INDY Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 5, 1998

• 0910

[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): I am going to call the meeting to order pursuant to Standing Order 108(2), study on a document entitled “Sustaining Canada as an Innovative Society: An Action Agenda”.

I'd like to welcome our witnesses here, but just before we begin we have a housekeeping matter. We attended the NRC on Tuesday and we utilized a bus to take us there. The comptroller's office told us originally we didn't need a motion, but now we do.

Mr. Lastewka.

Mr. Walt Lastewka (St. Catharines, Lib.): I move that the industry committee approve the payment of the transportation to NRC on February 3, 1998.

The Chair: Do I need a seconder for that? Mr. Bellemare.

Mr. Werner Schmidt (Kelowna, Ref.): How much did it cost?

(Motion agreed to)

The Chair: Now we'll move right along to our witnesses. Everyone should have a brief in front of them. We have before us three people today: Dr. Denis Gagnon, who is acting president and CEO of the Canada Foundation for Innovation, and with him are Carmen Charette and Manon Harvey.

Dr. Gagnon, I believe you will be starting.

We'll let Dr. Gagnon explain the people he has with him.

Dr. Denis Gagnon (Acting President and Chief Executive Officer, Canada Foundation for Innovation): To begin with, I should tell you that Carmen Charette is vice-president, programs, at the CFI. She was appointed last November. Manon Harvey is vice-president, finance, at the CFI. She was there, I guess, from the beginning, somewhere in July. I wanted both Carmen and Manon to be here this morning. So if you have any questions related to programs or finance, they can address them.

[Translation]

The Canada Foundation for Innovation is a new presence among the agencies, corporations, and foundations that provide support for research and development in Canada. Its establishment is the result of a vision for Canada—a country whose strength and vitality are not only drawn from the rich land to which we are heirs, but also from the mines, talents, and creativity of our people.

Our socio-economic well-being is directly tied to our ability to develop Canadian science and technology. And now, perhaps more than at any other time in our history, knowledge and innovation are equated to wealth.

The case has been made to you on many occasions. We need Canadian science and technology to grow near businesses that add value to our already abundant natural resources, and that create high-quality and high-paying jobs in Canada for Canadians.

We also need Canadian science and technology to keep us at the forefront of the knowledge-based industries where we continue to demonstrate the power of Canadian ingenuity.

I see the Canada Foundation for Innovation as an essential element of a national effort to ensure the development of an innovative society in Canada—and this is the only reason why I have accepted the opportunity to be associated with this new organization.

By working in concert with existing bodies and institutions— the granting councils, other funding agencies, and research organizations—and by partnering with the private and voluntary sector and with the provinces, the Foundation will, I believe, make a real difference in the quality of our own lives, and most importantly in the lives of our children.

As part of the federal government's investment in knowledge, the Foundation has been given a fairly specific mandate—to increase the capability of Canadian universities, colleges, hospitals, and not-for-profit institutions to carry out important world-class scientific research and technology development.

With the initial $800 million investment it received from the federal government, the Foundation will be able to contribute an average of $180 million a year over the next five years to research infrastructure projects in this country. Contributions by the Foundation must average about 40% of the total cost of these projects. That means that when the contributions of our funding partners and the accrued interests are taken into account, almost $2.5 billion will have been invested in Canadian research infrastructure.

• 0915

[English]

Let me make one point perfectly clear. The foundation is not about the simple acquisition of hardware. It's about providing Canadian researchers with the means to exercise creativity and innovation to their fullest. It's about providing bright young minds with the tools they need to grow and develop and make their own contributions to their country and to the world.

At the CFI we don't shy away from these ideals. Our goal is to promote and enhance the strategic development of research at Canadian institutions. Our founding policies challenge these institutions to develop plans and strategies to strengthen research and research training, to collaborate with each other, and to seek partner support.

We believe the high expectations we have for Canadian research institutions are the best insurance. We have to create a society where scientific excellence, creativity, collaboration, and innovation are viewed as core values.

The CFI uses four key funding mechanisms to support strategic development in Canadian research institutions.

The institutional innovation fund enables institutions to strengthen their research infrastructure according to their own priorities. We expect many universities, colleges, and hospitals will seek our support for infrastructure projects that will enable researchers to work on ground-breaking topics that are currently beyond their means.

The regional-national facilities funding mechanism is designed to encourage institutions to join in regional or national consortia and to co-operate to plan the acquisition or development of large infrastructure. It calls for researchers and administrators in institutions all across the country to talk to one another, to share common dreams, and to plan together.

The new opportunities mechanism provides infrastructure support to new academic staff in areas that are essential to the institutions' research development. This mechanism comes at a crucial time for many young Canadian researchers now entering the peak years of their research career.

Finally, the research development fund helps smaller universities strengthen their research infrastructure and maintain their vital role as innovation leaders in many Canadian communities.

The first national competition for funding will be held this year in the spring, and we're gearing up to receive a large number of proposals from institutions across Canada.

CFI representatives are about to hold a series of country-wide information sessions to answer questions from the research community and to discuss potential new programs that will advance the development of research in Canada's institutions. All proposals will be reviewed by experts of international stature to ensure that CFI funds go to the best possible projects. There are good reasons to expect that the CFI will have a major impact on research and development in Canada.

The time is long overdue for a major infusion of new infrastructure for Canadian research. The foundation's capacity to support research infrastructure is relatively large and its capital of $800 million will be committed over five years.

Potential funding partners, who will be providing 60% or more of the capital for projects supported by the CFI, are showing strong interest in our programs.

Research institutions are making ambitious plans for applications to the foundation and are actively seeking funding partners.

Discovery through research has the potential to expand our knowledge and to have dramatic effect on the well-being and prosperity of Canadians. The CFI has an important role to play in this, but our responsibility is only a part of the larger picture.

The foundation is well aware that its support represents only one part of the equation for the funding of research infrastructure. In many cases, provincial governments, granting councils, and other research funding organizations will play an important role in answering the ongoing operations of the infrastructures supported by the CFI.

• 0920

I would like to emphasize that the CFI supports infrastructure and equipment, not research personnel and not operations. That is the role of the federal granting councils, of other federal departments and agencies, of provincial governments and of the institutions themselves.

The foundation will, no doubt, boost the capability for innovative and productive research in many parts of the country, but this is only the first step. By successfully achieving our mandate, we will directly increase the pressure for more research funds, funds for operating support, for staff, for trainees.

In his presentation to the finance committee during last October's pre-budget consultations, my predecessor, the late Dr. Keith Brimacombe, founding president of the CFI, made an eloquent plea to increase the funding of the federal granting councils. I quote:

We are here not to argue our own case, but to urge your careful attention to the roles and responsibilities of the three federal granting councils. Their capacity to support the operating costs of research has been severely impaired in recent years. We believe that there should be a substantial increment in the allocation to all three councils.... It is vitally important that the councils keep pace, on the operating side, with the capital program of the Foundation.

Together, the CFI and its funding partners have the potential to inject up to $2.5 billion into the research infrastructures in universities, colleges and hospitals. Part of this investment will be used to replace existing infrastructure. The balance will provide new infrastructure.

It is difficult to estimate the exact proportion of the investment at this point, but let's assume that 30% will be used to replace existing resources. That leaves us with 70% to invest in new infrastructure. In real terms, this means that $750 million will go to repair and update facilities and about $1.75 billion will go to new infrastructure.

Conservative estimates place at about 20% of the capital cost, or $350 million, the incremental costs that the new infrastructure would incur each year. These costs are what you have to pay for the regular maintenance of the infrastructure, to provide professional and technical support if you want to use the facility to its fullest and, most importantly, to support additional research trainees, who are critical to the success of Canadian innovation.

We can safely assume that partners from the private and voluntary sectors, as well as various provincial government programs, will bear part of these incremental costs. But, even with expected contributions in the $100 million range, that still leaves us with a $250 million annual shortfall. The question is, who will pick up the tab? In many people's minds, this is the sole responsibility of the three granting councils. If this is the case, well...the mathematics just doesn't add up.

Given the granting councils' budget cuts of recent years, do we really believe that they are in any position to support the personnel and operations of new infrastructure funded by the CFI?

The impact of the CFI's programs will hit as soon as 1998-99 and will build quickly afterwards. We cannot waste time. We need to find ways to optimize the CFI's investment in infrastructure and in the people who will use these facilities to push the limits of knowledge and train more young researchers.

Given the context, I can only repeat the recommendation we made to the finance committee that, starting in 1998-99, the Government of Canada allocate the three granting councils a special budget increment of $50 million per year, to reach $250 million by fiscal year 2002-03. We believe such an investment is essential to complement and support the mission that the federal government has entrusted to the Canada Foundation for Innovation.

[Translation]

Madam Chair, thank you very much for inviting me here this morning. My colleagues and I look forward to answering any questions committee members may have.

[English]

The Chair: Thank you very much, Dr. Gagnon.

We'll begin with Mr. Schmidt.

• 0925

Mr. Werner Schmidt: I want to thank you, Dr. Gagnon, for appearing here this morning. It's a pleasure to meet you, and your colleagues as well. Many of the questions that I had you have anticipated in your presentation, and I appreciate that very much.

The major concern I have, however, is the sustainability of the Canadian Foundation for Innovation. In particular, exactly how will the funds be allocated? If we take your distribution of 30% to 70% for repairing old infrastructure and for new infrastructure, in the order of things to come in the next year where will it go? Will it go 30% and 70% each year, or will we start with 30% this year and do all the repairing of infrastructure that's broken down and then in the next year we'll start doing the new stuff? How will this go?

Mr. Denis Gagnon: That's a tough question. It's hard for us to know right now, at this point in time, what kinds of applications we will get by April 1 and May 1, because the first two competitions will be held on these days.

My feeling is that it should reflect what we think over five years. So I wouldn't be surprised that for this year, for the first two competitions, we should get numbers like 30%, 35% for repair or replacement and then the rest for new infrastructure. But it's hard to say, it's hard to know.

Maybe Carmen could add something to that. No? Am I right?

Ms. Carmen Charette (Vice-President, Programs, Canadian Foundation for Innovation): I would agree with that, yes.

Mr. Werner Schmidt: Have these guidelines been given to the people who are potential applicants? Do they know that the rough distribution of funds will be 30% and 70%?

Ms. Manon Harvey (Canadian Foundation for Innovation): We haven't set any specific allocations to old infrastructure versus new infrastructure. What we've designed are four mechanisms with target total amounts that will be invested towards those mechanisms. But we have in no way said that we'll allow only 30% of our funds to go to old infrastructure and the other 70% to new infrastructure.

As Denis said, we don't know exactly what's going to come to our table come the spring. We'll have to review those requests. We'll have other competitions in the future, so we'll have to adjust based on what comes to us. But there are no set guidelines, no set percentages as such.

Mr. Denis Gagnon: Perhaps I may add to that.

As I said previously, we're about to start a tour of Canada to meet with the research community. We'll be holding eight regional meetings, and there's another one coming also. I don't know what they're going to tell us, but we'll be listening carefully.

I can tell you at this point in time, from the messages I'm getting, the phone calls, e-mails and so on, that a lot of people want to let me know that they have a problem: their big piece of equipment has broken down, they have to replace it. I get this kind of message at this point in time.

It doesn't necessarily mean that for the first two competitions most of the applications we're going to get will be dealing with repair or replacement. This is not what I mean. But this is there, and this is the message that we are getting from all across Canada.

Mr. Werner Schmidt: We know that. We knew that before the foundation was set up. So that's not exactly new information.

The significant part here is that the operation of the innovation fund and the foundation should be transparent and open so that the people will know ahead of time what it is that you really are about to do. These are public funds, after all, and we really have to be careful about how we do this. If you really want to make a difference, as you indicate here you are going to do, and provide direction and stimulate innovation and new development in Canada, then it seems to me to be very significant how that money will be allocated.

You indicate that you will have internationally reputed scholars and researchers who will evaluate the projects and put them in some kind of priority so you can allocate funds consistent with that priority. I really appreciate that.

• 0930

But it seems to me that one of the key elements here will be transparency and a clear indication of what these people can expect. I know from past experience—and I suspect you do too—that there is no dearth of requests for money. There's no end to the amount of money that people will ask for. So it seems to me that if we're really going to have an impact here, we have to have our guidelines set ahead of time so that these people will come forward with the kinds of proposals that have a chance of being accepted. Clearly we must do more than simply say we're going to wait until we get some proposals.

Ms. Carmen Charette: There was a competition announcement made in early December that describes our mechanisms but also describes in quite a bit of detail the criteria by which all of these applications will be assessed. It also talks about the fact that we recognize the need to replace infrastructure but also the need for a new infrastructure that will allow the launch of the types of activities they have not been able to do.

I've been in touch, just to get a feeling for what is coming up the pipeline, if you wish, with the vice-rectors' research in many universities across the country. We're starting to get a sense of the types of things they're thinking about. I think a lot of it is to do the types of things they haven't been able to do before and to take on some challenges in order to have a real impact in terms of innovation.

So I think the reaction to the competition announcement has been very positive. People have come back with some questions, but I think they feel the rules of the game are pretty well laid out. We're about to go out on the web site with a manual on all our policies and our guidelines, and we are incorporating in there answers to some of the questions that we're getting, to make sure it is very clear. We'll be working very closely with the institutions to help them in this process.

Mr. Werner Schmidt: It seems to me that one of the other areas we have to be so careful about is the actual business plan that these institutions present to you, because it's one thing to ask for money, but it's another thing to determine the parameters of the program. But the most important part of all of those.... That determines the direction, but the business plan or the financial plan associated with this is going to give legs to this thing and actually make it work. So how much diligence will you apply to the evaluation of the business plan that will finance this operation?

Mr. Denis Gagnon: That's a good question, a a very good one.

When we started the operation some time in October, it became evident to Keith, who was then the president, to me and the others that we had to make sure that within the assessment criteria we would have something that we called a concerted plan, or a plan from any institution, so that we would know exactly where they wanted to go, how they wanted to get there and what they would do to get there. And this is a message that will come through in all these regional meetings we'll be holding in the weeks to come. Some institutions are not used to that.

Mr. Werner Schmidt: That's why they're in trouble.

Mr. Denis Gagnon: That's the least I can say.

Again, we had many questions about that. They wanted to know what we were expecting from them as, as you call it, businessmen—and that's exactly what it is. They wanted to find out what we would do with these plans, how these plans would influence the selection of projects and so on.

So I'm expecting good conversations all across Canada about that, but I want to reassure you that this is a major issue for CFI and we'll be holding to this criterion because I believe it's an important one.

Mr. Werner Schmidt: The answer was very short. That's fine. Thank you.

Will there be experts in research as well as experts in business on your selection criteria?

Mr. Denis Gagnon: Absolutely.

Mr. Werner Schmidt: Okay, thank you.

• 0935

Ms. Manon Harvey: If I might add to Denis' answer regarding your concern with operating funds and our diligence when we review the business plan, one of the requirements when they present a request is that they show the sustainability of the project, that the operating funds have been promised by the universities, the provincial governments or wherever. If the sustainability is not proven, it's a no-go.

The Chair: Thank you, Mr. Schmidt. Mr. Murray is next.

Mr. Ian Murray (Lanark—Carleton, Lib.): Thanks, Madam Chair.

Dr. Gagnon, you've made a strong pitch on behalf of the granting councils, and you also quoted your predecessor when he said it was important that the councils keep pace on the operating side with the capital program of the foundation. We're all aware of the fact that there are many more applications to these granting councils than can be accommodated. They go through a rigorous peer review process. Is there a plan at all to try to fit the successful candidates for grants with the funding being provided by the foundation? Is that even possible or is that desirable?

Mr. Denis Gagnon: We'll try to achieve that as much as possible, but remember, the act that created CFI and the funding agreement requires that we do our own evaluation, our own assessment of the projects. This is something that we will be doing—I think I should tell you that—over the next weeks, because at the same time as we meet with the research community, we want to talk with provincial governments and with the federal granting councils and provincial granting councils. We will try to establish links in such a way that our decisions—which have to remain our decisions—could really approach what they've done.

If you look at the Medical Research Council or NSERC or the other councils, they have good ways of evaluating science. They know how to do it. If we can achieve this type of collaboration, I'll be extremely happy. So there would be, as I think you said, a continuity between what they're doing and what we're going to do. I think this is pure logic, and we'll try to do that.

Ms. Carmen Charette: I just wanted to add that throughout the process we've been in close contact with our colleagues at the research council and we've asked for their input into the design of our activities. We're also discussing how we can collaborate—for example, trying to get applicants to agree that we have access to files in the granting council so we can look at the quality of what they've done in the past and the quality of their research—so that we don't duplicate efforts and the right hand goes with the left hand. That's what we're trying to achieve together.

Mr. Ian Murray: That is essentially what I was asking.

Do you anticipate that just because of the competitive nature of the process, the foundation will, over time, actually change the nature of some of the particular universities that are involved, and that there will be a rationalization of resources and therefore some universities may stop doing what they've been doing because the money will be centralized in another university? How do you anticipate dealing with the obvious jealousies that can arise from this?

Mr. Denis Gagnon: We're preparing the message that.... Of course, we've written so many documents in the last three months, and you'll find key words that always come back in these documents. I'm going to make sure that while we meet with the people out there the same messages and the same key words will be used. We're talking about strategic planning, we're talking about concerted planning, we're talking about priorities and things like this.

Some people do listen to that carefully and they like the message. Other people are not used to that and they say, well, let's try to do things, let's try to do business together.

• 0940

I think that in the long run CFI will change a lot of things. CFI will change mentalities. CFI will open some eyes all across Canada. I know the universities. I've been there for 30 years. I know what it is. I know how they feel. I can tell you that—at least this is my hope, and I think we're going to get there—CFI will change a lot of things.

Ms. Carmen Charette: I think it's already starting to happen, just by the discussions we're having with institutions. Because these applications are coming from the institutions, not from individual researchers or small groups of researchers, I think it's putting the institutions in a position to think about where they're going and the choices they have to make.

One message we're also going with is, don't send us thousands of applications, be strategic in the way you're going to do it, make choices. In some of the discussions I've had it's obvious that the thinking is, okay, we have an opportunity, how are we going to use it best?

Mr. Ian Murray: The assumption is as well that we're really trying to address the problem of basic research.

Do you anticipate that there will be pressure to move along the continuum towards more applied research, or do you have very strict guidelines to try to keep it in the area of basic research?

Mr. Denis Gagnon: I would say the guidelines are clear. We're not saying that they shouldn't do basic research. What we're saying is that they should try to present projects that clearly will define clear applications. Again, this came through quite easily.

Of course at the beginning they didn't like the idea, but then they know what it is. They know what CFI is all about. When we talk about innovation we've defined what innovation is all about in our terms and it is clear for them. It is clear from the documents that we've prepared.

If you look at the assessment criteria, for instance, it is clear that of course there is a place, a part for basic research. There's no doubt about it. But most of the criteria are related to the innovative process, are related to the application of technologies and sciences and so on.

So I think the message is getting through. I think they're going to come with the idea of trying to achieve our objectives—and their objectives, I hope.

Ms. Carmen Charette: We talk about it in terms of benefits to Canada. It will be up to them to show us that getting this infrastructure will allow them to do research that will be of benefit to Canada. That can be seen in very broad terms. It could go as far as looking at policy issues in the area of environment, for example. So that message is clear.

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): Here in committee, I would like to begin with a comment that will probably lead up to a question to the minister.

Let me go back to what you said on page 3: we must develop plans and strategies to strengthen research and research training. The key words you use are strategies, priorities, and concerted action. The position of the Quebec government on this is exactly in line with what you are asking for. Quebec already has a research and development strategy. Moreover, their activities are in line with your objectives. I am putting these remarks forward as a comment, as I said I would, because my question will be addressed to the Minister.

I also have another comment, Madam Chair. Here, I see a plea for granting councils. I have the feeling that, as we go ahead with the Foundation's projects—and you have demonstrated this with figures—there will be less money available. This could hurt basic research. I make these remarks in the form of a comment as well: these are very good projects, but we must be aware that granting councils will need much more support if we want Canada's knowledge industry to be solid. Right now, it's really hitting bottom. Things can't really get much worse.

• 0945

So those are my comments. My first question, and I hope not my last, is on the New Opportunities mechanism. I would like you to say a few words about it. I can see that your strategy is based on four key funding mechanisms, and I have no problems with the Institutional Innovation Fund, the Regional/National Facilities, and the Research Development Fund. But I would like some more details on the New Opportunities mechanism. You're saying that we don't have the money for new talent, or at least researchers at the beginning of their careers, yet these funds are in place to provide infrastructure. I don't quite understand how this mechanism works.

Mr. Denis Gagnon: The New Opportunities mechanism was developed because we knew full well that, at present, Canadian universities, hospitals and research institutions have a great deal of trouble coming up with the funds they need to provide the young researchers they bring in with the scientific equipment and environment those researchers require.

Naturally, in response to the budget cuts made throughout Canada, universities started reducing research and faculty staff. But now they are hiring again, and in my opinion will continue to do so for several years. Universities and hospitals tell us that they do not have sufficient funds, and would like our help in providing young researchers hired by universities and hospitals with proper equipment, so that they don't leave. In other words, you could be your generation's most brilliant genetics researcher, but if you don't have the equipment you need for leading-edge research in genetics, your research will never lead to any applications.

So with these funds, we will try to help research institutions across Canada to keep their young brains, rather than losing them to the United States or Europe. They will stay in Canada because Canadian institutions will have the infrastructure they need.

Ms. Hélène Alarie: You probably have budget projections that give you some idea of how much various sectors will require. Is the New Opportunities mechanism a priority? What share of total funding do you expect to allocate to it? Would it be a specific percentage?

Ms. Carmen Charette: At the moment, we have earmarked 40 million dollars for the New Opportunities mechanism. And on April 1, there will be a competition to deal with urgent needs in that area. We are setting aside funds for 200 grants. Then, over the next five years, we plan to provide 300 additional grants, which may amount to as much as half a million dollars.

The Board of Directors has discussed the issue, and has identified New Opportunities as a priority. But these are only projections for the moment. The programs have been designed to provide some flexibility. As needs are determined in the coming months and years, we will adjust these amounts to meet the most urgent needs.

Ms. Hélène Alarie: Thank you.

The Chair: Thank you, Ms. Alarie. Mr. Bellemare.

Mr. Eugène Bellemare (Carleton—Gloucester, Lib): Mr. Gagnon, could you please give us a very brief overview of your background, so that we gain a better understanding of what is going on?

Mr. Denis Gagnon: You said, "a very brief overview", but I'm no longer very young and this could take some time. I'll do my best.

I began my scientific career with a Bachelor's degree in pharmacy from Laval University. Then, I went on to McGill University, where I did a Masters and PhD in pharmacology. After that, I left Canada for Sweden, where some work that interested me enormously was going on. I remained there for a while, and then went to England.

• 0950

I came back as a professor and researcher in pharmacology at the University of Sherbrooke Medicine Faculty. I did many things, but to sum it up, I'd say that I spent eight or nine years in Sherbrooke after which Laval University recruited me as Department Head and I became Vice-Rector of Medicine and then Vice-President of Research at that university. That's sort of how my university career ended.

Between times, and I have to say this, of course, I was member of the Medical Research Council of Canada for six years. I had a brief respite, I was given a bit of a breather and, a few years later, I became member of the Natural Sciences and Engineering Research Council of Canada. I've done a fair bit of work.

Mr. Eugène Bellemare: Your CV is certainly very encouraging. In your presentation, you mainly mentioned giving funding or grants to post-secondary institutions and hospitals.

In another report, and I don't know which one it is, it said:

[English]

and associated not-for-profit research institute organization

[Translation]

However, you did not specify that in your report. Could you tell me why?

Mr. Denis Gagnon: You're absolutely right. I should have added that during this morning's presentation.

Under the legislation that created us and the funding agreement between the federal government and the Foundation, there are four kinds of beneficiaries who can receive funds from the Foundation: universities, hospitals, colleges, in the broad sense of the term, and non-profit organizations.

Mr. Eugène Bellemare: Fine. Could you give me an example or two of such organizations?

Mr. Denis Gagnon: Yes. We're trying to interpret legislation to make sure that it's applied equitably. For example, some pan- Canadian organizations and some non-profit institutions were created to group researchers together to be able to give them new means, especially in the area of telecommunications and microelectronics. Research centres were set up by three or four universities that got together. There are different situations like that. As you can see, I have some hesitation in naming some of those non-profit research centres because we're actually looking at their eligibility right now.

Mr. Eugène Bellemare: Am I to understand that you're an organization that will be granting funds and will mainly be subsidizing the purchase of equipment?

Mr. Denis Gagnon: And infrastructure.

Mr. Eugène Bellemare: Yes, I know that can also mean the pipes and the building. So that's strictly what it is. Who will then evaluate the ideas being put forth? Will it be another organization similar to yours? Let's say that a Canadian heart institute wants to invent a new heart and that the idea is considered very good. As some gadgets will be needed, are you the ones they are going to go to? This proposal would be approved because we have the right researchers and we assume such a percentage of the project. Now, to set up these activities, machines, instruments and equipment will be necessary. Who will be the master of ceremonies at the marriage, who will be high priest deciding that the marriage is a good one?

Mr. Denis Gagnon: The master of ceremonies or the high priest, as you call him, will certainly be someone from the Foundation. The Canada Foundation for Innovation is the principal for the whole thing.

Some of the criteria for our evaluation have to do with the scientific quality of projects, while the others have more to do with the innovation, implementation and other aspects.

• 0955

We're set up to do the scientific analysis if required and examine the scientific content as to the objectives of innovation and implementation of technology.

As our vice-president for programs explained before, we are going to try to count on the co-operation of organizations used to doing scientific evaluations. Thus, in some cases, the evaluation could possibly be done jointly by the Medical Research Council of Canada and ourselves. If they already have an evaluation of some project that's being suggested to us, we will ask them for their co-operation to avoid duplication of the evaluations. This hasn't quite jelled yet, but I hope it will work out that way.

As for the rest, it is the responsibility of the Foundation. I'd like to point out that the funding agreement and the Act are specific on that point: it is our board of directors that makes decisions on each of the projects.

Mr. Eugène Bellemare: As you probably noted, and will soon realize as the man holding the purse strings for the renewal of research infrastructure, whenever it is a question of money, people are always looking out for their own advantage. Will the money be divided according to provinces or regions? Without referring to any province in particular, there are some regions of Canada that have many research centres. Birds of a feather flock together, and they always seem to be concentrated in the same places. How are you going to make a judgment call?

Mr. Denis Gagnon: As interim president and chief executive officer of the Foundation, as was also the case when I was first vice-president and just like my colleagues, I think we sometimes feel caught between the mandate we've been given, with very precise objectives relating to innovation and the development of technology and science, and a possible mandate relating to the most equitable distribution possible of the funds among the regions. There can be a contradiction between these two approaches. We were told that we should support and fund the best projects, the best science, and the best facilities so that we are in a better position to carry out technological applications. One of our objectives is the creation of jobs with a high scientific content and so forth. In all honesty I must admit that I sometimes feel caught between these two approaches.

Under our Act and financial agreement, we are expected, as I interpret it, to be sensitive to regional matters as well as the development of science and technology in all regions of the country. I can assure you that we will be as sensitive as possible to all these matters and that together we will be able to carry out our mandate taking into account this important aspect you emphasized. I'm in full agreement with you.

For 10 years when I was vice-president of research at Laval University, I was faced with the same problems, although on an entirely different scale, of course. I was from a medical background and the accusations I heard always came from faculties that had nothing to do with medicine. I was told that money was being given to science but nothing to social sciences and or anthropology. This is a kind of comment I've become used to. Now we'll have to adjust our reactions to another kind of scale.

Mr. Eugène Bellemare: We talk about geography as if it were a problem. There's also the approach in favour of creating industrial clusters. By analyzing different countries or different regions, we can immediately identify these industrial clusters. For example, Switzerland is recognized for its pharmaceutical firms and its banking system, whereas other countries have reputations in different areas.

• 1000

Are you considering whether you should encourage the development of such clusters in regions that have a special expertise, to create jobs and make these a centre of excellence for Canada in a particular field? I'm from the Ottawa area and I tend to think that the only place where there is high tech is the Ottawa region. From the point of view of economic development, is this your kind of thinking? Would you grant funds to someone from Yukon who has come up with a good idea, wants to put it into practice and needs some type of equipment?

As part of this cluster approach, could the Toronto region decide it wants to become a big automotive centre and emphasize this kind of development to compete with other countries instead of having this happen in a haphazard sort of way? Do you understand what I'm getting at?

Mr. Denis Gagnon: I know this country a little. I nearly feel like saying that I know it like the back of my hand. For years, I did a lot of travelling throughout Canada. What I want to leave you with this morning is that I am pleased to see that in Canada and all regions of Canada, what you would call clusters or what we call centres of excellence have sprung up.

Our mandate is basically to oversee all of Canada's research institutes. Of course, some provinces have more than others, but the quality of scientific research does not depend on the size of the province or of a university or hospital. It is based on the presence of a cluster and I think it is important to stress that. You know, some smaller universities might be less flamboyant than others, but sometimes they come up with very innovative, extraordinary projects.

Part of our job is to make sure there is some continuity, as we said earlier. We always look at various factors: strategies—or strategic planning as it says in our documents—priorities, choices, a university or hospital's determination to present the best possible projects to meet our objectives. I think that can happen nearly anywhere in Canada.

[English]

The Chair: Thank you, Mr. Bellemare. Mr. Lowther.

Mr. Eric Lowther (Calgary Centre, Ref.): Thank you, Madam Chair.

I have a couple of quick questions—I think they're quick—and then I think Mr. Schmidt has a brief question.

First of all, it would seem that most of your efforts are directed towards the infrastructure side. Is there any consideration towards commercialization at the output side of basic research in the funding you're going to be doing? Are you involved in that at all? You did talk a little bit about consideration of deliverables or application—I guess that was the word—in your criteria, some application of what's being done. Unless I misinterpreted that, I thought that was some output you saw coming out of this funding in the basic research that was going to improve Canada and those kinds of things. Is there a commercialization component in there helping these outputs get into the market at all?

Mr. Denis Gagnon: I would have to give you the list of what we call eligible costs, what we can pay for. I will ask my colleagues to let you know more about it.

The funding agreement was quite clear. We are in the business of funding infrastructures, and infrastructures are described in the funding agreement. We can't go outside of that.

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I will now turn to Carmen.

Ms. Carmen Charette: Our act is very clear that the funds we provide can go to infrastructure.

In the context of our criteria and in the context of the potential benefits of the research to Canada, we talk about a potential contribution to job creation and economic growth. That is where commercialization would come in, in terms of the proposal making the argument that because they will get this infrastructure they will be able to develop products that will lead to new companies or new ventures.

We talk about interaction and partnerships with industry, provincial organizations, other intended users of the infrastructure, and eventual receptors of the results of this work. It will be an output. We are in the process of looking at how we will measure down the road the success of the investments we have made. So we will look at outputs and outcomes. Those are some of the indicators we will be looking at.

Mr. Eric Lowther: So there is a market consideration when you are funding: Is there a market for this research? Is there some demand for what they are doing?

When you talk about job creation it's not job creation within the research community itself; it's new job creation coming out of this.

Ms. Carmen Charette: When we talk about the whole issue of training we talk about it as training through research. We're not saying the only aspect is to train people who will become clones of the people who trained them—not just people who hold academic positions or positions in the environments in which we will be putting that infrastructure. We're looking at training that is broader than that; people will use those skills in all sectors.

Mr. Eric Lowther: I would caution you about using the word “clone” these days.

Ms. Carmen Charette: It's an expression that....

Mr. Eric Lowther: I know.

On another note, you have a big sack of money, $800 million. That's $25 for every man, woman, and child in Canada—taxpayer money. I'd like to have a better idea of what kind of things you are held accountable for. That's a tremendous amount of power. You can sway all kinds of research activities. I'd like to understand, with that power and influence, where you bottom line is. If you don't deliver, what happens? Does this just go off into the mist and we hope something good comes back some day? I'm being a bit facetious, but I would like to make my point.

Mr. Denis Gagnon: I hope this is not the kind of scenario we are going to be working with. Remember, $800 million represents 40% of the total budget that will be supporting infrastructure in Canada. If the private sector, provincial governments, and hospitals pay too much, this 40%, and pay the remaining 60%, I have a feeling they are going to do it with some sense of achieving something. I'm quite optimistic.

When the provincial governments, or a hospital or a university, have to invest many millions of dollars from their own budget, my feeling is they are going to come with top-notch projects and they will try to make it work over the years. I'm quite optimistic about this. They're developing strategies. They're now thinking in terms of priorities. They're now trying to do the best.

Of course we are accountable, so at some point we will probably have to come before this committee and tell you what we have done with the money. If I am here, I can tell you that I'll be happy to provide you with the numbers, because I really believe in this foundation.

• 1010

The Chair: Mr. Schmidt.

Mr. Werner Schmidt: Thank you, Madam Chair.

My question has to do with a prior determination of who gets a better chance to get money than someone else. It's not on the quality of the program necessarily, but in terms of a balancing of sectors. I'm thinking here particularly of the technology partnerships program, where it says, right off the top, that one-third of their money for next year is going to go into the environmental and enabling technologies area. That's going to get 30% of all their funding.

Have you done a similar thing? Will one-third go to projects that NSERC likes, one-third to SSHRC, and one-third to MRC, or is it going to go to the proportion of universities or...? Have you any idea of which sector is going to be leading in terms of the projects that will be approved?

Mr. Denis Gagnon: I can tell you that some sectors believe they're going to get 85% of the total funds of the CFI. I can tell you that for sure. Of course, some sectors—you remember the four: health, environment, science, and engineering—will probably be in a better position than others to get the matching funds, because the funds are there waiting for them.

So, our board members, in their wisdom—I think I should talk about wisdom now—told us we won't make any specific allocations by sector. What they want us to do is to wait and see. Let's do the first two competitions, they told us, and then we'll see if there's a different type of pressure coming from the four sectors.

I gather from what they told us at our last meeting that they want to make sure all four sectors will somehow be covered.

I'm afraid that's about all I can say about this this morning.

Mr. Werner Schmidt: That will be part of the accountability.

Mr. Denis Gagnon: Oh yes, it will.

The Chair: Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): Thank you.

In your opening address you talked about colleges and universities. However, in all of the comments I've heard you make subsequently you almost always talked about universities and never colleges. I'm slightly concerned about that because I see there's been a dramatic shift. Some evolving technologies are actually going on in colleges as opposed to universities. That's an opening comment. I think we have a thought process that all our research must go on in universities, and I don't think that's necessarily true.

What's the definition of infrastructure? Is it basically equipment? Is that what we're talking about?

Mr. Denis Gagnon: It means equipment, specimens, databases...what else?

Ms. Carmen Charette: Software, communication linkages, intangible properties used or to be used primarily for carrying on research, including housing installation essential for the use and servicing—

Mr. Alex Shepherd: No bricks and mortar.

Mr. Denis Gagnon: It could be. The funding agreement permits us to support and fund part of a building that would have to be either renovated or acquired—or built, actually. So we could do that if there's a project that requires that a building be refurbished, or renovated, or built—an extension of a building.

Mr. Alex Shepherd: That's not a big feature of your budgetary process.

Mr. Denis Gagnon: No.

Mr. Alex Shepherd: I was just trying to find ways to get more bang for the buck. In your arrangements with whomever, with people who are looking to get these injections...take the equipment they're asking for and try to find some way—and this isn't always possible—that this equipment could be manufactured in Canada. In other words, you have two ways to create technology: one, the actual use of the equipment in a university or college environment; and, two, somebody actually manufacturing this.

• 1015

We were just at the National Research Council, and I know that most of that equipment is coming from Europe. Is there any thought process on how we can stimulate the actual manufacture of some of that equipment in Canada?

Mr. Denis Gagnon: I hope it will. I hope that what we are going to do will help the Canadian industry, but we don't have such criteria that would apply so that the people would have to make sure that they buy Canadian. If this is what you mean, we couldn't do that.

But one of our criteria talks about the most efficient way of acquiring an infrastructure. So probably then we will have discussions with them. If there's a big piece of equipment that is made in Canada and the application says that now they want to get this same equipment that is made in Germany or another place, then we can ask questions in order to find out if this equipment bought in Europe, for instance, would be more efficient or not than the same equipment made in Canada and bought in Canada. So we'll have a look at this.

Mr. Alex Shepherd: What about the flip side of that a little bit, in the sense that I'm a possible equipment manufacturer but I haven't made those machines—whatever they are—before? I want to get into that field and that innovative technology in actual manufacture. Are you looking for some...? I know that you can't do this 100%, that it's impossible, but are you looking for some interest group that would actually try to perform that in certain areas of evolving technology?

Mr. Denis Gagnon: I must tell you honestly that we didn't look at this at all so far. I can say that we didn't think about the whole thing. Maybe we'll have to look at it and see if there's anything we can do about it, but I'm honestly not sure that we could do something.

Mr. Alex Shepherd: Okay. So you'll put it in your thought process and give it consideration.

Mr. Denis Gagnon: May I say, Madam Chair, that I'd like to comment on your first comment, the colleges.

We're going to make sure that the colleges will be treated in exactly the same way. There's only one problem, and this is probably why I didn't talk too much about the colleges this morning. We were supposed to meet together. The association of Canadian colleges were supposed to come. That was the first week of the ice storm, so the whole thing was postponed. We are going to meet with them next week.

Ms. Carmen Charette: We've had ongoing discussions.

Mr. Denis Gagnon: Mind you, as you've said, and as I see it, some colleges are very well equipped to do very good innovative research. My feeling is that they are going to be there and they're going to be an important actor in the whole thing.

Mr. Alex Shepherd: In the whole scheme of things, how do we attempt to eliminate duplication? I know this becomes judgmental. Say UBC is doing some kind of research and the U of T is doing something similar and they both want a similar kind of device. Do you try to act as an adjudicator and say, look, we've got only so much money here, we think it should be in UBC at this time, and why don't you people communicate and make that type of technology better rather than competing with each other?

Mr. Denis Gagnon: That's the reason why. From institutions we wanted to have a business plan so that we could make up our mind about the opportunity of developing an infrastructure somewhere while it exists in another region of Canada.

Are we going to succeed in avoiding totally a duplication? I'm not sure. But at least we'll have the tools to ask questions. We'll have what's needed to go back to a university or go back to a hospital and ask why they want to develop this. It is there. They've done a good job on that specific research project, but it doesn't mean necessarily that we'll be able to avoid duplications. But we will do our best.

Mr. Alex Shepherd: May I take that one step further, in the sense of skewing?

• 1020

This is where you come into micro-managing innovation, but looking at world technologies and saying Canada isn't really going to be a great competitor in some of these areas, because we're starting too late. The Japanese have a long planning horizon out there already. Let's do things where we can be effective and maybe zero in on the technologies where we can compete, rather than try to compete with limited resources against people who have long planning horizons already established. Do you do that sort of thing?

Dr. Denis Gagnon: Yes. And we have ways to evaluate that and we'll be in a position to take some hard decisions dealing with this kind of approach. You're right. We're going to do it.

The Chair: Madam Alarie.

[Translation]

Ms. Hélène Alarie: I have listened very closely to everything you said. Yesterday, when we were reviewing the NRC, I asked them for the estimate of annual replacement costs for their infrastructures. Their estimate was $13 million per year. It is just a research centre, a major research centre in fact, but there are so many of them. During the meeting, they also said that in their assessment, the life span of high tech equipment is just three years. In many other areas as well, equipment becomes obsolete very quickly.

Another comment I heard earlier is that we look for practical applications; we are trying to create jobs. During the break, I met with the head of my riding's FORD who told me the Foundation would create jobs. That troubles me a little and the question I have for you is the following: do you target a particular group of researchers?

We've reached a point where our researchers are being asked to promote their projects. Bear in mind that they get 50 per cent of the funding from elsewhere. So a researcher's task is not to be a promoter. So that worries me a little. I think the gap is widening between the researchers doing basic research and those whose project could have some practical applications in the future or in the very near future.

So my question is the following: are you targeting a specific group of researchers with this system?

Mr. Denis Gagnon: Ms. Alarie, my answer would be no, not necessarily. When the Foundation refers to job creation in its mandate and in its documents, it means it plans to help universities develop research projects that will help train young people who will then play critical roles in creating new businesses. That is really our primary focus.

So, in our view, it is not necessarily a matter of changing a university researcher into a promoter or business person. That isn't our objective at all.

In actual fact, our objective is to try, while at the same time developing research, science and technology, to provide people with better training and to find new avenues for research and development, so that new companies can be created which will in turn hire—I was going to say something as though I was still at university when in fact I'm no longer there—the increasingly better educated young women and men who are graduating from our universities. This is our primary objective.

Ms. Hélène Alarie: I have another question with respect to the project assessment. You said that it was the board of directors that assessed the projects and determined whether or not they were eligible.

Yesterday, I tried to put myself in the shoes of a researcher and to see whether or not the board of directors was a bit like the Tower of Pisa, to see whether or not the board was slanted to one side. My impression is that the researchers submitting projects will have a tendency, and this would be a perfectly human reaction, to take a very close look at the board of directors.

My comment does not pertain to this in particular, however, I am wondering why the board of directors does not request that the projects be assessed by peers, as is the case with the granting councils, which meets with everyone's approval.

Mr. Denis Gagnon: Either I expressed myself poorly, Ms. Alarie, or I wasn't understood correctly. The Foundation's board of directors will be responsible for all final decisions.

• 1025

We have established all of the assessment mechanisms, which are still under Ms. Charette's responsibility. These include peer assessment committees as well as assessment committees whose members are not necessarily scientists but who have knowledge in the area of technology application in the private sector, and so on and so forth. We wanted everyone to be represented on our committees.

These are, therefore, the committees that are going to be making a decision. A committee, by definition, does not make... I apologize, I was going to say something awkward. In our system, a committee does not make decisions. It will indicate to us which projects are the most deserving and important. This information will naturally be forwarded to the Foundation chairman who in turn will pass on the list of recommended projects to the members of the board of directors.

Therefore, the committee makes recommendations to the chief executive officer and this person in turn makes recommendations to the board of directors. However, it is clear, and this has to be clear, that the scientific committees, the peer committees, are the ones that will be reviewing all of the projects initially.

Ms. Hélène Alarie: Good. Thank you.

[English]

The Chair: Mr. Lastewka.

Mr. Walt Lastewka: Thank you, Madam Chair.

I really appreciate your presentation and your openness this morning as we begin the first bidding. Many times members of Parliament, including myself, look at what box the program fits in. You forced us to go outside the box a little bit.

I'm glad to see there's a bottom up approach in this first round to understand the priorities of the universities, the colleges, the hospitals, and so forth.

My concern has been all along—and I think you've helped me a little bit today—that the procedure would become political rather than scientific, meaning that we really take a good inventory of where we are in Canada, what needs to be done to go forward, and do what I call catch-up, because we have not had large amounts of dollars in research. I think it's important that we move ahead.

I'd like you to again share with the committee. My concern has been that the large universities, the big six or ten, will play a dominant role. I think you did mention that in some of the smaller universities and the colleges there's a niche where they can do research, and they can really add to our science. Can you tell us a little more about how you're going to search that out and make sure the smaller universities aren't overwhelmed by the larger universities?

Mr. Denis Gagnon: What we've done, sir, to tackle that problem, to address that issue, is to have a special funding mechanism for small universities and colleges.

For small universities that's almost accepted now. As I told you before, we'll be with the people from the colleges next week, so we will find ways of structuring a program that will be similar to what the small universities have.

There's one point about this funding mechanism that has to be remembered. We set aside a sum that is $40 million for smaller universities, and we've identified the smaller universities. Through a very complicated algorithm we've come up with figures. We were in touch with what we call the smaller universities and we told them, look, this is what we think: We will reserve some money, we will set aside some money for you, and if you want to come to us with a magnificent project, please do so, and we can assure you that we'll have money to support your project if it fits, of course, and if it corresponds to our criteria. This is quite important.

• 1030

We didn't want small universities from anywhere in Canada to be in a position to compete with McGill. That's my alma mater. I didn't want a small university to compete with McGill, Toronto, UBC, and others. It wouldn't be fair. This is the reason this funding mechanism was designed specifically for smaller universities. And there will be another one for the colleges as soon as we can get together.

Mr. Walt Lastewka: On the other hand, I didn't want—and I hope we weren't looking at it that way, the colleges and universities, and even across the provinces—to all of a sudden be discussing that this is my fair share: my university is here in rural Canada, and our fair share is.... They still have to have a priority; they still have to have a strategy; they still have to meet all those items that you mentioned, which apply to everybody. I just want to make sure that that's exactly what you're saying.

Ms. Carmen Charette: In the competition announcement, the document that they've received is very clear that similar standards will be used, the same criteria apply. It's not a blank cheque, it's not guaranteed. They have to come in with their institutional plans, their priorities, and then submit their proposals.

Mr. Walt Lastewka: Okay.

I think this was a question that was asked a little bit earlier: When will the official bidding begin?

Mr. Denis Gagnon: April 1 and May 1.

Mr. Walt Lastewka: I take it that between now and April all the guidelines and the research and everything will be done and then April 1 will be the official bidding.

Mr. Denis Gagnon: The last document to be put on the website to send throughout Canada is the application formula. It's going to be there either tomorrow or Monday; let's say Monday. It's going to be on the website on Monday. They will know about it and then we will be discussing it with them.

Mr. Walt Lastewka: Thank you.

The Chair: Mr. Schmidt.

Mr. Werner Schmidt: A question was asked earlier by my colleague about accountability. There are two parts to the accountability. One is the fairness and the equity and the sectoral distribution of funds; that's one aspect of accountability. The other part of accountability was triggered by your comment that they're doing good research. Now, that's an interesting comment. It implies the ability to evaluate the quality of research.

What measures would you recommend that the success of this project be evaluated by? I think that is a very significant question, because it's pretty easy to throw money around, and that has to be done fairly and it's certainly important to account for how you distributed that, but I'd like to know if I'm getting value from a dollar. What kinds of measures can we use or would you recommend that this committee use? It's all very well for you to come back and say this is what we did, but what measures should we use to say yes, you guys did a good job?

Mr. Denis Gagnon: I'll try to answer that question.

At this point in time we're working on what we call a performance evaluation for CFI. I want to put in place all the criteria that will be used by you people and by others to find out, after five years or six years, if we've done a good job. We're trying now to write down some of these criteria for performance evaluation. Among that, of course, we'll try to get as close as we can to real life, to facts and things like this, but it's not always easy. We'll try to find out after five or six years if the funds provided by the foundation have helped create a new industry and if the training of people was better under these conditions than the ones that exist at this point in time.

• 1035

So we have set criteria like this. I've been discussing this with our chair. We will have to discuss it later on, because we want to make sure that when the board members.... And let me tell you, the board members were quite clear at our last meeting when they told me, because I was then acting, “We want to make sure that we'll have a good performance evaluation so that people will be in a position to tell us if we've done a good job or not”. And these will come out.

Mr. Werner Schmidt: A good performance evaluation....

Mr. Eric Lowther: We want to make sure we have a good one.

Mr. Werner Schmidt: Yes, you see, that's the key. To me, the more important question is whether there are good criteria that will in fact determine whether the performance was good or bad. See, it's more important that we determine the right measuring sticks, if you will. As a scientist, you know only too well exactly what I'm talking about here. It's the measures that are the key here, and that will determine whether your performance was good or bad.

Mr. Denis Gagnon: You're right. I think we have good criteria.

Could you help me outline these?

Ms. Manon Harvey: Yes. We're working on developing the framework—

Mr. Werner Schmidt: Good.

Ms. Manon Harvey: —whereby we will measure what came out of the funds that we disbursed and also how well the CFI as a foundation operated. Was it efficient? Could it have done better through the granting councils, or whatever?

The only difficulty is that five years down the road, we'll have funded infrastructure. It's hard to measure the direct impact infrastructure has on outcomes. For instance, normally it is the research grants that go to the research people that will let them operate and develop something, so our impact will be indirect. We are having a bit of discussion as to what's the best measurement and how realistically we will be able to measure the impact of CFI. We're working towards that, for sure.

The Chair: Mr. Lowther, you have a brief comment.

Mr. Eric Lowther: Just on that very comment, I would suggest to you that in the development of your criteria you allow the community that you're intending to serve with these grants to have a key role in determining what those criteria are going to be. You don't do it in isolation of them.

Secondly, when in fact you are looking to see whether you have made a difference, one of the voices—not the only voice, but one of the voices—would be all these institutions, hospitals, universities, and not the ones you've just funded, but the broad base of all of them, even the ones you haven't funded, to say, “Is this making a difference out there, folks, and how much of one? Give us a score from one to a hundred or something. Where do we sit? Where are we missing the mark?”—and all those kind of questions, as opposed to the self-assessment program that sometimes happens, which lacks credibility because of the clear conflict of interest. This is not to cast any aspersions, but you can't put faith in a self-assessment a lot of times because of that. If you really want to score yourself and get accolades, have an independent process of the community you're serving.

Ms. Carmen Charette: That is certainly part of what we're considering in this process we're into right now, developing this evaluation framework, the tools we will use to evaluate the impact of what we've done. But one thing we're wrestling with, of course, is the whole nature of research. Impact could be thirty, forty years down the road. I think people have to be aware that in five years' time, if we make an investment and it has been there and used for four years, it might be difficult to really get a good handle on that. So that's why we have to find ways to measure the short term while keeping in mind that it may take a while before we really reap the benefits of it.

Mr. Eric Lowther: I don't think you should be afraid of that. If that comes back, that's the mantra we're hearing from the basic researchers out there: these five-year windows are not going to do it, folks.

Ms. Carmen Charette: That's right.

Mr. Eric Lowther: And if that's what's coming back, well, fine.

Ms. Carmen Charette: Good.

Mr. Eric Lowther: To be worried that they're going to say it didn't make any difference because it was only five years, so we really don't want to talk to them—

Ms. Carmen Charette: No, I think that's what we want to make sure we.... We feel the expectations of all parties are very high and the expectation is there that in five years we'll be able to say this makes such a difference, and we want to make sure people understand that window of really making a difference is far beyond five years. As long as everybody understands that and we find ways to follow the progress over time and then really appreciate the impact, that's really key.

• 1040

The Chair: I have two brief comments or questions for you, Dr. Gagnon.

You raise an interesting point, that you will be providing 40% of the funding and you are looking at private partners out there. I'm just wondering what response you've had from private companies, if you've had any contact with them, or if it's up to the universities, the hospitals, to make those contacts, or if anyone has approached the foundation directly so far and said, we are out there, we are supportive, line us up with people who are looking for funding, and if you're going to be a vehicle of that nature as well.

Mr. Denis Gagnon: We have prepared an outreach program for the private sector. But of course what happened—it's unfortunate—was that before Christmas Keith and I had decided he would take care of the private sector and I would take care of the granting councils, universities, and provinces. With what happened, at the beginning of the year I found myself having to do both jobs, and I honestly couldn't do it at this time. It has not been completed at this point. But it is our intention to outreach the private sector and to inform them, to ask them to be actors and to be investors and to be funders in this wonderful endeavour.

At the same time I can tell you the messages and the comments we are getting from the research community are that yes, a lot of people in hospitals, in universities, in colleges, are quite active right now in seeking funding from the private sector and also from the provincial governments—let's put it clearly. I honestly can't tell you at this time if we're going to succeed, but my appreciation of what I hear and what I get as specific information on that issue is that yes, it will work. It will work.

The Chair: I appreciate that comment.

I also wanted to follow up on the last part of your presentation this morning, where you mention the fact that although there is going to be this new investment in infrastructure, the fact is the research has to be done there, and it looks as if there's going to be a lack of funding for the research through the granting councils, and that you support their request to the finance committee for the additional funding. That is a major concern I share, and I just wonder if you could expand on it a bit—how the granting councils have relayed that to you, that the money is going to be there for the infrastructure, we're going to have the facilities, but we may not have the dollars to do the actual research.

Mr. Denis Gagnon: That's the problem. The worst thing that can happen with a program like ours is that we provide a team of researchers with a very nice piece of equipment but it sits there; it can't be used, because they don't have funds for operating the infrastructure, they don't have funds to pay for the salary for a technician to make it work, and so on. The whole thing is there, and in my view it's a lost investment. This is why we're working quite hard now, and we are going to be working hard, with the private sector, with the provincial governments, and so on, to make sure these operating grants will come and will permit the use of this equipment to the fullest. It is important that it be so.

I must say that by all means, when we get these projects we will try to make sure—and on some occasions it would be illegal for us to spend money on a piece of equipment if we're not sure—they will be able to sustain it over the next five years. These are all different means we will use in order to make sure these sums....

But we have a problem. Yes, in Canada at this time, I must say it and I must admit it, we have a problem with operating costs and maintenance costs, and trainees' costs, I would add. But as I said previously, I'm optimistic and I feel we're going to find solutions for that.

• 1045

The Chair: I'm optimistic as well.

Do you have any final comment you'd like to leave with the committee?

Mr. Denis Gagnon: To tell you that I am, as we say in French, agréablement surpris. I'm really happy to be here with you this morning. I never thought you would give CFI such a long period of time to have discussion and exchanges. I am happy and grateful for that.

My last comment would be to tell you that we will do our best to achieve the mandate that has been entrusted to us. I hope for the best.

Thank you.

The Chair: We thank you for taking the time to be with us this morning. We know that you have a huge undertaking and that all Canadians are looking to you to solve a lot of problems that are out there. As a committee we appreciate it and we thank you. We know we'll probably be meeting with you again in the future.

I now adjourn the meeting to the call of the chair.