Transport Committee on March 1st, 2012

[Gerard Peets]

One of our messages is that Canada's patent regime is competitive internationally.

The decisions that are facing companies when they're bringing products to market involve what market they are trying to access, and they will use the patent framework of that market. Definitely, you see in the categories that we have identified that Canada's patent regime is on par with those of its trading partners. Most of these areas are covered by international agreements such as the TRIPs, and there's a level of standardization there.

[Jeff Watson, Conservative, Essex, ON]

Somebody just said not long ago that Canada has a strong position as a start-up nation—I think that was you, Mr. Davies—and that the challenge is getting the capital to grow. Is the problem that banks are risk averse with respect to helping companies grow?

[Mitch Davies]

Actually, it's a question of the asset class. If we're talking about technology and knowledge, the type of lending that a bank would undertake, based on some fixed assets and protection around those, is not where the gap is. Banks are involved with the SME sector to a great extent in terms of providing working capital and support for industries where there are assets.

The question in technology financing is that it's more venture financing, meaning the ability to evaluate the business plan in an area of completely new breakthrough products and innovation. The sophistication to make those decisions is not generally available in all the banks. It's something that's built up where you have a strong cluster of industry. You see it in Silicon Valley and in Boston, where they have a strong, deep specialization in technology and innovation and in the disruptive markets, and they can make those kinds of bets.

The question in Canada is how to build a corollary to that to support the bright people who come out of our institutions and want to start up businesses and see them grow in this country. A recommendation in the Jenkins panel that's under consideration, among other approaches, is whether support should be provided to incent more private sector money to come into this space to build expertise. Rather than have government make the choices, the idea would be to pull more private sector money in and build the critical mass in terms of a very specific area of financing.

It's not like bank lending. It's not asset-backed lending. It's lending against a future growth plan and looking for, ultimately, exit through an IPO into public markets.

[Jeff Watson, Conservative, Essex, ON]

With regard to Automotive Partnership Canada, what was it designed to do that's different from AUTO21? Why was the decision not to simply expand the scope of AUTO21 to accommodate what APC does?

Obviously AUTO21 is a national centre of excellence, so I'm interested in why this decision was made. How does APC differ, and why couldn't that be done by AUTO21?

[Mitch Davies]

Automotive Partnership Canada is actually to bring the federal funding bodies together around a particular industry and to drive their funding support to meet industry needs.

Actually, the innovation here is around the kind of challenge that was mentioned in the presentation from Transport, around making the programs accessible. Essentially, Automotive Partnership Canada brings the programming together to a common table so that you actually review and adjudicate the projects together. You don't have a duplicative process whereby you'd apply to NSERC for one thing and to the Canada Foundation for Innovation for your infrastructure support, or you'd be working with the National Research Council on their in-house strategic collaborative research and development. They brought it together so that you actually can work up proposals with industry directly, who then pull resources from those agencies. They have their own funding programs.

In other words, we didn't create a new program. What we created was an integrated framework to deal with the specific industry. In particular, in auto, where we have strong export performance, we have a significant industry. It's very important economically, but it's small-scale R and D. The question is should we—

[The Chair, Conservative, Merv Tweed]

I have to interrupt there.

[Jeff Watson, Conservative, Essex, ON]

I'm still looking for an answer on how AUTO21 can't do what APC does, but....

[The Chair, Conservative, Merv Tweed]

I'm sorry, but your time is up.

Go ahead, Ms. Morin.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Thank you, Mr. Chair.

Mr. Davies, you talked a lot about airport noise in your presentation. You also mentioned that you were involved in reducing the noise.

Since the Montréal-Trudeau international airport is in my riding, I receive many complaints from my constituents about airport noise. Could you tell me what your role is in developing this technology and what steps you can take to further reduce the noise in the future?

[Mitch Davies]

I'll give two examples. Through the strategic aerospace and defence initiative, we support Pratt and Whitney Canada, in particular in the development of the technology that will be inserted into its engine families. Each engine iteration is seeking improvements in terms of the cost to run it, efficiency, and use of fuel. It's looking for increased performance in terms of lightweighting to reduce fuel load and cost for operating the aircraft. The third, of course, is to improve performance to meet standards around the world. In Montreal, as it is in any major city where airports are located, communities are seeking to have quieter airspace and to improve.

In terms of developing the next generation family of engines, for example for small aircraft, Pratt and Whitney Canada would be supported through the strategic aerospace and defence initiative. I also mentioned the business-led networks of centres of excellence, known as GARDN, which is specifically focused on green technologies as they relate to aircraft. One aspect of their research would also be on noise reduction. When an aircraft or engine manufacturer is working on its next generations of engines, they will make specific targets in terms of decibel level and decreasing the overall noise produced by their engines. There's a direct link between the R and D support and the product that ultimately results in improved performance in terms of noise.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Are there currently many regulations on airport noise? We know that Canadian airports are supposed to be closed between 11 p.m. and 7 a.m. so as to reduce the noise at night, which has a significant effect on people's health. But airports have the right to allow planes to take off earlier or to land later. So we are sort of letting the guideline to the discretion of airport authorities.

Should we establish regulations to reduce the engine noise at night? If not, is there research currently being done on this issue? For the time being, the noise level in my constituency is still too high. Could you tell me what do you plan to do to solve this problem so that I can tell my constituents that the Government of Canada cares about their health and is working on the issue?

[Kristine Burr]

The regulation of airport noise falls under the Aeronautics Act. It's a federal issue. At the same time, airports are expected to be sensitive to the concerns of the adjoining communities.

One thing I would mention, however, is that depending on where the airport is located within Canada—I'm thinking of Montreal, Toronto, and Vancouver in particular—we are seeing more and more planes arriving or leaving in the middle of the night because they are coming from or going to China or elsewhere in Asia. The business traveller particularly wants to be able to arrive for the next working day in Asia, so the issue of aircraft noise and airport noise is going to continue to be a challenging one.

At the same time, as was noted just now by my colleague from the industry department, with every generation of plane and engine that is developed, one of the considerations is noise abatement and making the engine and plane quieter. Technological changes are evolving, and at the same time, business activity is increasing. There is not going to be a simple answer to your question. There will be the pressure for more planes and more growth. Of course, for local residents it will be a sensitive issue from time to time.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Richards is next.

[Blake Richards, Conservative, Wild Rose, AB]

Thank you, Mr. Chair.

I appreciate you all being here today. It's looks like we've saved the best for the last, by the clock here.

I have some questions for our folks from Transport. I notice that in talking about your strategic approach to innovation, you had four key points that you wanted to focus on. One was encouraging greater awareness of the advanced technologies. Another was looking at modest research and knowledge investments. The third point was promoting better information flows. Your fourth point is the one I want to home in on a bit here. It piqued my interest for sure. It is looking at ways to ensure that policies and regulations do not pose barriers to innovation.

A key part of our government's focus in our economic agenda has been looking at ways we can reduce red tape and government regulation. We had our red tape reduction commission, led by Maxime Bernier, to look at ways to reduce government red tape. We're looking at things like the one-for-one rule, meaning that every new regulation would require an old one to be eliminated so that we're never increasing the regulatory burden.

Government can help in other ways, but when it comes to encouraging private sector innovation, I think government can often help the most by getting out of the way and allowing businesses to do what they do best, which is create productivity, innovation, and jobs for Canadians.

I am interested in hearing a little more about that specific part of your agenda on ensuring that policies and regulations do not pose barriers to innovation. I'd like to hear from you a little more about the plans in that regard. Maybe you could give us examples of some of the things you're looking at in the red tape reduction area to remove regulatory burden.

Can you give us some specific examples of initiatives or things you're looking at in that regard?

[Kristine Burr]

At a high level, I would say we're very interested in looking at ways that technology applications can make the overall regulation of a particular mode more efficient, whether it's the marine mode or the rail mode.

On the regulatory cooperation now under way as a result of the Prime Minister's announcement with the President on the Beyond the Border initiative, we are having active discussions with the Americans in a number of areas to see how we can harmonize our regulatory oversight.

We have one specific application there that involves intelligent transportation systems, as I was mentioning. We're going to mutually apply technologies at the border to measure border wait times, and we'll make sure we harmonize with the U.S. so that there's a single process. It will ease the review and inspection of goods as they cross the border, and the wait times should be improved.

I'd like to ask Monsieur Fortin to give you a specific example of how we're working with the rail industry to find ways to use innovative measures to improve regulation.

[The Chair, Conservative, Merv Tweed]

I'm sorry, but I have to interrupt here because of time. I'll ask you to submit it to the clerk to be distributed among committee members.

[Marc Fortin, Regional Director General, Atlantic Region, Department of Transport]

Sure.

[The Chair, Conservative, Merv Tweed]

Time is of the essence right now.

Mr. Poilievre is next, on a point of order.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

I know I'm next in the speaking order, which you will not be able to permit, but I'd like to make an information request.

In this document, Innovative Transportation Technologies, you have a tremendous list of very detailed and practical transportation innovations. Can you produce for us a table for each one indicating their status? Is it a work in progress? Has it already been implemented, and if so, for how long? Who was the innovator company, university, etc., and what government program was involved in helping to bring it about, if any? Of course, it's perfectly acceptable to say there was none.

That will give us an idea of what programs are actually delivering results and which of these innovations just come organically from the marketplace.

Thank you very much.

[The Chair, Conservative, Merv Tweed]

Thank you.

Thank you to our guests today.

On advice for the committee, Tuesday we have Encana and the Canadian Propane Assocation. Notices will be sent out.

Thank you very much.

The meeting is adjourned.