Science and Research Committee on March 23rd, 2023

[Kim Furlong]

Yes. Absolutely.

What we need to be as a nation is more ambitious. The government, in taking risk and accepting failures, needs to be more agile and talking publicly about failures, acknowledging them before saying, we're going to do this.

I remember speaking to the premier of Alberta and saying, “You need to bet on your people”. In Alberta, people go through booms and bust, and as industry was going down and he was thinking about diversifying, I was like, why wouldn't you bet on the people who tolerate the risk the highest in Canada?

Right now, if you look at Alberta's economy, they were the ones with the highest growth in venture in the last quarter and in the last year. Yes, government.

It's not saying that governments need to make uninformed decisions about the allocation of taxpayer dollars. I can point to examples where the dollars are returned, profit is made. The policy imperatives that we're talking about today in growing our economy and being more solidly positioned for the future are the benefits that are accrued by being involved, but we need to be focused.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Robert, what's the barrier to doing that?

[Robert Asselin]

May I add two dimensions to this that I think are really important?

The first is public procurement. We have amazing global champions in advanced industries. I'm thinking about CAE, Bombardier, and I'm thinking about MDA in space. They get money from NASA, from the Pentagon, but they don't get anything from DND. They don't get anything from our Space Agency—or very little if they get any.

Why are we thinking like this? No other country does this. We have to change the way we encourage our own global champions.

Éric Martel, the CEO of Bombardier, was telling me the Pentagon is in love with their planes because they are small and very technologically advanced, and here we are in Canada not buying any of them, including for our own Prime Minister, who travels a lot.

I think that's an aspect.

The other aspect that I want to raise, and you will be, I hope, sympathetic to this, is pension funds. Our pension funds have less than, and Kim raised this.... In Canadian private equity they have less than 3% of their portfolio. How crazy is this? How come we don't change the incentives for this to change? This is Canadian capital by Canadian taxpayers wanting a return on their pensions. We're sending this money all the way....

I think this is an easy fix on both fronts, but we're not doing it.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Do I still have time, Chair?

[The Vice-Chair, Conservative, Corey Tochor]

No, unfortunately you're actually seven seconds over right now, but that's all right.

Moving on to our two and a half minute round, from the Bloc, we have MP Simard.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Asselin, I liked your last comment, as I found that it reflected what is happening in the forest industry. I am thinking, for example, of Chantiers Chibougamau, which makes glue-laminated beams. Unfortunately, these beams are only commercialized in Europe, for large infrastructures. That product is not used here or, at least, its use is not encouraged.

This brings me to talk to both of you about the fact that I find it quite amazing that our market development mechanisms are not more powerful. I'm thinking of the whole innovative bioproducts sector, such as the example of investments in cellulosic fibre production from paper pulp, which is where FPInnovations is involved. However, producers tell me that there is currently no market for that product. Could a market development mechanism in Canada be helpful in this case?

[Robert Asselin]

I'm still thinking about the National Research Council's industrial research assistance program. There needs to be better matching on the innovative technology side, not just on the more conventional research side.

For the other niche that you mentioned, there is another program that has been created for the benefit of small and medium-sized enterprises, SMEs, which is innovative solutions Canada. However, the very limited scope of that program, which is based on the first-buyer concept, should be expanded. An SME must develop a technological invention, as well as need help and a sign of confidence. It is not a matter of issuing blank cheques, but of doing a rigorous examination and ensuring that public money is well invested. A lot of countries are doing that and I don't see why Canada wouldn't.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Ms. Furlong, I must confess my lack of knowledge of the financial industry, which is pretty huge after all. I'm sorry if I'm talking nonsense.

You spoke earlier about workers' funds in Quebec, including the Fonds de solidarité FTQ and Fondaction, from the CSN. There are regional development funds in the Saguenay-Lac-Saint-Jean region of Quebec. It's no secret that is a tax shelter, but it still has a small volume. I assume that exists elsewhere.

When it comes to venture capital, shouldn't the government be encouraging these kinds of initiatives, or are they too small scale to really give businesses some sort of a springboard?

[The Vice-Chair, Conservative, Corey Tochor]

I'm sorry, Mr. Simard. We are out of time now. That was 13 seconds over.

However, if you would, could you provide a written response to his question?

[Kim Furlong]

At the regional level, the amount of money invested is too small to have an impact.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much.

We're going to move on to our second two and a half minute portion with MP Cannings.

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

Thank you.

Ms. Furlong, I'm still thinking of the end game here. We had big multinational companies like Nortel and BlackBerry, and someone mentioned Bombardier, which always seems to have its own struggles. Is this just a problem of the size of Canada?

When I talk to people in the hydrogen sector, they're doing world-leading research and development of products, but they say we need the government to step up and provide the hydrogen infrastructure in Canada to make people buy into their things and keep their IP here in Canada.

Perhaps either of you could answer that because it strikes me that this talks to the government procurement role here.

[Kim Furlong]

The Canadian market is small; we won't lie. It has the potential to grow more anchors and bigger companies. We always seem as Canadians to put our eggs in the basket of the shiny object. Shopify was the last one. We just need more of them. The potential is there. The number of companies that have become what we call “unicorns” over the last two years, which is a billion dollars or more in valuation, has increased tremendously in Canada.

On the procurement aspect of it, you spoke about life sciences and your friend selling his company. There's a number of times that a Canadian government, a province, will say, no, they won't buy this product, and when a Canadian company goes abroad and tries to sell their therapeutic product to someone else, they'll ask, “Who in Canada is buying it?” The company has to say, “No one.” Given that test of saying no one at home has taken a chance on them, the fact that Canadian companies still manage to sell their products outside of our border before the Canadian market has adopted them so amazes me. That's something that we need to change.

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

Yes. It strikes me that the measure of success in Canada seems to come when you sell to Google or Microsoft. That's the Canadian success. You make a lot of money and lose that IP—

[Kim Furlong]

My favourite example is a company called CarbonCure, which started out of Halifax and now operates out of Vancouver. The name of the company tells you what they do. They capture the carbon emissions and turn them into carbon. They sell to Amazon. They sell to Google. They sell to Microsoft. They have managed to position themselves as a partner to all of these multinationals. It's a VC-backed company. It was seeded first by BDC.

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

Right.

Thank you.

[The Vice-Chair, Conservative, Corey Tochor]

Witnesses, thank you so much for your testimony today. Thank you to the members for their questions.

We now will suspend briefly, before moving on to our next panel.

[The Vice-Chair, Conservative, Corey Tochor]

For our second panel we have two witnesses.

I'd like to make a few comments before we get back into the swing of things here.

For interpretation, for those on Zoom, you have the choice at the bottom of screen of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

I will remind you that all comments should be addressed through the chair.

We have two witnesses and each will have a five-minute round of opening remarks, and then we'll get into the rounds of questioning.

I understand we've changed the order around a little bit.

Mr. Georgaras, you have the floor for five minutes.

[Konstantinos Georgaras, Commissioner of Patents, Registrar of Trademarks and Chief Executive Officer, Canadian Intellectual Property Office]

Thank you, Mr. Chair, for the introduction.

My name is Konstantinos Georgaras. I'm the CEO of the Canadian Intellectual Property Office.

I would like to note that I am honoured to be speaking from the unceded territory of the Algonquin Anishinabe people.

I'm pleased to discuss how the Canadian Intellectual Property Office, or CIPO, supports innovation and IP commercialization. CIPO is a special operating agency of Innovation, Science and Economic Development Canada. We hold a vital position in the innovation ecosystem, between creativity, inspiration, science and technology on the one hand and the marketplace on the other. We provide IP rights in the form of patents, trademarks and industrial designs. These rights both incentivize creativity and help innovators get to market to use, license, trade and protect their IP.

Our core mandate is threefold. First is the timely delivery of quality IP rights, so that innovators can enter the market with confidence. Second is to raise awareness throughout the IP ecosystem to help innovators make informed decisions. Third is to help businesses compete globally, through international co-operation.

Regarding our client base, CIPO's reach is extensive. In 2021, we received almost 129,000 applications for IP rights. Because IP rights can last for several years, including up to 20 years for patents, there are over 875,000 IP rights in force in Canada today. Combined, CIPO has over one million interactions per year with clients and potential clients.

It is important to note that companies operate on a global scale. As such, over 70% of IP comes from abroad. Likewise, 56% of Canadians will file in other jurisdictions in which they are operating.

Going beyond the numbers, as part of the national IP strategy, we work closely with ISED and Statistics Canada on the survey of IP awareness and use, which surveyed 16,000 companies. This is new information I would like to share. We asked companies how IP directly contributed to their business success. Almost 60% of respondents indicated that there was a direct benefit, including increased business value, increased revenues and employment, and the ability to collaborate and secure financing.

These benefits do not just accrue to multinationals. In fact, micro-sized entities with only one to four employees also reported tangible benefits. The survey also revealed that 58% of respondents were familiar with IP, but there remained an awareness gap. Importantly, only 4% of respondents had a formal IP strategy in place.

In building on these survey findings, we just published CIPO's business strategy, which provides a five-year horizon of priorities. One priority is to continue working across the IP ecosystem to address the awareness gap. We offer a number of general tools and information products to help innovators make informed decisions, including what to consider in developing an IP strategy, how to navigate the IP system to seek rights, how to find and hire an IP professional, and how to protect rights in Canada and abroad. In total, our information products have been accessed over 200,000 times.

CIPO is just one piece of the IP ecosystem puzzle. We have an extensive network with key partners federally and provincially with business associations, academia, and IP professionals, to help reach potential clients.

Last year, along with key partners, such as the Business Development Bank of Canada, NRC IRAP, the trade commissioner service and the Intellectual Property Institute of Canada, we collectively formed the IP village, which is a partnership to help Canadian SMEs better understand how to use IP more effectively.

In closing, there are multiple dimensions to understanding IP commercialization and how it is positioned in the broader innovation ecosystem. For CIPO, we are honoured to serve the most creative people in the country, with over one million interactions annually, to help them get to market with confidence, make informed decisions along the way, and compete globally.

Again, thank you for the opportunity to be here today. I'm happy to answer any questions.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much for that.

Now we're moving to our second witness, Mr. Schaan, for five minutes.

[Mark Schaan, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry]

Thank you, Mr. Chair.

I'm pleased to join you today from the Algonquin Anishinabe peoples' unceded and unsurrendered territory.

My name is Mark Schaan. I'm the senior assistant deputy minister of strategy and innovation policy at Innovation, Science and Economic Development Canada. I'm joined by my colleague from the department, Nipun Vats, the assistant deputy minister of the science and research sector.

My responsibilities include initiatives to encourage innovation, promote economic growth and strengthen Canada's business competitiveness in the global marketplace, including through IP policy.

The government recognizes that IP is a key asset for businesses and that having a sound IP strategy in place can be crucial to business success and growth in today’s economy. IP-intensive firms are more innovative, export more, enjoy higher growth and create better jobs.

Recognizing this, the government has made a number of investments to build an IP-savvy innovation ecosystem, starting with an initial investment of $85.3 million through the national IP strategy launched in 2018. The strategy is designed to help Canadian businesses, creators, entrepreneurs and innovators understand, protect and access their IP.

The IP strategy is founded on three main pillars, which are IP legislation; IP awareness, education and advice; and strategic IP tools for growth.

The strategy comprises a number of discrete initiatives, including amendments to key IP laws to reduce barriers to innovation—including to the Patent Act, Copyright Act and Trademarks Act—to clarify acceptable practice and to prevent misuses of IP rights. It includes the creation of the College of Patent Agents and Trademark Agents to provide independent regulation of this profession and to support the provision of quality advice.

The strategy includes support for IP clinics at law schools in the amount of $1 million over five years and $0.2 million ongoing. Those clinics provide basic IP advice and help train the IP experts of the future.

The strategy includes an indigenous intellectual property program, whose funding is $1 million over five years and $0.2 million ongoing. That program funds eligible indigenous organizations to support participation in World Intellectual Property Organization sessions, small-scale initiatives and projects related to IP, indigenous knowledge and indigenous cultural expressions.

The IP strategy also includes ExploreIP, with $4.5 million over five years and $0.4 million ongoing, which provides one-stop, web-based access to IP owned by Canadian governments and universities that can be bought or licensed, and support for the inclusion of Canadian IP in international standards. There is also a pilot patent collective, at $30 million, to support firms in the data-driven clean-tech sector to access a range of services including educational opportunities, patent intelligence, advisory support and a patent pool.

More recently, in 2021, the government launched additional initiatives to further support Canadian researchers, start-ups and technology-intensive businesses. For example, a $90-million investment in ElevateIP will help business accelerators and incubators provide Canadian start-ups with access to IP supports to help them strategically manage, leverage and protect their IP.

The $75-million IPAssist provides support to clients of the National Research Council's industrial research assistance program with their IP needs.

These investments are complemented by the strategic IP program review, which was announced in budget 2021. The review is currently assessing how Canada's innovation and science programming could better integrate IP considerations throughout the life cycle, from basic research to near-commercial projects. To inform the review, the government wants to hear from the public on this crucial issue. It will be launching a web page and questionnaire on the national IP strategy web page.

Finally, the blueprint of the new Canada Innovation Corporation was recently released, announcing an outcome-driven organization with a clear and focused mandate to help Canadian businesses across all sectors and regions become more innovative and productive.

Canadians are talented, creative and inventive. These activities will help Canadians and Canadian businesses take their new ideas and new technologies and turn them into new products, services and growing businesses in Canada.

I want to thank you for your time today. We are happy to take any questions from the members of the committee.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much for the testimony from our witnesses today.

We are going to move into our six-minute round. Starting off is MP Lobb for six minutes.

The floor is yours.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Good afternoon, gentlemen. Thank you for appearing here today.

For the first question I'd like to ask, there have been a few articles written recently that are slightly critical, let's say, of the changes to the Trademarks Act, which are potentially causing many delays in regard to looking at patents and copyright issues.

I'm wondering if you have any thoughts on this. Has it caused this? That's what some lawyers are saying. If so, what is the ability to speed this process back up?

We'll start off with that, I think.

[Mark Schaan]

I'm happy to start on legislative changes and then turn to my colleague from CIPO to talk a little bit about the administration of those trademark rights.

As I noted, as part of the intellectual property strategy, a number of changes were made to Canada's IP laws to ensure they were protected from potential abuses. One way that was done was actually to try to prevent trademarks from being exploited by individuals who might be doing what is sometimes called “trademark squatting” or actually sitting on a number of trademarks with no intention for their use.

One way we dealt with that was to try to put in place effective mechanisms to ensure that when there wasn't use, people were able to pursue those trademarks and strike them from the roll. It was also to ensure we had effective practices in place in terms of the fee structure associated with trademarks.

By and large, I think those cases and those changes are actually an important part of the changes, but I'll turn to my colleague from CIPO, who can talk a little bit about the current situation at CIPO on trademarks.

[Konstantinos Georgaras]

Thank you very much for the question.

A number of factors have converged over the last few years that I'd like to speak to.

There has been a continual growth in demand for trademarks. Last year, we received over 82,000 applications at CIPO. This represents a 71% increase in demand over the last decade. This is a global phenomenon.

As well, in 2019, we acceded to an international treaty, through which we now receive 29% of all our applications. In fact, Canada ranks fifth in the world for demand through these treaties.