Science and Research Committee on March 7th, 2023

[The Vice-Chair, Conservative, Corey Tochor]

I'm going to ask that the response be provided in written form. We're already over the time period.

[Lena Metlege Diab, Liberal, Halifax West, NS]

Thank you.

[The Vice-Chair, Conservative, Corey Tochor]

We will now move to Mr. Blanchette-Joncas for six minutes. Thank you.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much, Mr. Chair.

I welcome the witnesses joining us for this second hour.

At the risk of repeating myself, I'm going to return to a topic I've mentioned before, which is research funding in Canada.

We have with us representatives from Colleges and Institutes Canada. I took the time to prepare myself and read their pre-budget brief. I thank them for that work.

The first recommendation put forward in this brief is to increase funding for research and development in Canada. Let me read the title: “Canada's Innovation Slump”.

It states that in 2020, Canada ranked 20th out of 36 OECD countries in terms of the proportion of GDP spent on research and development. While the OECD average was around 2.7%, ours was 1.6%. In fact, we've lost ground, because in 2001 we were spending 2% of our GDP.

It seems that for some people in government, science is witchcraft. You don't do science projects with incantations, repeating that science is good, and that you're going to develop innovation. We need concrete measures, which requires investment.

It is usually said that we compare ourselves to console ourselves. However, I feel rather embarrassed. It's inconceivable that Canada, a G7 country, is the one and only country that has cut its investment in research and development over the past 20 years. I will make a point of repeating this message ad vitam aeternam, hoping that people will grasp the gravity of the situation.

I'm going to get to the heart of the matter now, although research funding is an important topic.

Mr. Taylor, you mentioned earlier, with respect to the inadequate funding of research in Canada and the lack of support from the federal government, that over 12,000 partnership offers from the institutions you represent had been turned down. I would like you to tell us today about the concrete and direct consequences of the federal government's lack of financial support for research. You mentioned that you receive only 2.39% of the money provided by the three funding agencies. I'll round it up to 2.4%, to be generous. I am capable of being generous, Mr. Chair.

[Jeffrey Taylor]

Thank you for the question.

I'll give you a bit of history on the funding we've had over the last 10 years from the funding council. In 2013, it was 1.87%. In 2015, it was 1.99%, and in 2020, it was 2.39%. It's a flat 2% within a rounding error, but there is a small uptick there.

Of course, we're very grateful for that increased funding that comes to us. I think there's a chance to build more momentum and increase funding in the—

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Excuse me, Mr. Chair.

The French interpretation isn't working.

[The Vice-Chair, Conservative, Corey Tochor]

We'll stop for a second and confirm.

Your time is stopped at two minutes and 10 seconds.

Okay. We believe the translation is working now.

We'll resume, Mr. Blanchette-Joncas.

[Jeffrey Taylor]

Okay. Coming back to the question, I was citing some numbers of funding that we've received in colleges over the last 10 years. In 2013, we were at 1.87%. In 2015, we received 1.99% of tri-council funding. In 2020, we're at 2.39%. It's a flat 2% within a rounding error, but there is a small gradual uptick for which we're very grateful. We think we can probably build on that momentum and be able to grow that more.

If we look at NSERC data, just in the last two years at NSERC, 1,400 proposed partnerships were stalled because of a lack of funding, so there's definitely an appetite to see that increase.

The importance of rebalancing these investments.... Of course, the importance of fundamental university research I don't want to discount at all, but I think growing the envelope for the college and community innovation program would be a great opportunity here. Absent this move, we're leaving opportunity on the table.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much, Mr. Taylor.

In your brief, you also raised the possibility of expanding the contribution of CEGEPs and colleges to programs aimed at, among other things, the subject of our study today, namely, support for commercializing intellectual property.

You also talked about the possibility of a new national platform, which would enable the transition from labs to the marketplace. This would be an ongoing opportunity to promote commercialization.

Can you tell us more about that?

[Jeffrey Taylor]

Thank you.

Right now, we believe that IP staying with the partner is the best strategy, but our projects are funded in a very limited way. It's almost transactional. It's “Yes, partner, thank you for this project. We'll work with you. Here's your product. Here's your result. Here's your validated process. Good luck.”

We don't have any funding for wraparound supports. We don't have funding to do follow-up and really guide any IP strategy for the partner. We make referrals, of course, for part of this larger ecosystem. We're happy to connect them to their partners, but they're largely on their own once the project ends.

We're quite proud of how short and sharp we are and how fast we can move with the projects. I think I mentioned that 85% of college projects are done in less than a year, and we really pride ourselves on that, but that can be limiting for the business partner who's trying to figure out what to do with their IP when they're done.

Support for relationship development and wraparound supports on a national scale—a national framework for that—would be wonderful. Right now, I expect it's very ad hoc and piecemeal. It's different from college to college to CEGEP, and it depends really on what kinds of funds the partner would have, so it's quite limiting for a lean start-up enterprise.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much for that.

We're out of time on that round. Now we'll move on to the next member of Parliament.

Mr. Cannings, you have six minutes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

Thanks to both of you for being here.

I'll continue on this line. I'm interested in more details.

You say that you turned away thousands of potential partners because the funding wasn't there. First of all, at what stage are these companies coming to you? Are they full-fledged companies and is this something where they just want to work on a new product? Are they real start-ups with very limited cash? I'm just wondering if you have a sense of what kinds of companies are coming to you.

[Jeffrey Taylor]

It would certainly be a spectrum across the board. This is a fun fact that I share: Every Canadian is a 30-minute drive from a college campus, everywhere. Colleges serve people in large urban centres right down to the most rural of locations, and that really means we serve start-ups that just have an idea that they want to get off the ground right up to much more established businesses. It is all very SME-focused. We don't do a lot with giant corporations. Sometimes we do, but we're much more focused on the small enterprises.

Certainly, at Nova Scotia Community College we have worked with a spectrum of partners, from a start-up that just has a neat idea of how they can take their hobby—maple syrup tapping in their backyard—to market, helping them get out there with new culinary innovations, right up to very large, well-established, 50-year-old local businesses. We just did a project with a company called Kohltech, a window manufacturer in rural Nova Scotia. They wanted to integrate a solar panel into their windows, so there's a product on the line now that shows how you can put up a nice, clear-glass window, and if you put it in the sunlight it generates electricity for your home. We helped them with the integration of that product. It can be sort of across the board.

The breakdown of partners is 67% small and medium-sized enterprises, 14% large corporates and 14% non-profits.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

You say you had to turn these down because the colleges didn't have the funding. Would we need more faculty? Would we need more facilities? How is that broken down? If the governments were to provide more funding to colleges, what do you need the most to say yes to these requests?

[Jeffrey Taylor]

That's a great question.

The funding really goes toward expert knowledge—that could be your faculty comment, so a bit of staff time—and consumables and equipment are a large part of what's going on. If we're going to integrate a solar panel into a window, we need to buy a lot of equipment to make that happen. I don't mean a lot, but we'd need 10 thousand, 12 thousand or 15 thousand dollars' worth of equipment to make that happen, and that can be a barrier for a small business. That's just not an expense they can afford on their books.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I guess a criticism we hear of Canada, or at least where Canada differs from other countries, is the amount of private sector investment in these innovations. I'm just wondering if you have any comments on how we can get that to change, whether IRAP or the new innovation corporation funding will help that. I am just wondering where we can make a difference.

[Jeffrey Taylor]

The business expenditures in R and D—that statistic—are tough for Canada. I agree. I love to think that colleges are part of the solution for this, and that's because we really leverage the industry's contributions in this space. For a partner who needs us to do a project for them to develop a new innovation, we're not going to just give it away. We need them to put some skin in the game, and it's a long-term journey, of course, to get that stat up to where we maybe want it in Canada, but we can slowly tease that along and increase the leveraging amount the business is willing to put in when they start to see benefit. I think colleges can really play a role in solving that problem.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you very much, Mr. Cannings.

Moving on to five-minute rounds, we have Mr. Williams.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you, Chair.

Thank you, Mr. Taylor. It's great testimony so far.

What is the success rate of applied research at our colleges and institutions? What I mean by that is, if we're working with 10 different businesses and fund them, how many are commercialized and what is the success rate of those? Do you have statistics for that?

[Jeffrey Taylor]

Thank you for the question.

I don't know if I have stats on hand for that in front of me. I'd like to think that, if we had better IP wraparound supports, we would be able to work with the businesses, follow up and help them with their IP journey post-project. Right now, it's often, like I said, transactional. We do the project, we give it back to them and then we hopefully direct them to a good way to go, but we don't know what the long-term journey of that IP is.

We do know—and I'm sure you know and this committee knows—that for firms that own their own IP, exports are higher. They pay better wages and there is more growth, so owning IP is definitely an important part of ensuring that they go on in the right direction. However, we'd need some investment for wraparound and follow-up to really be able to answer that.

[Ryan Williams, Conservative, Bay of Quinte, ON]

I would ask you to submit that to the committee later, if you can get that information.

Would you know if individual colleges or polytechnics would have that information that they could submit?

[Anna Toneguzzo, Director, Government Relations and Policy, Colleges and Institutes Canada]

We will certainly follow up on that to provide the committee with additional details. Yes, I think we could get some data for you.

[Ryan Williams, Conservative, Bay of Quinte, ON]

I think it's very important.

[Anna Toneguzzo]

We could get some examples as well.