Industry Committee on May 25th, 2020

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I agree.

In terms of that, many Canadian universities have intellectual property management offices and they take an ownership stake in IP that is commercialized from research that would originate from their institutions.

Do you think maybe we're looking at it the wrong way—that rather than paying Canadian universities to take ownership stakes that are a patchwork and balkanized across the country and are derived from taxpayer-funded research, should we perhaps be restructuring that so that it's more of a national benefit and that the intellectual property commercialization capacity is done in a more strategic way, again, rather than through a patchwork of different ILOs across the country?

I know this is spicy, but it really hasn't worked over the last 20 years.

[Jim Balsillie]

It hasn't worked. Let me give one nugget to your committee.

Everyone likes to talk about the Fraunhofers in Germany. They have 72 or 73 research hubs all across Germany. They changed the world. Do you know how many tech transfer offices they have for their 72 research entities? They have one. With high standards, high expertise and high focus, they knew what to distribute and they knew what to centralize. It's to scale and it's to core.

Why don't we just do what Germany does?

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

On that note, one of the arguments that is always used in saying why the government shouldn't retain some stake in the IPE while universities do is that researchers will never come to Canada under this system.

Given the example of Germany that you just cited, would you classify that as true in all cases?

[Jim Balsillie]

That's not true whatsoever.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I didn't think so, but I wanted it on the record. Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our last round of questions goes to MP Ehsassi. You have five minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair. I will be sharing my time.

I have a quick question for Mr. Walker and Mr. Paterson. Of course, what we've been hearing over the course of the past several months is that it's important for supply chains to be more resilient. There has been a lot of talk about how those supply chains are bound to become more regional and that geography is going to play a much more significant role.

Mr. Walker, have you seen any evidence so far that supply chains are changing and that Magna might become a beneficiary of that?

[Donald J. Walker]

We haven't seen too much yet. I think the new CUSMA is going to change the sourcing. We've already seen some things move that are sourced in China. That's one of the reasons we needed the new CUSMA to include Mexico, because we can source some competitively priced products from there that involve high manual labour.

I don't think much will change in the supply chain of the automotive industry. It's already very sophisticated. They've gone through some learning experiences with earthquakes in the past. I do think the most significant thing that's going to happen with the new CUSMA will be that we can at least be a trading bloc and we can be competitive against the rest of the world. It will be interesting to see whether people can get around the RVC and the LVC, the labour value content, to ship product in without paying duties, but that's the most significant issue in our industry.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

Mr. Paterson, would you like to add anything to that?

[David Paterson]

I agree entirely with Don. There are always opportunities for countries that are smart and really make the basis for success in their areas. Jim talked about some of those areas, and we've talked about some of them ourselves.

The other big factor is that the auto sector is not only going through a massive transformation just to accommodate the new CUSMA, but we're also going through a massive technology transformation at the same time. For the first time in 100 years, we're changing the fundamental technology of our vehicles on a massive, quick basis to move to electric cars right across the piece. We're also going to introduce vehicles that drive themselves that will take away driver error, which is killing 40,000 people a year in the United States.

There are huge opportunities for change. It's a lot to juggle at the same time. When you throw in COVID and all those other challenges, such as rail strikes and things we've talked about in the past, it becomes very difficult. Therefore, we have to be nimble. We know how to move around problems. We work closely.

Don and I talk on the phone all the time, because we're solving problems every day.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you.

Madam Chair, I'd like to yield my time to MP Longfield.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

I would like to continue the discussion on the supply chain with Supply Chain Canada. COVID-19 has shown the world how important supply chains are, and validating product and validating processes, and doing inspections and working with professional partners all through the value chain.

I used to work with Supply Chain Canada when the Purchasing Management Association of Canada was a separate group, because purchasing is also a big part of the supply chain. If we look back at research and recovery and the role that the Canadian government can play in bolstering our research on supply chain as well as delivering to the world, being a trading nation that is the only G7 country with trade agreements with all other G7 countries, what's the opportunity we have?

[Christian Buhagiar]

The real opportunity we have here with supply chains in Canada is to make sure, again, that we're understanding consumer demands and are able to react to them.

In regard to the other piece, I want to come back to a comment that was made earlier. As we go through the crisis, the ability of the federal government to take a more assertive role in emergency management around the supply chain will be a key issue. One of the challenges we've had is that the deferral in many respects to the provinces has left us with a patchwork of guidelines and processes. Moving forward, there is going to be a considerably larger role for the government to play when it comes to managing the supply chain during times of emergency.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

That is our time for today. I thank the witnesses for being with us.

With that, the meeting is adjourned.