moved:
That, given this government has continually failed to improve Canada’s research funding to build Canada into a competitive, progressive knowledge-based economy, and given that science, research and innovation are the foundations of a strong economy and the creators of the jobs of tomorrow, in the opinion of this House, the government should reinvest in these areas to ensure long term, predictable and globally competitive federal funding.
Mr. Speaker, on a personal note, if there is one reason more than any other that brought me into politics, it is the issue on which I am about to speak.
Simply put, science, research and innovation are the foundations of a strong economy. They will create the jobs of tomorrow.
It is clear to me that the current government does not understand what I have just said. This is particularly apparent if we look at its recent budget and indeed at all its preceding budgets. Notwithstanding all its pronouncements, it has failed to grasp the importance of establishing policies that will ensure long-term, predictable and globally competitive federal funding.
Before I get into details, I want to focus on a crucial part of what I have just said. I am referring to the jobs of tomorrow.
How is this different from the jobs of today?
First, an important observation: the economic blueprint for Canada in the 20th century no longer applies. The Canada that was content to sell its natural resources and low-tech products to the rest of the world can no longer assume that it will remain prosperous in the 21st century. The world has changed, not only because of globalization but for other reasons as well. There is indeed a new paradigm at work.
While resources remain an important component of our economy, it is knowledge and the resulting products and services that result from that knowledge that will ensure that we secure a prosperous future for our children. That is where the jobs of the future lie.
In this world where emerging countries now have hundreds of millions of middle-class, well-educated citizens who have ferociously embraced the virtues of open competition, Canada risks being left standing while others race ahead. Emerging countries are not only producing low-tech manufactured products more cheaply than we are, they are beginning to produce high-tech products that will soon flood the global markets.
In this world where a country such India produces more PhDs than the United States, in this world where the Internet has levelled the playing field in terms of access to knowledge, there are no longer any safe assumptions about the future other than the fact that knowledge and the application of that knowledge will determine who prospers.
In this interconnected world where productivity and innovation determine wealth and economic security, where does Canada stand?
Mr. Speaker, the statistics are discouraging. Canada's productivity has been declining over the last five quarters—its worst performance in 20 years. Basically, Canada is not competitive. In terms of innovation, Canada is 13th of 17 according to a 2008 Conference Board of Canada study. That is certainly nothing to write home about.
Are we creating the jobs of the future? The answer is no. We are proud of our successful companies, such as Bombardier, Research in Motion, Ubisoft and Apotex, and of our space industry, among others, but the truth is that we have to do even better.
We have a very well-educated population, and we have to take advantage of that. To do so, we need federal policies that will enable us to reach our potential. Our neighbours know it, and our competitors know it. Our government is the only one that does not understand.
As a first step, let me say the following. Science, research and innovation require a long-term approach, not an ad hoc, one year at a time approach.
What is really important, if one believes in a long-term approach, is to say it loud and clear. Our scientists and our knowledge-based industries must hear from the government. Hearing it allows them to plan for the long-term. It allows them to truly commit themselves to research and innovation. It sends them the message that what they do is important for the future of our country.
Second, governments should not be trying to pick winners. They should not favour applied research if it means that fundamental research will suffer. They should not focus on commercially-oriented science if this means that other science will suffer. Doing so fails to recognize society's great advance on all fronts and that all research benefits us all, often in ways that had not been anticipated. It is a supreme conceit for a government to assume otherwise.
This does not mean certain strategic areas of research cannot be given an additional impetus. Playing to our strength or trying to take the lead in a particular field is a smart thing to do, as long as it is not done at the expense of other research.
It does not help to create a positive climate of co-operation between the government and our university stakeholders when the Minister of State for Science and Technology bullies the executive director of the Canadian Association of University Teachers, as happened recently. Shouting, interrupting and telling one's visitors to shut up only serves to create a chill between government and those with which it needs to create strong links.
Another illustration of the fact that the government does not understand the importance of science was the elimination of the national science adviser position. The purpose of this position was to offer the Prime Minister an opportunity to consult directly with a respected scientist who would offer not only advice but also the unvarnished truth about Canada's scientific performance.
Both the United States and Great Britain have respected national science advisers. For instance, a Canadian national science adviser could have told the Prime Minister early on in his mandate that climate change really did exist and the Prime Minister could then have acted expeditiously.
Looking at the recent budget, it is clear that the government does not have a coherent strategy for scientific research. While it funded certain areas, it totally overlooked others.
For example, it implemented so-called efficiency cuts of $148 million over three years at the three research granting councils without increasing their operating budgets. It failed to fund Genome Canada in this budget so it could undertake its next cycle of research funding in co-operation with its public and private partners. The National Research Council was not funded for research in this budget. It was instructed to find savings of $27.6 million over three years as part of its strategic review. The program to fund the indirect costs of research was also cut.
Mr. Speaker, everyone agrees that federal organizations have to undergo strategic reviews from time to time to optimize their operations. Our neighbours have clearly recognized the importance of increasing investment in science and research to create the jobs of the future, so the question is, why has the government decided not to allocate more funds to the organizations I just mentioned? Regardless of what the Minister of State says, adjusted for inflation, government spending on research in the natural sciences, engineering, social sciences and humanities has diminished since the Conservatives took power.
I would add that government spending on research relative to its total spending generally went up beginning in 1993 under the Liberal government, but has continually gone down since the current government came to power. The Liberal government spent 4.9% of federal money on research. By 2008, that number had dropped to 4.1%. That says a lot about how important research is to this government.
I would also like to point out that this government would like the $2 billion announced for university and college infrastructure to be identified as part of the funds allocated to science and research. In reality, as we all know, this money is for building maintenance and other infrastructure projects and does not represent direct investment in scientific research as such.
Now this government and the universities are fighting about the $2 billion. It seems that the government would like the money to be spent solely on university infrastructure directly related to scientific research whereas the universities would like to have more leeway in how they spend it.
When comparing federal spending on research in 2008 to that in 2005 and adjusting for inflation, research has decreased in the following ministries: Agriculture and Agri-Food Canada, Environment Canada, Fisheries and Oceans, Industry Canada, National Defence and the National Research Council.
Another interesting statistic deals with the gross domestic expenditure on R and D, or GERD. Canadian gross domestic expenditure on R and D as a proportion of GDP rose significantly under the Liberal government to just over 2%, well over the OEDC average of 1.5%. Unfortunately, over the past two years, GERD as a percentage of GDP has declined, led by a failure of the government to maintain continuing investment in R and D.
Not only is the government failing to rise to the occasion, it is actually sliding backward at a time when it should be demonstrating a strong commitment to research. At a time when President Obama is making massive investments in basic research in fields such as health, renewable energy development, energy efficiency, electronic medical records, broadband, smart electrical grids and other areas, why has the government's approach been so piecemeal and incoherent? Where is the vision? Where is the strategy?
I would now like to focus on innovation and the elements that allow a country such as Canada to be innovative. Let me begin by identifying one area where Canada did very well until the Conservatives took over. I am speaking to the funding by the federal government of our universities and research hospitals. The reason we have done so well in this area is because of visionary decisions that were taken by the Chrétien and Martin governments to re-invigorate research in our public research institutions.
Since 1997, consecutive Liberal governments have committed $12 billion in new funding to support basic research. As a result, Canada is now the G7 leader in terms of university research and development. Liberal governments more than doubled the budgets of Canada's research granting councils to a total of $1.6 billion in 2004-05.
It was under the Liberal leadership that Canada saw the creation of the following important programs: the Canada Foundation for Innovation, the Canada research chairs program, Genome Canada and the program to fund the indirect costs of research. These far-reaching programs lifted Canada out of a hole and made us leaders in public funding of research.
Establishing programs that support research in our universities and research hospitals is certainly necessary, but not sufficient to ensure that Canada becomes a leader in innovation. It takes more than that. A federal policy on innovation requires a coherent approach that recognizes all the essential elements of innovation. And, as we know, there are many. It is one thing to be creative. Bringing a new product or service to market requires much more.
We all know that research can lead to promising ideas but that many challenges must be solved before the research can be commercialized, that is before it results in goods or services that people want to buy. We must recognize that other elements are essential to innovation.
Let me cover some of those elements essential to innovation. One of them is access to venture capital to allow companies involved in R and D to fund the effort required to develop promising research into a marketable product or service. Often that effort takes many years and often it is undertaken by small and medium-sized companies that have no other source of revenue other than venture capital.
While venture capital pools increased steadily in the United States between 2003 and 2008, they have actually decreased in Canada, according to the Canadian Venture Capital Association. This is cause for concern since venture capital is one of those essential elements required to support innovation. The government should be in active discussion with the venture capital industry to see how it can help improve the growth of venture capital.
Another essential element deals with intellectual property. The reality is Canadian intellectual property laws are weak in Canada and must be strengthened in order that those who generate that intellectual property can own it. Without that protection, innovators are not assured that the fruits of their hard work will remain under their control.
Another important role for government in fostering innovation is to provide tax incentives in the form of credits, some of them refundable, to companies that engage in research. While the current scientific research and experimental development, or SR&ED, program does address the requirement to some extent, it also has proven to be cumbersome to use and restricted in its application. This program needs to be re-examined immediately in order to ensure Canada is using it as effectively as possible to support promising research.
Finally, effective transfer of promising research to the marketplace requires strong linkages between those who perform the research and those who know how to commercialize and market the fruits of that research. Some mechanisms are in place, but we have the right to ask whether they are achieving their intended objectives or do we need to look at other methods that would be more effective in creating effective partnerships between the public and private sectors. We should certainly be pursuing this aggressively if we hope to become a more innovative country.
The government is putting the squeeze on science when it should be committing to an even greater role for science in the 21st century. To paraphrase a recent headline, Canadian research lacks adequate funding and the government a coherent vision. While the U.S. invests heavily in science as a key part of its economic revival, Canada is spending less and putting scientists out of work. I do not think I can say it more succinctly than that.
On top of that, the Conservative minister of state continues to erode relations with the very sector he is there to support. His combative, top-down approach is indicative of the government's failure to work in partnership with stakeholders.
Let me illustrate the stark contrasts between what the government is doing and what our American neighbours are doing.
U.S. President Barack Obama's stimulus package is investing a total of $65 billion over the next two years in the knowledge-based economy. On a per capita basis, this is six times more than Canada's investment. This is why the U.S. will be a leader in creating the companies and jobs of the future, while Canada risks getting left behind. What is it about this that the Conservatives do not understand?
Given that the government has failed to improve Canada's research funding to build Canada into a competitive, progressive knowledge-based economy and given that science, research and innovation are the foundations of a strong economy and the creators of the jobs of tomorrow, for those reasons it is essential that the government reinvest in those areas to ensure long-term, predictable and globally competitive federal funding for science to make Canada a leading innovator on the world stage.
