Industry Committee on June 6th, 2006

[Maxime Bernier, Conservative, Beauce, QC]

As a federal government, we must argue and push that. The next meeting I will have with my provincial colleagues, I will be beside B.C. and Alberta and Quebec and Ontario and try to argue that mutual recognition is very important. They did that in Australia, they did that in New Zealand, and they have freer and more competitive countries. So if we can build another kind of agreement inside the international trade agreement, another kind of agreement between provinces based on mutual recognition, that will be a big step for a more competitive economy in Canada.

[Colin Carrie, Conservative, Oshawa, ON]

All right, thank you.

You mentioned in your opening priorities minimizing the paperwork burden for businesses. I understand there's the Biz Pal program. Could you expand on that and explain that a little bit more?

[Maxime Bernier, Conservative, Beauce, QC]

Yes. This program was a pilot project. We had some information from the business community that they wanted to have this kind of program being followed for every small-business enterprise. We have an agreement, and we will be sure that all small and medium-sized businesses will be able on the Internet to have access to all the permits that they need from the federal government. We're going to try to reduce their regulatory burden. We want them to be more efficient and us to be more efficient on what we ask from them. It would be one place where they're going to be able to have all the regulations they must follow, so it will be more efficient for them, and also for us, the federal government.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Carrie.

We'll go now to Mr. Vincent--no, to Mr. Crête.

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

Minister, Mr. Beaudoin, from Bombardier, and Mr. Perrin Beatty, representing the Canadian Manufacturers Association, have spoken out quite strongly on the subject of interest rate increases.

I would like to hear your opinion on the subject. Should we not put the brakes on rate increases so as to breathe a little life into our economy, particularly the manufacturing sector?

[Maxime Bernier, Conservative, Beauce, QC]

You know as well as I do that it is the Bank of Canada that sets interest rates. You had the privilege of hearing Mr. Dodge when he appeared before your committee. I believe that he clearly expressed the position of the Bank of Canada.

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

But it is your position that I am interested in hearing.

[Maxime Bernier, Conservative, Beauce, QC]

My position is very simple. I look at what the Bank of Canada is doing when it sets the long- and short-term rates, and, as a consumer, I adjust. Canada's industrial sector is efficient, innovative and productive. I think that, as it always has in the past, it will be up to the challenge.

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

Yes, but Mr. Beatty is the spokesman for the Canadian Manufacturers Association and Mr. Beaudoin represents a large corporation. The entire forest industry has said the same thing.

I understand that the Bank of Canada is an independent body, but you are entitled to your opinions. Since, as Minister of Industry, you are responsible for the country's economic vitality, I would like to know if you feel that the Bank of Canada should slow down a little. There have been nine rate increases in less than one year. Would it not be time to take a break?

[Maxime Bernier, Conservative, Beauce, QC]

I think that the Canadian industry has had to face the upswings and downturns of the Canadian dollar and has always managed to adjust. I am confident that the industrial sector will continue to adjust.

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

So you want our economic activity to continue to move freely.

[Maxime Bernier, Conservative, Beauce, QC]

Market forces affect the value of the Canadian dollar and the Bank of Canada has a role to play in setting currency exchange rates; that is a fact of life in every industrialized country. We have to look at both sides of the coin. When the dollar is high, these same companies can buy lower-cost goods and equipment that will then be used to increase their productivity, since they source these goods and equipment mainly in Europe, for example, in Germany, as well as in other developed countries. So it costs less to acquire goods and equipment when the dollar is high.

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

So, you don't share the opinion expressed by the president of the Canadian Manufacturers Association, which represents all of the exporting manufacturers and people from the forest industry; you think that everything is fine.

Are we not witnessing a two-tier economy emerging here in Canada, with manufacturing job losses in Quebec and Ontario, on the one hand, and an overheated energy sector, on the other? Are you not worried about having a two-tier economy? In a few years, the oil boom will be old news, and we will be left to pick up the pieces.

[Maxime Bernier, Conservative, Beauce, QC]

As I said earlier, I put my faith in the industry, in business people.

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

That is what they are asking of you, sir.

[Maxime Bernier, Conservative, Beauce, QC]

They are in the best position to know what their company needs, and I think they have already shown that they can adjust to interest rates, to the value of the Canadian dollar, and that they will continue to do so in the future.

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

Do you think that the price of gas has anything to do with the increase in the value of the dollar? Mr. Dodge told us that the price of gas has increased significantly in the last year or two; do you feel that this is the main reason for the increase in the value of the Canadian dollar?

[Maxime Bernier, Conservative, Beauce, QC]

I don't intend to speculate on the increase or drop in the value of the dollar or on the ins and outs of these fluctuations. Market forces are working and the dollar reflects the strength or weakness of our economy according to the value that investors put on the Canadian dollar.

I know full well that Canadian companies are able to adjust to competitive situations, just as they do when facing competition from Asian countries.

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

I'm not asking you to look to the future, I am asking you to analyze the past. Do you think that the sudden increase in the dollar's value over the past two years can be explained in part by the increase in the price of gas?

[Maxime Bernier, Conservative, Beauce, QC]

I couldn't tell you.

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

You couldn't tell me?

[Maxime Bernier, Conservative, Beauce, QC]

It isn't something that I have taken a very close look at. That is not the role of my department. It is up to the Department of Finance to examine the impact of interest rates on Canada's economy, and the like. So I really can't speculate or tell you why the dollar has increased or dropped in value.

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

After 12 years, I really thought that I had seen it all, but, Minister, you surprise me.

[Maxime Bernier, Conservative, Beauce, QC]

Fine.