EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 22, 1996

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[English]

The Chairman: Could we come to order?

The committee is very proud to have had the assistance of the Liberal caucus on education. They have helped us with this round table today to bring together leaders from Canada's educational institutions, leaders who will help our committee prepare the next budget and who will help us try to set a future course for Canadian government involvement in the future of our institutions and our young people.

The committee is very grateful to all of the members of that caucus, including its chair, Peter Adams, and members Mary Clancy, Ted McWhinney and Andrew Telegdi, who are here representing that group.

I'm very pleased to present our witnesses: from the Canadian Association of University Teachers, Robert Léger, government relations officer, and Shirley Mills, treasurer of the CAUT executive committee; from the Canadian Federation of Humanities and Social Sciences, Marcel Lauzière; from the Association of Universities and Colleges of Canada, Robert Giroux, president, and Dr. Art May, president of Memorial University; from the National Consortium of Scientific and Educational Societies, Dr. Paul Hough and Dr. John Service; from the Canadian Graduate Council, Rubina Ramji; from the Coalition for Biomedical and Health Research, Clément Gauthier; from the Canadian Research Management Association, Henri Rothschild; and from the National Graduate Council of the Canadian Federation of Students, Brad Levigne.

Have I missed anybody?

I believe we're going to start with you, Mr. Giroux. We look forward to your presentation.

Mr. Robert Giroux (President, Association of Universities and Colleges of Canada): Thank you very much, Mr. Chairman. We're very pleased to be here. We've prepared an opening statement that I will read on behalf of AUCC, CAUT, and the consortium.

Mr. Chairman, about a year ago your committee convened a round table to discuss federal funding of post-secondary education as part of its pre-budget consultations. Several of the groups represented here today participated in these discussions.

The principal thrust of our arguments last year was that in its attack on the deficit the federal government had largely neglected its commitment to generate jobs and growth. Our recommendations dealt with federal support of university research through the granting councils, improved student assistance, and enhanced opportunities for international collaboration and exchange.

We were most encouraged by your subsequent committee report of January 1996. In particular we were heartened by your emphasis on the critical role basic research and the quality of our universities play in sustaining Canada's science and technology enterprise.

We also put considerable hope in your strongly worded recommendation that no further cuts be made to the granting councils.

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Mr. Chairman, at the outset we wish to express our gratitude to your committee for its vision and its enduring support for a healthy and vibrant research community in this country.

As you then noted in your concluding remarks, last year's round table was testimony to the bridge-building the university community has been engaged in for several years. As we discuss the future of university research here today, you will notice that the university community and its partners have a clear sense of future directions for federal support of university research. We have progressed from an agreement on broad principles to a consensus on concrete actions.

[Translation]

Mr. Chairman, in recent months the AUCC, the CAUT and the National Consortium have worked together to resolve problems affecting our research and development performance.

We are here today to present to you the results of our work, in the form of a series of proposals which should enable the federal government to play its leadership role.

In developing these proposals, we were very aware of the fiscal reality facing us all. Nevertheless, we hope that your committee will look favourably upon our action plan.

[English]

Since members of the committee have all received our document, ``Putting Knowledge to Work: Sustaining Canada as an Innovative Society'', permit me to draw your attention to its highlights.

The problems we have identified and the actions we propose all relate to the need to give the current and upcoming generation of researchers confidence that Canada is a place to undertake a challenging research career.

To this end we propose concerted action under federal leadership over the next five years on three principal fronts: promoting research careers, arresting the erosion of research infrastructure, and enhancing partnerships to foster knowledge and technology flows.

Mr. Chairman, our action plan seeks to put knowledge to work in order to sustain Canada as an innovative society by improving our performance in these areas.

Promoting research careers. In order to promote research careers, we recommend two initiatives. First, our proposal for a new research frontiers program is designed to, first, assist universities in developing their research and training capabilities in fields that are crucial for the social and economic development of the country; second, to enhance the capacity of Canadian universities to attract and retain the brightest graduates and most promising faculty members; third, to provide young faculty members with the research support and facilities required to enable them to establish their research careers and become competitive nationally and internationally; and, last, to contribute to the re-engineering and restructuring of universities.

Most graduate students opt for careers outside academe. Employers have deplored the fact that while young researchers are academically well prepared, they lack an understanding of and appreciation for the imperatives of the world of work outside academe. The result is a protracted period of adaptation before new employees become fully productive, innovative researchers.

The problem stems from the fact that during their graduate studies most master's and doctoral students have relatively few opportunities to gain research experience outside academe during training.

Our second proposal consists of transition awards offered to graduate students in order to give them an opportunity to explore research career opportunities in a variety of settings at first-hand. Employers, on the other hand, would have an opportunity to identify prospective researchers. These research terms would complement their formal education and would make the transition to the world outside academe smoother and more efficient.

Arresting the erosion of research infrastructure. The erosion of research infrastructure has become a widely acknowledged fact. We firmly believe that arresting this erosion requires intergovernmental cooperation that builds on the complementary roles each level of government has played in the development of Canada's university research enterprise. We propose both a short-term initiative and a long-term initiative to address the infrastructure issue.

[Translation]

In our proposal Infrastructure for Innovation, which all committee members should have received, we recommend that a second Canada Infrastructure Works program focus on modernizing university research infrastructure.

By seeking the modernization of the research equipment and facilities of Canadian universities, our proposal aims not only at creating short term jobs, but also at strengthening the basis for prosperity and sustained growth.

[English]

While such an initiative would bring much-needed relief in the short term, a more permanent solution must be found to ensure the long-term health of research infrastructure. The problem of overhead costs associated with federally sponsored research has been described and analysed repeatedly over the past fifteen years. The federal government has refused to accept sole responsibility for these costs.

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We agree that the federal government need not assume full responsibility for the overhead costs associated with granting council funding. We therefore propose that the federal government build on existing provincial initiatives by matching provincial support for research infrastructures in our Canadian university research infrastructure support program.

The third part of our thrust is on the enhancement of research partnerships and knowledge flows. Much of the innovative programming introduced in recent years has focused on forging research partnerships between different actors in the country's innovation system. This experimentation must continue building on the lessons drawn from recent experience. The networks of centres of excellence program is the most innovative research support program of the last decade. We therefore recommend the renewal of the national centres of excellence program.

One of the most significant barriers to the successful transfer of knowledge from universities to industry has been the lack of funds to bring innovations from the pre-competitive stage to commercialized technology. As a result of this strategic gap, Canada is losing both employment and economic growth potential. Therefore we recommend that the government encourage the development and enhancement of technology transfer at Canadian universities.

Universities are storehouses of knowledge and expertise that are underutilized in many respects. A more complete range of university resources could be better applied to support community development to assist in the adaptation of communities to the realities of our globalized knowledge-based society. These resources include, for example, the knowledge, skills, and expertise of faculty members and the curiosity and enthusiasm of students looking for challenging assignments.

We therefore recommend the creation of a program to assist in the establishment of community research shops. Building on existing outreach activities, the research shops would serve as an interface with the local and regional communities, including community and business groups as well as local and regional governments and agencies. Their role would be to assess and to seek to meet the education, training, research, and information needs of the community.

In short, what we propose is a set of strategic initiatives designed to sustain Canada as an innovative society.

[Translation]

We were therefore pleased to hear some of the statements made by the Minister of Finance when he appeared before your committee on October 9 last. We were pleased to see that he was once again emphasizing a balanced approach by stating that Canadians do not want a government capable only of efficiently managing the books. They want their government to maintain a society where compassion still has a place. The minister even added that the government has a responsibility to help Canadians to adapt to the challenges of the modern economy.

Mr. Chairman, we share this view when seeking to use knowledge so as to preserve Canada's innovative capacity.

The Minister of Finance also recognizes that market forces and the business sector are not a panacea for all our problems. He stated that there are things that private business and markets cannot do and will never do. He said that businesses can never do enough basic research. We agree with the Minister on this and ask the government to take measures to actually implement these statements.

Science and technology are an area where the leadership of the federal government is not challenged. The Minister of Finance also stressed the need for partnerships, innovation and the leverage impact of federal funding. Our proposals incorporate all these points.

[English]

Our plan of action is premised on the need to increase this country's overall research effort. A convergence of views appears to be occurring in this area, as shown by a recent report of the Conference Board of Canada entitled Performance and Potential: Assessing Canada's Social and Economic Performance. The report had noted that leadership and an increased R and D effort were required to effect significant improvement in Canada's innovation performance.

We believe our plan is pragmatic, realistic, and achievable. Our plan focuses on a limited number of issues; it does not attempt to address the wide variety of problems plaguing the university research enterprise. It sets clear priorities and proposes concrete measures designed to sustain our capacity to innovate over the long term. With its emphasis on putting knowledge to work, our plan shares the same objectives as the federal science and technology strategy.

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In devising our action plan, we were very cognizant of the fiscal realties facing all governments. It would be most desirable for Canada to enhance its R and D effort in order to close the gap between our own national effort and that of our principal trading partners. What is needed is a return to our long-term research investment patterns, which will get us to 2% of GDP devoted to research. We accept that this may not be achievable in the short term because of the current focus on deficit reduction. However, modest corrective measures are needed in the short term to arrest the erosion of our capacity to innovate.

Being realistic, our plan is also achievable. It relies extensively on partnerships. Indeed, our plan provides for the use of federal funds to lever support from other partners.

Mr. Chairman, thank you for your attention. We look forward to a productive exchange.

The Chairman: Merci, Mr. Giroux.

Have you done an estimate of how much it would cost us each year for this program you have outlined?

Mr. Giroux: Mr. Chairman, the big bulk of our efforts is on the infrastructure works program, phase II of the infrastructure programs, and that, of course, is dependent on what percentage was given, and also on how large the federal contribution would be. If we assume a federal contribution of what it was last time, about $2 billion, we can give you a yearly accounting of the amounts. But leaving the infrastructure out, of which over the three years there would be a federal share of about $400 million, the amounts go from $55 million to as high, in the fifth year, as somewhere around $160 million to $170 million. So it's a program that starts low and goes up in the five-year time span. We have costed it and we can provide you with those numbers.

The Chairman: It's important to have those figures. Thank you very much.

Mr. Levigne, please.

Mr. Brad Levigne (National President, Canadian Federation of Students): Thank you.

First I'd like to thank the members of the House of Commons finance committee for inviting us here today.

I'm the national chairperson for the Canadian Federation of Students. I'm here today representing Mr. Steve Wilson, who is the national chairperson of our graduate students' caucus. Because of academic obligations in Vancouver, he couldn't be here.

I'd like to start this afternoon by saying the federation and its graduate caucus, representing approximately 50,000 graduate students across Canada, endorse the proposals that are found in the document ``Putting Knowledge to Work''. There are many good arguments for supporting the project, which will enhance our country's research infrastructure, but I'd like to highlight just one of them today, the necessity to retain talented young researchers in Canada by creating a stimulating environment where they'll find adequate facilities.

Like many other graduate students, I've seen friends leave this country because their research needs couldn't be adequately met in Canada. I've argued with them, sometimes quite forcibly, to stay in the country. But in the end, in those arguments I have lost, I couldn't deny the obvious, which is that in many fields of study Canada just has not invested enough to produce the kind of quality research programs and facilities that would have made it easier for these students to remain in Canada. While the proposals found in the document may not be enough by themselves to reverse the trend entirely, they would certainly go a long way to slow down the process, particularly the infrastructure for innovation program.

One of the document's main strengths is the emphasis it places on building links with the community. Proposals such as the creation of transition awards would incite students to explore what lies beyond the horizon of academic life. It is always healthy to broaden one's perspective, and graduate students could learn a great deal by getting research experience in the private, public, and non-profit sectors. While most of us are aware of the research and development needs of businesses in Canada working in the high-technology sector, other organizations also rely heavily on research to perform their missions. Trade unions, government departments, school boards, marketing firms, environmental groups, etc., all require the expertise Canadian graduate students have.

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In this vein, we also think very highly of the idea of creating community research shops. There is a need to bridge the gap between academic institutions and community groups in this country to show that the knowledge and expertise found in colleges and universities can benefit not just those who are attending, but also the rest of the community. This is not to say, of course, that knowledge shouldn't be valued for itself, but knowledge can also be useful. The proposal put forward here has the merit of recognizing this.

Furthermore, real-life problems often require researchers to show ingenuity and stretch themselves, adding to the overall competence of the students involved. Our members would certainly be proud to be part of such an effort.

I'll stop there. Again, to the finance committee, I thank you for inviting us today. I'll be pleased to answer questions.

The Chairman: Thank you, Mr. Levigne.

Mr. Lauzière.

[Translation]

Mr. Marcel Lauzière (Canadian Federation of Humanities and Social Sciences): I am pleased to take part in this round table and discuss the future of university research from the point of view of the humanities and social sciences.

[English]

The Humanities and Social Sciences Federation of Canada represents 24 associations and disciplines, ranging from philosophy and history to psychology, political science and economics. As well, 69 universities are members of the federation. The document you have in front of you entitled ``Putting Knowledge to Work: Sustaining Canada as an Innovative Society'' was prepared by the AUCC, CAUT and the National Consortium of Scientific and Educational Societies. This presents a number of concrete and promising initiatives that this committee should examine with care.

The federation believes these are wise investments that merit your fullest attention. It is also important to note that the social sciences and humanities have an important role to play in these various initiatives.

[Translation]

I would indicate more particularly certain points which seem to us to be very relevant. First, as regards infrastructure, methods must be found to ensure the health of university libraries which are essential to research in the humanities. We also talk about traditional collections, that is books and scholarly reviews, but also access to major databases which are essential for social and policy research.

[English]

Today - in fact, it was only a few minutes ago - Dr. Jon Gerrard gave a press conference in collaboration with Carleton University, Statistics Canada and the federation to announce the data liberation initiative in the context of National Science and Technology Week. This is an important initiative that the federation has promoted. It will provide, in fact, university researchers across the country with full access to Statistics Canada micro data.

This represents a major step forward for social and policy research in this country. Through this, the federal government has indeed clearly shown that it believes in the importance of full access to government-held data for research purposes. Now we hope that more will be done, which is what I think is suggested in this document.

The section on the networks of centres of excellence should also be seriously considered by your committee. I would emphasize the need to ensure full and increased participation from the social sciences and humanities. The area suggested in the document will necessarily call upon the expertise of both social scientists and humanists.

Finally, I would like to ask you to pay particular attention to the initiative called community research shops. The federation strongly believes that we must find the means to enhance knowledge sharing between universities and communities, particularly in the humanities and social sciences.

This is why the federation has been investigating, in the course of this year, the Dutch initiative referred to in this document. We have visited these centres and have carefully documented their functioning so we may learn from their experience. The visits we have made have convinced us of the importance of establishing similar centres here in Canada.

The community research shops, or the community research and information centres, as the federation has named them, would be an innovative and strategic way to stimulate the sharing of knowledge between universities and communities. They would create a synergy between universities and communities, the likes of which has never been seen in this country. The federation, therefore, urges the committee to study this recommendation very seriously. I hope we will have an opportunity to discuss it further.

Thank you.

The Chairman: Thank you, Mr. Lauzière.

Mr. Gauthier.

Mr. Clément Gauthier (Executive Director, Coalition for Biomedical and Health Research): My name is Clément Gauthier. I'm the executive director of CBHR. The Coalition for Biomedical and Health Research brings together Canadian faculties of medicines; biomedical, clinical and health researchers; and the Health Research Foundation of the Pharmaceutical Manufacturers Association of Canada.

Thank you for inviting us to appear before this committee. It is generally understood that Canada does not have a lot of new money to spend, and what we do have must be spent wisely for a maximum return on investment.

Basic biomedical, clinical and health research yields the following benefits for your investment. As for low-cost, high-value jobs, our brief suggests how to create about 32,000 jobs at approximately $5,500 per person yearly.

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Training tomorrow's scientists is a key attraction for global investment in Canada. There's the incubation of spin-off companies, such as BioChem Pharma in Quebec, TerraGen in British Columbia and Vascular Therapeutics in Ontario. There's also the potential to control health care costs and preserve Canada's health care system, as well as new treatments and therapies for a higher quality of life.

This brief details how these benefits can be achieved, as well as showing the cost of neglecting to invest in basic research.

On page 7, you will find a graph. This is an enlarged sample of the graph, which shows that funding for health research in Canada is in a tailspin at a time when all of our G-7 competitors are investing heavily in this promising sector.

The brief discusses both an innovative way to promote economic growth and job creation while restoring Canada's competitive position in the global marketplace.

Thank you once again for the opportunity to address this committee. I urge you to seriously consider the recommendations contained in our brief.

The Chairman: Thank you, Mr. Gauthier.

Ms Ramji, please.

Ms Rubina Ramji (Co-Chair, Canadian Graduate Council): Thank you for the opportunity to speak. The Canadian Graduate Council represents more than 20,000 graduate students across Canada. Maintaining socioeconomic progress through research and development is a high priority to our organization, because many of our members are already engaged in research and development in universities across Canada today.

We are the upcoming generation of researchers whom Canada will use to enhance society through innovative policies, new products, processes and services. We can also be the ones who put the knowledge to work. The humanities and social sciences students have the background knowledge to take scientific base research and interpret the innovations that affect the social and economic needs of society as a whole.

The best form of planning is to plan for the future. Lifelong learning begins with knowledge. The best way to build a strong foundation for the granting councils is to ensure that Canadians receive the best possible education from the start.

What Canadians have known for decades is that an increase in middle class citizenry is possible through knowledge, which is linked with well-being. Literacy increases a society's well-being as a whole. It is a key benchmark for prosperity and affluence in this country. Encouraging the growth in the middle class through a university education opportunity has caught on everywhere as the most potent economic development program ever devised.

The federal government has stated in the red book that the crucial role in building innovation systems is to work with the private sector to identify strategic opportunities for the future and then to redirect its existing resources toward the fulfilment of those opportunities.

Research and development, and education and training, are all areas where the federal government can and should focus its efforts to achieve strategic economic opportunities and promote economic growth.

The federal government has to ensure that there is a policy on public funding for post-secondary education to make sure that all Canadian citizens have access to educational institutions. In order to survive in a global economy, we must not impoverish ourselves. At the very least, Canada has to keep up with the innovations of other countries.

We feel that tax breaks can help the private sector support such enterprises. We know that charitable credits for donations to federal political parties range from 35% to 75%, while it is 17% for charitable organizations.

Universities do not fall into this categorization. The federal government has recognized the role of the private sector in partially funding universities. Why not give the nation the incentive to support the institutions that can directly affect economic growth and the universal accessibility of literacy?

We hope the Liberal government will continue to support basic research, including the provision of stable funding for the national granting councils and students. Thank you.

The Chairman: Thank you very much Ms Ramji.

Henri Rothschild.

Mr. Henri Rothschild (President, Canadian Research Management Association): Thank you, Mr. Chairman. I have a very brief statement to make on behalf of the Canadian Research Management Association.

[Translation]

First, I would like to remind members of your committee whom we represent. Our members are responsible for the management of more than half of the research undertaken in Canada. Furthermore, and this is part of the rather unique character of our association, we represent research managers working in all areas of innovation in Canada, that is in both the academic and industrial world, and of course, in government laboratories.

[English]

The purpose of our organization is to promote initiatives that ensure that those whose job it is to manage the research enterprise of Canada will have the tools to do the job.

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Simply put, we want to be the ``best of breed'' as global innovators, and we want the tools to be the same. Foremost among those tools is human capital, which is why we're pleased to be here with the AUCC and those whose job it is to produce that human capital.

We support Canadian universities and colleges in their efforts to ensure that they are competitive and able to perform the important part of the effort. We applaud their effort and that of the councils, particularly to build bridges via university programs, and especially the networks of centres of excellence. These are innovative programs that deserve to be maintained, if not enhanced.

The CRMA recognizes the difficulties faced by governments at all levels in efforts to deal with the twin problem of deficit and debt. However, too often, strategic support for research, whether it's counted as within the granting council's budgets or as a sub-element of departmental A bases, falls victim to general across-the-board cuts to departmental budgets. We've called attention to this in the past, and we've been very encouraged by the pronouncements of your committee on such matters.

CRMA members recognize the positive role played by you and your committee in drawing attention to the importance of technology, innovation, research and science. Do not underestimate the importance of that role. Science cannot have too many champions in this country, and it's especially important that this support is provided within the context of discussing the public finances of Canada. In other words, this is a key element of wealth generation and not as yet another demand on the public purse.

The reports of the Standing Committee on Finance on this issue have been a breath of fresh air and a real source of encouragement to us. We are grateful for this. Your leadership is very welcome indeed. Thank you.

The Chairman: Thank you very much for those kind words, Mr. Rothschild.

[Translation]

It's now time for the question period. You have the floor, Mr. Bélisle.

Mr. Bélisle (La Prairie): I have two questions for Mr. Giroux. You spoke about possible participation of universities in the National Infrastructure Program, obviously with the support of the federal government, if there is a second phase. As you know, in phase I one third of the funding came from the federal government, one third from the provinces and one third from the municipalities. If there is a phase II, would the funding be shared in the same way and therefore one third come from universities themselves?

Mr. Giroux: Mr. Chairman, my first answer would be yes. If a second phase of the National Infrastructure Program was implemented by the federal government, funding would be shared between the federal government, the provinces and universities. The universities could contribute directly themselves, but also obtain support from the municipalities, who would have everything to gain by supporting such a program, particularly those where universities are located. Nor have we ruled out the possibility of obtaining contributions from the corporate sector for example, which would be agreeable to supporting such a program.

We have even included this factor as one of the important criteria in judging the value of a project, be it a contribution from the corporate sector, from a foundation, from a private company, or even as a result of fundraising or some other means. Therefore, we want to retain a certain flexibility in the methods used by the third source of funding, but we expect the other two partners to be funded in the same way as during the first phase.

Mr. Bélisle: I have a second question, Mr. Chairman.

When talking about university infrastructures, I presume that you are referring to the modernization of equipment, buildings and laboratories. Would this also include what might more precisely be referred to as intellectual infrastructure? I know that this is mentioned in some documents. Could you clarify what is meant by intellectual infrastructure and the scope of this concept? Does it mean research staff, training researchers, or other aspects?

Mr Giroux: If we are still talking about the second phase of the National Infrastructure Program, we consider that it would be very useful in enabling university to incorporate the benefits of advanced technology, by obtaining the equipment needed to access data banks around the world and other means of communication provided by high technology.

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We also considered the importance of libraries. In many cases, they would have to be brought into the 20th century so as to enable information and knowledge to be transmitted. This program does not cover funding for researchers, which would be a totally different matter.

Now, if you examine the other projects contained in the program we presented today, which are focused on researchers themselves, on partnerships, etc, you will see that there is considerable discussion about the question of intellectual infrastructure. We talk a lot about researchers themselves and the tools they need to do their job.

Mr. Bélisle: Thank you, Mr. Giroux.

The Chairman: Thank you, Mr. Bélisle.

[English]

Mr. Grubel, please.

Mr. Grubel (Capilano - Howe Sound): Thank you, Mr. Chairman.

Welcome. It's good to see you here again and to hear your excellent presentations. I also liked your document. I think it's very innovative.

I would like to call your attention to the new ``Fresh Start'' document the Reform Party has just produced. It contains our budget for the next four years, when we are in government. You will be happy to know it will contain an increase in $4 billion in spending on health care and higher education by the provinces. In the details of our budget, which have not yet been released, I can tell you provisions are made for increased spending on research and development. I think you will be pleased we have listened to you and we have taken your recommendations very seriously. We believe there are a lot of savings to be had from other programs, and in fact economic growth in the future, if we hold spending constant, will make it possible for us to provide these increased expenditures without having to touch any of the other programs seriously.

I would like to ask a question now. It concerns what has happened to the willingness of the private sector to come forward with support for your institutions and activities after the federal government and provincial government cuts that have taken place. I would be particularly interested in hearing about Ms Ramji's suggestion that perhaps those contributions could be even higher if the taxation treatment of the funds, these contributions, were more generous. Would you have proposals for the federal government along those lines? Have you given any more thought to that than has been available in your oral presentation?

Mr. Giroux: I can attempt to answer part of it. Then I will turn it over to Rubina.

One rather interesting statistic is that business, the private sector, now funds almost 18% of the $2 billion university research enterprise. Of all the money spent in universities, 18% comes from the private sector. It was 8% ten years ago.

We ascribe these significant improvements to tax incentives. These have been extremely useful. But we also ascribe them to the fact that in the last five to ten years our granting councils have earmarked funds for research partnership programs. We have statistics showing that for every dollar NSERC, the granting council for natural and engineering sciences, puts in, it gets $1.60 in additional money, or 168% on the basis of $1, from its partners in the exercise. Therefore the emphasis in our paper on strengthening those partnerships, the emphasis on, for example, the centres of excellence programs, because they do lever funds from the private sector and the federal government gets maximum output from its grants.

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Ms Ramji: As I stated when I was speaking, it would be an incentive to give private businesses tax breaks. Even to make universities into institutions that could be considered charitable would give businesses tax breaks when they gave money to them. Also, with the proposal that's been put on the table, the community research shops and the transition grants both affect private businesses. Private businesses will gain a lot of research and development from universities and the students coming out of them. If they are willing to put money into this, they would gain a lot out of it.

Mr. Grubel: Are there no proposals that, for example, universities be given the same kinds of rates of concession, tax reductions, as political contributions or anything of this sort? You haven't gone to that concrete proposal as a bargaining chip to take to this committee or to the Minister of Finance.

Ms Ramji: It's something that I've put in my proposal. I don't have it in writing, but we are going to submit a proposal from the Canadian Graduate Council in a few days, and it will include that.

Mr. Grubel: I must note that I went back to my old university, Simon Fraser University - the same university Dr. McWhinney comes from - and I found that more and more buildings carry the names of donors. In fact, there's a large expansion taking place at the Simon Fraser University downtown campus, and it is also predominantly financed by private money. I found that very encouraging, and I hope the quoting that you've been doing to the private sector will continue, even if the Reform government increases spending on your causes because of all the other benefits that obviously are taking place.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Grubel.

Mr. Adams.

Mr. Adams (Peterborough): Thank you, Mr. Chair.

I'm one who believes that government should have an active involvement in higher education and research, as well as a passive involvement through manipulation of the tax system.

Mr. Chair, I'd like to thank you and all members of your committee for conducting these hearings during National Science and Technology Week. I know our delegates really appreciate it; I certainly do.

I've enjoyed the presentations. I wondered if we could have a little bit of discussion on these community research shops in the context of research infrastructure. I think it was Mr. Levigne who said it is the idea of putting knowledge to work, and that sort of thing. One aspect of that has often been the subject of debate.

Sometimes questions are asked in the House of Commons about the nature of research projects put forward by universities. I think we all know that basic research, curiosity-driven research, is fundamental to the whole research effort. But we also accept that this knowledge should be put to work, and it is our society that of course puts it to work.

As it happens, Mr. Chair, some of us had the opportunity to visit Queen's University - and I see we have Mr. Dick Bowman here from Queen's. As I understand it, ladies and gentlemen, there is an organization at Queen's that is commercializing the results of medical research so that the value of these results stays in Canada. I also understand that it's sometimes very expensive - which is why I used the medical one - to test these ideas.

I wonder if any of you would care to comment on community research shops - give us some more detail - and particularly on this commercialization of research results.

Mr. Lauzière: I can perhaps answer the first part of that question, and I'll let someone else answer the second part.

The idea of these research shops, or research information centres, stems from the need to really develop mechanisms that will foster knowledge transfer, particularly in the humanities and the social sciences, where that knowledge transfer is probably not as advanced as it is in other fields. The initiative is in fact based on an initiative that exists in the Netherlands, where a number - in fact, fifty - of these centres operate in Dutch universities.

We visited those centres this spring to see how they work. In fact, it was quite exciting to see the relationship that the universities have with their surrounding communities. We felt it was wonderful for the communities to have access to research that they would normally not have access to for lack of funds, for lack of capacity of hiring consultants, or for lack of getting large research grants. It was a way for faculty members to link up with communities, and it was also a very important way to involve students in the work of associations, non-governmental organizations, school boards, unions, etc.

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The students we interviewed when we were there said very concretely they saw this as a very important part of their education. They felt when they went back into the workforce, or when they started in the workforce, they had a better grasp of how things worked. They had a better understanding of how they could put their research, as you were saying, to work for communities.

The proposal AUCC has in its report is something the federation certainly supports wholeheartedly. We would very much like to see a network of these centres set up. There are a number of initiatives that exist in Canada, but they're not sufficiently structured. There is no network. I think there really is a need to move on this front.

The Chairman: Mr. Giroux.

Mr. Giroux: Mr. Chairman, I think Dr. May and then Mr. Hough would like to comment on the same point, but you are the chairman, sir.

The Chairman: Absolutely. The chair and the members are in your hands, and happy to be there. Thank you.

Mr. Giroux: I think Dr. May and then Mr. Hough would like to comment on the same subject, particularly on the commercialization aspect.

Dr. Art W. May (President and Vice-Chancellor, Memorial University): Mr. Chairman, any university these days that has a research capacity of any size almost certainly will have an office of technology transfer.

Is my microphone on?

The Chairman: This is a problem with high-tech.

Dr. May: We'll see what we can do for you.

The Chairman: Your offer is accepted. How many academics does it take to change a lightbulb?

Dr. May: We won't get into that.

Mr. Adams: The answer is half as many as the number of politicians.

Some hon. members: Oh, oh!

Dr. May: Back to the subject at hand, any university with a science and technology capacity, or a science and engineering faculty, will almost certainly have an office of technology transfer or something similarly named.

These have grown up over time. Their function is to get discoveries out of the lab and into the marketplace. The university is not the place where you would expect the expertise to exist to get the discovery commercialized and into a marketplace, to find the venture capital and all of this, but it is the place where we have a capacity that can be turned on relatively quickly and easily. So we set up these offices to look after issues of intellectual property - licensing, patenting - and in some cases the formation of a small business with participation by individuals or by the university itself.

In our own case, we've set up this office not as a sub-unit of a university department but as a company in its own right, a self-financing, not-for-profit corporation.

Perhaps I could pass along from there.

Dr. Paul Hough (Chair, National Consortium of Scientific and Educational Societies): Mr. Chairman, I would like to extend this to the networks of centres of excellence program, which is probably the premier program of university research these days involved in transferring technology to other sectors.

To this point, approximately 600 organizations are now partnering the centres that are already in existence. They involve 48 universities in this country in 9 provinces. I think they represent an outstanding example of the kind of thing your colleague was referring to with respect to not only identifying the technology but getting it out to where it can be used.

This is really an extension of what Mr. Grubel was referring to earlier about how the private sector becomes involved in these things. I would say the private sector is attracted to excellence. The private sector is going to contribute to the basic research and the preventative research in areas of substantial recognition and in whatever area is pertinent to that industry's particular activities. But certainly the networks of centres of excellence program is attracting a great deal of direct cash from the private sector and an enormous amount of in-kind support as well.

I think it has also had another impact on the whole research community that is a bit difficult to put a dollar value on. It has changed the outlook of a number of researchers in all areas of endeavour. Partnering is really something that not only needs to be done, but can work and expand one's horizons quite significantly.

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So I think it has a number of advantages, and those are the primary reasons we're strongly urging in our proposal that phase III of the national centres of excellence program be fully funded.

Thank you.

The Chairman: Thank you, Mr. Hough.

[Translation]

Mr. Gauthier.

[English]

Mr. Gauthier: On the commercialization of university research, over the past three years in our sector - the biomedical and clinical and health research sector - the Medical Research Council of Canada has created a very effective and powerful vehicle to find venture capital and to transfer technologies to the market. This is illustrated graphically in appendix 4 of our document, which shows the virtuous cycle of growth and opportunity that is happening now, involving those various vehicles.

You heard here last year the executive director of the Canadian Medical Discoveries Fund, Dr. Cal Stiller, who exposed to you how the Canadian Medical Discoveries Fund was recruiting venture capital. I must tell you that this year they are up to $190 million of investment capital that has been recruited.

Here you see where in the cycle they come in, right after the networks of centres of excellence, into the pipeline to push basic research towards growth companies, and after that, for example, from public companies towards mature companies.

You have also in that circle the MRC-PMAC health research program, the partnership that MRC has initiated with the Pharmaceutical Manufacturers Association of Canada. That brought in $200 million from industry towards support for research in universities over five years.

So basically those mechanics have been put in place by the council to facilitate that transfer and to increase the commercialization of university research, and that has been successful.

The only problem is that the rate-limiting step here is the investment by government into basic research, because that's really the pump-priming effect that is key to this whole virtuous cycle. It has been going down since 1995, and that's a major problem.

[Translation]

The Chairman: Thank you, Mr. Gauthier.

[English]

Mr. Rothschild, please.

Mr. Rothschild: I'd like to add to what Dr. May said a moment ago. The attention that's being focused now on the greater commercialization of publicly funded research in universities is something that has taken on greater importance in the last few years and is likely to do so in the next few years.

The activities in the universities in Canada are to some degree masked by activities in government laboratories as well. In other words, we're seeing the establishment of activities or the initiation of activities that are aimed at looking at how to better mine that ore body of great commercial potential in that kind of research.

I note two examples: the Communications Research Centre and a number of offices within the National Research Council.

All of this is a growing realization that we could get better return on the investment if we had a more systematic approach, and as importantly, with all of the efforts spent on this kind of publicly funded research there are probably far more opportunities than we've been able to tap up until now.

Thank you.

The Chairman: Thanks, Mr. Rothschild, and thank you very much, Mr. Adams.

Mr. Telegdi.

Mr. Telegdi (Waterloo): Thank you very much, Mr. Chairman. I'm pleased that the delegation is still around. I was afraid when I was listening to Mr. Grubel that they would all leave after you were finished speaking.

The Chairman: You mean they would want a fresh start, too?

Mr. Telegdi: I'm pleased that everybody is here.

I'll throw in a bit of information, then I have a series of questions. One is, there's a fundamental difference between political contributions and charitable contributions or contributions to institutions. The fundamental difference is that you get a big tax break for the first $100 you donate politically, 75%, and the rationale behind that is you want a wide range of people contributing, the widest range possible, whereas with a charitable contribution, the more you give the more you get in terms of a tax receipt, and there isn't that small limit as there is on the political one.

I point that out because it's something I went off and did some research on. Anyway, that's the rationale that came back, and I agree with much of the rationale to try to broaden the contribution base.

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I represent the federal riding of Waterloo. In terms of what you're talking about, in my day I was president of the federation of students there and the Ontario Federation of Students - what have you.

One thing I've been grappling with ever since my university days is how to deal with the elitist image that exists around the whole issue of research. To me, it's very clear. Not only do you get short-term jobs from research, or media jobs, but you also lay the foundation for long-term work.

I don't think the academic community, or the government for that matter, has made the case very well to the public out there of how important it is and how many factory jobs or low-tech jobs it will provide. People tend to hear ``research'' and see somebody in a white coat at the university dealing with tests they do not understand. Is there any way of bridging the gulf and making the public understand the number of jobs that are actually involved? That is the challenge.

Mr. Giroux: Mr. Chairman, there are a number of people who would like to tackle that one.

It's a very important issue, Mr. Telegdi. Maybe representatives of the CAUT would like to start - Ms Mills - and then I think Brad Levigne would also like to comment on it.

Ms Shirley Mills (Treasurer, Executive Committee, Canadian Association of University Teachers): First of all, I might comment that I'm the treasurer of the Canadian Association of University Teachers, but I'm also a university teacher and statistician.

I deal daily with the problems of trying to make people understand basic research as well as applied research, and what we really do in universities. I ran a statistical consulting centre at Carleton University that worked with the community to try to bridge the gap and show what we do in the university and how it can be applied. We certainly have made inroads by operating a service like that. I think a lot of other universities are making these inroads by making partnerships to try to communicate to the outside world that we're not really an ivory tower any more.

Things have very much changed inside the university. There is a very great need for basic research because that's the root system that feeds all our known knowledge. If we don't have that root system, if we let that deteriorate, we don't have anything to work on in the future. But the applied research is also being done in the university in collaboration with partners in industry, government, and labs in the not-for-profit sector. So it is certainly going on.

I think university researchers have to make this point publicly more often. I think we have been faulty in the past in not letting people know what we're doing, but we are now coming out and saying we are linking more and making people understand what is going on back in our offices. Frankly, we're not in our offices a great deal because we're out there doing research with people.

Mr. Levigne: I think the challenge to bring down the elitism of research is the same challenge to bring down the notion of post-secondary education today, in general. I think they're the same battle, and there are a number of fronts upon which we can fight it.

One example of bringing the average Canadian into a better understanding of research is the idea of the community shops. It's an excellent example of how to open up the whole notion of what research is. There is the example of the Dutch model of the research shops, and there are examples of community groups going to the university in their community to find out how they can organize themselves and represent themselves to government. There is the example of how to promote a particular idea of fighting against political torture going on around the world on behalf of Amnesty International. Other small groups of individuals, or individuals, are going to the institution and saying, ``I'd like to find a better way to do this. Do you have anybody to put on it?'' The shop acts as a vehicle to bridge the individual with the desire for the information and the individuals who are actually out there soliciting, compiling and analysing that information.

If we want to do that, we have to take it out of the academic journals and the academic organizations, many of which are at the table today, and bring it down to the community level, particularly for institutions that have a great economic impact on communities like Waterloo, Peterborough, Halifax and St. John's. These are excellent examples of places where we need to break it down.

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Again, it's the same battle. Who are these institutions there to serve? Is it these young people who come in from out of town or from the well-to-do neighbourhoods? No, these institutions - as many of their charters outline - are there to serve the community, and I think the research shops go a long way toward building that bridge.

The Chairman: Briefly, Mr. Hough.

Dr. Hough: Mr. Chairman, I'd like to come to the point you've probably made about the employment aspect of research and underline the reality that in all cases of the research granting agencies, for instance, commonly anywhere between 55% and 75% of an individual research grant goes to the support of people. Those people include graduate students, research assistants, and technicians in some cases, but a very high percentage of each individual grant, regardless of discipline or area, goes to the support of people. That is something I take quite seriously that we have not necessarily communicated adequately.

It also comes back to the question of the research planning councils in the sense that the Medical Research Council, as an example, in the last couple of competitions has found it necessary to reduce each individual grant by about 20%. That impacts directly on the ability of the individual researchers to engage assistants, students and others in the research enterprise.

The Chairman: I know there are a lot of others who would like to comment on this, but with your permission I'd like to make sure we've given all the members of Parliament here the opportunity to ask questions. Then you can go back and pick up on any points you didn't have a chance to comment on. Would that be okay?

Mr. Solberg, please.

Mr. Solberg (Medicine Hat): Thank you very much, Mr. Chairman. I want to welcome all the different witnesses to the committee again. It's good to have everyone here.

I have an observation really, perhaps not even a question, on some of the comments that have been made about the need to connect in some way with the local community. With respect, Mr. Lauzière, you were talking from your perspective about the humanities and social sciences. I guess I would just make the observation that out of all the different aspects of research, the humanities and social sciences probably have to struggle the hardest to be recognized as important to the country. The high-tech industries, for instance, have a very obvious application, but the applications in the humanities and social sciences fields are less obvious.

I want to encourage you in what you're attempting to do, but I think it's also important to make a distinction between making these connections in the hope that a tremendous amount of more government funding will come your way and making these connections so there is a constituency of support built up for what you're trying to do and an understanding of what you're trying to do.

I do think it's important, in order for the humanities in particular and the social sciences to survive, for people to have a better idea of exactly what you provide in terms of a benefit to the country. I guess I would just make that observation. I want to encourage you and would be interested in anything you have to say with respect to that.

Mr. Lauzière: I certainly agree that the challenge is a big one. We certainly feel it can be met, because people in the communities are concerned about social, cultural, political and economic issues, which are the areas of research for the humanities and social sciences.

To link this to the previous question, I think the centres would go a long way toward breaking those barriers. They would involve students very early in the process of understanding the need to attract students. Maybe the faculty members would understand the need less to work within and closely with communities. Doing it at a very early stage is very important.

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Another aspect of these centres is to ensure that the knowledge developed through these partnerships is also disseminated to a much wider community. There is a challenge, and we really feel the centres will go a long way in showing the relevance of humanities and social sciences.

Mr. Solberg: I have one brief question. At what point will these centres be in place and when can we expect to hear back from you so we can find out how things are going?

Mr. Lauzière: Well, if we can muster the necessary support and funding, we'd love to have these centres up and going as soon as possible, but the process is a complex one.

We want this to be done by the best possible means, through funding and a competitive mechanism, but as I was saying earlier, a number of initiatives out there in Canadian universities could seed these community research centres. From the consultations we have done across the country, we've seen a huge desire to get moving on this type of activity as soon as possible.

The Chairman: Thanks very much, Mr. Solberg.

Ms Whelan, please.

Ms Whelan (Essex - Windsor): Thank you, Mr. Chairman.

I want to pick up on something that was mentioned closer to the beginning of the presentation, having to do with the infrastructure. I just want to get some clarification of the position of the experts before us today.

In Ontario, the Canada-Ontario infrastructure program offered a way for universities to participate. I understand that was different in other provinces; each province had a bit of a different agreement. But from the perspective of Ontario, are you asking to participate again in the same way for capital infrastructure as well as having a separate type of program for research, or are you asking that the program be varied? I'm just trying to understand.

Mr. Giroux: Ontario was by far the province that provided for the application of the first infrastructure program to the university sector. It supported a variety of initiatives and projects, some of which were very basic bricks and mortar, as we call them. Because of the deteriorating state of infrastructures generally, the Ontario program provided for that, and the universities of course were benefiting from it.

Some of the other provinces did so, but it was very much on a project basis. For example, the University of Lethbridge did take advantage of the program.

With respect to the second phase of the program, we are targeting it more to the research kind of infrastructure. When we say 20%, we are targeting that 20% to laboratories, information technology, the state of the research equipment, upgrading libraries and so forth. We have obtained from our membership hundreds of projects that do fit all of these criteria.

If, however, it were decided for any given province that the other 80% of the funds in that province, or part of the other 80% of the funds, were to go to the more traditional infrastructures applying to university - the heating plant or whatever - we would have no objection to that.

What we wanted to make sure of was that we were earmarking a certain portion towards the research infrastructure, because we have been noting - and our universities have been making a case about this in recent years - how bad the state of that particular infrastructure is. They saw this program as a way to provide corrective action.

Ms Whelan: The other part of my question is this. When you talk about partnerships and community centres....

I come from Windsor and Essex County, and we benefited differently from other provinces on the infrastructure. I'm familiar with the University of Windsor's choices for the infrastucture.

As well, though, I see partnerships taking place between the university, the private sector and the federal government with the Chrysler research centre that just opened. I know there are tremendous opportunities out there in getting those partnerships to continue. I'm just wondering if there is any fear or any concern that the research is then part of a company. Do we still see that as a way of contributing wholeheartedly to basic research all across Canada? I think that partnership is an excellent opportunity for University of Windsor students. I'd like to hear your perspective.

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Mr. Giroux: We certainly support those partnerships and we wish to see them continue. What we are concerned with, however, is that the very strong emphasis on commercialization of university research should not be to the detriment of some of the other parts of the research spectrum, which starts from very basic research. We wish to strengthen that, and that's why we went with a proposal for new research frontiers to help young researchers get started and so on.

We also feel that the research partnerships are often very much with the kinds of industries that are large and that are able to provide funding to match the money the governments are providing. Many of the more medium-sized enterprises don't necessarily have the means to get into these kinds of partnerships. Again, that's where the community research shops are going to be extremely important in terms of fostering that kind of assistance to more community types of small and medium-sized enterprises.

What we're saying is that you already have a lot of good things going out there, but we've identified gaps in a number of places and we're trying to develop approaches that would fill those gaps.

I don't know if others would like to comment on that.

Dr. May: I would like to add a quick word from the perspective of universities.

One of the important things an infrastructure program would do is to allow the universities to play in the larger leagues, in which they ought to be playing. If you go to an industrial lab you will find it superbly equipped. You shouldn't be surprised. They're in the business and they're competitive and they have to have the latest equipment. If you go to a university lab you're much less likely to find that.

So if you want to have a partnership between a high-tech kind of industrial concern and a university, then you'd better be in the same league and be able to talk to each other. In the university infrastructure, the capacity to be a partner has deteriorated.

That being said, let's not overlook our successes. In the past 10 years or so we've put in place about 200 industrial research chairs in this country through the Natural Sciences and Engineering Research Council. These are partnerships of industry, universities, and the federal government, through its grant in council. Some of these are very successful partnerships and are not small potatoes. They're typically in the vicinity of $750,000 to $2 million over a five-year period.

The capacity of the universities to play the game is deteriorating. I think that's the major point of the infrastructure program.

The Chairman: Thank you, Ms Whelan.

Mr. St. Denis.

Mr. St. Denis (Algoma): Thank you all for being with us today. It's very helpful.

I would like to ask for some information, if you have it, on the relationship between private sector research and public sector research. I think it was Mr. Giroux who mentioned that the participation of the private sector in public research has gone from 8% to 18%.

There must also be a lot of in-house research in industry, where they have their own research shops. Looking at years past, there used to be complaints that even though those companies had operations in Canada, there was a lot of research done in the head office in the U.S. The point was made in Mr. Giroux's opening remarks that there aren't a lot of opportunities for young researchers to get hands-on experience in an industrial environment, a commercial environment, so that when they do go out to work they are prepared for the world of work.

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How does Canada size up in relation to the U.S. and the other industrialized nations generally in the proportion of purely private sector research compared with the public sector? What is the balance or imbalance in Canada? It seems to me if we are not having a lot of private sector research done, that is part of the problem where our young people aren't getting the chance to participate in hands-on research opportunities.

Dr. May: Let me comment to see if I'm feeding back the kind of information you want to hear.

Canada has the weakest research economy of the G-7. In Canada about half the research is done in the private sector. In the United States two-thirds of all R and D is in the private sector. In Japan three-quarters is in the private sector. We have a fairly weak private sector capacity overall, and what we do is dominated by a few entities: information technology, aerospace, pharmaceuticals. BNR, for example, has a research budget that is equivalent to the budget of the three granting councils; just one research company.

So we don't have a base capacity well distributed around Canada. But we do have 88 degree-granting institutions, spread all over the country; unfortunately not one in every riding, but well distributed. These granting institutions are members of AUCC. Not all of them are research intensive, but most of them have a capacity to do some research, and some of them have a capacity to do a great deal of research. That's where the partnership comes in.

I go back to the infrastructure approach. Give us the tools to do the job. Give us the base to be able to forge partnerships with the private sector. Give us the ability to expand our technology transfer offices so we can encourage the spin-off of small businesses with support, an umbilical cord, if you will, from the university.

But at the end of the day Canada spends something like 1.3%, 1.4%, of its gross domestic product on research, which is about half the U.S. figure, which is about one-third the Scandinavian. We also do somewhere between 3% and 4% of the research done in the world - just enough to be able to understand what's going on elsewhere, because we have to borrow a lot from elsewhere. We need to know what the pattern is and what the capacity is and apply the relatively small amounts of resources we have to the right ends. Hence back to the infrastructure program, which we think will put us in a position to do just that.

Mr. St. Denis: Just a short clarification. Is it possible to know, when we look at the G-7 countries...and you've explained that we have the lowest percentage of private sector research. Do the other countries have a higher percentage principally because they have been drawn into the business by governments or is it partly because, as in the case of Canada and the U.S., the head offices are in the U.S. and we couldn't do anything in the world to draw that research here; it wouldn't matter what we did as far as taxes go?

Dr. May: Part of our problem is the branch-plant economy; part is that. But the other part is the kind of economy we have, which is very heavily resource based and agricultural. Although that's changing, it's still the Canadian pattern.

The Chairman: Mr. Duhamel.

[Translation]

Mr. Duhamel (St. Boniface): I'm pleased to see you here together today. I greatly appreciated your presentation.

I have two questions for you.

[English]

First, I want to confirm what I think I understand. I'm referring to this document, page 12, point 6. I'll quote directly:

...direct employment and training opportunities at Canadian universities, teaching hospitals and affiliated research institutes for about 32,000 people per year for three years, for $5,510 per person yearly....

I'm assuming, and correct me if I'm wrong, if there were that kind of investment we could create those kinds of high-quality jobs.

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The reason I want it confirmed is that I have seen, as have others, initiatives undertaken to create employment. This is an extremely low figure for the kinds of jobs we're talking about, so I'd like some confirmation on it, and some explanation as to why it's so low. It's a lot of money, but it's low compared to figures that Mr. Giroux and I have seen, and which were perhaps a little higher than this.

The other point I'd like to pursue is where it would put us if we were to respond as you have requested today. I want to build on Mr. St. Denis' question in relation to those other countries. We're lagging now, and some of the reasons have been given as to why there is that gap. Where would this put us? Would it put us halfway there, three-quarters of the way there, second-from-last as opposed to last, or what?

Those are my two questions. Merci, monsieur le président.

Mr. Giroux: I think Mr. Gauthier should take the first one because I think,

[Translation]

Mr. Duhamel, you wanted to take a quote from his paper.

Mr. Duhamel: Yes.

Mr. Giroux: Mr. Gauthier.

[English]

Mr. Gauthier: Yes, this is based on the estimates of the Government of Canada for expenditures planned for the Medical Research Council of Canada. The council actually states in that document that with their $241-million budget in 1995-96, they have been able to provide employment opportunities for an estimated 29,500 people in technical and support staff and for 7,500 investigators, and have been able to provide training opportunities for some 11,000 graduate students and post-doctoral fellows.

So basically, within our proposal - and this goes back to page 12 of our document -

[Translation]

The Chairman: Excuse me, could I ask you to speak a little more slowly for translation purposes?

[English]

Mr. Gauthier: I should speak in French probably. It would be slower.

The Chairman: Merci.

Mr. Gauthier: This is actually the basis for our calculations for creating these jobs at that low price. But it is a fact that investing money in training through granting councils and through basic research is cheaper. We included in there students, scholarships and the training of people, so it is much lower. But these people are still employed, they're learning, and are moving towards their careers.

Mr. Duhamel: You have extrapolated from a previous experience, so you are confident that this is really quite correct.

Mr. Gauthier: It's from the most recent budget of the MRC, and we extrapolated that for the other two granting councils as well.

Mr. Duhamel: Thank you.

[Translation]

The Chairman: The second question now.

[English]

Mr. Giroux: On the second part of the question, Mr. Chairman, Canada now spends about 1.5% of its GDP on research. That puts us lower than Taiwan, the Netherlands, Britain, Germany, South Korea, and so forth. Sweden is at 3%. Japan is at almost -

Mr. Duhamel: What about overall research efforts?

Mr. Giroux: I'm talking about overall research efforts. Japan is at 2.8%. We recognize that this can't be done overnight, but we're saying that if we could only start reshaping the curve over time - instead of having it go that way, we could just ease it upwards a bit - and get it to about 2%, we would be right on with the Netherlands, we would be close to Britain, and we wouldn't be too far from Germany. We'd still be behind the United States, Japan and Sweden, but we would be in the middle of the pack. Right now we're at the end of the pack, or at the bottom of the pack.

People might ask why that is important. Well, these companies are all economies in competition with ours, they're all in a globalized economic situation. We know that if we don't keep up, we might not feel it tomorrow, or even next year or the year after that, but ten years from now we will feel it. Ten years from now we will say, wow, these companies have surpassed us tremendously and they have the good jobs; they have the high-paying jobs. So I think it's very important to realize that we do have a responsibility to bring that curve upwards.

Mr. Duhamel: So to summarize very briefly, Mr. Chairman, if we were able to do this, we would be roughly in the middle of the pack with our major competitors. Is that what you were saying?

Mr. Giroux: That's right, and we'd be with countries that are much smaller than us in terms of population, like Sweden and so forth.

The Chairman: Thank you, Mr. Duhamel.

Mrs. Chamberlain, please.

Mrs. Chamberlain (Guelph - Wellington): Thank you.

I represent the University of Guelph and, as you know, we are a leader in research, so this is a topic that really concerns me an awful lot. I think there are some very serious things happening in this area. If we don't keep up, I really don't know where we will be as a country further down. We talk about our future all the time, but I really, truly think this is where our future is.

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I want to ask your opinion on something. It is something that has been discussed with me in my own riding. There is a view that we sometimes do research and we take a certain product to a certain point. We get it very close to completion or to the part where we would do value-added and finally make money off a particular piece of research, technology, or whatever it's been working on.

Do you agree we don't do very well at the close-to-completion stage in Canada? We take something to a certain stage and then suddenly sell it off to somebody else to make money. Do we not finish the job? Are we lacking in this area and are we missing the boat? Is this a spot we could be looking at for infrastructure dollars to finish products off and to really profit from them as Canadians? Do we miss a step there, or is this misinformation?

Dr. May: If I may start, Mr. Chairman, I was delighted to hear somebody say they represent a university. My member of Parliament represents St. John's East, but St. John's East contains all of one university. So I'll tell Mrs. Hickey she has to get her riding right and then we'll tell the Speaker.

You're asking a very complicated question.

Mrs. Chamberlain: I know.

Dr. May: The Americans invented the fax machine, but the Japanese produced it. Then there is the television set. You can think of all kinds of examples.

There is only one approach to this, I think. Build these bridges between the universities and the industries that have a capacity to take advantage, so you can at least say we've made the technological links, we've made the brain power links and we've made the human links. Here is the knowledge. Here is the company that can take advantage of it. Now what do we need? It gets more complicated. There is venture capital, pilot scale development, test marketing, etc.

I'd like to ask Mr. Rothschild, because the CRMA represents research managers in government, universities and the private sector. This has to be one of their continuous challenges.

The Chairman: I think Henri was hoping this question would be asked.

Some hon. members: Oh, oh!

Mr. Rothschild: I'm not sure.

As Arthur mentioned, this is a very complex area. It is getting more complex as the enterprises research itself is accelerating the pace and as the time horizon for research-based products is getting shorter and shorter. Where is your best return? Is it in doing contract research? Is it in manufacturing, and at what stage?

It depends on the sector of the economy. The field of software is different from the field of pharmaceutics or from the field of microelectronics. The key, for an economy like Canada, is in various areas to try to get a handle on where the best high value-added jobs are and where the best return is.

I mentioned biomedical. In pharmaceutics now there is a growth in what are basically contract research organizations, whereas five or ten years ago people were saying they did not want to do contract work because it is low-end stuff. We want to actually manufacture. Now this is flipped around. The manufacturing is at the low end and the contract research stuff is at the high end.

Dr. May made reference to financing. I don't believe Canadians are as weak as they think they are in terms of commercializing the value of research. This certainly is not true in many aspects of telecommunications. I think our record is actually quite good.

In other areas, the incentive - I'm not talking about government incentive, I'm talking about market incentive - for actual commercialization of the research product has not been there. This is true in the resource sector. I'm not trying to avoid your question. I'm just trying to say it is very difficult to give an across-the-board answer.

It is also true this answer is a moving target. It really depends on a number of fields. The field of venture capital was barren in Canada five to ten years ago. Mr. Gauthier made reference to the CMDF and other such funds. There is going to be, I expect, a growth of these kinds of activities, and they have a virtuous cycle. As soon as these funds start making money, people will flock to where the funds are making money so they can make more money. Then you'll see greater commercialization.

I'm not sure I addressed your question properly, except to say it's very complex. It is probably the most important issue for our members in terms of knowing exactly where to put your finger when the globe stops on the high value-added jobs.

The Chairman: Thank you very much, Mrs. Chamberlain.

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Before we wrap up, did I cut anybody off? Would either our witnesses or members like to add anything else?

Mr. Telegdi.

Mr. Telegdi: I was just going to touch on some other questions.

First, there's no question that the city of Waterloo and the whole community there is a perfect example of what happens with the new economy and all the research that comes along.

One of the big issues that is on the horizon and that can be a problem as far as getting research commercialized is the whole issue of intellectual property rights, particularly in our university institutions. In the case of the University of Waterloo they're very liberal in terms of promoting faculty, trying to commercialize research, and making very little demand on the faculty in terms of control over what was developed at the time in the university.

How do you see that as a problem nation-wide, with various universities that will have much tighter standards on intellectual property and how much they as an institution will control the faculty members?

The Chairman: Is this is the issue as to whether the developer or the institution gets the patent?

Mr. Telegdi: That's right.

The Chairman: Does anybody want to respond to that?

Dr. May: I have some experience in the granting council and the NSERC council. The short answer is that this was often raised as a very difficult problem, but when you addressed it, it seldom proved to be that difficult. In other words, it could usually be worked out. I don't think it ever stymied development. That is not the issue that stopped the development of a promising.... That always got worked out, and yet it was constantly raised as a big, difficult thing. When the rubber hit the road, as it were, and people wanted to move something, it moved.

The Chairman: Mr. Grubel.

Mr. Grubel: We heard that the definition of basic research is that it really constitutes a public good for the world as a whole. There's no immediate application. Anybody can draw on it with zero marginal costs, and it's really accruing to the world as a whole. In our own technology development and in our teaching and so on, we are drawing a lot on pure knowledge produced by other countries. Therefore, in a way, as good citizens of the world, we should really contribute our share to the public vault of basic knowledge, basic research.

Have you used this argument in your presentation as a defence for appropriate spending of money on basic research?

Mr. Giroux: Not in those words, but I must tell you it sounds very good, Mr. Grubel, and you can be sure we'll use it in the future.

Some hon. members: Oh, oh!

Mr. Grubel: You should consult with economists.

The Chairman: Mr. Rothschild.

Mr. Rothschild: On this point, in terms of Canada's contribution to the world supply and the advancement of knowledge and curiosity-driven research and all that stuff, I'm not referring to the absolute amount we spend. As most of you know, the ability to determine between good and not-so-good research is an imprecise science at best, but if you use the indication of citation index and publication for research dollar spent, Canada is among the leaders. I don't think we say that often enough. This is in part an answer to your point. I think we pull our weight, and so we should.

The Chairman: Thanks, Mr. Grubel.

Do any of the witnesses want to add anything to what's been said today before we close off? Mr. Hough.

Dr. Hough: At the risk of saying something that would be blindingly obvious, Mr. Chairman, I would like to underline the fact that the science community is really trying to work collectively, collaboratively, and in focus to address the issues it faces today. I think what you have before you is a good example of a number of organizations that represent a very large number, if not the totality, of university researchers and other researchers in other locations. The proposals we've been working on ourselves are meant to address not only the issues but the gaps in that.

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We also have a very strong basic research capacity in this country in our universities. I don't think we should shy away from that fact or diminish it in any way whatsoever. I think we should build on it, and I think that is happening through a variety of programs. Those are the kinds of things that we're trying to ensure go on and that continue to contribute to the economic activity in this country.

The Chairman: Thank you, Dr. Hough.

Mr. Giroux.

Mr. Giroux: I'd just like to thank you, Mr. Chairman, as well as members of the committee who have asked questions today. We have appreciated the opportunity. We hope our contribution will be extremely helpful to you as you prepare the report on your deliberations later on in the fall.

The Chairman: Thank you very much, Mr. Giroux.

In terms of the process that was touched on by Dr. Hough, let me just say that this process began last year, when Sally Brown undertook to bring together a collectivity representing students, colleges, universities, teachers, the social sciences, engineering, the natural sciences and business. That was the first time that I thought the community came together with one united voice, one program behind which they stood collectively. I am therefore delighted that you would have continued this process and that it would have been fostered as well by our educational caucus chaired by Peter Adams.

I also understand that other individuals helped behind the scenes - I'm sure there are a lot of them - but I'm told Bob Best, Beverlee Stevenson and Don Savage also assisted in making today's meeting possible. I think you could see that all of us, from all parties, were extremely receptive to the message you have brought before us.

In particular, we appreciate that you have recommended specific programs and that you have costed them out for us. I think we were all hit very hard by your comments to us about the need to take Canada out of last place in the developed world in terms of R and D as a percentage of gross domestic product. I don't believe there is anybody at this table who believes we can be a strong economic force in the future unless we undertake the investments in human capital, in human infrastructure, and in research and development that you have outlined today.

On behalf of all members, I thank you very much.

The meeting is adjourned.

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