Thank you, Mr. Chair. Before starting, I want to present my deputy minister, Richard Dicerni, and the associate deputy minister, Carole Swan.
I'm very pleased to be here today. It's a great day for me; this is my first appearance before this committee. And it's a nice challenge, so thank you for the invitation.
Industry Canada and its portfolio partners, as you know, touch upon a wide range of responsibilities, including small business financing, consumer protection, industrial sectors, competition law, basic and applied sciences, and practical research. Overseeing such a diverse group of organizations is both interesting and sometimes daunting.
The approach I am taking is consistent with the approach Conservatives are taking with government. We are careful stewards of the economy and we are focused, deliberate, and fiscally responsible. We are determined to govern programs the way the programs should be governed, consistent also with federal responsibilities.
Canadians want a government that manages their public funds wisely and with accountability. I take their trust seriously. Mr. Chair, the last Conservative government put in place the environment for the Canadian economy to grow at a nearly unprecedented rate. Despite challenges in some sectors, Canadian companies continue to grow and create more jobs. This is not to say that from time to time our economy does not face significant and sometimes fundamental challenges and uncertainties. In response, we have to establish the conditions so that those who wish to work, save, invest, and innovate have the opportunity to do so.
This involves creating fair and effective frameworks for business. This work can be accomplished with the help of our provincial and territorial partners by completing the final chapters of the agreement on internal trade. We have an internal trade agreement, but we don't have the best free trade across all provinces.
Recently I met my colleague in Alberta and congratulated him on the great strides he and his counterpart in British Columbia have made toward improving trade and labour mobility between their two provinces. That's a very good agreement, and I'm pleased; I hope the other provinces will do the same.
The federal government, the provinces and the territories must unite to advance certain issues and to strengthen the economic union. Even though economic forecasts are optimistic, it has become very clear that certain manufacturing sectors and certain regions in Canada are finding it hard to adapt to world economic trends, such as increased competition in the area of consumer goods from emerging economies, a climbing Canadian dollar and fluctuations in the prices of natural resources and energy.
In the course of his presentation before your committee last week, David Dodge, the Governor of the Bank of Canada, pointed out that these same trends are also having a positive impact on many Canadian families. Consumer goods are less expensive and families are making ends meet more easily. Canadians who work in the area of natural resources production, of building materials, of machinery and in the energy sector are receiving higher salaries.
In the manufacturing sector, production continues to climb and many manufacturing businesses, faced with stronger competition, have decided to invest in machinery and equipment, which will improve their productivity. However, certain areas within this sector are going through a transition period. None of this is easy for employees, their families, communities and businesses. Nevertheless, the way companies react to this situation will enable them to become more competitive internationally and better prepared to deal with eventual economic upheaval.
The new government will continue to work with companies and industry to ensure that they fully benefit from the opportunities which are emerging within the changing world economic context.
I appreciate the detailed study your committee has undertaken of the manufacturing sector. I also intend to put forth a program of action based on certain key pieces of legislation which define the parameters of Canada's market. We must ensure that our laws are in line with the current economic reality.
For instance, I am in the process of working with my colleague, the Minister of Canadian Heritage, on potential amendments to the Copyright Act. In the knowledge economy, we must strike a delicate balance between the protection of copyright holders and a reasonable access to those rights for learning and teaching purposes. That is the challenge we must all face together.
The last Parliament adopted An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts. This act contains important measures to protect the salaries and pensions of employees working for companies which have gone bankrupt.
We would like this legislation to take effect as soon as possible, but we must first address some technical issues. It is important that framework legislation be efficient and drafted in a spirit which reflects the various recommendations made by committees.
We must also adopt a strategy to promote the growth of research and innovation activities in Canadian institutions.
Over the past few months, I have met with businesses, universities, and research leaders to hear their views on the state of science and technology in Canada. As stated in budget 2006, I have been mandated to develop a science and technology strategy in collaboration with the Minister of Finance. That strategy will take into account the entire range of support that the federal government provides for research. It will be mindful of the jurisdiction for post-secondary education, which we share with our partners in the provinces and territories, as well as the role in support of research. Above all, it will ensure that we seek excellence in our science and technology endeavours.
Government initiatives shall focus on results and value for money. Most importantly, they need to make life simpler for Canadians. Industry Canada helps small and medium-sized businesses with information on financing, business planning, etc. This ties in with your study of the manufacturing sector. You've had witnesses here talking about cutting red tape and reducing the paperwork that people must fill out to meet government requirements. We need smarter regulations on our part. We need to ask how we can protect consumers and protect the safety and environment of Canadians in ways that draw out innovation and competitiveness, not stifle them.
We should also mention the Paperwork Burden Reduction Initiative, which is being carried out in partnership with the Canadian Federation of Independent Business and other private sector organizations. This joint initiative has established priorities and reduced the paperwork of small businesses, which allows all Canadian companies to save time and money.
The study on the cost of complying with regulations is one of the very practical tools which will be developed within the framework of this initiative. The study will help us clearly understand what it costs a company to comply with regulations and how much it costs that company on a daily basis. The study will establish a point of comparison which will enable us to measure any progress we make. The first results of the study should be available this fall.
I would also invite committee members to hear for themselves what the people responsible for developing the Paperwork Burden Reduction Initiative have to say on the project. They have a concrete and personal vision of the obstacles which small and medium sizes enterprises face when they must deal with different levels of government.
When small and medium sized enterprises are in a growth period, they often look at the possibility of expansion. Given the fact that our economies are integrated, these companies usually look towards the United States as the first international market in which to expand. Despite several decades of work, we must continue to strengthen the economic relationship between the countries of North America: Canada, the United States and Mexico. For many years now, our countries have been integrated up to manufacturing, logistical and financial levels, and it will only take a small disruption to trigger significant economic consequences in many sectors and regions.
Canada's new government wants to encourage the creation of innovative products and ideas. We look to Canadian businesses to continue their investment in people, equipment, and research. My colleague Minister Flaherty spoke recently about seeding a culture of innovation, particularly among Canadian businesses, and he is not the only one who sees that need. The telecommunications policy review panel, for example, recently presented the government with an interesting and thoughtful report. The panel's members explored important questions such as how to ensure that reforms to telecommunication policies will benefit Canadians. I am now reviewing their report and recommendations as we consider future investment in these areas.
Our recent budget demonstrates our commitment to keeping this strong economy moving forward and seeing how we want to proceed as a government. One way is through the economic boost that will come from 29 tax cuts for Canadian businesses and individuals, reductions worth $20 billion over the next two years. For example, small-business owners will have more money to invest in their businesses thanks to our decision to raise the income setting of small-business income tax rates and to cut that tax rate from 12% to 11% by 2009.
We are reducing the general corporate income tax rate from 21% to 19% by 2010. We eliminated both the federal capital tax and the corporate surtax.
Finally, budget 2006 provides an additional $100 million per year for research funding, increasing the budgets of research granting councils and additional funding for the indirect costs of federally funded research.
Mr. Chairman, I addressed many issues in just a few minutes, but I could have addressed many more. I want to first and foremost highlight the fact that our government has acted in a targeted and responsible manner. We are carefully managing the economy in order to create a climate conducive to improving the productivity and competitiveness of Canadian companies, which will benefit all Canadians.
We are focusing on results-based policies and programs which will enable us to optimize the resources which fall under federal jurisdiction. We are determined to create an investment-friendly climate in Canada in the areas of research and infrastructure, including attracting significant investment from the private sector. This is a key element of Canada's continued growth in productivity and in the competitiveness of our companies on international markets. By building a solid economy and by exercising vigorous financial discipline, we will create a situation conducive to discussing new initiatives to improve productivity and to foster Canada's competitiveness.
Thank you. I will now be pleased to entertain any questions and comments you might have.
Thank you very much.
