Industry Committee on April 1st, 2022

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thanks to our witnesses who are here.

I'm just wondering whether in our private sector, or maybe in our public sector too, anyone is taking advantage of the science, research and development tax credits. Is anyone out there actually taking advantage of them, and what's your experience so far with them?

I don't know if Mr. Fursman or anybody else has done that. They're being used by a lot of different sectors, but I'm not sure if quantum computing is actually accessing those right now.

I'll leave that open to whoever wants to jump in.

[Andrew Fursman]

Thank you. I think you're referring to the scientific research and experimental development tax credits, commonly known as SR and ED?

[Brian Masse, NDP, Windsor West, ON]

Yes, I mean SR and ED.

[Andrew Fursman]

I would say that's been particularly helpful, especially at the very early stages of setting up 1QBIT. Our company is almost a decade old now, and being able to recoup some of the money we have invested in the experimental research we do has been very helpful.

It's one of the easiest programs to access and it's open to basically anybody in this field in Canada. I think it's a very good program.

[Brian Masse, NDP, Windsor West, ON]

Have you been able to make application yourself or are you using a third party to do so? This committee spent a lot of time in the past, and I'll maybe pass this on to the analyst to look at what we have recommended before, because it was very difficult. There was almost a cottage industry set up to help people get through the application process, so they would lose some of that money to pay for people to do applications.

It's good to hear, and it's been a real focus for a long time here. I'm just wondering if you have any suggestions on how to make it more accessible.

[Andrew Fursman]

This will probably not make me any friends, but my suggestion would be to not use any of these advisers and to do the work yourself. It's not that challenging if you get a handle on it.

I think most organizations probably have the processes already in place that track the work of their employees in order to make this a fairly straightforward process if you've been through it once or twice. It's also easiest to start at the beginning, doing it yourself and growing along, but anyone with a finance organization within their company should be capable of doing this without having to pay significant sums to third parties.

[Brian Masse, NDP, Windsor West, ON]

That's excellent.

Is there anyone else who would care to jump in on this subject matter?

[Dr. Stephanie Simmons]

Yes, I would like to.

SR and ED is fantastically helpful, and I echo everything that has been said. It's easy enough to do. It's phenomenal. It's absolutely a giant competitive advantage.

I can't say the same for the bureaucratic red tape around the SDTC program or the SIF program or any of those other kinds of organizations, but for SR and ED—phenomenal.

[Brian Masse, NDP, Windsor West, ON]

Do you have any suggestions on the other ones or do you want to submit them later if there are a couple of things...?

On SR and ED, this is really positive. This is about the first time I've heard about this type of experience. I'm sure the analysts will come back.... It goes back to our original manufacturing study ages ago, so this is really encouraging, to be quite frank.

Do you have any suggestions on the other systems? That would be really good.

[Dr. Stephanie Simmons]

Yes, absolutely, and I'm happy to extend all of these conversations privately.

Generally, the SDTC process is too slow.

The SIF process is too slow, it's opaque and it's not quantum specific in any way, so it doesn't tackle the fact that this is a very quickly moving industry. What you propose as a project that would be approved 18 months later may no longer be relevant by the time it's actually approved, right?

You have to start mobilizing.

[Brian Masse, NDP, Windsor West, ON]

That's excellent.

Can I now switch quickly to you, Ms. Broadbent?

You mentioned something very unique that we haven't heard in this committee discussion so far. It was about the diversity with regard to the field. Can you elaborate a little more, with more emphasis on that? I think that's really critical. In this committee, under Industry, we're responsible for corporate board governance models with regard to diversity and equity. That's part of the mandate under Industry Canada.

I'm just wondering if you have more thoughts about that, because there has been an attempt on the corporate side to have.... We went with Canada's “comply or explain” model for equity and representation on boards, and other countries have done different things. I'm wondering if you have any thoughts on how to improve that aspect for Canada, because we are a little bit behind other countries for that representation.

[Dr. Anne Broadbent]

Thank you very much for sharing these concerns and expressing the efforts that are being undertaken right now.

I mentioned “camaraderie”. The reason I mentioned it is that we visibly recognize, I think, common experiences and challenges. I think it's fair to say—and I have anecdotal evidence—that women face a much higher barrier to success in the field.

I mentioned that EDI is recognized as a catalyst for innovation, but the contrapositive of this is that threats to EDI are limitations to innovation. If you make that equation in your mind, you really see the advantage that you can gain by having EDI-enhancing initiatives. I believe that these threats should be formally treated as threats, just as any other ones. Ways to mitigate this risk include incentivizing equity-enhancing measures and career-building measures—

[Brian Masse, NDP, Windsor West, ON]

Is there anyone...I'm sorry. I don't mean to cut you off. Please go ahead.

[Dr. Anne Broadbent]

If I have another minute, another question I would like to treat is harassment.

For instance, there are some things that have been done. In 2017, the American Geophysical Union revised its ethics policy to treat harassment, discrimination and bullying as scientific misconduct just as it does any other type of misconduct such as fabrication, falsification and plagiarism.

I also mentioned the support system for child care. The years of early parenthood often coincide with the critical career-building years for highly qualified personnel, and women are particularly affected. Please note that these early years of education are characterized by a very precarious employment situation. We're talking about one- or two-year post-doc contracts, and that's very difficult to balance with thoughts of building a family.

[Brian Masse, NDP, Windsor West, ON]

Those are excellent points. I was going to raise your notation on child care as well.

Mr. Chair, do I have any more time?

[The Chair, Liberal, Joël Lightbound]

No. It would be too brief to have an answer, Mr. Masse. In any event, we'll come back to you in a subsequent round.

We'll move to Michael Kram for six minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Chair.

I believe all of my questions will be for Dr. Simmons.

Doctor, earlier this week, the committee heard testimony that once quantum computing becomes widespread, all of the encryption algorithms used by the Canadian banking sector will be obsolete. Do you agree with this analysis?

[Dr. Stephanie Simmons]

I would go further than that. You only need one quantum computer that is capable of breaking this for all of those things to be obsolete. You don't need them to be widespread. It's very asymmetric: We need to defend everything, whereas only one from an adversarial country would absolutely eradicate trust in all online communications of all forms—banking, and everything else. It's very important that we consider this.

[Michael Kram, Conservative, Regina—Wascana, SK]

Okay. Specific to the banking sector, if this country's banks don't take any protective measures and one bad actor develops quantum computing, what would it be like when Canadians go to the banks to withdraw cash? What would that look like?

[Dr. Stephanie Simmons]

It wouldn't work. I don't think it would be recognized right away. I think there would be major theft and we wouldn't recognize it, and then there would be an erosion of trust and it would be a very difficult situation.

We have to start layering in provably secure communications, one-time pad or QKD for these kinds of critical things. With regard to the SWIFT infrastructure, for example, SWIFT payments and interbank lending overnight all need to be considered, because they all use a lot of third party software that may themselves have RSA leaks. It's a major undertaking, and I am aware that the banks are aware, and I am aware that our security services are aware.

However, I think that the undertaking is bigger than we've been describing. I think it's going to be a substantial undertaking because of how integrated the software world is and because there are so many layers of obsolete legacy software that are going to be difficult to go back and figure out how to patch. This is the ultimate zero-day problem, because there's no known patch that's provably secure at the moment.

[Michael Kram, Conservative, Regina—Wascana, SK]

I just want to make sure I understood that last point. If these bad actors develop quantum computing and you have your life savings in a Canadian bank, would you keep it there?

[Dr. Stephanie Simmons]

I'm not sure how the banks are going to respond...what their risk-mitigation strategy is. Maybe they would shut down all access. It's a difficult situation to imagine. This is one of the reasons that I didn't spend my five minutes talking about how great my company is. I spent the time warning people. We need to get ready.

[Michael Kram, Conservative, Regina—Wascana, SK]

I wonder if you can elaborate, then, on how difficult it would be for the banking sector to secure our financial system. I'm gathering that there would be more than one program or changing a few lines of code.

[Dr. Stephanie Simmons]

Yes, sir. It's going to be a substantial undertaking. It's going to be a very substantial undertaking, and I think it's going to take years.

[Michael Kram, Conservative, Regina—Wascana, SK]

Obviously Canadians have to have confidence in the banking sector if they're depositing their life savings there. What laws or regulations do you think the federal government should implement to make sure that Canadians have confidence in the banking sector?