I'm sorry to—
Evidence of meeting #13 for Science and Research in the 45th 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.
Evidence of meeting #13 for Science and Research in the 45th 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.
Founder and Chair, Centre for International Governance Innovation
Sure. The fundamental AI was funded by taxpayers for 30 years at the University of Toronto—
Liberal
The Chair Liberal Salma Zahid
I'm sorry for interrupting. The time is up. If you would like to respond in writing for that, it would be great.
We will now go to MP Hepfner for five minutes.
Please go ahead.
Liberal
Lisa Hepfner Liberal Hamilton Mountain, ON
Thank you, Chair.
I want to say hello again to Mr. Balsillie. I don't know if you've made the connection, but I was a journalist in Hamilton during basically all the years you were trying to bring an NHL team there. Gary Bettman sneered in my face when I brought up the idea with him, but I just want to say that your efforts were very appreciated in Hamilton during all those years.
I'll pick up where my colleague Ms. DeRidder left off and give you a chance to expand.
When you were running Research in Motion, I think you had 44,000 to 45,000 patents in your name. You are a person in Canada who has more IP than maybe anyone else. That wasn't 30 years ago. It was a long time ago, but really, what has changed since then? Why were you able to build a huge company in Canada—Research in Motion—and get all these patents? Today, we're struggling to do the same.
Founder and Chair, Centre for International Governance Innovation
My mentors for commercialization were in the United States. They helped me navigate the State Department on our geopolitical issues, and they also showed me how to file, generate and navigate the global IP landmines. I kept coming back to Ottawa and saying, “What you're articulating as how the world of business works is not what I'm experiencing in the world, and it's not what I'm experiencing in Washington.” They were just not interested in that. There was a certain narrative of “Cut taxes. Cut regulations. It's a free market. Hands off.” I just didn't experience that in the world.
As to the nature of ideas, the asset is created by the government and changed hundreds of times per day. As this became more and more important and interleaved with data and AI, the role of the public-private frameworks soared in strategic relevance and strategic behaviour. That's what wasn't in Canada's policy thinking, but it's what I experienced around the world.
Liberal
Lisa Hepfner Liberal Hamilton Mountain, ON
I find it really interesting that you're calling for more government intervention, for another government body to help maintain our IP here in Canada.
I'd like to turn to Mr. Hepburn because I only have a couple of minutes left.
Mr. Hepburn, I found your testimony very interesting—the fact that we have no shortage of enthusiasm for commercialization but that innovators here have to sell their intellectual property to the United States to afford clinical trials.
It occurred to me that when we do have a big company in Canada, we tend to vilify it. I'm thinking of Loblaws or Air Canada. When they get really big, they seem to take on all the ire of struggling Canadians. I don't know if you have any thoughts on that.
I typically serve on the heritage committee, and we talk a lot about artists' IP, our cultural IP and how we're losing our cultural sovereignty to other countries because we're losing the rights to ideas.
Can you comment on those ideas?
Dean Emeritus, University of British Columbia, As an Individual
In Canadian policy, there is a bit of an obsession with small and medium-sized enterprises, which is fine; we need to help small companies get established. A lot of the large companies that are vilified are in this protected sector, and maybe that's why they're vilified. I say that having avoided a five-hour delay on Air Canada by flying Porter yesterday.
The difficulty is in helping provide policy frameworks. The biotech industry is a particularly pointed example, because it's the policy of large multinational pharma companies to buy IP from small companies. They've long since abandoned doing a lot of their own research. They let others do their own research, typically with government support, especially in Canada. Then they simply buy it if it's a successful thing, or they create an agreement—which I've seen over and over again in Vancouver—where they'll give a lot of money to get a potential drug through phase one clinical trials. The founders will say, “That's great—lots of money”, but of course the sting in the tail is that if they're successful at phase one clinical trials and it looks like they really have something profitable, they're told, “You're our company now.” I think that's creating the environment....
Biotech is completely about intellectual property and about patent protection in particular. It's great that we protect the patents, but if we don't allow companies to succeed in Canada, then we know where the patents go. They get sold to some big multinational, which then develops the technology and makes the profits from it.
Liberal
The Chair Liberal Salma Zahid
The time is up.
We will now proceed to MP Blanchette-Joncas for two and a half minutes.
Bloc
Maxime Blanchette-Joncas Bloc Rimouski—La Matapédia, QC
Thank you, Madam Chair.
I'm coming back to you, Mr. Balsillie.
You said we need a single consistent approach and a clear position, rather than a fragmented system.
Quebec has successfully built a comprehensive ecosystem. We have a chief scientist, a chief innovator, a research and innovation investment strategy, players such as Axelys and Synchronex, 59 college centres for technology transfer, and financial levers including Investissement Québec, the Caisse de dépôt et placement du Québec and the Fonds de solidarité FTQ.
As you can see, we have an ecosystem that works in an integrated way towards a shared vision under a consistent governance structure with innovation expertise.
Do you think Quebec already has the integrated model Canada is still looking to build?
Founder and Chair, Centre for International Governance Innovation
Directly, no, I do not think Quebec has taken the right approach. You have 59 tech transfer offices. The maximum you should have is two or three.
Second of all, if how they do the granting councils, do the partnerships and manage the frameworks is not managed upstream by Ottawa, then even if you do everything right, they're such a big actor in funding and so on that you're lost before you start.
Bloc
Maxime Blanchette-Joncas Bloc Rimouski—La Matapédia, QC
How do you think it's possible to make the ecosystem better when the provinces all have different models and no integration? I described Quebec's ecosystem, which is already developed.
Ultimately, how do we get the best return on public investment?
Founder and Chair, Centre for International Governance Innovation
When you look at the tech transfer offices, invariably they're subscale and non-core and don't have enough expertise. Think of Fraunhofer. Fraunhofer's research is probably 10 times bigger than Quebec's when you look at the scale of all of Germany—or maybe five—yet they have one. You have 59 and you're maybe a fifth of the size. You're two orders of magnitude more fragmented than Fraunhofer, as an example.
Second of all, if it's not aligned in coherent orientation with Ottawa, which is writing the cheques and setting up the programs, it's not going to work. When you just look at the outcomes, it's a very technical game. It's about enclosure. If one small leak in the enclosure system is mismanaged, most of the benefits leak out.
That's how the system of intangibles and negative rights works. We need a comprehensive reapproach.
Liberal
The Chair Liberal Salma Zahid
Thank you. The time is up.
We will now end this panel with two minutes for the Conservatives and two minutes for the Liberals. Then I need four or five minutes at the end for one or two questions for members regarding committee business.
Mr. Ho, you have two minutes.
Conservative
Vincent Ho Conservative Richmond Hill South, ON
My question is for Mr. Balsillie.
You mentioned in your opening statement that the OECD projects that we'll be the slowest-growing advanced economy through to 2060 as a result of bad policy.
At the household level, people are feeling it with shrinking paycheques and rising costs. We see that in other metrics. We see a productivity crisis over the last 10 years, GDP per capita in real terms falling and investment per worker collapsing. It's no wonder the Prime Minister is asking Canadians to sacrifice more. Things are looking pretty bleak.
We know there are over 134 federal innovation programs. The Liberals, a couple of years ago, announced that they would launch the Canada innovation corporation. It looks like another federal bureaucracy.
Do you see an issue with that? Do you think that just pouring more money into it—they've announced $2.6 billion for it and it keeps getting delayed—and adding more bureaucracy is the approach? Do you think we have to spend our money a bit more wisely?
Founder and Chair, Centre for International Governance Innovation
It is a strategic orientation issue of managing the enclosure.
I will give an example. We started a sovereign compute fund for $2 billion plus, but the first $240 million was given to an American firm called CoreWeave. That's like using your health promotion program to buy cigarette machines for the cafeteria.
We cannot afford to be counterproductive in these things because we're vulnerable and our resources are scarce. We cannot waste our compute and data management, which is a factor of production. We cannot mismanage our intellectual property, which is $7.5 billion.
I believe the budget this week is the most important budget of my lifetime. It's an opportunity to reorient to actually gain the benefits of the big intangibles bar. We have all the potential to be a very prosperous and sovereign nation, but we must update our thinking institutions to attune to 21st-century realities. We have not done that yet.
Liberal
Liberal
Jennifer McKelvie Liberal Ajax, ON
Thank you, Madam Chair.
My question is for Dr. Hepburn.
You mentioned some researchers and companies coming out of UBC that were extremely successful. That's not necessarily the case everywhere.
Is there a secret sauce that the ones that make it have, or is it more the industry they're in? They all seem to be medical. What is the recipe for success?
Dean Emeritus, University of British Columbia, As an Individual
A lot of it is luck. There was a very large company, QLT, that had a technology that was superseded by an American firm. Then they made some bad management decisions and they went away.
AbCellera is a current darling and is founded by a colleague, Carl Hansen. They delayed going for investment capital until they were better developed, so they didn't have to sell out the IP they'd grown, but they're lucky as well. They had a technology that fairly rapidly got into the clinic. Typically, the delay getting into the clinic is a decade or more, and it's tough to survive and do the necessary regulatory steps to do that.
Other companies have typically been bought out because that's the way to survive. You've heard about the valley of death. An organization whose founding board I was part of—the Centre for Drug Research and Development—provided facilities for developing and doing the necessary preclinical work to bring something to clinical trials. It's now adMare. It partnered up with a Montreal organization.
There are things like that, but all of these things help small companies survive. They don't help them grow into big companies. Growing into big companies is where the problem is.
Liberal
Jennifer McKelvie Liberal Ajax, ON
Do you have any recommendations on how to grow into big companies or how can we support the move from the pilot stage to full commercialization and implementation?
Dean Emeritus, University of British Columbia, As an Individual
Well, Mr. Balsillie keeps—
Liberal
The Chair Liberal Salma Zahid
I'm sorry for interrupting. The time is up for MP McKelvie.
Maybe you can send that in writing—
Dean Emeritus, University of British Columbia, As an Individual
If I could, I'll just say that Fraunhofer is a model. We don't have that here.
Liberal
The Chair Liberal Salma Zahid
Thank you.
With that, I want to thank the witnesses for appearing before the committee and for their important input into this study.
I have just two things to ask of members.
The first thing is that we have the study budgets to adopt. The clerk sent two draft budgets on Friday, October 31.
The first one is for the briefing session with the chief science adviser in the amount of $1,000. Is everyone in favour of adopting that budget?