EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 26, 1996

.1534

[English]

The Vice-Chairman (Mr. Valeri): Order.

Pursuant to Standing Order 108, we are going to be receiving a briefing from industry officials on the document entitled Science and Technology for the New Century.

I'll be filling in for our chairman for the next little while.

The first order of business is to present the first report of the subcommittee on agenda and procedure. May I dispense with the reading of the report?

.1535

Some hon. members: Agreed.

The Vice-Chairman (Mr. Valeri): Thank you.

May I ask for a mover?

Mr. Bodnar (Saskatoon - Dundurn): I so move.

Motion agreed to [See Minutes of Proceedings]

The Vice-Chairman (Mr. Valeri): Now the witnesses. I'd like to welcome you all. I'm going to ask Alan Nymark, the ADM for industry and science policy, to make the introductions.

Mr. Alan Nymark (Assistant Deputy Minister, Industry and Science Policy, Department of Industry): Thank you very much, Mr. Chairman. I have with me today Andrei Sulzenko, who is the executive director of the science and technology strategy, the strategy that was released byMr. Manley on March 11, 1996. Doug Hull is the director general of science promotion and academic affairs. He is the senior official responsible for the community access program and the SchoolNet program. He will be joined, I believe, by Elise Boisjoly, who is the manager of those two programs.

Mr. Chair, the proposal we have for the briefing today is to break it up into three parts. The first section would be to address the science and technology strategy. The second section would be to look at the technology plan, particularly of the industry portfolio Mr. Manley has and the various elements involved in the technology plan. The third part of the presentation this afternoon would be to give you two examples of programming related to the information highway, namely SchoolNet and the community access program.

Mr. Chairman, I believe we have been invited back again tomorrow afternoon. Our intention was that we would save two items for tomorrow afternoon. The first would be to look at the program we call Strategis, which will be launched tomorrow by the Prime Minister and Mr. Manley. It's the most comprehensive business information source and the largest World Wide Web site to this effect. Secondly, we would give you an overall briefing on the information highway more generally tomorrow afternoon.

So there are three topics this afternoon and two more topics tomorrow. We're very flexible. If you'd like to do some rearranging of that agenda, we'd be happy to do that. I'm in your hands,Mr. Chairman.

The Vice-Chairman (Mr. Valeri): Does that meet with the committee's agreement?

Please proceed.

Mr. Nymark: Thank you very much. Perhaps just before turning it over to my colleagues I could introduce it by giving a bit of perspective on the issue of science and technology.

I think all of us in our everyday lives are seeing the increasingly pervasive impact of technologies. Whether in altering the way we work, the way we learn, how we live, or indeed how long we live, increasingly issues of technology, science, and engineering are coming to the forefront in our daily lives.

From the point of view of the government's approach to these issues, I sense an increasing movement from the preoccupation with dealing with the adjustments to globalization in the 1980s and the early 1990s towards governments in the OECD countries trying to come to grips with the issue of the movement towards an increasingly knowledge-intensive economy and society.

.1540

What I mean by ``knowledge-intensive economy'' is not just high-tech. It's not microchips and computers and all of those sorts of things, but it really is that increasingly there is a requirement that in everything we do more knowledge is required.

Economists traditionally saw the growth in the economy as being determined primarily by labour and capital. Increasingly, the economics profession and the business schools are looking at the issue of knowledge itself as increasingly being a primary factor of production.

Knowledge can be influenced. Governments have a role to provide an environment for knowledge, whether it's its creation or its diffusion. You can influence the degree to which society, particularly the economy, deals with the issue of knowledge and ensures that it is distributed well across the country so that people may take advantage of it.

Since knowledge is increasingly the source of wealth, it's to everybody's advantage if knowledge is diffused widely.

The government has also focused on the issue of innovation. In the context of its jobs and growth strategy it issued this book, Building a More Innovative Economy, as one of the jobs and growth agendas a year and a half ago.

In the pieces of paper that were circulated to you, there is a chart that outlines the four themes that are included as the basic building-blocks towards a more competitive economy. These building-blocks are trade and investment, marketplace climate, infrastructure, and, finally, technology.

The government's jobs and growth agenda related to the microeconomy contains some 60 measures, with a budget of some $350 million over a number of years. The majority of those initiatives have been implemented to date, but until last week the building-block on technology really held a place marker.

The government had launched a review of science and technology in 1994, and it was pursued through a variety of means: extensive consultations, inputs from the Prime Minister's National Advisory Board on Science and Technology, an internal review of all aspects of the government's science and technology program. That culminated this past week, on March 11, with the issuance of the government's science and technology strategy.

Our first speaker or presenter this morning is Andrei Sulzenko, and he will briefly outline the major elements of that science and technology strategy.

Mr. Andrei Sulzenko (Executive Director, Science and Technology Review, Department of Industry): Thank you very much, Mr. Chairman.

I believe all members received copies of the documentation when it was released on March 11. We have a few extra copies of the main document with us, if members need to refer to it.

As Alan has outlined, this process began with the 1994 budget. The first part of it involved a fairly extensive series of consultations across Canada, led largely by Dr. Jon Gerrard, who is our Secretary of State for Science, Research and Development.

.1545

I believe we have supplied to the committee a list of the Canadians and organizations that submitted briefs and various other submissions to us. We also had an internal process that complemented that, a report from the Auditor General on our management of science and technology, and finally a report from the National Advisory Board on Science and Technology called Healthy, Wealthy and Wise, which gave further input. So we did not lack input into the process.

It has culminated in this document, which is really part one of two parts of the overall strategy. This document lays out essentially the framework for the government's approach to the management of a $5.5 billion investment in science and technology. It is complemented by ten other documents, issued by the various science-based departments and agencies - I'd say including the Treasury Board, given its role particularly with scientific personnel - which demonstrate the strategy in action.

To appreciate the government's overall approach, one would have to look not only at the framework but also at how individual departments and agencies are putting that into action. About the government's jobs and growth thrust, a lot of that will come out in the individual action plans themselves.

I'll outline the strategy document very briefly. It consists of four main parts. The first part establishes quite clearly a set of three interrelated goals for our science and technology effort.

I might add that there is a broad consensus, based on our consultations and other deliberations over the last two years, on these goals. NABST, in its report, summarized them most succinctly. The three are sustainable job creation and economic growth, improved quality of life, and advancement of knowledge. Even though very much of what the industry department is about is the first, this strategy recognizes very clearly that the government is simultaneously pursuing several other goals.

We've also defined - I might add this definition was helped very much by the program review process that all departments and agencies in government have gone through in the last few years - what the government's core S and T activities are. I'll list them, because I think they will be evident in some of the examples.

The first core activity is funding and performing scientific research to support the mandates of departments and agencies. This is probably the area that was subject to most scrutiny in program review as each department went through its evaluation.

The second activity is supporting research in universities and colleges. This is done mainly through our three granting councils and also through our program for the network centres of excellence.

The third area is supporting private-sector research and technology development. I might add on March 11 Minister Manley announced the details of the new technology partnership program, which will be, when it reaches maturity, a $250-million-a-year program designed to partner with the private sector in leading-edge technology development.

The fourth area is providing information analysis and building networks. One of the consistent themes we heard throughout the consultation process was the need to develop what is called the Canadian Innovation System. The government is committed to that. In fact, a lot of what we are doing with the information highway, which you will hear more about tomorrow, I believe, points in that direction.

.1550

The third part of the strategy consists of establishing new governance mechanisms for federal S and T. There are several parts to this.

At the highest level the government has decided to establish a new advisory council on S and T. It will replace the NABST. Compared to the NABST it will be somewhat smaller, but its role will be much more of an adviser to the cabinet on establishing S and T priorities and directions. In fact this new council, which will report to the Prime Minister, will also be reviewing with the economic development policy committee S and T priorities and will be advisers to that committee.

In addition, we will be establishing new mechanisms for improved coordination across departments in government at various levels. Under the leadership of the Treasury Board we will be establishing among the science-based departments and agencies a much more transparent and accountable management system for science and technology.

Each department and agency will prepare on an annual basis, as part of their business planning exercise and their outlook documents, an S and T component. This will be rolled up into an annual report on S and T, which, in various versions, will be used to aid cabinet discussion of priorities and also to assist Parliament in its review of the government's activities.

Another critical feature of this management structure, which was pointed to very clearly by the Auditor General in his 1994 report, was the need for departments and agencies to set very clear targets for performance measurement and evaluation of their science and technology effort. This will be a key feature of the new system, and it will be aided by a review by Statistics Canada of improving our measurement system for science and technology. I believe it's several million dollars of investment by Statistics Canada over several years in that area.

The last part of the strategy involves giving the various departments and agencies fairly clear direction in terms of the principles they will apply to their activities. We've laid out in the latter half of the document seven principles. I won't take committee members through all of that; that would take quite a bit of time.

There are two main points on this. One is I believe there's a fair degree of consensus on these principles, not just within government but across the country. This is very much a distillation of the advice on direction the government received. The second point is they will be very important in terms of the performance measurement over time of the various departments and agencies.

The action plans I referred to are built around those principles, and then when the time comes, let's say a year from now, that Parliament or cabinet reviews where we are, either on an individual department basis or more collectively, there will be some baseline for accountability in terms of fulfilling those directions. They're not mere words; they will actually be the basis on which our performance will be evaluated.

Mr. Chairman, that's the basic outline of the document. I'll be most pleased to answer questions at the appropriate time.

The Vice-Chairman (Mr. Valeri): Thank you.

I wonder if we can go to the questioning at this point. I'm in the hands of the committee members, but given the topic itself and the interest in it, I wonder if committee members would agree to a five-minute questioning time allocation at this point, not as a precedent-setting motion, but to get as many questions as possible in from all sides, given that the witnesses do have a presentation they'd like to give us as well. They mentioned they may require about fifteen or twenty minutes to do that. Around 4:30 or so I want to go to those presentations and then allow for questioning on the demonstrations as well. Also, the witnesses will be back tomorrow.

.1555

Is that okay? Are we in agreement?

Some hon. members: Agreed.

The Vice-Chairman (Mr. Valeri): We'll start with Mr. Leblanc.

[Translation]

Mr. Leblanc (Longueuil): We know there are a lot of researchers - you said a few words about that before - in universities, research centres and business. Often, the clearest problem is transmitting information or the scientific results between those institutions or firms. Is there anything in the new program that will give easier access to researchers?

It also says that maybe the results of the research could be commercialized. We know there are businesses doing research who don't necessarily want to share the results of that research but they might sometimes wish to sell it. In this new program, is any provision made for accessing the results of research to optimize productivity?

[English]

Mr. Nymark: Yes, there is. It's become quite clear in our consultations that much of the research that is done either in government labs or in university laboratories is highly respected and is increasingly found as being highly relevant to the private sector.

The government has several programs, two of which I might mention. First, the National Research Council runs a partnership program in technology transfer. In essence the purpose of that program is to open up government labs to commercialization projects with the private sector.

Similarly, NSERC has a program called the technology partnership program, which is specifically addressed to how you can get science and technology that is conducted in universities into the private sector, in partnership with them, to exploit it for commercial purposes.

As well, as part of his information highway program, Doug Hull is linking, for example, all of these university offices that are attempting to commercialize the S and T going on in their labs to share that information on a national basis, not just on a local or regional level, but to have it up and available on a national network.

The issue the member addresses came up over and over in the consultations and is one the government is attempting to address specifically related to both government labs and university labs.

[Translation]

Mr. Leblanc: Sometimes, some government or private research centres make important discoveries that could be applied in industrial context and often those research centres don't have the means to look for the firms that might want to use the results of their research. We often see research carried out at great cost being sold for a good price in other countries where they can commercialize the results.

.1600

Within the framework of this program, couldn't the government help universities or research centres when they make important discoveries? Couldn't it help them reach whatever corporations who could market some of the results of that research?

I don't know if you get my drift. The interrelation between industry and research is often very difficult, and research centres have to sell the fruit of their research to other countries. I think the government should do more to help set up a better communications network. I don't know if you have provided for that in the program. That is important if we're to increase productivity and employment here.

[English]

Mr. Nymark: Yes. I couldn't agree with you more; and we are attempting to deal with this in a number of ways.

Mr. Doug Hull (Director General, Science Promotion & Academic Affairs, Department of Industry): The issue is a complex issue, because the nature of research varies by sector, by the type of institution involved; by a number of different factors. So the problem is not amenable to one solution.

The government has mounted a number of different endeavours. For example, the granting councils have chairs in various different disciplines which involve industry in the research early on, so they're aware of what's going on at a university or within a government laboratory, for example, and are best able to understand how that might be adopted.

Programs such as networks of centres of excellence have been a very important and major commitment by the government to ensure university researchers appreciate the importance of transferring their technology and to focus the research grants on those areas of research that are most relevant to Canadian industry. There are also programs, such as the Medical Research Council fund, which facilitate the accumulation of capital to promote the transfer of technology.

Finally, as Alan mentioned, there are a number of different ways in which the information highway can be used to facilitate this transfer. A large part of the problem is an information gap. University researchers or government researchers don't necessarily rub shoulders every day with the right people to transfer the technology to. So using the information highway to expose commercialization opportunities is a very powerful, low-cost mechanism.

Several different mechanisms have been put in place, such as the Canadian Technology Network, the Canadian Technology Gateway program, and the Trans-forum system, all of which are aimed at slightly different clienteles but all of which bring these opportunities to industry, to the banking system, etc., very quickly and can actually share information back and forth among the researchers themselves, to facilitate their efforts.

The Vice-Chairman (Mr. Valeri): For the Reform Party, Mr. Schmidt or Mr. Mayfield, have you decided who will be going first?

Mr. Mayfield (Cariboo - Chilcotin): It doesn't matter. Are we both going to have an opportunity?

The Vice-Chairman (Mr. Valeri): You'll have five minutes for the first go-around. Then we'll come back.

Mr. Schmidt (Okanagan Centre): I have a couple of questions. Going back to the governance structure, could you clarify exactly what is going on here? How is this really going to work?

Here are the complicating factors I think I have here. You are going to have performance measurement being done somehow by Statistics Canada. We're going to have a new advisory council to the prime minister. We're going to have an economic committee that applies to the cabinet. We're going to have two ministers who are responsible for coordinating this science and technology business across departments, and we're going to have those two ministers advised by a number of committees. In how many committees and in how many different ways is this stuff going to be handled before any kind of decision is made?

.1605

Mr. Sulzenko: Perhaps I could take you through the logic of it one more time.

Basically, the system we are putting in place maintains ministerial accountability. In other words, each minister, to the extent that there's a science-based activity in his or her department or agency, will be responsible for that. So when we talk about performance measurement and setting targets and so on, to a large extent it will be left to individual departments to figure out the best means at their disposal.

At the current juncture, the role of Statistics Canada is in effect a research role in terms of trying to help departments develop these sorts of performance measurements. We're really working off a best practice now, because it's a very difficult process. In fact, I believe our own agency here is recognized by the OECD as being one of the leading agencies in the world on this sort of inquiry.

Each individual department will prepare its own science and technology plans. It comes together in a number of places. It comes together at the level of the economic policy committee, which, at least on an annual basis, but presumably more often than that, will be reviewing the overall science and technology effort of the federal government; that is, its $5.5-billion investment.

They will be reviewing it on a number of levels, but for the first time we will be able to do so on an aggregate level; in other words, rolling up the various plans and reports and, first, determining retrospectively how well we have done in relation to our objectives and, secondly, giving the cabinet a basis for making decisions about where we will go from here.

To be very frank, at the moment we do not have that kind of roll-up of activity in that level of detail. This new system will provide that.

The role of this advisory council will be similar in some respects to the old one, but it will be much more integrated into the decision-making process in the government. They will be dealing not only with the Prime Minister but also with the same committee that is going to make recommendations on future directions for science and technology.

In effect, even though there are many aspects to the system, ultimately the objective is to provide a basis for better decision-making.

Mr. Schmidt: I understand what you're trying to do. I'm just wondering how in the world this system actually is going to work.

It strikes me that we've got ministers on the one hand, who are called to account to do this or to administer this and coordinate this across departments, yet you just told us that each of the departments will be providing, as part of their plan, a science and technology plan, which will go to the economic planning committee, which is neither the Minister of Industry nor the Secretary of State for Science and Technology. So you've got an economic policy committee that's receiving information on the science and technology part of each of the respective departments. Where is the minister, and who's accountable for what here?

Ultimately, the buck has to stop somewhere. I strikes me that, given the way in which this thing is set up, that buck could disappear in so many different places that nobody could be held to account for anything. They could keep on doing whatever they jolly well please. As long as they have some kind of plan at the beginning, somewhere they can come along and say ``Well, we did this''.

If it's a best-efforts measurement, then that's no measurement at all, because the Auditor General told us very clearly, ``What is the measure? Where are we getting value for our dollar?'' I don't see anywhere in here where we are getting a value for our dollar. At least, somehow you haven't communicated to me exactly how that's going to work.

I can see how this thing goes, but it seems to me that you could fritter this away very easily. It seems to me that you could have a group of bureaucrats over here and a group of government people over there, and these guys do whatever they jolly well want to do and the ministers are sitting wondering what happened.

We can all figure out what happened, all right, because you can write all these numbers on the side over here, but is it what they want in the first place? There's no connection.

The Vice-Chairman (Mr. Valeri): We will get a quick response.

.1610

Mr. Sulzenko: Our expectation is that with this new system there will be a much higher degree of transparency and accountability to Parliament itself, either directly through various committees of Parliament or indirectly through the Auditor General. That will remain. Individual ministers will be accountable for their departments. What we're trying to do at the same time is to improve the basis for collective, i.e. cabinet, decision-making.

I'm in a position to describe the system to you. It's another debate how that will work. Next year at this time we'll have the first full year of this new system in place. You can make your evaluation at that time.

The Vice-Chairman (Mr. Valeri): Thank you.

Mr. Nymark: Mr. Chairman, I'd like to add one feature. This is a very large enterprise. A $5.5 billion expenditure involving 22 departments and agencies isn't a simple matter, and we all recognize that. We think the governing structure is reasonable, yet it's multifaceted. It's not a single governance system you're going to put this through, because we have tried to weigh what the Auditor General said, which is that one needs to strike a balance between the centralization of authority and accountability and the responsibility of individual ministers to be administering their departments as they see fit.

As Andrei has said, we have been given early indications from the Auditor General that he sees this as a positive first step, that we have the direction right, but the proof will be in the pudding. The proof will be how we make this system work and whether we will actually be accountable in a transparent way, so a year from now you will be able to judge whether it's been an effective system. We can describe that for you now. We can't prove it now.

The only proof we have, as it were, a week after the announcement of the strategy, is the strategy itself. As Andrei has said, there are two parts to the strategy. The first is the summary of the document, which as he indicated has seven principles upon which the government will conduct its S and T effort.

After coming to the agreement collectively amongst ministers and in cabinet that those were the seven principles they would live by, the cabinet turned out to the individual ministers and said, take those seven principles now and apply them to your departments and come up with action plans that support those seven principles. They did that - fairly quickly, but they did that - and those ten documents are also now available to you. If you wish to talk to individual departments to see how what they are doing relates to the overall S and T strategy, that information base is now available to you.

What hasn't been done yet is putting the precision on the performance indicators you're suggesting is necessary. One of the reasons that hasn't been done yet but will be done over the course of this year is we don't have the data even from Statistics Canada to know exactly how to do that. We've given them a fairly large investment to come up with that system fairly quickly so a year from now you're not asking us the same question.

The Vice-Chairman (Mr. Valeri): Mr. Murray.

Mr. Murray (Lanark - Carleton): Thank you, Mr. Chairman. As so often happens, Mr. Schmidt has anticipated my questions exactly.

First, going back to NABST and the replacement for that august body, I recall when it was set up roughly ten years ago now it was a pretty heavy-duty body of advisers, fairly secretive, advising the prime minister. I'm wondering what was wrong with the previous body. You talk about wanting to integrate their advice more closely into what you're trying to achieve with the changes in science policy. Actually, that's my question on NABST.

What was the problem? Did you find you needed a different mix of people, or after a few years did it cease to be as effective as it was when it first started, if it ever was effective?

.1615

Mr. Sulzenko: I think there are two answers to your question. First, the former NABST had multiple functions. It was an adviser to the government. It was also a public advocate of new directions, to a large extent. The members themselves focused a lot of time and effort on writing reports.

This new body will be more focused than the NABST. They will be smaller. And I think one of the reasons the government has decided they will be smaller is that if in fact they are going to be advisers to cabinet, you can't have fifty people sitting around the table, having a useful conversation. I don't know if the exact number has been decided yet, but it will certainly be smaller by a substantial margin than for the former NABST.

But also, the government has taken the view that the public advocacy function can be better served by other bodies, not one which has a bit of a conflict, as the NABST did, where they are both a confidential adviser and a public advocate at the same time. Our system, this innovation system, is maturing enough, to the point where their unvarnished advice, without strings attached, will be coming to the government on a whole range of S and T matters. So I believe the government is trying to segment much more carefully the type of advice it's getting.

Mr. Murray: My next question is about the departmental science activities and how they'll be audited. Statistics Canada doing some kind of a study doesn't excite me too much. I look at $5.5 billion in expenditures. That's more than the budgets for a lot of big departments for a year; and probably another $5.5 billion will be spent while a lot of this auditing, if you will, is going on.

My question is really what terms of reference will the auditors have. I compare this with the auditors the government sends out from Revenue Canada to audit private firms when they are claiming ITCs for scientific research and development. They have some pretty specific ideas in mind about what qualifies and what doesn't. I'm still fuzzy on who is going to be judging the activities of the department against the goals that are being set - what they have to prove they are doing to pass the test, and to whom.

Mr. Sulzenko: I think it will be dealt with on a number of levels. Obviously the Auditor General will have a substantial interest in seeing how we've responded to the recommendations in the 1994 report. There is an enhanced role for Parliament, and not only because of the new expenditure management system in departmental outlook documents and the review by various committees of departmental plans. In piggy-backing on that system, we're going to have a very explicit S and T component for those relevant departments and agencies, and that will be part of the parliamentary scrutiny. So I believe through this we are enhancing Parliament's scrutiny of departmental performance.

Similarly, more confidentially internal to the government, as part of the business plans of each department Treasury Board will be reviewing the S and T component. That will be transposed to the cabinet committee level, where, as I mentioned earlier, we're going to have an annual report that will give the government some clarity in what we've done, how well, and where we can go. So within government itself, at various levels, there will be review and accountability.

Then I think the public scrutiny will also be enhanced. These ten action plans are public documents. They are fairly clear statements of where we are going among the various departments and what we're trying to do. I think that will be the basis against which we will be measured by the public.

.1620

When I say ``public'', I mean that there are a lot of client groups out there that have a very direct stake in what various departments do. You can take agriculture as an example.

I think the transparency will allow various groups within government and outside of government, say starting a year from now, to have a view on how well we've done in relation to what we're proposing.

Mr. Lastewka (St. Catharines): I want to ask a question on the support for private sector R and D. You emphasized leading R and D, and I wanted to hear a little bit more about that and to be able to understand better the difference between leading and transferring of technology, so I will understand the difference in how you are going to be monitoring those.

Mr. Nymark: The distinction I was attempting to make was between technology development or creation and the diffusion of that technology.

On the technology development side, one of the key features of the S and T strategy from the point of view of the industry portfolio is that the government has announced the technology partnership program. As Andrei has said, at its full maturity it will be a $250-million-a-year program. It will support the private sector by investing in it on a shared basis and sharing the risks and the rewards in three streams of activity. The first stream is in the aerospace and defence conversion. The second is in environmental technologies. The third is in the enabling technologies, which include, for example, biotechnology, advanced materials, and advanced manufacturing.

The government is cognizant of the fact that we have been seen by other countries' international organizations as not having the same intensity of technology development capacity in the private sector as some other countries have. There are explanations for that; for example, the composition of our industrial structure. We tend to be a more natural-resource-based economy, and until fairly recently natural resources didn't tend to be as technology intensive, although they are increasingly that way.

Secondly, we have a very high degree of foreign ownership in comparison to other countries, and that may impact on the degree to which technology development takes place.

At the end of the day, it is judged that in all G-7 countries and virtually all OECD countries there remains a role for the government to assist in an investment way - not in a subsidy way - to fill that innovation gap on a partnership basis. That is the purpose of the technology partnership program.

[Translation]

Mr. Leblanc: When I examine the creation of this new organization, it seems to me the government is perhaps showing too much initiative and trying to control or define more priorities than before. Am I wrong?

In countries with very high productivity like Germany and Japan - I know they're not the same size we are - it seems to me that this success has much to do with the fact that private enterprise sits as a majority on those boards. It's business and the manufacturers who establish priorities.

.1625

It seems the government want to grant itself even more powers. The government will have more of a say in setting priorities. To my mind, that's a mistake.

The new operation rule and this new way of managing lead me to believe the new board will be very much accountable to government and very little to the real stakeholders, the manufacturers.

[English]

Mr. Nymark: Your impression may be just a little bit askew - from what we intend, at least.

I think the federal government's first step forward in a national science and technology strategy is to get its own house in order. That is what the Auditor General suggested we should do. We have a large, $5.5-billion, investment, and before we start preaching to others about what they should be doing in their domain, we are attempting to be more strategic, more accountable, more efficient, and more open to the private sector to emphasize partnerships where we're making investment and to do it on the basis of investment, not subsidies.

This is not a plan that is designed to give the impression that the government is all-knowing and all-seeing in its relationship to the private sector. Quite the opposite. The government took the advice it was getting from the private sector in the consultation strategy, and that was, ``Please. Your first step is to make sure that you're running your own backyard efficiently. Then we'll be delighted to partner with you''.

There are subsequent steps here. A first tentative approach is this technology partnership program. It is one in which we have taken a great deal of advice from the private sector.

When we establish the program, it will be our intention not to run it as part of a government department, but to create a special operating agency to have at arm's length. We intend to have the strategic direction of that program determined by a private sector advisory board, which the minister will chair personally, so that the directions for the program will be very much in tune with the needs.

The program is designed to be, in essence, demand driven and not supply pushed. We have, in consultation with the private sector, determined three streams of activity, but we are not trying to determine the individual projects ex ante and say that those are the only kind we will fund. It will be up to the private sector to come forward and propose a partnership and seek our investment in what they're trying to do.

[Translation]

Mr. Leblanc: It's always the same thing. I agree with you that the program provides for investments and loans first, instead of gifts. I agree with you on that.

It still remains that an important supplier like the government, and its financial management, is often tempted to say that if it invests so many million dollars then it should also decide on the priorities. Some senior officials often play around with that. They say: "I'm paying, I decide". That's what one Deputy Minister told me and I found it a bit funny.

For example, the federal government has just decided that fusion is no longer a priority and the atom has now become the priority.

.1630

Of course, if the government pays, then it decides. That's how the present structure leads once again to the government making the decisions, more than private enterprise.

[English]

The Vice-Chairman (Mr. Valeri): Do you have a quick answer to that?

Mr. Nymark: The government is certainly going to be trying to establish priorities for itself, there's no question about that. That's what everybody has told us we must do. It's what the Auditor General has insisted we do. I think it's what many members around this table and other parliamentary committees have said we should do.

We have to have clear objectives and priorities and be able to measure the effectiveness. That is the intention of the S and T strategy. The intention is not to be a highly interventionist, old-style industrial policy instrument, which tends to tell the private sector how to do their business.

I might add that there is a limit on the contribution of the federal government for individual projects in the technology partnership program. We expect not to go above 25% to 30%. The project has to be driven by the private sector and be commercially determined by them to have a rate of return that would justify the investment before we would even want to participate in it.

The Vice-Chairman (Mr. Valeri): Thank you. I've got a fairly extensive list of questioners. Can I get a quick question from Mr. Godfrey, and then come back to Mr. Mayfield?

Mr. Godfrey (Don Valley West): Thank you. I feel like the hand from beyond the grave. It's nice to be back.

In the science and technology report, there's quite a lot made of the national innovation systems thinking. Yet the report really is restricted to looking at federal assets and dealing with governance mechanisms for those assets.

The committee has been asked by the minister to examine the problem of the innovation gap in this country, which suggests something rather larger than the S and T strategy. Would it be a useful way of proceeding for the committee to in a sense say that the answer to an innovation gap is a national system of innovation, the S and T document represents a point of departure, and that the most useful thing this committee might want to do in its deliberations is to go beyond simply the federal assets to look at the provincial assets, the private assets and everything else that's been mentioned?

Indeed, it could ask itself questions like: How do we compare with other national systems of innovation? What governance structure could be applied to a national system of innovation, rather than just the federal assets? What are the performance measures for a national system of innovation rather than simply the federal assets? How do we finance it? It's that sort of thing. Would that be a useful piece of work for the committee to carry on?

Mr. Nymark: Yes, that is a challenge I am sure the committee is up to. It's exactly where I personally would hope the committee would go.

The national system of innovation is a concept that is now becoming widely shared among developed countries. For too long, governments have looked at the concept of science and technology in terms of the number of lab coats, the expenditures on R and D, or fairly simple kinds of measurements of which you're putting into the innovation system.

I think it's just as important to know what the banking sector is doing to support your more knowledge-intensive firms. Indeed, that's why last year the House considered the amendment to the Business Development Bank, and specifically looked at amending its mandate to ensure that it was moving its portfolio from a real estate base to a more highly knowledge-intensive kind of firm to which it would be loaning.

Similarly, I think that the university system out there is under tremendous pressures right now. It's an institution in turmoil at this particular point. There's stress from the fiscal side. Yet on the other side, they have tremendous pressures from private sector firms to deliver the kinds of highly qualified personnel needed by those firms.

.1635

Increasingly, when we talk to large companies, particularly on the knowledge-intensive side, they are no longer coming to government worrying about the capital cost allowance and things like that. They're worried about whether they are getting sufficient scientists and technologists coming out of schools on whom they know they can count to stay in Canada in a climate that is favourable to their kinds of activity.

So what are firms going through? As for the individual worker, if knowledge is the issue, there is more and more responsibility being placed on the individual worker for ensuring that they have the assets, or the productive base - i.e., knowledge - to carry them through their careers.

I think there are several other pieces of this puzzle that need to be explored. Indeed, as I tried to indicate, what we tried to do was get some credibility back into the management of the federal assets, but we need to go beyond that now and engage the national system.

The Vice-Chairman (Mr. Valeri): Thank you very much. Mr. Mayfield.

Mr. Mayfield: Thank you. I just have a few questions, if I may.

My first question has to do with priorities. I'm looking at the goals you've set out. I suppose ``high-minded'' would be one word for them, while ``hyperbole'' would be another, as I look at the best in the world and fulfilling jobs for the most effective social, environmental and health programs in the world. Goal three talks about fostering Canadian participation in all major fields of science and technology.

You talked about this as a puzzle. I'm wondering how you are going to decide which pieces you are going to play with first and how you're going to involve non-government sectors in fitting this puzzle together. I'd like to know what the priorities are. What strategy do you have for that?

Mr. Sulzenko: First, with respect to the latter part of your question on involving other client groups or outside advice, most, if not all, science-based departments and agencies of the government have outside advisory groups. In fact, when we reviewed this I believe there were something like 80 of them in existence today.

Mr. Mayfield: I assume you had lots of advice.

Mr. Sulzenko: We have lots of advice coming in, there's no doubt about that. One of the proposals in our strategy is a way of trying to consolidate some of that advice and being able to deal more strategically with cross-cutting issues in the government.

As I recall, the first part of your question was on setting priorities. This all culminates obviously at the cabinet level. What we're trying to put in place is the information and analytical base for ministers to make decisions on priorities for S and T. I've described that process briefly, but at the present time we don't have that base to look at the whole array of activity from a number of points of view to decide what works, what doesn't, and what we should emphasize relative to other areas.

Notwithstanding that, governments do make decisions on priorities. The fact is that in this most recent budget, when the government announced this new program for $250 million a year at maturity, this is a clear decision in terms of priorities within science and technology, given that the deficit reduction targets are being met at the same time. We hope that the new system we put in place gives a better basis for making those decisions on priorities.

Mr. Mayfield: The second question relates to perhaps the infrastructure upon which you will have to depend to put that in place. We could talk about universities, but the illustration I want to use is a very simple one. Perhaps in your mind it's a very minuscule one, but it will do for my purposes, I believe.

.1640

In my constituency is a little community called Tatla Lake. Branching out from Tatla Lake is a series of places with wonderful names like Chezacut, West Branch, and Tatlayoko. They have just received this community access program. They have raised the money in the community; they have made their application; and they're on the list. The problem is that they don't have the telephone lines to make it work. They have party lines. The fight now is with BC Tel to see if they can get their telephone system upgraded so they can make this little program work and get the centre operational. Not only that, but there's a variety of exchanges. This whole vast district of fewer than 2,000 people has a number of telephone exchanges. So, in order to phone your neighbour, it's pretty well all long-distance.

How is your department going to be looking at this kind of infrastructure, this tiny bit, in order to make it work as part of the interschool net, the community access, and all these kinds of things, which are the tiny nuts and bolts behind all this? Have you given that any thought?

Mr. Nymark: We have a half-hour response to make in a presentation on that subject. May we hold that question until we make the response?

The Vice-Chairman (Mr. Valeri): That brings me to my next point. You have a presentation that you'd like to make. I have two other questions that I'd like to get in. If we do have to run over the allotted time by 10 or 15 minutes, is that okay with committee members?

Mr. Schmidt: How are we going to handle this? This is a huge area. I know that it's a major priority for the Department of Industry, Mr. Chairman, and you've designated today and tomorrow. This issue is far bigger. It's $5.5 billion, of which $250 million is a minuscule part. Yet in many ways it's at the nucleus of this thing. I feel that it's highly inadequate. We haven't even touched the $250 million, except maybe very peripherally.

The Vice-Chairman (Mr. Valeri): I agree.

Mr. Schmidt: I'd really like to get into that one. That's probably an hour and a half right there.

The Vice-Chairman (Mr. Valeri): Agreed. I appreciate your comments, Mr. Schmidt.

At the next steering committee meeting we should sit down and develop a more focused strategy on how we want to deal with this particular issue. If that involves having more meetings, bringing in additional witnesses, and looking more in depth, then I think you'll find support from committee members outside of that steering committee as well.

At this point we should get the questions in, have the presentation, and then deal with it in the steering committee. I would certainly be supportive of that position.

Mr. Schmidt: I have another question.

The Vice-Chairman (Mr. Valeri): I'm sure you do, as do all others.

I have Mr. Shepherd and then Mr. Ianno. We can go to the presentation after these two questions.

Mr. Shepherd (Durham): Canada's spending in research and science and technology is very small relative to that of a lot of other countries. We talked in terms of $5 billion. That sounds like a lot to us commoners, if you will, but I know that in real terms it is a mere drop in the bucket.

I've listened to you discuss how this policy is going to be undertaken in government itself. What I see is a horizontal structure that's basically trying to go across departments that are vertical. So, by definition, we have a form of alienation that already exists within that. How do you get consistency through that horizontal structure where in fact it's being commanded in departmental or vertical structures?

Having said that, and looking at the wider expanse of spending in science and technology in Canada generally, and maybe going back to some of the things Mr. Godfrey was getting at - without having somebody with their hand on the tiller all the time, which probably is not conducive to genuine research, how can we eliminate the concept of undue competition? What I mean by that is, how can we ensure that the Department of Fisheries and Oceans isn't doing a research project similar to one that is happening in Agriculture Canada? Or, within the wider picture of that, how can we ensure that MacMillan Bloedel isn't doing something in the forestry industry when another forestry company, in New Brunswick, is doing identical research? How do we envelope the research we do have and get the biggest bang for the buck out of it?

.1645

Mr. Sulzenko: On your question about overlap or duplication of research, it is an issue that I believe was front and centre in the program review exercise the government went through. Given that most departments, including, I would say, Industry Canada, had fairly substantial targets for reduction, it did focus attention on that very point. This is not say there may not be pockets left, but....

You used the example of the Department of Fisheries and Oceans. Their reduction over several years is quite substantial, to the point where they actually had to rethink their business lines in terms of freshwater fish management, which is being offered to the provinces. They also have a memorandum of understanding with the other resource-based departments and the Department of the Environment.

So we are using a number of techniques to try to ensure we're working in a coordinated fashion. We're eliminating certainly the duplication, and we're trying to reduce the overlap. In our strategy we have a number of additional techniques, involving outside advisers as well, to try to deal with some of these cross-cutting issues to make sure we're maximizing the taxpayers' bang for the buck.

Perhaps Alan will speak on the small R and D effort in relation to other countries. I believe that was the first part of your question.

Mr. Shepherd: I guess I'm just recognizing the reality. That's just the way it is. We have just so much money to spend. Within those parameters, how do we ensure both within government and indeed within the domestic economy generally....

For instance, something struck me as interesting when I was out in British Columbia. I discovered that our science labs were heavily involved in studying infestation of the forests. Then I discovered that Macmillan Bloedel was building a better box. This was quite good. It was an innovative process. Then I discovered a company such as Weyerhaeuser in the United States was building a better tree.

How are we part of that process? How are we going to be there in the 21st century, with the limited resources we have, without channelling the resources we do have in very specific areas?

Mr. Sulzenko: It's a good example.

Our approach throughout our overall strategy has been to emphasize the word ``partnership''. What that means, though, is not just working more closely with each other internally to the government and in the private sector, the business community, and the universities, but it's developing mechanisms so we can have a common information base and share information. A lot of what Industry Canada is about these days is putting in place those networks so we can know what's going on, whether it's in the United States or abroad.

You'll be briefed tomorrow, I believe, on Strategis, which is a new information-based program coming out and which will provide, we hope, a better basis for interaction not only between government and the private sector but also among various private sector players.

The Vice-Chairman (Mr. Valeri): Mr. Ianno.

Mr. Ianno (Trinity - Spadina): Thank you, Mr. Chairman.

First of all, I would like to commend the department for its change of attitude over the last year and a half in terms of hearing the words ``partnership'', ``leveraging'', etc. It's a total change in the last year and a half from when I was first sitting here listening to you and the department at large.

.1650

When the commercialization partnerships are formulated, what is the assurance that the government will get a return on its investment in regard to when the investment is profitable, when it's sold and to whom, fair market value, etc.? I would like to extend the question also to NSERC and all the other departments and funding agencies that are run by Industry Canada.

Again, I'm not differentiating between basic research and applied research, but what structure do you have in place to ensure that moneys will be returned to the government to be used again for the research industry?

Mr. Nymark: First of all, the incentive is unless it's returned, the department will shrink. It's built into our A-base that we will get a return on this investment. This is not gravy; this is A-base. So it means survival.

On the technology partnership program specifically, let me tell you it is a very high priority right at the moment. We opened the wickets, as it were, on the day of the announcement.

Mr. Ianno: That's only the $250 million?

Mr. Nymark: Yes. I know you were talking more broadly, but at least on the $250 million, we've opened the wickets. We've established tight financial parameters around which we will invest money.

Again back to Mr. Schmidt, this program is probably of sufficient interest that we should bring in a team that is in fact operating the program and be prepared to go into detail.

Just to give you a little vignette on it, we're establishing in essence a collection agency. Governments are not typically very good about securing the return on the investments.

Mr. Ianno: I'm not concerned about the $250 million. I'm sure that will be set up and will be seen very well, considering Mr. Murray's and Mr. Schmidt's concerns in terms of the auditing and everything else that goes along with it.

My concern is the money we don't see. For NSERC and all of the other departments, how do we ensure it's not just...I don't want to use the term ``wasted'', because I don't think that's the case, but how do we ensure there is a return so we can reuse that money?

Mr. Nymark: I don't think there's a short answer to that. Andrei has already given many of the answers.

Although we have lots of advice, we still run into over and over again in our consultative process that we're not really sure what R and D is going on in those government departments. Is it really up to standard? When we do R and D out here in the university system, we're peer-reviewed. Are any of you guys in there peer-reviewed in terms of quality of the science and technology?

The direction departments have given - and it's quite explicit about this - is each federal research facility and program will establish and follow a rigorous schedule for submitting its proposed research activities to an expert review by clients, stakeholders and peers in order to ensure the scientific, economic and environmental excellence of its research.

The reporting procedures that are being put in place will allow you at the end of the day.... As part of the tabling of the outlooks and the business plans in Parliament every year starting next year, departments will have to be very explicit on their science and technology activities. You have every right to ask these questions.

Mr. Ianno: With all due respect, though, that's not answering my question, which is on the monetary side, as compared to whether the work is being done well by the scientists. I have no doubt. With your 30% investment, where will we see a return? How will you gauge that?

.1655

Mr. Sulzenko: We're trying to make a distinction between this new program, which is based on a repayable feature, sharing in the risk and the reward.... Much of government activity, particularly in the laboratories, is not on a cost-recovery basis. Those labs are in operation because there's a public good to be met. So for a lot of the activity there is not an expectation of financial return. That too is changing, but the underlying premise for a lot of activity is not then to recover those expenditures.

Mr. Ianno: I want to relay something similar to Mr. Mayfield's perspective. I'm talking about when money is given to NSERC, or wherever, to universities and the private sector, and it's not the technology fund, the $250 million - it's all the other moneys - and something is eventually developed and is taken to commercialization and someone is benefiting from it. Where is the money coming back to the government from that procedure?

Mr. Nymark: Thank you for being patient with us.

There is no standard policy on that now, just as in the initial days of the cost-recovery approach of the government there was no standard answer to what the criteria for cost recovery were.

As Andrei says, in a minority of cases we'll expect a return on investment, but at the moment I couldn't satisfy you that our criteria for return on investment under the technology partnership program and the return on investment that the Medical Research Council has established in its medical equipment fund that it has set up under the private sector are the same. They're not. I assume they're not, because they weren't organized to be the same.

Mr. Ianno: Are you talking about two different funds? Is that what you're referring to? Is the private sector venture fund what you're referring to in the latter part?

Mr. Nymark: Just as another example, but I'm sure there are probably a dozen out there.

Mr. Ianno: I'm not referring to that. I'm talking about when NSERC gives to the University of Toronto in a partnership of some sort, maybe with a private sector company, and something gets developed that's commercially viable. How does the government get a return, a royalty - a standardized form that they basically all sign by receiving the money, stating that if something is developed, then the government will get a percentage - 1%, 10%, 5%, or whatever the appropriate amount is - so that in effect the government will be getting something back? Why is that not being set up, if it isn't - when we've been at this for two years on the same procedure?

The Vice-Chairman (Mr. Valeri): Can we get a fairly clear and concise answer to that question?

Mr. Hull: The answer to the question is that there isn't a policy like that. When the federal government gives research grants through the granting councils to universities and to researchers, that funding is in fact the property of the university and the researcher. So if the intellectual property that results from the research is transferred, then that becomes a return to the researcher or a return to the university.

Mr. Ianno: In other words, I should take back my compliment on the leveraging, because you're not doing that in the sense of getting something back.

Mr. Hull: Perhaps I could just conclude the point, but you're almost, to some extent, correct.

Given the way in which the universities are now being downsized because of reductions in granting council budgets, there is a tremendous pressure on both the institutions and the individual researchers to protect their intellectual property and to transfer that for a commercial transaction.

For example, the networks of centres of excellence programs have been put on a very steep decline. To keep their own research programs going, they're expected to bring in increasing volumes of revenues that they would earn themselves.

From the point of view of the federal government, the money doesn't come back to the federal government, but hopefully, through these innovative measures that put incentives in the system for the researchers and the institutions, the same volume of research will be maintained at a lower federal outlay. That's the incentive system. The funds don't come back.

.1700

The Vice-Chairman (Mr. Valeri): Mr. Ianno, you've made your point. We see perhaps some necessity to look at a policy, and I'm sure you can do that on your own with the officials.

We have a decision to make.

Mr. Schmidt, you indicated you may want to ask another question, and I'm sure there are other questions around the table. The witnesses would like to give us a demonstration on SchoolNet and community access.

We're meeting tomorrow afternoon as well. I know the information highway is on the agenda tomorrow. It's 5 o'clock. For all intents and purposes, we said we'd go until 5 o'clock. We can go to the demonstration, if you need ten or fifteen minutes of that, or we can continue questioning, if the committee members would like to do that, and move the demonstration to tomorrow.

Mr. Schmidt, I take your comment - and it's been echoed by a number of other members - that we need to take a step back and look at how we're going to deal with this issue in much more detail, calling for additional meetings down the road.

Mr. Murray: I just want to mention that we have a vote at 5:45, with 5:30 bells, so we're essentially captive anyway for the next little while. I'd like to see the demonstration. The officials have brought all this equipment over and I think it would be only fair to have them go ahead with the demonstration.

The Vice-Chairman (Mr. Valeri): Great. We're all in agreement then. We'll go to the demonstration.

Mr. Hull: Thank you.

While my colleagues are setting up I'd like to introduce Ms Elise Boisjoly, who's the person responsible for the SchoolNet program, and Wayne Tosh, who's the person responsible for the community access program.

Perhaps I can just give a little bit of background to these programs. First off, these programs have been funded to the total amount of $52 million over a five-year period, which ends in 1998-99.

An hon. member: Is that $52 million annually?

Mr. Hull: No. That's the total amount, so it's $13 million a year.

The $52 million covers four program elements, of which we'll only be describing three today: the community access program, the First Nations SchoolNet program, and the SchoolNet program. The Computers for Schools program, which is also covered, is not included in this presentation.

I understand the committee has expressed an interest in these endeavours, and that's in fact why we're covering them, but to actually describe these programs would take a lot more time than is available. What I'll try to do is give you a sense of two things: the structure of the programs and the deliverables and the outputs as far as the community or the client group is concerned.

If you have additional questions, we'd be happy to address those or come back at a later date.

Alan gave the framework for the creation of these programs under the Building a More Innovative Economy agenda. It's quite simple math, if you like. The world is moving toward a more knowledge-based, competitive global economy. That puts a tremendous emphasis on skill sets, particularly technical and entrepreneurial skill sets.

The second major trend is the tremendous and rapid evolution of the information highway. Very few people really comprehend how fast this infrastructure is actually unfolding around the world. The cost of doing it relative to other sorts of infrastructure is very low, so it's unfolding incredibly quickly, even to less developed countries in the world. They're basically leap-frogging over a lot of the infrastructure that Canada has taken fifty to sixty years to put in place and are going to become internationally competitive players very quickly.

It's extremely important that this country get heavily involved in this field, build on the strengths we have and capture the benefits as quickly as possible.

These two programs, the community access program and the SchoolNet program, are aimed at trying to take advantage of that to build the skill sets on young people so they'll be able to enter the job market, very quickly transfer to employment and become well positioned to be entrepreneurs in this global economy. Second, they're aimed at the communities involved producing jobs and growth. Ultimately that's the measure. Somebody was asking what the measures for programs are. Well, they're jobs and growth. If we can't produce jobs and growth then we're not really doing what we're hoping to do.

.1705

The first part of the slide presentation has to do with SchoolNet. What you'll see quickly on this slide is the history of SchoolNet. It started in May 1993 with an attempt to link 12 schools and to see whether we could use the information highway, which was not much talked about in 1993 if you can believe it, to bring additional resources to schools in a very low-cost manner. The program was successful and went on to a goal of linking 300 schools. Today we're up to about 6,000 of the 16,000 schools in Canada being linked to the information highway.

This morning there was an announcement of a partnership between the provincial governments, the federal government, and the telephone companies to link all schools in Canada by the end of the next school year. That will put us about three years ahead of the American goal. In fact, we will have achieved the goal before the U.S. government will actually have got its program very much under way.

The goal of SchoolNet really is to facilitate the linkage of the 16,000 schools and 3,400 libraries in Canada, which are very important to the development of the skill sets we have been talking about, and, in particular, the 447 native communities that fall under the federal government's jurisdiction.

The next slide I won't go through in detail. It covers the fact that these are our aims. Our aims are skill sets, the ways in which we can distribute information across Canada using schools and libraries as delivery points, etc.

The next slide shows effectively the SchoolNet advisory board structure. The key thing here is that the SchoolNet program is a partnership program. The federal government does not have extensive jurisdiction in the area of education. It does have more in the area of the information highway. So we're working very closely with all the educational stakeholders across Canada - the provincial governments, the boards of education, the various educational stakeholders - to unroll this program and to make Canada a leader in the world in information technology and education.

Happily, this is happening very quickly and we're getting an amazing amount of support across Canada by all the stakeholders. Everybody effectively is contributing a little bit of their expertise to make it happen.

The next slide will indicate to you where we stand in terms of the percentages of schools connected. You can see where we are today, which is the light blue, versus the mauve of where we expect to be by the end of next year. In fact, all those bars should be literally 100% by the end of next year. This slide hasn't been updated as of today.

What I'm going to show you in the next few slides are some examples of the sorts of services that are available on SchoolNet now.

This is the SchoolNet home page. There are literally hundreds and hundreds of services available to schools that are connected to SchoolNet. These are free of charge. They bring to the school resources literally from around the world. It's possible to connect to technical experts, scientists and engineers, and news groups on particular areas. Students can consult these individuals freely. Teachers can consult them. We have large amounts of material being made available through very significant organizations, Canadian federal organizations and national organizations in the United States.

Increasingly, as schools get connected they begin to produce this material themselves.

One of the most rapidly emerging areas of SchoolNet is the projects area, grassroots projects where schools are actually inventing projects to interrelate with other schools across Canada and around the world to begin learning interactively. This is something that is within the ability of every school to do. So every school can now be a content provider in this area.

The second project is the national graduate register. This system will shortly be unveiled. It will link all universities and colleges across Canada to an electronic register, allowing Canadian students to put their CVs on line and to have those accessed by Canadian industry, which effectively creates a national labour pool and allows every firm, even a small one, to do on-line campus recruiting across the country.

We hope that this will greatly accelerate the smooth transition of a lot of students, with a lot of government capital behind them in terms of their education, into the labour market as quickly as possible.

The next project is a SchoolNet national atlas. This is a project coming out of Natural Resources Canada and is an example of how a major expertise in a government department can be put to use through education. This system provides on-line map-building capabilities so that students can do mapping for geography, history or economics projects, etc. There are literally hundreds and hundreds of maps in here, and these can be constructed by layers, according to what the students are interested in. We'll be bringing in international maps and local maps over the course of the next year. This is a very powerful tool, and is recognized worldwide as being one of the best sites on the Internet.

.1710

The next project is Accroche-Toi!. This is a very small project, taking $6,000 to get this system on-line, just to give you an idea of the kind of scale you can achieve here. It's an on-line counselling service for at-risk students. This project is a francophone project. There are anglophone projects as well. It allows students to interlink with individuals who can give them some advice on where to go to handle problems about which they otherwise would not have people to whom they could talk.

There's Child Find on-line. This is really a superb service that was developed in New Brunswick. It provides on-line exposure of all students or children in Canada who are missing. Believe it or not, there are 60,000 students annually who go missing. A lot of these are abductions by parents, etc. This system provides a way in which the information on missing children can be spread electronically to all parts of Canada immediately and allows people to actually report sightings of missing children.

This is a very cost-effective system to produce. I think we spent about $15,000 out of our department to do it. Sun Microsystems put money in, and other people as well. The system came up on SchoolNet.

SchoolNet RINGS is a project out of Newfoundland. This is sort of a precursor to the GrassRoots project. There are literally hundreds of curriculum-based, interactive projects that are coming forward from schools throughout Newfoundland that are in fact shared with other schools across Canada.

The GrassRoots project, which I mentioned, is sort of flowing out of the SchoolNet project. This provides a simple, quick grant of $300 to a school for a good curriculum-based educational project. We expect to have hundreds or thousands of these projects on-line within the course of the next year.

At the announcement this morning, Stentor provided $30,000 a year for three years to assist the federal government with the amount of money we've put forward. We expect a lot of other firms to do so as well. We expect, in fact, the provinces to match that amount.

So we will have several millions of dollars that we will be plowing into schools through these $300 grants. That helps them pay the Internet bills, etc., that they will incur in getting connected.

Just two more quick services. The SchoolNet News Network was announced this morning. We had schools all across Canada filing news stories, creating an effectively national student newspaper on-line. This will be issued on a more or less continuing basis during the course of the year to give students tremendous excitement in terms of their literary skills. A lot of them have ambitions to be journalists, etc., so here's a way in which they can report on news in their community.

I can tell you that the Canadian media is interested in getting this as a live feed, and even providing assignments to students to cover local events where they may not have a reporter anywhere near the event.

The Books of Remembrance is another project that some of you may have seen this summer. We had a group of high school students digitize the Books of Remembrance, covering the Second World War and the merchant marine from the Second World War. These are now available on Parliament Hill. There's a live site, which is extremely active. There's tremendous public response to this. Another two books are being done by a local school as a junior achievement project. The last two books are being done in Newfoundland. The Newfoundland Regiment is being done in Newfoundland.

That's the kind of project that's going on right now. We have about thirty or forty of these digitization projects now under way in schools and communities across the country, and we'll be mounting hundreds more over the course of the next year.

The software evaluation service is one that's just coming on-line now. It's an example of how we can use the Internet to produce tremendous economies very quickly. Every province in Canada literally does its own evaluation of educational software. This system allows all provinces to work together, so that software is evaluated only once and in greater depth. Teachers can get a better understanding of how effective that software is for pedagogical purposes.

.1715

It's also extremely important to help Canadian firms that are in the educational software industry to get into the market more quickly. Having a review of the sort we are undertaking under this evaluation service helps them in the marketing of their software abroad. In fact they are very excited about a service like this and what it will help them do in terms of marketing.

Community access - I'm switching gears here - is another program. Its goals and structure are quite a bit different. The aim of this project is to get as many rural and remote communities in Canada onto the information highway as quickly as possible. If in fact the global information economy is going to be coming at us, then we have to have every community in Canada quickly on the information highway marketing their services so they can begin to sell those services internationally.

The power of the information highway is that it cuts through all the middlemen. If you can get your web page up from a small town in northern British Columbia, you could be selling services worldwide at literally no expense and with no middlemen. You can get a lot of services internationally that you would not have a hope of getting any other way. You just simply would not have the resources, including better financing you might find at Canadian banks.

So the goal of this program was to bring a minimum of a thousand communities onto the information highway by 1998. We're in the process of accomplishing that now. The first year of the program is just literally being completed. As you may have known from the Speech from the Throne and the budget, the government has extended the program and increased it to at least 1,500 sites. We anticipate that we'll be able to produce significantly more than that.

It's an annual competitive process that is under way to select the communities. They're provided with grants of up to $30,000, depending upon the nature of their application and the costs they would incur to get on the information highway. Again, the aim of this program is to stimulate jobs and growth.

Just to talk quickly about the approval process, it's a two-tiered system. Communities provide their applications to a local selection committee that's at the provincial level and that knows the communities and how they operate. These provincial committees make their recommendations to the national committee, which effectively, at least in the last round, accepted the applications and rank-ordered them by the amount of money available. These recommendations are then provided to the federal government. In the first round, the federal government accepted the recommendations unchanged.

There were 770 applications received. Of those, 400 were recommended by the committees. We had the funding for 271. Since then, we've added 87 additional communities. More, in fact, may be coming in. So for the first year of the program, we've actually had 358 communities being provided with the resources to come on-line. The target would have been 333, so we're on the positive side in terms of that target. We expect that many more communities will be coming on-line with additional resources.

I can tell you that the provincial governments are now extremely excited about this program. One province today has indicated that they will be making every one of their schools, of which there are 390, into community access sites, so that's literally full coverage across that province.

Why are we doing this? Perhaps I could address the point that was raised by the member earlier about the small communities in northern British Columbia and the problems they may have. You're very right. In fact, the information highway infrastructure is very thin once you get outside urban areas in Canada. We have one of the best telephone services in the world, but whether it will support high-speed access so that businesses can use the Internet is another question. Certainly if you get out into remote locations, that isn't the case.

This program is aiming to change the economics of laying down that infrastructure. There's very little incentive for a company like the telephone company to go to a community and upgrade the infrastructure. Where's the revenue going to come from? But if you go to the community and you show them what the Internet can do and you train them as to how to use it, then you might actually change the economics of attracting that company to upgrade that infrastructure, because now they're paying clients.

One community approached us this morning to say that - this is just down the road in Lanark County, and it was one of the community access sites - they've managed to, based on the community access program, bring all the major users to the table that are in the community, including a number of fairly large businesses, plus other institutions such as hospitals, etc., each of which have contributed $10,000 to a pot.

.1720

A telephone company is now coming to the table and has agreed to upgrade the infrastructure in the community, which moves their target date for doing so from 2015 to May 1996. Effectively they will shortly have a much better infrastructure, and that will allow them to build businesses in the community that they otherwise wouldn't be able to build.

In fact a number of the businesses that were there, including Spar Aerospace and others, have indicated that the poor quality of the infrastructure might encourage them to leave. So the situation has to some extent been turned around, and that will produce additional jobs in that community and keep the employment levels relatively high.

In the next few slides you'll see a number of examples of what is beginning to unfold under the community access program.

This is the home page of CNet, which is the community access electronic network and provides a whole range of services to communities. We're beginning to develop partnerships with various organizations such as the Federation of Canadian Municipalities, etc., to bring on a whole set of additional services of the sort that are under SchoolNet to facilitate local community development. This CNet mapping system allows that to happen very quickly and very economically across Canada.

The next slide shows you an example of one of the early home pages of one of the towns that was very early on in the community access program, Gagetown. That community in fact is a community of only 600 people, of which half were trained on the Internet through the community access site. Most of the adult population has been trained. From that will come ability to draw material from the Internet and ability to contribute material to the Internet, and hopefully additional business activity.

An example of one of the projects the community has undertaken is they have digitized a major collection of papers and memorabilia of the prime ministers of Canada. This is the kind of thing they're able to do now. They can do it on-line from the comfort of their own homes and communities. There's no reason that, for example, when the federal government gets into the digitization of its activities - and the provinces and other organizations - they can't send those kinds of projects to Gagetown to have them done, because now Gagetown is on the highway.

In fact Gagetown is cheaper than Toronto. So if you're looking for a good place to do business, do it in Gagetown, and they'll tell you that.

An hon. member: [Inaudible - Editor].

Mr. Hull: The point of the matter is they're in the market, so the market can sort out where the work should be done, but Gagetown has a -

An hon. member: [Inaudible - Editor].

Mr. Hull: Okay. The next one is Coaticook, which is a small town in Quebec where a home page has been created, again showing some of the services they can provide. The following slide shows one particular project they're very proud of, which is a municipal recycling program. They're letting other communities across Canada know how that program is working in Coaticook.

Steinbach is in Manitoba. Quite a number of communities in Manitoba applied. In fact one of the highest application rates across Canada was from Manitoba. There's a number of very active sites in that province, and this is an example of one. They have put up a description of the services that exist in their community.

I should tell you these are very rudimentary at this point. People are basically learning how to play with this sort of stuff. But as we get more sophisticated over the course of the next few years, we're going to be able to put up some very powerful information.

An example is tourism information. As bed and breakfast organizations and tourist establishments come on, they can now track clients worldwide as to when they plan to be in Manitoba or when they plan to be in Saskatchewan, because you can do all this planning on the net. In fact a large portion of the travelling population is now using the net to do its travel plans.

Another example is a Mennonite community where in fact they've begun to digitize the Mennonite heritage collection and put that up on the net. This is an example of sharing a Canadian culture that literally would be impossible to share any other way than by doing it on the net, other than if you happen to be visiting that particular site.

We don't have too many examples at this point of jobs and growth. We have some examples, however, and over the course of the next year we'd be happy to keep you informed as we begin to generate a lot more of these success stories.

.1725

The Vice-Chairman (Mr. Valeri): Do students have access to SchoolNet?

Mr. Hull: Yes. SchoolNet is a free service. It's on the Internet and it's available to anybody who dials in.

The Vice-Chairman (Mr. Valeri): Thank you very much. Your timing is perfect, as I see the bells are going for the vote at 5:45.

On behalf of the committee I'd like to thank the witnesses. Certainly by the discourse we've had this afternoon you've come to appreciate how much interest there is on this science and tech review topic. We as a committee perhaps have to look at it a little more closely as to how we're going to tackle this big issue and how we can structure it so we can get the most information and have the greatest impact.

I look forward to our meeting tomorrow afternoon, which is at 3:30 in 209 West Block, where we'll be discussing the information highway.

Mr. Schmidt: How many of us here have seen the Strategis presentation? I've seen it, and I really don't want to spend the committee's time looking at that.

The Vice-Chairman (Mr. Valeri): I haven't personally seen it. I don't know who has.

Mr. Schmidt: Could we have the Strategis presentation last and the info highway first?

The Vice-Chairman (Mr. Valeri): Sure, we can arrange that in terms of our meeting tomorrow.

I look forward to the meeting tomorrow, and thank you very much again.

The meeting is adjourned.

Return to Committee Home Page