Science and Research Committee on March 9th, 2023

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

Do you have anything to add, not only to encourage us as parliamentarians, but also to help us in our discussions on commercialization in the health field?

[Nadine Beauger]

I find that we've done very well together. I applaud the government's initiatives because it's really the government that made it possible to create a program like the centres of excellence in commercialization and research, as well as the centre of excellence networks. The federal government's vision is what led to success stories like those.

I believe that the government should continue this support, specifically for organizations that have demonstrated they are capable of getting results. That would enable us to increase the number of new companies in Canada and strengthen entrepreneurship in the life sciences, which is important for us. We shouldn't depend solely on human and financial capital from outside Canada.

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

Thank you very much, Ms. Beauger.

Is that my time, Mr. Chair?

[The Vice-Chair, Conservative, Corey Tochor]

Yes.

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

Thank you very much.

[The Vice-Chair, Conservative, Corey Tochor]

That's all right. I like to let the witnesses finish their thoughts. I will cut off members, but I won't cut off witnesses, unless it gets extreme.

Now, we'll go to MP Blanchette-Joncas for six minutes.

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

Thank you very much, Mr. Chair.

I'd like to thank the witnesses who have joined us to contribute to the study.

I'll begin with some questions for Ms. Beauger.

Ms. Beauger, It's a pleasure to welcome you to the committee today in connection with this important study.

Of course, I congratulate you on your commitment to IRICoR. I know that you worked there for quite a few years and that you now appear to be headed towards new challenges. I did nevertheless want to draw attention to your excellent work and point out that we can take pride in having an organization like IRICoR in Quebec. It is having a major impact on the transformative research being conducted in Quebec, elsewhere in Canada, and around the world, on highly innovative therapeutic solutions.

I'm going to follow up on my colleague's line of questioning. I'd like to know more about the status of the situation in Canada and where it stands in the commercialization of intellectual property.

According to the most recent data from Innovation, Science and Economic Development Canada, which happens to be from 2016, Canada was ranked 31st out of 37 OECD countries in terms of trademark applications per capita.

Do you have anything to say about that?

[Nadine Beauger]

Thank you very much for your kind words.

As I was saying earlier, I believe we can do better.

You also mentioned something very important that is related to intellectual property, namely trademarks. And in addition to trademarks, there are also patents. That's something that needs to be followed up.

Given the level of innovation and funding from the federal and provincial governments, we are capable of transforming these early investments into marketable intellectual property on a larger scale. We are clearly able to do this.

Once again, I believe that organizations like ours, if they work together with technology transfer companies and other organizations across Canada, will be able to increase the value of intellectual property.

We can even create new intellectual property through public funds in order to establish partnerships with the industry. That would definitely improve our status among OECD and G-7 countries.

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

Thank you, Ms. Beauger.

I'll take the liberty of adding to your comments.

Of course, further details would help. As you mentioned, we need to talk about patents. In terms of Triad patents, which is what a series of patents for a given invention in Europe, Japan and the United States are called, Canada ranked 19th out of 37 countries per capita. I'm no expert in mathematics, but 19th out of 37 means that Canada would not necessarily qualify to be a G7 country.

I'll continue with some further questions.

In your opening address, Ms. Beauger, You went on to talk about the low level of investment by the Canadian government in research and development. You said that Canada lagged behind the G7 countries in 2019.

I would nevertheless like to add that Canada was the only G7 country to have reduced its funding over the past 20 years. It's also the only country to have lost some of its researchers over the past six years. I think the picture is still rather bleak, and I'm trying to understand it.

As someone who headed an organization like IRICoR, can you tell us what companies in this sector are doing to become competitive and raise their profile internationally, when we have a government that does not make research and development funding a priority?

I'd like to hear what you have to say about that.

[Nadine Beauger]

It's true that the situation is not very good based on the numbers you mentioned. What I said about 2019 was that corporate research and development funding was what put Canada last in the ranking.

I still believe Canada can do better. I was talking about data from 2019, and since then, there has been additional funding in Canada. Initiatives like this need to continue, because—and this gets us back to some extent to the question of patents—for far too long, the only performance indicator used was the number of patent applications.

What we're now seeing in our specific field, the discovery of drugs, is the importance of developing patents and filing high-value patent applications on the composition of products that lead to significant financial gains. It's really a way of proceeding that would raise our profile and increase the value of what we have in Canada.

To get back to your question, I believe that the government really needs to channel its funding and focus on organizations that are working effectively and offering high-value assets that would attract research and development funding from outside the private sector.

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

Ms. Beauger, you said that we can do better. And yet, our neighbours, the United States, doubled the core budget of the National Science Foundation. It's the biggest single research funding program.

How can we compete in this area when Canada is lagging behind the United States? As you know, internationally, science and research are highly competitive fields. I'd like to see what you have to say on this. If you don't have the time here, you could no doubt send us your opinion in writing.

Thank you very much.

[Nadine Beauger]

I'd be happy to do so.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much.

Now we're moving on to MP Cannings for six minutes.

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

Thank you.

Thank you to both of the witnesses here today.

I'm going to start with Mr. Karim and some of the recommendations you made. You had three. Two of them specifically mentioned CIC, the Canada innovation corporation.

You went on later to talk about the differences with the American situation. Here we have an economy that's 10 times the size of ours and, arguably, has a different culture around investment and risk. You then mentioned that there were American government incentives on top of that.

I'm wondering if you could comment in more detail about what the American government provides start-ups or other companies, compared with what Canada is doing right now and how that relates to your recommendations you mentioned around the CIC.

[Karim Sallaudin Karim]

Absolutely. Thank you for that question.

To answer the question, I'm going to address a couple of points that came up just before.

One of the points was why Canada is lagging in patents and trademarks.

The answer to that lies in how many large pharmaceutical and/or high-tech firms we have in this country. The U.S. and Japan—the U.S., especially—have a very large number of high-tech firms like Google, Apple and Facebook. These are your drivers of patents. Trademarks come because you're pushing out new products. The pharmaceutical folks and high tech are always pushing out new products. You will see a large number of trademark applications.

The reason why Canada is lagging is that we don't have large pharmaceutical or high-tech firms in this country. We have some decent ones, such as OpenText, for example, but in the past, we had Nortel and BlackBerry, which were driving a lot of that. We don't have that now.

To come to your question now directly, what is the U.S. doing that's giving it such high returns?

I think they are investing in early stage innovation more effectively than we are. This goes to the three recommendations. The U.S., I mentioned, has these SBIR and STTR programs. Both of those programs can be applied for not just by small businesses within the United States but also by universities. You can take researchers out of the university or the national labs, and they can go and run a start-up and get funded through these programs for two years to get the start-up and the prototype to a level that might attract VC investment.

By doing lots of this consistently over time, they have created a pipeline of innovation. That's what eventually ends up giving the long-run advantage.

In our case, we don't have such a program in Canada. In fact, when we put forward these programs, we try to section universities and research, education and commercialization into different buckets. We have to start to put these three together to make sure that all three have the ability to work synergistically.

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

Thank you.

You mentioned big pharmaceutical companies. I'd like to turn to Madam Beauger and ask her to comment on that.

Madam Beauger, you mentioned how important it was for your researchers to interact with big pharmaceuticals in order to move up and grow. I imagine the investments big pharma is providing.... It's often buying those ideas, innovations and IP and moving them out of Canada.

Is that correct? Is that the price we pay for not having big pharmaceuticals in Canada?

[Nadine Beauger]

Thank you for the question.

I would put some nuance in. When there was collaboration between big pharma and the research teams we worked with at IRICoR, there was initial recognition of the value of the research we developed together. When we're talking about dollars, there are some initial upfront licence fees the companies pay.

The other thing I would point out is that there's joint IP developed between the research teams within the pharma companies and research teams. This joint IP is recognized through payments made throughout the development of the projects, when there's development made by companies based in the U.S. or in Europe—that is, be they within Canada or outside. There are constant financial returns for our public sector in Canada, in return for those collaborative projects.

I think, with a model like ours, that's the reality. We see, for example, that the Canadian market for pharma companies is quite small, so, for sure, they launch their products outside Canada. However, this portion of innovation is crucial. With this model, we've demonstrated we can have significant returns for the country on innovations we developed.

I would add, as well, that there are some royalty payments made to the institutions and the public organizations in return for the market introduction of innovations made in Canada. Those are all the tangible returns we have.

I would add even more with regard to, as I mentioned, savoir faire. When there is collaboration between the research teams in academia and those in big pharma companies, all of that knowledge is invaluable for the next projects coming out of our academic institutions in Canada, which can benefit from this know-how, going forward, and create new IP coming out of Canada.

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

Thank you.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much.

We'll now move on to our five-minute round. We have Dan Mazier.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Thank you, Mr. Chair.

Thank you to the witnesses for coming out here today.

Dr. Karim, how many patents have you filed?

[Karim Sallaudin Karim]

Are you talking about me, personally, or do you mean from a university perspective?

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

I mean from a university perspective.

[Karim Sallaudin Karim]

We know how many our professors are filing but our students are also filing patents, and those are harder to track. I would say it's probably on the order of close to 100 or higher, perhaps, annually.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Good.

How many of those patents have resulted in commercialized products?

[Karim Sallaudin Karim]

Again, I'd have to go back and review our exact numbers. I can probably get back to you.

However, I can also throw in that I, myself, have been involved in commercialization through the university, so I can say for certain that at least 21 of those have resulted in a range of commercial products.