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37th PARLIAMENT, 2nd SESSION

Standing Committee on Industry, Science and Technology

EVIDENCE

CONTENTS

Wednesday, May 28, 2003

1535

The Chair (Mr. Walt Lastewka (St. Catharines, Lib.))

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance)

The Chair

Hon. Rey Pagtakhan (Secretary of State (Science, Research and Development))

1540

1545

1550

1555

Mrs. Marie Tobin (Director General, Innovation Policy Branch, Department of Industry)

Mr. Rey Pagtakhan

1600

The Chair

Mr. James Rajotte

Mr. Rey Pagtakhan

1605

Mr. James Rajotte

Mr. Rey Pagtakhan

Mr. James Rajotte

Mr. Rey Pagtakhan

1610

Dr. Thomas Brzustowski (President, Natural Sciences and Engineering Research Council of Canada)

The Chair

Mr. Andy Savoy (Tobique—Mactaquac, Lib.)

Mr. Rey Pagtakhan

Mr. Andy Savoy

Mr. Rey Pagtakhan

1615

Mr. Andy Savoy

Mr. Rey Pagtakhan

Mrs. Marie Tobin

Mr. Rey Pagtakhan

Ms. France Landriault (Director, Corporate Performance, Evaluation and Audit Division, Social Sciences and Humanities Research Council of Canada)

1620

Mr. Andy Savoy

Dr. Thomas Brzustowski

Mr. James Rajotte

Mr. Rey Pagtakhan

1625

Mrs. Marie Tobin

The Chair

Mr. Rey Pagtakhan

The Chair

Mr. James Rajotte

Mr. Rey Pagtakhan

Mrs. Marie Tobin

Mr. Rey Pagtakhan

Mrs. Pat Mortimer (Secretary General, National Research Council Canada)

1630

Mr. James Rajotte

Mr. Rey Pagtakhan

Mr. James Rajotte

Mr. Rey Pagtakhan

The Chair

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.)

1635

Mr. Rey Pagtakhan

Mr. Dan McTeague

1640

Mr. Rey Pagtakhan

The Chair

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)

Mr. Rey Pagtakhan

Dr. Thomas Brzustowski

1645

Mr. Brent St. Denis

Dr. Thomas Brzustowski

Mrs. Pat Mortimer

1650

The Chair

Hon. Gilbert Normand (Bellechasse—Etchemins—Montmagny—L'Islet, Lib.)

Mr. Rey Pagtakhan

Mr. Gilbert Normand

Mr. Rey Pagtakhan

Mrs. Marie Tobin

1655

Mr. Rey Pagtakhan

Mr. Gilbert Normand

Mr. Rey Pagtakhan

The Chair

Mr. Rey Pagtakhan

Mrs. Marie Tobin

1700

Mr. Gilbert Normand

Mr. Rey Pagtakhan

Mrs. Marie Tobin

Mr. Gilbert Normand

Ms. France Landriault

Mr. Gilbert Normand

Ms. France Landriault

Mr. Gilbert Normand

Ms. France Landriault

Mr. Gilbert Normand

The Chair

Mrs. Pat Mortimer

The Chair

Mrs. Pat Mortimer

1705

The Chair

Mr. Rey Pagtakhan

The Chair

Mr. James Rajotte

Mr. Rey Pagtakhan

Mr. James Rajotte

Mr. Rey Pagtakhan

1710

Mr. James Rajotte

Mr. Rey Pagtakhan

Mrs. Marie Tobin

Mr. Rey Pagtakhan

Mrs. Pat Mortimer

Mr. James Rajotte

Mr. Rey Pagtakhan

Dr. Thomas Brzustowski

1715

Mr. Rey Pagtakhan

Ms. France Landriault

Mr. James Rajotte

The Chair

CANADA

Standing Committee on Industry, Science and Technology

NUMBER 047

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, May 28, 2003

[Recorded by Electronic Apparatus]

¹ (1535)

[English]

The Chair (Mr. Walt Lastewka (St. Catharines, Lib.)): Pursuant to the order of reference of the House dated February 26, 2003, we are dealing with the main estimates for the fiscal year ending March 31, 2004, votes 75, 80, 85, 90, 95, 110, and 115 under Industry.

Before we proceed with the minister, I have one point of business to clear up. It concerns question 184, a request by Mr. Rajotte to the Department of Industry for a number of pieces of information.

I want to confirm that the report has been received.

Mr. Rajotte.

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance): It has been received, Mr. Chairman. Thank you.

The Chair: Thank you very much.

We'll now proceed with today's appearance of the Honourable Rey Pagtakhan, Secretary of State (Science, Research and Development). In addition, we have Marie Tobin,director general of the innovation policy branch with the Department of Industry; from the Natural Sciences and Engineering Research Council of Canada, Mr. Thomas Brzustowski; from the Social Sciences and Humanities Research Council of Canada, France Landriault; and from the National Research Council of Canada, Pat Mortimer, secretary general.

I welcome you, Minister, to the industry committee. I understand your voice is kind of slipping and that you'll need to call on the other members of the committee.

I'll ask you to proceed and then we'll go from there.

Thank you very much.

Hon. Rey Pagtakhan (Secretary of State (Science, Research and Development)): Merci, monsieur le président et membres distingués du comité permanent.

I am pleased to be here today to provide you with an update of the Industry portfolio and its activities over the past year with respect to science, research, and development.

To assist me in this capacity I am joined today by the officials the chair has just introduced to you. Should my laryngitis, Mr. Chair, interrupt my presentation, then I have asked Ms. Tobin to carry on, with your permission.

I would say, Mr. Chair, it was your prompting, when I was talking with you yesterday, that gave me the boldness and your understanding that led me to the decision to come. As you are aware, my responsibilities as Secretary of State for Science, Research and Development are threefold: first, to advance and advocate for wise, effective management of federal investments in science and technology; second, to promote an environment for research that is beneficial to all Canadians; and third, to always keep an eye focused on what lies just beyond the horizon as far as science is concerned.

With this mandate in mind, let me take a few minutes to highlight key science, research, and development accomplishments within the Industry portfolio over the past year. I am proud of what we have been able to accomplish.

Secondly, I would like to address the issue of horizontal policy coordination in government science and technology.

Finally, I will talk briefly about the just released report on federal science and technology entitled Science and Technology Advice: A Framework to Build On.

Slide 2 will show that, broadly speaking, the Industry portfolio activities in research and development fall within three categories: performer, funder, and enabler of research and science.

As shown in slide 3, as a performer of research the Industry portfolio has under its wings the premier research and development establishment in Canada, the National Research Council. Pat Mortimer will tell us a bit more about that during the question and answer period, if need be. The NRC runs 21 institutes that have activities in roughly 20 communities across the country and employs over 3,000 of the best minds in Canada, be it in biotechnology, materials science, or nanotechnology.

Once again, the government has seen fit in its 2003 budget to increase the NRC's $660 million science and technology budget, having allocated another $20 million over the next two years. This will serve to secure Canada's participation in leading-edge astronomy projects and also help establish new innovation centres or so-called technology clusters in Regina and Charlottetown.

In the role of performer, I also want to highlight the modest yet important role Industry Canada itself plays in research and development. I say “modest”, since the role is focused mainly on the telecommunications field, but the work within this focused area is vital and is making a difference in how Canada competes with the world.

I speak here of the world of the Communications Research Centre, or CRC. This organization, with an annual budget of some $36.3 million, continues to explore new ways to reduce the cost and improve the performance of broadband satellite systems.

The CRC boasts a long list of success stories of which we can all be proud, successes such as the development of fibre optic technology, generating over $9.5 million in revenue over the past eight years, and other successes too, such as software-defined radio that provides secure and clearer communications for Canadians, and the CRC Innovation Centre, which is regarded as one of the most successful on-site incubators in Canada.

¹ (1540)

Mr. Chairman, you'll agree with me that with both the National Research Council and the Communications Research Centre, as well as others, the Industry portfolio is a major performer of government science and technology.

The next slide shows that the portfolio as funder also plays a dynamic role in ensuring new and ongoing strategic investments in research and development, in both the private sector and the university community. The main way this is done for the private sector is through Technology Partnerships Canada, or TPC. TPC is investing strategically in research and development to maintain and grow the technological base and capabilities of Canadian industry. It also encourages small and medium-sized enterprises to flourish across the country.

This role is complemented by that of the long-standing industrial research assistance program--I understand the chair has a particular interest in this from the NRC--which remains key to fostering technological growth in small enterprises and is one of the most popular federal government programs. Budget 2003 included an additional $50 million over two years to further strengthen IRAP's network of technology advisers and to provide more research and development assistance to firms.

Finally, we are helping to spur innovative science and research through public-private partnerships. This includes investments in the Perimeter Institute of Waterloo through our partner, the Natural Sciences and Engineering Research Council, NSERC, and contributing to the Medical and Related Sciences (MaRS) Centre in Toronto. Budget 2003 allocated $20 million in funding for MaRS. This promises to be a world-class convergence centre that will accelerate the commercialization of academic research in areas such as biotechnology, medical devices, and genetics.

Let me now turn, Mr. Chairman, to our role in funding university research. I have with me at the table representatives of two of our three granting councils: NSERC and the Social Sciences and Humanities Research Council. The third council, the Canadian Institutes of Health Research, as you may know, reports directly through the Minister of Health.

Since 1998, support for these three organizations has increased every year. This year is no exception. Budget 2003 provided $125 million in new annual funding--that is a 10% increase--as well as $225 million in annual funding to help with indirect costs associated with doing federally supported research at universities, colleges, and university hospitals.

All three organizations have invested their moneys wisely, funding not only individual research projects but also spearheading community-university research alliances, in the case of the Social Sciences and Humanities Research Council, and industrial partnerships through the funding of research chairs, in the case of the Natural Sciences and Engineering Research Council, just to mention two.

Both councils have also been actively involved in funding northern research and have responded to the call in Budget 2003 to enhance this focus within the 10% increase in base funding.

Since we are on the topic of northern research, let me just make a quick comment on the recent commitment of the government to allocate an additional $16 million over two years to research and related logistics in the north. In so doing, the Government of Canada is helping to contribute to a better understanding of issues that are important to this community and indeed important to us all.

Mr. Chairman, if we want our country to succeed in the knowledge-based economy, we need to support the men and women who push the frontiers of knowledge and are the driving forces behind innovation. We need to provide support on several different fronts in order to foster an environment of research excellence.

¹ (1545)

Turning to the next slide, if you were to liken knowledge creation in our universities to a highway--and I credit Dr. Brzustowski for this slide--you would see, Mr. Chairman, that through the Canada Foundation for Innovation we have provided the vehicles necessary for such a journey. Through the Canada research chairs we are supporting the drivers for those vehicles. Our new program to address the indirect cost of university research provides the parking lots and the garages.

Our just-announced Canada graduate scholarships program will go some way towards encouraging our young people to make that journey, to make that voyage. Finally, our granting councils, the Social Sciences and Humanities Research Council and the Natural Sciences and Engineering Research Council, provide the essential fuel needed to complete that journey.

Allow me to explain, members of the committee and Mr. Chair. One of the major announcements in science in Budget 2003 was the creation of the Canada graduate scholarships program, to be administered by the three granting councils. We created the Canada research chairs program a few years ago to allow Canadian universities to recruit and retain the best minds in the country. We are creating the Canada graduate scholarships program to allow our best students to pursue graduate degrees and to train to become the researchers of tomorrow.

Our three granting councils were already helping some 5,600 graduate students, but this new program will increase the number of scholarship holders by 70% and ensure that the Social Sciences and Humanities Research Council is able to offer scholarships at the master's level. When fully implemented in 2007, we envision some 2,000 doctoral and 2,000 master's students will be supported each year through an annual disbursement of $105 million.

Finally, let me mention several other important investments in university research contained in Budget 2003. If we can go back to the previous slide, number 4, one is the additional $500 million contribution to the Canada Foundation for Innovation, for investment in research hospitals. This contribution brings the total amount of the federal investment in the CFI to over $3.6 billion, and I'm proud to say that over 2,400 projects have already been funded across the country.

Funding opportunities for exploration and discovery in some of the newest and most exciting undertakings that are on the leading edge of science today are also important. We created Genome Canada with a total federal investment of $300 million to explore the frontiers of genomics. We invested an additional $75 million in Budget 2003 in support of large-scale projects for applied health genomics. Finally, this year, as I mentioned earlier, we invested $225 million per year to establish a program to address the indirect costs of research.

I turn now to slide 6. While instituting a permanent program helps Canadian universities across the board, it particularly enables smaller universities to increase their research capacities.

Let me now turn to the role of enabler, which I mentioned earlier in addition to those of performer and funder. I would like to highlight here the important responsibility for information collection, analysis, and dissemination. The NRC in particular provides advisory services through the library services of the Canadian Institute for Scientific and Technical Information, or CISTI, through linking done by the Canadian Technology Network or CTN, and through advisory services provided by IRAP, among others.

Another key feature of the enabler role is science promotion. We want to encourage and inspire our young people, especially those who might be taking an interest in science for the first time or are considering science among their career options. It is important that we always look for new ways to raise public awareness, especially among our youth, about the importance of science and about the important role it plays in our economy, our ecosystem, and our future prosperity.

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Throughout the federal government, science-based departments and agencies such as the Canadian Space Agency, or CSA, are showing young people across Canada how exciting science truly is. One example is PromoScience, a program sponsored by NSERC that provides support to organizations in opening science and engineering doors for Canada's young people.

Another example is the Shad Valley program, of which Industry Canada is a major and long-term supporter. We have provided over $6 million to help improve and expand Shad Valley's entrepreneurship, science, and technology program.

Mr. Chairman, what I have outlined for you so far have been investments by Industry portfolio partners in research, science, and technology, and in the people and knowledge that drive these undertakings. The initiatives I have talked about so far are not only helping to build smarter, stronger communities across this country; they are also helping Canada reach the innovation goal of becoming one of the top five countries in the world for research and development.

Let me switch to my second topic, that of horizontal policy coordination of science.

Science is a discipline that is too broad and too dynamic to fall within the purview and responsibility of one level of government, let alone one ministerial portfolio.

Our government recognizes that success in this field hinges on first making sure that individual ministers are enabled to make decisions on matters of science that relate directly to their mandates, and second, ensuring that coordinating mechanisms exist across the government. There's no sleight of hand in what we're doing; we simply do not strive to manage science.

Let me take a moment with the next slide to highlight, among that of others, the work of the Council of Science and Technology Advisors, the CSTA, on which I serve as chair. This organization provides the Government of Canada with expert advice on the management of horizontal federal science and technology. Earlier this month the CSTA released its most recent report, Science Communications and Opportunities for Public Engagement, or SCOPE, in which it made some excellent observations. Key among its recommendations, the council emphasized that communications are an integral part of the management and conduct of federal science and technology.

Communication of sound government science allows the public to feel confident about the products they use.

This latest CSTA report follows on the heels of an earlier report released last December entitled Employees Driving Government Excellence, or EDGE. In that report the CSTA identified four foundations that it feels must be in place if our government is to achieve excellence in its science and technology human resource system. They are leadership, management, opportunity, and legislative and policy structure.

Science and technology linkages are another area the Council of Science and Technology Advisors continues to explore--linkages across government and between government, industry, and academia. It's within this array that our government's role is situated. The CSTA will be looking at how the Government of Canada can best capitalize on these linkages so that we can marshal science and technology resources wherever they are located in Canada. As chair, I am looking forward to playing a part in the development of this report.

To be clear, Mr. Chairman, this is about more than teaming up with partners. I expect that the CSTA is going to challenge government to find new ways of doing business and sharing information. We must find ways to overcome divergences among groups, including their various organizational norms, values, resource capacities, differing tolerance for risk, and abilities to share outcomes.

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The eighth slide will show the third key topic that I would like to discuss--that is, the newest report on federal science and technology, entitled Science and Technology Advice: A Framework to Build On, which is being released today.

Mrs. Marie Tobin (Director General, Innovation Policy Branch, Department of Industry): I have brought along copies, hot off the presses, for you all. This is the fifth in a series of reports that have been issued since the release of the Government of Canada's 1996 science and technology strategy. This is an important report, and I am sure it is of interest to all members of the standing committee. I would like to take this opportunity to share with you some of the highlights of this document.

The report contends that sound science advice is a key input to the way any country develops public policy. Canada is no exception. It shows how the Government of Canada is taking action on the advice it receives and how it is making best use of it. In doing so, it serves as a basis on which Canada can continue to build the tools and skills necessary to remain a competitive force in the global marketplace.

Moreover, the report showcases some of Canada's major science and technology achievements for 2002 and, where appropriate, highlights steps taken to implement the framework for science and technology advice.

It also demonstrates how various federal agencies and organizations are working together to incorporate horizontal policy coordination as part of their science activities. This is an important point, because it serves as a reminder of the many linkages in the science world. Indeed we must continue to work together to eliminate institutional barriers between government science, university science, and private sector science so that all partners can contribute fully to improving the quality of life for all Canadians.

Being released with the report is the booklet, Science and Technology Data 2002. This pocket-sized book of facts and figures on science and technology in Canada and our place in the world is a much-used reference source throughout Canada and around the world. Industry Canada has been producing this data book annually since 1987.

I look forward to hearing the committee's feedback on the report and data book.

Mr. Rey Pagtakhan: In conclusion, as you can see, our government and the Industry portfolio are unwavering in their commitment to science, research, and development. We are investing wisely in innovation, knowledge, and research, as well as in the people who drive these undertakings.

In Budget 2003, the Government of Canada adopted tools to continue the job that had already been started and to improve our productivity even more. Nearly $1.7 billion has been pumped into research and learning to stimulate innovation.

We will continue to strive to find ways to ensure that partners in science can communicate efficiently and effectively. Just as important, we will strive to listen and act on the advice given by science partners.

Indeed the coming years hold incredible promise for Canada. Thanks to the ongoing work of this department, we are helping to contribute to our country's future success.

So I say, je vous remercie, monsieur le président et membres distingués du comité. I look forward to answering your questions about the Industry portfolio, particularly its stress on science, research, and development.

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The Chair: Thank you very much, Minister.

I will now begin questioning with Mr. Rajotte, for eight minutes.

Mr. James Rajotte: Thank you very much, Mr. Chairman.

Thank you, Mr. Minister, to you and your officials for coming in today. We have a number of questions.

First, though, I want to state for the record that the Canadian Alliance is very supportive of the excellent work that the granting councils have been doing, and we're certainly supportive of the government increasing their year-to-year funding so they can operate some of the long-term projects they're doing.

I would like to begin the first question and talk about overall science and technology policy and the influence within the government. Mr. Minister, you're sort of a dual-hatted minister. You're veterans affairs and science and technology. I must admit, I would prefer if the government decided to have one person responsible for science and technology and perhaps even look at elevating that to a full minister.

When you compare that with the situation, say, with our southern neighbour, the United States.... I recently read an interview with Doctor John Marburger, who is the science adviser for President Bush. He was asked whether he had influence. The questioner challenged him and said basically, you don't really have any influence with President Bush. His response was that he sits in on a 7:30 a.m. meeting with Andrew Card, Ari Fleischer, Condoleezza Rice, and Karl Rove--essentially President Bush's inner staff--each and every morning. So I think that shows the importance of science and technology for the Bush administration.

Yet I'm fairly concerned that certainly our government here in Canada does not take science and technology as seriously when they allocate a Secretary of State and give you added duties of being the Minister of Veterans Affairs. In terms of science and technology policy, do you sit in on daily briefings with the Prime Minister, with the Industry minister, and with other cabinet colleagues to direct science and technology policy in Canada?

Mr. Rey Pagtakhan: I do not sit with the Prime Minister on a daily basis. I don't think any minister meets with the Prime Minister daily. When I was parliamentary secretary to him, yes, I was with him almost on a daily basis.

I should say, however, to your observations as to whether it should be a full ministry or not, that is the prerogative of the Prime Minister since it relates to government structure.

In terms of your fear that it might dilute my effort, being also with Veterans Affairs Canada, I thank you for your compassion.

I should say also that the veterans organizations in the country had objected when I was initially given the added responsibility of science, research, and development. But when I met with them, I put out 10 research projects that had been done in the country that had impact on seniors and veterans. After that, they were no longer worried. In fact, just a few minutes ago I tried to help the Tele-HomeCare Project apply the tool of science and research technology to the delivery of health care to our veterans.

In terms of what else we do, I meet with the Minister of Industry almost on a regular basis. If other schedules do not compete, on Wednesdays, all the secretaries of state meet with the Minister of Industry. Once a week we try. I sit on the Cabinet Committee on Economic Union and the Cabinet Committee on Social Union, two committees certainly on science, research, and development, and all the aspects of science are discussed on a regular basis with my ministerial colleagues.

So I think I am able to provide that input to science, research, and development. I thank you again for your understanding that it can be a very heavy load, but as my professor in St. Louis used to tell us, nobody dies from hard work.

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Mr. James Rajotte: The second issue I want to touch upon is this. One of my concerns with science and technology policy and R and D in Canada is the fact that we fund it and we advise it through a multi-layered level of bureaucracy, which I think is actually contrary to an effective science and technology policy.

You look at funding through the granting councils, which we certainly support, but then you fund through Technology Partnerships Canada. There are so many layers of bureaucracy set up, and many groups have approached us, including people from Synchrotron, people from the Coalition for Canadian Astronomy, and they say, “Please set up a single source of funding authority. You can fund through different agencies, but please allow us to approach one government source, present our project, like the Coalition for Canadian Astronomy, and then get funding for it.”

I recall meetings with them when they were so frustrated because they met with two ministers, the Secretary of State, two departments, two parliamentary committees. They would get a little finding from the CFI, a little funding from NRC, a little funding from Industry, and then Industry would say they needed more funding from NRC. They would go back to NRC and NRC would say they needed more funding from the CFI. Then the CFI would say, we'll give you the funding if Industry does. Finally, in the last budget, they did get their funding, but it was such a frustrating process for all of them.

The Auditor General in 2000 recommended you set up some single authority that would say a certain project deserves funding, and the government would then find the sources--whether it's CFI, Industry, NRC--and fund that specific project. The Auditor General recommended it in 2000 and I have been asking about it for two years.

Why has this type of system not been set up yet? Do you agree that it would be preferable to going to three or four different agencies and government departments?

Mr. Rey Pagtakhan: Certainly, I have the highest respect for the Office of the Auditor General. I should say, however, the current structure is, I think, serving us well, because the granting councils and the CFI are arm's-length bodies, so we are removed from their decisions to give grants to the qualified applications and removed from the possibility of political interference. That is very important.

We have to continue to develop research excellence and remove as much as possible political bias. At the same time, when it comes to a real industry need, we have TPC and IRAP, so we have a complementary approach.

At the same time, we have also been having partnerships among university, business, and the private sector. I think what we have moulded in Canada is a workable solution, rather than one big bureaucracy that would then dictate to the granting councils, which ought to continue at arm's length and which could then dictate to the CFI, which also ought to be at arm's length. So I think we are able to pursue that sense of independence on the part of our research scientists to review applications on a pure merit and excellence basis.

Mr. James Rajotte: I am not disputing that. In fact I support independence from political interference. That's not my question.

My question relates to the one-stop shop. Scientists representing national research facilities like the Canadian Light Source, TRIUMF, and the Sudbury neutrino facility have made a recommendation for a single source of operating funds for their facilities. So whether it's arm's length or not is not the concern. The concern is that they get the single source of funding, and they know they can get the funding for a certain project and for a certain time.

Is that something we should move toward in Canada? I certainly believe we should, and I would hope you would adopt that approach.

Mr. Rey Pagtakhan: You admit you believe in the independence and beauty of the current system, but the current system of independence and arm's-length performance would be erased if we had one source. You would approach the Minister of Industry, and the Minister of Industry would have the equivalent of the granting council's job as it now exists, and he would say, “I would like this project”. Can you imagine, then, how peer review would disappear?

I believe the current system works.

Would you like to add to that, Marie, since you have experience with this?

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[Translation]

Dr. Thomas Brzustowski (President, Natural Sciences and Engineering Research Council of Canada): Mr. Chairman, I would like to add a few words.

[English]

The issue of the workload of Canadian university researchers is real. It's recognized, and all of us at this table have been working in our own ways to try to reduce it, or at least to try not to impose anything beyond that. It's very clear we're trying to reduce the number of sources, trying to simplify programs as much as we can within our individual mandates, and trying to reduce the waiting time between deadline and decision. For example, our deadline for our biggest program of about 3,000 applications per year for discovery grants is November 1, and the results are guaranteed to be in the mail by March 31.

But science is growing more and more complex, and we're finding that increasingly scientists are having to involve colleagues from a variety of disciplines in getting their work done. I think that growing complexity, and also the growing scale, is showing us we will have to work with the research community to take into account all the points you've raised and all the points the minister has raised. We will have to work together to develop better ways of dealing with the very large projects. We're not there yet. We're managing to do a good job with the ones that exist, but I think the pressure is for more large projects.

The Chair: Thank you very much, Doctor, for your comments, but I think the question Mr. Rajotte was trying to reinforce is that the customer, who happens to be the researcher in this case, is being told to go from one department to another within the government in order to complete the project. That's the frustration of the community that Mr. Rajotte's trying to deliver.

Thank you very much, Mr. Rajotte. We'll be back to you.

Mr. Savoy.

Mr. Andy Savoy (Tobique—Mactaquac, Lib.): Thank you very much, Mr. Chair.

Thank you for appearing today, Mr. Minister.

The goal we have in Canada is to become one of the top five research nations by 2010, and although we've made progress in the last four or five years, I know our gross expenditure on R and D as a percentage of the GDP has gone up. I think it's from 1.69% to 1.82%. I believe we've made progress on that front, but we still rank 15th in the world in terms of research spending based on that good number.

To move forward in that direction, I think we have a good start, but they estimate we'll need to double the number of post-grad scientists and engineers in our system at present. They also say we have to put more dollars into it. I would say we also have to look at commercialization as an issue: How do we reach out? How do we promote R and D within the business community?

But specifically on the issue of the personnel, to move in that direction, and the requirement to have double the engineers and scientists by 2010, do you think...? And I applaud the recent initiative to phase in over four years 2,000 MSc and 2,000 PhD students, but I don't think that gets us quite to where we need to be. I think it increases it by 70%.

What other initiatives, apart from the graduate scholarships program I just mentioned, are we considering to increase those numbers?

Mr. Rey Pagtakhan: Mr. Chair, I think Mr. Savoy is right in his observation that if we depend only on the funding given and the goal of 2,000 masters and 2,000 doctoral students, we will have 4,000 for a period of time. Since our goal is about 12,000, we will have reached about only 30%. But the program will be reviewed at the end of the period, and hopefully it will be a favourable review and the resources of the government will be there to further enhance this particular allocation for post-graduate students so we can develop the critical mass of our research scientists.

Mr. Andy Savoy: Okay.

In terms of NSERC, CRC, and CIHR programs, which are very valuable to the research community, what do you consider doing in those programs specifically to attract and attain qualified, high-quality personnel in the R and D milieu?

Mr. Rey Pagtakhan: First, for research scientists and people to get interested in that, they have to see a bright future ahead of them; they have to see that they will be able to pursue their field of interest in terms of research. They have to be assured that the facilities, the infrastructure, will be there. So the increase in funding, some additional $500 million for the CFI, certainly is a step in the right direction.

Also, you mentioned the graduate scholarship programs. Certainly, it will develop our young research people. Also, the Canada research chairs will attract the very best among our people. And when you get the very best in the world of scientists, then they too will be able to attract the young students who would like to study with these very special people. So these were some of the initiatives.

Certainly, even with the scholarships, the amount we will give as a scholarship must be to a level of financial support that is competitive with the world, because if the other countries give far more.... I was in that category once upon a time. Human nature being what it is, you would like to go to a place that offers more. Canada was one of the best before, when I trained in 1968 to 1971. The research fellowship was tax-free. Although I was only getting this much, I know that is my net income. So that kind of thing perhaps should be revisited by the government in the future.

º (1615)

Mr. Andy Savoy: Thank you.

In looking at the value, when we were doing our peer review study actually, one of the issues I had was trying to quantify the value of actual R and D. We had a very difficult time with our assessment mechanism, in other words, saying what R and D rendered the most bang for our buck in terms of our investments. There was also a discussion surrounding the programs that would provide the most value to Canadians and value to our economy, whether in NRC, or SSHRC, or CIHR. We asked which ones were more valuable, basically.

Do you have a way of assessing, or reviewing, or evaluating R and D through those programs and then relating that to the actual economic benefits gained from those investments? What work has been done in that capacity to try to more readily quantify the actual economic gains?

Mr. Rey Pagtakhan: Certainly, the evaluation of any existing program is now a rule in government. For example, when we launched the innovation strategy, it is one way of knowing that part of that is the performance appraisal.

But I would ask Ms. Marie Tobin, because it's a very excellent question, to comment in some detail on what is in place in terms of our evaluation approach to assessing the R and D and our goals.

Mrs. Marie Tobin: I think the first thing to say is we rely on general economic studies that have been done at large and more than once on the value of pure R and D, not one sector versus another but what you call basic research in every sector.

The value to society, whether it be economic or social benefit, far exceeds the cost in any studies we have seen. We could send you some, if you want, but it is absolutely recognized. Edwin Mansfield, in the United States, in particular, did an awful lot of studies tracking those economic and social benefits.

That being said, we've accepted that, in general, investment in R and D, in basic research, pays off for Canada. And within the different programs that the granting councils come up with within their sphere of influence to better the research in their fields, each one has specific objectives and is monitored against those objectives. And the objectives are not simply--and I'm sure Tom and France can talk way more eloquently about it--to produce a number of publications, but they are to disseminate knowledge to have an impact on society, to create new products and technologies. And all of their reports indicate the successes they've had, but they may wish to add to this.

Mr. Rey Pagtakhan: Who would like to answer the question? Yes?

Ms. France Landriault (Director, Corporate Performance, Evaluation and Audit Division, Social Sciences and Humanities Research Council of Canada): With the new federal requirements to focus on results, we are really trying to develop programs that have objectives with measurable outputs. We are developing a diversity of tools to track progress along specific objectives. We are establishing the results-based accountability frameworks for our programs that do have indicators related to these outcomes very specifically.

At SSHRC we've implemented an electronic research report form that will capture data on all the research we support, and we will be able to report to Parliament, through our annual performance report, on specific outcomes and achievements through our programs.

º (1620)

Mr. Andy Savoy: In looking at the three granting agencies, have there ever been any studies in terms of the economic value per research dollar invested on a granting council basis, in other words through SSHRC, CIHR, or NRC, looking at the actual economic return on investment?

I understand that there are certainly social issues we have to consider, but looking specifically at the economic return on investment, do we have any figures on that?

Dr. Thomas Brzustowski: The studies quoted by Madam Tobin talk about numbers such as a 28% annual return, but the studies we do are quite different. We, for example, have tried to look at the economic implications of basic research, and we have just published our third edition of something called, Research Means Business, which is a survey of 134 first-generation companies whose existence we can trace back to a grant for basic research, that is, with no innovation in mind, sometimes 10, 20, or 30 years ago.

The companies employ in the range of 10,000 very highly qualified people, heavy on masters and PhDs. Their sales, of the ones that report them, are in excess of $2 billion, and they are just the first generation.

But on the other side of this is established industry and our programs of research and partnership with established industry in which we have typically in the range of 600 projects going on each year, of which about 100 represent new companies of all sizes and from all sectors and 500 are either continuing or repeat business. These are justified by the companies in terms of their expectations, or their experience, and they put something very close to $2 on the table for every dollar of NSERC money that goes to universities.

We do give awards, for example, each year. This year will be the seventh, or even the eighth year, of these for particularly outstanding achievements in that sort of university-industry partnership. For their economic achievements, I can't give you an overall number because they differ so much from industry to industry, but it is very clear that the stream of industry partners coming back to us tells us that from their point of view, in their business model, they see value in this. I wish I could give a global number, but I am sure it would be hard to produce a totally credible one.

Mr. James Rajotte: I'm lucky today, Mr. Minister, in that because I'm the only opposition member here, I get to ask half the questions.

I would like to touch upon R and D, particularly the scientific research and experimental development tax credit. I have a report or submission from the Canadian Advanced Technology Association that it made with respect to the innovation agenda.

The association thinks there is a major problem with the tax credit and believes it should be revamped. One of the problems it sees is that private companies are eligible for the tax credits whether they are profitable or not, whereas public companies, who do the vast majority of R and D, can only get their credits when they are profitable.

The association's recommendation is that the government revise the SRED tax credit program so that it becomes an effective stimulus for R and D, not just in good times but in downturns as well, by making public companies eligible for credits whether they are profitable or not. This is a suggestion from a very credible organization, and I would like to know whether you agree with this specific recommendation or whether you think the tax credit needs to be reformed but in another way, or whether you think the credit is operating well the way it is.

Mr. Rey Pagtakhan: I must admit that it is one of the fields I am not an expert on, and I will ask Ms. Marie Tobin to give us a more specific technical answer on that. I know that during the innovation summit there was a proposal raised that we could improve our science and technology tax credit. I think a study has to be done before any specific change could be had, but I will ask Ms. Tobin to elaborate on this.

º (1625)

Mrs. Marie Tobin: Unfortunately, I can't elaborate an awful lot. This is the purview of the Canada Customs and Revenue Agency rather than us. Industry Canada does monitor what's going on.

Mr. Rajotte is correct that there has been a report on this. It is not new, and it is our understanding that they are consulting with people on it. Whether there will be any action taken on behalf of that, I don't know, but there are a number of issues--such as the one Mr. Rajotte mentioned but also others mentioned in the national summit--that the CCRA has been seized with, and we are told they are consulting in good faith to see how they can refine their regulations and open up the system.

It is a very successful program, but you can always make it better.

The Chair: Let me interrupt your time here, Mr. Rajotte, since you have lots of time today.

One of the problems we have when we get into R and D tax credits--and this is not new; it's come in front of this committee for many years--is that they need to be improved. We look to the Secretary of State for Science, Research and Development to be the champion on it, to report back to the industry committee, because what happens as soon as we get into areas like this is we might as well just have Finance come and report to us on all the items.

So I would ask that you, Minister, take it upon yourself to work with your colleague and get back to us on how the tax credits are going to assist in the industry we are responsible for, and that's small business and businesses that apply for R and D. I would ask you to take that on.

Mr. Rey Pagtakhan: Mr. Chairman, I take your suggestion very seriously. Certainly I will raise this, first, with the Minister of Industry, and second, with the Minister of Finance.

The Chair: Thank you very much.

Mr. Rajotte.

Mr. James Rajotte: Thank you, Mr. Chairman.

I would respectfully submit, though, Mr. Minister, that you are the Secretary of State for Science, Research and Development. You state in your presentation your responsibilities are threefold.

First, you advocate wise, effective management of federal investments in science and technology, of which this is one key component, I would submit. Second, you advocate promoting an environment for research that is beneficial to Canadians, which I would think is the whole purpose of this tax credit. It is called “the scientific research and experimental development tax credit”, and so I would very respectfully submit that it's a major tax credit that you should be very familiar with.

I would appreciate it if you could get back to us about whether you do agree with this recommendation from the Advanced Technology Association or whether you think it should be reformed in another way.

I want to return to the single program delivery, because I think it's a crucial point for science and technology policy in Canada, because another one of the recommendations from the CAT alliance was a recommendation that the government's industrial R and D programs--including SRED, IRAP, and Technology Partnerships Canada--be placed in a single program delivery agency. So I'm not talking about arm's length or not. But would it not make sense to follow this recommendation and place these within a single program delivery agency?

Mr. Rey Pagtakhan: Before I go to the next one, on the R and D tax credit, I'd like to indicate that I am told that in fact we have one of the most generous R and D credits in the world. But having said that, my commitment to the chair to in fact discuss this further with the Ministers of Industry and Finance remains.

Mrs. Marie Tobin: Maybe Pat can talk about IRAP.

Mr. Rey Pagtakhan: Would you like to comment on that?

Mrs. Pat Mortimer (Secretary General, National Research Council Canada): I can comment on the IRAP aspect of that recommendation that we're familiar with. It came into the innovation strategy consultations and was discussed. Whether or not it was embraced by the community is another issue. These are programs that support industry, but not all in the same way. They work closely together, but I'm not sure there's any value to the community, to the clients, in actually combining them into a separate agency.

The IRAP program benefits greatly from its connection with the National Research Council because it deals with the early R and D stages of a development in small business. There is a sequence between the early R and D stages that are supported solely through IRAP contributions through IRAP-TPC into the larger closer-to-development, repayable contributions via the Technology Partnerships program. That is a different sort of management from the hands-on advisory-type services that IRAP gives.

Our feeling is that we've been working on trying to make IRAP as effective as possible and working with the other agencies that help industry--and it's not just these three--to ensure to the customer that there is a single entry point. You can go to an IRAP office anywhere in Canada and they will direct you. If they're not at the right stage in the innovation scale, they will work with you to find the right home. So I think that what we would gain from a single point of entry, we would lose from the synergy that now exists with the National Research Council.

º (1630)

Mr. James Rajotte: Okay, let me try this from another angle then. I'll just ask a very specific question.

What logic is there behind funding Canadian Light Source through the NRC and Western Economic Diversification, through one government agency and one government department or one regional development program, and what sense does it make to fund genomic research in Canada through Genome Canada, Western Economic Diversification, and Canada Economic Development in Quebec? Would it not make more sense to fund Canadian Light Source through the NRC solely, or genomic research through Genome Canada?

Mr. Rey Pagtakhan: On the diversity of interests in the country, the complexity of the science research in itself, the bigness or smallness of science enterprises, the varying regional differences in the country as to how they will define their own regional interest, I think this arrangement provides for that kind of one-to-one approach in any given region of the country.

Having said that, certainly NRC is developing a memorandum of understanding, an agreement with the various regional agencies to in fact provide money for IRAP. So there is an approach to collaboration, but not working to remove completely the regional agencies as they exist today, because I think the reality is, this is liked by people who are in those regions.

Mr. James Rajotte: So you're funding Canadian Light Source through NRC and through Western Economic Diversification because otherwise it would not be funded through the region? I'm not sure there's logic to that.

Mr. Rey Pagtakhan: No, the regional economic agencies are given a set of funds for a given fiscal year, and then they look at the applications for economic growth and development in that particular region. It may involve a small amount of research; it may involve feasibility studies; it may involve actually doing pilot work on some given project. I don't think that would be within the purview--most of the time, anyway--of the granting councils, which are more focused on not just the criteria.

The Chair: Thank you, Mr. Rajotte. We'll be back to you.

Mr. McTeague.

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): Minister, thank you for being here, and I deeply apologize. You're doing well notwithstanding the laryngitis. It's perhaps something I could learn. I see my colleague Mr. Savoy has apparently caught the same bug. I know each of you were in different parts of the country last week, so I want to know what was going on last week that I wasn't aware of.

Minister, you wear the hat of being responsible for the NRC, and of course for IRAP. I'm interested, obviously, as a member of Parliament who is not just the vice-chair of the committee but also a member from Durham. Right now, our community, and I think the country, stands to lose or to gain one of the most important projects in this century, something that would probably rival or surpass Canada's involvement with such innovative infrastructures as the Avro Arrow or perhaps the equivalent of Canada's NASA, and for the sake of 10-cent dollars, the Government of Canada could in fact bring a critical mass of scientific infrastructure to this country and to our region, the likes of which have very few parallels.

I'm interested in pursuing with you, if I could--and obviously a decision may not have been made at cabinet, and if so, it certainly hasn't been made public--given all the advantages and the potential support that exists for it, how much effort your department is making toward advocating the realization of the ITER project in Clarington, Ontario.

º (1635)

Mr. Rey Pagtakhan: I acknowledge and recognize the importance of this particular scientific field, and certainly to have an involvement in the international thermonuclear experimental reactor project would appear, at least on the surface, to be good for the country.

I think the reality, as this is being discussed with my other colleagues, particularly the Minister for Natural Resources, is how much is the commitment that is required, how long is that commitment to be given, and is it something that the country, at this time, should fund, considering and taking into account all the other projects that are out there for science, research, and development?

I won't say no decision has been made, but certainly I received representations from the ITER group just the other day, and I saw their case, that it is really good not only for advancing our research capacity and scientific level in this particular field, but in fact is the energy source for the future.

But I told them that while I look at these more seriously--and also the economic spinoffs that will occur from this--perhaps the biggest impediment, if I could call it an impediment, will be, are we ready as a country at this time to spend this significant amount for this particular project? I will await the recommendation of the Minister of Natural Resources, because we have asked him to come back to us and share his analysis and sentiments on this. I will listen with an objective ear.

Mr. Dan McTeague: Minister, I appreciate that. I think that is very refreshing and encouraging.

I am aware of the $2.3 billion commitment over 30 years that is being asked of the federal government, which would, of course, match what we're doing provincially, and I think it is certainly worth the effort, understanding that an international cooperation means that Canada doesn't have to put all the money up front but may very well, as a result of this commitment, get what many other countries would be bidding for. I know there is a certain furtive debate that's out there, and this is, of course, an interesting issue for all of us here since we believe anything that could advance the development of new technologies within our soil and bring with it the kind of respect and the kind of economic drive that comes with new technologies would certainly have a number of very positive spinoff effects.

I have often been a very critical member of the government, as you very well know, but I've also been, in many respects, an innovator, perhaps more so than the Canadian Alliance.

I'm getting an admission here from the vice-chair. I see the chair laughing in agreement, Mr. Minister.

But I am very, very hopeful that the Government of Canada makes the right decision here for all the right reasons. Certainly I think the financial consideration is well worth the effort. It's a small downpayment on a tremendous future.

Let me shift for just a moment here, Minister. I appreciate the work that is done by many of the agencies, the three granting agencies, and so on, that you're involved with. We've asked this question before of representatives of natural resources, but I want to ask it again.

It seems that when there are potentially new good technologies that exist out there--and I gave examples, for instance, of someone being able to tweak a ballast on a fluorescent light so that it's only consuming one-third of its energy, or someone using the exhaust from diesel and being able to reconfigure that with a small amount of hydrogen to create output on a diesel engine doubling its horsepower--when someone has a great idea within Canada they are told, look, we think this is a great idea and we'll help you a little bit, but we have the belief that the private sector is probably in a better position to do that. Unfortunately, the private sector is very competitive, and often those private sector interests are not Canadian. Therefore, good Canadian technologies that could, for instance, respond to our commitments under Kyoto tend ultimately to wind up being foreign-owned, foreign-dominated, foreign-controlled, or foreign-capitalized. While I don't have a problem with that per se, I think Canada is losing out on some pretty important technologies.

I respect what we've done with Ballard, but I wonder, Minister, if it has occurred to you and to the agencies you represent, whether we could and should be doing more at cabinet to say Canadian technologies can be supported by silos of funding within the Canadian government where the options are promising and real, certainly in terms of the two technologies I mentioned at the outset.

º (1640)

Mr. Rey Pagtakhan: Thank you, Mr. Chair.

Certainly in terms of its participation in the climate change agenda of the government, the Industry portfolio is very much engaged. Just to mention a couple of initiatives that Industry has taken, its interest in being involved in urban transit funding for infrastructure is part of that, aimed at reducing undesirable emissions. Second, there's the development of some of these newer sources of energy: the fuel cell, hydrogen. I just recently announced a project in Winnipeg, my own city. So there is an interest in that; Industry Canada is very much involved in the climate change agenda.

The Chair: Thank you.

We're going to go to Mr. St. Denis.

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chair. Thank you very much, Mr. Minister, and for your officials being with you.

My interest is in the area of science education. I know the provinces guard carefully their jurisdictions when it comes particularly to high school education, but to post-secondary as well. We don't have any direct involvement, but I'm wondering in what way we do or could as a federal government participate either directly with high schools or with school boards.

I'm thinking mostly of the high school level. That's where you really engage, when people are making decisions about where they're going to go with their lives. In particular, because aboriginal youth are mostly going to high schools in nearby non-aboriginal communities, they're making decisions as well about careers in science, and we need more aboriginal youth deciding to go into sciences.

I'm just wondering what we do now, or what the potentials are for involving ourselves as a federal government with provincial and territorial ministers of education and school boards by way of, for example, helping with science fairs. You see so many school boards, with provincial cutbacks, cutting back on what some would think is a luxury, but certainly science fairs aren't a luxury. They're as important as high school hockey programs, as far as I'm concerned. I support both.

I'm just wondering what the possibilities are there. I know, Dr. Pagtakhan, you're a medical doctor yourself and have worked yourself, I'm sure, with lots of young people in your time. What might your views be on that, sir?

Mr. Rey Pagtakhan: In fact, through its councils the government has a number of initiatives. The Natural Sciences and Engineering Research Council has some specific programs--some to come fairly soon, others already existing--such as the PromoScience program, the Undergraduate Student Research Awards program, and including the educational chairs.

I will ask Mr. Brzustowski to please elaborate on these.

Dr. Thomas Brzustowski: Thank you, Minister.

Mr. Chairman, this question is very important for us too, because when the issue came up of the source of the highly qualified people who will be helping move us to that higher level of R and D capacity in the nation, it became clear that one really had to go all the way back to filling the pipeline with young people who had been turned on to science early, perhaps by a wonderful experience in elementary school in their first science or math course, and then cultivated along.

As you pointed out, we're very conscious of our limitations as a federal agency in doing this. We take it as a given that anything we do is done in cooperation with the provinces in this area.

Our PromoScience program operates at the community level. We essentially support volunteer efforts--and there are many of these across the country--that try to involve young people and give them opportunities additional to what is in the school to get them interested in science. We certainly support this program. We have been doing so for some time. In fact, our budget is $2.5 million for this. We provide awards in the many dozens each year. We also give awards to the individuals or the groups who have accomplished most.

But we are going beyond that. We are now going around the country talking to people in faculties of education and in faculties of science, trying to determine what is being done in the universities that have faculties of education to attract people with an understanding and a love of science and mathematics into the teaching of science and mathematics.

It is really quite wonderful to discover how much is being done. It is not a historical record; it is all prospective. We might be able to help with this in supporting chairs, for example--and this is prospective now--jointly between faculties of education and faculties of science; or perhaps, and this of course would involve provincial jurisdictions, providing research experiences through our undergraduate student research awards to students studying to be science and math teachers.

We are contemplating all of these things. We recognize that as a federal agency the best we can do is join in partnerships with those whose responsibility it is and try to influence them. It is a very active field with us and very important.

º (1645)

Mr. Brent St. Denis: Thank you.

If I have time for a bit more, Mr. Chair, I have another question for Dr. Brzustowski.

Going back to the government's innovation agenda, one of the ideas that has been talked about and I think has a lot of merit is the notion of technology clusters. I think it is something the research council has an interest in and maybe a stake in.

I have a northern Ontario riding, and the community of Sudbury near my riding is desperately trying to become a centre of excellence for mining, which could hopefully create a technology cluster in mining technology and science.

I wonder if you or anyone else at the head table could talk a bit about the technology clusters and what that could mean for Canada.

Dr. Thomas Brzustowski: I will start the answer and then I will pass it over to Pat Mortimer.

Certainly the physical proximity of companies that are established and small companies and growing companies to a centre of competence in a particular area is hugely important.

We have some programs that try to do this. We have NSERC research networks, which are highly concentrated local small networks of people that try to provide that. Our university-industry partnerships also operate in a way that tries to provide that, but the larger program focusing on clusters is a program of the National Research Council. Perhaps Pat Mortimer can give you a better answer than I could on that.

Mrs. Pat Mortimer: Technology clusters are something the National Research Council has been looking at for a number of years as a concept and then as something to put into an operational phase.

We were looking at the experience we had in some successful clusters across the country and realized the real benefits to economic development happen within communities and happen when the communities work together.

There are a lot of components. It's more than just an R and D organization and funding science: you need a source of highly skilled people; you need financing; you need the mentors; you need incubation facilities; you need innovative companies that are going to take the spinoffs from the R and D.

We have embarked on a number of specific initiatives within the ability of our agency to support them, primarily based on areas where we have technical expertise or existing facilities, simply as a way to increase our chances of success. We have about 10 of these cluster initiatives under way at the moment, and that is quite a challenge.

The point is, we are investing money, but it is a community-led initiative. It cannot run simply by the federal government putting money into the riding and going away. The community has to pull together; they have to agree on a focus; they have to bring their own resources to bear on this. We've had quite a bit of success, but we're only in year three or four of the strategy we're undertaking.

In addition to the specific ones where we are really investing new money and trying to help create major clusters, the IRAP program is as well, in some of the lesser areas, looking at opportunities to cluster companies together, so that companies in a similar field in a similar technology area, instead of competing with each other, are working together to increase their economic benefits. One of the best examples of that is in the Niagara region with the wine industry.

We're strong believers in the theory of clustering--being a bunch of scientists, we looked at the theory first--and we're working with the communities to try to make this happen. We are aware of the interest in northern Ontario. At the moment we're not in a position to really move on it in a strong way, but what we can do is help the community identify the elements it needs to make this a success and start some preliminary steps to help the community itself pull together and benefit from the lessons of technology clustering.

º (1650)

The Chair: Thank you very much.

Monsieur Normand.

[Translation]

Hon. Gilbert Normand (Bellechasse—Etchemins—Montmagny—L'Islet, Lib.): Mr. Secretary of State, thank you for being with us.

I am asking myself a question, a little bit along the lines of that put to you earlier by Mr. Rajotte. In your presentation, you mentioned the CSTA, that talked about coordination within the government and that, in a previous report, stated that the government had itself quite a challenge, that of replacing close to 5000 scientists within the government itself over the next five years, in other words 1000 a year.

I do not know if there has been any follow-up in that regard over the last two years. For the government to be in tune with the scientific world, it must have its own scientists and these people must be competent.

[English]

Mr. Rey Pagtakhan: Mr. Chair, on the clusters, I'd just like to add that I had a workshop in Winnipeg on that issue, in fact to identify best practices, and certainly it's one way of strengthening communities.

On the need for 5,000 new scientists that you alluded to and the advisory council, I missed the last part of your question.

[Translation]

Mr. Gilbert Normand: Over the next five years, the federal government, be it within the Department of Agriculture, that of Natural Resources, or that of Health, will have to replace 5000 researchers. I would like to know if the government has taken measures in view of replacing these people.

[English]

Mr. Rey Pagtakhan: Madam Tobin, would you like to answer that specific question?

[Translation]

Mrs. Marie Tobin: Mr. Chairman, I believe that 5000 is the number quoted by the Auditor General in her report on science and technology. The Council of Science and Technology Advisors has done a study in this regard. After analysis, we realized that there was undeniably a problem, but that this problem is perhaps not as acute as had been stated by the Auditor General.

Indeed, it seems that government scientists are in love with science and that they do not retire as early as do other public servants. They are therefore ready to stay on the job despite the fact that several of them are already well-renowned scientists. This is in fact giving us a little bit of breathing room.

Furthermore, we have benefited from the cooperation of the Public Service Commission and of Treasury Board in allowing government laboratories to fast- track certain hiring procedures which sometimes take an awful lot of time. This will allow young scientists to be hired and to benefit from the presence of their elders; they will thus be able to tap into the corporate memory before taking over.

The future will tell us if these measures were sufficient. It is quite a challenge, but we are trying to find ways to facilitate the transition.

º (1655)

[English]

Mr. Rey Pagtakhan: Mr. Chairman, I would like to add that the Treasury Board minister has also indicated that she would like younger people in the civil service, and crucial to that, of course, is that we have a supply to draw from. So our doctoral programs are one avenue.

[Translation]

Mr. Gilbert Normand: I have already mentioned the problem of coordination, particularly between departments, within the government, as far as science is concerned. Often, departments do not know what the others are doing. It is possible, for example, to have research on food canning being done at the same time by both Fisheries and Oceans and Agriculture Canada.

I do not know if any progress has been made in the area of coordination. We talked earlier about having a single source. I myself have already made the suggestion that a vice-minister or that a minister of State oversee this, and it would involve having a science advisor in the Office of the Prime Minister.

However, I know that you are superman, Mr. Secretary of State, and that on top of it you are minister of Veterans Affairs. It seems to me this is adequate proof that this is not a priority for the government.

[English]

Mr. Rey Pagtakhan: Mr. Chairman, when I hear that question from one of my predecessors, of course, I always feel trepidation--

Some hon. members: Oh, oh!

Mr. Rey Pagtakhan: --because he has certainly studied the subject matter very well, among other things.

The Chair: I think the same question came from Mr. Rajotte, though.

Mr. Rey Pagtakhan: Yes, I acknowledge that, but certainly this is one of the very subject matters that the Cabinet Committee on the Economic Union earlier this month mandated the Council of Science and Technology Advisors to undertake developing linkages among departments of government and between the government itself and the external sources so that we will know where the talents are.

Hopefully, one of the recommendations or studies they will look into will be areas of potential duplication. On its surface, duplication may mean a waste of effort and resources, but if the project reinforces the previous one, then that too is a strength in itself.

So that is being undertaken by the Council of Science and Technology Advisors, and it hopes to issue its report in the spring next year.

Whether there should be a scientific adviser to the Prime Minister's Office, again the advisory council certainly is able to bring us advice from an array of experts. The advantage of an advisory council is that it does not come from any one particular scientific discipline. In theory, for example, if a chief scientist comes from one perspective, then unwittingly that perspective may be emphasized more than the other disciplines.

[Translation]

Mrs. Marie Tobin: I do not know if there is much to add, Mr. Normand, but the mechanism that exists presently, that of the ADM Committee on science and technology, is working. This committee has sub-committees that are studying closely the matter of governance and the way of creating more formal cooperation mechanisms. Furthermore, there will be a report on the ACST study in this area. This committee has been in place for some time now and there are a good many cooperative projects. Science is becoming more and more complex and several departments are therefore faced with the same problem.

» (1700)

Mr. Gilbert Normand: With regard to the ITER project, I was personally involved in negotiating this project with other countries. Canada's position has always been to say that it is ready to supply a location but that it will not invest a single cent. Has Cabinet's position in this regard changed? What is Cabinet now prepared to invest financially? It is difficult to negotiate with other countries when we do not have a penny in our pockets and nothing to offer except a piece of land. Has Cabinet changed its view in this regard? Is Cabinet prepared to invest money in order to draw the ITER project here to Canada?

[English]

Mr. Rey Pagtakhan: When I read his transcript, I think the Minister of Industry also said that this matter has in fact been discussed among colleagues and that no decision has been made.

[Translation]

Mrs. Marie Tobin: I believe the minister has already answered. From what I know, no decision has yet been taken. It is the minister for Natural Resources who is sponsoring the project, since it is an energy project, but the decision will be made by Cabinet.

Mr. Gilbert Normand: In the document, we see that the budget for the Social Sciences and Humanities Research Council of Canada was increased by close to 250 million dollars from 2002-2003 to 2003-2004. Is this 250 million dollar increase attributable to indirect university costs?

Ms. France Landriault: Yes.

Mr. Gilbert Normand: In fact, this does not come under the budget of the Social Sciences and Humanities Research Council.

Ms. France Landriault: You are perfectly right. It is the 225 million dollar budget for the new indirect cost program that flows through the Social Science and Humanities Research Council, since it is the inter-council secretariat for the Canada Research Chairs that will be administering the program.

Mr. Gilbert Normand: But why not have given a breakdown for that amount? We now have the impression that humanities research is getting more money whereas it is not the case.

Ms. France Landriault: This is the way we are asked to fill in Treasury Board's charts. But I believe there is a note explaining this tremendous increase.

Mr. Gilbert Normand: Yes, it is note 14. But in the presentation, one must read between the lines, as we say. The impression given is that there is a budget increase, whereas that is not the case.

[English]

The Chair: Thank you very much, Mr. Normand.

Before I go to Mr. Rajotte, I'm going to ask a question of Ms. Mortimer, who I'm sure was waiting for it.

Mr. Minister, I believe the IRAP budget was increased in the A portion by $25 million a year. At the same time, it wasn't very clear whether the agencies reduced the $30 million, or the somewhere between $25 million and $30 million, they used to contribute to IRAP. I understand there have been some secretaries of states of the regional development areas who were continuing the agreement to fund IRAP at a higher level, knowing full well that this committee has recommended on two occasions that IRAP be doubled, because small business seems to be getting the short change on this.

I'd like to get an understanding of this. Have the regional agencies agreed on additional funding for the IRAP program?

Mrs. Pat Mortimer: Yes, four of the regional agencies, ACOA, DEC, WD, and FedNor, have agreed to contribute $3 million a year, which will be $12 million. We have three-year signed agreements with them to re-allocate resources from them to support IRAP. Those are contribution funds to go to firms.

If I can clarify the money from the budget, because I know it's confusing, the budget gave $25 million to IRAP. Although the budget states it is for two years, I can say that Treasury Board has confirmed that is an ongoing increase to the IRAP budget, which is good news.

The Chair: Is that part of your A budget going forward?

Mrs. Pat Mortimer: It will be part of the A base for IRAP from now on. Some money from that is required to transfer the IRAP ITAs, who are currently under contribution agreements, so they can become employees under the current regulations for transfer payments. But clearly, there was at least $12 million in ongoing funds added to the program.

And with the addition of the other $12 million, the funding reallocation from the regional agencies, there is a real increase in the budget of IRAP.

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The Chair: I want to thank you for that, except that our IRAP program still runs out of money after seven, eight, or nine months, not because we've lowered the bar, but because we have put in a system that has worked with many small businesses across the country, yet we still run out of money.

Going back to Mr. McTeague's question, we are now holding back research in small business in many cases. I guess I would like to get reassurance that all efforts possible will be made to get more money into IRAP, particularly because small businesses seems to get less noticed, because they only ask for $15,000, $50,000, or $100,000, not millions, like some of the other programs for large corporations.

I hope we will have your assurance that you will work on that.

Mr. Rey Pagtakhan: Certainly, Mr. Chair. As has been said, it is now part of the ongoing A base funding, so whatever increase we have, IRAP will receive that share.

The fact that the regional agencies have agreed is indeed a very good sign. Certainly, the Minister of Industry is very committed to the IRAP program.

The Chair: Thank you very much.

Mr. Rajotte.

Mr. James Rajotte: Thank you very much, Mr. Chairman.

I want to follow up on some of the questions Mr. Normand was posing, and I'd particularly like to clarify the way in which the federal government decides to fund a large national or international research facility. Mr. McTeague mentioned the ITER project under consideration.

Just for clarification and for my edification, could you perhaps just walk me through the process. If I were one of the persons working with one of these projects, what process would I go through, step by step, by which the federal government determines whether the project I'm working on would be worthy of support or not?

Mr. Rey Pagtakhan: Essentially, the first thing is to be sure the appropriate department is approached. Of course, with the information booklet we have, and hopefully with more public awareness of the existing programs, the interested business would come to know who to approach. But Industry Canada would certainly be playing that critical role in terms of the industry implications of a big project, and we know that science, research, and development is under Industry Canada, which is the department to approach.

Now there could be an instance where a department has a responsibility. For example, there is Atomic Energy of Canada, which is under Natural Resources Canada. As ITER falls more or less under the purview of Natural Resources Canada, the decision was made that the Minister of Natural Resources would bring that subject to the cabinet committee and eventually back to cabinet for resolution.

Of course, the process includes discussions among ministers, just like discussions in any business firm. Ministers discuss such things as, what outcomes do we hope for, what are the economic and social benefits, and is it something we can afford in light of the competing priorities?

Sometimes it comes down to competing priorities. For example, we just heard that there is a need to increase our funding for the industrial research assistance program. I know the chair would like that to be doubled--although he's grateful that we have already increased it this much. But I too would like to increase the IRAP program. So if it becomes a matter of competing priorities, the business case has to be made.

Mr. James Rajotte: If I understand it correctly then, the project is brought forward and a determination is made of what department it best fits into. Even if it fits within one or two, it will go through one ministry; it either goes through Natural Resources Canada or.... And that minister is then responsible for shepherding it through cabinet, and ultimately the cabinet makes the funding decision.

Mr. Rey Pagtakhan: Yes. And of course, as part of the political process, the interested groups want to go directly to ministers to bring their case forward and develop the interest and knowledge of the various ministers, or go to other members of Parliament, who then bring this thing for discussion and debate. Listening to the citizenry is part of our process.

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Mr. James Rajotte: I'll just ask then about a project that received a lot of attention a couple of years ago, the Canadian Neutron Facility. Was it a cabinet decision not to fund the Canadian Neutron Facility? Is that where they were denied? Is that still a possibility?

Mr. Rey Pagtakhan: The one at Chalk River. Would you like to answer that?

Mrs. Marie Tobin: My understanding of the process, and I believe it's in the record of this committee and that's why I can say something, is that there was a time when the cabinet process called for what we called “unfunded proposals” to bid forward to cabinet for a decision. There were far too many unfunded proposals to match the financing that was available. The Canadian Neutron Facility, I believe, fell in this particular category.

With time, any project of that magnitude changes, the costs differ, and a variety of things can happen. The National Research Council is the lead agency on that part of the project. I don't know whether Pat has anything to add, Mr. Chair, but I think it's a question of there are finite funds and an awful lot of meritorious projects in science.

Mr. Rey Pagtakhan: Pat, would you like to add to that?

Mrs. Pat Mortimer: Okay. I should also mention that this is another energy-related project. I think it doesn't help with the complexity that there is a research side related to our interests with the National Research Council, but there is also a research need from Atomic Energy of Canada Limited, which is part of Natural Resources Canada.

It is Natural Resources Canada and AECL that have the licence to operate the reactor, and would have for reactors of this type, and need the approval to either renew or rebuild. We can work with them in championing the science side of it.

As such, it's really an issue with NRCan and their plans for AECL, and what their plans are for research in that area. We're in contact with them, but I think that's where it is now.

Mr. James Rajotte: Thank you.

The second item I want to touch upon is actually with the funding of the granting councils. There are representatives here, the heads of two granting councils and representatives of all three granting councils. I was going to ask if you'd like more money, but I think that's a tough question to put in front of your Secretary of State here.

I would like to ask this, because some people have approached me and have said they think there is a better method of funding or granting councils. One of the frustrations I hear is that if it's funded on a year-to-year basis, particularly years ago in the mid-1990s when they went through a period of cuts, it's very hard to plan long-term for your researchers, for your scientists. It would be preferable, not to set up a CFI foundation, but to fund it like the CFI, where you know you have consistent funding for, say, a five-year to ten-year period and you know you can count on that.

Is that a better way of funding? Is there a way to set that up? Is that a fair question to ask the three granting councils?

Mr. Rey Pagtakhan: I will ask the chair of one of the councils.

Dr. Thomas Brzustowski: I think it is a very fair question to ask because the research community expects, particularly in discovery grants, commitment by us to them for several years. Obviously, that is a bit of a challenge to receive funds on an annual basis, maybe with guarantees in the budget for the next two or three years, with things then being defined in the A base at a time when government's policies that are designed to promote more and more research are succeeding and the pressure to do more is on us.

The situation you describe would be almost unique in the world. Most of our counterparts in the U.S., U.K., Germany, France, and other countries face the same kind of situation, which is the ability to provide annual supply by government with the need to assure long-term stability to the people doing long-term projects. It's a generic problem, but within that our successes are quite remarkable.

If I may, Mr. Chairman, I indicated to you that I wanted to share an item of really good news with the community, and it's very much related to this question. Right now we're in the midst of quite a startling renewal of Canadian universities. It's a combination of demographics meeting constructively the policies and the programs that are in place. University professors who were hired in the late 1960s and early 1970s when Canadian universities exploded, are now retiring. Only a fraction of the people in our area, in the natural sciences and engineering, have been active to the very last day in doing research, but all of the replacements are expected to do research, want to do research, and the best thing of all for the country is that they are qualified to do research. They are really very well qualified.

Just to give you an example, in the last competition for discovery grants held in February, of about 3,000 applications, 894 were new people, new professors, appointed in Canadian universities. Only 266 retired. All of this is against the background of a total number of professors that has been fixed and may just begin to rise slowly in the next few years because provinces have put up money in response to student enrollment. What that means is that even if this is a budget pressure in the short term and we have to manage it, and the last increase helped in terms of the country, we're moving up. We're putting the conditions in place for qualified people to move from one level of research capability to a higher level. I can't imagine anything better that we could be facing.

We have to give them promises of three-, four-, or five-year grants. We obviously have to do that. This limits the size of grant we can make. This limits our ability, our flexibility, in managing our budget, but it's not impossible. We're doing it and getting them started. I will say this. It is a short-term management problem and long-term great news for the country.

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Mr. Rey Pagtakhan: The Canada research chairs, Dr. Brzustowski, is the one you have in mind where there is a much longer term than one year.

Ms. France Landriault: This is the case for many of the programs we support in the granting councils. Under the regular programs, the standard research grants, we give three years of support to researchers. In the larger programs, such as the major collaborative research initiatives, we give support for five years. So although we do normally get increases on an annual basis rather than for long periods of time, it doesn't impede our capacity to give multi-year support to the researchers. They are quite well taken care of in terms of their needs for a given period of time.

Mr. James Rajotte: Thank you, Mr. Chairman.

The Chair: Thank you very much.

Does anybody else over here have a question?

My last comment is going to be that I very much appreciate the work you've done in universities and the various new research areas that have blossomed. I refer to the one at Brock University in the viticulture area, where now that's expanding because so much of it applies to the flower industry. And now they're looking at coming up with their own Niagara Peninsula flower and a new cluster of greenhouses has started. It all started because of that research chair at Brock University and the new researchers who are there. I think it's great to see that just blossom up.

I want to thank you very much, Minister, for taking the time today to be with us. We're very much interested in this area of work. In fact, we normally have some of the other areas like TPC and CFI come to us, not during the estimates month but during the year, to bring us up to date, and we'll be calling on those two areas probably in the fall to explain to us how they're progressing from the investment side and the return on investment side. So thank you very much, and thank you to all the officials for being with us today to help us to understand what you're doing and where you're spending all that money.

Thank you very much. The meeting is adjourned until tomorrow.