HEAL Committee Meeting

STANDING COMMITTEE ON HEALTH

COMITÉ PERMANENT DE LA SANTÉ

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 1, 1998

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[English]

The Vice-Chair (Mr. Reed Elley (Nanaimo—Cowichan, Ref.)): Good morning. I was only made aware of the request to become chairman about fifteen minutes ago, so I apologize for being late.

In the absence of our usual chairman, Joe Volpe, I would like to ask the committee to give unanimous consent to go forward with the presentation of our report in the absence of a quorum. Thank you.

We're pleased to have members of the Medical Research Council of Canada with us this morning, particularly Dr. Henry Friesen, the president of the MRC.

Dr. Friesen, would you please introduce the members of your group who are presenting this morning? We'll then ask you to begin your presentation. And welcome; it's good to have you here.

Dr. Henry Friesen (President, Medical Research Council of Canada): Thank you very much, Mr. Chairman and ladies and gentlemen. It's a pleasure for us to be here to tell you about the MRC.

Joining me this morning are members of the senior management group. Dr. Mark Bisby is the director of programs; Guy D'Aloisio is the director of corporate services; and Dr. Howard Dickson is a scholar in residence. Dr. Dickson is in an innovative program in which individuals who have extensive research background choose to spend some time with MRC. He has just completed a twelve-year term as associate dean of research at the Faculty of Medicine at Dalhousie University. He's interested in the subject of ethics, and will speak on that as questions arise. Also with us is Mr. Marc LePage, our director of business development. And, Mr. Chair, with your permission, I would like to ask you to allow Dr. Alex MacKenzie, from the University of Ottawa, to highlight how applications of research make a difference in the lives of children.

With your permission, that is the group that will be prepared to address issues and answer questions.

The Vice-Chair (Mr. Reed Elley): We're very glad to have Dr. MacKenzie with us, too.

Thank you very much. We're happy to have you here to share with us this morning. Please begin.

Dr. Henry Friesen: The Medical Research Council is one of three federal granting councils. It's the lead council that funds research in the health sciences. Our mandate is simple and straightforward: to support, promote, and advance research in basic clinical and applied sciences in the health field, as well as to offer advice to the minister.

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The council was created in 1960 as a branch, an offshoot, of the National Research Council. As with many agencies, there has been substantial change and evolution during that period. I was given the honour to direct the affairs of the council in 1991, following which a major strategic redirection of the council was undertaken as a result of an extensive consultation that took place.

Council had a proud record of achievement in supporting basic biomedical research. Given the advice we received from a very elaborate consultation, it seemed to us that we should broaden the spectrum of research in our portfolio, to embrace all of health research; that we should continue our commitment to excellence in support of science as it relates to health; but that we should also be diligent in evaluating carefully everything that we do. As a result, particularly given the new realities facing all governments, we recognized that government couldn't do things alone, that we were in fact part of a world that was interdependent and linked—linked in terms of the sciences, but also linked in terms of the funding opportunities, including the health charities, the provincial agencies and the federal government, but increasingly also the opportunities that the health industry sector presented.

Marc LePage joined the council and emphasized the value and the leverage that could be obtained through partnerships. In our business plan, we set out a vision whereby we could use the base funding from the federal government to advance the opportunities in partnership with the charities and in partnership with industry. Over the last five years we have levered well over $1 billion of support.

Perhaps the most innovative program was the Canadian Medical Discoveries Fund, which was an MRC-inspired initiative that is now the single largest investor in the life sciences in this country. It has raised from 70,000-plus Canadians across the country close to $300 million that is now being invested in start-up businesses, which are in fact part of the growing health industry sector in this country—homegrown Canadian talent, Canadian discoveries, exploited, developed for the first time on this scale as a result of an MRC-led initiative. A good deal of the acknowledgement must go to Marc LePage for promoting that activity.

The council's activities are stretched from coast to coast. It addresses an issue of vital importance to Canadians: their health. It's important for the committee to recognize that research is the underpinning of our health care system and the health of Canadians. It's that new knowledge that is generated that informs Canadians, and it assists them in making the right choices in terms of lifestyle options. It also provides the renewal force that introduces new and effective therapies, and evaluates them on the basis of science so that the right choices are made in terms of the interventions in the health care system.

If we think back to when the council was created in 1960 as compared to today, we're astonished at the changes. The council was created two years after I graduated from medicine. It is breathtaking and stunning to look back to see what existed then versus what exists today. How rudimentary our knowledge was. How impossible it would be to manage our health care system today if we still faced all the pressures, had nothing changed. Canadians intuitively understand and recognize that.

In a recent poll that we took, when asked, two-thirds of Canadians rated investing in health research as their number-two priority, right behind investing in a health care system. That surprised us. But if you reflect for a moment on how generous Canadians are in supporting health charities, I think that's the ultimate expression of the confidence and the intuitive sense that Canadians have that research really does make an important difference in the lives of their families and indeed themselves.

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The MRC portfolio is stretched from coast to coast, in some 150 institutions centred in some of our major universities. We have a portfolio that provides grant support for some 2,400 scientists. Their technicians and support staff probably number in the neighbourhood of 10,000. In a sense, then, we're the base funder for some 10,000 individuals engaged in health research in this country.

Very helpfully, last year, after budget declines over several years as part of program review, we had a major increase in funding. That was a very good first step, as our minister recognized, because it enabled us to fund a whole range of new products. It was really a most welcome intervention, because we were in considerable stress trying to manage a system in which the pressures were great where the funding had declined.

As we now look ahead to the new century, we believe there's an opportunity for Canada to do business differently—and that's differently in a manner that is important. We see the opportunity to look at all the assets that form the health research enterprise, and to knit or link them together for a national purpose to see the underpinning of health research as a foundation of our health care system, in a network that we have referred to as the Canadian Institutes for Health Research. It's an opportunity, in my view, to mobilize the resources that are in place. It's not about building new structures, it's about seeing new opportunities with new eyes and about taking full advantage of those opportunities for the support and benefit of Canadians and their health.

With those comments, I would now be pleased with my colleagues to answer questions any of you may have.

The Vice-Chair (Mr. Reed Elley): Thank you very much, Dr. Friesen. It's with a great deal of interest that all of us are listening to what you have to say. I'm sure we all have some questions for you.

As a proud investor in the CMDF myself, I'm very interested to hear about the work of that particular fund. I follow with great interest what Dr. Cal Stiller and others are doing with the money I invest in that fund. Can you tell me a bit about what CMDF is now doing, and about some of the projects it's involved in?

Dr. Henry Friesen: I'll introduce the subject, and then invite Marc LePage to speak. He has very extensive knowledge of the partnership arrangement that we have with the fund.

The initiative really recognized that we had a very good record of discovery in Canada but a rather sad record of seeing Canadian discoveries too often developed by American capital. That was often the first step in luring Canadian talent to the United States, where some of those bright ideas financed by Canadians were developed. We would then buy back, at inflated prices, some of those very discoveries as they were developed. We asked the Boston Consulting Group to look at that issue for us, and they pointed out at the time—this was in 1992—that there was a deficiency in Canada in risk capital at that early stage of discovery. That led us to then work with others—with Dr. Stiller, with the unions, with the Professional Institute of the Public Service. This was a labour-sponsored venture-capital fund to put in place the Canadian Medical Discoveries Fund.

To do what the legislation that created the labour-sponsored venture capital fund was intended to do—provide risk capital for Canadian opportunities—the fund has been very aggressive in looking across the land to see opportunities. Indeed, Dr. MacKenzie is a recipient of one of those investment opportunities that CMDF saw. It formed a small start-up company. Perhaps both Marc and Alex can tell you a little bit about how it works and indeed how it set the stage in terms of other investments that CMDF has made.

Mr. Marc LePage (Director, Business Development, Medical Research Council of Canada): Perhaps to complement or to round out those comments, as an investor I guess you would have received your annual report recently.

The Vice-Chair (Mr. Reed Elley): I didn't want to turn this into a shareholders meeting, though.

Some hon. members: Oh, oh!

Mr. Marc LePage: The summary of the annual report reminded us that CMDF is in fact three years old operationally. It's still a very new experiment. I think what's striking there is that after three years of operations it has been able to raise a lot of money on the one hand—which is quite important, as it's an expensive business.

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It's been very successful. It has 70,000 shareholders. That's more shareholders than the Royal Bank or the Bank of Montreal or those other banks have. It's a very wide participation, a lot of involvement. There are about 40 companies in the portfolio. There are a lot of early-stage companies, a lot of mid-stage companies, and very few late-stage companies. The whole intent of CMDF was to really be at the early stage, which was the area that was most in trouble.

Perhaps more interesting is what's rolling out recently and really augurs well for the future, the pre-venture-capital investments. They have two companies, one that's called University Medical Discoveries Inc., which covers all of Canada except Quebec, and then Medtech, which covers Quebec. These are investments in the $50,000 to $250,000 range, which I think are problematical to everybody. And that's in a sense before there's a company, at the point where it's still a piece of research but has commercial potential. There are about 25 investments in those two companies right now, and it's accelerating. Those would be the companies we'll see in a year's time. So it's a very rich pipeline, quite unique to Canada.

Looking forward, I think we've started quite a bit. There's a lot of dynamic energy in the sector. You can probably anticipate some consolidation. There are a lot of smaller companies and there are some strategic initiatives under way. One could anticipate in the coming months that there would be some mergers and an attempt to get critical mass. You'd have companies that would have the weight to really compete on the international scale, because this is not about being the best in Canada; you have to be the best in the world. Being number two is not an option; you have to win.

Perhaps with that I might hand it over to Dr. MacKenzie, who has a very typical story of an early-stage commercialization effort.

Dr. Alex MacKenzie (Pediatrician and Head, Molecular Genetics Laboratory, Children's Hospital of Eastern Ontario): Hello. I'm Alex MacKenzie. I'm a geneticist and a pediatrician here at the Children's Hospital. I come at it from really a clinician's and scientist's point of view. I can't really speak to the dollars as much.

Back in 1991 I got my first Medical Research Council grant. It was for $57,000, I believe, to look at a disease called spinal muscular atrophy. It's a fatal illness of infants. It's a disastrous disease that causes death in the first 12 months. It's a pediatric equivalent of Lou Gehrig's disease, or ALS. We set out looking for the gene that caused this. By good fortune, in 1995 we found the gene that we think is an important modifier for this disorder. As it turns out, it's a gene that keeps nerve cells alive. Actually it was Marc who pointed out the potential commercial benefit of having a gene that keeps nerve cells alive. And through the efforts particularly of my colleague, Bob Korneluk, and myself we started a small biotech company called Apoptogen Inc., looking for ways of turning on these genes that could potentially treat stroke, Alzheimer's, Parkinson's, as well as the spinal muscular atrophy.

In a sense, I feel incredibly fortunate. We really won the lottery with the cloning of that gene. I really don't know about the dollar sense as far as profit goes; I do know as a pediatrician that from the initial outlay of $57,000 for the initial MRC grant, we now have a $20 million outlay looking at how these genes work potentially for a therapy for this fetal disorder for infants. Just looking through that lens has been a tremendously positive influence on us. And there's a lot of excellent science that has been done here in Canada—not in San Diego, not in Boston, not in England—which from an economic point of view is good news and from a scientific and clinical point of view is great news as well.

The Vice-Chair (Mr. Reed Elley): Thank you very much.

Would you like to contribute to that, Mr. Dickson?

Mr. Howard Dickson (Scholar-in-Residence, Medical Research Council of Canada): If I could.

I come from the outside, as it were. Dr. Friesen indicated I'm a scholar-in-residence at MRC. I've been there for three months. I think during my time as associate dean at Dalhousie I have seen an absolutely tremendous transformation in the culture within the academic medical centres. I think you should know what a tremendous difference people like Marc LePage and Henry Friesen have made in terms of turning around the culture. When I became associate dean at Dalhousie I would venture to say that there would not have been more than one or two individuals in our whole medical school who would have understood the importance of protecting their intellectual property, and more so, how to go about doing it.

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In the 12 years during which I was associate dean there's been a tremendous change in that culture. People really do understand the importance of what they're doing and they want to ensure that the benefits of the research they undertake are going to have economic impact in Canada as well as impact in terms of health care delivery. So there has been a tremendous shift, and examples like Dr. MacKenzie are not isolated. They are occurring everywhere in this country right now.

The Vice-Chair (Mr. Reed Elley): Thank you.

Judy, do you have a question?

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): I have a couple of questions.

I'm sorry, I missed the first part of your presentation, Dr. Friesen, so some of this may have been answered.

I'd like to get some clarification around what we should be watching for and pushing for leading up to the federal budget with respect to medical research. Many of us are starting to benefit from a card campaign that is going on across this country calling for 1% of the health care budget to go into medical research. So where are we now with respect to the goal based on the increase that happened in the last budget, which I think brought us, from what I recall, up to the 1994 level of funding? Also, what should we be looking for to get us up to 1%? Is that realistic? Is that a possibility in the upcoming federal budget? And what advice would you have for us in terms of pushing for an appropriate objective?

Dr. Henry Friesen: Thank you very much for that question. I did not specifically allude to it, but really emphasized the opportunity that exists in this country.

Both the Prime Minister and Minister of Finance— I particularly recall the Minister of Finance's words as he concluded his economic statement, where he pointed out that there are those who would readily settle for second place in this country, whereas he and the government see the opportunity, and indeed the desirability, that we should aspire to be the best in the world. In research in health I think we can aspire to be the best. The health care system is Canada's most cherished and valued program, and that ought to be linked to the very best research underpinning as a foundation.

As part of this global reality, particularly vis-à-vis the United States, the environment in research has become very attractive, given the extent of funding that our colleagues in the United States have enjoyed. Just three or four weeks ago, when Congress passed the balanced budget, they provided an extra $2 billion to our counterpart agency, the National Institutes of Health, which already on a per capita basis has probably a fourfold increase above ours. It's this attractive environment that is a great incentive for Canada's very best to move south. So that's an issue.

It concerns me a great deal that when you read the C.D. Howe report about brain drain, it is very real and it's costly. It's costly because if we look just at the investment in the educational sector for these people, it's a $400 million drain on the Canadian economy.

It's unfortunate that if we don't get our environment so attractive that expatriate Canadians wish to come back, let alone Canadian post-docs choose to stay here, we're running the risk of losing that intellectual capital.

The health research awareness week to which you've referred, the 1% target, was mounted by the teaching hospitals across this land, of which there are at least 70 to 75. They called for, as part of this vision, a situation where we could see linked, integrated across scientific boundaries, integrated across geographical and institutional boundaries, and integrated and integral to the health care system, the Canadian Institutes for Health Research network, where those involved in research are galvanized for a common purpose to improve the health of Canadians. That's the goal. That's the initiative that should seek funding to 1% of the health care cost as the goal.

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As a broad coalition of interest groups—the health charities, teaching hospitals, provincial health agencies, the social science council and communities, the industry—an unprecedented coalition of interests around health, we met with the minister on October 30 and presented the vision. Having heard the case made, he said he will be our unequivocal champion for this initiative. Those were very strong words. I think he understood how important it is to see the strong research base that underpins and in fact is the driving force for innovation in our health and health care system.

The goal is 1%, which would be $750 million. That is a very substantial amount of money, but if you think of it in terms of the cost of the health care system, $78 billion, it really is an appropriate level for the federal government to see as an investment in the one area of health program delivery that is uncontested as a federal responsibility. If we moved toward that— And the suggestion isn't that all of this should happen in year one, but it should be seen as an appropriate goal for this country. I think it is an appropriate goal. Currently we're at about 0.33%.

It's a very substantial challenge. It's not going to be easy. It's a question of priorities and choices. But in a modern view of the world, moving into the 21st century, if there's a health theme in the budget, I think most people would readily recognize that research must inevitably be a serious component.

Ms. Judy Wasylycia-Leis: I have more, but I can—

The Vice-Chair (Mr. Reed Elley): Yes, thank you.

Ms. Caplan.

Ms. Elinor Caplan (Thornhill, Lib.): Thank you very much.

Thank you for coming before us. I know you're all very busy, and we appreciate you taking the time to come and tell us a little bit more about the important work of the Medical Research Council.

There are a whole lot of questions I could ask, but the ones I'm particularly interested in are on the results of the research.

Although we know, for example, that the United States is spending so much more than we are, one of the things that's most impressive to me is the results of MRC research and the spin-offs and job creation opportunities, which have been so important. I thought I'd give you a chance to talk a little bit about that and then to talk about the effectiveness of the work you do.

People want to hear about value for money. Frankly, I think we're getting much better value for our money in Canada than the Americans are getting for theirs. Is that a fair statement? I think the facts would say I'm right.

Dr. Alex MacKenzie: I'm taking time out from a review panel for genetics right now; I'm playing truant. We're looking at 50 applications.

You're absolutely right. The results are tremendous. But a sizeable proportion of the grants we're looking at right now that we are going to rank as very good or even as excellent are not going to get funding.

Let the others chat about all the great results, but I'm painfully aware of the individuals who are being ranked so highly. And it's not greybeards such as myself; it's the 32-year-olds who are just starting out, in their first, second, or third year who are going for renewal and are going to end up not getting funded. That offer to the States is going to look that much more attractive.

I don't want to twist your question into a negative, but there is a lot that is going unfunded right now, from my worm's-eye view.

Dr. Henry Friesen: Let me begin, and then I'll invite Dr. Bisby, who is our director of programs, to elaborate on some more examples.

Last night's news carried the wonderful story of Dr. Lorne Tyrrell's discovery of the first effective anti-viral for hepatitis B. Dr. Tyrrell is a dean of the University of Alberta and still carries on with his research program.

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About 10 years ago we provided a small grant—I think it was $50,000—for Dr. Tyrrell. He had the idea that if he could grow duck liver cells, that would be a very good screening tool for anti-viral agents, anti-hepatitis agents, because the hepatitis virus is hard to grow. He was right. He screened a whole series of compounds, and it turned out that exactly the same molecule that generated BioChem Pharma was the most effective agent for treating hepatitis. The 3TC molecule—it's the same molecule, marketed now under lamivudine, which was just approved by Health Canada this past week—is the first effective agent for hepatitis B. That's going to change the lives of millions of individuals around the world.

As some of you will know, 3TC is a key ingredient in the treatment of AIDS. It's generating over a billion dollars of sales around the world. BioChem Pharma is the world's third largest biotech company. It employs 1,500 Canadians. That, too, was from a grant from the council 14 years ago. It was a stunning discovery with huge ramifications. Now it's estimated the sales of the agent for hepatitis B will generate perhaps even larger sales than 3TC. That's one example.

A second example I would offer is an example of using engineering techniques. We have for a number of years watched with interest how Dr. Keon has pioneered important new developments in the field of cardiac surgery. He and his colleagues have developed the first implantable cardiac replacement. It's one of the start-up companies, which is now capitalized I think at $20 million or $30 million—

Mr. Marc LePage: It's close to $100 million now.

Dr. Henry Friesen: $100 million. It again is going to provide for individuals who are suffering from serious and crippling congestive heart failure an opportunity to enjoy a quality of life, if events unfold as we anticipate they should.

There are many examples from different fields that we could sight. In infectious disease, Dr. Plummer and his colleagues from Winnipeg have made extraordinary discoveries about some of the resistance mechanisms that operate and, as it turns out, protect individuals against HIV. These studies were not carried out in Canada. They occurred because of a collaboration first pioneered by Dr. Ronald with a group in Nairobi and Kenya. Science is a very international activity. Disease knows no boundaries, and increasingly in this world where travel is so rapid, these diseases will affect all of us. So we have to have an environment in which we scan both the risks and the potential harms.

There is an area where I would note we need to do more. That is in the area of prion diseases, for example, mad cow disease. The science in that area has advanced, but is still relatively rudimentary. Unless we invest as a country, we run the same risk that Britain did. The beef industry is very important to this country. If we're not armed and equipped and prepared, we could have serious problems in this country, and we would be caught off guard. Some of those areas of course affect our blood supply as well. So it's an important dimension of the need to make sure our environmental scan is adequate so Canadians are defended against potential risks, where the science provides an insight and the opportunity.

Another example is breast cancer and prostate cancer. We have in this country one of the world's leading authorities and contributors to this field, Dr. Fernand Labrie in Quebec City. He works in the area of hormones, endocrinology. It happens to be my field. I have considerable knowledge about that subject.

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He looked at it and had the view that if one could block all of the estrogen-like activity completely with blockers and design appropriate molecules that were better than current agents, more effective agents might be found. As a result of his effort there is a new molecule in trial that will again, in my view, have the potential to replace and be an improvement on tamoxifen for the treatment of advanced breast cancer. The disease affects altogether too many Canadian women.

Prostate cancer is a huge problem, and similar in scale and scope and mortality for men. The investment in that field is seriously deficient in Canada, given the importance of the disease. Dr. Labrie has again introduced a whole new method of treatment that has now been adopted worldwide. He's formed a company again, a bit like Dr. MacKenzie. It's gained in size and scale and I think it now employs about 700 to 800 people.

Dr. Alex MacKenzie: We should be so lucky.

Dr. Henry Friesen: When I travel, I'm so impressed with the vitality of the health enterprise, particularly in Quebec. I think there are some valuable lessons for us, and we've tried to adopt some of those lessons and apply them to the country as a whole.

Working together is a very obvious and impressive performance in Quebec, where the networking among the individuals has advanced to a degree that I would say is helpful as a model and an example to the rest of the country. The result is impressive.

Mark.

Mr. Mark Bisby (Programs Director, Medical Research Council of Canada): I would like to give some more examples of a rather different kind to make the point that the council used to be known for funding essentially biomedical research, and many of the examples Dr. Friesen just gave are in that sphere of health research.

In 1993, as a result of the strategic planning exercise Dr. Friesen referred to, the council expanded its mandate to encompass all areas of health research. We now have peer review committees that are skilled in evaluating grants in the areas of health services, research, population health, and the broader psycho-social and behavioural determinants of health.

I would like to give some examples of studies that we're funding in those areas right now to give you a view of the expanded mandate of the council and the impact this has on the health of Canadian.

As you know, many elderly patients have problems; they fall and fracture their hips. This usually results in lengthy hospital stays and lengthy periods of rehabilitation. Susan Jaglar, at Sunnybrook Hospital at the University of Toronto, is studying a program that allows for the early discharge of these patients from hospital and their subsequent rehabilitation in the comfort and security of their own homes.

I think you can appreciate, if this program is evaluated as a success, the impact it will have on hospital costs and the quality of life for seniors who sustain these hip fractures who would far rather be in their home environments than in rather sterile hospital situations.

In a similar kind of vein, Gina Brown, who is a nurse at McMaster University, is looking at a program designed to provide improved information to the nurses who provide home care to patients after their hospital discharge. It turns out that about 20% of those who are readmitted to hospital after their discharge from hospital are admitted because there's some problem with their medications—an inappropriate combination of different medications is the usual one.

Gina is studying a program that would educate nurses to provide much better information to the patients about the drugs they're taking. She believes 50% or so of these readmissions could be prevented with better education to the nurses who are giving home care. You can again see immediate potential there for health system savings and for improving the quality of life.

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Judith Chipperfield, from the University of Manitoba, is looking at the strategies seniors with disabilities and chronic disease conditions of various kinds use to manage the activities of daily living. From her sample population, she is trying to tease out those strategies that give the patients a feeling of control over their own lives versus those that make them feel dependent upon others. I'm sure you can appreciate that if she can identify the winning strategies and educate seniors generally about how to utilize these strategies, there would be a great improvement in the quality of life for seniors.

Certainly other research shows that when people feel they have more control over their lives, they are healthier. There's a direct connection between having control and being healthy.

Those are just a few examples of the kinds of health-oriented research the council is now funding. I could go on and on—I probably don't need to—but I think you can appreciate that in addition to the biomedical studies that often have a more long-term and very significant impact on health, these studies in the health area can have a very short-term, immediate, and important impact on the health of Canadians.

The Vice-Chair (Mr. Reed Elley): Thank you, Dr. Bisby.

I think Mr. Jackson has a question.

Mr. Ovid L. Jackson (Bruce—Grey, Lib.): Thank you, Mr. Chair.

I'm probably going to come at it from a different angle because of a number of things I'm doing. I know that Bill Gates is spending about $3 billion a year and he doesn't even know whether he'll find a new discovery or not. So it's not necessarily the amount of money you spend; it's how you do it strategically.

There are two things I'd like to find out from you. The Yanks do extremely well because they rob the world of their young people. Everybody wants to go there, and that includes us. So I'd like to ask you how we can keep our young people here. That's the first question: what else could the government do?

Second, are our universities doing as well as those in the United States? I think the Ivy League-type guys have almost a kind of scouting system throughout the world, where they find young people who obviously have special skills and give them scholarships. Are we doing our fair share of that in order to make sure we get our share of the new discoveries that are coming on track? I think it's very important for Canadians.

Dr. Henry Friesen: Those are important issues. I met with some of the peer review members last night. These are scientists who volunteer—as Alex does and has—to evaluate the research grants we receive. We review some 2,000 a year to fund 400 to 600 a year. It's an arduous task.

In conversation with one of these individuals, this man lamented the fact that the young graduate students in his lab, or those who were more advanced looking at post-doctoral experience or advanced training, who in the past would go to the United States, would take it as the norm to come back. But increasingly over the last number of years he's observed that too many find the environment there attractive. As they receive offers to come back to Canada they look at them, and I suppose, as in the athletic field, if the contracts they're offered are so attractive, people choose to stay and follow the best contract. So I think it is an issue of opportunity.

The C.D. Howe Institute study that analysed these issues observed that particularly in the health field or the science arena—unlike managers, where it is often salaries where tax reductions really are an important dimension—the issue is opportunities. Do people whose passion in life is to do science feel they can do good competitive science at an international level in this country? If the answer to that is yes, they are quite pleased to come back, even though their salaries may be a little less because quality of life is better here.

So there are certain offsetting advantages besides salary. But for scientists, opportunity to pursue science at an internationally competitive level is an important ingredient.

A good example of that is a young person who is one of Canada's treasures, in my view, in the field of genomics. He commutes every week between McGill and Boston. He's a Canadian, McGill-trained, who went to Boston at MIT and got some experience in the field of genomics, one of those hot areas. He's very loyal to this country. We offered him a $100,000 to $200,000 grant—and that's rich by Canadian standards—but in the United States he has access to $3 million to $4 million, with a team. So he commutes back and forth. I worry about the likes of Tom Hudson, because some day he is going to get tired of commuting.

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So in strategic areas we have to make some strategic choices. If we're going to compete, we have to compete with the best. The environment has to be attractive. Dr. Bisby carried out an analysis. I think it was 160 Canadians he charted who had moved to the United States. Of the 160, 7 or 20—

Mr. Mark Bisby: The ratio was about 6:1. Six left for every one who came back.

Dr. Henry Friesen: Another example is in the Burroughs Wellcome Fund; it's a competition available to both Canadians and Americans. There were 18 Canadian Burroughs Wellcome Fund recipients whose addresses were in the United States; there were only four whose addresses were in Canada.

Mr. Mark Bisby: If I might add to your question about whether or not our people are measuring up, in that particular competition, which is a very distinguished competition for young people starting out in their scientific careers, the success rate of the Canadian applicants was two to three times higher than the success rate of applicants in the United States.

Dr. Henry Friesen: So they do measure up.

Another measure of quality—Ms. Caplan referred to the quality—is the Howard Hughes Institute, which provides support to programs around the world. Half of the foreign recipients were in Canada.

You asked if the universities are being aggressive, entrepreneurial, providing the kinds of incentives that make sure Canadians seek their education here. I sense a considerable change in approach and attitude by universities. They now, in a sense, market to students. I attended an alumni event of the University of Toronto and heard the president challenging the audience, not for money, saying, “Send your children to the University of Toronto. You get the best education in the world. We have available the best support mechanisms, in scholarships, that are possible.”

To your question as to whether universities are being imaginative in ensuring that Canadians stay in Canada for their education, I think the answer to that is yes. There are some very important new innovations taking place in that sector.

The Vice-Chair (Mr. Reed Elley): Thank you, Dr. Friesen. I think Ms. Wasylycia-Leis has a question.

Ms. Judy Wasylycia-Leis: I would like to follow up regarding the question about the brain drain. You had earlier put a price tag of $400 million on the brain drain. Is that a price as a result of lost opportunities and spinoff benefits to our economy or is it a price pertaining to the cost to our country of educating folks to become scientists?

Dr. Henry Friesen: It's the latter; it's the investment in the intellectual capital of Canadians, which unfortunately we're exporting to the United States.

Ms. Judy Wasylycia-Leis: On the overall budget question I asked, if I heard you correctly, in order to achieve a medical research budget of 1% of the overall health care budget, we would need approximately an additional $750 million.

Dr. Henry Friesen: It would be $500 million, with $250 million of the MRC budget incorporated to achieve that goal. So that's $500 million in new money.

Ms. Judy Wasylycia-Leis: That's $500 million in new money.

Dr. Henry Friesen: Yes.

Ms. Judy Wasylycia-Leis: And you're saying that as long as there's a commitment to have that spread out over a couple of years—

Dr. Henry Friesen: We're suggesting that three to five years is quite a reasonable goal. It's a challenge, but I think it has validity. Well, first of all it has validity in the sense that I've made the comparison with the United States. It's also valid in comparison with what the United Kingdom does. In addition to the MRC budget in the United Kingdom, the national health system chose four or five years ago to target 1% of the national health system cost to research. I think that would begin to position Canada to be internationally competitive, to create the kind of environment that would keep Canadians in this country.

Ms. Judy Wasylycia-Leis: Would that goal cover off your proposals or the new concept you are advancing around the CIHR? Is that part of that overall objective?

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Dr. Henry Friesen: Yes, it is, because the Canadian Institutes for Health Research, at its very core, would see an integrated approach to supporting research. This would be the means by which the federal expression of support for health and program delivery in an uncontested sector in the health area, research, could be delivered right across the country in a way that Canadians would recognize it. It's part of the environment that would be embraced by the Canadian Institutes of Health Research network. It's a virtual series of institutes linking Canadians them across themes, scientific boundaries, and disciplines with two goals in mind.

One goal is to improve the health of Canadians. It's not just medical research, but health and medical research. That's an important distinction to note. But you should also see the product of that investment, which is the knowledge platform or discovery platform that encourages economic growth and opportunity. Of course in our view this could provide as many as 40,000 to 50,000 high-value, high-paying jobs in this country.

Ms. Judy Wasylycia-Leis: So the CIHR concept is to not only integrate the research activity going on in this country, but to also, I think to use your own words, expand upon the mandate of what is traditionally known as research. So we start in this country by making more proactive linkages between ill health and health determinants, which means economic and social circumstances that impact on health and well-being, and so on. Is that correct?

Dr. Henry Friesen: Yes, that's correct. We see the importance of the social determinants of health as absolutely critical to recognize. Those are part of this activity. Canada has an important lead in this area with some of the important work by Fraser Mustard and his colleagues at the Canadian Institute for Advanced Research. The social determinants of health are absolutely vital.

There's also an opportunity to try to understand the biological links between social determinants and health. Those are not understood. So there's some opportunity to link both social science research with basic discovery research.

There are four domains envisaged. There's the social science domain. There's research in health services to make sure that what happens in the health system is cost-effective. Clinical trials are to be conducted to gather the evidence to make our health care system more evidence-based. Also, quite clearly, there's investing in basic research. Those four themes would be part of this network.

Ms. Judy Wasylycia-Leis: Is it your hope to designate a portion of the overall budget for the Medical Research Council for this new concept?

Let me just elaborate. There's a reason why I'm asking these questions. One of the letters I received was sent from a University of Manitoba professor to the Prime Minister, indicating that he was looking for an allocation of $150 million in the February budget for the CIHR concept. Beyond that, the concept would require $300 million and $500 million respectively over the subsequent two years.

I'm just wondering if that's your position. Is that what we should be pushing? How does that fit in?

Dr. Henry Friesen: My position is that the government will decide about pace and scale in terms of all of the other budgetary pressures. I think it's important to declare a target. The task force that has spearheaded this initiative has made those recommendations and suggestions. But I think they also have recognized that there may have to be some pacing driven by other considerations. They're different from those.

I think it's very important to begin the journey to position this country to be truly internationally competitive. This initiative would get us some distance toward that goal.

The Vice-Chair (Mr. Reed Elley): Thank you, Dr. Friesen.

I've been fairly lenient in terms of time allocation, as you probably are aware. But we do have a number of other questioners. I suspect we'll probably be looking at another 15 minutes for our time here, so I want to make sure that everybody's questions get asked.

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Mr. Nault, you have a question.

Mr. Robert D. Nault (Kenora—Rainy River, Lib.): Thank you, Mr. Chairman. I probably have four or five questions, but I won't get them in, by the sounds of it. I'll restrict mine to two, then.

One question is on the issue of funding. Say you're looking at a research proposal, and say there are grants given to a particular individual. Let's use Dr. MacKenzie. I didn't want to pick on him today, but he's here, so why not. Say you and the government make an initial investment. Whether it's $60,000 or $6 million, is there any equity position taken by the Government of Canada whatsoever? If you say to the government that you want another $700 million, what equity position does the Government of Canada get in particular research projects that will inevitably, or in some circumstances, generate a very wealthy company out of it? Do we get a return on our investment?

You may make the argument that we create jobs, but if in fact you want to increase the ability for the government to participate in this, if we're looking at value for money, then why wouldn't the Government of Canada take an equity position in some of these projects where in fact individuals become very wealthy over it? In your comments, you used examples of people who have been very successful, not only, of course, on the medical discovery side, but on the business side as well.

First of all, I'd like you to give me a comment as to how you feel that's working. Do they do it differently in other countries to generate more activity? It's an investment made by the Government of Canada, but we get very little return, I suppose, except for the job side, if you want to be pretty crass about it.

The other issue, which is one I bring up at just about every committee I attend, is that I'd like to get a sense of what you're doing in the aboriginal world. I happen to represent 51 first nations. What I found from travelling in northern Ontario is that there are some peculiar difficulties in aboriginal populations that we're not dealing with.

Two things come to mind. One is solvent abuse, such as sniffing gas and things like that. There seems to be very little research being done on the effects of that particular phenomenon. The other one, of course, is the suicide rate, which has caused us a lot of concern. This is the mental health side. When I look at your documents, I don't see any applied research on that unless it's in the drug-oriented side. I'm looking at the more specific cultural differences and those kinds of things where drugs just aren't going to work.

Those are the two questions I have. There's one on the investment side and one on the aboriginal side.

Thank you, Mr. Chairman.

Mr. Marc LePage: Perhaps I could address the investment issue. I would say our approach on this has been to really focus on growing this industry very rapidly. We're in kind of a race with the rest of the world. These are very early days in biotechnology. It's more important to get to critical mass so we have a self-sustaining biotechnology or medical devices industry.

We've made a lot of progress. We've taken, I would say, a Team Canada approach. On our team, our other players are called Revenue Canada and Department of Finance. What we don't get directly, if you want, through equity, we pick up the job and the tax revenues. The instrument we've used, in a sense, to make sure we capture all of this in Canada is particularly the Canadian Medical Discoveries Fund. We've also used other associated funds whose mandate is only to invest in Canada. We know the action is going to happen in Canada, so it's not going to be commercialized offshore.

Dr. Alex MacKenzie: Also, the universities are actually equity holders as well.

Mr. Marc LePage: I'm sorry to interject, but in our case—

Mr. Robert Nault: Let me give you an example of what I mean, if I can. Let's use poor Dr. MacKenzie again, because he's going to be a wealthy guy some day. I hope he will. Just let me use that as an example.

Let's say for the sake of argument that the Government of Canada gives Dr. MacKenzie $100,000 to start his research. He then becomes very successful with it. For that, he would sign a contract that says he would be willing to give the Government of Canada 1% back as an equity position. I could take the 1%. If he ends up with 2,000 employees, good for him, but I'll get my 1% back for the Government of Canada. Then I can put that back into applied research again. That way, there's a little bit of social policy built into this and the equity position is a fair one.

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We do it in the regional development envelope for business. We take equity positions all the time. What's the difference between that and a business on the health side when someone becomes very successful? Why wouldn't we be doing that for the council?

Mr. Marc LePage: We're certainly looking at that. We have been looking at that. It's probably a function of the maturity of the industry. It's an issue that will become more acute as we go forward. We could probably go further in that field.

In 1994-95, when we really got on track in this area, our experience with the United States, when there was central federal government control of intellectual property, was that yes, you had absolute control over equity, but there was very little technology transfer happening. So you had maximum control of a small pie. When they loosened up, the thing exploded and grew a lot faster.

We've taken that attitude so far. So let's open it up and let it go as fast as you can. Perhaps in the coming years, as it matures, one could go forward. At this point, it would be my personal judgment that we would probably slow down the process. You might get some equity, but you would have fewer companies happening, I would think.

Mr. Robert Nault: Say I was a businessperson in the health field. Say I was Dr. MacKenzie, and I needed $1 million to start up a company. And say I couldn't get it from the private sector. I then go to the Government of Canada or council to say that if you give me $1 million, I'll give you a 1% equity. I would be very quick to jump at that because that's a pretty good return. You couldn't get that anywhere in the private sector.

Then you would eventually, as the council becomes self-financing— That's part of this process. Governments are being asked to cut taxes and do a lot of things. But at the same time, research being as important as it is, there has to be a component of reinvestment somehow into the system without always going back to the finance minister to ask for more to keep up to those guys down south or somewhere else.

Dr. Alex MacKenzie: In fact we do that by giving the university an equity position. But what we could do is carry that through. The universities are the ones who apply for the grants. But we could just say that in addition to the university, there would be 1% for the funding council. That does not strike me as an unpalatable idea.

Dr. Henry Friesen: Two years ago we hosted an international meeting on innovative funding mechanisms for the 21st century. One of the papers that was posited there in effect explored that approach as an idea. It was seen as really quite an interesting idea.

We have, as Marc said, for the moment adopted a position about Canadians and Canadian institutions, whether they be public or private. As Alex said, the university, being a public institution in a sense, is increasingly an equity holder. This is as opposed to what has often been the case in the past in which merely licensing fees were seen as a preferred option. In the long run, an equity position is probably the more rewarding option if you can be patient. But universities often weren't patient. So it's an issue that will in fact continue to be looked at.

The second question you put was related to the aboriginal community and the health of the aboriginal community as that relates to a number of key issues that affect the aboriginal community. I would add, perhaps, diabetes as an important other dimension. The reality of some of the issues you outlined underscore the importance of social determinants of health. That's because a number of those dimensions relate to the social environment that impacts on choices made by individuals in that community.

So it's an important issue for us. We do have some programs in the social determinants of health. There are programs related to issues that you haven't mentioned, such as fetal alcohol syndrome. That's another extremely important issue for the aboriginal community.

The issue of suicide and solvent abuse is being looked at not with a particular focus on the aboriginal community. In the end, there have to be researchers who work with the aboriginal community. As you can appreciate from your own background and experience and interest in this field, the aboriginal community needs to be involved in shaping the research agenda and take ownership for the agenda. There have to be researchers who are connected with it. It is a challenge.

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Increasing numbers of individuals coming from the aboriginal community now are beginning to have, and have gained, the expertise needed to conduct the kinds of research programs you refer to. It's one we're keeping a close eye on and a watching brief on.

In terms of diabetes, there are some very important programs underway, with particular focus on diabetes in the aboriginal community, where the incidence, the frequency, is much higher than in the rest of the community.

The Vice-Chair (Mr. Reed Elley): Thank you very much, Dr. Friesen.

We'll give Mr. Myers the last question and then you gentlemen can have the last word.

Mr. Lynn Myers (Waterloo—Wellington, Lib.): Thank you very much, Mr. Chairman.

I was heartened to hear you say, Dr. Friesen, that research extends beyond biomedical; it goes into areas of health in general. I think you spoke at one point of integration and the systems that are inherent with and for that.

I am interested in nursing. I was looking at the operating grants by area of research for 1997-98. Just scanning it very quickly, it looks as if that's your lowest priority in terms of where you're giving assistance. I wonder if you could comment on that in terms of nursing. It looks like it's 0.2%. Why is that the case? Perhaps you could do that at this time.

Dr. Henry Friesen: Nursing, as is defined in the chart, arises in part from the designation. You could ask the more fundamental question, what is nursing research? Is it research conducted by nurses? That's the definition, I think, used in this particular chart.

Nursing research is undergoing rapid change, as is the whole profession. Not that long ago, Mary Ellen Jeans, the director general of the national health research development program, former dean at McGill, now executive director of the Canadian Nurses Association, told me that she was the first or third—a small number—nurse who graduated with a PhD.

The numbers of individuals who have a PhD in nursing have very rapidly begun to increase, and we begin to see that expressed in terms of research applications from nurses to our programs. As we've enlarged our portfolio and have now three committees related to health services—psychosocial, behavioural, and population health issues—we anticipate a substantial increase in applications from nurses who are researchers.

I spoke to the Canadian Association of University Nursing Teachers—I think that's the term—just a couple of weeks ago, in the construct, the framework, of the Canadian institutes of health research. I made the point and threw out the challenge: come forward with your idea for an institute of nursing research in that framework. How would it look? What would be the requirements, as one expression of opportunity? The second expression is, across the various institutes, whether it be heart, child or maternal health, just like social science is cross-cutting across institutes, how can you see framing and being integrated across all of these different institutes to see a component of them as nursing research?

In terms of health professionals, nurses are the largest component by far. But the academic development of programs I think is rapidly reaching a level of maturity that perhaps the biomedical had some decades earlier. So it's capacity building.

Nurses tell me that release time becomes very important. They're so busy, in a sense, in the educational programs that the time and opportunity, given the compression of salary support that's available to nurses—there just isn't enough time. Again, in the construct of the Canadian institutes of health research, I see an opportunity to provide salaries for those in different fields who wish to pursue research.

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I note your point about the paucity of nursing research, and I think it's valid. But I think the opportunity to see an expansion of that element of the program is very likely.

Mr. Mark Bisby: I would add that the actual participation of nurses in our research program is much higher than that chart indicates. The proportion of our grant holders who are nurses, who have nursing degrees, nursing qualifications, is about 2%. It's almost ten times the number of grants that are actually identified as nursing research. And similarly, on our peer review committees about 2% of those members are holders of nursing qualifications.

Mr. Lynn Myers: I certainly take the point about it being the largest component when it comes to health. I think that's very important to note. As you know, there are huge issues surrounding nursing standards and integration and numbers and the changing statistics with respect to nurses and availability and such. I think it's very important that we not lose sight of that.

I wonder, Dr. Friesen, if perhaps you could tell us how many applications you did not fund that were requested last year in this area.

Dr. Henry Friesen: I don't have those numbers at my fingertips. Mark may, but if we don't, we can certainly make them available to you very shortly.

Mr. Mark Bisby: Are you referring to applications generally in our competitions?

Mr. Lynn Myers: No, I'm talking about nurses. We're still zeroing in on nurses here.

Mr. Mark Bisby: We can find that data for you.

Mr. Lynn Myers: I think that would be useful.

As I'm sure the committee is aware, some of the nursing people actually want us to fund them separately. So in the great scheme of things, I think that's something we have to take a look at. In the context of what you're doing or perhaps not doing, that may be a consideration.

The Vice-Chair (Mr. Reed Elley): Thank you very much, gentlemen, for coming and sharing with us this morning. I'm sure we've all found this very enlightening and stimulating.

We're going to take a short recess as a committee and rejoin shortly after.

[Proceedings continue in camera]