FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 2, 2001

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[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order and welcome everyone here this afternoon.

The finance committee is continuing its pre-budget consultation. The round table participants are the following: from the Association of Universities and Colleges of Canada, we have Monsieur Robert Giroux, president; and Professor Robert Lacroix, chairman of the AUCC board of directors and chief administrative officer of the University of Montreal. From the Canadian Association of Research Libraries, we have Paul Wiens, university librarian, Queen's University; and Tim Mark, executive director.

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We also have, from the Canadian Institutes of Health Research, Dr. Alan Bernstein, president; and from the Natural Sciences and Engineering Research Council of Canada, Dr. Thomas Brzustowski, president. Of course, there is also Dr. Marc Renaud, president of the Social Sciences and Humanities Research Council of Canada.

Historically, this is one of the most interesting round tables during our pre-budget consultation hearings, and I'm sure it will continue to be today, as well. You're all seasoned veterans of the finance committee, so I don't need to explain to you how this committee actually functions. You, of course, have five to seven minutes to make your presentations or introductory remarks. Then we'll engage in a question and answer session.

We will begin with the Association of Universities and Colleges of Canada, Mr. Robert Giroux. Welcome.

Mr. Robert J. Giroux (President, Association of Universities and Colleges of Canada): Thank you, Mr. Chair.

Thank you very much for initiating this round table on higher education, as part of the finance committee's pre-budget consultation process.

[Translation]

The 92 universities and university colleges represented by the AUCC are pleased to have this opportunity to discuss the essential contribution that Canada's universities make to the economic and social well-being of all Canadians.

Robert Lacroix, Chairman of the AUCC board and Dean of the Université de Montréal, is with me today because we consider these useful hearings to have considerable importance.

[English]

We've all been preoccupied, in recent weeks, with the tragic events in the United States. These events will undoubtedly impact Canada's priorities and its fiscal situation, as policy-makers continue to assess their domestic and international implications. We recognize the need to be both realistic and flexible. We will all need to await Mr. Martin's fiscal and economic update, to assess the full implications of these events for the government's agenda.

In the meantime, as the minister indicated in the House of Commons on September 18, it is important to continue to address the priorities already identified by the government, including investments in research and development. For its part, AUCC remains committed to its role in achieving the federal government's innovation agenda of moving Canada from fifteenth place to fifth place, in terms of our relative investment in R and D.

We applaud the government's recognition of the direct links between education, R and D and innovation, and the future economic and social well-being of all Canadians, as reflected in Mr. Martin's remarks to your committee on May 17.

The Conference Board of Canada, in its recent report card on Canada's socioeconomic performance, makes it clear that Canada still has a long way to go to improve its innovation performance. Clearly, however, if Canada is to reap the benefits associated with university education, research, development and innovation, government must significantly enhance the health of the university environment. To become one of the most innovative countries in the world, and indeed even to maintain our current standing, Canada will need to have more researchers doing more research in more research institutions.

We will need a deeper pool of university educated graduates, who have the kinds of skills required to excel in a knowledge-based economy. We will also need more faculty members, who can teach a growing number of students and mentor them, as they develop skills that have the potential to dramatically alter the way we think and live.

To meet these objectives, let me outline four key measures that are essential. First, on the issue of indirect costs, the need is urgent. The non-payment of indirect costs to research on federally sponsored research is forcing universities to divert significant sums of money from teaching and maintenance to support the growing research enterprise. It is creating unproductive tensions between teaching and research, and it is a major reason why universities are losing ground in their efforts to remain internationally competitive.

These negative repercussions have been building over many years and must be redressed if the government is to deliver on the promises of its national innovation agenda. We estimate that the payment of indirect costs will require an annual investment of up to $400 million.

Second, while the payment of the indirect costs of research will enable universities to more fully support current and future federal investment in research, smaller universities will require additional assistance to further develop sustainable research capacity. Given the importance of ensuring that institutions from all parts of the country contribute fully to the innovation agenda, AUCC believes that a federal research capacity-building initiative is essential. We estimate that such a program, based on research excellence, will require an investment of $20 million to $30 million a year over ten years.

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Third, to meet the objectives of moving from fifteenth place to fifth place, we believe the government will need to significantly increase support for the direct cost of research by more than doubling the combined budgets of the three federal granting agencies by 2010, with particular attention paid to redressing the funding imbalance in social sciences and humanity research.

Four, we recognize that the depth and breadth of knowledge workers needed to realize the innovation agenda will require government to significantly enhance direct support for masters and Ph.D. students.

[Translation]

Mr. Chairman, those four measures combined will do a great deal towards achieving our collective goal, making Canada one of the most innovative countries in the world.

Lastly, we would draw the committee's attention to another challenge, which emerged during the budget cuts of the 1990s. Mr. Chairman, I mean the need to deal with the accumulated cost of deferred maintenance.

Crumbling campus infrastructure is a major impediment to universities' efforts to recruit the 30 000 new faculty members they will need over the next decade. As well, without proper investments, in the necessary infrastructure, the 25 percent increase in the undergraduate enrolment expected by 2010, coupled with the need to enhance graduate student placements will stretch available resources beyond their breaking point. This calls into question universities' capacity to provide higher education to qualified students and to mount the graduate programs the innovation agenda will need, and fully support the federal research program.

The AUCC believes that addressing accumulated deferred maintenance will require a national effort, in which the federal government could play a preponderant role. We would suggest that a one-time dedicated fund be established in partnership with the provinces, with a university contribution, to perform the accumulated deferred maintenance in universities, colleges and associated educational institutions. The funds would be drawn down over several years. We believe that the federal government should invest some 1.2 billion dollars in the fund each year; that amount would come out of the current estimates.

The measures we propose would renew the partnership among the federal government, the provinces and the universities in education, research and development, and innovation. It would provide universities with the means to support and stimulate innovation, as well as to continue investing in people and ideas. We believe that this represents a sound, long-term economic and social investment for all Canadians.

Thank you, Mr. Chairman.

[English]

The Chair: Thank you very much.

We'll now hear from Mr. Paul Wiens, from the Canadian Association of Research Libraries.

Mr. Paul Wiens (University Librarian, Queen's University; Canadian Association of Research Libraries): Good afternoon, and thank you for the opportunity to appear before this committee today.

My name is Paul Wiens. I'm the university librarian at Queen's University, and I'm here on behalf of the Canadian Association of Research Libraries.

Our organization was established in 1976 and is made up of Canada's 27 major academic research libraries, the National Library of Canada, and the Canada Institute for Scientific and Technical Information.

CARL represents all of the major research libraries in Canada, and therefore speaks on behalf of the thousands of Canadian scholars, researchers, and students in all the disciplines who need timely access to comprehensive and authoritative information resources, on terms, I may add, that are competitive with those who do research outside of our own country.

Over the last few weeks, we have all been horrified and saddened by the tragic events in the United States. These events have led to a greater determination to maintain and protect our democratic way of life. In these difficult times, I hope committee members will continue to recognize the important role our institutions of higher learning, innovation, and research play in our nation's continued development and economic well-being.

I would like today to address the role of our country's academic research libraries in supporting the national agenda for research and innovation. I want to address as well the urgent need to recognize and fund research information resources and services as an important part of the overall indirect costs of university research activities.

Information resources and services offered by research libraries are critical for much of the research funded by research granting agencies. Researchers, particularly in science, technology, and medicine, depend on current information to meet their research needs. With over 660,000 articles published in one year by U.S. scientists alone, libraries are an essential tool for researchers to stay abreast of developments in their fields.

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In a 1998 article, “Developing Performance Measures for Library Collections and Services”, Susan Rosenblatt characterized the information-seeking behaviour of a researcher as:

a recursive process of discovery in which scholars initiate research through a process of skimming and scanning sources of information, discussing the question with colleagues and browsing in the library. As the research process proceeds, information is even more systemically extracted, synthesized and questioned. In short, the scholar works from source to source, not in linear sequence but in an ever-widening ring of reference, citations, and discoveries; the research library provides the environment in which much of this discovery process can take place.

For most of those working in the sciences, the journal continues to be the major research tool. In spite of the changes in journals made possible by technology, they continue to be the vehicle where the results of research are published. Access to a range of specialized journals, then, is a prerequisite for staying current with work in a researcher's field, as well as in related disciplines.

In addition, access to indexing and abstracting resources provided by libraries is essential. Whether from their own computer using library-provided network resources or from the physical library collections, researchers rely on a library's collections to pursue the “ever-widening ring of reference, citations, and discoveries” that make up the research process. The stronger the library collections, the greater the ease of access to new discoveries, and the fewer the barriers for a researcher to keep pursuing an idea to its fullest.

To illustrate this point, I'd like to quote a brief anecdote from a medical researcher, Judy Anderson at the University of Manitoba, who describes her own requirements for a research library:

First, it must be a collection with breadth and depth. If my work is to be innovative, I need to be able to find information from many different perspectives, and let these make connections with my own knowledge. Sometimes I read an article and it triggers `the next step' in an experimental design. Other times, I read an article, put it down, and only later seek it out again. So the articles need to be there easily and for repeated uses.

The second priority of this researcher was that the collection be current and encompass indexes, abstracts, and other databases that are rapidly updated with new citations from a larger number of journals.

The anecdotal evidence of this example is reflected again and again in published reports of the information-seeking behaviour of scientists. In some, the research library is of vital importance to the intellectual life of the university and to the researcher in any discipline.

The importance of information resources to the research process is also recognized by the high priority many universities have given to the funding of information resources, funding levels that often exceed university grant increases by a wide margin but are still not enough to meet increasing information resource costs.

In another strategy, university libraries have engaged aggressively in nationwide consortial and cooperative arrangements to reduce the cost of acquiring research information resources. Most notable of these consortial initiatives is the Canadian national site licensing project, which is now delivering some 700 electronic research journals to researchers and scholars at 64 universities across Canada. This three-year $50-million pilot project, one of the first of its kind in the world, has been funded 40% by the Canada Foundation for Innovation, with participating libraries and provincial government agencies raising the remaining 60%.

However, despite increased expenditures for collections in all regions of the country and other innovative initiatives such as those just mentioned, extraordinary cost increases for information resources and the declining value of the Canadian dollar have resulted in a reduction of between 21% and 32% in the average effective purchasing power of CARL libraries in the five-year period from 1995 to 1999. Over the 10-year period from 1990 to 1999, the effective purchasing power for journals in all disciplines has declined by 42%. At the same time, research libraries have had to take on the incremental costs of managing digital collections and creating a new electronic infrastructure as they make the transition from the print to the electronic environment.

In the global competitive context of research, knowledge creation, and innovation, Canadian research libraries are one of the critical but neglected indirect costs of research. This neglect is underscored by comparison of library expenditures by the 13 Canadian members of the Association of Research Libraries with other members of that organization, an organization of the 112 largest North American research libraries. In 1990, one Canadian library ranked among the bottom ten libraries in total library expenditures. In the year 2000, seven Canadian libraries ranked in the bottom ten.

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The indirect costs of research associated with the operation and maintenance of libraries are real, significant, and essential, just as are the costs associated with facilities such as labs, the management of the research process, and with regulations and safety compliance. Recognition of the need to reimburse universities for these costs has been advanced repeatedly, and the need has become more acute.

As the Prime Minister's Advisory Council on Science and Technology pointed out in its September 2000 report, research libraries in universities are a critical element in creating a sustainable university research environment and “must be many times larger and more complex than they were a few years ago”.

At my own institution, in an initiative that I believe reflects the views of many other universities, the university senate has affirmed the principle:

that the extent and depth of the library collection of this university, as a research university, be guided by the research activities of the institution,

—and further—

that spokespersons for the university vigorously press the case with all providers of research funds... that research funding make explicit provision for the acquisition of bibliographic materials that are essential ingredients to the research process.

Until universities achieve the funding necessary to address all indirect research costs and capacity challenges, libraries will be ill equipped to contribute fully to the innovation agenda. It is essential that research library funding grow in concert with increases in granting council funding to promote excellence in research and innovation.

Thank you, Mr. Chair.

The Chair: Thank you very much Mr. Wiens.

We'll now hear from the Canadian Institutes of Health Research, Dr. Alan Bernstein, president. Welcome.

Dr. Alan Bernstein (President, Canadian Institutes of Health Research): Thank you very much, and thank you on behalf of my colleagues for inviting us here today to talk about the importance of research and innovation to our country.

As you know probably better than certainly I do, in today's global and knowledge-based economy, science and technology are key drivers of the engine that fuels economic growth. Our nation's future prosperity and health depends critically on our ability to develop new scientific knowledge, to exploit it, to exploit it here in Canada, to develop the new products and services to alleviate the personal, societal, and economic burdens of disease, and to develop an innovative, cost-effective, and sustainable health care system.

My overall message to you today is fourfold. Why invest in health research through CIHR? First, the economic burden of illness and disease in this country is well over $150 billion. Second, research is the driver of the knowledge-based economy, and health research will build and diversify Canada's knowledge-based economy. Third, I think investment in health research is the best way to brand Canada, as the Prime Minister has said, as the place to be in this 21st century, the century of health research. Fourth, health research is absolutely critical if we are going to have a health care system that is sustainable, is going to contain costs, and be innovative.

I've provided a handout. I'm not going to go through every slide, but I want to highlight a few points.

The Government of Canada set us on a bold new course in the year 2000 in the creation of the Canadian Institutes of Health Research. We have been mandated to be integrative, proactive, strategic, and problem-based in our approach to health research. I think we've been very active over the last 15 months in developing and turning that vision of CIHR into a reality. I'm not going to go through that in detail today; I'd be happy to do it in depth, but there are some examples of what we've been doing in the deck that I've provided.

As I've pointed out in slide 11, this is truly the century of health research. The genome sequence is in. The impact of that and other new technologies, our understanding of the psychosocial environmental determinants of health, and the interplay between all of this in determining health and disease parameters is really going to transform research in the next 10 to 20 years, our economy in the next 10 to 20 years, and the health care system.

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I think we will see a profound revolution in all those areas, leading to new treatments, new prevention strategies, and new approaches to that. Canada, by creating CIHR, has I believe laid a solid foundation for positioning us as a country in this new century of health research.

If you look at slide 13 and the Speech from the Throne, a number of key priority areas were laid down: the health care system, children and families, aboriginals, the environment, and the knowledge-based economy. I think CIHR is directly relevant to all of those key areas in the government's broader social and economic agenda.

I said a few minutes ago that Health Canada estimates that in 1993 the health burden of illness to Canada—almost ten years ago now—was $157 billion. That's a big number. Even a 1% decrease in costs in that burden, i.e., $1.57 billion, is threefold over CIHR's current budget. That's a threefold return on investment, and I think, especially these days, a threefold return is not bad. Again, I can give many examples—and some of them were in the deck—of where Canadian researchers funded by CIHR have really brought in profound savings to the health care system. They have made it more innovative, more responsive, and more cost-effective.

I shall also point out that the CIHR model is being followed internationally. I have been invited to, among other places, Australia, where I went last June to talk about CIHR to the Minister of Health. They're very interested in this. The Netherlands have visited us. New Zealand has visited us. Israel has visited us. The U.K. has visited us. This is a global model, where the rest of the world is watching Canada to see how we are developing this integrative approach to health research.

Let me say a little bit about the knowledge-based economy, an area I know is of great interest to this committee, starting around slide 28. Canada has the world's second largest biotech industry. It's very vibrant. It fundamentally rests on the basic research that's funded by agencies like CIHR, NSERC, and SSHRC. The spinoff activities from university teaching-hospital labs is key if we're going to be competitive in this new global economy.

CIHR is playing key strategic roles in cataloguing that pipeline of discovery and in the commercialization of spinoff activity to make sure these discoveries are kept in Canada. CIHR is also providing interesting, sustainable high-tech jobs for young Canadians.

Again, I'm not going to walk you through the examples. They're here in the middle of the deck I provided to you. Another point I wanted to talk about is that both the Prime Minister and the Minister of Finance have talked about moving Canada from fifteen to fifth in GERD. The Minister of Finance has reminded all of us that the G in GERD does not stand for “government”, it stands for “gross” expenditure on R and D. He's pointed out that if we are to get from fifteenth to fifth, we can't just be driven by what government does or spends. The other sectors of the economy have to play their role.

I've highlighted for you in slide 51 and in a few others after that the various sectors and their contributions to health research in this country. I think it dramatically makes the point that in health research other sectors of the economy, particularly industry, particularly the provinces, and particularly the health charities—i.e., Canadians—are contributing growing amounts to health research. If you look, for example, at 1990, for every dollar of federal government investment in health research there was $5 put in by those other sectors. Ten years later, despite the growth in the federal government investment—which is really remarkable—that ratio has grown from 5:1 to 7:1. The other sectors are more than holding their own in contributing to that GERD, to getting Canada from fifteenth to fifth.

Indeed, if you compare Canada to other countries, I think we stand out, particularly with the health charities and the millions of Canadians who contribute to them in supporting the health research endeavour in this country.

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Almost every province in the country, from coast to coast to coast, is reorganizing their health research efforts and reinvesting in health research. In B.C. there's the Michael Smith Foundation for Health Research, and Alberta Heritage is of course very familiar to all of you. This morning I was speaking with the Ontario Science and Innovation Council, who were visiting here in Ottawa at the NRC labs, talking about the many programs they are putting in place to position Ontario to take advantage of federal government support. P.E.I. is developing a health research institute, operated in part with some funding from CIHR. Every province in this country is, as I said, re-investing to rebuild their investments in health research.

Obviously, the tragic events of the last few weeks have given us all pause. The impact is all-pervasive. One of the obvious issues for all of us, including this committee, is future government spending. Where should the priorities be?

My colleagues have already, I think, remarked on the importance of reaffirming the long-term commitment to research and innovation if we're going to go down this route at all. I would simply echo that and point out that investments in health research are, in my judgment, more important than ever. Indeed, I think it's important for Canada to look at what the rest of the world is doing, given the events of the last few weeks and the downturn in the economy.

Slide 56 is a little story from this week's Nature, the world's pre-eminent scientific journal. The headline is “Support for science is firm”—that's in the U.S.—“as emergency raises budget”. So the Congress has re-affirmed its support for the National Institutes of Health, the American equivalent of CIHR. When President Bush took office, he basically cut virtually every program except one, and that was the NIH. They are receiving this year an increase of $2.8 billion U.S., and Congress has reaffirmed that increase in light of recent events.

I point that out for a couple of reasons. One is that the country that has been mostly directly affected by what happened on September 11 is not backing down from its commitment to research—and I think correctly so. Secondly, independently of the events of September 11, the increase for NIH is $2.8 billion. That's not the budget; it's the increase, which will take it to about $25 billion.

If Canada really is serious about investment in research and it wants to stay internationally competitive, this is going to require a continued and sustained investment to get us to the 1% figure for health research, which in CIHR's case would be about $1 billion.

I would just end, Mr. Chair, with a quote from Mary Lasker, the great philanthropist in the U.S.: “If you think research is expensive, try disease.”

Thank you.

The Chair: Thank you very much, Dr. Bernstein, and thank you for a very thorough presentation and package you left with us.

We'll hear from the Natural Sciences and Engineering Research Council of Canada, Dr. Tom Brzustowski. Welcome.

[Translation]

Mr. Thomas A. Brzustowski (President, Natural Sciences and Engineering Research Council of Canada): Mr. Chairman, thank you for inviting me and giving me this opportunity to present some ideas on behalf of NSERC.

[English]

I have prepared a handout, and all I will say about the handout is, Mr. Chairman, that it makes the point that NSERC will help provide the people to meet the government's agenda.

The three points I would like to make to you are on the first page of the handout—two words under “Goal”—the diagram on the last page of the handout, and something else that is not in the handout, something I will simply call the price of success.

But let me introduce my comments by saying this, that I'm very, very glad and very relieved that the committee is continuing its hearings. I'm quite convinced that what you are doing here is considering measures that will build for the future, and I believe—and I believe this firmly—that delays, reversals, decreases, and cancellations in doing as a nation what we consider important would be a victory for the terrorists. They may never know what we've done, but we would know, and we would pay the price. So I'm delighted that the committee is continuing, and I'm very grateful for the opportunity to appear.

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Let me make my first point then. At the bottom of the first page in this handout you will see, under “Goal”, it says “To increase prosperity in Canada and improve the lives of Canadians by making Canada one of the world's top five nations in research and innovation.” The words “research and innovation” are chosen very carefully, because we realize that not all research and development pays for itself. A great deal of it doesn't.

But if we are going to raise the prosperity of this country, if we're going to improve the quality of life of Canadians, if we're going to, as a nation, be able to more often put our money where our mouth is when we express our most precious values, then we do need prosperity. We need new wealth creation, and that's why the word innovation is here. That is, some research will lead to new goods and services that Canadian manufacturers will offer in international markets, and the successful innovations will help us create wealth in this country, will help us acquire prosperity, which our society will then be able to use to express its values.

This is a definition of innovation that I take very seriously, because without that, Mr. Chairman, a goal expressing our wish to move from fifteen place in R and D per capita to fifth place in R and D per capita does not guarantee that the nation will necessarily become more prosperous as a result.

The second point I wish to make is in the diagram that you find in two places. In the deck it's the small diagram at the bottom of the last page, but for your convenience, we've expanded it to a larger diagram in the very last page. It's a diagram that shows our attempt to portray on one sheet of paper an array of the various costs associated with university research.

I would like to draw your attention to the very last column on the right. It's labelled “Indirect Costs”. These are the costs to the universities of being in the business of providing the facilities and the support for research. You will notice that the first one there is the library. You will also notice that there are elements there that are imposed by us—by funding agencies of the federal government—that increase the costs to the universities of doing research: providing ethics reviews when research involves human subjects; meeting the standards of animal care when animals are involved; providing accountability; providing the legal capacity to sign contracts and agreements; or the capacity to provide meaningful reports on time. All of these things are part of the indirect costs to the university of providing research.

I say this because I want to point out that NSERC certainly does recognize the need for the universities to have some help with the indirect costs. Otherwise I think we will simply find that if we impose high standards of administrative competence and high standards of accountability and reporting and so on, the universities may not be able to meet them—quite apart from deferred maintenance, quite apart from providing technicians and what have you. So I think the case is well made.

My last point comes back to NSERC, and it concerns the price of success. The government, Mr. Chairman, has put policies in place to make it very clear to the country as a whole that university research is important for our future. It has put funding mechanisms in place to offer support for various aspects of that university research, and I'm very happy to say that the policies are working. In the world in which we live, the indicator of that is what is happening in the universities when people retire.

The people retiring from Canadian universities these days are people appointed in the late 1960s and through the 1970s generally. Not all of them by any means have been active in research. Some have not been active for the last few years. Others were never active in research because the mandate of the institutions that appointed them didn't really include emphasis on research.

But every single replacement of these people, every single one, is expected to be active in research from the time they start at the university. They have CFI there to help; they have the Canada chairs—they have all of these things. But many of them don't have this help, and they apply to NSERC for grants.

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Last fall, for the competition that was held in February of this year, we had 761 new applicants—new university professors—applying for research grants in a competition of about 3,000. This year, every indication is that the number will be at least as large—new applicants.

We support about 9,000, or a little more than that, out of maybe 12,500 people in the disciplines in which our mandate lies. Even if the 12,500 decreases—because some universities are decreasing the number of appointments—the 9,000 is rising, and it's rising rapidly. That, to us, is the price of success. We are operating with the same budget now that we had two years ago, when the growth wasn't there.

I think it's wonderful news for the country that the growth is there, and I feel an obligation, on behalf of NSERC, to give these new people the start they need to get their research going, because I think we're all convinced that the policies are in the right direction and the activity is important.

Mr. Chairman, with that I will simply conclude. I thank you again for giving me the opportunity and I look forward to answering your questions.

The Chair: Thank you very much.

We'll now hear from the Social Sciences and Humanities Research Council of Canada, from the president, Dr. Marc Renaud. Welcome.

[Translation]

Mr. Marc Renaud (President, Social Sciences and Humanities Research Council of Canada): Thank you, Mr. Chairman. Good afternoon, ladies and gentlemen.

I will be speaking English. I apologize to my fellow francophones, but I have a very simple reason for this. We have only five minutes, and I do not see how I can put forward a concise message in French so that everyone can understand. I will therefore be speaking English. I apologize for that.

[English]

[Editor's Note: Inaudible]

The Chair: —

Go ahead.

[Translation]

Mr. Marc Renaud: That is because, in French, we have to speak very slowly for people to understand. Isn't that right?

[English]

We're living in pretty troubled times. We have a brief, and I won't go into the detail of this brief. You can read it as well as I can. I'm going to just flag for you some issues in there.

I would rather chat with you a bit about the context in which we live now. We're living in very troubled times. Everybody has been talking about this. We're all thinking about this in all kinds of different ways. But this is probably a reflection of the fact that the world has changed at an incredible speed over the last few years.

Let me tell you a personal anecdote. I had a chance recently to visit my primary school, and I must admit I had a profound shock. There's no better way to see the future than to have a shock from the past. I was born and raised in eastern Montreal. Like all kids of my age, and like kids now, I was very much in a relationship with my school, with my street, with my church, and with the values of that environment.

When I look at my classmates, almost half of them did not even finish high school. I don't know where these people are in the current labour market. Further, remember, there were no TVs in those days. I thought people talking English were learned, like people talking Latin. I realized only when I was 10 years old that there were people talking English in real life, in real flesh, in real time.

When I look back upon those years and look at what's happening now, it's incredible how much we've changed: the labour market has changed drastically; our industrial structure has changed also in drastic ways; the global village has become very real; and one way or another we all have now to become much more accepting and much more tolerant vis-à-vis strangers, vis-à-vis other cultures.

When we look at the future, what do we have in store? What we have in store is a growing need for so-called knowledge workers—and please believe me, “knowledge worker” is not a rhetorical set of words. We need our kids to go to school more than ever before. A high school diploma just doesn't get you anywhere in the labour market these days.

We're living in a world where every single institution has to adjust to change. They have to adjust to globalization. It's true for our families, for our churches, for our schools, for our businesses. All institutions have to adjust. Further, we all have, one way or the other, to become culturally fluid. We have to learn how to behave with different cultures, and again, to be accepting and tolerant.

I'm saying all of this because this is the real, broad context for what people have been talking about around this table, and what we're talking about in this brief.

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We need our universities more than ever before. We need all the universities we have, wherever they are—small, medium, and large ones. Within universities, we need social sciences and humanities. We're about 55% of the university professoriate. I can tell you that the world of social sciences and humanities is the world where people are thinking through how to get those institutions to adjust, how to get out of... Canadians have to become more global citizens while keeping their own Canadian identity.

So that's the context for this brief. If you would please turn to page 2 and graph 1, that's the crux of the matter. Robert Giroux has alluded to this.

We're confronting potentially a quite important crisis. What this graph illustrates is the incredible growth in demand for university professors in the next ten years. This growth is occurring because a lot of people are retiring. It's also occurring because everybody's predicting a 20% increase in the number of people who go to university. The graph there is for social sciences and humanities faculty, but the same applies for natural sciences. This is what the demand will be for university faculties.

Now let's look at the supply. If you look at the dotted white line on these black histograms there, these are the numbers of predicted Ph.D. people who will be interested in an academic job. We know that no more than 50% of the Ph.D. degrees we deliver are going to people who are interested in going into academia afterwards. So we're faced with a dramatic problem. In the social sciences and humanities, we're almost sure that the need year in and year out for the next ten years is 1,600 new professors a year, and the number of Ph.D.s coming out of universities potentially to fill these jobs is between 500 and 750.

What are we going to do? How are we going to cope with this? So this is why we're presenting sort of a platform here as to what we think should be done, and it's best synthesized in the graph on page 4. What we're saying there is we have three levels of problems: one is training those Ph.D.s to get into university; the second one is attracting them into university jobs; and the third is retaining them there.

On training, the best way to get people to do a Ph.D. is to get rid of their debt and actually support them to go to school. I realized again while visiting my primary school that when I went to study in the U.S. I had in those days—that's in the early seventies—$9,000 of scholarships, and my tuition fees were taken care of by an American foundation. That $9,000 today is worth $42,000. SSHRC is now giving scholarships of $17,000 for our Ph.D. students, and we're giving a very, very, very small number of those scholarships.

You see why people drag their feet and don't finish their Ph.D. You see why people don't go and finish graduate school.

So our first point is that... When the time comes, we all know we're in trouble now. When the time comes, please don't lose the focus on investing in our young people who will be driving our universities in the future. Let's provide them with scholarships that will help them get there and finish in time.

It's also important for us at SSHRC, because we don't have this, to develop a masters program. We need to support people at the middle level, because it's by supporting them there that you're going to get them to do a Ph.D. afterwards. By supporting the masters level, you also give a huge hand to all of those small universities throughout this land that are actually basically finishing their diploma at the masters level.

So our first point is please help us in investing in our young people and providing them with scholarships.

Secondly, we have to attract people to university jobs. The British academy has just finished their report, using all kinds of methodologies to show that a university teaching job is less and less attractive. It's true in finance, it's true in economics, but it's also true, they say, in literature departments. I would like to think that we're caught with exactly the same problem in Canada, and if we want to cope with this, we have to provide tools to get those people interested in the job. Our research chair program is quite helpful, but that's later on in the process, not in the beginning stage of one's career.

To attract people in the beginning stages of one's career, we propose a program to provide them with seed money to actually get going, get going in research. Tom was explaining the extent to which our faculties are changing.

• 1615

[Translation]

I will pass you a paper, as they say in French.

[English]

This is even truer in the social sciences and humanities than it is in the natural sciences, because in the social sciences and humanities people who were in the university were told to just write your book—go to the library and write your book; you don't need research money. This is not true any more. If you visit Canadian universities now, every single faculty is going to say the same thing: We want money. We want research students to work with us. We need help to get going. We want to make discoveries.

Again, we have to attract them into these jobs, and it seems to me some kind of package from the feds is needed for getting going on that front.

Third is the issue of how to retain people in a university job. I talked to some of you in the industry committee in June about one of the problems we're facing, which is our success rate. I won't bore you with this now, but it has one huge implication as far as SSHRC is concerned, in that the big universities win more than the small and medium-sized ones, for reasons I can get into, if you wish, in the question period.

If we don't find a way to increase our success rate... Not 200%—that would be crazy. We're talking about competition here; we're talking about excellence. If we increase our success rates, then the young people will win more, people out of eastern Canada will win more, people from Manitoba and Saskatchewan will win more, and that will make a huge change in their lives. It will give them the feeling that they actually are paid by the government to get going in making discoveries and making breakthroughs in human knowledge.

This is what is described in this. I won't go into detail, but our proposal is to say... There's no money in there. We know the troubled times we're living in, and you'll have to make the decision as to what is the equilibrium. But the plea is please continue to invest in universities, and above all—and I may sound like I'm preaching from my parish—above all, think about the social sciences and humanities in all of this.

[Translation]

That's it. Thank you.

[English]

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

We'll now proceed to the question and answer session. Mr. Epp.

Mr. Ken Epp (Elk Island, Canadian Alliance): Thank you very much.

Thank you to all of you for being here and sharing your insight and wisdom and stimulating our thinking.

I would like to start off with Dr. Renaud and say to him how good he makes me feel, because I thought I was getting to the generation where I was the only one who was in school before there were TVs. I think we learned better in those days. There was more emphasis on abstract thinking. We read books. We designed pictures in our minds based on what we read in the book, instead of having it all spoon-fed to us. I really think that abstract thinking is better developed in that environment than what we have today. But this is not a time to bash TVs, I guess.

Dr. Renaud, you say you need more funding, obviously, for the social sciences and humanities research, but is it not true that the cost of research in your area is considerably less than in the science areas?

Dr. Marc Renaud: There's no question about this. We don't need the equipment. On the other hand, we have to be careful about myths in this. Of course we don't need synchrotrons, but we need, for example, to launch new databases. Those new databases that StatsCanada has developed they put $50 million behind. These are the things we need to do our research.

The costs are not the same. It's ridiculous, however, to think that we don't need money, that we just need our pencil. That's how we thought before. When I was first hired at the university, nobody ever told me I would apply for funds. To be honest, I didn't think I would need any funds. Then I began to realize that I had students I had to take care of, and that if I wanted them to work with me and be part of my team, I had to find ways of supporting them. Second, discovering things cost money. Developing a survey instrument, or digging into a logical database, all of these things require time, and time is something that costs money and it requires money to hire people.

The scene in Ottawa is that Canada gives to 55% of its faculties 12% of its funds for research. This is much too low. If you look at other countries, it's very hard to make a comparison. The right figure is more around 25% of the funds that should go there, certainly not 55% of the funds.

I guess that's what I have to say on this.

Mr. Ken Epp: Okay.

• 1620

I have a question that probably all of you could answer. It's my observation that when I wander around universities—which unfortunately I don't get to do as much now as I did when I was younger—and look around, a lot of the professors are old. Do you have any figures on demographics?

I think one of you mentioned that many are retiring and need to be replaced—in fact, I think it was you. Is that true right across the disciplines? What are we expecting, as a country, in terms of being able to replace all of the retiring professors at the universities, in both the research and teaching components, which are tied together? Our population is still increasing, and our demands on the universities are increasing by probably 5% to 6% per year, in terms of population growth of students—that's just a guess. Just enlighten us on the increasing demands and the demographics of the professorial staff.

Mr. Robert Giroux: I would like to answer that. We could certainly send the committee some research information we have published in the last couple of years on this matter.

First of all, we foresee, over a period of 10 years, a growth in student population—I'm talking now about full-time students and not part-time—of over 25%. That forecast was made two years ago, and now we're finding that almost every year there's a growth of about 5%, as you rightly point out, in terms of new entries into the system.

Secondly, the university faculty population, demographically, is one of the oldest of any profession in Canada. A very large proportion will be between 55 and 65 in the next 10 years, and heading toward retirement. We have estimated that over that period, universities will need to recruit over 30,000 new faculty members. About two-thirds of that will be to replace those in the existing faculties who will be retiring, and the remainder to deal with the growth in university population.

It is a major challenge that universities are facing, and of course Canadian universities will also have to compete on an international scale. They won't be able to fill those jobs from Canada. They'll have to compete for them because universities in the United States will be coming to Canada to get some of our good professors. We have to be able to do the same thing, and also rely on the graduation rates of our Ph.D. students. That is why, of course, both Mr. Renaud and I have pointed out the importance of supporting graduate students, so we will have more in our universities to be able to feed this very large number. It'll be a major challenge facing our institutions.

Mr. Ken Epp: Okay, would anybody else like to comment on that?

Dr. Alan Bernstein: I just want to add another component to this. It's not just the retirements, of course.

I don't have the hard numbers, but I've been travelling across Canada, and I was at Memorial last week. They've just added two new floors to a centre for applied health research, in partnership with the provincial government. They have a proposal in to CFI to build a new building for health research. McGill has a new proposal to build a huge new research building for health research. Calgary is building a new building. In Toronto, five new buildings are being built.

I think over the next five years we're going to see huge demand for new faculty members who are research-minded—my colleagues have already touched on this—in part prompted by the very good programs that have been brought in by the Government of Canada over the last five years—CFI and CRC—and the provincial commitment to research in universities.

There's one thing I didn't touch on, and we've touched here, about the need for new graduate students. The CIHR has brought in a new block-training program for health research in the 21st century. With partners in the health charities, industry, and the provinces, we will hopefully put on the table somewhere between $10 million to $20 million a year, simply to train post-docs in a multidisciplinary way, and fund groups of investigators who are committed to training in this new sort of multidisciplinary environment. We've had an amazing robust uptake by the research community in Canada in this new program.

• 1625

Dr. Thomas Brzustowski: I would just like to underline all of this with one or two numbers the committee members might find useful.

The number of university professors in this country in all fields is in the order of 34,000. In the fields narrowly defined as engineering, mathematics, and science, there are about 9,500, but NSERC also supports physical geographers, some psychologists, people in animal health and what have you, with a population of maybe 9,000 out of a universe of maybe 12,500. If you look at our number of new applicants, this represents something in the order of 6% or 7% of the faculty members in the field, so we're talking about that level of replacement.

I know that a number of the large universities, such as the University of Alberta, the University of Toronto, and the University of British Columbia, have hiring plans in their faculties of science and engineering that number in the hundreds over the next few years.

The Chair: Who else would like to comment?

Mr. Ken Epp: I have another question. I was in the education industry myself, at the front of the classroom, for 31 years. When I look at the universities now, they have very large classes. Interaction in the classroom environment, one on one with the professor, is impossible when you have 250 or 300 students in the lecture theatre. So it is very much a one-way communication.

What use are universities now making of new technology, in terms of interactive technology, with computers and videos and that type of thing, so that those lectures, those one-way communications, can be taken by the students at their convenience? That would stop the huge expense of running large classrooms. From the professor's point of view, he's nothing but a... I shouldn't say this, because I taught in that type of an environment and I tried to make sure that my classes were always new and different and exciting. But for many it can become—I've observed this—just a routine of repeating the same thing they've done three times earlier this week, and next year they will do it again.

Is there any response to that? To what extent are we using innovation in the education business itself?

The Chair: Who would like to talk about innovation?

Dr. Renaud.

Dr. Marc Renaud: I can assure you, travelling and visiting universities and seeing the extent to which there is experimentation with new technologies in classrooms, it's fabulous what's being tried out there. The problem we have is there are no lessons out of this. There's no conclusion as to what's the best way to approach it.

SSHRC is investing $20 million a year for the next five years on an initiative called an initiative on the new economy. This is precisely one of the key questions we would like to see answered. You see, Canada has 87 universities, or so. We have the huge advantage of being able to compare the experimentation from Acadia, HEC, and Saint Francis Xavier, and look at what it provides at the end of the day for one's learning. Therefore, we hope that in one or two years from now we'll be capable of providing you with very concrete answers to your question.

In the adjustment of schools to the future, there's no question that the pedagogy has to change and the new technological tools have to be used. The question is how to make the best use of what we have. Again, we don't know what's happening all over the place now.

Mr. Ken Epp: I would think the libraries would be particularly involved in that, in terms of assimilating and assembling information that's available on demand for students, at both the universities and now in remote locations.

Mr. Paul Wiens: I think some of the examples we can cite where that kind of innovation has occurred, amongst other universities, are at the University of Calgary, the University of Toronto, and others, where information commons have been created. They bring together all of the electronic access that libraries are able to provide in the networked environments we have today, with access to the print materials people still use a great deal, as well as assistance with the use of the electronic resources and how to find information.

So we're bringing together in one location—one-stop shopping if you like—an information resource that broadly meets the needs of all of the students.

Mr. Ken Epp: Okay.

• 1630

The Chair: Mr. Mark, go ahead.

Mr. Tim Mark (Executive Director, Canadian Association of Research Libraries): Thank you.

You may also be aware of the Industry Canada study that was done together with the Council of Ministers of Education Canada, and that's the Advisory Council for Online Learning. The report was tabled earlier this year. We made a submission.

In answer to your comment, yes, this is a very dynamic and extremely exciting field, and libraries are playing a full part in it by developing exactly such interactive tools and learning aids.

[Translation]

The Chair: Mr. Loubier.

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Thank you, Mr. Chairman. I welcome our witnesses here today.

Mr. Bernstein seems to doubt whether the Minister of Finance can meet the commitments made last year to university research and health research, partly because of the events which occurred in the U.S. on September 11, and also because of the current economic situation, in other words, the quite evident economic slowdown.

Have you heard any rumours that the Minister of Finance would renege on his commitments, or is this simply a concern you have?

[English]

Dr. Alan Bernstein: I'm not sure I can answer that question directly.

The budget for CIHR called for a $110-million increase this year, which we received. I understand from conversations I've had with the Minister of Health that this is a good phase one level support for CIHR. If I look internationally at what the Minister of Finance has said in his speech in New York in January about where Canada should be, for example—and I have his quote here—he said if we are going into an area of research, we should be serious about it; we should really aim to be number one.

Canada has amazing strengths in health research. There have been headlines in Canadian newspapers in the last few years about the great strengths Canada has in health research. For a small country, we really can be number one, per capita. We can be the very best, but that requires an investment from the Government of Canada. I take the words of the Minister of Finance to mean that if we're going to do it, we should aim to be number one. We should be serious about it.

As I said in my presentation, there actually is great partnership. Every province in this country is investing directly in health research. They have an understanding of the importance of research for their health care systems and for the universities, so every province is partnering. They are now partnering directly with CIHR. A great model for federal-provincial partnerships in research has been developing through us. I don't know if that answers your question.

[Translation]

Mr. Robert Lacroix (Chairman, AUCC Board of Directors; Chief Administrative Officer, Université de Montréal): When we examine this issue in the light of current economic uncertainty and the risk of an economic slowdown, I believe the answer is twofold.

First of all, the government of course wants to stabilize the economy quickly and not have it fall into a recession. Obviously, one way of achieving that is to use part of a potential surplus and invest in university infrastructures. That is probably the best investment the government could make. Investing in the infrastructure is the best way of revitalizing the economy, since construction and infrastructure have the biggest multiplier effect on the economy as a whole.

Secondly, I would point out that, in so doing, the government is investing not in a white elephant but rather in the true economic future of Canadians and university research in Canada, without affecting its current estimates.

• 1635

The current estimates must of course also be used in the context of increased funding for major councils and indirect research costs. There again, I believe that this is the best avenue the federal government can take at present to stabilize the economy and at the same time reduce uncertainty about future economic activity, and ensure that this short-term investment is highly profitable to future economic growth in Canada in the medium and long term.

Clearly, none of us has sought the current economic situation, but we have to experience it. To turn things around, however, I believe that investing in university infrastructure and regular research budgets are the best avenues for eliminating uncertainty, stabilizing the economy, and increasing Canadian economic growth over the long-term.

Mr. Yvan Loubier: Professor Lacroix, on that subject, have you had an opportunity to discuss your proposals on indirect research costs with department officials, or with the minister himself? This debate has been ongoing for some time. I have been here eight years now, and I have been hearing about it for eight years. And I think you first presented this proposal—that 40% of direct costs be reimbursed—some years ago as well. Does anyone seem open to your ideas to date, or is there a generally negative reaction to your proposal?

When we compare our universities with those in the U.S., the picture is remarkably bleak. They are outstripping us, not because researchers are paid better in the U.S. but because research infrastructure in Canada is inadequate. Even federal contributions are now far from adequate.

Mr. Robert Lacroix: I believe that Mr. Giroux can add something, since he has many dealings with ministers and deputy ministers. Quebec, the other provinces and the federal government are all beginning to have a greater understanding of the need for indirect cost reimbursement.

The problem is this: in the past 20 years, research activity in universities has increased considerably. We do not have the same universities we had 20 years ago. You were there then, Yvan. John McCallum was at McGill then. Now, we no longer have the same universities. A great deal less research was carried out, and there was less need for indirect cost reimbursement. Now, however, research has grown phenomenally. And it must continue to grow if we are to achieve our research objectives.

University budgets, which are primarily intended to support undergraduate teaching and graduate education, is increasingly being diverted towards research, because indirect costs are not being funded. We end up in the situation Mr. Epp described earlier, whereby we have to increase the number of students in our classes so that the university can support its indirect research costs. In other words, we have to teach bigger and bigger groups, we have to cease maintaining our premises and our buildings, we cannot use new communications and information technology, because it is all too expensive and we do not have the funds. There is a huge problem there. The trade-off between research quality and teaching quality could become a considerable problem in Canadian universities if we fail to deal with the indirect costs issue.

Mr. Giroux, can you tell us how ministers have received your proposal?

Mr. Robert Giroux: I simply wanted to add that I meet with senior officials and ministers quite frequently. This summer, I had the clear impression that they did want to deal with the indirect costs issue, particularly in the context of the white paper on innovation, if we can call it that. It is one component of assistance to Canadian universities. I believe that, in principle, the fact that indirect costs must be paid is being accepted.

• 1640

Some provinces have also highlighted the significance of the federal government's action by themselves paying the indirect costs of research which they support.

At present, we are in the same position as everyone else. Nothing is certain. The events of September 11 will determine the extent to which the government will be prepared to help, and how far it will help. We are realistic, and understand the situation.

Mr. Yvan Loubier: Mr. Chairman—

[English]

The Chair: No. We're way over time.

[Translation]

Mr. Yvan Loubier: No, no. He took more time than I did, Mr. Chairman. Please allow me at least two minutes. I just have a simple concluding remark.

[English]

The Chair: Very briefly. Are you going to take five minutes like Professor Renaud?

[Translation]

Mr. Yvan Loubier: No. This is just a brief remark, directed specifically at Mr. Renaud. I do not wish to engage in polemics. I simply wanted to remind him of something that Félix Leclerc said a few years ago, shortly before he died. He said that we should prohibit the French language, ban it forever from our lives, and only then would we understand its value and the importance of protecting, promoting and defending it.

I would ask you to reflect upon those words. I believe it is very important that language never be considered the obstacle to a message, to an explanation for a given phenomenon. I myself speak French, English and even Spanish, yet I have never felt restricted by time. I can put across any message I want even in five minutes, Mr. Chairman.

[English]

The Chair: We will now go to the speakers as listed—be mindful of the time—Guarnieri, Leung, Barnes, Cullen, and Nystrom.

Ms. Albina Guarnieri (Mississauga East, Lib.): Thank you, Mr. Chair.

Your insightful presentations certainly provoke many questions, but in the name of being concise and to allow more time for questions from my colleagues, I'd like to turn to the Association of Universities and Colleges, in particular to explore finding solutions for one of our pressing social needs: the plight of the older worker.

There's certainly little mystery for us regarding general operation of universities and colleges and the balance between tuition fees and government funding. We have two different requirements in this country—a standard education system of degree-granting programs for young people and a system that I sometimes think is second class for retraining older or displaced workers. We see a tremendous amount of government spending on programs such as job training, which typically don't involve universities. They usually involve other bodies and organizations.

Are universities positioned to be the vehicle for the delivery of job training to older workers? Would this be a feasible solution for some of the plights of the older workers we see today?

Mr. Robert Giroux: Thank you very much. Of course, this is very close to my heart, because I consider myself to be one of those older workers who is slowly getting there—

Ms. Albina Guarnieri: And I'm getting long in the tooth, too.

Mr. Robert Giroux: Universities are providing quite a number of courses and programs on a part-time basis. The number of part-time students varies depending on the cycle of economic activities. When employment prospects are very good you see a drop in part-time workers, but when the prospects are less good, you see more and more part-timers. This is one area in which universities can help.

Universities now are working the most in the area of distance education and technology enhanced learning. They are developing programs to provide continuous learning at great distances; the campus setting is not necessary. Universities are making many strides in this area.

We have a consortium in Canada of what we call virtual universities who have grouped together to provide this training. By the way, this is also a very strong export for Canada in terms of the expertise of its university courses and its university excellence. They're moving in there.

• 1645

We will also be having discussions with the Department of Human Resources Development Canada at our forthcoming October meeting, and here we will want to see how best to support the government's skills and learning initiatives, which have some relationship to recycling or providing more education for older workers.

Ms. Albina Guarnieri: Then do you see yourself moving more into usurping some of the roles that other organizations have fulfilled in the past? For instance, we've all heard the anecdotes about the lack of tool and die makers.

Do you see yourself offering a broader range of potential job retraining in the future?

Mr. Robert Giroux: We see this more as a role for community colleges, who are much better equipped to do it than the universities.

They can develop programs more quickly than we can. They can move them in. They're also located in many more communities than universities. We have close to 200 community colleges, CEGEPs, and other institutes across the country.

In our view, we are complementary to each other. I don't see any universities moving into the kinds of areas where the colleges have done well and should continue to do well.

Ms. Albina Guarnieri: Is this because of the lack of infrastructure? What are the obstacles preventing you from moving more into this area?

The facilities are there during the summer. Would you not like to make better use of those facilities, which stand idle? Is there a risk element? Perhaps you won't have enough students to fill certain classes?

Mr. Robert Giroux: Our campuses are often used during the summer for specialized kinds of training, and probably some of that is happening. At the same time, the philosophy of our universities is to build on what we can do best. The undergraduate and the specialty programs are what universities do well, and we rely more on the colleges to carry on some of the other activities.

We are facing in this country some very serious shortages in some of the very basic trades. This could well be addressed through elements of specialty courses flowing from high schools before students go to colleges. We all have a role to play. Universities will apply themselves in the areas where they can do the best job.

Ms. Albina Guarnieri: Thank you.

The Chair: Thank you.

Ms. Barnes.

Mrs. Sue Barnes (London West, Lib.): Thank you, Mr. Chair.

Thank you for your presentations. Many of us believe also that any stoppage of R and D flows would be a vast mistake for all Canadians, not just those involved directly but for all of us. Therefore, I'm certainly a proponent of increased R and D funding in all of your councils.

Having said that, I get angry, just as other people do, and I feel like something of a backhoe from the provinces. The provincial governments are supposed to fund the universities. I see tax cuts. I see incursions into security issues and other new ventures. And I think, my goodness, why don't we just take care of our jurisdictions? This is one of the jurisdictions that isn't being taken care of, especially in Ontario, which has the lowest per capita funding of post-secondary institutions. Yet at the same time, because I absolutely understand your problem with indirect costs and know this is a necessity for knowledge-based economies, I also see the need for them.

I have only been on the finance committee for the past year. As a starting point, to put this into context, you said in your brief that the finance committee did endorse the recommendation of indirect costs, but I don't believe it was at a 40% transfer of block funding. I thought there was at some point a mention of a tied-funding percentage of the council grants. I can see how that would be a lot more saleable from a jurisdictional perspective. I can see it as something that is potentially more doable.

Exactly what happened in the past on that recommendation, and why did you switch gears? How did you arrive at 40%, which seems pretty stiff?

Mr. Robert Giroux: First of all, we've always maintained that the federal government should do what its competitor countries—like the United States and the United Kingdom—are doing very well. They are funding the indirect cost of research. They are funding it as a percentage of the direct cost to research, and essentially our benchmark is the funding of the granting councils in this case.

• 1650

Of course, we've recommended this to this committee. We've recommended it to the industry committee, who have supported a recommendation on indirect cost. The committees stayed away from a percentage. They did not say it should be 20%, 40%, 60%, or whatever. We've arrived at a number of 40% on the basis of our review of how it was funded elsewhere. That's one element.

In the United States, it's averaging more than 40%. What we have to remember also is that in the United States, they're funding, in virtually all of the cases, the salaries of the researchers, which in Canada are being funded by the universities. In the United Kingdom, the numbers are floating around 45%. There is a report of the Advisory Council on Science and Technology, which advises the Prime Minister and the Minister of Industry on issues related to science and technology in the country. They have recommended, after a very thorough review and consultations with a number of stakeholders, that the amount should be around 40%.

When we asked our institutions to take a look at what would form the indirect costs, all of the costs that are in there—many of them mentioned by Dr. Brzustowski previously, and many others—they average around 40%, or even more. So that's the basis of our 40% number.

Mrs. Sue Barnes: I'll just ask if you could table those reports with the committee so we can all share that background material.

Mr. Robert Giroux: We can certainly send you the report of the Advisory Council on Science and Technology. They released it earlier this summer. We'll make a note of that, Mr. Chairman, and we'll send it over to you.

Mrs. Sue Barnes: What have you done with the provinces? Haven't you gone banging at their door to say, “This is your responsibility; you're supposed to fund post-secondary education”? We are getting these increased funds on research. I know you don't want to kick the gift horse on the R and D funds, but at the same time, this has created a very real issue for you. It won't diminish. But at the same time, you've talked about provincial sharing of funds. Is there no sharing apparent in this area?

Mr. Robert Giroux: The way universities are being financed in this country is that the provincial governments, of course through the help of the transfer payments and the CHST, are providing block grants to the universities for their ongoing operations, which of course nurtures and funds the teaching functions and many of the other functions that are part of the university, including the salaries of the faculty who are also researchers.

The federal government has strongly been supporting the research function through the granting councils. One of the elements... The federal government has done even more, because it has realized and recognized that research infrastructure is also very significant, and through the Canada Foundation for Innovation it is funding research infrastructure in partnership with the provinces and others.

Mrs. Sue Barnes: That's right.

Mr. Robert Giroux: The missing link, the element that is not being funded by either the federal or the provincial governments... because the provincial governments are funding the indirect costs on their own research funding. Ontario is doing it. Quebec is doing it. Many other provinces are doing it. But the federal support of indirect costs is not there. That's the missing element. It's part and parcel of the funding formula in other countries as they fund research.

In the United States, they fund public universities. Those public universities are funded by the state for their major university function: teaching. When NIH or NSF funds the research function in those state universities, it funds the indirect costs.

Mrs. Sue Barnes: Okay. I want to be clear that what you're really asking for is that any research grant coming in has an incremental supplement of 40% of the amount of the grant.

Mr. Robert Giroux: Right.

Mrs. Sue Barnes: And you want that block funded and divided up toward the universities as a direct grant, even though right now there is absolutely no mechanism by which we could get that money to you in that way.

Mr. Robert Giroux: No, it would have to be provided through the budgets of the granting council, but as a direct grant to the universities based on the percentage of the direct costs they are funding.

• 1655

Mrs. Sue Barnes: Okay. For the social sciences and humanities, I hear what you're saying to us, and I agree you are relatively underfunded. But I also must say I'm very pleased that CIHR is happening, and it's certainly doing well in my region, which is southwestern Ontario and London. I will continue to support any of the R and D around this table and in my caucus. Thank you very much, gentlemen.

The Chair: Thank you, Mrs. Barnes.

Ms. Leung.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Mr. Chairman.

I want to thank all the learned speakers for their presentations. A lot of us are on the post-secondary education committee, and I think as a whole, we really support what most of you are saying.

I have a question for Dr. Alan Bernstein. I want to congratulate you for developing the 13 institutes. It must be quite a job selecting them and grouping them into different groups.

Recently, a number of professions have approached me for various reasons. They have expressed their concerns. They feel they have not been included—for example, dermatology, skin diseases; and dentistry, oral health. I believe they are in one of the institutes—musculoskeletal and arthritis. In the meantime, they did give me a reason to wonder why they are not being officially or professionally recognized.

We know, in the NIH in the United States, oral health is a separate individual institute. Oral health and dermatology both have their own provenance and are important in the health field. Would you kindly explain the rationale for this, please?

Dr. Alan Bernstein: That's a very good question. When the governing council, over a year ago now, right after CIHR was launched, came to discuss the slate of institutes, there was no fixed number. We had all degrees of freedom. I think we agreed on several principles on how to proceed. One was parsimony—the smaller the number the better—in part because we have, relatively speaking, a small budget.

NIH, you're right, has an oral health institute. They have 28 institutes and a number of offices. But their budget is US$25 billion. We were faced with trying to cover the waterfront of health research, because that's our mandate, but at the same time, keeping the number of institutes as small as possible so we really could have some impact in those areas the institutes chose to work in.

Every area, as far as I know, is covered in those 13 institutes, including, as you said, dermatology and dentistry. There are other areas, just to give you some more ammunition, such as vision research and biomedical engineering. We don't have institutes in those areas either, but they are covered in other institutes. We'll see how those strategic initiatives roll out from the institutes, whether in fact oral health, dentistry, and dermatology are in fact covered or whether they are neglected because they don't have their own institutes.

The last thing I will say about it is that the number and nature of those institutes is not written in stone. We will have a formal review of the institutes in about a year and a half or two years. At that time, we will look at whether the 13 we have are the right ones, or whether we should be adding, subtracting, or modifying the slate of institutes, and we'll go from there.

In some ways—and this is the last thing I will say about this—there's an advantage in not having an institute. I'll give you one example. We don't have an institute of rural health. It's an important area for this country in many ways. We have a major initiative underway at the moment. Dr. Renée Lyons from Dalhousie University is spending her sabbatical year as a special adviser to me on rural health. She is developing a strategic initiative in rural health research. She's going around to each of the obvious institutes that have an interest in rural health—the Institute of Population and Public Health, the Institute of Health Services and Policy Research, etc.—and asking if they want to buy in on this.

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So there's an advantage in not being owned by any one institute in that you can get all of the institutes to buy in. So she's using that sort of degree of freedom in a very clever way. If it looks like this rural health initiative—and this is a good example—should become a permanent fixture in the constellation of CIHR institutes, we will make it that in a year or so. None of this is written in stone.

Ms. Sophia Leung: To me, rural health is separate. It's not a specialty; it's a geographical type of health specialty.

I see that in one of the institutes you have already described the various bones and joints and the skin and teeth. So, actually, dermatology and oral health are included.

Dr. Alan Bernstein : Yes.

Ms. Sophia Leung: My problem is that they come to me. I don't think it will affect your funding. They would like to be officially included, like arthritis, dermatology, and oral health.

Dr. Alan Bernstein: I see. You're saying you want to add it to the title of the institute.

Ms. Sophia Leung: That's right.

Dr. Alan Bernstein: Okay. The Governor in Council has set up a process to revisit some of the titles of the institutes. I'm certainly prepared to look at that and have the Governor in Council revisit that. That's not an issue. I won't promise you that we will change it, but we certainly will look at it again.

Ms. Sophia Leung: Thank you. That would be great.

The Chair: Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman, and thank you, gentlemen, for your presentations.

I'm going to pick up on the comments of my colleague Sue Barnes. I understand that the issue of indirect costs is a problem in a pragmatic sense that's facing universities and colleges. I certainly don't have any problems with that. I guess what we're here to do is to find solutions.

As an Ontario federal MP, I have a problem with looking at this and saying that the federal government should immediately move in and cover the indirect costs of research. Maybe this is in a sense myopic for me, but I look at the federal government setting up the research chairs, a major initiative that was very well received by the universities and colleges, and they were outspoken—and I think you were at the time, sir. The Canada Foundation for Innovation, at $3.4 billion, in fact, with legislation that this committee endorsed last session, now includes an overhead component.

Maybe I'm a bad learner of history, but what I'm hearing is that suddenly the provinces have decided they're going to fund teaching, but sorry, research is something else, not our bailiwick.

When I went to school, I always thought there was a teaching and a research component to universities and post-secondary institutions and that the two were inextricably linked. To say you just move money from one pot to another and never the twain shall meet, I find that hard to swallow.

Perhaps Industry Canada and Minister Tobin are very supportive of this conceptually. I don't know where that innovation issue momentum is going, and maybe the support goes beyond that, but as an Ontario MP, I have problems when I see the Ontario government cutting taxes, which we're doing as well, but they have some issues, and I don't want to get into a partisan debate, and I'm sure you won't get dragged into that either. I see these sorts of problems at the university and college level.

I think Humber College is in your association.

Mr. Robert Giroux: No.

Mr. Roy Cullen: They're not. They're a community college, but they're doing some excellent work.

Nonetheless, that's my problem. Help me, as a federal Ontario MP, understand why the federal government should be stepping in to fund indirect costs when we have really stepped up to the plate, I think, with the research chairs, with the Canada Foundation for Innovation. Why should we be there?

Mr. Robert Giroux: I can really appreciate the observation you're giving.

First of all, the universities are caught in between in this. It's fine to say, why shouldn't the provincial government do something, or why shouldn't the federal government do something? But the federal government has given itself a vision for the future. It has given itself a goal of increasing research and development. It has given itself a goal of going from fifteenth to fifth place in the world, and of course, it has given itself time. It sees the universities as key partners in this. We are being told that all the time, and as you point out, the federal government has shown this in the last three to four years with some very specific initiatives that say they believe in this and want to support it.

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The more the federal government puts money into direct research funding, the more it's making it difficult for the universities to respond in a capable way of maintaining the research enterprise, because it is not being funded by the federal government nor by the provincial governments for the overhead, the indirect costs, and the cost of many of the things that are requirements of the granting councils.

You've mentioned the research chairs. When the program has fully matured we will have 2,000 research chairs. The faculty at our universities by that time will number 40,000; it's 34,000 now. All new people who are coming in will not be research chairs; they will be going after funding at their institutions with the granting councils. The universities will be asked to support them with technicians, with research offices, with committees to look at ethics considerations, and a number of other things, and the libraries, which have been and are becoming so significant. That funding isn't there.

I can well appreciate how you feel about it, but we have said to this committee for a number of years that the more the federal government increases its funding, the more acute the problem becomes.

We think the time has come to recognize it. It's not as if we're inventing something. It has happened in the United States, and it's happening in the United Kingdom. It's not as if we're the only ones saying it; an independent advisory council on science and technology, which provides advice to the government, has looked at it and said it needs to be done, and it has used the arguments I'm putting forward this morning.

So we come to this because it is essentially the responsibility of funding what we call the full cost of research, because that's the element that is missing. It's not denigrating what the government has done; we've supported it 100%. We've been the organization that supported it the most. But we've also said all along that a time will come when this issue will have to be dealt with, and we think the time is now because of the expectations, the high demands that are being placed on universities.

Mr. Roy Cullen: I appreciate what you're saying. Maybe there was a certain naïveté on my part in thinking that if the provinces had any commitment to research and innovation, if the federal government reached out in this way with these major initiatives, they would come in behind and provide the kind of indirect support... I guess that was naive.

This morning we were talking to another research institution and suggesting to them—I was, in any case—that hopefully you're taking this message to the provinces. The problem is, when you take it to the provinces and then you bring it here, it's sort of like the scatter-gun approach. If I were a province, I might say, oh, well, they're trying with the feds as well; maybe the feds will buckle in the end.

If you went to the provinces and said we're not going to put this on the table for the federal government, they've stepped to the plate and we think you should be there...

Mr. Robert Giroux: They are not, and that is a fact. Of course, the provinces, in their requirements, are asking for increases in transfer payments. The problem with the increases in transfer payments is that the provinces have a lot of latitude to put it where they think it suits their needs.

If you've been observing what has been happening—and I'm sure you have—it has been going essentially towards health. So if transfer payments are being increased, we're never sure just how much of it will be going to the universities. That's why we know if it's paid directly by the federal government to the institution, it will be used by the research enterprise in the institution and will strengthen that enterprise.

The Chair: Thank you, Mr. Cullen.

Mr. Roy Cullen: Thank you.

The Chair: I want to follow up on some of the comments that members of the committee have made vis-à-vis who's funding, and I think that's important. But having said that, we still have made a commitment to be fifth, if I'm not mistaken, and that remains. It's very important when we make commitments that in fact we honour them, and we'll have to find ways to cooperate perhaps with the provinces and whoever else would like to cooperate to in fact reach fifth place, because I think it's a worthy goal.

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I mean, as an individual in a committee that cares about a pro-growth agenda as a way to enhance the standard of living of Canadians, I think the investments we have made in this area will pay dividends.

Without getting too political—because quite frankly in the federal government and the provincial governments we all face challenges, and we always face the challenges of limited resources—I'm just wondering whether the provinces have an antiquated view of what universities actually do, because they're limiting their funding to certain functions such as teaching, and others, obviously. There's a new world order in relation to learning that perhaps has not been accepted yet. Do you have any thoughts on that?

Mr. Robert Giroux: Yes, Mr. Chairman. I don't want to mislead the committee on this. Many of the provinces are now involved in some quite extensive research funding. But it is provincial research funding. They are paying the indirect costs in their research funding. They're funding the basic core budget of the universities, which of course is for the faculties, the facilities, the ongoing costs, and so forth.

Secondly, they are funding more and more research in universities. The province of Alberta has made some tremendous strides. Ontario, Quebec, British Columbia, and many other provinces are doing it. So they are complementing and adding to the whole research funding that exists across the country. But the federal government has always been the prime mover in the research funding field, in terms of the support of research funding across the country. On that particular front, it has itself committed to double its own research budgets.

When you go from fifteenth to fifth, all parts of the economy have to increase their R and D investments. By far the major funder is the private sector, the corporate sector. That sector also has to come to the plate and do its share, with the provinces and the federal government. We're of course zeroing in here on the federal government's role, but a very strong effort is needed from all parts.

The Chair: That's fair enough when you appear in front of a committee that is part of the federal government, but it's also very clear from what you're saying that this could only be achieved through effective partnership between the private sector, the provinces, and the federal government.

I just want to speak to you very quickly and ask a question about the emerging market for life-long learning. As we look towards the future, I think you will find that life-long learning is going to become a bigger slice of the education pie. Knowing what we know about the private sector, if there is a dollar to be made you're going to find new players in an education system that perhaps many years ago involved just your schools and universities.

I could see an organization—off the top of my head, Walt Disney, Time Warner, and others, or companies that have converged, such as telecommunications companies and the media—that could perhaps begin to infiltrate this growing industry, if we can call it that. This raises the important question, do the universities and educational institutions have the capital to compete with some of these very large organizations that I predict will get into this educational sector?

[Translation]

Mr. Lacroix.

Mr. Robert Lacroix: I believe that we have to see the issue as a whole. Continuing education is increasingly shifting towards graduate studies. More and more people already have a bachelor's degree. Thus, the role of universities will probably become more important than ever.

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The other very important aspect of this is that we will have fairly general administration and communications programs. The universities, and even private-sector institutions doing the same thing, could teach general skills.

However, as soon as training programs require major laboratory facilities or teach professional programs, like medicine, dentistry or pharmacy, the university will be involved to the full.

People are often a little unclear about continuing education. However, the private sector has made some headway in some very narrow sectors, covering perhaps 10% of the spectrum of university education. As for the rest, the universities are already playing their role, and will have to continue increasingly to do so. Given that they cover approximately 80% of the field, universities have had an incredible mission.

[English]

The Chair: I understand that.

You're saying that they now have infiltrated 10%, if we can refer to this as a market for one second. But does 10% mean 20% in five years, 30%? Do you see a trend evolving? What is it that you see? This issue becomes very important because as the whole issue re-orients itself, then in our role as legislators we have to be thinking as well about what type of education system we want to promote within the country.

Monsieur Giroux.

Mr. Robert Giroux: It's extremely difficult to project the part of the market they will occupy.

We're seeing some signs now that what was a strong enthusiasm and a strong push by a lot of private sector firms to get into this particular market is beginning to abate to a certain extent. Some organizations are having serious financial difficulties.

The problem with distance learning or continuous learning, and with the virtual university, is the quality of the material, the quality of what is being taught. That is looming as a major challenge.

For example, in the spring there was a big article about MIT putting freely on the Internet all of its courses and programs, giving people access to whatever they wanted. Now they didn't put their degrees on that particular footing, but the material.

One of the reasons we heard at the time was that it's just too expensive, too difficult to start developing programs and courses that MIT would control totally. So they decided, why not make all of our material available and let people use them? This may bring even more business to MIT, as part of an approach.

I'm taking a long way to answer your question. There's another trend you should be aware of. We're finding that the growth in interest in our universities is very much there. What our universities are doing, more and more, is using technology on the campus itself to support and therefore provide accessibility to what's on the Internet and all of those available sources.

So I tend to be where Dr. Lacroix is. I tend to say that there is really a limit to how much they can do. They will certainly concentrate on Masters of Business Administration and certificates of that type. But in many of the areas, the university setting will be extremely important and will continue to be the way to proceed.

The Chair: How do you see your evolution? You can't stay the way you are now. If in fact there is a group of individuals who, according to Monsieur Lacroix, now represent 10% of a market, how do you react to that? What kinds of plans do you have?

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Are you going to get into a more... I don't know?

Mr. Robert Giroux: All our universities, or many of them, are now positioning themselves to increase their technology and to enhance learning.

The report that was referred to by our colleagues in CARL, done by Dr. David Johnston, dealt with providing funding to develop approaches and programs and to strengthen the technology and so forth in order to increase university capabilities. They will be positioning themselves to get into that market. What is extremely difficult to foresee is the size of that market, but they will certainly position themselves because they see it as an addition to their overall ability as a university.

Another element that is spurring them is of course the trade implications of all this. There is a lot of interest in many of the developing countries and other countries around the world about what Canadians can offer in terms of programs, and therefore the virtual university and distance learning become a major factor.

The Chair: Are there any further comments?

Monsieur Renaud.

Dr. Marc Renaud: SSHRC did a pretty extensive consultation on life-long learning last year to try to figure out how we should target our initiative on the new economy, and life-long learning is one of the fourteen. I must admit that the conclusion we reached out of that consultation is that although everybody feels there's a need there, people will have to learn throughout their lives, people won't stick to the same job as did previous generations, and we don't know exactly what we're talking about when we talk about life-long learning. It's still an ideology.

My belief is that we will need to actually focus on what universities can deliver. Robert Giroux was talking about colleges. Colleges are doing a very good job in technical training. Robert Lacroix mentioned that universities will have to do life-long learning in terms of graduate studies. What does that mean in concrete terms, and where will universities go? I think this is something in front of us. We're all questioning ourselves.

The Chair: My first question focused on large corporations. They may in fact benefit from the economies of scale they have within their own organizations, particularly ones that have, as I said earlier, converged with media and telecommunications companies. They have a lot of resources at their disposal.

But what about the role of the small business, the sort of entrepreneurial type who is going to develop a little niche market for training and education? Do you see that as an emerging trend in your field?

Mr. Robert Giroux: It's been there. It's been there for a number of years. There are projections. I remember attending sessions in the United States where it was said that this market will grow twofold and threefold. I may not be up to date here, but I'm not seeing a major competitor—if I could call it that—to what the universities and the colleges can offer, because they have, of course, as Marc has said, been very much in this business. Private companies do not offer the same kind of course content and the same number of courses as the universities and colleges. That's the reason the colleges and universities are saying that if there is going to be any competition there, let's strategically prepare and gear ourselves to be able to compete. But I don't see it very much. There was one institution that approached us last year to see whether they could become an AUCC member. Since then, I think their business has been essentially quiet.

There are other institutions that are more in information technology that have run into severe problems. Therefore, I think people are taking a bit of a step back and trying to think through what all of this means for them, because it's very expensive to put in place.

The Chair: Let's say Bill Gates comes up to you tomorrow and says he's offering $3 billion—I'm not exaggerating, because that is well within his means—to create an effective... not a merger, but a partnership with one university, the University of Toronto, McGill, or what have you. Can you see that happening in the future? You can?

Mr. Robert Giroux: I can't, but if he does, I'll make sure he pays the indirect cost of research, Mr. Chair.

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Some hon. members: Oh! Oh!

Mr. Robert Giroux: I'm sorry. I apologize.

The Chair: I did tell you right off the bat that one way or another we're going to find that money.

Mrs. Barnes.

Mrs. Sue Barnes: I just have one question. Say for now I can buy into the indirect cost of research. What I can't understand is how a university, funded by a provincial government, can neglect its libraries, because surely the library and the research that is available to students are essential components of post-secondary education. I see how you're saying it's an indirect cost of being a facilitator for all the research, but I really do believe that libraries, above all other elements of a university, should be an essential service to students—regular students, undergraduate students, and post-graduate students. I have real problems buying that as an indirect cost, as if it's an ancillary need or as if upgrading a library that is not up to date is somehow not directly in the ambit of running a university.

Mr. Paul Wiens: I have a couple of points. One, I don't think universities are neglecting their libraries. At Queen's University, for example, our funding for library acquisitions has doubled in the last eight years. The problem is that the cost of information resources has outstripped even those increases in funding by a wide margin. Universities like Queen's are really struggling to maintain a certain level of information resources in the face of grant increases that are at the level of the CPI or even less. I think there is a big cost problem here that the universities are trying to deal with. They are trying to deal with it the best they can, but there isn't the funding to do that.

Secondly, on the indirect cost of research for libraries, my own personal estimate is that at least a third of the information resources we provide and the services we provide are related to the research that goes on on our campus. I was just looking at some numbers I have here for Queen's, and in 1990-91 our research grants totalled $58 million. Today they are at $77 million, and we are trying to provide the same kind of support for all those researchers—where the research is now at a value of $77 million—on a base we had when the research funding was $58 million. That's where the indirect costs have to come in, in my view.

Mrs. Sue Barnes: Thank you. I appreciate your trying to explain that.

C'est tout.

The Chair: Ms. Bennett.

Ms. Carolyn Bennett (St. Paul's, Lib.): Thank you, Mr. Chair.

I have two very specific questions. Obviously, in this time where there may be some other calls on the budget and there might be a little stall in the arrival of new dollars, Dr. Bernstein, what sentence would you like in the finance committee report to keep us on track and invoke the government's conscience? Is that the $1 billion being ramped up in 2005?

For the others, what would be the sentence around “indirect costs” that you would like? Is it just loosening the rules so that federal dollars can be used for indirect costs, or is it...

The Chair: Write something along the lines of “just the cash”, please. Right?

Mrs. Sue Barnes: Give us more money.

The Chair: With the address.

Dr. Alan Bernstein: I think we're all obviously aware of the slowdown in the economy and the recent events of September 11.

Research is a long-term investment. I think the worst thing the federal government can do would be to start and stop. We'd be better off not starting. I think we're having a discussion on the long term here. We're not talking about the next month or even one year ahead; we're talking about the next five to ten years. The Minister of Finance has said that he is committed to taking Canada from fifteen to fifth in ten years.

I think what you're hearing from us is to reaffirm that commitment, to translate that into reality, and, as my colleagues have said, not to let the events of September 11 deter Canada from its course, which is to build a country and a place to be in the 21st century.

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Dr. Thomas Brzustowski: Let me just say that—we're being lighthearted at this end—if Pogo had been a Canadian, he would have said, “We have seen the enemy and it's fragmentation”. And I would say this: on the one hand, we should say that the government is right because it is important for the country to attract researchers in greater numbers and to have better research done in more important areas to enhance innovation. But on the other hand, we have to be prepared to find ways of paying for that, regardless of the fragmentation that might exist in the system today. We have to find ways to do that.

The Chair: Dr. Renaud.

Dr. Marc Renaud: Yes. If I were looking for one sentence, I would say, let's finish the job. I think all committee members should read Rob Prichard's Killam talk, where he describes the new paradigm of the federal approach to financing universities. It's a very interesting article because he shows how, without people realizing it, the investment in CFI, Genome Canada, the granting councils, and the Canada research chairs program is focusing federal investment in ways that are extremely profitable for the country and for the universities. What we've been talking about is finishing the job, about indirect costs and re-equilibrium in budgets for the granting councils. I think that's the key thing.

The Chair: We're going to have to go and vote so we can do our job, but we'd like to thank you very much. This is, as I said earlier, always a very interesting panel. You can rest assured that we certainly appreciate your concerns and that we will do what we can to honour our commitment.

The meeting is adjourned.