Madam Speaker, it is an interesting motion that we are debating this afternoon:
That the House condemn the government for having dropped the Canadian content requirements in the contracts for the purchase of military equipment and refusing to set up a genuine program for the conversion of the military industry, thus endangering the Canadian aerospace industry located in Montreal.
Right off the top, I have to say that this motion has great difficulty with one of the realities of the economic world today. We
live in a global economy. The motion fails utterly and completely to address the question that Canada must be competitive in that world. It seems to state that looking for subsidies somehow seems to be the answer. I could not disagree more with the thrust of the motion. I might wish to condemn the government for other things but that is certainly not one of them.
I would like to take a slightly different approach to this whole business and look at it from the industrial point of view, from the development of industry and, in particular, innovation and the science and technology thrust that ought to happen in Canada. One of the first of these is that Reformers encourage investment, not subsidization.
This country needs to develop entrepreneurs, risk takers, people who understand what it means to take a new idea and make it work. It is, after all, these innovators in this new technological world that are the engine of the new economy that is developing all around us.
We need to develop a culture that rewards entrepreneurship, innovation and research and ensures that there is a level, competitive and honest marketplace in which these people can operate. That is what we need. This motion does the exact opposite. It throws the whole marketplace and the honesty of the marketplace right out the window. Therefore, we cannot approve it for that reason.
If entrepreneurs are developed with the skills to be innovative and to take the necessary risks, we will develop the kind of fibre in the people who will make Canada strong and who will get us to the competitive position that we need.
In order to do that, we need to do something else. We need to encourage investment in capital structures, in buildings. We also need to develop investment in equipment. That is obvious. The one that is not so obvious is that we need to have investment in research and development.
Let me draw members' attention to what the president of Digital Canada had to say about Research and Development Canada: "By far, the most overriding issue is the investment climate for innovation in Canada". We have all heard stories of new Canadian inventions. These are not so new. They have been around for a while but they were new at one time. One was the heart pacemaker and the other was the variable pitch propeller. Both of these inventions were exploited not in Canada but in other countries because of the reluctance of Canadians to take risks.
It is unlikely that Canadians are any more risk adverse than anyone else in the world. They will take risks. However, we have always had taxation and fiscal policies that encouraged investment in enterprises that had hard assets to back them up as opposed to enterprises that were based strictly on knowledge. That is the direction we will be moving in the future.
I am so encouraged to see that at least some of our banking community is beginning to recognize this. They are beginning to recognize that we need to recognize assets that are not hard and fixed but rather rest really in the minds, the capabilities, and the skills of individuals.
Then he goes on to an example of a particular company. Guess which company it might be? The Digital Equipment Corporation, which was founded in 1957 with only $70,000 of venture capital. That was put up by a company in Boston called American Research and Development. It took 70 per cent of the equity in the company but also showed the founders of the company how to build and manage a successful company. The result was that when that company went public on the American Stock Exchange in 1966, less than 10 years later, that $70,000 investment was worth about $30 million. That is significant.
It was the tax provision that existed in the United States at that time that made it possible for these ventures to succeed as they did. We need to learn from these successful countries and do something very similar. It has nothing to do with the kind of subsidization that is being advocated in this motion.
We need to go one step further as well. Canadian investors and Canadian entrepreneurs need to recognize that they need to have a change toward venture capitalists. They seem to have the idea, which is only human-I am certainly like that-that if something is mine, it is mine, and I want it all.
When you get into the idea of venture capital, these people who have the deep pockets with millions and sometimes billions of dollars in them, and who are prepared to underwrite the venture, do not want to just give that away. They want to say this is a good idea and they want a part. The company we just looked at took 70 per cent, but it became a $30 million investment later and gave a tremendous return to the owner.
The person who has the great idea needs to recognize that they have two options: they have all of the idea with no money to develop it, which means they will never make any money and never get rich; or they have the option of going to somebody who has a deep pocket, venture the thing out, share the major risk on the other side, and get rich in the process as well.
That attitude needs to develop in Canada. It needs to develop among academicians. It needs to develop with our entrepreneurs. It needs to develop on the part of parents of people who are seeking success in the industrial world.
We need to move into another area as well. We need to get into the area of management. When we get into high tech specialized industries and we need specialized management as well. We need
managers who understand science. We need managers who understand technology.
You can be the most brilliant scientist, the most brilliant technologist and understand all the machinations and all the intricate workings of networks and things of that sort, but if you cannot manage people it is no good. It takes a special kind of management skill to do this. We need to do that.
There are two skills I would like to draw to our attention today. The first of these is that these people need to learn how to solve problems. That becomes the key. It is not so much are you able to push the button or are you able to program the computer, but rather can you solve a problem. Then you must recognize that you probably cannot do it alone and that your skills need to be combined with those of someone else, a third party and a fourth party, so that the group together forms a team. That team then begins to solve the problem. At different times, different members of that team will become leaders. The whole concept of seniority and the other things that are traditional with us will go out the window.
This motion, on the other hand, says no, no, no, do not do that; just create a government program for this industry so that it can be diverted to peacetime operation rather than military operation. No. Government needs to encourage the development of balanced people who can do the kind of management we talked about. We need to give to the individuals who seek this kind of education an opportunity to do that.
Members in the House will remember that we proposed a voucher system of education so that the student, the researcher, or the scientist who wants to advance himself becomes a person who selects where, when, and into how much detail he will go to get that skill in development. It seems to me that is rather significant, instead of having the university decide here is your program, here are your answers, come and get them. The student says no, he needs this kind of an answer, and asks if they have this kind of expertise. He searches around until he finds it and then gives that voucher to that institution and says he wants to do this. The institution benefits, gets the money, and has the resources to give this student what he needs.
We need those kinds of things. We need new people, we need investment, we need all those kinds of things. We need to go beyond that as well. We need to develop a sound vehicle for the transfer of technology from the place where the brains are to where it is actually applied in a profitable way. Canada has a gap here. That gap is an inability to adequately, effectively, and consistently transfer technology from the research bodies, usually universities and governments in some cases, to the development industries in order to provide strategic technologies for manufacturing, service, and resource based sectors.
Usually the best way to do that is to collaborate between sectors. The centres of excellence do this to a degree, as does IRAP, but we need to do something a little more advanced than that. We need to support more industry driven networks like Innovation Place in Saskatoon. That is an example of how university, industry, and government can collaborate and bring about true advancement in technology and the application of skill and innovation to new ideas.
It is becoming rather clear that some professors, who all want seniority and who all want these great salaries, are having great difficulty getting to the level of income they aspire to. At this particular centre of innovation these professors are driving the best cars around. They are living in the biggest houses. They have the kinds of bank accounts they have always dreamed about. Why? They have the willingness to take their intellectual property and work together with an industrialist or entrepreneur and work together with certain elements of the government and say together we can build a whole new way of doing things. They have succeeded in doing that, and congratulations to them.
There is something this government has done that is not too bad. It has financed a study called "The Commercialization of Research in Canada". Get a load of what this report advocates, which is very interesting. I hope the government has the nerve to do this: "Canada's universities should radically improve their intellectual property policies and processes for transferring scientific discoveries to industry or lose eligibility for government research grants". Madam Speaker, have you ever heard of this type of thing before? This is absolutely unbelievable.
The report goes on to state: "The policy should clearly articulate a university stance on the following issues: the responsibility of researchers to identify research results with possible economic or social benefits; electronic publishing; ownership of the intellectual property; a process for reporting and recording the facts of the case; routes and options for the protection of the intellectual property; options for revenue sharing; guidelines for technology transfers and commercialization, especially with Canadian based businesses; and exceptions to the policy in particular cases where a special contract is more desirable with the terms of the policy, such as in contract research, network research, or research involving a prior intellectual property". That is some of the most forward thinking I have heard in a long time.
It goes on: "Failure to develop such policies or to hire a person responsible for identifying and disseminating intellectual property and technology transfer policies to all individual researchers within the university should preclude all of the school's researchers from eligibility for government-industry targeted funding, such as granting council strategic programs".
Is that not a refreshing sound to hear? This would be absolutely amazing. Think of what this would do to the university. This would bring together for once the community and the academician. It would bring together the industrialists and the taxpayers who fund all this stuff in the first place and show how we can build a better Canada. That is the kind of motion we should be debating today, not the kind of motion that is before the House.
They are radical suggestions. Should they happen? Yes, they should happen. The reason they should happen is because Canada is in a globally competitive environment. Competition has become the imperative. It is a sad thing to say that science is not sufficiently recognized in the House. It is high time we recognized the significance of the role science plays in our daily life. We need to become aware that it is not only competition; it is also the role science plays in our economy and in our industry. While that may raise the ire of basic researchers who are afraid of having their work hijacked by economic demands, it must be accepted.
There will be an inevitable division between the traditionalists and the innovators. They will fight with each other. While neither can be excluded, the innovators must receive attention. The marketplace will ultimately decide that. Their time has come. They are the ones who can provide Canada with a foundation of economic independence. They will provide global competitiveness. The innovators are skilled in technology and science. The traditionalists, like all of us, will benefit from the country's wealth. Their task will not be lost; it will be assured. They will have jobs. We cannot let the naysayers turn us away from what is necessary. We must support the innovators, choose the path and move forward in that direction.
These are major new directions for our country. They are not easy to develop. They will not happen overnight. They require co-operation at all levels. I am very encouraged by some of the things that have happened recently. The important thing to recognize is that industry has to get into research. Industry must form consortia to share the costs of research.
I would like to address the comments of the Auditor General of Canada with respect to science and technology in Canada. He had some pretty serious things to say. With respect to some of the comments, we should stand back and say wait a minute, is it really that bad? Yes, it is. He suggests that the lack of progress in previous attempts to produce results oriented action plans can be attributed to a lack of overall government-wide leadership, direction, and accountability for implementing dramatic changes. That is probably one of the worst indictments anybody could make about the Government of Canada.
Seven billion dollars are spent on research and development in Canada. This country has a debt of $560 billion. We spend $7 billion on research. Not one of those dollars should be taken away. We need to spend that kind of money. In fact we should probably spend more. When the Auditor General of Canada says this money has not been focussed, has been spent in a manner that does not have a general direction, I say shame.
We need a focus. We need direction. We have been waiting for over two years for a policy on science and technology. It is still not here. I hope it will come very soon. We need it desperately. If we are to be an economically viable country, if we are to be competitive globally, we must come to grips with this part of our development.
We must oppose the motion. Instead of doing what the motion proposes, we need to encourage investment. We need to encourage innovation. We need to develop a new attitude toward venture capital. We need to develop specialized management. We need a sound vehicle for technology transfer. We need to recognize the value of collaborative research. Finally, we must take seriously the Auditor General of Canada's caution to get off our butts and get a focus and a direction for the country.