Industry Committee on Sept. 28th, 2006

[The Chair, Conservative, James Rajotte]

We'll call the meeting to order.

This meeting has been specially set up in order to review the government's announced budget cuts, which were detailed on September 25, earlier this week.

We have asked officials from the Department of Industry to appear before us today, and they have accommodated us. From the department we have Richard Dicerni, the deputy minister; Carole Swan, the senior associate deputy minister; and Tom Wright, the assistant deputy minister.

I certainly want to thank you for rearranging your schedules on such short notice and appearing before us today. Many of us have seen you many times before. This is obviously a special meeting. We will be spending an hour and a half discussing the government's items announced on September 25.

Just before we go into a brief presentation by Mr. Dicerni, I do want to make it clear that the officials are here to present information on what the government's plans are. They are obviously not political. They are not members of Parliament. They are not ministers. They are not here to give the political reasoning behind the expenditure reductions; those are obviously given by ministers.

As Mr. Carrie mentioned last time, if we as a committee want to get into the political rationale for the decisions made by the government, we're certainly free to invite people like the President of the Treasury Board, John Baird, who can certainly provide those answers.

So I will be holding members to that, that this is for information and explanation. I've told that to the witnesses as well, so they know what's expected of them.

I understand, Mr. Dicerni, you have a brief opening statement. I recognize that there is nothing to hand out, but that's because we didn't give you any time to present anything in written form. We'd appreciate any comments you have as an opening statement.

Welcome.

[Richard Dicerni, Deputy Minister, Department of Industry]

Thank you.

My comments will be very brief, because I assume that if you've asked us to come and appear before you, it is not to listen to bureaucrats wax eloquently.

My opening remarks are on the verge of being completed.

We will do our best to answer your questions without exceeding the limits that officials must respect in circumstances like these.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Dicerni. You've set a record for the shortest presentation by any witness to a committee, which means Mr. McTeague has to buy you dinner. We will inform him of that.

We'll start with Mr. Lapierre.

[Jean Lapierre, Liberal, Outremont, QC]

Thank you very much, Mr. Chairman.

Mr. Dicerni, ladies and gentlemen, welcome, and thank you for your availability on such short notice.

To start with, I am interested in two things. Let's begin by talking about the budget cuts. As regards to your department, it says:

Funding for third parties to further their interests or programs that are not effective, do not achieve results or are being re-focused or targeted for improved effectiveness.

Do you consider Technology Partnerships Canada an effective program that does not yield tangible results?

[Richard Dicerni]

If I am not mistaken, Monday's announcement called for a reduction of approximately $20 million for this year, and the same amount for next year. I think, as Mr. Bernier mentioned yesterday in the House, that this program still has enough money to continue investing in a number of projects. Moreover, I am confident that several announcements will be made shortly under this program.

[Jean Lapierre, Liberal, Outremont, QC]

There was in fact talk of a surplus. If I'm not mistaken, with respect to this program, there are applications on the minister's desk that usually well exceed the funds remaining.

Since January, how many applications have been processed, how many have been accepted, and how many are on hold?

[Richard Dicerni]

I would have to get back to you on that. With 24-hours notice, I did not have an opportunity to put together as large a file of analyses as I normally would.

This program receives a number of applications. As I was saying, we expect to be in a position to make some announcements shortly. We'll be able to give you more exact numbers then.

[Jean Lapierre, Liberal, Outremont, QC]

Since January, have applications been approved under the Technology Partnerships Canada program? I know that when the government changed hands, some applications were on hold. Companies have been waiting for a reply since January.

Since January, have there being any positive replies to these applications?

[Richard Dicerni]

As you know, I have only been in this job for a short time. Perhaps my colleague, Mr. Wright, could provide you with more information.

When the minister was appointed, he undertook to review the program, because of a number of concerns with regard to its management and to ensure transparency and accountability. These reviews have been completed; Mr. Bernier released them publicly recently. As I was telling you, we expect the government to make a number of announcements relating to this program shortly.

[Jean Lapierre, Liberal, Outremont, QC]

But Mr. Wright must know if applications have been accepted and if files have been dealt with, because, after all, it's been eight months.

[Tom Wright, Assistant Deputy Minister, Department of Industry]

I must admit that I would have to check whether the recommendations have made it through the decision and announcement stages. Progress is being made on many files. As the deputy minister mentioned, there will undoubtedly be announcements shortly. I would have to check.

[Richard Dicerni]

I've been on the job since May 1^st, and to the best of my knowledge, there haven't been any announcements about specific projects.

[Jean Lapierre, Liberal, Outremont, QC]

The announcements come as a surprise. However, when were you and the minister consulted about these budget cuts? Was the consultation protracted and perilous, or did it take place last Sunday?

[Richard Dicerni]

I've had the opportunity to work for different governments at the federal and provincial levels, namely for Mr. Rae and Mr. Harris. All of these governments had to deal with fiscal constraints, budgets, and budget cuts. Each government uses its own approach. It varies according to the financial requirements and the objectives people are pursuing.

[Jean Lapierre, Liberal, Outremont, QC]

In this case, when were you consulted? When was the minister informed?

[Richard Dicerni]

This is getting dangerously close to the ministerial decision-making process. I'd better be very cautious. This is getting very close to the ministerial decision-making process, to what goes on between the deputy minister and the minister.

[Jean Lapierre, Liberal, Outremont, QC]

I'm not trying to corner you, but according to my sources, you were consulted last Sunday's evening.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Jean Lapierre, Liberal, Outremont, QC]

You are talking about reviewing the program, but dozens of people are waiting for a response from Technology Partnerships Canada and are very concerned about the future of the entire aerospace industry.

Is it true that formal announcements should be coming in November regarding both the applications that the department is considering and the future of this program?

[Richard Dicerni]

We had an opportunity to meet representatives from the aeronautics industry a few days ago. Mr. Bernier met with them, and I spent several hours with them. The sector is very important for Canada. It makes an important contribution to Canada in different areas. That contribution is widely acknowledged.

As regards the announcements, I believe that Mr. Bernier has stated that the program must be reviewed. I have talked about a number of ad hoc situations. The minister wanted to ensure transparency in accountability for the new contracts, in order to remedy what he considered shortcomings. The process is now quite advanced and we expect to be able to make some announcements linked to the specific projects shortly.

[Jean Lapierre, Liberal, Outremont, QC]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Lapierre.

Mr. Crête, you have the floor.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chairman. Welcome to the committee.

My first question deals with the Canadian Tourism Commission. An expense of $5,675,000 linked to the move to Vancouver was eliminated. Moreover, in the summer, I met with the CEO of the Canadian Tourism Commission. She told me that approximately $5 million will be needed to deal with the fact that Canada is not doing it well as it has in the past in terms of tourism compared to other countries. In this regard, Canada has slipped from 9^th to 12^th place in the world.

Have you considered taking the funds not spent on the move and using them to address this new tourism problem, instead of simply cutting the budget?

[Richard Dicerni]

I also had an opportunity to meet Ms. McKenzie a few weeks ago, when I attended a meeting of the Commission's board of directors.

As regards the $5.6 or $5.7 million earmarked for the move, the Commission had a budget of about $25 million to facilitate its move to Vancouver. I was told that the move cost approximately $18 or $19 million and that the Commission had obtained Treasury Board approval to access these funds. However the decision was made not to access them, because the funds were considered...

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Did someone at the Canadian Tourism Commission decide not to request the reallocation of these funds?