Industry committee  I'm sorry, is it doing too much?

Industry committee  I certainly believe, and I think I've spoken to the fact, that anything from the middle of that innovation cycle on—from the supply chain on, and even earlier—should be market pull. Therefore you absolutely need partnerships, and strongly so. The private sector market need doesn't eliminate the need for federal dollars.

Industry committee  I'll speak to one aspect of that and I'll leave my colleague to address other aspects. I'm really glad you've raised this, because I think this is a critical issue for Canada too. One, with 32 million people, we have to give up on the idea that we can be everything to everybody and be competitive in every sector of the economy globally.

Industry committee  Absolutely, the energy industry, for one. I would say it is one of the strongest energy industries in the world. We have superb schools and superb research facilities. We have companies that are looked to around the world. We have the world's greatest energy resources in Canada, plus the endowment of those energy resources.

Industry committee  I think some of those can work. I'm always a little concerned about too much capital going into buildings and equipment, because people are probably one of the most critical resources of all. I'll come back again to the importance of making certain you have that complete supply chain.

Industry committee  I don't think it's only a question of an industry making profits as to whether they choose to reinvest. If they can continue to make those profits, why would they invest more in R and D? So some industries and some sectors are more R and D intensive than others. As I said before, where industries won't move--because if they're private sector they have shareholder responsibility and fiduciary responsibility to those shareholders--is back into projects that are such high risk that they cannot see a return.

Industry committee  Correct. What we're doing in this country, in my view, right now is planting an awful lot of wheat and not harvesting it. We need to figure out the complete system, from planting to fertilizing to harvesting to upgrading to pasta or bread or whatever. If we just plant the wheat, others come in, harvest it, and use it to compete against us.

Industry committee  Absolutely true. Since this ratio is probably the most critical metric of all to a healthy innovation system, one could cynically say that if the private sector isn't going to put up the R and D dollars, the government should put up less to bring that balance back to three to one, because that three to one, or in fact greater than three to one, has been shown to be absolutely optimal for an innovative economy.

Industry committee  Whose opinion do you mean? What I've said there is not about oil; I have said that Canada can and should produce more energy. It's not a question of oil. I am not here to represent the oil industry. I represent no industry whatsoever. What I'm telling you is that you will fundamentally change society in a way that I don't think the economy can stand if policies are brought into place to limit or reduce the quantities of energy that this country consumes.

Industry committee  In general they're far too diffuse. They have maybe a very narrow focus, and the typical amount of money is very small. As I indicated in my comments, the biggest difficulty in the commercialization phase is to put together demonstration projects that are high risk that the industry private sector alone cannot fund, but that might be $10 million or $100 million projects.

Industry committee  Yes, but I would argue that they need to be agglomerated. We don't need 200 programs, and one program would be far too simplistic. We need perhaps 20 programs where significant dollars would be available and targeted to different areas. My comments should not be taken as arguing against the need for basic research in the early stages of research.

Industry committee  There are two issues really with biomass energy. One is that biomass can only be collected and transported economically over very short distances. So think of a 20-mile or 30-mile radius around some type of a processing plant that will produce a useful energy byproduct. The second thing is that the variability of the feedstock is very substantial.

Industry committee  Thank you very much, Mr. Chairman and members of the committee. It's a pleasure for me to speak to you this afternoon, and I thank you for the opportunity. As the chair suggested, my career has been a combination of things. Most recently I spent some time in Ottawa with the National Research Council, but prior to that, I was in the venture capital business as an entrepreneur.

Natural Resources committee  I can't tell you. I don't represent industry. I think you have to go and consult with industry: Perrin Beatty's organization, people like that; or in particular, CAPP and the coal guys; the EDG; some of the people who are specifically--and I use this word in a totally non-pejorative sense--lobby groups for the industry and can speak more directly for industry than I can.

Natural Resources committee  Thank you again.