like a natural fit.

Thank you, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Dreeshen.

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

Thank you very much, Mr. Chair, and welcome to all our guests today.

Mr. Smith, I'm a former math teacher and one of my students worked for your department for a number of years, so I have great knowledge of what has to happen as far as statistics are concerned. But I'm also a farmer, so when we talk about the agricultural census form coming back, and I've seen the long forms and I know all that is designed with that, you've mentioned that it's going to be presented in such a way that it makes it relatively easy to submit answers over the Internet.

What time of year is it going to be coming out? Are the questions changing from what they have been in the past? What are you looking at specifically on the agriculture point?

[Wayne Smith]

The census of agriculture started with large farms in December 2015. We're working on the collection of the census from that point through to September. A lot of the contact with the farms will occur during the May-June period largely because in order to save money we're piggybacking on the operations of the census of population to make the whole operation more efficient. We're well aware this is difficult for some farmers, particularly during seeding periods, and there's a fair bit of flexibility for the responses to come back from the farms. As I indicated, we'll be in the field until September to collect them.

In terms of the content of the census, the struggle in statistics is always between continuities: you have the same information available and you can look for trends over time and new issues that need to be addressed. There are slightly fewer questions in the census of agriculture this time because we intended to obtain some of the information through administrative data. There will be some additional questions looking at issues of current concern. Organic farming and deployment of technology, for example, are where we would be looking for additional content. This time we hope to persuade the largest possible number of farm operators to respond via Internet.

One of the advantages of responding via Internet is that, based on the type of farm, it jumps you past a whole bunch of questions you don't have to answer. It guides you through the questionnaire as opposed to a paper questionnaire, where you wind up looking at every question and trying to decide whether or not it applies to you. We started that process in the last census. We're hoping that more and more farmers will adopt that response channel, and the result will be a reduction in the perception of burden as a result of the census of agriculture.

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

You mentioned that you needed some protection in law. I wonder if you could expand upon that. I didn't quite get where you were going with the statement you made during your address.

[Wayne Smith]

If you look at the statistical legislation of most developed countries, for example, the United Kingdom, Australia, and New Zealand, and other countries with the Westminster system, but also Europe, in law certain specific powers are assigned to the chief statistician or director general of the national statistical office, powers over things that involve decisions about statistical methods, analysis, dissemination.

In many pieces of legislation there's a specific reference to the independence of the statistical office. The difference in Canada is that our legislation essentially creates the head of Statistics Canada as being simply a deputy minister. It has none of those provisions. Almost all of the powers in the legislation are assigned to the minister and delegated as opposed to directly assigned to the chief statistician.

International standards have strongly suggested specific provisions in law that would enhance the independence and they exist in most of the other developed countries.

That is what we're looking at, bringing us in line with what is done in most other countries.

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

In the answer to Mr. Longfield, there was a discussion about colleges, universities, and polytechnics, and of course the research dollars that are there as you try to work with those various organizations. I, too, was involved with the colleges and universities.

You talked about pure and applied research and the dollars that go into each. I'm wondering if you could discuss that somewhat. You talked about broadening the mandate for colleges and universities in your discussion. I wonder if you could fill us in on where you see that going. We know there are going to be advancements in those areas and that you're going to play a major role in that. I wonder if you could expand on that, please.

[Dr. B. Mario Pinto]

Mr. Chair, I'd be pleased to. First of all, let me just step back a minute and point out that even the universities do a great deal of applied research. They don't just do discovery-based fundamental research. It's this dynamic between discovery and innovation that we are reinforcing.

Sixty-five per cent of the faculty in universities were hired in the last decade. This has given rise to a very different workforce. It's a highly entrepreneurial workforce, and they are very keen to partner with industry. Twenty-seven per cent of our faculty partner with industry at the moment. We don't divide this up into discovery only and applied research only.

The colleges and polytechnics offer a much more ready presence with industry to solve their problems immediately. The universities, for example, may work on the next generation battery technology, but they may work in concert with a college in looking at new ways of generating and mining lithium.

I think it's the marriage of those two expertises and the synergy that we try to exploit. We are the convenor. We bring those partners together. We try not to distinguish and differentiate so much between the fundamental and the applied. We recognize that there's a spectrum of different types of research, and we try to get the best of the best working together.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Masse. You have seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you to the witnesses for being here.

I have a couple of questions for Statistics Canada. This has been an interesting voyage I've seen over the years. I was part of the complete count in 2000 when I was a city councillor. I found that was particularly important, especially for regions like mine where we have a lot of immigration, multiculturalism, different languages and cultures, and so forth. We actually did the door-to-door canvassing campaign. I was tasked with that by the mayor at that time to help be part of that process.

The value of the long-form census was clear. I would like you to explain the difference between a short-form census and a long-form census with regard to the quality of the data, and what the data could subsequently be used for.

[Wayne Smith]

The short-form census goes to 100% of the population. It has about 10 questions on it. Most of them are basic demographics such as age, sex, and relationships between people, whether they are married or not. There are also language questions about official languages, mother tongue, and so on. We ask 100% of the population. Because it is a census, the estimates that we generate from those questions have no sampling variability. There is no “accurate to within between 0% and 1%, 95 times out of 100”. The numbers are considered to be the numbers. They are considered to be absolutely accurate, not subject to sampling variability.

The questions that we ask on the long-form census are a much larger set of questions. We get into education, ethnic origin, visible minority status, and so on. We won't be getting into income this time. The long form is fairly onerous on the population. Since 1971, instead of asking those questions of 100% of the population, we ask them of.... The ratio has varied over time. It has been one in five, one in three. It is now one in four. For this census round, we are going to do one in four.

Those estimates are very solid for larger areas and larger populations. As you get into very, very small units, there is more sampling variability. There is more statistical variability as a result of sampling.

The view is that the trade-off, the reduction in burden and the savings in terms of costs, justifies that decrease in the reliability of the estimates.

[Brian Masse, NDP, Windsor West, ON]

That's really important. That is why in the last Parliament I tabled a bill to provide independence for the chief statistician and so forth after the long-form census was eliminated.

With regard to the data assimilation and the maintenance of it, does that continue to stay in Canada?