Science and Research Committee on March 28th, 2023

[David Durand]

Thank you for the question.

Bold New Edge, MVIP and FORPIQ are in communication with ISED as well as with IP, business and the ecosystem. It's good practice for companies to do verifications from time to time to see if they're missing something that might be of value or that might be commercialized. That is why, with our partners, we've started circulating a new type of survey to be able to identify and detect records of inventions that are able to be commercialized—again, if there is the market product fit that we were alluding to earlier.

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

Right.

I have one last thing. You mentioned women and IP and about how women are lagging. What is being done to turn that around?

[David Durand]

A lot of STEM activities are being promoted, and a lot more funds are being directed toward women, including through the Thrive platform by the BDC. I believe that's an approximately $500-million fund for women trailblazers.

In an upcoming article that's being published in the World Intellectual Property Office magazine, we're also storytelling in the sense that we're putting a spotlight on two researchers, from the University of McGill and the Université de Montréal, who are supported by Axelys as well. It's putting their technology at the forefront so that it can inspire more women in the field—any field, not only AI or through information technology.

It's important to have good role models, and that's something that FORPIQ is promoting. For instance, HISTurn was by Professor Sarah Kimmins, and Professor Mayo designed another walking aid.

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

Thank you.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you so much.

We will now move on to our five-minute round.

From the Conservatives, we have MP Lobb for five minutes.

The floors is yours.

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

Thank you, Mr. Chair.

Thank you for the witnesses who are here today.

One question I want to ask is not a Canadian question, although you can draw parallels to it. It's about what's currently happening in the tech sector in the United States. What has traditionally been in, say, New York and the Silicon Valley is now moving to Austin, Texas, and to Miami. The reason isn't the climate. It's because of regulation and taxation at both the corporate level and the personal.

If we draw the same context to Canada, are we competitive? It just seems to me that there are more taxes and more regulations. I'm not trying to be political here; that's just the way it seems. I'm wondering if either of you can provide any context to that. Is that an impediment to innovation or to the commercialization of innovation?

[Daniel Schwanen]

Yes. To give you a very short-form answer, the answer is yes.

Now, we also have to realize that here in Canada we're not a very large market. We don't have a history. We're still building our venture capital market. As I said, we have trouble attracting investment in general, even by Canadian firms. With all these things combined, and sometimes even fragmenting our market even more, here we are, not really....

Let me put it this way: We're not really rolling out the red carpet for people who might come here and create IP-related jobs. Absolutely, incentives matter, but of course so does a quality labour force, which we have. The idea is to turn this high-quality labour force into investment opportunities that investors will want to capture.

But yes, the whole.... It's a whole; I can't point to a single part of it.

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

Okay, good.

I want to touch on another topic just because you mentioned financing. I know Mr. Sousa mentioned that as well. He was finance minister in the province at one time, so he would be well versed in this.

Recently when Silicon Valley Bank ran into their trouble, I was amazed to find out that there was about $400 million or $600 million in Canadian loans. I guess when innovators find out they can get loans from San Francisco and it's easier to do that, or maybe they have cross-border interests—and I'm sure the banks are going to scoop up the Canadian part of those loans with Silicon Valley Bank—why are Canadian banks or pension funds allowing competition to beat them to the tune of $600 million in such an important sector?

Do you have any ideas on that, any thoughts on that?

[Daniel Schwanen]

It's partly the risk-averse culture, I would say. I would say that clearly in Silicon Valley the financing aspect, the firm-growth aspect and the technology aspect blended together. If we don't have one, we won't have expertise in the other.

I think we're still building in Canada, I think it's fair to say, our expertise in financing companies, loans, etc. based on intangibles and not on tangible properties. I just think, as with many things that I could mention, the U.S. has been a first mover, and Canada is getting to be a good imitator. That's what's going to happen, exactly as you mentioned. We are behind the curve.

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

I do think that could be an issue with bankability and lending. We know Canadian banks are secure. If you're comparing them to a regional bank in the States right now, the Canadian banks look pretty good, but maybe if Canadian banks are out there listening to this committee, they can be part of the solution.

There's one last thing I want to ask about as well. It's to do with the Kitchener-Waterloo story and Magnet Forensics. This was a high-tech business not started by a high-tech person. It was not started out of a university, as far as I know. It was started by a police officer. The company recently sold at market cap of almost $2 billion, but it was sold to an American private equity firm headquartered in Chicago. In a way, with my Canadian flag wrapped around my shoulders right now, I think that's a shame.

When we look at net benefit to Canada and the Investment Canada Act and all these things, is this something that the governments need to look at going forward? When we have these crown jewels that can sell around the world and add to our GDP, should we just let them be sold willy-nilly to an American private equity firm?

Thank you.

[The Vice-Chair, Conservative, Corey Tochor]

I'm going to ask the witnesses to provide a written response if they agree to. We are at 41 seconds over already, Mr. Lobb. I'm doing my best to keep things on track.

We now go to our next MP, Madam Diab, for five minutes.

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

Thank you very much, Mr. Chair.

I would like to thank the witnesses for being here today.

I'm going to start with you, Mr. Durand.

I'm quite interested in the following, and noticed that my colleague Mr. Cannings sort of asked you this question. I wouldn't mind hearing a little bit more about your May 10 event, in particular with respect to, perhaps, women and IP and the gender innovation gap that you sort of alluded to in your presentation. We know there's a gender gap with respect to women in every profession. Obviously from what we have heard you say this morning, it's a pretty large gap when it comes to innovation and what we're talking about here.

Can you tell us a little bit more, in terms of your studies in Quebec, in Canada and anywhere else in the world, about how we compare?

[David Durand]

In response to your question, in terms of the gender gap, Canada is lagging in that respect. Statistics from the Canadian Intellectual Property Office talk about one in five. That means of every five inventors, one is female. In comparison, in Europe it's one in three, which is almost half. We have to do whatever we can to promote women in STEM and support their inventions and how they interact as well with universities. They are a very captive audience, especially in universities, for doing declarations of invention and to be able to support their community, which is something that's very important.

In addition, there is obviously BDC's funding through the Thrive platform, which is also something that needs to be commended in the work that they are doing as well.

I think the more we're able to put a spotlight on women-led innovation, the more that will encourage youth. That is one of the strategic axes of the World Intellectual Property Organization, and the reason this year's theme is Women and IP: Accelerating innovation and creativity. I believe that is a good platform to work from.

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

I totally agree with you. Thank you for putting a light on that. We need to do a lot more of that.

It takes a lot....You're right. People of all genders need to see women in leadership roles, in businesses, and that. Thank you for flagging that and doing that.

I'm proud to be part of this government, which has introduced, quite frankly, child care, because I have girls who are now mothers. One of them is about to get her Ph.D. in chemical engineering. She just gave birth last week, and so I know the toll it takes on females in all occupations, but particularly in engineering and innovation, and all of that.

Would you agree with that? I'm sensing you want to comment.

[David Durand]

I do, because I would also like to add the point that....For instance, Professor Mayo started her entrepreneurial road at the age of 65, and her product is currently getting a lot of market traction. That is one of the reasons we referred to Dr. Mark Weber of McGill. I had asked him to put a spotlight on some trail-blazing women, and he offered a few names, including Dr. Mayo and Dr. Kimmins.

This is why there has to be a spotlight on women-led initiatives in Canada.

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

Thank you for sharing that. There's hope for women of all ages, which is wonderful, but we need to start at all levels. You're right.

You talked about national security being transferred to foreign countries. Under the Investment Canada Act, investments by foreign investors are subject to the ICA review, including sensitive sectors, which receive scrutiny. Bill C-34, which was introduced, updates the national security review process of the ICA, including a new requirement for pre-implementation filing.

The requirement is to prevent a company from closing its transaction before the review is completed. I want to seek your input and comments on the importance of this kind of review, and any other suggestions you may have.

If I have time, I'll ask that of the second witness.

[The Vice-Chair, Conservative, Corey Tochor]

Unfortunately, you're going to have to request them to provide a written response. We're 11 seconds overtime. I'm sure they'll endeavour to give you a written response.

We'll now move on to the last two and a half minute round.

MP Blanchette-Joncas, the floor is yours.

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

Thank you very much, Mr. Chair.

I’m very sensitive to the issue of gender discrimination, but I’m even more sensitive to the current scientific ecosystem in Canada.

Personally, I am not proud of this government. Canada is the only G7 country to have reduced its investment in research and development over the last 20 years. I am not proud of this government for failing to increase scholarships for young scientists and students for the past 20 years. I am not proud that we are the only G7 country to have lost researchers in the last six years. It’s really nothing to be proud of.

While we’re on the subject of pride, I’m going to try to restore a bit of it, in the hopes of convincing some of my colleagues of the value of scientific research in Canada. We have to walk the talk. Our neighbours to the south have taken some significant steps. Here are some of them.

Over the next five years, as part of the CHIPS and Science Act passed in the U.S., the base budget of the National Science Foundation, which is the country’s largest research investment program, will double.

Mr. Durand, what will happen to Canada’s competitiveness if the federal government does not significantly increase its investment in research and development?

[David Durand]

That’s a great question, and unfortunately I don’t have an answer. The only thing I can add is that you don’t necessarily have to take the U.S. market as a benchmark.

Let’s look instead at Quebec, which has already taken some excellent steps through the Quebec Research and Innovation Investment Strategy, SQRI2, as well as with the Quebec Innovation Council, headed by Luc Sirois. Quebec is therefore positioning itself as a leader in the innovation space, and the entire Canadian ecosystem can learn from it.

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

Mr. Durand, thank you for bringing Quebec’s initiatives to the forefront. Having said that, I try to take a broader perspective. I’m looking at the federal level, and as far as I know, there is no Chief Innovator in Canada. I think it would be a good idea to create such a position, along the same lines as Canada’s Chief Science Advisor or the equivalent position in Quebec.

Thank you for your answer, all the same.

That’s all the time I had today.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you.

Now we'll go to the last member of Parliament.

MP Cannings, the floor is yours for two and a half minutes.

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

Thank you.

I'd like to ask Mr. Durand a question.

One of the recommendations that you put forward here is to create more IP management education for students earlier in their education process, and I assume you're talking about university education here. You're talking about the business community, so these are business students.

What we've been hearing is that a lot of the IP developed by university students, obviously, happens more in the sciences and technology parts of university faculties. Do you propose that IP education be provided to those students? They are the ones who are going on to do the research and create the IP in large part. They're the ones who need to know that. Where do we provide that education? Where are we doing it now? How can we do it better?

[David Durand]

The response to that question is, yes, these types of courses should be geared to the universities, both in the sciences faculties and in the arts faculties. This is one of the reasons we talk about IP and business together. Of course, it takes the scientists to come up with some innovative ideas, but it's never done in silo. It needs to have a team around it. It needs to have a proper management team and also seasoned operators to be able to promote the technology and to be able to go on a track of being able to sell it and commercialize it across Canada.

However, in terms of the education, yes, this is something that.... For instance, I teach at the University of Ottawa in the faculty of law, but the captive audience has to also be in business schools so that they get to understand the intricacies of intellectual property and how it's manipulated in the sense of how it's being able to be used and leveraged. This is an important part of our mandate to educate, as well.

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

Okay, thank you.

[David Durand]

Thank you.