Evidence of meeting #39 for Science and Research in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Mr. Keelan Buck
Alain Francq  Director, Innovation and Technology, The Conference Board of Canada
Andrew Greer  Managing Director, Purppl
Jarret Leaman  Founder and Chief Strategy Officer, Centre for Indigenous Innovation and Technology
Krista Jones  Chief Delivery Officer, Ventures and Ecosystems Group, MaRS Discovery District

11:55 a.m.

Managing Director, Purppl

Andrew Greer

I have a couple of things on that. We've said several times in this conversation that we measure what matters. Are we measuring profitability? Generally speaking, I am seeing the government measure jobs, revenue and investment, but not profitability. That seems to be where the effort is placed. I think there's a bit of an oversight there.

11:55 a.m.

Liberal

The Chair Liberal Lloyd Longfield

Thank you.

Mr. Blanchette‑Joncas, you may go ahead for two and a half minutes.

11:55 a.m.

Bloc

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

Thank you, Mr. Chair.

Mr. Francq, a May 2022 Conference Board of Canada report showed that recent international trade agreements emphasize protecting trade secrets. Do current Canadian laws and regulations adequately protect trade secrets? If not, what improvements could be made?

11:55 a.m.

Director, Innovation and Technology, The Conference Board of Canada

Alain Francq

Again, I think we need structure. That is the recommendation you have heard all the way back to when Mr. Balsillie and Mr. McLean were talking about being able to build the awareness and thus the protection, in answer to your question.

Programs that provide education right from the post-secondary level as they move into the economy through to IP intelligence and knowing where that IP is and where it can hit the marketplace and all the experts that we currently don't have access to—but we do—and enabling freedom of operation are things that the Innovation Asset Collective looks at. We need more of that in order to compete.

11:55 a.m.

Bloc

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

Thank you, Mr. Francq.

How do you think international trade agreements affect the commercialization of intellectual property in Canada?

11:55 a.m.

Director, Innovation and Technology, The Conference Board of Canada

Alain Francq

We do have international joint S and T—scientific and technical—co-operation agreements that are leveraged quite a bit. Those, by the way, are both academic and business agreements, usually, when you look at Global Affairs and how that's done. I think that is beyond Canada. I think we have the recommendations here for commercialization within Canada, but we need to leverage those joint S and T partnerships, because most of them are with innovative nations.

Essentially, the 2% or 3% of our highly qualified property is our ticket to the other 98%.

Noon

Bloc

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

Thank you.

What does the government need to prioritize to ensure more IP development, protect market share and support Canadian businesses?

Noon

Director, Innovation and Technology, The Conference Board of Canada

Alain Francq

Nothing happens in a vacuum. We need to be able to have the development of an idea at one end of the innovation spectrum, move it through to the company level and then move it through, as Andrew just mentioned, measurement of the prosperity impact on the country. That is the continuum. We need systems across that entire continuum.

Noon

Liberal

The Chair Liberal Lloyd Longfield

Thank you for the concise answer.

Mr. Cannings, if you could bring us home, you have two and a half minutes, please.

Noon

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Thank you.

I'll turn to Mr. Greer

I'll ask you to expand on the point you made that not all IP is patentable, that you have to protect some with contracts and licences. Could you give some specific examples of IP that would be best protected or only protected in this way? How would we do it now? How can we support businesses and organizations that want to do this?

Noon

Managing Director, Purppl

Andrew Greer

Thank you for your question, Mr. Cannings.

In the case of business process innovation, there's a lot of it that doesn't deserve to be patentable. It's best protected through a contract or a licence. You can license the process to other organizations. This can happen from a non-profit or a for-profit.

If we speak specifically about the tech sector, where I have years of experience as well, for much of the code that goes into games, technologies and that sort of thing, if you release a patent, you have to release the code, and then it's significantly difficult to litigate to protect that and prove that someone is actually copying your code. It's a huge process.

A better strategy for many tech companies is to just protect it through trade secrets, which means licensing, contracts and that kind of thing. Putting it into a patent is a actually highly risky. I think there's a lot of discussion around the IP sphere to get more patents, but there are a lot of companies that don't want to do that. We need to be focused on making sure that the rest of the protection is included in this strategy.

Noon

NDP

Richard Cannings NDP South Okanagan—West Kootenay, BC

Thank you.

Noon

Liberal

The Chair Liberal Lloyd Longfield

Thank you. That was tremendous input.

Thank you to both witnesses. We had a great discussion this morning. I wish we could continue, but we are at time.

We'll suspend just for a minute while we get our next panel up.

12:05 p.m.

Liberal

The Chair Liberal Lloyd Longfield

Welcome back to those who have been here for the first part, and welcome to our new witnesses.

I'd like to make a few comments for their benefit as we get started.

Wait until I recognize your name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking.

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

All comments should be addressed through the chair.

Now I'd like to welcome our witnesses. To continue this discussion, we have Jarret Leaman, the chief strategy officer of the Centre for Indigenous Innovation and Technology, and Krista Jones, who is the chief delivery officer of the ventures and ecosystems group for MaRS Discovery District.

We'll be opening up with Mr. Leaman for five minutes, please.

12:05 p.m.

Jarret Leaman Founder and Chief Strategy Officer, Centre for Indigenous Innovation and Technology

[Witness spoke in Ojibwa and provided the following text:]

Boozhoo aanii, Jarret Leaman ndishnikaaz Magnetawan First Nation nidoonjibaa (Niizh manidoowag).

[English]

Hello, everyone. My name is Jarret Leaman, and I am a member of Magnetawan First Nation, located in southern Ontario, out in the Muskoka region.

I am a co-founder and volunteer for the Centre for Indigenous Innovation and Technology, or CIIT. We have been operating for about five years. Our goal is to increase indigenous representation in the technology and innovation spaces. We achieve that by undertaking programming such as on-the-job training, work placements and research.

Canada’s major cities are often seen as major hubs of innovation, and indigenous people play a huge part in that in Canada in health, technology and many other spaces.

Historically, indigenous people have had little control over initiatives that are initiated by non-indigenous institutions to collect their data for research or for private businesses. Indigenous data sovereignty expresses the inherent right and jurisdiction of an indigenous nation to control the collection, ownership and application of their data.

The Government of Canada’s dual commitment to reconciliation and open government presents an opportunity to support indigenous data sovereignty as a key foundation for developing local and regional data capacities, self-government and partnerships in the technology and innovation sectors, spurring valuable intellectual property and other assets.

Through CIIT, we have explored multiple visions held by indigenous people about the future and what it means for younger generations and nation building. Technology reconciliation and the opportunity for indigenous peoples to participate equally in the digital economy and its impact sectors are common priorities shared both by the urban and rural communities.

There have been lots of great examples of indigenous innovation over the last couple of years.

An example may be the Missanabie Cree First Nation emergency preparedness application that's being used to help evacuate indigenous communities in times of flood or emergencies.

Trent University, for example, offers a learning experience with a unique mix of indigenous knowledge and western teachings, learning from indigenous and non-indigenous faculty, elders, guest speakers and scholars from across all of North America to receive a Bachelor of Science in indigenous environmental studies and sciences.

We've also partnered and had an opportunity to work with CILAR, the Coalition of Innovation Leaders Against Racism, which provides new pathways and transformational opportunities for Canada's Black and indigenous peoples and people of colour. CILAR has helped us work with TD Bank on a research project.

One of the things we heard from indigenous communities in our engagement across the year was the idea or the understanding of self-determination and co-creation. We understand that the Constitution provides existing rights under section 35 of the Constitution Act of 1982. We also recognize that it's inherent that it may find expression in treaties and land claims agreements and in the context of the Crown's relationship with first nations, Métis and Inuit peoples.

The United Nations has recognized the need for alternative metrics and post-sustainable development goals, with some form of indigenous development factor. There is also recognition of the need for a much greater level of community involvement and partnership in the gathering of culturally relevant information and data.

Some broad areas of discussion included understanding the intricacies between collective and individual rights and their link to wealth generation as well as a deeper understanding of indigenous self-determination and a co-creation process.

Neither governance arrangements nor social collectivities are static; they are dynamic entities that may be modified and reconfigured according to changing conditions and needs. Other areas of law that consider collective interest, such as labour relations, continue to understand the dynamic, changing conditions and needs of the social collective.

An example of co-creation took place in 2017, when the Ontario government developed the Indigenous Institutes Act. It was a great project and created a framework for ongoing collaboration between Ontario and indigenous institutes to support a strong and independent indigenous institutes sector, overseen by an indigenous-controlled and indigenous-governed council.

The City of Toronto also has done some innovative work in its approach with the development of the indigenous data governance, Métis and Inuit data research circle and the development of the city's indigenous data governance strategic framework.

12:10 p.m.

Liberal

The Chair Liberal Lloyd Longfield

Thank you very much for all that.

Unfortunately, we're out of time. If you have more, you can work it into answers to questions.

Now I will ask Krista Jones to take the floor for five minutes, please.

12:10 p.m.

Krista Jones Chief Delivery Officer, Ventures and Ecosystems Group, MaRS Discovery District

Good afternoon. Thank you for having me today.

My name is Krista Jones, and I'm the chief delivery officer for MaRS Discovery District. MaRS is a large-scale commercialization engine that has supported 4,000 Canadian entrepreneurs and their deep IP-based SMEs over the last 20 years in key growth sectors.

We are focused on the critical underserved middle stage of the economic growth cycle, where the commercialization of IP and translational research grows into category-leading companies that increase productivity and boost GDP. I want to say a big thank you to all of you for supporting this work through the scale-up platform that's partially funded by FedDev Ontario.

A recent independent study of the economic impact from MaRS-supported SMEs showed that over the past 12 years, they contributed $29.6 billion to GDP, with an annualized growth rate of 20.7%. This group is growing at more than 10 times the rate of Ontario's compound annual GDP growth. This growth rate is what will fuel Canada's future prosperity and our productivity and anchor Canadian leadership in critical advanced industries. It's what will enable Canada to build major knowledge-based economies around our existing strength in creating global-leading IP.

Nearly half of the world's largest corporations today are in the technology and health care sectors, and they are collectively worth over $9.5 trillion. This is more than double that of their peers in the energy, materials and financial services sectors combined.

Many other speakers have highlighted that the business enterprise R and D expenditure is one of the leading indicators for economic growth and that Canada has lagged its international peers and the OECD average for the last 20 years, by 37.5% in 2021 alone. In Canada, our top R and D spenders represent 61% of total Canadian spend and are focused in the technology, health care and industrial advanced industries, but they are only 21% of our 100 largest companies, and none are in the top 250 global patent holders.

The pullback of the industrial sector's R and D in Canada has left only one Canadian company, BlackBerry, on the list of the top 250 patent holders globally, in the 117th position. To truly compete at the global level, we need more Canadian firms that are category leaders and can compete internationally, such as Shopify, Magna, Constellation Software and OpenText. We need to protect and nurture our intellectual property and talent in the same way we protect our lumber, precious minerals and oil and gas resources.

In April of 2021, MaRS wrote a white paper we called “Good, Better, Best”, outlining the pathways to drive long-term economic sustainability for Canada. Unfortunately, Canada's choices have largely been in the “good” category. This is where we license our IP directly or where larger foreign-owned entities establish a Canadian-based R and D centre as a result of acquisition or via government stimulus. This is not in our “better” and “best” categories. The recent deal with Volkswagen to invest $13 billion to be matched with a largely in-kind contribution of $7 billion into a Canadian-based EV gigafactory is a case-in-point example of good outcomes.

Current market conditions are threatening to erase hard-won gains for this stage of growth in the last five to seven years, putting urgent pressure on Canada's ability to build our own knowledge-based economies that allow us to build and to add persistent value in the global value chain to create new industries.

Domestic SMEs have to compete with foreign multinationals with much deeper pools of capital for talent and market share. The sheer volume of Canadian R and D talent working for multinationals, both in and out of the country, plays a role in driving economic performance outside of Canada, allowing other major economies to outperform on the global stage.

The World Intellectual Property Organization's global innovation index ranking shows Canada progressing slowly year over year based on the strength of our innovation inputs, but our lack of domestic commercial outputs in key advanced industries is keeping us from regaining top-10 global status and increasing our productivity and GDP numbers.

It's for all of these reasons that MaRS remains laser-focused on the critical underserved middle stage of the economic growth cycle. This is the key to convert IP and translational research into high-growth, category-leading companies that are domestically headquartered global firms. As the global value chain increasingly shifts from the tangible to intangible-based economies, the long-term risks to Canada of not fostering and growing category-leading, Canadian-headquartered advanced industry firms are severe.

We need a critical mass of start-ups in our ecosystem that are able to scale into companies that anchor intellectual property-focused industries in Canada and solve for major impacts on the world.

This is why we need at least—

12:15 p.m.

Liberal

The Chair Liberal Lloyd Longfield

Thank you very much.

We're very tight on time, so I will keep things rolling. We'll go over to Mr. Tochor, please.

12:15 p.m.

Conservative

Corey Tochor Conservative Saskatoon—University, SK

Thank you very much for that.

Krista, you talked about foreign internationals. Would Volkswagen be a foreign national company?

12:15 p.m.

Chief Delivery Officer, Ventures and Ecosystems Group, MaRS Discovery District

Krista Jones

Is it a foreign multinational? Yes.

12:15 p.m.

Conservative

Corey Tochor Conservative Saskatoon—University, SK

On the announcement of $13 billion-plus that is going to be shovelled out to them, how much IP that's created and how much research and development would stay with a Canadian company? Would that be all shipped back to Germany?

12:15 p.m.

Chief Delivery Officer, Ventures and Ecosystems Group, MaRS Discovery District

Krista Jones

I want to be clear: This is a good outcome for Canada. The Volkswagen investment is a good outcome. It will produce economic return for the country.

12:15 p.m.

Conservative

Corey Tochor Conservative Saskatoon—University, SK

We agree that economic activity is good in Canada, but just on the IP, please, under the agreements that you know, is the IP going to stay in Canada or get shipped back to Germany?

12:15 p.m.

Chief Delivery Officer, Ventures and Ecosystems Group, MaRS Discovery District

Krista Jones

I'm not aware of the details of the deal, so I'm not sure what the IP provisions are.

12:15 p.m.

Conservative

Corey Tochor Conservative Saskatoon—University, SK

If you were advising the Government of Canada, would you require in the agreement that some of that IP stay in a subsidiary or a branch of Volkswagen? How would you structure the deal better? Your words were “good, better, best”. If this is the lowest of the three, how do we get it better?