Science and Research Committee on Feb. 5th, 2026

[The Chair, Liberal, Salma Zahid]

I call this meeting to order.

Welcome to meeting number 23 of the Standing Committee on Science and Research. The committee is meeting to study the mandates of the Minister of Industry and the Minister of Artificial Intelligence and Digital Innovation.

I would like to make a few comments for the benefit of witnesses and members.

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

I remind you that all comments should be addressed through the chair.

For this panel, I would like to welcome, from the Department of Industry, associate deputy minister Mark Schaan, and assistant deputy minister Nipun Vats, science and research sector.

Welcome. Thanks a lot for appearing before the committee.

Before we begin, I would like to inform you that Minister Joly will be appearing online in the second panel. I will end this panel at 12:50 so she can log in and we can start right at one o'clock, because it's a hard stop at two o'clock. In order to give the full one hour to Minister Joly, we will start....

I'm sorry; there is no translation. Let me work that out.

[The Chair, Liberal, Salma Zahid]

Now we're good. I hope everyone has translation. Is everyone okay?

Mr. Blanchette-Joncas, do you have translation?

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Yes.

I would like to share some information with you, Madam Chair.

[The Chair, Liberal, Salma Zahid]

I'm sorry. What did you say? Can you please repeat that?

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

It's for information.

Can you hear me okay?

[The Chair, Liberal, Salma Zahid]

Yes, we can hear you.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

The information that I—

[The Chair, Liberal, Salma Zahid]

Let me finish and then I will come to you.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

I have no problem with that.

[The Chair, Liberal, Salma Zahid]

Because there was no translation, I will repeat that Minister Joly will be appearing for the second hour. We will end this panel at 12:50 so she can log in and we can start at one o'clock. It's a hard stop at two o'clock, so we have one full hour with the Honourable Minister Joly.

Yes, Mr. Blanchette-Joncas.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

I just want to let you know that I'm having trouble with the interpretation. It's difficult to hear the interpreters. I don't know if it's because they're not in the room and they're remote right now, but the interpreter's voice seems very far away in my headphones. It's almost impossible for me to hear the interpreters.

[The Chair, Liberal, Salma Zahid]

Okay. Let me check that.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Thank you.

[The Chair, Liberal, Salma Zahid]

Okay, they have fixed their headset. There was an issue. I'm sorry about that.

We will now proceed with our witnesses for a brief opening statement, and then we will go into rounds of questioning.

Mr. Schaan, please go ahead. The floor is yours.

[Mark Schaan, Associate Deputy Minister, Department of Industry]

Madam Chair and members of the committee, thank you for inviting me to testify before you today.

I'm joined here by Nipun Vats, the senior assistant deputy minister for the science and research sector.

I'll keep my remarks brief, as the minister will provide more fulsome comments when she joins you for the second hour.

Innovation, Science and Economic Development Canada, across its portfolio, supports the minister in fulfilling his mandate to strengthen Canada's long-term economic resilience and competitiveness.

Our role is to ensure that Canada's strengths in science, research, technology and talent are fully mobilized in service of our national prosperity.

We are operating in a rapidly changing global environment.

Economic uncertainty, accelerating technological change and shifting geopolitical dynamics present both challenges and significant opportunities for Canada.

Within the department, our job is to create the conditions for Canadian ideas, workers and businesses to thrive.

This includes supporting a strong research ecosystem, building and scaling industrial capabilities and ensuring that emerging technologies translate into productivity gains and opportunities for people in every region of the country.

More than anything, we recognize that talent is essential.

Whether we are discussing clean technologies, advanced manufacturing, artificial intelligence, life sciences or critical minerals, Canada's global competitiveness ultimately depends on the researchers, innovators, entrepreneurs and skilled workers who turn discovery into impact.

The minister will speak in greater detail about the government's recent investments to reinforce Canada's research and innovation capacity and to attract and retain the highly skilled people who drive it.

As officials, our commitment is to provide clear, evidence-based advice and work collaboratively with partners across sectors and across the country to help build an economy rooted in knowledge, innovation and opportunity.

With that, Madam Chair, I'm happy to take questions from the committee.

[The Chair, Liberal, Salma Zahid]

Thank you.

We will start our first round of questioning with MP Baldinelli for six minutes.

Please go ahead. The floor is yours.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Thank you, Madam Chair.

Thank you to our witnesses for being here this morning.

My understanding is that the government made its announcement today with regard to the EV mandate. I have some questions on that, because it's still early on.

Under the previous mandate, a credit regime was put in place as part of that program. Does that credit regime or any credit regime exist in the new program that's been established by the government?

[Mark Schaan]

There are important components of the automotive announcement today related to credit systems. One is obviously around credits for the affordability of EVs. That's the new $2.3-billion program that offers individuals and businesses purchase or lease incentives of up to $5,000 for battery electric or fuel cell EVs and up to $2,500 for plug-in hybrids. Those incentives apply to a purchase price cap of $50,000 on cars made by countries Canada has free trade agreements with. In the case of cars made in the Canadian automotive industry, the $50,000 cap will not apply.

There's also a remission framework in place. Is that the credit system you were referring to?

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Well, under the previous system, Mark, for example, for every fuel-engine vehicle the Big Three would sell, they would have to pay a credit of $20,000 to an EV company that had the ability to sell credits in Canada. I'm wondering if there's that type of penalty to reduce the incentive to buy an ICE vehicle as opposed to an EV. I'm wondering if there's that kind of program, with credits that vehicle manufacturers would have to pay to EV producers.

[Mark Schaan]

I'm happy to come back to the member with respect to the specific details on that.

The pieces I'm most familiar with are the EV affordability program and the remission framework, which will essentially reward companies that produce and invest in Canada.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Thank you.

I want to follow up on our conversation from Monday.

We were talking about the MOU the government signed with Cohere, and I was trying to find out more details on what that MOU entailed—whether it was contracts, agreements and so on. I read today that Cohere signed an agreement with Ottawa for a $339,000 contract with the federal IT department to use its Command A model for CANChat. It's great news for Cohere.

Does that flow out of the MOU that it was using with government to identify efficiencies, where AI could be used and how better to implement it?

[Mark Schaan]

As I noted in our previous engagements on the subject, the MOU is a strategic indication by the government that Cohere and, similarly, Coveo are strategic companies that have extraordinary value to the government and the ecosystem.

There's no requirement, as a function of the MOU, to utilize a given provider in any forthcoming procurement or services arrangement. The agreement between Shared Services Canada and Cohere to install Command A and utilize its capacities within the CANChat application at Shared Services is obviously SSC taking up the strategic signal, but using existing procurement mechanisms to retain the services of Cohere for the purposes of CANChat.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

It's great for Cohere. They're a Canadian company. We like to see that. I'm just wondering whether or not each department now will have to go through an open and transparent procurement process to finally come to a decision on something like Cohere.

[Mark Schaan]

That's exactly right. Each department is still accountable for its own procurement decisions under its own funding envelope.

As the common service provider, Shared Services has a mandate for the Government of Canada for certain aspects of our IT build-out, but each department is still federated in its requirements to be able to enter into procurement on its own terms. They would be required to ensure that they were utilizing the appropriate procurement vehicle for the services or engagement they were in the market for.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Thank you for that.

Finally, as part of the government's expenditure reduction plans and reviews, each department was asked to reduce spending by, I think, 17% over the next three years. I'm looking through the department that you're the deputy for. What programs in the industry have you been looking at?

For example, the strategic science fund was created to provide stable, long-term federal support to Canada's third party research and science organizations, and it plays a critical role in delivering national research priorities. Is that one of the programs that's being investigated for expenditure reduction?