[Recorded by Electronic Apparatus]

Tuesday, November 5, 1996

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[English]

The Chairman: Pursuant to Standing Order 108(2), the committee will resume consideration of its review of science and technology and the innovation gap in Canada.

I would like to thank the many witnesses for coming. We are experimenting, as you may know, with round tables. We've had busy ones. The hardest job for the members is to get a handle on what message you'd like to bring to us, and please leave time for questions. I think it's fair to say that the members are very much engaged in this subject, are very interested in it.

Without in any way, shape, or form limiting what ideas you want to put on the table, I would appreciate your staying within a ten-minute limit. If we have four or five presentations of ten minutes each, we'll leave ourselves lots of time for questions.

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There are votes tonight, in roughly two hours, which will put a little bit of a constraint on us. There are sufficient votes that we won't be able to come back. That will be at either 5:30 p.m. or 5:45 p.m., so we'll have to wrap up at about 5:30 p.m.

I'm going to ask arbitrarily, because he is the first guy I saw coming in, for Dr. David Johnston to lead with the presentation. He has been involved with this.

Perhaps for the record most of you would say in one or two sentences how you've come to be here and what organization you represent or don't represent. I would appreciate it.

Without further ado, we'll turn it over to Professor Johnston to start.

Thank you for coming.

[Translation]

Mr. David Johnston (Professor, Information Highway Advisory Council): Thank you,Mr. Chairman. It is an honour for me to be here before you because the work your committee is doing is very important for our country.

[English]

I am here I think out of good luck. I have the good fortune to be the chair of the Information Highway Advisory Council. I served three five-year terms as principal and vice-chancellor of McGill University, part of that for five years as dean of the law faculty at the University of Western Ontario. I now happily return to, as we say, honest work as a professor of law at the Centre for Medicine, Ethics and Law at McGill. When Mr. Manley asked me in April of 1994 whether I would chair this advisory council, I didn't have an excuse to say no. I was delighted to do so, and it brought me back to the very first book I wrote as a young law professor, which was Computers and the Law. A lot has changed since that book.

The Chairman: Mr. Johnston, our parliamentary secretary wants to point out that you're the first witness to use the words ``law'' and ``honesty'' in the same sentence.

Mr. Bodnar (Saskatoon - Dundurn): I thought they were the same.

Prof. Johnston: We lawyers collect those jokes. There's the tombstone that read, ``Here lies a lawyer and a gentleman.'' The visitor said, ``Good heavens, in this country they bury them in pairs.''

Mr. Chairman, I believe you and your colleagues have in front of you some slides that focus on the work of the Information Highway Advisory Council. You also have the response of the government in the burgundy book, a report that was issued by the government in May 1996 entitled Building the Information Society: Moving Canada into the 21st Century.

Our work began in April 1994. We were given twelve months to advise on three objectives, four principles, and fifteen issues. The three objectives were creating jobs through innovation and investment; reinforcing Canadian cultural identity and sovereignty; and accessibility with respect to the information highway. In the throne speech in January 1994 the government committed itself to a national strategy for building the information highway and the lofty ambition that Canada should be the world leader in the information highway by the year 2000, with the highest quality, most accessible, lowest-cost information highway in the world.

Our report was released in September 1995. It was entitled Connection, Community, Content: The Challenge of the Information Highway. It contained over 300 recommendations, primarily directed towards government, but towards other sectors as well. In the burgundy book, as we refer to it, the main 1996 report, the government could report that more than two-thirds of the recommendations had been acted upon in some fashion or another. Our understanding is that the remaining third are under consideration.

The federal government's action plan as set out in that May 1996 document can be focused on four themes: building Canada's information highway; making sure Canadians can seize its benefits or, as Latin scholars would say, quoting that poem of 2,000 years ago, carpe diem, seize the day, seize the opportunity; providing a prominent place for Canadian content; and ensuring affordable, accessible, and responsive government, with government as a model user.

We expected the work of our advisory council to be completed in September 1995, butMr. Manley, the Minister of Industry, asked us to continue for a second year. So in phase two our own action plan has two themes: to help to advance the public policy agenda and to provide a status report on Canada's progress. Although we will disappear as a private citizens' group as of April 1997, we think it would be advisable if a progress report were done each year between now and the year 2000 to see whether we are achieving that lofty ambition of being the leader in accessibility, in penetration, in quality, and in low cost.

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In our work in phase two we have emphasized five themes: access; Canadian content; the Internet, which, even as we appreciated it as a fast-growing phenomenon back in April 1994, I think has overwhelmed most of our expectations and is growing at a very rapid pace; economic growth; and workplace and lifelong learning challenges.

Under access I could summarize the challenge very simply as what measures are needed to ensure affordability and equity of access to essential services.

On the Internet I could summarize the questions most simply by asking: what is the role of the Internet in the information highway, and how should governments and the private sector respond to ensure benefits are realized by all Canadians?

Under Canadian content the question might be framed: what are the best means of supporting the production, distribution, and promotion of Canadian content, products, and services? While we often think of Canadian content in terms of our cultural aspirations, it's useful for me to remind myself that 4% of the gross domestic product of Canada is made up by jobs that have to do with putting content on the information highway. So we have an opportunity for our domestic economy and for export purposes as well.

That leads me right into the next theme, economic growth. We might summarize the questions of greatest pertinence to us as: what measures are needed to exploit the potential of the information highway, with particular reference to electronic commerce, lifelong learning, and telemedicine?

I might say on lifelong learning, Mr. Chairman, that we were given three objectives, four principles, and fifteen issues. We changed not one in terms of the menu, save for the fact that at our third council meeting - we met once a month - we added a fifth principle, and that was lifelong learning should be a key design element in building the information highway. I think that may indicate the kind of perhaps more fundamental orientation we took to this task than would have appeared by our terms of reference. That challenge perhaps is the greatest one, along with access, to ensure that we Canadians take advantage of the information tools and ride the tide of the information revolution rather than being overwhelmed by it.

With respect to economic growth, how can we translate these measures into opportunities for Canadian industry?

Finally, under the theme of workplace and lifelong learning, we might summarize fundamental questions for us as: how can we respond to changes in the workplace and, in the situation of labour, develop a lifelong learning culture, and how should we use the information highway and the learning technologies during this transition?

I should report that one of our recommendations was a key feature of collaboration, particularly at the intergovernmental level. We did recommend that the ministers of communication or information highway or other portfolios that pertain to that area of endeavour meet to establish a common purpose. That meeting did take place on September 30, 1996. It was the first time, I think, in the last decade that ministers of communication have met.

The meeting launched a process of intergovernmental consultation outlined in the federal action plan. It is very clear from that very positive and quite constructive meeting that those ministers share a vision of opportunities of the information highway and the role of government in turning those opportunities into achievements. They established for their own agenda a four-point focus: access, delivery of government services, protection of personal information, and electronic commerce. A senior officials committee was established. The next meeting will be held under the chairmanship of New Brunswick in June 1997, and we have great hopes that the spirit of collaboration present in Winnipeg on September 30 will be equally present until the month of June 1997.

Mr. Chairman, let me finish those remarks - there's a very brief report of the work of our council - by saying this. Although the technology and the tools are essential features of the information highway and it is important, as your committee understands from its deliberations and from the interest that each of you have, that science and technology as part of ideas and innovation be the key driving forces of building the new Canadian economy, a knowledge-based economy, one should look more deeply at the knowledge-based society. The fundamental importance is of course the individual and the tools we place in individuals' hands and the opportunities we make available to them.

To my mind, as a Canadian who grew up in a little town in Ontario and has had the great, good fortune to study at and be part of some of the fine universities of the world - Harvard, Cambridge, and fifteen wonderful years as principal of McGill - there is no country in the world, there is no society in the world, that can compare with this beloved Canada of ours in terms of its civility and its equality of opportunity, which have been so much a part of our history. I think our challenge is to ensure over the next stage that the equality of opportunity so many of us have enjoyed and through which we were able to receive an education and accept responsibilities in our society will be available to the next generation. We believe the information highway overwhelmingly offers an opportunity for us to continue the great tradition of equality of opportunity and demonstrate that we can have both excellence and equality of opportunity in our society.

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Thank you for the opportunity to meet with you, Mr. Chairman.

The Chairman: Thank you very much, Dr. Johnston.

I'll turn now to the CANARIE project, CANARIE Inc. We have with us Mr. Andrew Bjerring.

Mr. Bjerring, perhaps you could introduce yourself and say a few words to get the discussion going.

Mr. Andrew K. Bjerring (President and Chief Executive Officer, CANARIE Inc.): Thank you very much, Mr. Chairman. As you've said, I'm representing CANARIE. I'm the president and CEO of that organization, a position I've held for the last three years. CANARIE has been in existence for approximately three and a half years. Just prior to its formal incorporation it was a project within Industry Canada. The roots of that project go back to the late 1980s.

CANARIE has had three primary areas of activity over the last three and a half years. They're described in the material we've distributed to you. I won't in my remarks review that material. I hope it's fairly explanatory in the material I've distributed.

One of the documents you do see is a piece we recently prepared, addressing the need in Canada for a health information highway. This particular document has been prepared in cooperation with Industry Canada and Health Canada. They've participated in the process. I think it does represent in microcosm one of the very important applications that this country should be looking at in terms of the future of the information highway. Again, I won't go through it in detail.

I will, however, focus my general opening remarks on two areas. The first is the matter of the maintenance of a competitive information technology and telecommunications sector in Canada, IT and T for short. The second is the role that an advanced IT and T infrastructure will play in support of broader scientific and industrial activity in the country, in particular in research activity.

In a nutshell my view is that although many other conditions must be met if the Canadian economy is to remain strong through the ongoing transition to a more global, more information-based economic order, one of the most important is that we have a strong domestic IT and T sector, including a competitive information infrastructure supporting among other things strong science and technology research.

Using 1994 figures, and these may be familiar to the committee members, companies in the broad IT and T sector in Canada have generated $54 billion per year in revenue. In the sector we import goods and services of approximately $32 billion per year, while we export approximately$16 billion per year, which produces a deficit of $17 billion.

The sector employs over 300,000 men and women and conducts over $2.5 billion in R and D. Despite the large deficit number, overall this appears on the surface to be a good base on which to build Canada's future IT and T competitiveness, where the global market is expected to continue to grow at rates well into the double digits.

Unfortunately, behind these figures lies a more disquieting picture. In terms of most of the macro-statistics mentioned above, the sector is dominated by a few large companies: Nortel; IBM Canada; and the telephone companies, especially Bell Canada, TELUS, and B.C. Tel.

In the software and services sector very small companies predominate, with the average size of approximately 14,000 software and services companies having only six employees. They have an average R and D expenditure of less than $25,000 per year per company.

Although average numbers like these inevitably tell only part of the story, they do point towards two conclusions.

First, at the macro-level the strength of our IT and T sector, especially relating to balance of trade and R and D issues, is vulnerable to the fortunes of a few large players in their respective markets. Besides maintenance of a domestic framework that does not disadvantage these larger players, the real action for them will be in international markets, where trade agreements and deregulation of telecom regimes around the world are critical factors.

The second conclusion is, putting the very large players to one side, that the future health of the IT and T sector in Canada is highly dependent on our ability to nurture the creation and development of successful small and medium-sized enterprises, especially in export areas such as software and equipment, where the need might be greater for such support in these areas as, first, a framework that encourages commercialization and increases the receptor capacity of industry; second, targeted R and D incentives; third, the provision of international market intelligence that's relevant to smaller companies; and fourth, processes to support the development of partnerships involving Canadian companies, including international partnerships.

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In short, Canada's IT and T sector is essentially bimodal, and we have to recognize the important contribution to the creation of economic growth in this country of both the few very large companies and the numerous relatively small companies.

Those conclusions are directed primarily at the traditional IT and T sector consisting of equipment, software and services organizations whose products fall into conventional computing and communications categories. We should also note, however, that the distinction between the products of this sector and those of the so-called ``content'' industries is becoming blurred as technology increasingly mediates our experience of such content. Whereas the distinction between software and the products of traditional print or broadcast industries can probably still be maintained, it's less clear that the distinction between software and multimedia information bases accessed through new user interfaces on the World Wide Web, for example, serves much purpose.

Indeed through such innovations as the new programming language called Java, what you experience on your computer as multimedia content has in fact been transmitted to your computer as an executable program called an ``applet,'' and therefore the distinction between software and content disappears altogether. Thus I would argue that over the next few years the largest growth area for the IT and T sector might well be in these new content areas, including those that are usually regarded as distinct economic sectors.

Indeed it's here that the transformation to an information economy might well have its most profound impact as information industries, wherever they are found, respond to the opportunities and challenges of the new technologies. In Canada, information industries that appear to have a real opportunity to capture some global attention with innovative services and applications of this sort are tourism and financial services. But the two industries where I think the opportunities are even greater are health and education, or learning and training.

There are many unanswered questions as these and other information industries explore what the effects of new technologies will be on their way of doing business, especially given the public sector focus of health and education institutions. There are also many dire predictions of the consequences for these industries if they aren't at the bleeding edge of change.

My own view is somewhat less catastrophic, because I think there is time for experimentation, reasoned analysis, and cautious choice among alternatives. But I also think, for health and education, a national effort to help focus these processes of change and to develop the private sector opportunities for these traditionally public sector industries may well be essential to their successful transformation in the years ahead.

What I've argued so far is that a strong domestic IT and T sector is important in its own right, given the significance of the global market for products and services that fall into this increasing complex basket of goods that includes information products as well as traditional hardware and software. A strong domestic IT and T industry is even more important, however, because of the contribution it makes to the competitiveness of virtually every other sector of the economy for the creation, ongoing development and support of the country's infrastructure.

The role of IT and T in the development of a more competitive economy is an incredibly broad topic, touching on most of the terms of your mandate. Given the limited time, I'll focus on the need for competitive advanced networking infrastructure to support science and technology research. I'm sure others will address other critical matters such as computer skills development, and so forth.

First, there is a small matter of definition. Although the term's meaning will clearly continue to evolve, an advanced networking infrastructure supporting Canadian science and technology research would involve providing very broadband networking capacity to link universities, government labs, research libraries, and industrial R and D facilities to each other and to their counterparts around the globe, together with related services and distributed computing services.

Today, that infrastructure would probably be along the lines of what was recently announced by President Clinton as Internet II. President Clinton has committed $500 million to the development of this facility, and the top 50 or 60 universities in that country - and the number is growing daily - have made their own commitments to following up on this initiative.

In Canada, CANARIE is working with the universities and others across the country to define a similar initiative that we are calling CA*net II, referring to the first generation Internet backbone that linked the universities and labs of this country in 1990 with NRC support. We have already met with the National Science Foundation regarding possible collaboration between our initiative and the United States' Internet II initiative.

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It is our belief that in the years ahead advanced networking infrastructure of the CA*net II type will have a profound impact on all S and T activities, perhaps as profound as the invention of the computer itself. S and T research is an inherently global activity. It's inherently collaborative, interactive, and information-intensive. These are the hallmarks of activities that are ripe to be transformed by advanced networks.

S and T research was the pioneering application for the Internet as it started in the 1970s and expanded with the creation of NSFnet in 1985, and S and T research will probably pioneer this next generation of advanced networks as well.

Areas where advanced networks can play an especially critical role include high-energy physics, artificial intelligence, robotics, advanced graphics, molecular modelling, and genome sequencing. The latter area is a good illustration, since advanced networks open up a new way of approaching the immense data-handling requirements associated with human genome research and the spinoff activities in the pharmaceuticals industry.

In the United States, all the genome sequencing is done on one or two massively powerful computers. In Canada, NRC is building the world's most advanced distributed genome sequencing project, involving five labs across the country. If successful, this project will produce similar benefits at a fraction of the cost of the American program, and all because advanced networks make the distributed approach feasible. CANARIE hopes to be working with Jacques and his colleagues at NRC on this project.

In closing, it is critically important that Canada continue to support such ventures as CA*net II and the NRC approach to distributed genome databases. The role of advanced networking infrastructure in supporting science and technology research will only continue to grow. Canada needs a commitment that we will continue to be active in advanced networks for years to come.

Thank you very much, and thank you for the opportunity to say a few words.

The Chairman: Thank you, Mr. Bjerring. You've covered a lot of territory on behalf of CANARIE, and I'm sure there will be lots of questions when the members come back.

I'm going to turn now to Mr. MacIsaac, who is here from the Institute for Robotics and Intelligent Systems. Mr. MacIsaac, would you like to say a few words?

Mr. Bernie MacIsaac (Chairman, Institute for Robotics and Intelligent System (IRIS-NCE)): Thank you, Mr. Chairman.

The Chairman: Mr. MacIsaac has comments written in English only, so I need the permission of the committee to circulate them. Permission granted.

I'm sorry, go ahead.

Mr. MacIsaac: Thank you, Mr. Chairman. I apologize for the fact that I speak only in English. It's one of the consequences of coming out of the backwoods of Nova Scotia.

I'm chairman of the Institute for Robotics and Intelligent Systems and its associate organization PRECARN. I'm also president of a company called GasTOPS, which has been in business for18 years. It started from zero and it has about 85 people at this point. My comments are a mixture of my experience in the research world and my experience in running a business.

I would like to focus my initial comments on the issue of networking and how I consider it to be an important change to the way research is conducted in this country. I would then like to add some specific observations with respect to today's proceedings.

I think our standard of living is inextricably linked to international trade. International trade means competition, and it means therefore that what we sell has to meet global standards. In the future, I think much of what we will trade in will involve complex technologies - not just computers, but the application of computer technology to many aspects of machinery that we can learn how to trade in. This will depend on our mastery of these technologies in order to compete in a global market.

That means we have to continue to invest in knowledge. Knowledge keeps us informed and is a component of the technologies and the products that we expect to sell. But that's only part of the picture.

I believe that conversion of basic knowledge into products and services is the job of business. I believe that the development of knowledge is undeniably a public responsibility that we all must share. I think the concept of networking in research is fundamental to bringing the costs of that process down.

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My experience in business has taught me that knowledge exists really in about three forms. First of all, it exists in the minds and the heads of those who have achieved the discovery. It may exist as a written record, which is a paper that academics enjoy, and it may exist as a physical embodiment of the research, a lab rig or a prototype or some device of that sort.

I've also learned in business that time is of the essence, that you really have to treat business as an ecosystem; if you pull away one component of it, it dies. Failure to recognize that as something important to the research community is failure to recognize their contribution to the business environment.

If I use that as a model, I would argue that any network research involving frequent conversation and frequent sharing of knowledge among researchers is inevitably going to be a more productive effort than any isolated efforts that may occur. If you've ever spent a couple of years in a research lab, you'll realize how lonely it is and how it makes one antisocial. Furthermore, it's a slow, maddeningly frustrating process, so if you have a colleague on the other end of the country who can tell you you're on the wrong road, that's immensely valuable. That process is something that has to be supported on an ongoing basis.

The second advantage of this process that I see is the sharing of ideas. A wise man told me one time that if you keep your ideas to yourself, you have one idea, but if you share it with ten people who have ten ideas, you have ten ideas. We don't know how the human mind thinks creatively, but if you bother to read about it, we do know one thing: if you have ten ideas clattering around up there in some fashion or other, you're far more likely to be creative and come up with a new invention than if you're trucking along with just one idea. I believe the process of sharing this kind of information is absolutely fundamental to accelerating the rate of progress in producing ideas.

I'd like to add another dimension to the concept of networking. I'd like to add the concept that a researcher who's steeped in technology could learn how to talk to someone who is steeped in business. In the process of that exchange you are going to produce something that is much more relevant to the ecosystem we spoke of earlier.

The researcher is not a fool by any stretch of the imagination, and neither is the businessman, but they come from very different worlds. If you get them to talk to each other and to simply discuss on a rational basis the ideas that need work from a business perspective, you then find yourself with a research colleague who doesn't necessarily think like you do but who is able to think in a far more pointed manner about the development he's undertaking that may contribute to your industry. In my opinion, that's an absolutely necessary component of this ecosystem.

The other thing that is part of this weed I'm trying to grow is the fact that researchers, unless they are intending to make a career of it, spend something like three or four years of their lives, or maybe a little bit more, working on a particular idea. That results in them presumably recognizing the fact that that's enough of what they're doing, and they will then go out into industry and get a job. They will therefore take with them their ideas.

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So the process of networking in research and putting business people together with researchers results in a far more, what I would call market-ready kind of individual, who then makes his way out into industry, and that's another equally important part of this process we're talking about.

Finally, I consider research to be antisocial, at least insofar as the individual is concerned. If you spend three years in a lab by yourself, you're liable to bite somebody when you are finally let out into public. The result of this process that I describe is individuals who are far better qualified to communicate and have a far better understanding of some of the issues outside technology, and they take that into the workplace. I consider that to be extremely important.

On the specific issues that relate to the mandate of the day - critical industries and technologies of the future - don't look to business for answers to such questions. Business has a short-term survival instinct based on an annual plan. They might have five-year plans or ten-year plans, but they're not qualified to dream about the technologies of the next hundred years that are going to make us a living. They don't even think that way, for the most part.

I would argue that you need to look to that sector of our population that is free to examine these issues and have the brains and the training to do so. In other words, go to the research community. Make sure, however, that their thought processes have some relevance, which comes back to the issue that they have to broaden their interests to look at the economic consequences of what they're doing.

I used to say that business should never try to tell government how to govern, because they can barely govern themselves. I think that comment is still valid here. I doubt there are many people who grind away every day making a profit who are qualified to say what kind of technology we're going to be dealing with 50 years from now. The job of government is to develop the basic knowledge, which I believe can only be done through a social process and the creation of a climate in which innovation can flourish.

What impediments stand in the way of emerging technologies? I'd like to put forward the idea of a hub-spoke concept when thinking about Canada in this regard. Canada is like a small company in many regards. It has good technology, resources and people, and it's largely solvent, but somehow or other we have problems making our way into the competition and winning often enough in the competition.

I do this regularly because I run a small company. If a small company is geographically displaced, in much the same way as Ottawa is displaced from New York, then we're obviously not anywhere near a hub. As a business, I am not anywhere near a hub, so I then need to develop a strategy that is appropriate to my location out on a spoke.

In my opinion that argues strongly for far more foreign partnerships with Canadian business and Canadian institutions than I believe currently exist. The number of times I've bumped my head against ``it was funded in part by Canadian public funds, therefore you cannot exploit it outside Canada unless the Canadian company is in charge of it'' - this is really difficult to float in front of an international partner, saying he's not allowed to participate in this except in some way that protects Canada and Canada's investment.

I would argue that in the north-south hub-spoke thing that I speak of, the need for stronger and recognized international partnerships with small businesses, as well as large businesses, is somewhat overlooked.

What steps can be taken to promote a climate that encourages both science and entrepreneurship? I would observe that an entrepreneur is just another human being whose tolerance for uncertainty is a little higher than normal. It's not infinite. We like to win and we like to have confidence that we can pick the odds properly.

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Canada is an interesting labyrinth of intergovernmental regulations that most people don't realize impede entrepreneurship. My suggestion is that you look hard at these regulations and shoot as many of them between the eyes as you can.

I once invented a fish processor that I thought was a great idea, but I stubbed my toe against regulations that say inshore fishermen are not allowed to clean fish at sea. So I dropped the idea. This is an observation. In fact, I had a huge strip torn off me by somebody at Fisheries Canada for even promoting the idea that processing fish at sea was an idea that maybe Canada should look at.

How well are Canadian institutions meeting the skills of high-tech industries? I don't see a problem here. I think Canadian institutions are excellent, and the education I got was as good as I could have received anywhere in the world.

I think Canadian business has a problem with training. I think their attitude toward training stinks. We seem to be of the opinion that we should import talent rather than train it, and I think Canadians need to collectively develop more dedication to the country. I'm incensed by the number of university graduates who refuse to pay their student loans. We haven't even got the guts to publish their names.

I was recently told that Canada needs a good war so that we can relearn the lessons of cooperation that we seem to have forgotten. I think that's a bit drastic, but I do think the government has a role in reminding citizens of some of these responsibilities - more so than government does.

I recently made a trip to Malaysia, and I was struck by the rank advertising in the Malaysia Airlines back pages, talking about how great Malaysia was, how good it was to its citizens and what investments it was making. I'd love to see something like that in Air Canada's En Route magazine. That's the kind of thing that I think would help Canadians a lot.

That's it, sir. Thank you.

[Translation]

The Chairman: Our next witness is Mr. Jacques Lyrette. Welcome.

Mr. Jacques Lyrette (Vice-President, Technology and Industry Support, National Research Council of Canada): Thank you, Mr. Chairman. I will be making my presentation in English and in French. The text of my transparencies has been distributed in both languages.

[English]

I'm here as a National Research Council official responsible for the industrial research assistance program, which I will talk about. Before we start I'd like to say a few words about our view on innovation and how we provide a bit of oil in innovation systems. It's very important to understand that the IRAP network is a very complex machine with people at the end of the phone.

[Translation]

I do not have to tell you how important innovation is for the Canadian economy. We must also be aware that the innovation process involves more than invention, diffusion and innovation. It involves interrelationships between various elements of the Canadian innovation system that I am going to talk about a little later on.

Economists always consider innovation to be a linear process of invention, innovation and diffusion. They often forget that the interaction between the various elements of innovation is dependent upon success factors: technology, financing, marketing, competition, small and medium-sized enterprise management, regulations - regulations are important - information and evaluation.

[English]

The innovation system in Canada is very complex, and in a diagram I have tried to capture what I feel the innovation of Canada is. We do have an incentive infrastructure that includes universities, government research labs, private research labs and provincial research labs that provide the technology.

But for a firm, the world is much bigger than that. Technology is just one element of a bigger picture. Finance is as important. International sales are as important. Labour, production.... The other issues that surround the SMEs are very important. I forgot to say at the beginning that the program is directed only to small and medium-sized enterprises.

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[Translation]

The Industrial Research Assistance Programme (IRAP) is under the purview of the National Research Council. A lot of people fear that these programs come under the National Research Council for reasons of access to technology. I must tell you that IRAP has access to every technology.

[English]

IRAP is under NRC purview, but we do not give any particular treatment to NRC technology. IRAP takes the technology wherever it is. The next diagram indicates where NRC sits in the middle of the innovation system, and where IRAP and the Canadian technology network, which I will talk about in a minute, sit in relation to the technology and the other elements of the innovation system.

[Translation]

IRAP's mission is to stimulate innovation in Canadian small and medium-sized enterprises. The aim outlined in the five-year plan that was approved a few weeks ago is to increase the innovation capabilities of SMEs.

[English]

Some of the speakers spoke about the innovation chain. The diagram in front of you looks at the sources of technology. The SMEs on this curve - it shows that the federal labs and the university and private research labs are very close to large firms and high-tech SMEs, but some of the SMEs are basically low-tech. IRAP covers the spectrum of these SMEs.

The next chart indicates that IRAP interacts with companies at the risky level.

[Translation]

We often forget that university research and high technology are very risky areas. IRAP takes risks with businesses. I will speak a little later about IRAP's performance as regards these risks.

We also talk a lot about the availability of funds,

[English]

venture capital, but everybody wants to make money and not take any risk. That's where I think IRAP is filling a very important gap. IRAP is more than a program. It is a network of people across the country - industrial technology advisers. It is a value-added service. We don't just give money. We work with a company in structuring their project and finding the right help they need, and basically we share the risk with the companies. For every dollar we invest in a project, on average we get two dollars invested by the company.

We have over 240 technical advisers across the country. The important thing to note about these advisers is that not all are NRC employees. Only 90 of these advisers are NRC employees. The others are in about 140 institutions across the country that are on contract to NRC to provide this service on our behalf.

[Translation]

IRAP works with businesses that have a broader technical capability. You might want to look at the statistics contained in the transparencies I have supplied. The manufacturing sector accounts for 75% of our clientele whereas the services area makes up the remaining 25%. This proportion has increased by 6% since 1991, and more and more businesses are coming for funding. Following the disappearance of several government programs, IRAP is one of the few remaining programs providing sizeable grants.

It is worthwhile noting, regarding IRAP's contributions, that we invest in people and not in infrastructures. In this way, when a project is not successful, the people remain and they will create new businesses.

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[English]

In fact, we have compared IRAP's performance with the manufacturing sector. Fifty-five percent of our clients consider competition as a key ingredient of their business plan...versus 16% in Canada. They consider themselves more technically advanced than the competitor - 50% versus 25%. They have considered developing their technology for improving their position in the marketplace. Sixty-six percent believe it's more important, versus 33%.

Because of the time, I'd like to turn to the Canadian technology network that was built on the IRAP model - with people. The Canadian technology network is a network of about 250 organizations across the country that have agreed to join the IRAP network. They are available on the network to provide advice and financial, marketing and other services to SMEs that need help.

The fundamental difference between the CTN and other information systems is that you find a person at the other end who will give you the service. I try to refer to the combination of IRAP and CTN as my virtual multinational. Fundamentally, when an SME goes into the IRAP-CTN network it will find all of the services a multinational would find at its fingertips within the corporation. In fact,

[Translation]

the mission of the Canadian Technology Network is to provide electronic access to information and services. I would emphasize the services aspect for the small and medium-sized enterprises using technology.

As I said earlier, we have recruited more than 250 organizations throughout the country, including government labs and departments. It is important to understand that the network was built using the IRAP model, in other words with people.

[English]

We have learned a few lessons from working with IRAP. It has been in existence for 51 years. One, a lot of people believe that innovation is just a technology issue. It's not only a technology issue for SMEs. Many SMEs do have the technology, but sometimes they lack management practices or marketing skills. They need access to other services.

[Translation]

Another important issue for small and medium-sized businesses is strategic planning, project management and financing. We often talk about the availability of bank financing.

[English]

They all want to invest in company equity but not take any risk, and basically that's where IRAP and CTN provide a unique service.

[Translation]

To conclude, I would like to give you some statistics relating to the program. In 1995, we did a study of the IRAP projects carried out in 1991-1992, given that we had to wait long enough for the various products to come onto the market. Every dollar invested in an IRAP project lead to $20 in retail sales.

[English]

In 1995-96, for every dollar the government invested in IRAP, the firm invested two dollars.

In 1991, when we looked at the leverage effect of the IRAP program, each direct job created cost the government $8,111, and that's after a few adjustments. It also doesn't include indirect jobs. Finally, in 1991-92 we had created 9,388 jobs.

To conclude, the point I want to leave with this committee is that managing the linkages between the different elements of the innovation system is very important. Management doesn't mean the government must have regulations and rules, but trying to grease the linkages between these different elements will help immensely the SMEs. Thank you.

[Translation]

The Chairman: Thank you very much. You have in a very short period of time given us an excellent summary.

[English]

I really appreciate what you've done here. Some of us had an opportunity to visit your organization last week, so committee members have expressed an interest in the work you're doing.

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I'm going to turn now to the department. Grant Westcott is going to be the quarterback here. He has guaranteed me that he'll be the whip.

I thank the department people for being here. The context is to give a flavour on how you're connecting to these other people. You're a good ongoing resource to this committee and we appreciate your being able to come in from time to time.

So, in that context, we'll go through what you're doing a little bit and then open it to committee members.

Mr. Grant Westcott (Chief Information Officer, Department of Industry): Thank you very much, Mr. Chairman. Industry Canada plays very much a multi-faceted role in attempting to lead Canada into the new knowledge economy.

We do attribute all of our efforts towards the government's jobs and growth agenda. The other characteristic of what we do is basically we work in partnership with our constituents, our stakeholders, the business community, the academic community, and so forth.

We've organized our presentations this afternoon around three themes; our activities that contribute to closing the innovation gap.

Chammer Farina will talk about what we're doing in the policy area.

Eugenie Prévost will talk about what we're doing with technology road maps.

Maureen Lofthouse will talk about Technology Partnerships Canada.

I will then give a quick overview on what's happening with Strategis. I believe you were briefed on March 27 on what Strategis was all about. We'll give you an update, because we think it's an excellent barometer on how well we're doing in terms of reaching the business community with what we consider to be absolutely essential, and that's strategic information.

Finally, Doug Hull will talk about his activities in terms of the skills development area.

So, Mr. Chairman, I would like to now call on Chammer Farina to talk to the policy areas.

Mr. Chammer Farina (Acting Executive Director, Advisory Council on Science and Technology, Department of Industry): Thank you very much. What I'd like to speak to specifically is the Advisory Council on Science and Technology. I think that's what your committee has asked to hear about.

The council was created as a result of the science and technology strategy released last March. Its mandate is to review the nation's performance in science and technology, to identify emerging issues, and to advise on a forward-looking agenda.

It basically has two key functions to perform within the overall governance mechanism that was established by the science and technology strategy.

First, it's to identify emerging issues for the economic development policy committee. These are to be more action-oriented recommendations rather than general study-type recommendations.

Secondly, it's to review and comment on the government's progress in implementing the S and T strategy.

There are two key functions that are important here. One is to link to EDPC, and the second is to provide an outside commentary on how we're doing in terms of implementing the science and technology strategy.

The structure of the council is somewhat different from what we've ever had before in the area of science and technology.

First is that link to the economic development policy committee. That's a new feature of external advisory bodies in science and tech. As a result, its advice will be confidential. So there will be no public reports coming out of the council.

Secondly, it's a small group, 12 people only. Previous groups had tended to be much larger than that. The broad mandate of the council, of course, is not easy to operationalize with 12 people, so the first set of issues that the council will undertake relate to the issue of innovation.

How can we improve Canada's performance in the innovation area? Of course, you've heard earlier from the speakers here on the need to do that.

Specifically, the Prime Minister and Minister Manley, who is the chair of the committee, have asked the council to advise on the issue of how to get the private sector to show more leadership in the area of innovation. They have also asked the council to develop an action plan, based on partnership with the private sector, to improve Canada's innovation performance.

Members have been appointed. There's seven from the private sector, four from the university, and one that's in-between the private and public sectors.

The first meeting was held last week, and there were some preliminary discussions on priority areas for the council to address. No conclusions have been drawn as yet. The next meeting will be in mid-December.

The Chairman: Thank you very much.

Eugenie.

Ms Eugenie Prévost (Senior Commerce Officer, Department of Industry): Thank you. I'd like to address the committee in terms of technology road maps. It's a new innovative tool that Industry Canada started to speak to industry sectors about last year. It is a so-called process that fits within the government's technology planning mechanisms and agenda to support innovation.

What is a technology road map? It's a mechanism for identifying or forecasting new critical technologies, required by industry to meet future market demands. It has several purposes. One is primarily to identify and seize future market opportunities. Secondly, it is to focus industrial sectors and their upstream and downstream linkages. More specifically, what that means is instead of having one or two companies getting together with their suppliers to innovate together, it gets a whole sector together, and the companies within it, to work together collaboratively in order to innovate together in terms of forecasting where the market is going, what products and things will be needed, and therefore the technologies needed to address those needs in the future.

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Why are they doing this? Basically, it's to respond to the competitive threat from the U.S., which has developed road maps. In fact, yesterday I found out that approximately 140 road maps have been developed in the United States, some of them going on to second generations. Similar initiatives are occurring in Britain and Japan. What happens then is Canadian suppliers get shut out of this supply chain. Therefore, it's a real threat.

What's the output? What does a technology road map look like? It's basically two things. One is that it's a document under continuous evolution. What I mean by this is that as soon as it's completed, a year or so later what typically happens is industry gets back together again and says, let's review this in terms of where the market is going; let's forecast this out. What happens is that's the document they share amongst themselves. The document that's very private is the action plan, ``the innovation plan and strategy'', where strategic alliances occur within groups of companies with universities and things like that to actually develop those technologies and these products. What is key here are those new ongoing strategic alliances.

What are the benefits? There are several, but I think one critical one with industry is that it's on the leading edge. These companies are on the leading edge instead of following or being shut out of markets - in terms of international markets - and they increase their competitiveness, their profitability, their knowledge and their networks, and they also get to influence government policy.

How do we benefit as government? We get to address our agenda, which is jobs and growth. Also, we can better address what kinds of sectoral and regulatory policies they need - in other words, how we act as an enabler instead of a barrier.

Second, it enables us to make better strategic decisions in terms of the things we should be doing, what information products, services or intelligence we should be offering. Of course, we do that with our industry partners.

What's the approach we've been using? Facilitation. Clearly this is an industry-led, managed and implemented initiative. If we try to force this, it doesn't work. Clearly, government doesn't lead; we facilitate. Industry does this for themselves. That's why it's successful. What will happen is we're going to do an evaluation of these pilots as they are completed in terms of what impact has occurred in terms of the economy. We'll ask if this is an innovative process and tool, etc.

Lastly, where are the pilots occurring? Aircraft design, manufacture, repair and overhaul, and forestry operations have just finished their first draft. Aircraft design, manufacture, repair and overhaul were very enthusiastic about the process. Approximately 61 industry people were involved, working on eight technology areas in industry. They sat down and wrote it themselves, which is a real credit to them. A lot of these people hadn't worked together before in this manner, so it's truly their document.

Taking that one step further, in terms of there not being a link with the Technology Partnerships Canada program, we will hear from Maureen Lofthouse in regard to the action plan. When you have high-risk technologies that you want to commercialize, how can we assist in terms of that happening.

In terms of forestry, the industry will be meeting and discussing theirs on Thursday. Computer equipment, electric power equipment, and freight transportation, are proceeding and they will hopefully reach their draft stage sometime next year.

Document management software is a perfect example of when a tool doesn't fit, don't use it. Industry met. They took a look at it and said ``This isn't for us. We already collaborate effectively, we already have strong networks, and therefore we don't need this particular tool. We are already very pleased in terms of the way we're innovating.''

Automotive is an example where they're developing a strategy first, because of course they are so linked with the United States that when they put their road map together it will be in cooperation with the United States. For example, in terms of the clean car, they're asking what part Canada can play in developing our road map while ensuring it fits into the bigger picture.

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In summary, in taking a look at the aerospace and the forestry road maps, it appears we do have a tool that will have some impact in terms of being an innovation tool. The industry is quite excited about it, and I believe we'll be better positioned in terms of being more globally competitive.

Thank you.

The Chairman: Thank you very much.

Maureen.

Ms Maureen Lofthouse (Director, Enabling Technologies, Technology Partnerships Canada, Department of Industry): Thank you. Technology Partnerships Canada, which was announced and started operations in March of this year, is a new approach to government funding of industrial R and D. You'll recall that following the restructuring of the federal budget in 1995 the government decided that subsidies were no longer a good idea, and TPC resulted from a year of thinking about how a new program might be designed to take a different approach. We hope to leverage more private sector investment in research and development.

The program takes an investment approach and it provides a significantly lower contribution of project funding than was available before. You've heard from Jacques Lyrette that IRAP tends to fund about a third of project costs, and that's about the level we're aiming for too. Previous programs have funded up to 50%, and we believe it's important for government to send the message that what we want to see is private sector investment. Private sector companies that apply for our funds have to demonstrate they can find a significant portion of the costs themselves or from other sources.

The context for the program was driven by the jobs and growth agenda, together with the science and technology and the sustainable development strategies of the government. The program was announced along with the science and technology strategy. Its focus is to develop new technologies or to find new applications of technology in strategic areas of industry.

The program has three basic components: environmental technologies, enabling technologies, and aerospace and defence. These were determined as being strategic areas of importance where government has a role to play in supporting high-risk technology projects.

In some of these areas we find that foreign governments support Canada's competitors to a significant degree, particularly in aerospace and defence, but also in many areas of enabling technologies such as advanced materials and biotechnology. Therefore, we want to keep our Canadian companies competitive and help them undertake the risk involved in an advanced technology project.

The other element of investment is that we not only share the risk with the company, but we share the reward. Our contributions to a company are repayable. If it's a high-risk project that will result in high rewards for a company, then we look for a return greater than our initial contribution. Our minimum return will normally be the future value in future-year dollars of our contribution, but we will negotiate before the company starts the project that if in fact the company plans to achieve success with the project, then we will get a significantly higher reward.

Essentially, we're funding firms, and we fund some partnerships and consortia. Apart from the aerospace and defence industries, where we expect to see a lot of large companies coming in, we will try to focus on small and medium-sized enterprises.

In a sense, our funding is similar to that of IRAP, although we were specifically designed to fill the innovation gap that's been identified by OECD and other entities. The OECD had reported that whereas Canada funds basic research very successfully through the granting councils, applied research through IRAP and other programs, and then early production prototype activities through the regional agencies, venture capitalists and so on, there is a significant gap in between. It's this near-market development that TPC is established to fund.

We look for projects that have high risk, where the companies can't obtain conventional funding, and we see the role of government as providing them with earlier access to the market or a more complete project rather than a limited project, which they might have to undertake if their funding sources were reduced.

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As we show on the slide, we have close to 200 pre-applications and applications, and we have recently announced three specific projects, which were shown in the slides I've given to you.

Mr. Westcott: Mr. Chair, I've given a handout on Strategis. In the interest of time, perhaps I'll cut this very short. I think my colleague David Waung briefed you in March on the day of the launch.

Since that time it's been an overwhelming success from the point of view of acceptance by the business community. In terms of their reaction, I think the best indicator is the number of individual businesses within Canada that have accessed Strategis either once or multiple times.

In this case, over 115,000 individual companies, mostly within Canada, have accessed it at least once, and roughly 90,000 of those individual companies are repeat users and continuous users of Strategis. We have found that it has been very successful as an illustration of how one can use the electronic highway to disseminate information to help businesses compete in terms of global competitiveness.

I'd now like to ask Doug Hull to give a very short set of closing remarks on what he's doing in the skills area.

Mr. Doug Hull (Director General, Science Promotion and Academic Affairs, Department of Industry): If we're in an open, knowledge-based economy, the key commodity is brain power. Canada faces some real challenges in the area of acquiring the right level of skills.

We have shortages and mismatches in the skills area. We know that the length of time looking for a job is directly related to the number of years of schooling and skill acquisition. We don't have a culture of innovation and entrepreneurship, as many other countries that we're competing with do. Finally, we have some significant inefficiencies in the labour market of aligning people with the right kinds of brain power to the right kinds of jobs.

We have some strengths, however. Some of the strengths are the fabulous telecommunications system that the country has, the strength of our education and research infrastructure across Canada, and the great number of public and private institutions that have a commitment to education and to providing material in support of the education and research system.

One of the major tools we're using, in terms of promoting more skills across the country, is the information highway. Dr. Johnston has described the IHAC and the role it's played in putting the various priorities to the government. One of those is equitable access for all Canadians. Less than 10% of Canadians have access to the Internet, yet this is a tremendously important tool in terms of moving information to the people who need it from the people who know.

So the department has been actively involved, along with other organizations across Canada, in rolling out learning on the information highway. On the brief slide set that you have, I'll just touch on a couple of things that are being done.

SchoolNet and LibraryNet are cooperative ventures with provincial governments to link all 23,000 public schools and libraries to the information highway by 1998-99. We're more than halfway there now. We'll be the first country in the world to have achieved connectivity of all our schools across the country and all the libraries across the country, bar none. We'll probably be the most effective users of on-line education of any country in the world by that time.

There are 450 first nations communities across Canada scattered in remote locations. In partnership with the telephone companies across Canada, we're in the process of linking them all to the information highway. More than 250 of these 450 first nations communities are now connected to the Internet.

The community access program is aimed at bringing rural communities onto the information highway more quickly than would otherwise be the case. They face major problems in terms of the level of connectivity they're able to get and the nature of the infrastructure they're using.

We're in the process of linking 1,500 of these communities. There are 5,000 communities in Canada that would be applicable, of which 1,500 will be linked. The rest will be serviced through different kinds of tool sets that will enable them to use the information highway for jobs and growth.

There's a program called the National Graduate Register. It's a very powerful on-line system that will allow university and college students to get linked to businesses across Canada electronically so that, no matter where they are, they will be able to find a business employer who can use their skills.

There's a program called Computers for Schools, which delivered 20,000 recycled public and private sector computers to schools across Canada. This is growing extremely rapidly as larger numbers of firms begin to devote their surplus equipment to the school system across the country.

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Finally, the information highway isn't the only way in which we're developing this entrepreneurship and innovation culture. Hundreds and thousands of Canadians are in fact engaged in working with the school system to expose students to science and technology activities and to inculcate hands-on learning, which is basically laying the foundation for a more entrepreneurial culture in the years ahead.

There are at least 2,000 or 3,000 scientists and engineers and other technically trained people who are doing this sort of thing on a day-to-day basis across the Canadian school system. There are equal numbers in the area of entrepreneurship. Ultimately that's the low end of the system.

There's also the upper end of the system, which is the research network of the country. I understand you'll be meeting later on with people from NSERC and the granting councils. It's important to realize that there are some big changes under way in the universities across the country as they begin to couple more directly with the business community.

The pinnacle program in this respect is the networks of centres of excellence program, which has 14 networks that are really providing tremendous linkages between the very best researchers in the country and industry that is able to exploit that research and technology for commercial purposes. There are well over 3,000 Canadian graduate students involved in these networks and another 1,000 senior researchers in the country. It's a program well worth looking at when you have a little more time.

The Chairman: Thanks, Mr. Hull.

I'd like to thank the department people for giving us so much information. I know members worry about being able to absorb it all, and I'm sure we can call upon you again, either individually or as a group, to elaborate on these different issues.

I'll turn now to questions.

[Translation]

Mr. Leblanc, would you like to begin?

Mr. Leblanc (Longueuil): I followed the presentations made by the National Research Council of Canada and by the Department of Industry and I noted quite a bit of duplication within these two organizations. Would it not be appropriate to eliminate one of them, or for them to work more closely together or else become one, so as to avoid these duplications and extra costs?

Perhaps I am not asking the right people because our guests today are responsible for managing these departments and not for merging them. But would it be advantageous to combine these two departments?

[English]

The Chairman: How about having Mr. MacIsaac start with a response?

Some hon. members: Oh, oh!

The Chairman: Do you have any comments, Mr. Johnston? You've had to deal with this in your experience as principal of McGill and you've been involved on the government side in an advisory capacity. Do you have any general comments in response to Monsieur Leblanc's question?

[Translation]

Mr. Johnston: I prefer to listen because I do not always fully understand the questions. You are talking about merging the National Research Council of Canada with what?

Mr. Leblanc: With the Department of Industry.

Mr. Johnston: We might give the floor to the expert we have with us, Mr. Jacques Lyrette.

Mr. Lyrette: I believe that in bureaucratic circles we call that a career-limiting answer. You could perhaps put your question to the president of the National Research Council, who will be here next week.

In addition to the elements we have mentioned, there is a coordinating committee responsible for the various elements that make up the industry portfolio, that covers 14 agencies, including the National Research Council of Canada, granting councils and regional agencies. We regularly coordinate all of our science and technology activities. I am aware of the situation because I chair the portfolio committee responsible for ensuring that there is no duplication in areas where synergy is possible.

We work together to establish synergies. We are also working on more that 45 joint projects involving the various elements of the portfolio. The Department of Industry portfolio goes beyond the department per say. It comprises regional agencies, the Federal Business Development Bank, the National Research Council and the granting councils. Each one of these entities has a very specific mission. As far as the synergy between the various groups is concerned, we work very well together. For example, the strategic planners report to the CTN.

IRAP and TPC deal with two fundamentally different issues. TPC is more involved with marketing and this is why it demands to be reimbursed, whereas the IRAP program comes more into play at the bottom of the innovation curve, where risks are high.

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The IRAP program is not involved with marketing. It really deals with technological risks, and these are shared with SMEs.

Eighty-five per cent of our customers have fewer than 50 employees. The statistics are included in the brief I gave you. Only 4% of our customers have more than 200 employees. We define SMEs as businesses that have fewer than 500 employees. The TCP program is aimed at larger companies, even though they fit the SME mold.

The National Research Council and Industry Canada play completely different roles. We work very closely with granting councils. We participate in joint programs because there again our roles complement one another.

This is a long answer to a question that does not come under my jurisdiction. There are mechanisms in place to ensure that there is no duplication but that there are synergies. I have been with the National Research Council for a year and I have since the beginning chaired the intraportfolio committee. I must shortly table a report, in January, on the shared activities of the14 agencies that come under the portfolio in the area of science and technology.

Mr. Leblanc: Listening to you earlier, I noted that there were some resemblances, especially in the areas of innovation, participation and assistance. You explained quite clearly that you cover some of the ground and that Industry Canada covers the rest. I know that it is not always easy to tell precisely where one ends and where the other begins. We must reduce our management expenses for all of these programs as much as possible. This is why I asked the question.

If we eliminated the bureaucracy, could we perhaps make some savings in the management of all of these programs? Each department is responsible and carries out its research work to give as much help as possible to business. In my view, all of this business assistance research work is being duplicated. Everyone is working in the same fields. You begin with one company and when it becomes too large, it moves on to another department, but both departments are carrying out the same research work in order to assist these businesses. It seems to me that this is where there could be some link-up. I do not know. You are the experts and you are in a better position to answer my question. But it is always the same story: people always try to justify their jobs when they are the ones who are in charge.

Mr. Lyrette: It is not easy, within the limits of a ten minute presentation, to do justice to a program that has been in existence for 51 years. There are all sorts of relationships between departments so as to coordinate their various efforts, be it in their involvement with SMEs or in any other area. Industry Canada is in the process of organizing a series of conferences aimed at SMEs that will take place throughout the country. We are working very closely with our colleagues from Industry Canada.

The aim of the National Research Council is obviously very different from that of Industry Canada. Our objective is to promote the adoption or the diffusion of high-risk technologies. This aspect must be understood. The markets are not ready. Another important element of NRC's strategy is the international cooperation we talked about earlier. Thanks to our research work, we are able to attract foreign investment to Canada, as was the case in the Montreal area with the Institut de biotechnologie. Because of the existence of the lab and of our activities, foreign companies decided to come and set up here.

I am aware that my program has a $91 million budget, but NRC's internal costs for all of these people throughout Canada amount to $10 million. The rest of the money goes to businesses and other institutions.

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Regarding IRAP, that I could tell you a little bit about, it is a program delivery model. The program, that involves 250 individuals, 90 of whom are civil servants, is working very well and has facilitated the establishment of links with people from l'École polytechnique in Montreal, CRIM and provincial institutions that we work with.

We also succeeded in influencing the research that is carried out by NRC by distributing information on what is going on in the markets. When you look at the make-up of the high tech sector in Canada, you see that there are huge multinationals and then there are SMEs.

Unfortunately, in the area of innovation, when multinationals are involved, marketing and investment decisions in high-tech are not usually made in Canada, but when SMEs are involved, these decisions are made here. The beauty of SMEs is that they usually stay in the area in which they were initially set up. This is why we work very closely with regional economic development organizations. We give them access to this whole network of people who are capable of offering the technology or the related services they require.

More and more, we are seeing banks send us SMEs for us to approve their projects. If we give them our seal of approval, they go back to the bank that then agrees to lend them the money they need, which it would not normally do.

The Chairman: Thank you very much.

[English]

Mr. Schmidt, please.

Mr. Schmidt (Okanagan Centre): Thank you, Mr. Chairman. I have a couple of questions.

By the way, before I ask those, I would like to express my appreciation and respect for the people who are here this afternoon. I think this is absolutely fantastic, Mr. Chairman, the wealth of information that we are exposed to here. It's tremendous and really very rewarding. This is like a post-graduate course in a minute sort of way. It really is.

I'd like to address a couple of questions to Mr. MacIsaac. I was rather interested to hear your categorization of where knowledge exists. I was also interested in the suggestion you made that, really, we ought to share this knowledge freely and we ought to go about our business.

We have at the moment a real battle developing as to who owns intellectual property. That's the effect of what we're talking about here: what do I own as a creator of this new bit of knowledge? Then it has to be translated into some kind of a product or service. So I ask you, how do we get around this intellectual property ownership problem?

Mr. MacIsaac: I'm not so sure it is an easy question.

Mr. Lyrette: It's easier than mine, though.

The Chairman: Exactly.

Mr. MacIsaac: I'm going to make an assumption that the Canadian public is interested in making a living, in jobs and that kind of thing, and I'm going to make the further assumption that the best shot we're going to have at that is through some kind of business endeavour - just as a premise.

If that's the case, then my recommendation is that the intellectual property should be vested in whatever business has been chosen, stuck its hand up, or whatever mechanism it is, and that the government not be squeamish about that.

The reason I say that is - again, I'll offer you what experience I have - the minute you cross an international border and discuss technology that you have partly and you wish to sell, you are going to wind up, one way or another, in some kind of a collaborative venture with a foreign company. It seems to be almost inevitable. That's the entry point to, let's say, the American market or to the far eastern market.

The minute you put on the table the fact that you jointly own this with the Canadian public or that by any other mechanism it is possible to obtain this by other sources, you get into trouble. I've never been able to figure out why Canadians were so jealous about the issue of intellectual property, provided it is possible for the Canadian government to retrieve it if need be, if in fact they have funded all of it.

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The other observation I would have to make about this is that in this day and age it's almost never the case that the Canadian public has funded all of it. I've often thought it was a little unfair to create these impediments to good business based on a 40% or 30% contribution, which exists in many programs.

My recommendation, bluntly, is to invest it in the organization that's most likely to exploit it. I don't see a need to be squeamish about it.

Prof. Johnston: I have just a very brief answer to that very good question, Mr. Chairman.

Thomas Jefferson and James Madison attempted to answer that question in the United States Constitution. In the Constitution of 1789, they took the utilitarian approach to intellectual property and said the Congress of the United States shall pass laws to give a limited right of ownership to inventors in the creative arts and sciences for the progress of mankind. By that they meant they felt it was important to allow the individual who created the new patent or the new copyright to have a period of time when he or she would enjoy the fruits of that, but there would be an obligation to pass it on. It's quite an unusual notion of intellectual property because we've always thought of it as a natural law theory: my ideas belong to myself and I shall keep them and exploit them as fully as I want. It's not so in the U.S. Constitution.

Essentially, the theory of our copyright and patent legislation is that inventors shall have a limited right to exploit because that will encourage them to invent. The fruits of those inventions and ideas will benefit all.

I think that same spirit should motivate us today. In our universities we have worried a great deal about the question of division of profits from intellectual property. Having worried about this a great deal, my own view is that we should concentrate much more on growing the ideas and investing in the people. If we do that well enough, as Bernie MacIsaac has said, we will enjoy the profits from those and we will enjoy the profits from the export trade that comes from it. In sharing knowledge, we'll find that it grows.

Mr. Schmidt: I appreciate both of those answers very much. I think what this implies as the next step in the process is that there needs to be a shift in attitude on the part of industry and private entrepreneurs as well as on the part of the universities or institutions of post-secondary education.

It seems to me that on the one hand there's a tremendous academic jealousy that seems to develop in certain fields of study. Some faculties don't even talk to each other, one faculty to another. There's this fierce quietness, if you like, almost isolation. I think antisocial was the word you used, Mr. MacIsaac.

If we get to the point where we're going to do what Mr. Johnston has just said and invest in the business that actually makes this thing grow into a productive element of some kind, it seems to me there has to be a major shift in our attitude as ordinary Canadians, as business people, and as educators.

I have another question to follow this one because I think there's another thing that falls into this. I'd like your response to that shift in attitude, which I think really implies a shift in values as well.

Prof. Johnston: I'd love to answer that, but you go first, Bernie.

Mr. MacIsaac: I agree with you. I had the pleasure of a long conversation with a gentleman who studied the rise and success of some 150 companies around Route 128 in Boston. He was a Canadian and he participated in this study. He made the observation, which generally speaking I believe is correct, that there's an essential difference between the attitude of the businessman in the United States and the attitude of the businessman in Canada. The American businessman wants to make a deal and the Canadian businessman wants to control.

A voice: That's a good statement.

Mr. MacIsaac: I believe that is pretty close to the truth. Somehow or other we have to achieve a shift in attitude wherein the exploitation of knowledge and the exploitation of technology is for the purpose of generating profits, which in turn fund tomorrow's costs, which in turn create jobs. That's the purpose of the whole exercise.

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Prof. Johnston: Mr. Chairman, I'd like to give three brief examples to support the proposition. I think a change in attitude has largely taken place. While there is still a way to go, for me our glass is more than half full, not half empty.

The first example is SchoolNet, which Doug Hull spoke about a moment ago. For the taxpayers' investment of a little more than $50 million, we in this country will have succeeded in linking up every one of our schools and our libraries. Doug says this will happen by 1998-99.

I keep quoting ``by the end of 1997'', Doug.

Our American colleagues hope to accomplish that by the year 2000 at an expenditure of$50 billion versus $50 million here. That's a ratio of 1 to 1,000.

We accomplish that in this country partly because of the leadership of Doug and his colleagues. But their skill in facilitating collaboration and cooperation amongst what are otherwise barriers is something we read about all the time.

We're told there isn't federal-provincial cooperation in matters of education. We've built SchoolNet, which is a superb example of collaboration of the best kind, including the cooperation of the teachers unions, which, we're told, oppose these kinds of interventions because it threatens jobs. Not so in Canada. It will be the first country to link up every single one of its schools. That's 1% of the job. The other 99% is turning teachers from content providers into coaches, facilitators or enablers.

The second example is the centres of excellence network. Bernie chairs the one for artificial intelligence robotics. I have the great honour to chair the neuroscience network centre of excellence. Ninety percent of what we know about the brain we've learned in the last ten years. What a wonderful time to be alive to exploit that to the advantage of us all, but isn't it curious that a little country like Canada is one of the great leaders in neuroscience in the world, recognized around the world?

These 14 centres of excellence are universities without walls. They link up the best researchers in every single one of our 86, 87 universities across this country, including the very smallest of them and, say each of you participate in excellence. It would not be possible at Andy's university, the University of Western Ontario, or in mine, McGill, but by putting those together, we can establish critical mass, where we are taking on the best in the world in the quality of our discovery science and in building the businesses out of these centres of excellence to enhance the prosperity of Canada.

A third example is our universities and colleges. I have the honour to serve as the vice-chair of the Board of Overseers at my old university, Harvard. I sit on the finance committee, and as an ex-university president, I look very carefully at the moneys invested and the return.

The cost per student at Harvard University today is $75,000 U.S. Tuition, which is about $26,000 U.S., is one-third the total cost. The $9 billion endowment, private gifts, other grants, etc., make up the rest of that $75,000 per student.

The average cost of a student at Bernie's Dalhousie, Andy's Western or my McGill is about $7,500 Canadian. So that's a 1 to 10 ratio, not allowing for the U.S. dollar exchange.

I explain that to my business friends and I say, do you know that at those universities and mine we are producing teaching and research of a quality equivalent to that of Harvard, Princeton and others, and we're doing it at one-tenth the cost per student? Now, that's a miracle - that's a miracle occurring in Canada - and there are many explanations for the miracle.

There is a collaboration and a sharing going on in this country that's very precious. It's something of which we should be very proud. Here in North America an economy that is so integrated in many ways in education.... We have systems of which we should be very proud. I recognize we still have a way to go, but, my heavens, we're a long way along that road.

The Chairman: Thank you very much.

Mr. Schmidt: I have a very short comment. I agree with all of that. My point here isn't for this committee to say we're doing everything wrong; that wasn't my point at all.

Prof. Johnston: Understood.

Mr. Schmidt: My point is simply to say, what's the next step we need? There is a high-tech shortfall in terms of competition. That's what I'm getting at. I believe that's the kind of thingMr. MacIsaac mentioned, about getting this together; that shift in attitude does have to take place.

I know there are businesses today that do exactly the things that have just been described. But I know there are others that think training is none of their business and they will have no part of it. We're really going to get the shift in attitude. We have to bring them together.

I think Doug Hull has done an excellent job. I like what's happening there, but I don't for two seconds believe we're finished, or are anywhere near that.

I was on the Board of Governors of the University of Alberta, for example, and we had beautiful, excellent programs, but if I was to say here that we've arrived, well, I'd be stupid. That's false. We have not arrived, and we are not being as competitive as we ought to be.

We have slipped in the overall global competition, and what this industry committee is all about is to say, how can we raise that? I think that's the issue.

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The Chairman: Yes, I think so too.

Mr. Lastewka.

By way of introduction, Walt, to the witnesses, I should say that Walt is vice-chair of this committee and heading up a government task force on privatization of research. So we welcome his comments.

Mr. Lastewka (St. Catharines): Thank you, Mr. Chairman.

I too would like to congratulate the people here today for all the input. There's always one question I've been asking people. We receive many of the promotional brochures from each of the departments. I've been asking - I guess I'm now starting to plead - is there anything that would answer the question to someone who would like to learn more about, or be a participant in, the Canadian science and technology system we have in place?

Unfortunately, my colleague who asked the question on overlap earlier has left. Many times I've heard people say there are a lot of committees and a lot of joint...in place. But what is that overall system we could understand that's in place linking everything?

The Chairman: Do you want to begin?

Mr. Lyrette: Why not?

I tried to capture that in my slides. A lot of people talk about what has happened. I mean, we are part of the system. Before we had money problems we had universities on one side doing whatever they wanted. We had enough money to give grants and contributions to all the industry, and they'd go away and do their things. We didn't have to worry about international collaboration because we thought we could do it ourselves.

The system is coming together right now. Some of the things you're talking about.... I worked on a piece that I'd be willing to share with you. Trying to make sense out of it - I was writing a bit of it last night.

Fundamentally, I think the interaction amongst the players, the industry, the government labs, the university, is happening out there now. It's happening through Internet, it's happening to the centres of excellence, it's happening all over. That's what the strength of this country is all about.

When I look at the two balls in my diagram, on one side you have the infrastructure, which creates the technology. What's needed, what's happening right now, is that the financial community, which was way out there, is coming to us. They're starting to invest in risky technology, in high-tech. Some of the things we didn't dream about 10, 20 years ago.

So the system is coming together right now. I think Canada is far ahead of any other country. I've travelled in the U.S. and in France, and fundamentally they're way out of sync with what's happening right now.

The closest model I can come to - and it's my bias - is the one I put in my slides, where NRC is one of the players, because we have an institution that does research where it involves an upcoming industry. We have an institution called the Institute for Scientific and Technical Information, which is a repository of scientific information. We are now linking with universities. We have become....

It's too bad Mr. Leblanc is not here. We have a deal with CREPUQ, which joins all the universities in Quebec; we share our information with them. We have IRAP, which brings technology together, and now CTN, which is piggybacking on the Internet.

So the system is getting glued together, and I think it's working very well. Some of the things that Doug is doing with the National Technology Index, the National Graduate Register.... All these things are tools that did not exist 10 years ago, 5 years ago. Ten years ago I remember talking about this and was told that I was ET, that I was coming from way out there.

But this gluing of the system is coming rapidly, because fundamentally it's.... You can argue, is it as rapid as it should be? I personally don't think it should be faster. What do we need to do with that? We need more.

Committees are the sickness of governments. We manage by committee. The issue is that the best model, the one I put in my slides, the one I have up today, is where the linkage is coming together.

The Chairman: Mr. Lastewka, I think Mr. Hull would like to comment on that point.

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Mr. Hull: About a decade ago I remember reading a paper that came from some American organization - I can't remember which one - and it was talking about research and small economies. It said, this is an important group of countries to look at, because they generally invent more than they can absorb through commercialization in their economic processes, etc. The reason for this is that they're too fragmented and too small to really make all the connections, whereas we Americans can do this, and it's a good place to go if you want to get cheap technology.

Actually, what's happened in the last decade - and it's partly because the information highway has turned the weakness of being small into a strength - is that it's easier to link up small places than big places, and the networking....

All the kinds of things you're hearing about networking sort of started to happen just about a decade ago, coming out of the NRC. In fact, the beginnings of the network in Canada emerged from the NRC network. These things are now permeating the whole education research establishment in the country. So when you say, do we have a system, I'd say no, we don't have a system. Thank God, we don't have a system.

What we have is a fabric, and it was very loose and not a very tightly woven fabric, but it's becoming very tightly woven now, because the information highway is allowing people to explain what they do, and to share what they do across business, universities, government, laboratories, etc. This is working to Canada's strength right now, and it's very powerful and very inclusive. It allows any university or government lab that has technology to get in touch with other people.

So I think this is something to really look at, in terms of the importance to the Canadian innovations system. It's going to be even more powerful in the years ahead.

Mr. Lastewka: Maybe I should have used the word ``fabric'', and I will at the next group. I'll ask, do you understand our Canadian fabric, and see if they can explain it back.

Mr. Hull: I think we could probably do that, if it was a question of whether we could outline the fabric of the Canadian innovation system. It would be easier to do that than if it was a system that was hierarchical.

Mr. Lastewka: Then I want to change my words - I'll use fabric - such that we could have more and more people understand what it is, who could then participate in it, rather than say, who do I get to know so I can be involved?

We heard that last week during some testimony. Last week we heard things like, universities, yes, they are getting more involved with business and industry, and so forth. The remark from industry was, where the hell have you been for the last 10 years? We wanted you a long time ago.

This then proves to me that they are getting closer and closer. I can appreciate the networks centres of excellence, because I think they have put a lot of people together, focused in the direction and working together.

The Chairman: Mr. MacIsaac, did you want to speak to this point?

Mr. MacIsaac: I'll give it a try. I'm not sure I understand what a system is in this context.

I think the motivation of this day is to look at how, as a society, we can benefit from research. In my lifetime, I think we have made enormous strides in the direction of linking the exploitation of research with the production of ideas, in all kinds of ways.

I would, however, offer an agricultural simile here that goes like this. If you want to protect an acre of sweet corn, plant it in the middle of 100 acres of cow corn.

I am quite concerned about the level of public pressure there is now on the system called research to effectively eliminate or downgrade the work of people who are in the business of discovery.

I emphasize here that there's a huge difference between discovery - fundamental research - and the kind of activity that excites that class of individual, compared to the kinds of things I did when I worked at NRC, or the kinds of things I have done since I left.

I'm very much an exploiter. I'm very much targeted in my research endeavours. It's legitimate research, but it's cow corn by comparison. I think we need to find a mechanism to protect the workplace of those few people in the country who can actually discover, and give them some relevance.

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The Chairman: You have time for one more, Walt.

Mr. Lastewka: I don't want to have my question misinterpreted. My question is actually the opposite of what you just said, and that is, in the end how do we get more SMEs involved and more people understanding that research and development...and getting it out?

Mr. MacIsaac: I would offer a final comment. We desperately need a propaganda program in this country to keep in the country the 2% or so of the population who have an entrepreneurial spirit. Our biggest problem is not the numbers of people who leave, but who leaves. We do nothing whatsoever to encourage these people to believe that Canada is a good place to live in. We do nothing in any real sense to....

The opportunities are here; that's not the problem. It's not the opportunity, but it is a pain on the ass when you have to cross the border into the United States on a regular basis, deal with customs and all the other kinds of things that go along with that. One of these days these guys will say, to heck with it, I'm going to go south and I'm going to stay there.

It's that kind of little thing. There's nothing in an economic sense that would encourage him to stay other than the cold weather, the snow, and what a hell of a good place this is to live in.

We don't do a very good job of exciting people to believe this is a good place to live in, and it's very easy for them to slip away. It's the 2% slipping away who make this difference. If you keep them, they'll find the linkages.

Mr. Lastewka: I just want to make a short comment. I just want to congratulate the group on the work of Strategis. I think it's been an excellent tool that more and more people are using. You're to be commended on getting it to market, and fine-tuning it while it's in the marketplace, because I've used it.

The Chairman: Monsieur de Savoye, you have a question and then Mr. Shepherd. Why don't we turn to Mr. Schmidt's question as the bell starts to ring, but you can tell us how we should be moving the yardsticks in this debate in our committee. We may have different answers, but I think we all have the same question in our heads.

To you now, sir.

[Translation]

Mr. de Savoy (Portneuf): My question is for Mr. Johnston because I am especially interested in the information highway. Several speakers talked about this this afternoon, but as chair of the Advisory Council, you have a broader view of things than anyone else.

I have two concerns: accessibility and law enforcement.

In the area of accessibility, we can talk about affordability, but we must also talk about training. This is one of the necessary dimensions. We must also take into account language and culture. This leads me to talk about the availability of French language software, among other things, especially in the federal public service.

If we do not take into account these four elements, accessibility will be different for some, and we will develop a two-tier society with an ever growing gap between the two groups.

My other concern relating to the enforcement of our laws flows from the issue of the industry and content. Eventually we will have to produce here as well as import foreign products. The trade balance in this area should, at least this is our hope, not be negative, and perhaps it might even be quite healthily positive.

But all of this is dependent upon the reliability of the rules of international trade. I now come to the issue of our tax laws. When something is produced here or elsewhere, who pays for what? To whom is GST paid and by whom?

I am also thinking of our criminal code and of issues of censorship, pedophilia, etc.

.1725

There is also the civil code. Here I am thinking of consumer protection and of privacy issues. There are also copyright issues. I am reminded of the book on Mitterrand that was published in France and hundreds of thousands of copies of which were distributed without any rights ever being paid. France intervened and in a split-second the whole shop moved to Belgium. The content industry therefore has an awful lot at stake in seeing to it that multilateral agreements protect trade. How does your council deal with these issues?

Mr. Johnston: These are excellent questions. First of all, our report includes more than300 recommendations, many of which deal directly with issues of accessibility. We have set as a goal for Canada the offering to all Canadians, within perhaps as little as five years, the same access to the information highway as that which they have to the telephone and television. That is our objective. We are in the process of drafting, in cooperation with Industry Canada, a working paper dealing with several of the strategies that could facilitate this.

Your second question dealt with the promotion of the French culture and language on the information highway. We have quite a challenge in this area. We have formulated close to ten recommendations dealing directly with the methods, techniques and strategies to be used to promote the use of the electronic highway in the French language. Speaking with students and their teachers here in Canada, we were made aware of a very specific problem: at the present time 90% of the software used in primary and secondary schools is in English. The software comes from outside Canada, mainly from the United States. In French language primary and secondary schools, the percentage is 50. Even if we are still not very happy with imports accounting for only 50%, we know that most of the programs developed here are simply translations of programs developed in the United States. We therefore have the same problem in French language primary and secondary schools as in English language schools.

As far as legislation is concerned, we are faced with quite a challenge. We have made various recommendations dealing with issues of confidentiality and security on the information highway. As far as offensive content is concerned, in a world without borders, it is growing more and more difficult to have any control. As has already been said, it is first and foremost a matter of education, secondly a matter of personal discipline and, thirdly a matter of exchanges with schools in other countries that are experiencing the same problems as us.

The Chairman: Thank you very much. Mr. Shepherd.

Mr. de Savoye: With your permission, I would like to give you a brief conclusion.

The Chairman: I will allow you five minutes.

Mr. de Savoye: French language software does exist and is at the same level as English language software. Unfortunately, people sometimes fail to look into sources of supply.

[English]

The Chairman: Mr. Shepherd, do you have a question?

Mr. Shepherd (Durham): Yes, I'd like to address what I think various innovators have touched on, and this is the question about multinational corporations and national borders. We've been led to believe that because of the multinational corporation, science and technology knows no national orientation.

Yet I've been rather impressed by some of the witnesses who have been before us at an earlier date, especially those from smaller companies, maybe investing in smaller technologies in Canada, who very much see themselves as part of this country.

I guess the question I'd like to ask relates to technology road maps. Maybe I'm in the right area and maybe I'm not, but we talked about making that connectivity within Canada - for instance, a recent award of a licence for wireless communications. Using that as an example, I'm led to believe that both of these successful applicants had American partners. How is that promoting Canadian technology? Am I missing the point? Are there benefits to Canada, or are our technology road maps inevitably going to hook up with an American one in any case?

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Ms Prévost: If I can approach it this way, we're finding that the Americans have several technology road maps. They actually came into Canada and were cherry-picking certain firms and their technologies, because they didn't have the kind of technologies they needed to complete certain innovations. Of course, then Canadian companies would talk amongst themselves and find out this was happening. So, yes, that's happening.

I also gave the automotive example, where we're so linked with the United States that we'll turn around and say, what can we offer you? So there will be strategic alliances occurring.

Also, within, for example, aerospace, a lot of multinational companies are involved, and so it gets quite complex. In terms of their action plan, some of the companies may hold the technologies within themselves, because they want to go for an exclusive product mandate. They would then go forward to their parent company and say, this is what we want to be able to produce in Canada, and then put in a bid for that in dollars.

In other cases, there may be strategic alliances amongst Canadian companies in terms of them putting a product together and selling. Or the road-map information might flow from the Canadian partners and some of that information might flow to the U.S. parent company, which then says, yes, go ahead and partner.

So it's not a simple, clean answer in terms of what happens, where technology flows, and where alliances occur. It's just going to get very messy. But that's fine, too, as long as Canadian companies aren't shut out of being competitive, whoever their partner is.

The Chairman: Mr. Shepherd, the bells are ringing.

Mr. Schmidt raised the question. You have departmental people here too. Is there anything in particular, any messages, as to where we move the yardsticks in our work here as a House of Commons committee? Is there any particular quick message you can leave with us after hearing the debate? How can we help science and technology in Canada through our work on this committee? Is there any particular -

Prof. Johnston: Mr. Chairman, I could just make 15 seconds of comment.

First, one must invest in science and technology, particularly in excellence.

Second, we must work much harder at the quality of teaching of science and technology in our country, particularly at the very young grades, and particularly with young girls as well as young boys. I think the information highway offers some opportunities for us to do that better than we have done - and we have not done it well.

We must create a science and technology culture in this country to accomplish the things you have been talking about. We need all the power and resources, and above all the motivation of thoughtful, hard-working people, particularly in our very early grades, to do it.

Mr. Schmidt: May I suggest, Mr. Johnston, that you write that chapter in your next film, phase two of your IHAC, and say, how do we do this culture?

Prof. Johnston: I wrote the book with my daughter -

Mr. Schmidt: Oh, did you?

Prof. Johnston: - Getting Canada On-Line: Understanding the Information Highway. Our next one is Digital Law and the New Economy. It's focused on the investment in young people.

Mr. Schmidt: Good. And do you have some stuff on the science culture?

Prof. Johnston: Yes.

Mr. Schmidt: That's great.

The Chairman: Mr. Bjerring.

Mr. Bjerring: Mr. Chairman, in a nutshell I think many of the comments over the last hour or so have focused on networking. We've used the term in a variety of different ways, but one of the very important ways in which we've used it is in reference to the actual networking infrastructure of the country. It's on this that communication among scientists, researchers and business people rests.

So I think the continued development of the network infrastructure of the country in support of science and technology is absolutely essential.

The Chairman: As you see by the light, despite the good work here of these.... There are two people who will go out and vote against us, so now we have to go and vote in the House of Commons.

I'd like to thank you very much for being here. I know some of you have come from out of town. Your efforts to help us out are greatly appreciated. I hope you see this as the beginning of a working relationship with the committee and not just a one-shot effort.

Thank you again, department people, for your effort, and we'll be seeing more of each other as we go along.

The meeting is now adjourned until Thursday, November 7 at 10 a.m.

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