March 12, 2009
Ottawa, Ontario

Address by the Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway, at the Eighth Annual Research Money Conference

Based on a Transcript

It’s a privilege for me to be with you here today. I appreciate the efforts that companies such as yours make to raise the profile of science and technology initiatives, of companies and of opportunities. It’s very important that companies like yours, those of you who are involved in the private sector, are here today and tomorrow—we hope because of your efforts and maybe because of our [efforts as well].

In terms of the overall approach that we take, [I would say that] words are good but actions are better. In its most recent budget, the government invested, in terms of resources, just over $5 billion in a full range of research and other programs, innovative dollars that are made available right across the spectrum. Of course, the areas that I deal with are related primarily to trade. We have a goal, and we’re on track with this goal, of having the best and most favourable R & D tax offerings of any country in the G7, and we want to continue along that vein. We want to maintain a high level of competitive reality [so that we can] continue to attract both within Canada the types of investment, the types of research and technology that are going to continue to expand our opportunities here in Canada.

I’m told that Canadians generate 4.4 percent of all the papers on science and technology that are published around the world. Now I don’t know who the guy or the woman is who sat up late one night and read all the publication papers done in the world and determined that Canada’s are 4.4 percent, but that’s a pretty fair percentage. And I say papers are good and publishing is good but, again, actions are even better, and that’s why on the trade side I believe we’re there in a very active, very robust way and we want to continue to be so.

[We have a range of] global commerce and global partnership programs. One of these, Going Global, covers up to 75 percent of a company’s costs so they can get out and go global and do the kind of face-to-face meetings and opportunities that are required. If you’ve got a product and you’ve got a process or a service that you want to get out there, we assist in [making that happen]. Just within our trade department, we’ve got a $20-million program to encourage science and technology agreements with other countries.

The first visit that I did as trade minister was to Brazil, and one of the things I did there was to sign science and technology agreements to encourage research and development activity, innovation on both sides of those borders, and always with a mind and a hope to see research and development and science and technology agreements resulting in marketplace realities. It may be a particular product that then gets sold in a market or it may be a service that gets developed that can have broad applications in one or more countries.

One of the science and technology agreements that were signed, and this is related to China, is a joint project with McMaster University to look at and develop transponders that can be used in traffic applications. I don’t know if you’ve driven in Beijing or Mumbai lately, but if you think you’ve got traffic challenges, well, [those cities] kind of redefine that whole challenge. And so if applications can be developed that make those operations more smooth, then everybody benefits and that’s something that can have applications across a broad number of countries.

I’d just like to ask the question: has anybody ever driven in Mumbai? Hmm—and you’re here to tell the story. Well, I’m fascinated by one of the things—not just in Mumbai—but I’m using that as an example. It’s more lanes of traffic than you can count, [but] you can’t really count [them] because nobody seems to follow the lanes. And the traffic is so tight and so condensed that most people have removed the side mirrors from their vehicles because they would clip each other. That’s how tight it is.

And yet, in driving in that kind of highly charged atmosphere, horns honk all the time. And it took me a while to realize nobody’s really angry. The horn is being honked to let the person know you are right behind them or right beside them. And I will say that I’m glad this research is going on because I was fascinated to see that after several days of driving around there, I didn’t see a traffic accident. Now maybe that’s because they immediately got smothered when it happened, I don’t know. But I see more traffic accidents in an hour of driving around Penticton in my constituency than I did in Mumbai, and I say that quite seriously.

So somehow there’s this collective mental thing that happens with millions of people at one time, and I’m glad there’s some research being developed to capture that, because not only is it going to help traffic patterns in Mumbai, it’s going to help traffic patterns in Penticton, where we don’t have it as figured out. But it shows that some of the relationships and the research and technology that happens and the studies that go on can produce, not just a market product, but in fact a service that can benefit a broad range of the population.

Once a science and technology agreement is signed, a call for proposals goes out and it’s very encouraging to see what happens from those particular proposals. With our science and technology agreement with China, right after the call for proposals went out, there were some 340 responses, all very good. And some 26 different agreements were contracted, resulting in over $18 million of research from all partners involved. It’s hard to say how many further agreements, products and services are going to expand from just that one particular agreement.

The other thing about our S&T agreements is that they help to open up broader discussions on trade. As you know, we don’t have a free trade agreement as such with Brazil. But when you sign a science and technology agreement, it begins to open up trade opportunities that then lead to broader discussions on which particular areas we can have agreement to reduce tariffs in, to have regulatory harmonization, to compare our tax regimes, to look at investment possibilities. So these S&T agreements do more than just build certain bridges between initial groups, academic or business: they tend to broaden into much more active and much more robust trade discussions that wind up benefiting everybody in the longer term.

I can see from your program you’ve got people who today are going to be talking about some of these things in more specific ways. Mark Kershey [President, Spartan Bioscience Inc.] is going to be talking about the biospace or the bioscience program, and I think David Fung, as he is a director of ISTP Canada, is going to be talking about the opportunities there. So you’re going to be able to hear some very specific applications of what we’re seeing happening.

The importance of this particular approach going forward in a time of global downturn needs to be underlined just for a moment, because as much as people think that a time like this is not a great time—and it’s not, financially, and it’s not, economically—it is a time of opportunity, because when your economies are turning downward, there are two impulses that begin to kick in. One of these can be a protective impulse, and that’s where individual industries, on both the management side and the labour side, immediately rush to government and say, “Protect us, protect us. The economies are turning down, things are getting tighter, so what we need to do is build up trade walls.” Well, that’s the last thing that you want to be doing. You build a trade wall up and economies start to go down. We know that historically.

But we can’t just say to those business groups and labour groups and employee groups, well, we’re not going to do anything. We say, “You know what? We’re going to open the opportunities; we’re going to increase the opportunities.” That’s why we’re so aggressive on trade right now; we’re so aggressive on free trade agreements. We’ve [moved] out of the committee stage and into third reading in the House of Commons—today, actually—with a free trade agreement with [the states of the European Free Trade Association] Iceland, Liechtenstein, Norway and Switzerland, and that’s going to lever a broader discussion with the whole EU market.

A few days from now—and you’re hearing it here first, and I know there’s no media in the room so I can tell you the secret; I know you won’t leak it—a few days from now we’ll also be tabling free trade agreements with Peru and Colombia. And we’re close to concluding the final elements of an agreement with Panama. When I was in India in November, I met with the Indian prime minister [Manmohan Singh] and the minister of commerce and industry [Kamal Nath]. We have an agreement now to begin discussions on a more comprehensive, more formal trade agreement with India. I’ll be in China next month. We’ll be announcing the opening of six new trade offices and looking at expanding opportunities there.

So we’re doing what may seem counterintuitive; we’re doing precisely the opposite of what some impulse might be, which is to become internalized. We’re going outside; we’re being more aggressive to open up those opportunities. When you think about it, it was [during the] tech downturn in 2000-2002 that the BlackBerry emerged, and of course I don’t have to tell you about the success of that particular operation, [and of the many] spinoffs that at one time were unimaginable from one very successful Canadian product.

Of course, it has helped that [U.S.] President [Barack] Obama has commented consistently that the Secret Service wants to take away his BlackBerry and, you know, he said, “They’re going to have to pry it loose from my fingers.” I mean, you can’t buy that kind of advertising. But that didn’t just happen. The product, the Canadian product, was successful, developed and marketed in a downturn of the economy. Things can happen if we’re ready and if our businesses, if the playing field, is as clear as possible for our businesses to do things.

But we are aggressively moving in this field of science, technology, innovation, partnerships, free trade agreements, making sure we have the most competitive tax regime, opening up and expanding our credit capabilities with organizations like EDC [Export Development Canada] to make sure that in this downturn, business and innovation and science and universities are still free to do what they do best without being encumbered by government. [We] are looking at what we can do through government to assist the energies and the intellectual power and the innovative power which Canadians so capably demonstrate around the world time and time again.

And just to close out with the thought that, at a time when we hear a lot in the news about the negative things that are going down—obviously I’m choosing my words carefully here. I like to encourage the media to think about the effect of how they broadcast. And I want to make this clear: this is not government control of the media. We believe in freedom of the press; let me make that very clear. We need, however, to be thinking all the time about the effect of the media. We would never suggest that negative things should not be covered or negative stories should not be covered; of course they should be.

But I want you to think that as innovators and as investors and as developers of thought and products and services, we are living in a particular era where the public is being pounded mercilessly, 24 hours a day, with the darkest, grimmest projections of the fate of civilization itself because of another regular downturn in the market. And if people have not observed, since the beginning of time, markets go up, markets go down.

I ran into a friend of mine the other day, a constituent, who said, “I’ve lost $150,000 on my investments.” And I said, “Oh, did you sell?” And he said, “No, I haven’t sold, but I’ve lost $150,000.” I said, “No, the value of those investments has dropped $150,000, but you haven’t sold yet. Surely, you’re going to wait until the inevitable upturn in the market.” And he kind of grumbled and said, “Okay, well, all right, you have a point there.”

But the point is this: in the last few days, there’s been some resurgence in the markets—Asia, New York, TSX. And I love hearing about this. When there’s a downturn in the market, the headline is “Market Crashes.” When there’s an upturn, [for] two, three, even four days, further on in the financial pages is “Possible Uptick.” And I heard a great expression by a media person broadcasting this because there were a couple of very positive upticks in a number of markets, and he said, “We’re still trying to determine if this is an uptick or if it’s just a market head fake.” A market head fake. Now I want you to picture that. The market saying, “Let’s fake people out. Let’s make like we’re investing but really not.”

And so the thought I want to close with, with the job losses that are reported-and they should be reported, and there are job losses and we need to focus on that. Now I’ll be honest, I haven’t seen the headlines, the front page, but was it on the front page today that Bombardier signed a deal with Lufthansa? Was that on the front page today?

Thank you.