Government Operations Committee on Dec. 1st, 2011

[Richard Dicerni]

This foundation is a third party providing help and encouragement to young entrepreneurs who do not have much experience but who have good business plans and need support to launch their businesses. It is well managed and it is an excellent organization. The government has been supporting it for the last three years. I must add that they also have funding from other sources. We are not the only ones supporting them.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Therefore, young entrepreneurship is well supported.

[Richard Dicerni]

It is meant for young people. As I said, this is often the first bit of assistance they get. Once they get a bit more experience, they can contact the Business Development Bank of Canada, which may support them. When people are young, fresh out of university and need some support because they have good ideas, new companies are often launched thanks to this type of investment.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Initially, the money spent on the knowledge infrastructure enables a variety of young people to acquire the skills that will permit them to be more competitive in the economic world. There is also the second initiative intended for young entrepreneurs and other people. As for the total envelope of $250 million, how is it being distributed among Canadian universities?

[Richard Dicerni]

This federal government program totals approximately $2 billion. The $250 million is a part of supplementary estimates (B), which you have in front of you. It represents the last part devoted to the projects that had not been completed by the end of the fiscal year, in other words, March 31, 2011. These are projects that required an additional six months to be completed.

The breakdown was approximately 65% for universities and 35% for CEGEPs and community colleges. I should also add that the $2 billion invested by the federal government contributed to collecting an additional $2 billion to $2.5 billion from other partners, especially the provinces. Therefore, as a result, there was a total investment of approximately $4.5 billion in the post-secondary sector for infrastructure renewal.

[The Chair, NDP, Pat Martin]

Thank you, Jacques. Your time is up.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Mr. Chair, the answers to my questions were very pertinent.

[The Chair, NDP, Pat Martin]

Merci.

On behalf of the NDP, then, Ève Péclet. You have five minutes, Ève.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

I would simply like to continue along the same lines, regarding the Knowledge Infrastructure Program that was created in 2009. No sum had been allocated at the time the budget was tabled. Why has the government now decided to ask for an injection of approximately $243 million? Why was this fund not included in the main estimates, but rather in supplementary estimates (B)?

[Richard Dicerni]

I must go back. You mentioned Budget 2009, which contained this envelope of $2 billion spread over two years, in other words, $1 billion in the first year and $1 billion in the second year.

The government decided to delay a part of these funds. It was part of the $2 billion. It was a scheduling and timing issue. In fact, we had to determine the amounts necessary to complete these projects. Therefore, these are appropriations that had already been approved in the past, because they were a part of previous budgets. These unincurred expenditures were deferred because the universities, colleges and CEGEPs did not have enough time to complete all of their projects.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

You are talking about the $2-billion amount that was allocated for this fund. You are requesting $243 million. Does this mean that the $2 billion has been spent since 2009?

[Richard Dicerni]

The $243 million must be deducted from the $2 billion.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

So a part of the money still remains.

[Richard Dicerni]

This money will be spent this year, between April 1 and October 30, because people could not complete a certain number of projects on time for a variety of reasons, for example, the floods in Manitoba. I think you will hear the same findings later on from the Department of Transport, Infrastructure and Communities officials since they faced the same problem.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Do I still have time left?

[The Chair, NDP, Pat Martin]

Yes, you have two and a half minutes.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

As for Technology Partnerships Canada and the Strategic Aerospace and Defence Initiative, once again, no amounts were allocated when the budget was tabled, in other words, in the main estimates. However, now the government has decided to inject $21 million into the Technology Partnerships Canada and the Strategic Aerospace and Defence Initiative.

Could you tell us how the amounts will be distributed between the two parts of the program?

[Richard Dicerni]

The Strategic Aerospace and Defence Initiative is funded by two main sources. The first source of funding is the main estimates, which allocates approximately $135 million or $140 million, and the second source of funding consists of reimbursements from old programs, such as Technology Partnerships Canada.

On average, the department receives between $100 million and $110 million annually from projects funded in the past for which companies promised to pay us a return. We lend the money to these companies, and they repay us from their sales, such as engine sales. For example, Pratt & Whitney will repay us from its sales.

These amounts are partially reinvested in the program. The approximately $20 million that you have in front of you for supplementary estimates (B) originates from the royalties that the companies pay to the government. We usually receive these amounts in the last quarter, that is, in January, February or March. Therefore, it is too late to include these amounts in the main estimates. This is why it is done in the supplementary estimates.

[The Chair, NDP, Pat Martin]

Your five minutes are up now. Thank you very much.

Welcome to the committee, Mr. Chungsen Leung. You have five minutes.

[Chungsen Leung, Conservative, Willowdale, ON]

Thank you, Mr. Chair.

My question has to do more with the AECL. Why is there a budget for it when the company is being sold? Or is this the...?

[Richard Dicerni]

Is that AECL, sir?

[Chungsen Leung, Conservative, Willowdale, ON]

Yes. I noticed that there was a question in here.

[Richard Dicerni]

Which page is that?

[Chungsen Leung, Conservative, Willowdale, ON]

That's not under the budget.

Let me change the focus, on the digital technologies, to looking for how it helps the economy. What do you see as the long-term measuring stick for evaluating this program?

[Richard Dicerni]

There are a variety of measures. Canada has a very low adoption rate in regard to SMEs as compared to, for example, the United States. Much less of our economic commerce is done via technology. I know the industry committee has been having hearings on the issue of e-commerce, and I think will provide a report shortly.

Our adoption rate is approximately 76%, whereas in the U.S. it is in the high 80% range. According to analysts, to a large degree this could explain the difference in productivity between Canada and the U.S. So one of the measures we'd be looking at would be SME take-up of technology. Another one would be e-commerce, to ascertain how much additional business is done through the Internet. A third measure would be the number of students who actually register in various ICT programs at colleges and universities. A fourth factor would be the health of the overall ICT sector. We believe that the ICT sector is a very important one for a modern, mature economy like Canada's.

Those would be some of the indicators we would be looking at.