Science and Research Committee on April 18th, 2023

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

Thank you.

Mr. Hinton, you spoke about three things in terms of IP—education, generation and retention. I want to ask you specifically about education.

You spoke about a lot of programs. From the ones that you've identified and used or that some of your clients have used, what in particular is out there for females or people from indigenous communities or marginalized communities that they can use? What can you recommend based on what you're aware of?

[Jim Hinton]

The Innovation Asset Collective, an organization I co-founded, is a $30-million federally funded pilot program. It has a fantastic report on women and under-represented groups. We worked on that for quite some time. My colleague there, Myra Tawfik out of the University of Windsor, and the team prepared a fantastic report as well as action items.

There's a specific funding program for women and other under-represented groups within the Innovation Asset Collective, but that is limited, very limited, and time-limited now. That will stop by the end of March unless there is renewed funding. There needs to be full funding for that and for taking the recommendations. Myra and the team at IAC made a number of recommendations to expand resourcing for women and other under-represented groups.

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

Thank you. That's my time.

Thank you very much.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you for that round.

I'll move now to MP Blanchette-Joncas for the Bloc.

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

Thank you, Mr. Chair.

Thank you to the witnesses for participating in this important study.

Ms. Gagné, from the CCTT network, Synchronex, it's always nice to see you. In your opening statement, you talked about the three-year funding the government earmarked in the budget to support the college and community innovation program.

I examined the budget as well, and this is how much I saw: zero dollars. There is nothing, despite the consensus within the scientific community and among all stakeholders, including the ones at this table and all the witnesses we've heard from in the year and a half the committee has existed. The government has turned a blind eye, even disregarding the recommendations in a report the government, itself, commissioned on the science ecosystem. I'm talking about the Bouchard report, of course, which was released on March 20.

Specifically, I'm interested in hearing your views on that lack of investment in research—research investment is, after all, the first phase of the innovation chain. Meanwhile, our competitor and neighbour to the south has doubled the core funding allocated to its biggest program, the National Science Foundation, in the years ahead, under the CHIPS and Science Act.

Canada continues to drop in the global ranking when it comes to research investment. Do you agree with that observation? Also, what risks does that pose to your activities in the long term, tangibly speaking?

[Marie Gagné]

Thank you.

Knowledge development is the foundation of wealth creation. As everyone knows, businesses and organizations have to innovate in order to set themselves apart locally, nationally and internationally. Today, being innovative is just as important in municipal governance as it is in the business community. Pursuing innovation means going after knowledge and coming up with new research, which can then be applied. For that reason, I have to agree with you.

It's really important to provide greater support for research. I'm talking about research overall, not just basic research. A look at technology readiness levels, or TRLs, reveals the importance of providing support to every link in the chain. After all, a chain is only as strong as its weakest link. If you want to access innovation and knowledge and get that knowledge out to businesses—going from TRL 1 all the way to TRL 8 or 9—you have to make sure both basic research and applied research are very well-funded.

That's how you get knowledge developed in universities out to the stakeholders in need of that knowledge—businesses and organizations. That's where wealth creation happens. Wealth is created when an invention becomes an innovation and the knowledge is put to use. Accordingly, research as a whole needs to be better funded at every TRL.

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

Thank you, Ms. Gagné.

I'd like to talk more about the budget. As you know, the crux of the issue is money. The committee recently met with Jeffrey Taylor, the chair of the National Research Advisory Committee at Colleges and Institutes Canada. He told us that Canada's colleges received only 2.39% of tri-council funding in 2020.

Can you tell us where you stand on that? Could you also talk more about the issue you raised earlier in relation to short-term funding and the three-year budget investment? On a practical level, how does that impact your organization and the members you represent?

[Marie Gagné]

There's no doubt that we welcome the additional funding allocated to the college and community innovation program, which the Natural Sciences and Engineering Research Council of Canada administers. As I said, this is non-recurring funding, which is a problem because it doesn't allow for long-term strategy development or the purchase or introduction of new equipment. Something else it doesn't allow for is attracting and retaining top talent. Clearly, when you're forced to offer people temporary contracts, you can't be competitive.

Providing very good support for basic research but inadequate support for applied research impacts Canada tremendously. Applied research is where wealth and value are created. It's really time to adjust how research funding is apportioned and increase the overall level of funding throughout the chain. If we don't want to abandon an invention midstream and run the risk that it will never benefit a business or innovative solution, research has to be adequately funded at every stop along the way, every TRL.

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

Thank you, Ms. Gagné.

[Marie Gagné]

Ongoing funding is the crux of the issue.

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

Exactly. I completely agree.

[Marie Gagné]

In an inflationary environment…

Pardon me. Please go ahead.

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

Not to worry.

Let's come back to intellectual property. How do you think we should support the development of a research continuum? I'll be even more specific. How do we bring basic research players—universities—and applied research players—college centres for the transfer of technologies and others—closer together? The point is to turn inventions into innovations.

[The Vice-Chair, Conservative, Corey Tochor]

I'm sorry but we're out of time for this round of questions. I would ask the witness to please submit a written response to the last question.

We move now to our guest MP for the day.

Welcome, MP Angus, to our committee. For six minutes, the floor is yours.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Chair. It's an honour to be at this committee.

Mr. Hinton, I want to start with you. I was interested in how you talked about how IP is leveraged against companies, against our potential innovation. We certainly know that, with Google, Amazon, Meta and Apple, there is this whole concept of this kill zone for innovation. Their data banks are without parallel. They have predictive abilities to anticipate. They have a massive legal war chest and control of the market.

How do we, as Canadians, even play in that game when we see the kill zone of innovation around so many start-ups?

[Jim Hinton]

Those big companies have amassed tens of thousands of patents. Their datasets are unparalleled globally, and we continue to feed those as users. They always say in the last year they've generated more data than they have in all the years before that, so it's always continuing to ramp up. What we need to do is reduce this asymmetry.

There's a significant freedom-to-operate limitation when you're getting into markets where these big players are, so you need to reduce the IP and data asymmetry. You need to build an IP position that you can leverage against them. It's not about getting patents for protecting your inventions as much as it's about getting patents that are going to read on what they're doing and neutralize the threat of what they have. These big players need to be neutralized. If you do it one-off with one company at a time, they're going to keep buying you up or knocking you out and restricting your ability to grow in scale.

[Charlie Angus, NDP, Timmins—James Bay, ON]

One of the arguments that has been used is on antitrust, but antitrust tends to be on competitive pricing, whereas this is a whole different thing. This is about limiting future potential and future possibilities by just buying up or sidelining innovation. Given their massive power in market share and data power, you mentioned the idea of IP collectives. Is that what we have to look at as Canada?

I would love for us to take on antitrust, but I don't think our American neighbours are going to like that very much. Antitrust is going to have to come out of the United States, really, to make this happen—or Europe—but I don't know if we could do that. Would the IP collectives be a way of trying to level the playing field somewhat?

[Jim Hinton]

Maybe as a first competition policy, antitrust is absolutely a strategic lever to embed Canadian companies in global value chains. That's what the Americans use their antitrust policy to do. They grow their companies using competition policy, or not using it, to ensure that their companies are inserted into global value chains. That is absolutely a lever we can use to increase the freedom to operate for Canadian companies, if done strategically.

As you mentioned, IP collectives—the Innovation Asset Collective, which I co-founded, and Mike McLean was here earlier at the committee and spoke on that—need to be funded and expanded. Right now it's just for data-driven clean-tech companies. It needs to be much broader than that.

On the data side, we saw this with Sidewalk Labs. If you read the book that's out on that, I get a brief mention because I helped work with the Waterfront Toronto team on that to reorient the policy. It's about reducing the asymmetry in data and allowing Canadian companies to be able to access Canadian-generated data and to use that as a commercial asset.

There are the privacy concerns that need to be navigated and managed. However, ultimately, if the data is an asset and these big companies are able to use that to far out-commercialize you because they have access to that information, then we need to be able to get to that scale. We can really only mimic that scale, because we're a small open economy, in a collective way—so pooling data assets that Canadian companies can access and commercialize.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm really interested that you raised the issue of Sidewalk Labs, because I certainly pushed for the investigation at the federal level. Would it seem that we are naive in dealing with these companies? We were turning over a massive piece of prime real estate to one of the biggest companies in the world to do whatever they wanted. We were told it would be really cool for Toronto to give over all this land, all this potential, and, hey, they'll get all of our data, but they'll put it in some kind of trust maybe at a library someplace.

The whole thing from start to finish raised serious questions about public interest, public space and the public right to know, yet all those seemed to go by the wayside because it was Google and they were supposed to be cool. Is there a naïveté to Canada's approach to this?

[Jim Hinton]

Yes, absolutely. We got the bum's rush on the whole thing, and we were hoodwinked into doing that deal. Luckily we got out of it, because it would have been generations of economic opportunity lost. It was a land grab but a data grab, which is really even worse. There was some predatory contracting and all sorts of things embedded in there. On the record, I am saying that the patent terms were laughably stupid. They were trying to make the Canadians agree to things that were just foolish. They said they weren't going to sue us in Canada, but if we entered the U.S. market they would use their patents to sue us. It wasn't a partnership. It was them coming in...and it was at all three levels of government where we saw it: Toronto, Ontario as well as the federal government.

Everybody sort of saw the Google.... Maybe at the time, the Google brand was stronger than it is now with what's happening with some of the other data aspects, but it was a failure of political leadership across the board.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you very much.

[The Vice-Chair, Conservative, Corey Tochor]

Thank you for that round of questioning.

Now moving on to our five-minute round, we have Mr. Soroka from the Conservatives.

The floor is yours.

[Gerald Soroka, Conservative, Yellowhead, AB]

Thank you, Mr. Chair.

Starting off with Mr. Hinton, would you say that basically we do a poor job of trying to patent anything in Canada?

It seems that we do job creation at our universities to do research. That's about it, and then we sort of just let the money flow out. Is that a good assessment?

[Jim Hinton]

Yes. It's really on two fronts.

If you look at our research institutions, it's philanthropy. We're giving this stuff away. Universities are great. We do two things well, education and basic research, but that's being given away.

When it comes to applied research and commercialization, it doesn't happen. There was $4.5 billion spent on research and development at universities in 2018. Guess how much they made in commercialization? It was $54.4 million. Anybody can turn $4.5 billion into $54 million. It's easy. You can make more money: Just don't spend as much money as you spent before.

It's not happening. Universities are not doing commercialization. They're doing either basic research or philanthropy. We need to get more of the reorientation around supporting Canadian companies and having Canadian headquarter companies commercialize and scale globally.

If you look at some of the funding initiatives, even as recently as yesterday with Ericsson and Nokia, Canadian public funding is there. These are global companies. We're giving them money to generate IP, and then we're going to buy that back from them. Maybe it's a little bit better than Huawei, but it's still no good.

This is not what innovative economies need to be doing. We need to be the ones setting up Canadian branch plants in Finland or Sweden, or wherever else there's great talent, harvesting data and IP from them and then commercializing it globally. We're doing it backwards.

[Gerald Soroka, Conservative, Yellowhead, AB]

Okay. Because we've been working with these big tech companies for so long and they've patented so much, are there really any patents left that aren't going to infringe on them to some degree? Are we now forced to work with them because we have no patents of our own?