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Marc Garneau’s speech to the house

April 4, 2009

Thanks Derek for sending the transcript. Here it is

Science, Research and Innovation

Mr. Speaker

On a personal note: if there is one reason more than any other that brought me into politics, it is the issue about which I am about to speak.

Simply put:

“Science, Research and Innovation are the foundations of a strong economy. They will create the jobs of tomorrow”

Mr. Speaker, it is clear to me that the current government does not understand what I have just said. This is particularly apparent if we look at their recent budget and indeed at all the budgets they’ve brought down.

Notwithstanding all their pronouncements, they have failed to grasp the importance of establishing policies that will ensure long term, predictable and globally competitive federal funding.

Before I get into details, I want to focus on a crucial part of what I’ve just said. I’m referring to: THE JOBS OF TOMORROW.

How is this different from the jobs of today?

First an important observation: the economic blueprint for Canada in the 20th century no longer applies. The Canada that was content to sell its natural resources and low-tech products to the rest of the World can no longer assume that it will remain prosperous in the 21st century. The world has changed, not only because of globalization but for other reasons as well. There is indeed a new paradigm at work.

And while resources remain an important component of our economy, it is knowledge and the resulting products and services that result from that knowledge that will ensure that we secure a prosperous future for our children. That is where the jobs of the future lie.

In this world where emerging countries now have hundreds of millions of new middle class, well educated citizens who have ferociously embraced the virtues of open competition, Canada risks being left standing while others race ahead. Emerging countries are not only producing low-tech manufactured products more cheaply than we are, they are beginning to produce high tech products that will soon flood global markets.

In this world where a country such as India produces more PhDs than the United States; in this world where the Internet has levelled the playing field in terms of access to knowledge, there are no longer any safe assumptions about the future other than the fact that knowledge and the application of that knowledge will determine who prospers.

In this interconnected world where Productivity and Innovation determine wealth and economic security, where does Canada stand?

Monsieur le président, les statistiques sont peu encourageantes.

Sur la question de la productivité, le Canada recule depuis les derniers cinq quarts, sa pire performance depuis 20 ans.

En autres mots, le Canada n’est pas compétitif face à la concurrence.

Sur la question de l’innovation, le Canada se classe au 13-ieme  rang sur 17 selon une analyse du Conference Board of Canada réalisée en 2008.

Il n’y a certainement pas de quoi se réjouir. Sommes-nous en train de créer les emplois de l’avenir ?

La réponse est clairement NON !

Nous sommes fiers de nos succès comme Bombardier, Research In Motion, Ubisoft, Nortel, Apotex, notre secteur spatial et bien d’autres, mais la réalité est que nous devons faire encore mieux. Nous avons une population extrêmement bien éduquée et nous devons absolument l’exploiter.

Mais cela nécessite des politiques fédérales qui nous permettront de réaliser ce potentiel. Nos voisins le savent. Nos adversaires le savent. Seul ce gouvernement ne le sait pas.

As a first step Mr. Speaker, let me say the following:

Science, Research and Innovation require a long term approach, not an “ad hoc, one year at a time” approach.  What is equally important if you believe in a long term approach is to SAY IT LOUD and CLEAR. Our scientists and our Knowledge based industries must hear it from the government. Hearing it allows them to plan for the long term. It allows them to truly commit themselves to research and innovation. It sends them the message that what they do is important for the future of our country.

Secondly Mr. Speaker, governments should not be trying to pick winners. They should not favour applied research if it means that fundamental research will suffer. They should not focus on commercially oriented science if this means that other science will suffer.

Doing so fails to recognize that great societies advance on all fronts and that all research benefits us all, often in ways that we had not anticipated. It is the supreme conceit for a government to assume otherwise.

This does not mean that certain strategic areas of research cannot be given an additional impetus. Playing to your strength or trying to take the lead in a particular field is a smart thing to do as long as it is not done at the expense of other research.

And of course Mr. Speaker, it doesn’t help to create a positive climate of cooperation between the government and our university stakeholders when the minister of State for Science and Technology bullies the Executive Director of the Canadian Association of University Teachers, as happened recently. Shouting, interrupting and telling your visitors to shut up only serves to create a chill between government and those with which it needs to create strong links.

Another illustration of the fact that this government does not understand the importance of science was the elimination of the National Science Advisor position. The purpose of this position was to offer the Prime Minister the opportunity to consult directly with a respected scientist who would offer not only advice but also the unvarnished truth about Canada’s scientific performance. Both the United States and Britain have highly respected National Science Advisors.

For instance, a Canadian National Science Advisor could have told the Prime Minister early in his mandate that Climate change really does exist and the Prime Minister could then have acted expeditiously.

Looking at the recent budget, it is clear that this government doesn’t have a coherent strategy for scientific research. While it funded certain areas, it totally overlooked others. Some examples:

1. It implemented so-called efficiency cuts of $148 million dollars over three years to the three Research Granting Councils without increasing their operating budgets:

2. It failed to fund Genome Canada in this budget so that it could undertake its next cycle of research funding in cooperation with its public and private sector partners.

3. The National Research Council was not funded for research in this budget and was instructed to find savings of $27.6 million dollars over three years as part of its strategic review.

4. The program to fund the indirect costs of Research was also cut.

Monsieur le président, personne ne dispute le besoin de faire des revues stratégiques de temps en temps au sein d’organisations fédérales afin d’optimiser leur fonctionnement.

Mais la question qui se pose est la suivante : quand nos voisins ont clairement reconnu l’importance d’augmenter leurs investissements en science et en recherche afin de créer les emplois de l’avenir, pourquoi est-ce que ce gouvernement n’a pas également décidé d’augmenter les budgets des organisations que je viens d’identifier ?

Non seulement ça, mais si l’on ajuste pour l’inflation, les montants dépensés par ce gouvernement pour financer la recherche en sciences naturelles, en génie, en sciences sociales et dans les humanités sont a la baisse depuis l’arrivée des conservateurs au pouvoir, non-obstant les déclarations du Ministre d’Etat.

Et j’ajouterais le constat suivant qui en dit beaucoup sur la priorités qu’accorde ce gouvernement a la recherche : la proportion des dépenses du gouvernement allouées a la recherche versus ses dépenses totales, a généralement augmenté a partir de 1996 sous le gouvernement libéral mais diminue continuellement depuis l’accès de ce gouvernement au pouvoir. Sous le gouvernement libéral, 4.9% des dépenses fédérales étaient réservés pour la recherche. En 2008, ce chiffre a diminué a 4.1%.

J’aimerais également signaler que ce gouvernement voudrait que les deux milliards de dollars en infrastructure qu’il a annoncés pour nos universités et collèges soient identifiés comme faisant partie des fonds alloués a la science et la recherche. La réalité comme nos le savons tous est que cet argent, s’adresse a l’entretien de bâtiments et a d’autres projets d’infrastructure et comme tel, ne représente pas un investissement direct dans la recherche scientifique.

D’ailleurs, si je peux utiliser une expression bien québécoise, la chicane a poigné entre ce gouvernement et les universités concernant ce deux milliards. Le gouvernement semblerait-il, voudrait que l’argent soit dépensée exclusivement sur des infrastructures universitaires reliées directement a la recherche scientifique tandis que les universités voudraient que l’argent soit dépensé de facon plus générale.

Mr. Speaker, when comparing federal spending on research in 2008 to that in 2005 and adjusting for inflation, research has decreased in the following ministries:
1.    Agriculture and /Agri-food Canada
2.    Environment Canada
3.    Fisheries and Oceans
4.    Industry Canada
5.    National Defence
6.    the NRC

Another interesting statistic deals with the Gross Domestic Expenditure on R&D, or GERD.

Canadian Gross Domestic expenditure on R&D as a proportion of GDP rose significantly under the Liberal government, to just over 2%, well over the OECD average of 1.5%. Unfortunately, over the past two years, GERD as a percentage of GDP has declined, led by a failure of this government to maintain continuing investment in R&D. Not only is this government failing to rise to the occasion, it’s actually sliding backwards at a time when it should be demonstrating a strong commitment to research.

At a time when President Obama is making massive investments in basic research in fields such as Health, renewable energy development, energy efficiency, electronic medical records, broadband, smart electrical grids and other areas, why has the government’s approach been so piecemeal and incoherent?

Mr. Speaker, where is the vision? Where is the strategy?

I would now like to focus on innovation and the elements that allow a country such as Canada to be innovative.

Let me begin by identifying one area where Canada has done very well until the Conservatives took over. I’m speaking of course of the funding by the federal government of our Universities and research hospitals. The reason we have done so well in this area is because of the visionary decisions taken by the Chrétien and Martin governments to reinvigorate research in our public research institutions.

•    Since 1997, consecutive Liberal governments have committed $12 billion in new funding to support basic research.  As a result, Canada is now the G-7 leader in terms of university research and development.

•    Liberal governments more than doubled the budgets of Canada’s Research Granting Councils to a total of $1.6 billion in 2004-2005.

It is under liberal leadership that Canada saw the creation of the following important programs: the Canada Foundation for Innovation, the Canada Research Chairs program, Genome Canada and the Program to fund the Indirect Costs of Research. These far-reaching programs lifted Canada out of a hole and made us leaders in funding public research.

Créer des programmes qui nourrissent la recherche dans nos universités et nos hôpitaux de recherche, est certainement essentiel Monsieur le président, mais ce n’est pas suffisant pour assurer que le Canada devienne un chef de file en innovation.

Il faut bien plus que cela, car une politique fédérale en innovation exige une approche cohérente qui reconnaît tous les éléments essentiels à l’innovation. Et il y en a plusieurs comme nous le savons tous. Etre créatif c’est une chose. Mettre un nouveau produit ou service sur le marché exige beaucoup plus.

Nous savons tous que la recherche peut mener a la création d’idées prometteuses mais que plusieurs défis doivent être relevées avant que cette recherche mène a la commercialisation ; avant qu’il en résulte un produit ou un service que les gens veulent acheter. Et c’est ici qu’il faut reconnaître les autres éléments essentiels à l’innovation.

Mr. Speaker, let me cover some of those other elements essential to innovation.

One of them is access to Venture capital to allow companies involved in R&D to fund the effort required to develop promising research into a marketable product or service. Often that effort takes many years and often, it is undertaken by small and medium sized companies that have no source of revenue other than Venture Capital.

While Venture capital pools increased steadily in the U.S. between 2003 and 2008, they decreased in Canada according to the Canadian Venture Capital Association.

Mr. Speaker, this is cause for concern since Venture Capital is one of the essential elements required to support innovation. This government should be in active discussion with the venture capital industry to see how it can help improve the growth of venture capital.

Another essential element deals with Intellectual property. The reality Mr. Speaker is that Canadian intellectual property laws are weak in Canada and must be strengthened in order that those who generate that intellectual property can own it. Without that protection, innovators are not assured that the fruits of their hard work will remain under their control.

Another very important role for government in fostering innovation is to provide tax incentives in the form of credits, some of them refundable, to companies which engage in research. While the current Scientific Research & Experimental Development (or SR&ED) program does address this requirement to some extent, it has also proven to be cumbersome to use and restricted in its application. This program needs to be re-examined immediately in order to ensure that Canada is using it as effectively as possible to support promising research.

Finally, effective transfer of promising research to the marketplace requires strong linkages between those who perform the research and those who know how to commercialize and market the fruits of that research. Some mechanisms are in place but we have the right to ask whether they are achieving their intended objectives or do we need to look at other methods that would be more effective in creating effective partnerships between the public and private sectors? We should certainly be pursuing this aggressively if we hope to become a more innovative country.

Mr. Speaker, this government is putting the squeeze on science when it should be committing to an even greater role for Science in the 21st Century.

To paraphrase a recent headline: “Canadian research lacks adequate funding and the government, a coherent vision. While the U.S. invests heavily in science as a key part of its economic revival, Canada is spending less and putting scientists out of work”.

Mr. Speaker, I don’t think I can be any more succinct than that.

On top of that, the conservative minister of state continues to erode relations with the very sector he is there to support. His combative, top down approach is indicative of this government’s failure to work in partnership with stakeholders.

In closing, let me illustrate the stark contrast between what this government is doing and what are American neighbours are doing:

U.S. President Barack Obama’s stimulus package is investing a total of $65 billion over the next two years in the knowledge-based economy. On a per capita basis, this is 6 TIMES more than Canada’s investment. This is why the  US will be a leader in creating the companies and jobs of the future, while Canada risks getting left behind.

•    Mr. Speaker, what is it about this the Conservatives don’t understand?

Given that this government has failed to improve Canada’s research funding to build Canada into a competitive, progressive knowledge-based economy, and given that science, research and innovation are the foundations of a strong economy and the creators of the jobs of tomorrow…

For those reasons Mr. Speaker, it is essential that this government reinvest in these areas to ensure long term, predictable and globally competitive federal funding for science in order to make Canada a leading innovator on the world stage.

Thank you.

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