Science and Research Committee on March 22nd, 2022

[The Chair, Liberal, Kirsty Duncan]

I call the meeting to order.

Welcome to meeting number eight of the Standing Committee on Science and Research.

Colleagues, the Board of Internal Economy requires that the committee adhere to health protocols, the same ones that have been in place, but they are now in effect until June 23, 2022.

If you have questions, please contact our clerk of the committee for further information on preventative measures for health and safety, but they are the same ones that have been in place.

As the chair, I will enforce these measures, and I really thank you all for your co-operation. We have a really lovely committee.

Today's meeting is taking place in a hybrid format, pursuant to the House order of November 24, 2021.

There are a few rules to outline. Interpretation services are available for this meeting. You may speak in the official language of your choice. At the bottom of your screen, you may choose to hear floor audio, English or French.

The “raise hand” feature is on the main toolbar, should you wish to speak. All comments should be addressed through the chair, and when you're not speaking, your microphone should be muted.

The committee clerk and I will maintain a speaking list for all members.

We are delighted to welcome our witnesses tonight. We are thrilled that you can join us.

As an individual, we have Dr. Ken Coates, professor, University of Saskatchewan.

Welcome.

We have Mr. Jim Balsillie, co-founder and chair of the Council of Canadian Innovators.

We welcome you.

From Evidence for Democracy, we have Rachael Maxwell, who is the executive director, and Farah Quaiser, director, research and policy.

We will now hear from our excellent witnesses. You will have five minutes. At the four-and-a-half minute mark, I will hold up a yellow card so you know there are 30 seconds left to go. I will make sure that it is fair and even for everyone.

With that, I would ask Dr. Coates to take the floor for five minutes.

Thank you.

[Dr. Ken Coates, Professor, University of Saskatchewan, As an Individual]

Thank you Madam Chair. It's an honour to be with you today.

The subject of your talk—the successes, challenges and opportunities for science in contemporary Canada—is one of the most paramount issues of our time. We live in one of the most scientifically intense times in world history. Most of the scientists who have ever lived—when you define “scientist” in western terms—are actually alive today. The number is growing at a very dramatic pace, particularly in China and East Asia, and moving across the rest of the world.

We've now come to see science not as something by itself for academic purposes, but as something crucial to economic competitiveness. Governments are investing very heavily and are shifting their attention away from where it used to be, which is on the science of discovery, toward the whole question of science for the commercial benefit, the benefit of society as a whole, so there's a little bit of tension between pure science and that of practical, productive and commercial developments.

Canada has struggled to keep up in this enterprise. We try. We're earnest, as we always are in Canada. Like most countries, we've actually followed a very simple equation, which I call the “innovation equation”. We put a whole bunch of money into post-secondary education; Canada is a world leader in that area. Investing heavily in basic science, we do okay; we're not top of the list, but we're not terrible, either. Then, we put a whole bunch of money into the commercialization of scientific and technological discoveries. We do well on the inputs—we put money in for incubators and things of that sort—but we don't do all that well on the outputs in terms of creating great economic activity.

We have a situation in Canada where our scientists are actually doing very well. We have a high, better than expected return, but economically, it's not so great. We have some really bright lights: Kitchener-Waterloo, Toronto, Montreal, Ottawa and Vancouver. Watch what's happening in Prince Edward Island, Sherbrooke, Saskatoon, Kelowna and Victoria.

Innovation, not just in Canada but around the world, has become more imitative than innovative. In fact, innovation is no longer an innovative element within our society as a whole.

I suggest that Canada has to consider a series of specific changes. We don't have a plan for what Canada looks like when it's a technologically enabled nation. What is the vision for a science-based country? We need very much to give our scientists, our technologists and our companies something to build towards. We need to recognize the uneven access to the benefits of science and technology: high-quality education, not uniform across the country; access to the Internet, not uniform; the availability of practical high technologies.... What we're actually seeing is the strengthening of what I call “city states” in Canada, a widening gap between rural areas and small towns, and the further marginalization of indigenous people and the urban poor.

I think we also have to make much better use of government as an agent for change, using the government and their spending power as a positive agent for change. We watch this happening in Israel. We see it happening in Estonia, in Taiwan, in India, but not as much in Canada, which is unfortunate.

We also have to greatly improve our speed of decision-making. Decision-making has to match the speed of innovation and the speed of global business. Our current processes are cumbersome, slow and very predictable. We're not very much of a risk-taker.

I think we need to put a lot more emphasis on unique Canadian challenges by looking at providing health care in remote communities; dealing with a national housing crisis that is urban, rural and remote; rebuilding wildlife and fish stocks; and improving our resource extraction. We can solve Canadian problems first, and export technologies to the rest of the world.

We need to find a better balance between pure science and practical technological change. I would encourage your committee to look at the polytech sector, which does a really good job of taking the bench science and actually applying it in practical ways. I'm sure you're going to talk to these folks. I would encourage you to make sure this country invests in scientific literacy as well. One of our basic problems is that there is a huge gap among our politicians and civil servants, and the scientists and even the innovators who are working on the commercial side. They don't talk to each other particularly well, because the literacy is not as strong as we want it to be.

You have a very formidable challenge in front of you. Canada must be a country where the science and technology serves the legitimate and pressing needs of our country as whole. Money is part of the issue, but quite frankly, I think Canada needs to put more emphasis on direction, commitment and collective understanding. We have to know how scientific discovery can make us a better nation. We have to make us a wealthier nation and a stronger country. I think you have a formidable task in front of you.

I wish you all the very best in your deliberations. Thank you very much.

[The Chair, Liberal, Kirsty Duncan]

Thank you so much, Mr. Coates. You've given us a lot to think about.

With that, we will go to Mr. Balsillie for five minutes, please.

[Jim Balsillie, Co-Founder and Chair, Council of Canadian Innovators]

Madam Chair and members of the committee, thank you for the opportunity to present to your committee.

I'm Jim Balsillie, presenting on behalf of the Council of Canadian Innovators.

As the committee is currently studying the successes, challenges and opportunities for science and research in Canada, it's important to evaluate both the inputs and the outputs of this ecosystem for Canada. Canada has spent tens of billions of dollars of public funds to build capacity in science and technology. These investments have propelled our universities to the top of global rankings for academic publications and the education of highly sought-after graduates.

Where Canada fails is in the commercialization of its ideas. We invest in science and research and developing ideas that have significant commercial potential, and then we either squander them or give them away. Simply put, Canada is missing critical capacity to turn its valuable ideas towards meaningfully advancing our prosperity and security.

Forty years ago, the traditional production-based economy began transitioning to a knowledge-based economy, and more recently to a data-driven economy. A world previously based on open, shared science and on liberalizing trade through tariff reductions and a patent system designed to reward genuine innovation has transitioned to a world of closed science, closed markets and monopolization of knowledge and information.

In recognition of the growing importance of IP, in 1980 the United States passed the Bayh-Dole Act, sweeping legislation that addresses the ownership of inventions that arise from publicly funded research. Canada continued to ignore the importance of generating IP. By 2016, even as the global share of the capital stock composed of intangible assets rose dramatically, the share of intangible assets in Canada's economy actually declined.

Repeated initiatives aimed at promoting economic growth either had no strategy for generating and commercializing IP or were designed to transfer decades' worth of publicly funded IP to foreign firms. Today, forty years after the advent of the knowledge-based economy, Canada's deficit in IP payments and receipts is widening at an alarming rate, a position we share with developing countries.

These outcomes have consequences for our prosperity, security and sovereignty, as indicated in a recent internal briefing to the Prime Minister. The OECD recently projected that Canada's economy will be “the worst performing advanced economy over 2020-2030” and the three decades after, affecting Canada's ability to pay for the goods and services we value.

To stop these naive and damaging outcomes, I propose three recommendations. One, re-establish the Economic Council. Canada needs the institutional capacity for the contemporary knowledge-based and data-driven economy. Two, create provisions for research agreements in line with what our Five Eyes partners have done. Properly delineate strategic technologies requiring oversight and regulation that are developed out of publicly funded research. Three, invest in IP collectives that can provide professional, centralized resources for the science and research community.

In conclusion, despite a highly educated population and public investments in R and D, Canada has consistently been a large net importer of IP. Canada's history of research and education excellence deserves better outcomes on commercialization opportunities where they exist. The path forward is not spending more or less money on R and D. Rather, it's about building the missing policy capacity for the contemporary economy, including how knowledge is generated, monopolized and commercialized.

Thank you.

[The Chair, Liberal, Kirsty Duncan]

Thank you so much, Mr. Balsillie.

We're grateful to all of you for joining us today, and I thank you again.

Now we will go to Evidence for Democracy.

Welcome. You have five minutes.

[Rachael Maxwell, Executive Director, Evidence for Democracy]

Thank you, Madam Chair and members of this new standing committee, for the opportunity to be here.

My name is Rachael Maxwell. I am the executive director at Evidence for Democracy.

I am joined today by my colleague Farah Qaiser.

Evidence for Democracy is a national, non-partisan non-profit that works to close the gap between decision-makers, like you, and the best available science and evidence. We achieve this through original research, skills training and issues-based campaigns. We do this because we believe that we all benefit when governments make decisions informed by the best available science and evidence.

Our origin story reminds us that Canadians care about the importance of well-founded evidence in public policy. In 2012, thousands of Canadian scientists and their supporters concerned about the diminishing role of science in government organized the nationwide “death of evidence” rallies. Their message was clear: We need evidence-informed policy for a strong democracy. With this momentum, the organizers of the event went on to form Evidence for Democracy.

In the decade since, much has changed. Canada brought back a chief science adviser in 2017, whose office has championed a network of departmental science advisers and the rollout of science integrity policies. Since 2015, mandate letters have all stated a commitment to the use of science and evidence-based decision-making. These are commendable steps, but there is more to be done.

We support the calls already brought forward to you to make bold investments in science today. Canada must keep up and think bigger. But investing in science is simply a good first step.

Last summer British professor Ruth Morgan remarked, “The role of science has traditionally been reserved for enabling developments. Think about getting humans to the Moon, how we've transformed medicine...or simply how we've come to understand the workings of our planet.”

These are all critical developments to improving the quality of life for Canadians, and should continue to be pursued with vigour and ambition. But Morgan also noted that “science will need to become more than this if we are to make the breakthroughs in the global issues we currently face.”

The opportunity for science I want to emphasise with you today is this: While the returns of our investments in science and research matter greatly to our innovation and economic objectives, we need to ensure that they matter equally to our democracy and inform the decisions being made within it, because public policy needs science more than ever.

Virtually every policy issue that you will face as a parliamentarian can benefit from science, especially as we consider the ever-growing challenges related to climate change, food security, widening social inequality and so much more. We must work together to put evidence at the heart of public policy.

First, we need to make sure that a voice for science is secure in the federal government, because inevitably, every government will need access to science advice in the decades ahead.

We encourage this committee to consider efforts to protect and formalize the office of the chief science adviser. Additional advisory resources, such as a parliamentary science officer or expanding the science and research capacity in the Library of Parliament, could also be considered.

We need to revisit investments in federal government science to make sure government scientists are able to deliver on their work.

Beyond the federal level, science advice across this country requires a linked-up, pan-Canadian approach. Historical examples of science coordination of this kind exist and should be reconsidered in the current context.

Second, COVID-19 has shone a light on the three-way relationship between science, society and policy. We need more deliberate opportunities for scientists and policy-makers to come together to better serve society.

Getting the right evidence starts with asking the right questions. Schemes that allow policy-makers and scientists to co-create research questions could return more relevant and timely evidence. Better serving society also demands that we reimagine the skills that scientists and policy-makers need, and help them acquire these competencies.

We have just wrapped up our science to policy accelerator training program. Over 250 researchers expressed interest, making it clear that scientists want to participate in public policy.

For researchers, some important skills to contribute to policy include communicating evidence concisely and demonstrating its relevance to policy problems, and engaging with stakeholders to build trust and credibility around scientific evidence.

For their part, policy-makers may benefit from increasing their understanding of the nature and limitations of scientific evidence as well as risk and statistical literacy.

In closing, I wish to highlight that while science has never been more advanced and our ability to gain value from vast amounts of data is unrivalled, we are buckling under the pressure of threats such as climate change, misinformation and unchecked inequality. Future-proofing our country and economy requires a bolder approach to using science to absorb the shocks of the coming decades. This is true in the way that we invest in science and research today, and equally true in the way that the impact of publicly funded research finds its way back to you and decision-makers across the country.

Thank you so much for your time.

[The Chair, Liberal, Kirsty Duncan]

Thank you so much, Ms. Maxwell.

We're really grateful to all the witnesses for their time and their expertise.

I know our members are eager to talk with you.

We will go to a six-minute round, and we will begin with Mr. Williams, for six minutes.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you, Madam Chair.

Thank you to all the witnesses for joining us today.

Mr. Balsillie, I'm really interested in all the work you've done, talking about intellectual property and protecting that in Canada. You've identified some of that today. Canada, in 2019, generated about $39-billion worth of IP, but the U.S. generated $6.6 trillion. That's 169 times our intellectual property.

You had some recommendations tonight, but what, specifically, is the U.S. doing that we're not to generate the intellectual property that they are just south of us?

[Jim Balsillie]

The things that I recommended Canada begin, and much more, the U.S. began doing 40 years ago. The old expression is “The best time to plant a tree is 20 years ago. The second best time is now.” We simply have no strategy, no orientation and no capacity to generate and control intangible stock assets. They work on a principle of negative rights or restrictions, which is the polar opposite to the traditional tangible economy. We just had no capacity and no orientation.

There's a direct causal relationship. Canada is in last place in productivity growth in the last 46 years in the OECD, forecasted for the next 30 years. There is a direct causal relationship to this inattention to generating, controlling and then commercializing intangible stock assets. I've done business in 156 countries and it is in the water table of every aspect of how they manage research, commercialization, education and so forth in the successful innovation economies. It is epicentral.

I chaired a panel on this for Ontario. There are three simple recommendations. They're fairly similar to the recommendations here.

We simply didn't change for a changed world.

[Ryan Williams, Conservative, Bay of Quinte, ON]

In terms of what you said about intellectual property before, is it better for our country to be more protective of our IP or more open-sourced?

[Jim Balsillie]

Being more protective of IP is kind of like raising rent for the homeless. You can't protect something you don't have. The issue is that those who have a lot come to Canada and say it's raised protections so that we pay them more rent. They create a false myth that higher rents will catalyze more creation of intangible assets in Canada, and that's hokum.

The best thing for Canada is to lower protections, because we're an IP popper. Unfortunately, we've signed into treaties that have locked these in for decades to come. We have to play for the train we're in and, fundamentally, play the game that everyone else is playing. I don't think we have the opportunity to take these down. We've signed in extremely high provisions in the USMCA, the TPP, the TRIPS provisions and CETA, so this is the realm, whether we like it or not for decades to come.

All my recommendations are not to change the system, because we've locked into it; they're how to play better within the system. I reiterate that we should have done this 40 years ago, but let's get going now.

[Ryan Williams, Conservative, Bay of Quinte, ON]

In Canada right now, about 80% of IP is institutionally born. Is that similar in the U.S. or is it all over? Are some of these recommendations going to scatter that?

[Jim Balsillie]

No. I think it's much more commercial in the U.S., but their companies are trained and sophisticated and have scaled in this game.

Unfortunately for Canada, our best IP, even if it's institutionally generated, is claimed by foreign companies, so we don't get the economic benefits. The economic benefits and the security benefits flow with the stroke of a pen or the click of a mouse. They move differently from traditional, tangible assets, whether it's oil or manufacturing. That's the controlling mechanism.

Even if we generate it here, we squander it. I give lots of linked examples in the documents I provided, but I can give you lots of them.

[Ryan Williams, Conservative, Bay of Quinte, ON]

That's fantastic. After this, if there is anything else written that you can provide, that would be fantastic.

[Jim Balsillie]

I will. I have lots to share with you if this is of interest.

This is not about money. I don't say spend more or less money. This is about getting more for the money that we spend, where appropriate. And I say “where appropriate”, because not all research should be oriented to be commercialized. It's simply where the opportunity exists.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Yes.

In terms of the work you've done with the CCI and across Canada, where do you see Canada having a competitive advantage over the Americans or over the world right now? Are there certain things you see that we haven't taken advantage of yet?

[Jim Balsillie]

Yes. We have tremendous....

We invented the fundamental artificial intelligence, and then we gave it away to foreign firms. We had fundamental telecommunications technology and we gave it to Huawei. Canada is great at ideas and we have great indigenous industries. We could apply those to be value-added to raise our productivity.

I think Ken said it. We need some strategies. There are institutional arrangements, there are policy arrangements and there is capacity-building. Those are my three core recommendations.

We're full of opportunities to do better. Mine is an optimistic story. I think we can raise our GDP per capita.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you.

Dr. Coates, I don't have much time. Maybe you can write this for me, or just include it with another answer. I'm really interested in how we're developing rural innovation, not just urban innovation. You mentioned Charlottetown and I'd like to hear more.

I know I don't have any time, Madam Chair.

Thank you.

[The Chair, Liberal, Kirsty Duncan]

Mr. Williams, I always appreciate how to the point you are.

Perhaps we could hear from someone else and maybe you can get those answers or you can have that tabled. Thank you for your important questions.

Now we will go Ms. Bradford for six minutes, please.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you very much.

I want to thank all of our witnesses today for being with us.

Mr. Balsillie, I'm recently elected and represent Kitchener South—Hespeler. I'm very interested of course, in your perspective. You have a very unique perspective with the Council of Canadian Innovators and with the BlackBerry history, which I would argue is still today one of Canada's most iconic tech start-ups. It brought us mobile email and many of us can't even remember what life was like before that.

We do know that the success of the Waterloo region is largely attributed to the IP policy with the University of Waterloo, where the developer of the IP gets to keep the IP and commercialize it. This is quite unique among many universities, where the university institution owns the IP. This has resulted in attracting professors and students who find that very attractive.

I was interested in your comment about IP collectives. Could you explain how they might work?

[Jim Balsillie]

First of all, I'm not aware of a situation where Waterloo's IP policy has really materially contributed to Waterloo's success. I'm not aware of a company that's been a successful spin-off from Waterloo of any scale in the last 20 years that's professor-based research. Of course, you have tremendous students who begin to do this. The returns from Waterloo's commercialization have been minuscule—between $50 and $500,000 a year gross, with six and a half FTEs and hundreds of millions of dollars in research. I would be interested in the case where Waterloo's IP policy has contributed to the Waterloo region's success. I'm not aware of any in the last couple of decades.

IP collectives are very common around the world. There's a pilot at ISED right now, headquartered in the Waterloo region, for clean tech and data-driven technologies. Canada was built on collectives, whether it was credit unions for financing communities, mutual companies for insurance, grain co-ops, equipment co-ops or butteries. You can go on and on. Canada was built through coordinated strategies. It's simply that playbook.

They're very common around the world. Japan has multiple ones, as well as France, South Korea, Germany and Singapore. They're an organized structure that retains it and gives it stewardship rather than fragmenting it.

As a small example, the Fraunhofer Institutes—the 72 research institutes in Germany with 29,000 researchers—have one centralized agency. Ontario, where I chaired a panel on this, has between two and three dozen, depending on how you define, and is a fraction of the size of the Fraunhofer. It's two orders of magnitude of fragmentation of structural organization.

That's why I say it's really about the organization. It's an organization structural principle, to summarize it. There are tons of examples around the world.

Ontario started IP Ontario as a recommendation of our panel. Ottawa has a pilot. Scale it and it's pennies. It just helps those that quite frankly need the help. It's a market failure and a capacity failure. This is small dollars, if not zero dollars.

This is not a criticism of the universities. You've asked them to do a job that is not their normal job or skill. Like you don't want me to be your chef because I'm not skilled at it, but I have other skills.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you for that.

I'd like to transition now to the area of talent attraction and retention. Canada has a great workforce shortage across most sectors of our economy. I was wondering if you could go into some detail on how we can attract more top talent to Canada. We're a great country to live in.

What do you and the Council of Canadian Innovators see as a way to compete with the likes of the U.S. and U.K.? A lot of our grads maybe go down to the valley, for example, in the area of tech. How can we combat this?

[Jim Balsillie]

The first thing I would suggest is that you convene a panel with this specific question, because the rules on talent management used to be relatively reduced to convention, but everything is thrown up in the air now with COVID, remote work and all of that.

There's a tremendous number of things Canada can do. Because people can live where they want and then work where they need, and work and live in the same place, quality of life has become central, and then all the infrastructure to do that.... Our focus on bringing foreign branch plants is not relevant anymore, because the greatest competition for Waterloo companies, as an example, is actually working for Silicon Valley from Waterloo.

I think you have to get your arms around it. You have to have definite strategies: fast-tracking immigration; supporting good researchers; having appropriate infrastructure for them in terms of broadband, quality housing and all these things; and appropriate work law.

It's a new realm and there's a lot we can do, but when you begin with a sophisticated country, with a great quality of life, Canada should be a magnet for talent.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

I agree. I think COVID especially has made it a global talent pool. I'm concerned that it's very difficult for us to compete with low-wage places in the world where the standard of living is not what we would want in Canada, so that's going to be an ongoing problem.

Thank you very much.

[The Chair, Liberal, Kirsty Duncan]

Thank you so much, Ms. Bradford. It's a really interesting discussion tonight.

We will now go to Mr. Blanchette-Joncas for six minutes.