INDU Committee Meeting

STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, June 15, 2000

• 0913

[English]

The Vice-Chair (Mr. Walt Lastewka (St. Catharines, Lib.)): We're going to begin this meeting pursuant to Standing Order 108(2), the follow-up of a study of a document entitled Sustaining Canada as an Innovative Society: An Action Agenda.

Today we have, from the Canada Foundation for Innovation, Dr. David Strangway and Ms. Manon Harvey.

So Dr. Strangway, begin.

Dr. David Strangway (President and Chief Executive Officer, Canada Foundation for Innovation): Thank you.

We're pleased to be back again, and I'm very pleased that Manon, who is our vice-president in finance administration, is with me today. She will be able to address you or answer questions in French.

The Canada Foundation for Innovation has made significant progress in this past year. As you know, we are making investments in capital research infrastructure. I think you have in front of you the tables. I won't try to read the tables, but they show how the allocations and awards we have made have been distributed across the country.

Two of those projects in table 1 are referred to as “national” projects, that is, essentially every province is participating, or most provinces are participating. One of those has to do with digital technology for libraries, and it's a nationwide project.

• 0915

The other national project is the Canadian light source project, which is based in Saskatoon, but in fact the physicists, biologists, and so on who are participating in that project are from every part of the country.

When you look at the distribution across the country, we are very pleased to see that without a predetermination of distribution, the outcome of the awards has in fact affected every part of the country. Every province has been competitive in matching this contribution, which to date—as of the end of March—is $464.5 million on our part. You will remember that we put 40% into the projects. On that basis, that means well over $1 billion now is flowing to the institutions to support the capital part of research activities to give the tools to be sure that we are competitive in the research environment.

Interestingly, provincial governments and other agencies from all across the country, and the private sector, have participated in the funding of the remaining 60%. Basically, each province comes up with 40%, so there's an equal match, and the remaining 20% is largely from the private sector. It's not all from the private sector, but it is from independent sources, some of which would be from voluntary organizations and so on.

The CFI activities at the present time are divided into four major categories. The first and largest is what we call the innovation fund. The second is what we call the new opportunities fund. The third is the university research development fund, and the fourth is the college research development fund. You can see the statistics in table 2 on how the funding is distributed between those two sources.

Let me just take a minute to describe what those programs are so you can see the nature of what we're doing, and the framework.

First, the new opportunities fund is supporting newly hired researchers in all parts of Canada. At this point, we have given tools to more than 700 newly hired faculty members in every part of the nation. This is particularly important because young scholars getting started have had a very difficult time getting the tools they need to be competitive early in their careers. We have been very pleased with the results of those. In fact, if you could ever meet some of these young people in institutions that might be in your jurisdictions, you should take the opportunity. They are so fired up and excited about the fact that at this stage in their careers they're given the support they need to really do what they can do and deliver back to the nation.

The second program is what we call the university research development fund. This was an envelope that was set aside for the smaller institutions. Our definition of smaller is those that receive less than 1% of the total research funding in the country.

Again, our perception is that those institutions have competed very successfully for those funds, and we hear lots of very good feedback from those smaller institutions. I know, for example, our chair has Brock University in his district. Perhaps somebody could ask him a question as to how it works.

The third is the college research development fund. By and large, we have not, as a nation, thought very much about the colleges as being research institutions. We usually think of them as training and teaching institutions. But what we have discovered is that there is a significant number—not in all colleges, but in some—that have some very interesting research being done, and tools are missing. They need access to the tools to do their work. This has also been a very competitive program, and it's fairly new for us. Again, we're very excited about the results it is giving us.

The fourth and largest program is the innovation fund. This is the one that basically supports the larger institutions. I mentioned earlier that two of the large projects out of that category that were funded last year are really national projects. The rest tend to be more within their jurisdictions.

We are now involved in a second major competition, which is well underway, and the decisions are being reviewed next week. We have 90 people coming in from around the globe to help us review 415 proposals that are requesting of us about $900 million. We have an envelope of $350 million, so it's going to be a very tough selection process. The decisions will be made by the board of the CFI late in July. So by the time you come back in the fall, the second major competition will have been announced.

• 0920

When that is done, we will have awarded a total of $850 million, approximately, and that means there will have been a $2 billion investment in capital research infrastructure.

I can't help but say how pleased CFI was to receive the additional funding and the extended mandate that came in the budget that came down at the end of February. That has given us a renewed life. It's given us the opportunity for additional competitions, and we see no sign that there is a lack either of need and demand or of participatory support to make this thing happen.

I wanted to summarize very briefly a few of the impacts that can already be detected. You'll realize that this money is pretty new to the institutions. We are requiring research plans from them. They are increasingly focusing on particular research priorities, so you begin to see focusing coming across the country. These, when they're all complete, will become an enormously useful resource in looking at how the non-profit, non-government agencies are conducting and carrying out their research.

By requiring the matching funds, the other levels of government and the private sector are participating. That's also extremely rewarding, and we see it happening with increasing enthusiasm.

We are requiring from each institution and each research group an annual impact report out of which we can extract the major impacts. This is not something that Canadian institutions are used to doing. They're used to asking for the funding. They're not quite used to having to report back as to how they used it. But again, we think this is going to be a very valuable resource so we can begin to document how this has changed what is happening in those institutions, how it has made them more competitive and helped them address the questions you're addressing here as a committee.

As I say, these reports are bringing another dimension to it, because at the level of investment, what we're finding is that institutions are coming together to do things, and the discipline boundaries are breaking down. Take, for example, a tool like the light source project in Saskatoon. It's very difficult to say what the field is. It's affecting biology, genomic studies, material science, technology, and high-energy physics. It crosses all of those boundaries, because many different disciplines need to use the facility to do the activities they carry out.

So we are, as I say, very pleased with these results. We go through a process regularly of reviewing the processes. We meet frequently with people who are on the receiving end of these activities, so we are trying to be responsive and sensitive to the needs, and at the same time be sure we're making the right decisions.

I should add to this that we believe the creation of the Canada research chairs is also a very first-rate decision, again, in my view, strengthening the infrastructure capacity of the non-profit, non-government sector. By infrastructure, I'm broadening beyond just capital in saying that you're making sure the people are there to carry out the quality research that's needed for us to be competitive. That program is working closely with us, and in that case they focus on the institution and the institutional plans.

As far as the CFI is concerned, we are going to provide capital research infrastructure to the new people who are hired in those chairs, just as we're doing with the other new hires.

Secondly, we have started the planning for a competition that will set aside $100 million. What we're looking at is not just beginning to link institutions within Canada, but also linking institutions within Canada to partners from outside Canada. The logic here is to link the very best in Canada with the very best around the world. We'll have the opportunity to spend our money at home, and they'll spend their money at home. But the two pieces are greater than the sum of the parts.

• 0925

We are just in the process of putting this program together, and we think from the feedback we're getting it will be very well received, because, again, in the past few decades, in the tough times we have tended to cut our international linkages, and this is a start to reopen the international linkages and again to make us a global partner.

There are other elements of research infrastructure that still need to be addressed. One I refer to as non-capital research infrastructure, sometimes referred to as indirect costs. If you're looking at the total costs of research, you have the capital that we support, you have the chairs for the faculty and the researchers there, but you also have the other cost of research, which is the technical support, the individuals needed to run the facilities, people who can make sure the lab is functioning and that the maintenance and so on is in place. We cannot leave out the fact that the individual researchers also need increasing amounts of support through the granting agencies.

My final point is really just to show you the very last table. It's encouraging and discouraging. It's discouraging if you look at where Canada is today among the OECD countries with respect to its expenditures on research and development as a proportion of the GDP. Among the OECD countries, we're actually 15th, so we're not really a highly competitive research nation in the level of expenditures we make. But this is 1997 data, so the bad news is where we were.

The good news is with the CFI, the chairs program, the CIHR activities that have been supported and increased, and if you look at these other points that I've been making in terms of indirect costs and so on, I think we will see that two, three, or four years from now, as this data flows through, we'll move significantly up that table.

The tough news, of course, as I've been meeting people in other countries, is that every jurisdiction is addressing the same questions. So this is not a fixed 1997 target; this is a moving target. Generally, as I've travelled and met people from other countries, they have a mindset that says we should be spending about 3% of our GDP on research and development. So in that sense, we still have a way to go to get there.

That's the bad news, as I say. The good news is that we're making substantial steps that are moving us there.

I want to close with a quote from the National Science Board of the United States:

50% of new job growth in the United States flows directly from the research performed by the universities.

That's a very strong statement, but it was as a result of a major study they had done.

So, again, to look at the agenda you are dealing with and struggling with in the industry committee, I think the activities of CFI and the other agencies, the activities I referred to that need to be added to this to put us up there, are exactly the right ones that are going to keep us in the game.

Ladies and gentlemen, that concludes my remarks. Manon and I stand ready to answer questions.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Doctor.

I will begin with Mr. Riis.

Mr. Nelson Riis (Kamloops, Thompson and Highland Valleys, NDP): Thank you very much, Mr. Chairman.

The Vice-Chair (Mr. Walt Lastewka): You were here early. You were the first one here.

Mr. Jerry Pickard (Chatham—Kent Essex, Lib.): That's a shock.

The Vice-Chair (Mr. Walt Lastewka): We have lots of time, so everybody is going to get their...

Mr. Nelson Riis: Thank you very much for your presentation and for you folks being here this morning. There are a number of questions that come to mind.

First of all, I would like to ask, in terms of Canada, where are the innovative centres developing? Can you give us a little geographic sketch in terms of where the new Silicon Valleys are starting to spring up across the country?

Secondly, you mentioned our placement on the OECD list and the fact that everybody else is getting in this business in terms of putting more and more resources into innovation and research. The United States is opening up its borders to attract scientists from around the world, facilitating the entry of scientists. Germany is doing the same thing in terms of their immigration policy.

Can you give us an observation? Knowing what's happening, particularly at our universities with that senior level of professorship personnel retiring in the next few years, we're going to have, from my understanding, a huge shortfall at the professorial level. What does this mean in terms of what we should be looking at? I don't know if it's immigration policy or whatever, but as a problem in terms of a research profile.

• 0930

Third, you mentioned in your opening statement the college research development fund and the small universities. Some of us are very disappointed with the allocation of the research chairs because a number of the small universities, because of the way they were defining who would qualify, were left out. So again, we have a number of universities that will not receive any chairs, at least for the next number of years, and as a result of that will presumably not get some of the funding from your centre, as well as from some of the other research.

In other words, we're saying to some of the smaller universities, you will not be part of the innovative business here; we're going to put our resources elsewhere.

I'd like to hear your comments on that. I have others, but I'll wait until some of my colleagues have had a chance as well.

Dr. David Strangway: Well, that's enough for an hour's discourse.

On the first point, about where the centres of action are happening, I think having just had an opportunity to be in Brussels and talk to people from the EU about the difficulties they have, in effect, of all the countries that have less support, on how they're distributing to try to make sure everybody's competitive, it sounded like a very familiar ring, because we have, of course, the same issue in Canada.

There is no doubt that if you look at where the concentration of high-tech and research activities are, they are not uniformly distributed in every jurisdiction across the country. It's easy to pick Ottawa, Toronto, or perhaps Calgary, Vancouver, Montreal, Quebec City, and so on. I think those are self-evident. There's no point in spending a lot of time on describing that.

What you also see is the provinces wanting to ensure that they have the capacity to compete. So they are coming in behind this program, and they are also taking other steps in these cases to ensure it is there.

When it comes to other parts of the country, I find it very intriguing that what we are seeing in the proposals that come forward to us is that the smaller institutions often have more focused capacity to pick two or three areas in which they're going to be very good. In reading the research plans, they're getting better in the second round. They'll be even better in the third round. But the research plans from the small institutions are often better than they are from the large institutions, because they're able to pick a few focuses in which they're going to be very strong.

So you'd have to say that when you look at the larger centres I've mentioned, and perhaps a few others, there's an enormous number of peaks in their structures. When you look at the smaller institutions, you can find almost everywhere that there are interesting spikes of quality and activity. So I think to some extent, for example, the research development fund for the smaller institutions is reinforcing those institutions and giving them the capacity to do something.

In terms of the college question you raised, the chairs are allocated fundamentally on the basis of their proportion of the research they have been getting. So the question you have to ask yourself is, is that program designed to build the capacity to do the research, or is it being created to reinforce the excellence, which is also having trouble getting to the levels of international excellence we need to get at?

I think the decision was finally taken that about 6% of the chairs would be redistributed, taken off the top and set up for the smaller institutions. Some institutions didn't make the cut at all, because unless you had at least $100,000 of the research funding already coming in, you didn't make that first cut.

Since this is a rolling average that people are looking at, part of the answer to the question is for those institutions to be sure they have a small number of people who are really very competitive, because this three-year rolling average will move over time. I don't think institutions will be left out in the long run, and by redistributing 6% of them and taking it right down to the level of $100,000, you have most of the institutions in the country where there is some research being done. The ones that are left out are below $100,000. That doesn't leave very many out, basically, of the ones that actually have some capacity now on which to build.

I haven't answered all your questions.

• 0935

On OECD and immigration policy, when the chairs program was set up—

[Editor'Note: Inaudible]

Mr. Nelson Riis: ...the demographics of our senior researchers at the universities.

Dr. David Strangway: Yes. Let me come to the demographics now. Part of the reason for some of us being enthusiastic about the Canada research chairs program was the very reason you mention. Since the federal government is mainly looking at the research envelopes of the nation, the concern immediately became that if you look at the retirement profile, there are something like 35,000 faculty members in Canada at the present time, and something like a third of those go within the next decade. So 2,000 doesn't replace 10,000, but 2,000 is an enormously important shot in the arm to ensure the research capacity is remaining. Not only does it help with the replacement; it also helps with being sure we are either retaining or attracting the very best people to stay here.

So in terms of the competition of trying to attract and keep people here, the research chairs are going to be a massively interesting activity. There will never be enough, as there never is in any of these programs, but that will give us the edge in going after some of these people.

Already we're hearing from people that because we got these CFI facilities, we are now able to recruit people we never could have dreamed of, because they're not just going for tax and salary; they're going for the environment in which they can do their thing and really deliver the results back to the nation. So the package of things we're talking about is at least putting us on the competitive map to be sure we can attract and keep our very best.

The CFI part is almost as important in that as the chairs themselves, because how could you invite somebody to come to Canada to work on intense light beam sources if you didn't have an intense light beam source? I mean, you just wouldn't do it. And if the people did come to Canada and immediately they saw a chance to go to a place that had those facilities, that's where they'd go. So this is doing a lot in that direction.

The immigration sub-dimension of that is quite interesting. I understand there have been conversations with the people at Immigration, which is looking at removing, at least for these chairs, the two-tier advertising barrier we used to have. My own view is that in a year or two from now, we're going to have to remove all of those barriers, because it's no longer going to be a question of Canadians versus others; it's going to be a question of whether we are getting and keeping our share of the very best people from around the globe.

But it's my understanding that there is at least an informal understanding that there will be a way to waive the two-tier advertising process. So if somebody becomes available and an institution has the tools and the equipment, if they have one of the chairs, and if we have given them the facilities that will go immediately into the chair, they can use this immediately as a recruiting tool and to minimize the barriers.

Are we going to be successful? I don't know. It's a tough competition we're in, as you mentioned. Germany is doing it, the U.K. is doing it, the EU countries are doing it, Japan is doing it—less than others, but Japan is struggling with the same issue. We do have one very big advantage, and that is not only being a country in which both English and French are spoken but being a country in which these are languages that people want to come and learn and work in.

So we have a lot of advantages going for us, but we have to keep at it. The competition is tough.

The Chair: Thank you, Mr. Riis.

Mr. Pickard.

Mr. Jerry Pickard: Thank you, Mr. Chair.

Dr. Strangway, welcome to the committee. I'm going to question you on something that's more local and of concern in my area, and yet it is, I would guess, an example of smaller communities in Canada and directions we can head in that possibly you can help with. I refer to Ridgetown Agriculture College, which is a small college. People who go there are very attuned to the agricultural practices in southwestern Ontario, and all members of southwestern Ontario realize that in that small college we focus so much on the realistic practices and measures of a successful rural education, particularly the agricultural component.

• 0940

These colleges certainly don't have the advantage of the large universities you talk of. They don't have the facility. In order to make life reasonable in those types of settings, facilities are required, and certainly they have been requesting some support from your organization. I don't know whether you're aware of that or not. I sent their information forward to you.

Here we have a very small but a very successful university in dealing with the changes, practices, and innovations in agriculture, which have been phenomenal. It's one of the sectors that's changing most in the world, without question. I look at the agriculture that's going on in southwestern Ontario, and I would say it's competitive worldwide. There are innovations coming every day.

These innovations have to be part of the life of students. Therefore it's my view that your organization must look very carefully at what we're doing in those realms and make sure we facilitate the needs there. This is one of the reasons I sent that forward. Maybe you could comment on how you do facilitate those small, maybe parochial in nature, universities or colleges with single focus.

Dr. David Strangway: Well, I can't comment specifically on your institution, but I can comment on comparable ones. The program in Alberta at Olds College, which is an agricultural college, has put in proposals that have been reviewed and have been successful. Lethbridge Community College in Alberta has a variety of activities, but one of the areas they were very interested in was freshwater fish and tilapia, which is apparently one of the new, major, easily handled, managed food sources. We have supported them to get the facilities to do the research on tilapia. Nova Scotia Agricultural College has been very successful in receiving awards from us and has competed.

I can't off the top of my head answer the question about the specific institution, but we certainly have been responsive where those kinds of proposals have come forward and passed the peer scheme I'm talking about. We're not close-minded about the kinds of things you're talking about. We're really quite open-minded about them. But they have to pass the panels and the reviews.

Mr. Jerry Pickard: One other challenge these small universities may face is they don't have necessarily the specialization you'd find in a larger university. Some of these smaller colleges may well be in a position where they have struggled with having an auditorium in which they can do certain things, or with having the facilities to do some of the basic training and programs required in a facility such as that.

So to me, a different dimension needs to be applied to a school or college of that nature. I know if they came along with new greenhouse technology and said, “All right, we can show you the latest greenhouse technology and train students in it”, that may be perceived in a much different way from, “We have to have a training facility that's applicable to 500 students” or whatever.

Dr. David Strangway: One of the points I should explain with respect to the mandate of the CFI is this. The CFI mandate is fundamentally to support research. When it comes to the training dimension of it, that is a much trickier question for us, because now you're looking at questions of federal and provincial jurisdiction, whose responsibility it is, and so on. So our mandate is quite specific around research and perhaps the training to become a researcher. That would make some of these things a little more difficult.

But in terms of focusing on agriculture, a lot of our projects do come into that, and some of them do come from single institutions or institutions that have single mandates. Those are not in any sense ruled out, Mr. Pickard.

Mr. Jerry Pickard: Okay. Thank you very much. I appreciate that.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Pickard.

Monsieur Brien.

Dr. David Strangway: If I get into trouble, Manon will help me out.

• 0945

[Translation]

Mr. Pierre Brien (Témiscamingue, BQ): When I look at the picture of what is being forecast for the coming years, especially for chairs in research, I am extremely worried for the small universities. When you look at how the university chairs are going to be distributed and how the Canada Foundation for Innovation is going to fund the support infrastructure, you can see, for example, that the University of British Columbia will have 160 chairs, that McGill University will have 162 and the University of Toronto, 251. Back home, in Abitibi-Témiscamingue, there will be one chair. The gap between us and those universities is only going to increase.

You are wondering if the goal is to encourage present excellence or stimulate research. You can correct me if I am wrong, but I am convinced that the gap that now exists is only going to grow wider. And I am not talking about the capacity that some universities have for fundraising. Recently, McGill received a bequest of $60 million. The University of Toronto got even more. What can I tell the people back home? This picture is disastrous for us. A lot of money will be spent on research but, as far as we are concerned, the situation will be even worse in a few years than it is today as compared to the major universities.

[English]

Dr. David Strangway: I believe there are two major gaps we're attempting to address. The biggest gap, from Canada as a whole, is the OECD gap I was referring to, and the fact that we are far behind competitive capacities. One of the issues for CFI or the chairs program is to try to ensure that we are in fact internationally competitive. Today nationally competitive isn't adequate. Some of these reallocations are saying, let's make sure that where we have this level of excellence that's already there, they're not going to fall behind their international competitors.

In terms of the private sector fundraising, of course, you can't do anything but applaud people who have managed to get this kind of support, because that brings it into the system.

The second gap is the one you're referring to, which gets to the regional distribution. I think the idea of reallocating the 6% off the top and the idea of saying it's a rolling average, which says as you get stronger you're going to get a bigger share of that capacity, is really important. What the Province of Quebec has been very interested in doing over the last 10, 15, or 20 years is they've actually been making significant investments within the province which have made them more competitive in getting these federal funds.

I think what you're seeing is that people all across the country are looking at this. Part of the capacity building isn't only a question of CFI and the chairs; it's also a question of the investments that are made locally in order to ensure that they have this question of competitive capacity.

I think they also have to look at places like those you're referring to. Are there going to be two or three strong focuses where they're going to really focus and be very good at a few things? As an old university president, I know the easiest thing is to turn around and give a little bit to everybody and in every discipline.

I don't have the full answer to your question. I recognize the problems you're describing, but I'm also concerned that Canada is not going to be able to compete in the international forum at the same time. I think we've got two gaps we have to close.

[Translation]

Mr. Pierre Brien: From what I understand of what you are saying, the question of the gap between our small universities and our major universities is very low on the priority list. I remember that at the beginning, it was said that we had to keep our brains here, but the message I will be transmitting to the people in my riding is that we will at least be keeping them in our major universities, but not in our region. People won't accept that. I will give you an example. At the Université du Québec en Abitibi- Témiscamingue, we will have a chair specialized in research on pain, I think, and it is probably McGill University that will have the chair for research in mining. Well, we happen to have the mines. At the very least, I might understand that that chair might go to a Northern Ontario university, but I have problems understanding why McGill is involved in mining research.

• 0950

I could say the same thing about the Quebec government, the provincial government, that is going to be funding the infrastructure, but $900 million are going to the CFI and a lot of money is going to be going to chairs whose objective won't be to support our small universities.

I am looking at the projections from years 2 to 5 for the chairs, and I would like you to consider my point of view. You probably have more influence than I do in that respect. We should try to have something that will allow our smaller universities to make progress. I am not talking about those who aren't even in there, but of those who are there, some only have a single chair. The situation will be impossible for them. In five years, 160 chairs will be created in one university in Montreal and 250 in another one, still and always in Montreal. That is 400 chairs. We only get one. How do you want us to be able to attract researchers? It is impossible.

[English]

Dr. David Strangway: I don't have a good answer to your question. What I can say from the CFI's perspective is that what we have done in setting aside the small universities program is to ensure there is an envelope within which those smaller universities could compete.

That is now under discussion as to, with the new funding, how we should renew that program or whether we should renew the program. My perception is that that program has been very well received, and a number of universities have been very competitive.

In terms of mining, that's a very interesting question you're asking, because what has happened across the country in terms of mining is that most of the major universities, except a few, have actually closed down their mining departments, and the overall national capacity to do mining research has actually gone down significantly. It has remained in place at a few institutions. It remained in place at McGill; it remained in place at my old university, the University of British Columbia; it remained in place at the University of Alberta, although they have moved it over to oil and gas for obvious reasons.

The mining research activity has substantially gone down. It's beginning to come back. Where you see it building up again, particularly in Ontario, for example, is at Laurentian University. Laurentian University is the logical place to see mining activity develop.

I guess the question for Abitibi-Témiscamingue is not just a question of whether we give facilities, the question is do they have a provincial mandate to really build this so we can reinforce it. I don't know how to answer the question, but it's not just a single jurisdictional question.

[Translation]

Mr. Pierre Brien: Thank you. I will let others have a go at it.

[English]

The Vice-Chair (Mr. Walt Lastewka): Okay.

Next is Gurbax Malhi.

Mr. Gurbax Singh Malhi (Bramalea—Gore—Malton—Springdale, Lib.): Thank you, Mr. Chair.

Why is the request for the funding for the new opportunities more than the others? Are the other projects not so successful compared to the new one?

Dr. David Strangway: That's a very pertinent question. The institutions have an envelope to work with and we have been asking them to put their best foot forward. We would like to get to the stage where young...they're not all young; new faculty members sometimes are older, but mostly they're young faculty members. They do not have the long track records that established researchers do, but they have gone through a process at the institution of search and selection and they've selected the very best.

If you looked at the total success rate, you would find that many of the universities have already weeded out a significant number. We don't know how many came forward from a university compared to how many they wanted to bring forward.

There are two levels of selection. There's a selection at the institutional level before it comes to us, but they have also had a selection process that selected the most promising young scholars. Therefore we believe it's fairly reasonable that the success rate for young scholars... you're taking a bigger chance, in effect, than you are with somebody senior and experienced, but you want to give them those tools early.

Mr. Gurbax Singh Malhi: Also, in your table 2, the innovation fund requested more and they were awarded less than 45%.

Dr. David Strangway: That's right.

Mr. Gurbax Singh Malhi: Is there any specific reason why they were awarded even less than 50%?

Dr. David Strangway: In the case of the institutional innovation funds, these are very large projects, and in some cases I'd have to say the proposals that came forward were not... I'll use the term “mature”. They were ones where they saw a window, they came in for the proposal, but they hadn't really thought through the vision of why they needed this.

• 0955

We've been very serious about saying we're not going to provide this level of facility, at very high cost in many cases, unless there's a very real research vision, and this is the piece that's missing.

We may find in the future that the success rate goes up in those areas as they realize we are not just giving them equipment; we are giving the equipment if it's what they need to become internationally competitive.

Mr. Gurbax Singh Malhi: Thank you.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Doctor.

Ms. Jennings.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you, Mr. Chair.

Thank you very much for your presentation. I want to follow up on some of the questions of my colleagues on the other side concerning some of the gaps. You've made it very clear that there are some small colleges or small universities that do not necessarily have a history or a proven track record in research, whether it be a single focus or a wider lens, and in taking 6% off the top, you're attempting to at least deal with one aspect of that gap. In terms of the chairs, CFI, and the other mechanisms or programs the federal government has put into place to attempt to increase research and development within our universities, it appears that the gap isn't necessarily being completely addressed.

I'm going to take the example of my colleague here with the agricultural college. You mention that there are some agricultural colleges that have been very successful. Is there anything in place that allows for linking or encouraging, almost mentoring, of the smaller colleges that perhaps don't have track records and would like to become involved, or the smaller universities, like Abitibi-Témiscamingue, that already have track records in some areas but might wish to develop track records in other areas? McGill hasn't closed its mining; it's continuing to do the research, and that's why it got the chairs.

At the same time, we could have a mechanism built in so that if the logical conclusion is that you already have a learning institution where the minds are actually located, there would be some kind of linkage so the other institution could also develop its own capacity in that particular field.

If no program at the federal level actually allows that, do you think it would be good to look at the possibility of trying to develop something that would specifically address that?

Dr. David Strangway: We are very interested in ensuring that these issues cross not only institutional boundaries but also discipline boundaries. It is beginning to happen, and more of it is beginning to happen as a result of what we're doing.

It is not a simple question you're asking, though, because if you look at an institution that is struggling to compete with the University of California, Oxford, Cambridge, and the University of Berlin, they feel they're very much on the downside of that equation as well.

We have done a lot of mentoring, to some extent, with respect to the colleges because the colleges are sending to us, in a sense, requests for eligibility. We have not been very strict about eligibility criteria because we feel it must be their decision as to where they want to move. But in the process of that, we will give them lots of feedback about what we see in their plans. One of the things CFI has become known for is the dialogue it's willing to engage in.

The other side of that is we have to be fairly careful that we don't give them so much dialogue that we actually write their proposals for them, and then they come to us and we say they didn't make it because of the panel processes. This is a tricky area for us. So we give them lots of advice. We actually send people out to meet with many of the institutions to describe to them the CFI thinking on what their plans are. Also, by putting all of our successful results on the web, they can look at this material and see where there are patterns of success, and so on.

• 1000

I understand your point, and we're trying to keep that dialogue open. It's an interesting question, because if our staff tells people how to write a proposal in detail and then the proposal doesn't make it through the panels, then—

Ms. Marlene Jennings: That's not at all what I was thinking of. I have a university in my riding—Concordia. Concordia doesn't have any problems, in terms of their staff, their professors, researchers, or putting together a proposal and submitting it. There is also a CEGEP that is not located in my riding but serves a significant population of my riding. That CEGEP has developed its own niche, which is entrepreneurialship and certain of the trades. It has developed some networks with some of the learning institutions in Montreal. It's a French language institution, which means, in terms of the linkages with institutions outside of Quebec, there is more of a limit, because most of the institutions outside of Quebec are English, which means that if the staff in Montreal don't speak English, there's a difficulty there.

But I know for a fact that there are institutions—colleges and some universities in B.C., for instance—that have developed really interesting programs and proven track records, in terms of entrepreneurship. There could be some really interesting research in that, but they may not have those linkages established.

I'm wondering, not that CFI helps them write, but if there's an interest, whether there's a mechanism where you may be able to direct them to other institutions that already have some experience. If they can establish their own linkages and maybe joint partnerships or whatever, that will be great. If it doesn't happen, well at least the possibility was afforded them.

Before my time is up, I have another question. In terms of the table for OECD and the GERD/GDP percentage, that's for 1997. However, we should know, at least in Canada, what our percentages were for 1998 and 1999, and possibly have a projection for 2000, because we do have estimates of what our possible GDP will be. Do you have those figures on hand, to show whether or not our 1.6% has actually increased?

Dr. David Strangway: The 1998 and 1999 data hasn't increased significantly, but the CFI funding is just starting to flow, and the chair's money will really not start to flow until 2001. So I don't have a sensible projection.

You realize this is very complicated. The economy's been growing, the in-house research has been going down through program review, etc., so there are a lot of balancing factors. For the last couple of years it hasn't changed much in Canada. The shape of it has changed, but the number hasn't changed. My projection is that in 2001-2002 we will see that move up substantially. These new programs will make a big difference.

In terms of linkages, I have to say that one of the interesting ways of doing the kind of mentoring you're talking about is to look at some of the CEGEPs in Quebec that have been very successful in their own right in the program. In some of those cases, they have partnerships with existing institutions. So one of the ways we could mentor is by saying, “Look at what made this one successful.” But in all of these cases, it really comes back to the fact of whether there are people here and people there who know each other well enough that they want to do something together to convince their management that this is going to happen.

You're right that Concordia has been one of the successful universities in all this activity. But I am impressed with a number of the CEGEPs. Within the Quebec system, a number of the CEGEPs are actually given explicit research mandates, so they have a history and a track record of doing research because that was part of their funded mandate from the Province of Quebec.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Madam Jennings.

Mr. Riis.

Mr. Nelson Riis: Thank you, Mr. Chairman.

• 1005

I want to go back to two or three earlier points. I hope you don't get the impression that our questioning is trying to diminish the value of what you folks are doing. That's not the case. We are trying to—

Dr. David Strangway: I'll see you on the plane, Nelson—

Some hon. members: Oh, oh!

Mr. Nelson Riis: Okay.

I think, Doctor, what you're hearing is a little bit of the politics of this in that we—some of us—represent areas of the country that are providing the tax dollars and are not getting, in some cases, any return at all in this area. Our constituents are saying, “What's wrong with this system? Are you not doing the job you're supposed to?”—such as lobbying for your university and so on. It is frustrating.

Dr. David Strangway: Yes.

Mr. Nelson Riis: People are going to be less than enthusiastic about these programs, and I don't think they should be less enthusiastic, obviously. So I guess what you're hearing is just a frustration and something that... Well, obviously you were sensitive to this in the comments you made at the very beginning. Hopefully you can take this message back to other people so that we can overcome this in the future.

I have two questions, one in terms of the partnership funding you get from the private sector. You obviously come into this position as a leader of a university and are perhaps always knowledgeable about the problems that could be attached to private sector funding of research. Here again we increasingly have private sector funding, and I think it's fair to say... Obviously it's a debate as to the value of this. There are two sides to it.

But I guess my question is this: when you get private sector funding coming into these programs, to what extent in fact do they have a veto over the kinds of research being done, the kinds of chairs being supported and so on? I'm not quite sure what the question is there, but I think you get the drift of it, at least.

Dr. David Strangway: Yes.

Mr. Nelson Riis: Secondly, I'll go back to the point that you commented on earlier, and that is the retirement issue in the research sector. You said there are 35,000 faculty in Canada—I think that's a fair number—and a third of these will disappear in the next 10 years.

Dr. David Strangway: Well, they'll at least retire. Some of them will be replaced out of the operating funds, but some of them won't.

Mr. Nelson Riis: But a third leaving the system, right.?

Dr. David Strangway: That's right.

Mr. Nelson Riis: We have 2,000 chairs coming up in the next few years. Obviously others will be attracted from other countries, which is another question that we could get into in terms of what's going to happen to these other poor countries with everybody trying to go after their research people...

Dr. David Strangway: You have it.

Mr. Nelson Riis: That's another question for another time.

Dr. David Strangway: Oh, yes. That's a real—

Mr. Nelson Riis: When you talk about the gap between... I guess we're reflecting the gap in our own country. We have the gap between the research centres and the poorer areas of the country that have nothing, and then we can talk about the global gap that exists. It seems to me that as a country we are not addressing this issue. If a third of those people are going to go in the next 10 years, plus all kinds of senior people in business and in education, and generally in other sectors, it seems to me that we have an incredibly large problem confronting us at a time when we actually don't need additional problems.

Dr. David Strangway: That's right.

Mr. Nelson Riis: I wonder if you can say a little more about this. You did say that, yes, we're going to have 2,000 research chairs. This will help. You have the people that the CFI will attract into the areas and so on. But that's still going to leave, just in this one sector alone, a huge shortfall—at least that's what I see—and I don't think we're addressing this as a country.

So perhaps just those two comments... The private sector aspect of the funding, and again, this incredible shift in people retiring at a time when we would like to have these people around for an extra 10 years—maybe we should increase the retirement age to 75 or something to keep people around a little longer.

Dr. David Strangway: I wouldn't be surprised if we don't do that in the next decade. You may know that as the former president of a university in your province... and we actually went to the Supreme Court to fight the question of retaining mandatory retirement. The outcome was fascinating. The outcome was that it was counter to the charter but it was a reasonable exception, because there was no capacity: if you didn't have those retirements taking place, you couldn't bring in the young people.

The pattern we're coming into now is a very different pattern. The pattern is that many of these people are now retiring and we're going to lose quite a lot of capacity from that perspective. I wouldn't be surprised if you see the institutional responses figuring out how to ask people to stay on for another two, three, four, or five years, simply because that's the only way they can bridge the gap, in effect.

It's even more serious than just Canada, because this same pattern is an international pattern. It's a pattern in the U.S. It's a pattern everywhere you go. The competition is going to get very hot. It's already starting in the hot fields, and it's going to get very hot.

• 1010

That's why, fundamentally, even though the research chairs are 2,000 positions, at least it gives us the capacity to go after 2,000 or keep 2,000 of the very best in our envelope. The other side of the question, of course, is that the provinces aren't going to withdraw all of the funding that goes with these retirements, so the provinces, through their provincial universities, are still going to have the capacity to replace some of those people, in effect. I don't know—

Mr. Nelson Riis: But, Doctor, where will those people come from? I mean, our graduate schools aren't keeping up to demand.

Dr. David Strangway: I believe we're going to be opening up this two-tier business substantially. We have to for the chairs, and I think it's inevitable that if we're going to get those people... We have a fair number of people going through graduate schools, but when you look at the database, we're going to be hustling. I wish I had a nice answer to your question. I think it's a real problem. I think the things you're describing are the only ways in which we're going to be able to actually compete. I think it's a very serious issue for us.

In terms of the industry support, you will understand, as you mentioned, that as a former university president, the question always was, when you went after external export, be it government, private sector or whatever... You always have those agendas to deal with.

My own approach in fundraising activities, for example, was always to lay out what the university's research was. In that case, it wasn't just research but what the university's plans were, what the university needed. Then you would go and sell that project to get the support for it. In all of the cases, as you know, we ran a very successful fundraising campaign at UBC. I don't think there's a single case in which the funding we got wasn't for what the university said it needed it for.

Now, does that mean there's a subtle direction behind it? I don't think so, but it's always a concern. You have to keep alert to it.

If you want to read and reflect on this question, Atlantic Monthly, about two or three months ago, had a very interesting, thoughtful article about the U.S. It was an article called “The Kept University”. It addresses exactly the question you're talking about, Nelson. The question is, how do you maintain your integrity and yet at the same time contribute back to the economic development and the social development of the nation? Where most of the sensitivities in this area are arising tend to be in the biomedical areas.

People have to be very clear that they have policies and rules. Do you set those nationally? I don't think so. The universities are basically institutions that are funded provincially. I think every university has to agonize and deal with the issue and be sure they have clear policies on it.

You get into the question of intellectual property. Does the intellectual property belong to the faculty member? Does it belong to the university? Or is it some combination thereof? There are different policies in the country, but you'd better have a policy at your institution, because some day you're going to find somebody who is doing research who has crossed to the other side and is doing something very different but is building on that. So I think you need very clear guidelines. I think most of the universities are agonizing over that question.

I don't have simple answers. I don't think, when CFI provides 40% of the capital for their plans, that's a real issue. Does it impact their plans? I don't know. So far they're getting the other 40% from the provincial governments. Where I see the kinds of interesting leverages are that maybe the institutions are caving on their research plans to what the provinces want, maybe to the politics of the day, to whatever the agenda is of that particular political stripe, in effect.

The private sector component is typically 20% or less than 20% because of these other activities. What you see there is that a lot of it is in the form of very deep discounts or equipment that would be even donated to a particular project. In some cases, I think it will lead to interesting partnerships. Well, what's wrong with partnerships if they're very carefully thought through and managed? It's a philosophical question that can be discussed and debated, and it has a lot of different ramifications and views to it.

The interesting thing about the article in Atlantic Monthly is that the issue is centring more at the University of California at Berkeley than anywhere. All of us will remember the days at the University of California at Berkeley when there were other things that got started and made a big difference in how things went on.

So is this the start of something, or is it simply making sure people keep the balance in mind and don't become subverted? In those days, if you remember the Berkeley issue, it wasn't just the private sector. It was “Universities are not the handmaidens of either governments or the private sector. Universities have to be truly independent, going after their own mission and their own mandate.” The government industrial complex was the focus there.

• 1015

The Vice-Chair (Mr. Walt Lastewka): Thank you, Mr. Riis.

Mr. Brien, and then we'll switch over to Ms. Jennings.

[Translation]

Mr. Pierre Brien: So the Foundation contributes $125,000 for the infrastructure to go with the chairs, but after a while, what will happen to that infrastructure which, in some cases, will have to be built? The universities will have to take on those costs and part of the equation will be missing. How do you see the future after those $125,000 have been spent?

[English]

Dr. David Strangway: You shouldn't ask me that question—

Voices: Oh, oh!

Dr. David Strangway: —because the answer to the question is that, when the time comes, the CFI, with a mandate that lasts until 2005, will face the fundamental question of the renewal of facilities that, in the world we're living in, in fact become obsolete. It used to be that the universities talked about particular facilities, the modern facilities, having a 20-year lifetime. When you talk to the high-tech sector, they write off their facilities, their equipment, in typically three years now.

So the question, I think, is not answered today. If, for example, we provided the light source in Saskatoon, or a sequencing device at some university, or the super computing centre into the network across the country, you then have another question. The question is, when that super computer becomes obsolete in three years, or in five years, as the case may be, how do you then get the question of in effect keeping people with the modern tools? Because the modern tools no longer have long lifetimes to them. I think that's an argument that some day either me or my successor will be back to talk about.

By the way, to come back to the question around smaller institutions, I understand the concern, but let me mention at least a couple of things we have been doing that will be of some assistance to the smaller institutions.

I mentioned the national digital library project. The national digital library project is for the purpose of acquiring electronic journals. The idea of it is that this, through the “Canadians connecting Canadians” thrust, is now available, or will be available as they develop that, to every institution in the country. So library resources are going to become much less of a problem than they were in the past.

The second area—and the super computers is what reminded me of it—is that we have funded about five super computing centres across the country. There are two requirements. The first requirement is that they must hook themselves up to the optical fibre backbone across the country, and second, they must set aside at least 20% of the available time on that for other institutions to use should they need it.

We are trying to do a little bit of what you're talking about. If some of these other institutions need access to super computing time, there is actually a structure and an envelope within which they can get access. It doesn't answer the question of putting it at the institution, but for library resources, electronic journals, and for computing capacity, for example, that will be the case.

We are also looking at the imaging devices question. We have a lot of requests for modern imaging. I think there we can find interesting ways to hook up people across the country using imaging.

One of the things I have said a number of times is that the highly connected Canada is in fact going to be something where we're trying to put research tools to use the highly connected Canada, and that will provide at least some capacity.

It doesn't answer your question fully, but it at least puts tools in the hands of people who might not otherwise have had access.

[Translation]

Mr. Pierre Brien: I am happy to see that's part of your concerns and that the problem was raised. In any case, we should find a solution rather quickly because the problem is going to arise in a few years.

Considering the lack of funds, a lot of applied research was done over the last few years. The sector of the humanities and social sciences was somewhat neglected, in my opinion. In the context of this chair's program, for example, or in future undertakings, is there a wish to do a bit more than previously? What direction are we going in with that, finally?

• 1020

[English]

Dr. David Strangway: We have very clearly indicated that proposals in the social sciences and humanities are eligible for CFI funding. We've been quite aggressive on that, in fact.

The problem is that in social sciences and humanities, much of what people are looking for is release time to carry out their research projects. Since we're a capital funding agency, we cannot assist them with that part of their need. However, there are many areas in social sciences and humanities where access to interesting facilities is important to them. I'll give you an example.

We have a proposal in front of us now—and I can't say whether it will be successful because it's just going through the process—where Statistics Canada is talking about establishing six data centres across the country that will be networked. Those data centres would be regionally distributed—maybe not in terms of the small institutions, but they won't all be in Ottawa, at any rate.

The proposal to us is with regard to whether we can provide the capital facilities to help make that happen so that the researchers in the B.C. area, for example, or the researchers in the prairies can have access to those kind of databases. So there's an area where an enormous amount of the social sciences in particular need access to facilities because they need to manage and use and manipulate databases. Some of those people are going to be major users of the super computing facilities I was just talking about.

In the area of the humanities, there are still interesting needs. One of the things people are doing is looking at literature analysis. There's a project going on at the University of Alberta where they look at 18th century literature to see how the issues of women were dealt with in the literature, and they're looking for certain key indicators. This allows them to take a large database of literature and then search for patterns that occur out of this.

That's not something where somebody sits down to go through and read every piece, hand by hand, of all of the library material. The electronic library will permit people to do things they could never have done before.

There's a whole discipline emerging, sometimes called “bioinformatics”. Out of bioinformatics I think you're going to find all kinds of interesting things in which you look at health science databases and out of that you extract patterns and models, epidemiological patterns and so on.

We are very aggressive in trying to be sure that this community, where it has capital needs, really gives a lot of thought as to how this can be done. They still have to convince their universities, because the difference between us and the granting agencies is that we deal with the university administration and their research plans; we don't deal with the individual researcher. This is too big an investment. It's going to have an impact on where the university wants to go.

Again, in the present competition, we have about 40 proposals from the social sciences and humanities. How will they fare? I don't know. I can't answer the output question. I can tell you there's a lot more input this year than there was last year.

The Vice-Chair (Mr. Walt Lastewka): Thank you.

Ms. Jennings.

Ms. Marlene Jennings: I have two questions.

First, I'm sure you're aware that the government announced a new infrastructure program, third phase.

Dr. David Strangway: Oh, yes.

Ms. Marlene Jennings: In one of the previous phases, either two or three of the provinces allowed for universities and colleges to be eligible to receive infrastructure money. The other provinces and territories did not, although if two provinces formally allowed it, three informally allowed it, or three formally and two informally. I just know the total amount was five.

The federation of Canadian universities and colleges, I believe it's called—

Dr. David Strangway: The AUCC, Association of Universities and Colleges of Canada.

Ms. Marlene Jennings: —thank you— has recently done a study on what it's actually going to cost to put the infrastructure of the universities and colleges into a livable situation. There's a certain segment of it—and we're talking about billions of dollars—where over $1 billion would be required for urgent work. I understand that has nothing to do with what the CFI does.

• 1025

Dr. David Strangway: That's right.

Ms. Marlene Jennings: However, they are asking that the federal government include the issue of universities and colleges infrastructure at the negotiating table with the provinces and territories. Do you think that's a good idea?

Dr. David Strangway: You're asking a person who is very biased on the question.

Ms. Marlene Jennings: That's fine. Sometimes bias is very good.

Dr. David Strangway: Let me explain my bias. When they created the infrastructure program years ago, I was the president of UBC. One of the things that people don't realize about that university is that it is in rural British Columbia. It is not in a municipality. So as the president, I was the mayor of a town of 50,000 people, which is almost as big as your jurisdiction. I had to provide telephone service, heat, light, power, all of those things. Basically, they delivered the water to the border, and I delivered the sewage back to the town.

What I'm saying is that in this case I wanted them to accept that we had municipal status, and I made a lot of fuss with the provincial government about including us. I won the battle, but I lost the war. I didn't get a cent. They finally conceded that yes, the universities were part of the needed infrastructure. In our case it was roads, sewers, water, power lines, and all this kind of stuff. They accepted that in principle it was right, but they didn't allocate a cent to any of the universities or university-colleges. It all went to other places. So I fought the battle, and, as I say, I won the key issue but I lost. It didn't make any difference, anyway. So that's my bias.

But there is no doubt that the issue you raise of deferred maintenance, which is perhaps one way of putting it, is very substantial. In the tough fiscal years, you protect your people and you don't replace a roof. I used to joke that the University of British Columbia had 20 acres of roof and that if a roof lasted for 20 years, that meant you were in the business of replacing an acre of roof every year. Nobody recognizes that in the funding formulas or equations. You get a little here, a little there, and a little someplace else, and you struggle along.

Do I believe it should be looked at? I really do believe it should be looked at. But it's not an easy question, and it's not the business we're in. We do some renovation, but only where that renovation is explicitly in support of a really visionary research project.

Ms. Marlene Jennings: Thank you.

The last question I have for you is, if you had the opportunity not to suggest but to actually direct government in terms of meeting requirements and needs in the research and development area that you feel are not being met or not being met adequately or sufficiently, what would you say?

Dr. David Strangway: I've tried to give a couple of hints in what I'm saying here. I think one of the areas is what I call the non-capital research infrastructure, which others would call the indirect cost question. When you put a large facility into an institution, that institution in the process signs on the dotted line to say they will be able to manage and run that facility. That's fine. But there will come a day when providing that infrastructure isn't possible.

My own presumption is that, roughly speaking, the granting agencies provide one-third of the cost of research. They do not cover the costs of research. They cover the marginal costs of research. The facilities account for about a third of the cost of research. Then I would say that the indirect costs account for about another third of the cost of research. That's the technician you can't hire, the secretarial assistance you're going to get to write the papers, the assistant who gets on the phone and puts the databases together—whatever it might be.

So if you looked at the true costs of research, if you completely separated it out, you would find that the granting agencies are roughly one-third, the chairs begin to address the one-third that is the direct research people cost, we provide some of the facilities, and then you still have this indirect cost question that goes with it. So I would be looking very hard at the indirect cost question.

• 1030

The second thing I would look at is that, again, it's an internationalizing, globalizing world, and I think there are many cases where given the times we've been in, we have pulled out of international cooperations where there were real benefits for Canada.

I define these as two kinds: there's the kind where basically if you're looking at a particular set of environmental issues, global monitoring issues, or global warming, that's not just a Canadian problem, that's everybody's problem. We have to put our piece on the table just as everybody else has to put theirs on the table. So to even do the research, it's an international project. It's not Canada versus the others; it's Canada and all of the others.

There are areas in which there are unique facilities that are built somewhere, and you want your Canadians to have access to them. That may not be a global research activity, but it's a place where you shouldn't think about trying to build one of these in every country of the world. Again, we have pulled out of some of those. In my own field of the earth sciences, if you're going to learn a lot about your oceans, you have to be part of the ocean-drilling program. But when we get into tough times, what goes is the participation of Canada in the ocean-drilling program. So I think I would also add to my list that you need to look very hard at being sure not just that we play our part internationally but that we're not leaving ourselves behind because we don't have the chance to get in there.

Ms. Marlene Jennings: Thank you.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Madam Jennings.

Mr. Riis:

Mr. Nelson Riis: Thank you.

Doctor, one of the areas that I think has always been frustrating for us around this table, and for many others, is that in spite of so many initiatives that the federal government has taken over the years, the very lucrative research and development tax credits and so on, I think it's fair to say that we're moving strategically in some areas and on a variety of fronts to encourage and support innovation, and to support the researchers themselves, and that we've been making significant gains in the last while—as you say, we might move up somewhat on that scale as a result of this—but the feedback we continue to get is that we're still just not doing the job, particularly in the private sector, which is falling way behind in research and so on.

As someone who has been involved in this both directly and indirectly for many years, would you share some of your views. What is it about us that makes us so uninnovative compared with many others? We're part of the western industrialized nations and of the OECD and we seem to be similar, but when it comes to research, we always fall way behind, and from what we can gather, we still are. We're still not in that innovative spirit that we find in other places. What is it about Canadians that makes us less than innovative?

Dr. David Strangway: I thought it was the job of parliamentarians to answer that question, not of—

Mr. Nelson Riis: We need some help to answer that question, because people do ask us.

Dr. David Strangway: I sometimes jokingly say, I don't know why in Canada we have this feeling that we have to grind down every peak and fill every valley. We sometimes do have a sense that it's not okay to be really outstanding. I think the things you're talking about have to come with being truly outstanding.

Why have things happened in Silicon Valley? Why have things happened on route 128? Why are things happening around Cambridge and Oxford? Why are things happening in some of the EU countries and so on? At least one of the necessary conditions is a commitment that it is okay to be truly internationally excellent and competitive, and that will attract things around them. The research triangle in North Carolina would be another one. Tsukuba City in Japan would be another one.

I don't know why we are this way.

Mr. Nelson Riis: Perhaps I could offer a suggestion and get your reaction, if I could, Mr. Chair.

Dr. David Strangway: This is far off the CFI agenda.

Mr. Nelson Riis: And I appreciate that.

Dr. David Strangway: No, go ahead.

Mr. Nelson Riis: This will be my last question.

I don't think you would find many countries, particularly many developed countries, that would have the amount of foreign ownership and therefore foreign influence over its economy. It's perhaps a way of life, in a sense. It's university funding, etc., and that spins off in a variety of areas. It has always seemed to me that when you have so much of the decision-making of your country not necessarily being made in another country but certainly being looked at from another country...

• 1035

In my own part of the country, Weyerhaeuser Canada is a major forestry player. It's headquartered in Tacoma, Washington. I suspect that if you look at where it does its research, whatever research it does, it's probably not in Kamloops or Vancouver. It's probably somewhere in the Seattle or Tacoma area. This seems to be kind of a natural way of approaching life. To what extent do you think this view is real?

Dr. David Strangway: I think there is significant truth in that. You probably don't realize, Nelson, that I was on the board of MacMillan Bloedel at the time that Weyerhaeuser bought it out. At that time—in fact, before that—it became clear that the research that was performed in Vancouver with respect to engineered woods and so on was in the long run picked up in terms of the economy in places like Atlanta, Georgia. That's where the plants were built, the big plants.

Even when the company was headquartered in Canada, the research was done in Canada. The pilot plants were built in Canada. The invention of engineered wood came right out of those labs, right out of MacMillan Bloedel's research labs in Vancouver. Engineered wood has taken over the world of lumber these days. Where did they build the big plants? They built them south of the border. So it's not just a question, as you say, of where the head office is.

Eventually MB got to the point where in fact... Nobody wanted Weyerhaeuser to come in and buy it out, but Weyerhaeuser came in and made a deal that you couldn't refuse on behalf of the shareholders. We all stood up at the board at various meetings and said it can't happen, it can't happen. Then you looked at the deal that came forward and you looked at what it meant for the shareholders and you couldn't in your conscience fight it.

So it's not a simple question. Weyerhaeuser surely isn't going to do their research in Kamloops. They probably never did. They're not going to do it in Vancouver. They're going to do it in Seattle, in Tacoma, whatever they do.

On the other hand, it's an industry that doesn't do a lot of research. If you look at these numbers in here, the forestry industry in general is not a big contributor, whatever part of the world you're in.

It's interesting to look at Finland. Finland is the model that comes up all the time because Finland, at the same time as being a very major forestry nation, is also marketing an awful lot of the forest machinery around the globe, including to Canada. We buy most of our forest machinery from Finland, as you probably know. They have gotten things like Nokia and so on functioning. If you look at the indicators like this for Finland, for the past decade they've just done this. It's basically things like what we're doing with the CFI that have led to that. There are other pieces that they've added to the equation, but I think if you want to look at a role model for us, it would be Finland.

A lot of people say look at Ireland. I just visited the people at the EU. What's interesting about Ireland is that Ireland got its kick-start basically because the EU transferred an awful lot of funding to Ireland. It became very attractive from that point of view. Ireland has not gotten to the point where it's a net contributor to EU rather that a net drawer. But Finland seems to have been able to pull itself up by its bootstraps and has moved up. As you can see on this list, it's way up near the top, while 10 years ago it was way down.

Mr. Nelson Riis: That's interesting. Thank you.

Dr. David Strangway: Somebody should do a study of that particular jurisdiction. It's a small country. They had a crisis that triggered them to get into action. The crisis was the demise of the Soviet Union. They used to send stuff there. They used to market into there. They never had to think about it. It just happened. Suddenly that whole market disappeared from them. They're sitting there saying, “What are we going to do with all our people? What are we going to do with all this capacity?” There was a crisis, and that's really what triggered them into action.

So maybe we need a crisis, but I don't like to suggest that.

The Vice-Chair (Mr. Walt Lastewka): Mr. Brien.

[Translation]

Mr. Pierre Brien: I just have a little question on the $125,000 you are adding to the chairs for infrastructure. Must there necessarily be a private partner?

[English]

Dr. David Strangway: The answer is yes and no. At the moment, it is necessary to have a partner to provide the 60%. That does not have to be a private partner. At the moment, the Province of Quebec would be matching that with 40%. Then the institution has to determine where the remaining 20% comes from. But it does not have to be a private partner. It can be any other partner that's willing to contribute. It may be that the most logical thing for them to do is find a private partner.

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We are, however, investigating a program in which, for the smaller institutions, we would allow them to have not $125,000 but $75,000 that required no matching, if matching was a problem for them. I can report back to you in a few weeks if we get that signed off. The idea there is to reduce the matching problem barrier, if that's a barrier for the smaller institution, and to give them their choice.

Mr. Pierre Brien: Merci.

The Vice-Chair (Mr. Walt Lastewka): I have a couple of questions that I need to ask, since I've been involved with this area for a long while.

Members brought up the smaller universities and the colleges and so forth. I've seen a number of situations where a university and a college have gotten together in a program, like the viticulture one in Niagara, where Brock University is the lead but Niagara College is the support. Basically the growers and the wine industry and the winemakers now get all the benefit.

My concern is that in my travels across the country, there are many areas where universities are not working with colleges, and it holds back the colleges. Each one has their own twist on why they're not working together. Is there anything in the procedures that encourages working together and, if they have joint projects, that gets higher rating and possibly funding?

Dr. David Strangway: We haven't at the present time introduced additional criteria, but we are aware, as you mentioned, of a number of examples where it has worked. I think the way for us to do it, rather than to become interventionist, is to share information and say, “Look at some of these programs and how well they have worked. You should take a look at these yourselves.”

The chairs will be interesting from this perspective, although that's not part of CFI. They will be interesting because I think you will find that they're not competing for a bigger share of the pot. That may be a disadvantage because people might think the pot should have been distributed differently, but I think there will be some different reactions occurring because now all you want to do is strengthen what you bring forward. You know what you have to work with, in effect. It has to be very good.

We are very much hoping to see some of that inter-institutional activity, not only large university to small university or university to college or whatever those structures are.

We saw some of that coming in the Nova Scotia community college activities with respect to Dalhousie. We saw that in the Nova Scotia Agricultural College. I think perhaps the way for us to do it is to be proactive on showing what you can do, rather than putting in an explicit requirement, because then you start getting people reacting: in order to do this, I must do this, etc. It may not be the best plan for them.

The Vice-Chair (Mr. Walt Lastewka): The next question I have is this. In 1996 we did a study about commercialization of innovation in labs across the country, and so forth. We found out in commercializing sections of universities that there were some universities that had very good offices to commercialize and to feed back to the university areas of innovation, while others were very loose. There was some good innovation right on the shelves, and marketing studies had been done, but nothing had been brought out. It's good for us to be innovative and so forth, but if we don't follow the next step in getting it out, getting it commercialized, that's a problem.

Could you comment on any of your experiences on that and whether we are getting better as a university-college system in commercializing? Or is that not your area?

Dr. David Strangway: I can comment on it. It's not so much a direct CFI issue, but let me comment on it.

Basically, in the U.S. some years ago they introduced what they call the Bayh-Dole Act. There were two senators, Senator Bayh and Senator Dole, who introduced this. That said that the intellectual property is the property of the universities if it's developed with government support.

It is the perception in the U.S. universities, among the people who manage the processes at the universities, that this has had a massive impact on creating intellectual property and spinning it out either into small company start-ups or into licensing agreements. In other cases, the university might even take an equity position in that company. So the pressure here was to introduce something comparable to an incentive, rather than by legislation, to do the same thing.

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As I said earlier, I have just returned from the EU and they are going through this whole question. They're having an enormous debate on whether they should move into something like the Bayh-Dole Act or have the present hodgepodge of things. The perception in the European community is that their requirements, with respect to intellectual property, are terrible. If you even mention what you're talking about, you lose the intellectual property. Whereas in the U.S., once you have filed, you can then begin to publish and talk about it.

In Europe, the situation is that until you get the patent, you can't talk about it. It's a question of whether it's at the licensing stage or at the application for a patent stage. In the U.S. and Canada, the first person in the door gets the patent.

In our case, the universities in Canada divide into two very interesting groups. They're very disparate and they're absolutely committed that their models work best for Canada. One of them is what I would call the sort of UBC and several other universities' model, where the university takes first rights to the intellectual property. It keeps 50% of the income that goes with it for the university's purposes and aggressively goes out and markets that intellectual property.

The other model is the Waterloo model, in which the intellectual property is entirely the property of the individual researcher, and they will assist that person in spitting it out.

Now if you look at this and say, “Where has it been most successful?” it's a very good question. Those who use the ownership of intellectual property as a university function say theirs has obviously been much more successful. Those who leave it to the individual investigator, but provide support structures to them to make it happen, believe theirs is the best.

Right now this document is sitting there, trying to find out if there is some commonality that you can put into it. I hope we end up with some kind of pilot program that actually tries out some of these different models, so that over time we can learn.

The first model, the Canadian model, would be the U.S. Bayh-Dole Act model. The second model... But there are lots of good case histories to suggest they both work very well. Part of the question is the attitude of the university towards it, in either case. It's a controversial issue on our university campuses across the country.

The Vice-Chair (Mr. Walt Lastewka): You led right into my last question. Was that the end?

Dr. David Strangway: Yes.

The Vice-Chair (Mr. Walt Lastewka): I know it's been debated. I've been with people in Alberta on this. I think it was Jim Murray from UBC who went to—

Dr. David Strangway: Jim is the guy who helped develop the UBC policy.

The Vice-Chair (Mr. Walt Lastewka): —the University of Alberta in Edmonton.

Dr. David Strangway: We were very frustrated when he went and took our successes and showed Alberta how to do it.

The Vice-Chair (Mr. Walt Lastewka): I know.

I've always wanted to take a good look at our IP and our commercialization in Canada. I think this is where the committee needs to do some work and bring it higher up the ladder. We can spend a lot of money on innovation and labs, but if we're not helping the final act, that's a problem area. It's been debated amongst the universities and colleges. I've been involved this past month in exactly that debate.

Dr. David Strangway: It's a very tough debate.

I should add that CFI is asking people in their documentation of their annual reports—we require this report annually—what impact this is having. We want them to report that information, and we will publish that material on the web. We're also going to publish their research plans on the web.

This is going to be an interesting exercise. Now it's all going to be transparent, but it's also going to be transparent to every faculty member on every campus. So when the president signs a research plan or submits an annual report, all his faculty members can read it to see if they disagree with it or not. It's going to be an interesting transparency exercise over the next year or two, as this stuff comes out and it's right out there. It may feed into the debate you're talking about.

The Vice-Chair (Mr. Walt Lastewka): Mr. Riis, you have one more question.

Mr. Nelson Riis: I just want to say I'm very encouraged by your comments. I think this is something this committee could look at, and it would be very timely, particularly in terms of this new development, which sounds very exciting.

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My last question, Doctor—and I beg the indulgence of my colleagues, but it's a question I regularly ask—is about British Columbia. I'm always looking for a federally based program where B.C. gets its fair share, and I've yet to find one. I notice with your breakout, again, with 12% or 13% of the population, we get about 7% of the CFI funding.

I know there are reasons for—

Dr. David Strangway: Just to be fair, we take the national ones off that and then look at the remaining percentage. You're looking at the percentage of the total.

Mr. Nelson Riis: No, actually I broke that down. I took out the national projects.

Dr. David Strangway: Oh, okay.

Mr. Nelson Riis: Still, it gets about 7%. I know there's an explanation always, but what would it be in this case? Why does B.C. again not get its fair share, based on its population base?

Dr. David Strangway: As an old university president from B.C., I hesitate to answer the question, but I guess my answer would be, let's see what happens this time.

To be totally and completely fair, when this thing started, I think some institutions didn't really quite grasp the fact that this was for real. If you were to look at where the successes have been in terms of fair share, it's where institutions took the writing of the proposals very seriously and realized that this was a major thing that was happening. With CFI, and now the chairs, it's even much bigger. So I think we're going to see aggressive, well-thought out institutional responses as we come, and I think that will change this distribution. But that's just a perception on my part.

Mr. Nelson Riis: Okay, thank you.

The Vice-Chair (Mr. Walt Lastewka): Thank you, Dr. Strangway and Ms. Harvey.

Colleagues, this ends our meeting. I want to wish all of you a good, relaxing summer so you can get rid of all your frustrations—and fair share, and balance, and enjoy some time with families and be able to come back in the fall invigorated to get into some of these projects we've talked about.

Thank you very much.

This meeting is adjourned.