Industry Committee on June 1st, 2020

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now start another round of questions.

Ms. Vignola, you have the floor for two and a half minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Madam Chair.

My question is for Mr. Musson.

Mr. Musson, you spoke about a technology development program whose exact name I don't recall. In the past, funding from this program was earmarked for the improvement of a French fry plant.

How do you think Canada can improve the program to ensure that the funding is really invested in training, facilities and technology development, and not in something that we already know very well.

[Jeff Musson]

One thing we've done—and this is why we've worked with the University of Ottawa and directly with people at ISED—is to make sure that there is a proper framework in terms of deals or projects that are approved. How we fall in with that ISED program is that they've identified cybersecurity as a priority, and in order to qualify, you also have to be a business that works with a university.

I think the regulations or the approval of projects have tightened up significantly since that project was approved. However, our program is laid out such that, not only do we have the proven track record, but we're able to fit within the criteria that ISED has developed.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

For the benefit of the committee members and the public, can you provide one or two concrete examples of how a cybersecurity breach affects people's lives, while considering, for instance, that the 1987 crisis resulted from a computer that went haywire?

[Jeff Musson]

What you've seen right now with the pandemic being a health crisis, you can rest assured that a cyber-crisis would be similar. Smart cities are connected to a grid, so you can imagine what would happen if our electrical grid was attacked. Financial institutions and everything that's non-health related is potentially an issue that needs to be addressed here. The more connected we are, the more opportunities the bad actors have to able to access our networks.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Mr. Musson.

Our next round of questions goes to MP Masse.

You have two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Really quickly to StarFish Medical, how much of your manufacturing operations and your partnerships were you offshoring outside of Canada? I'm just curious as to how much of your manufacturing, as you lead people through the process, is done outside of Canada.

[John Walmsley]

The manufacturing of the systems and the subsystems is all happening in Canada.

[Brian Masse, NDP, Windsor West, ON]

Even prior to COVID, 100% of all the projects that you deal with and the companies you refer to them are within Canada.

[John Walmsley]

Separate from this program that we're discussing today...?

[Brian Masse, NDP, Windsor West, ON]

It's just in general. I come from an area of tool and die mould-making, where we transitioned outside of just auto to aerospace, mining, medical devices and so forth. I'm curious to know what we need to do for the future. Prior to this or when you're referring customers that go through you—I've gone on your website—are they referred to manufacturers outside the global supply chain or domestic? I'm trying to get a snapshot here.

[John Walmsley]

That's a good question.

We have our own manufacturing capability that we offer people to get them up and running. Then typically we will work with our partners' preferred manufacturer. By and large, I would say that those are all in North America, but are they in the U.S. or Canada? I would imagine that the split is probably in line with our own work, which is about 70% in the U.S. and 30% in Canada.

[Brian Masse, NDP, Windsor West, ON]

Are there any recommendations you have for us going forward to enhance that supply chain? Are you faced with some manufacturing maybe that has a weakness because of its dependency on.... Mr. Musson mentioned something about U.S. procurement, actually, if you didn't catch it. Even on our own defence procurement, we can get bumped by the U.S. at any point in time, even when we're ahead of them in the orders.

Thanks, Madam Chair. I will let you have the final word here.

[John Walmsley]

In this case, of course, we did see that there was a brief period when getting systems or components across the border was difficult, though that eased fairly quickly.

It would take me a little more reflection to give you a good answer to that question, I think.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Patzer. You have the floor for five minutes, please.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much, Madam Chair, and thank you to everybody who is on the panel today for the work you have been doing for the health and benefit of not just Canadians but of people around the world.

As far as the MDEL licences, medical device establishment licences, we have heard from companies in Ontario that were given 24-hour to 48-hour timelines to get approval, but it was 23 days in the one report I read. Is anybody concerned about the possibility that when you're told three to five days it might actually take significantly longer than this?

Anybody on the panel can answer that.

[Dr. Arthur McDonald]

Yes, there would be concern because we want to get the devices to market as soon as we possibly can.

However, we're very hopeful, given the fact that we had discussions back and forth with Health Canada to define the parameters of the product that we are going to be supplying at the time that the government was seeking to define the contract. We feel quite confident in being able to meet those requirements, including the testing necessary to prove that we meet them. We're very hopeful that perhaps the interaction we've had so far is such that they can meet that sort of deadline if they stick to devoting the resources to it they stated to us that they would.

Yes, we're concerned but it's out of our hands. We will just have to deal with what happens. We're optimistic.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. Thank you.

Moving on to Canadian Nuclear Laboratories, aside from your efforts in producing ventilators, I want to ask you about your work with hydrogen-based transportation. I was reading on your website that by 2020—so, this year—you were looking to have something to go with on that.

Are there any delays or any issues in getting to that goal?

[Joe McBrearty]

Thanks very much for that question.

We are still working very closely to look at hydrogen for transport. We have some specialized catalytic technology at CNL. We are in the process of continuing to do studies for those systems.

Obviously, with hydrogen, safety is the number one concern. One of the first things we have to do to get to hydrogen for transport is to verify that the systems we have and the processes we are working on will meet safety requirements.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

What's the environmental impact of this technology through energy efficiency and carbon emissions? The reason I'm asking is that we have seen from Environment Victoria, based in Australia, that to produce three tonnes of liquid hydrogen would actually release 100 tonnes of CO2 into the atmosphere.

I'm curious to hear your thoughts about that.

[Joe McBrearty]

Part of the production of hydrogen is an electrolysis production and it's also done by heat. One of the methods we look at in the production of hydrogen is using waste heat from other plants, heat that would actually be wasted anyway. You can use that heat to be able to help produce hydrogen.

The second part of being able to produce clean hydrogen really would come as a result of a small module reactor design in the production of electricity, which can then, from a clean perspective, produce hydrogen from that process for the country.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

How hard would it be to scale it or commercialize it so that it becomes a readily available product, if we're going to use it, potentially, going forward?

I notice that Honda, Toyota and Hyundai already have three vehicles that are running off hydrogen, and South Korea and Japan have moved to a hydrogen-based model going forward. To scale it to domestic capacity, what's that going to take?

[Joe McBrearty]

At this point, we are looking at taking the technology and the catalysts that we have at CNL from the laboratory benchtop to a prototype design, so that we can actually show that we can move it to industrial scale. We are not ready to do that yet. We would expect that it would take two to three years of testing and observation of that system to make sure that the process works and that it's safe. I think you're still looking at two, three or four years for a technology to be on the market for hydrogen for transport systems to use.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Ehsassi. You have the floor for five minutes.