Natural Resources Committee on Oct. 25th, 2012

[The Chair, Conservative, Leon Benoit]

Order.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

If we had wanted to put a cap and trade program in place, it would be in place. We obviously don't; it's part of your election platform.

I would like to get a comment from you.

We have talked about a number of different things here. My question is this: where can the government best commit to innovation? We've talked a bit about regulation, and a little bit earlier we talked about funding and leverage, international promotion, taxation policy, and working with academia. Do you have any thoughts on where government can best commit to innovation?

I suppose there's another option too, which is to stay out of the way and let the industry innovate, but I'm interested in hearing your comments on this subject.

[Dr. Marc D'Iorio]

Innovation is a system that has quite a few performers as far as R and D is concerned, but it goes beyond simply the R and D component and has to consider other instruments, so as to make sure, for example, that as technologies are developed, they get to market. I think a broader look at the innovation system is required—not just a look at the performers, but at how technology moves along as well.

I believe the OECD figures also show areas on which the government has been focusing to understand what the gaps and business expenditures are in R and D on a very broad scale, and what mechanisms there are for venture capital to come into play more broadly in Canada.

[Martin Aubé]

In terms of innovation, the federal government has a role to support industry in some of its activities as well as a role to generate knowledge for standards and to develop regulations and ensure that the best evidence possible is out there.

Just letting industry do their own thing might not be totally appropriate in the context of a broader discussion of innovation, because all the players have a specific role. Some of them are interconnected, but there are also independent roles.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Let's just talk about a couple of the roles that Natural Resources plays. I think Ms. Liu brought up the CANMET labs, but you talked about the geological commission and the forestry service.

I'd like you to talk a little bit about the Office of Energy Research and Development, CanmetENERGY, and the Office of Energy Efficiency in terms of how they contribute to innovation in the energy industry.

Where does Natural Resources insert itself? How do these units within Natural Resources contribute to energy?

[Dr. Marc D'Iorio]

The Office of Energy Research and Development is the coordinator of R and D and in a broad sense represents Canada in energy matters in a number of international fora, such as the International Energy Agency's committee on energy research and technology or the carbon sequestration leadership forum. It basically manages programs. It does not perform R and D; it is a funder of R and D, very broadly, not just for government labs but also for industry and for academia.

We work closely with other groups, such as NSERC, and work closely with the performers, such as the CANMET laboratories and the Geological Survey, and with the mining and metals sector in looking at lightweight material, for example, for transport, and we look at forestry as well.

With respect to the roles of the CANMET labs, I'll turn to Mr. Aubé.

[Martin Aubé]

CANMET labs are definitely the core energy performers of R and D for Natural Resources Canada. As I said before, we count about 415 employees, and that number is complemented by other parts of the department that do research in energy.

We deliver on a lot of the funding that's provided by the Office of Energy Research and Development. We receive approximately $40 million per year to undertake research and development within our labs, much of it in conjunction with industry, and as I mentioned before, we work directly with industy. Industry, seeing us as a key performer, requests our research services and our technical expertise to undertake their own private research and development.

More on the public goods side, there is a lot of knowledge being generated from the labs, especially in terms of input into regulations and standards. That's where you're getting a lot of the knowledge and the scientific evidence.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Do you want to say anything specifically about what you see as the main challenges and barriers to innovation on the supply side of this equation? We're going to be talking later about the two other sectors, but what are the barriers and challenges to innovation in this sector, or are there any?

[Dr. Marc D'Iorio]

It is a very large area, the supply side. There are quite a few companies with very different perspectives. In some provinces there are utilities that belong to the crown. We have to work with very different proponents in all of these types of projects.

One of the real challenges has always been trying to get various performers to work together and to bring the best minds together to address the issues we're trying to solve. Finding the best ways to collaborate, when government labs and the external stakeholders are included, is always a challenge, but it's absolutely essential.

I think other jurisdiction have found ways to have programs that allow performers in different areas to work together to address the issues and solve the problems that we face—on anything, whether it's on the supply side or—

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

There's strength in funding programs with other jurisdictions, and that is one of them: it brings people together to collaborate. Mr. Julian wanted to split the funding out, but there is strength in funding together on these projects.

[Dr. Marc D'Iorio]

Oh, there is very much strength in having a unified type of process to fund single projects that have many proponents. In fact, it's something we tried to do under the ecoENERGY innovation initiative; we went through regional workshops using regional development agencies, but also through webinars and putting online collaboration tools in place whereby proponents or researchers could identify themselves.

It led to real results. For each of our demo projects we had an average of nine different proponents working together on a demonstration project, and on the R and D, about five different proponents per project teamed from different groups. That's real success, as far as being able to pull the best out of our innovation system in Canada is concerned.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Anderson.

Thank you to all members of the committee for their questions to the departmental officials in this first meeting of our study on innovation in the energy sector.

I would like to thank our witnesses today, Dr. D'Iorio and Monsieur Aubé, and also all the officials at the back, for being here and for giving us information to start our study.

Go ahead, Mr. McGuinty.

[David McGuinty, Liberal, Ottawa South, ON]

Very quickly, I have a point of order, Mr. Chair.

I think both Mr. Aubé and Mr. D'Iorio did a heroic job today trying to answer questions that were put to them.

I'm wondering if it would be helpful for us to approach the department again and bring in either the ADM of policy or....

There are a number of economic angles and fiduciary questions that were raised today. Mr. Anderson raised two or three times some sort of prioritization of what sectors we are being most innovative in, and I think it put both Mr. D'Iorio and Mr. Aubé in a somewhat difficult spot.

Is it not possible for us to go back to the department and bring in another round, perhaps, of senior witnesses from the department to help us understand some of those questions? I know also Mr. D'Iorio and Mr. Aubé are going to struggle as they go back to find all kinds of answers to requests for additional information.

I think it would be important for us, Mr. Chair, at this early stage of the study to get a more global perspective on energy comparatively—what's going on in other countries, what's going on in Canada, what's going on in some provinces. I think it would be very helpful for all of us to get more information in that regard.

My suggestion is we go back to the department and perhaps get the ADM of policy and anybody in charge of economic analysis in the department.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. McGuinty.

I will say that all members and parties were asked to have their witness lists in for this part of the study. I don't know if anybody has other officials on the list. It is something we could discuss briefly at the next meeting, if you want to have a bit of discussion on that and see what the committee wants on that. Can we do that?

[David McGuinty, Liberal, Ottawa South, ON]

Yes, we could.

Just to clarify, I don't think any members had any say in which witnesses were coming from the department. Is that right, Mr. Chair?

[The Chair, Conservative, Leon Benoit]

Yes, that's true.

Mr. Anderson, you want to speak on the same thing. It's not a point of order, I don't think.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

It's just on the same comment.

I think our witnesses did an excellent job of answering the questions. I'd like to point that out. I didn't see that frustration that Mr. McGuinty talked about. I thought they did an excellent job. Certainly any discussion of our future agenda probably should be at a meeting dealing with future business.

[The Chair, Conservative, Leon Benoit]

Yes.

Thank you, everyone. Thank you again.

The meeting is adjourned.