International Trade Committee on Sept. 28th, 2016

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Looking at the technology sector, it's interesting. We haven't heard a lot from the technology sector in terms of the consultations from coast to coast to coast.

Certainly it's interesting, because your sector probably has to do some importing in terms of technology, building components or building systems. Looking at the service side of it that's exported, do you work at all in the area of cybersecurity?

[Ron Taylor]

Yes, we do. We have a company here called Verafin.

Are you referring to financial cybersecurity?

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Yes.

[Ron Taylor]

We do. We fall into that area.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Are you working together or in collaboration with the universities or colleges either in Newfoundland and Labrador or in the Atlantic region?

[Ron Taylor]

The great thing about moving to a place like Newfoundland and Labrador, after growing up in a place like Toronto, is that in half a million people, everybody knows everybody.

Last night I held a Hacking Health event at the university with 130 people. Here, there is collaboration because there are only half a million us in the entire province, and 250,000 of us thereabouts in the greater St. John's area. We all tend to collaborate together, which is really nice. I can pick up the phone, and I can call a provincial minister or a federal minister here. Those kinds of things are more difficult if you live in a place like Toronto.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Mr. Taylor, we've heard from witnesses here, and I've also heard from colleagues in the United States—I was at a conference earlier this year in Nashville—about their concerns about copyright and intellectual property, particularly on the online technology side and certainly in the music sector. Can you speak to that as well?

[Ron Taylor]

Intellectual property is always a concern, and the protection of that is very important.

We don't deal in types of technologies that are going to be taken and copied by a number of people. They are very specialized technologies.

I understand what you're saying. Having the protection of your copyright is very important. We have many clients who look at some of the other markets out there that are not included in this agreement. In those particular markets, the joke in the technology sector is that's a great place to sell your software once, because it will probably be reverse engineered, and it will come out in a different format somewhere else, so copyright and protection is very important, and I believe this agreement protects that.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Can you inform our committee on any work you are doing or your sector is doing for research and development?

[Ron Taylor]

In the research and development end of it, we're doing a lot in the oceans. We're doing many things like remote power and wireless power. Data security is big.

We have one company called Camouflage. It is doing a lot of research in data masking. When I talk about data masking, I'm not referring to encryption. For example, if someone steals all of your credit card information on your company, that information can be mixed up in such a way that it looks like it's real but it's not. That is the best way to describe it. If the data is compromised, the people who have it, even though it looks real, it's not. In its simplest form, it may show your first name, this person's last name, that person's address, so the information as such can't be used for criminal activities.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Mr. Taylor, is your business located in St. John's?

[Ron Taylor]

Yes, it is.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Internet connectivity must be better in St. John's than other parts of the island.

[Ron Taylor]

We have about 98% Internet connectivity here in the province. For the most part, the people who don't have it are in really small communities, but most businesses do have that.

[The Chair, Liberal, Mark Eyking]

Thank you. The time is up.

We're going to go over to the NDP.

Ms. Ramsey, you have the floor.

[Tracey Ramsey, NDP, Essex, ON]

Thank you for your presentation. It is something that we have heard a small bit about at this committee. I was out on the west coast, and there are a lot of folks out there who are really concerned because they're educating a lot of young people in the tech and innovation sector who are then heading to the U.S. They're leaving us. So there's a concern that we're not able to retain that talent here in Canada. I'm curious as to whether you have that same issue out here.

Also, talking about innovation strategy and the importance of that in Canada has been highlighted well here, but we had Jim Balsillie before the committee, the CEO of RIM, and he was quite strong in his presentation to us. He said the TPP will lock Canadian innovators into perpetual second place in the IT sector and the knowledge economy. He went on to guarantee us that there will never be another large Canadian tech company under the TPP: “The best thing for a Canadian innovator to do under TPP is to move to the United States.”

Could I get your thoughts on that and where Canada needs to go in terms of protecting innovation and ensuring that patents and the innovation remain here?

[Ron Taylor]

First all, there will always be people who want to live and work in other places. I have 30 years of doing that, so I get that part of it. At the same time, there are a lot of people who wish to stay and work in the places they were born and raised. The reason a lot of them will leave sometimes is that they don't have access to opportunities there. The great thing about the technology sector is it doesn't really matter where you live. It's not like you need to be right next to a port or an airport or right next to a transportation hub. A lot of the information is being moved electronically.

With regard to younger people, it's a challenge not just here in Newfoundland and Labrador but across Canada once you get outside the major cities. If you look at Newfoundland and Labrador, most of the focus in technology has been in the greater St. John's area. However, we have done a lot of work to reach out to other areas within the province in order to set up innovation hubs in those particular places that will help drive innovation and create opportunities.

We're a huge player in the start-up community here. The Hacking Health event I did last night was for 130 young people. It's about creating opportunities so that people who wish to stay and work here in Newfoundland and Labrador can. Some will want to leave just to get the experience outside, but I don't really—

[Tracey Ramsey, NDP, Essex, ON]

Sorry, I'm going to cut you off just because I have another question and I know I'll run out of time.

I think we share similar concerns on the committee around SMEs being able to access the foreign markets as well. Only 10.4% of small and medium-sized enterprises were exporting in 2011, and there are very serious challenges to be able to get them into those markets. When we come to communities and hear that the vast majority of businesses are SMEs, or micro, as you're saying, it's an even greater concern for the viability of not just your sector but others as well.

I want to ask you about the data localization. I've heard from folks who are very concerned about the data localization in the TPP. Essentially what will happen is that there will be no way to ensure that we keep data in Canada. It could go to the U.S., and of course they have the Patriot Act and different things that apply in the U.S. I live on the border of the U.S. in southwestern Ontario.

Could you speak about the data localization in the TPP?

[Ron Taylor]

It's always a challenge in the sense that you will get people who will say that in order for you to do business in their particular locale, you must store the data there. Most locales do have local storage of data, so the question is, what happens, then, when you can't have that clause in there that says, “You must store it here”?

[Tracey Ramsey, NDP, Essex, ON]

And we won't have that under TPP.

[Ron Taylor]

I know. It's really difficult for me to give a definitive answer on that, because there are so many different thoughts. There are people who would ask, “Well, will our data be protected?” A lot of the data is up in the cloud now anyway. If you're carrying around your hand-held device, that data is not in your backyard. It's—

[Tracey Ramsey, NDP, Essex, ON]

But it's held in Canada. It's held in clouds in Canada versus being held internationally or in any of the other countries. It's not just the U.S. that's a concern. Malaysia and other countries in the TPP certainly don't have the protections around data that we do here in Canada. Two of our provinces actually have provincial legislation to protect that data from going outside.

I think it's a real concern for Canadians when they're worried about where that data may be stored and what may be done with it.

[Ron Taylor]

I guess most of the people I deal with on a day-to-day basis don't see it as a Canadian situation, they see it as global. They realize that globalization is here to stay. It's about ensuring that people's privacy is protected, obviously, but the markets are global.

Just coming back to your earlier point, most of our small and micro-sized companies begin from the very beginning going out into international markets; they're not looking domestically. They're looking upon it as globalization, and the storage of information on a global basis.

[Tracey Ramsey, NDP, Essex, ON]

And I guess that goes back to—

[The Chair, Liberal, Mark Eyking]

Thank you. Your time is up, Ms. Ramsey.