Industry Committee on Jan. 30th, 2008

[The Chair, Conservative, James Rajotte]

Mr. Staples.

[Dennis Staples]

Thank you.

I missed the first part of that, but I caught the major part of it. Thank you.

I have a couple of comments. I would very much welcome, and I'm sure my colleagues would be very appreciative of, being involved in a debate on this matter that affects all Canadians. Let me say that right off. The opportunity here is to find a way to find solutions immediately if that's at all possible, and I think that's absolutely required right now. I made reference to the 22 recommendations, and if you can bear an analogy, I think we need to hit a home run on this one to make sure that we take action right now to stop the flow of jobs out of this country.

What I'm hearing in my community is sure, we've lost jobs in eastern Ontario, but we've created jobs elsewhere. They are certainly not being created in eastern Ontario. However, we are getting the odd inquiry where people are telling us that they would like to set up shop in Smiths Falls because they have a great idea, it's a new technology or a patent, and they could create jobs. And what we're finding is they're saying if they can't do it here they can go to the United States or some other country. So we are losing opportunities.

[The Chair, Conservative, James Rajotte]

Mr. Staples, could I get you to speak a bit more slowly, because it is being interpreted at exactly the same time.

[Dennis Staples]

My apology. I thought I was under a time constraint.

[The Chair, Conservative, James Rajotte]

Sorry. I should have mentioned that before.

[Dennis Staples]

We would very much look forward to finding some immediate and responsive and timely way to manage and follow through on opportunities that would solve the problems you're talking about today and that we're experiencing on a daily basis in our communities.

That would be my response.

[Douglas Struthers]

May I make a comment, Mr. Chair?

I think it's also understanding what we have in our rural areas of this country. I could speak to Ontario, but I also allude to the province of Quebec. Last year I had a meeting with some economists at the Conference Board of Canada. As it turned out, they were being commissioned, if that's the right word, to do some work for the province of Quebec, understanding the rural connection in the rural economies, but also the connection to the urban economies.

We showed them—this goes back to the Eastern Ontario Wardens' Caucus—a profile of the eastern Ontario regional data set. They were quite impressed by the template, because they said it puts in perspective the territorial assets or capital available in our broader regions. Collectively understanding that and knowing what kind of programs will fit what regions—in other words, not taking a cookie-cutter approach—is of great value. The federal government, in this particular case, is saying, let's look at a program we can put in place, but understand the region that we are working with.

We've talked about manufacturing, but in our area there's the other aspect of our region, called the Rideau Canal corridor. It is now a world heritage site. One of the requirements to be a world heritage site is that it must be sustainable. It's the communities along the Rideau Canal system that will make the canal sustainable, but we must make sure that the communities themselves are sustainable. So it's understanding, from a tourism perspective, as Mayor Staples has indicated, and from the retail perspective and the manufacturing perspective, as Mayor Fenik has indicated.

As important as it is to take action, the information is there. We have the people who have the skill sets to bring it forward in such a manner that we can say this allows us to take the next step to understand the region and have the appropriate programs to support new technology, skill development, etc.

[The Chair, Conservative, James Rajotte]

Thank you. The time is over, unfortunately.

We'll go now to Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Mr. Chair.

Thank you very much, Your Worships, for coming before us today. I'm going to make a very quick attempt, so as not to talk very much. You know how difficult that is for a politician, but I'd like you to have the opportunity to talk.

I was particularly intrigued when Mayor Struthers mentioned that you have done some quite impressive work—51 recommendations that you delivered. Would you be able to elaborate on the top three or four of those and let us know a bit more about them? It sounds as though you've done some of this work.

[Douglas Struthers]

To put it in perspective, one of them is addressing the broadband gap in eastern Ontario. Broadband in the 21st century is what the telephone was in the 20th century.

The challenge is.... Unfortunately, I don't have the numbers right at my fingertips, but I do have them with me. When you look at the population density in eastern Ontario, particularly when you get out of the large urban centres, which include Merrickville and Smiths Falls and Perth, it's a challenge. But many of the businesses that support our local communities are, if you like, in the fringe. They're outside of the core areas of the ISPs, the Internet service providers. They don't have the wherewithal to bring the service.

There was a provincial program last year to help in the first step to address that gap, and I believe there has been lobbying, if that is the right word, or encouraging of the federal government to participate in it. It's a very strategic policy goal, very achievable. There's a proposal for how to reach that goal.

[Colin Carrie, Conservative, Oshawa, ON]

I know Alberta is funding their broadband strategy right now. Do you know how much money the Ontario government is putting in?

[Douglas Struthers]

The Eastern Ontario Wardens' Caucus collaborated with the Eastern Ontario Broadband Coalition, and two years ago it was thought that to address the gap would cost in the $50 million to $60 million range. That number, I think, has since come down as companies continue trying to expand.

The provincial program last year was a $10 million program. In some communities they had a phased approach, but some of the responses to the RFP were actually proposing to invest more money than the one-third that went with the municipal–provincial program.

It has been a very successful first step, but I think if there were any one thing—not to diminish the need for maintaining and indeed enhancing our transportation links in eastern Ontario and the issues of cost of fuel—broadband is the key.

Our document shows, and Mayor Staples has alluded to this, that in eastern Ontario alone we have five deep-water ports. The world is out there. We have three significant crossings to the United States, our largest trading partner in the world.

[Colin Carrie, Conservative, Oshawa, ON]

I know our government has been working very hard at decreasing regulations.

I did have a question for Mayor Staples. You brought up the example of Ireland.

[Dennis Staples]

Yes.

[Colin Carrie, Conservative, Oshawa, ON]

You mentioned how successful they have been. One of our goals, really, is to see what we can do to attract more foreign investment into the country. We've already implemented the capital cost allowance writeoff. We're looking at those 22 recommendations, the SR&ED tax credit, and we've had some very positive input from manufacturers on that.

So, corporately, we are trying to lower corporate taxes to the lowest rate in North America from a federal standpoint. But I do understand that Ontario is one of the most highly taxed jurisdictions. We do have challenges with the provincial government on philosophies on how we can work with that.

You mentioned there were some federal measures we should reinstate. I was curious about what federal measures you thought we should be reinstating.

[Dennis Staples]

I picked that comment from the summary of recommendations. I looked at it very briefly. There's no specific comment I can make on that, other than to try to find a way—if I could answer it—to have the three levels of government looking at what we do, individually and collectively, to make it more attractive for business to stay in this country, whether in Ontario or other provinces, and to attract new investment into this country.

If I can just give you two quick examples that pertain to Smiths Falls, we have a small company in Smiths Falls called GH Metal. They're doing a small expansion right now of about 5,000 square feet and will add 50 to 75 more jobs, which is like a new industry coming to Smiths Falls, similar to what Mayor Fenik mentioned about Albany. However, this company is being wooed by New York State to move there. This company in Smiths Falls—and I don't want to jeopardize their success going forward—produces all of the mailboxes for Canada Post across this country. We're proud to have them in Smiths Falls. They also produce mailbox paraphernalia for 44 other countries around the world.

However, there's an opportunity coming up where that business arrangement will be reviewed in the next little while. So I'm hoping that's something the federal government can look at with policy to say it would be advantageous to keep those types of business entities in this country—going through the competitive process as well.

If I could just add one other example, we have another company in Smiths Falls called Wills Transfer, which to date has been taking finished goods from companies like Hershey's, Shorewood Packaging, and Stanley Tools, to give three examples, and now they've had to diversify their approach because the level of business for them has dropped off. So rather than taking goods to markets across Canada and the United States, as they did previously, they're now picking up finished goods in the port of Montreal and delivering them back into our communities.

That's what's happening in our economy.

[The Chair, Conservative, James Rajotte]

Okay.

Thank you, Mr. Carrie.

We'll go now to Ms. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you to all of your worships for being here today. It's really important to have your firsthand experience as leaders in your respective communities to understand in a very direct way what's happening in the economy in people's day-to-day lives. Thank you for your presentations.

I'm a big believer in our industries and our employers and the men and women who go to work every day and provide the goods and services we all rely on. When people talk about statistics of companies closing or laying off, or the impact in abstract economic terms, it really kind of glosses over the true impact of what this means in people's lives.

I think the significance of you three coming here as witnesses is that you are representing relatively small communities. I come from Toronto, and we have had about 125,000 jobs lost in the manufacturing sector, but when you talk about, for example, the Hershey plant in Smiths Falls, it's a big facility, but the proportionate effect on a community like Smiths Falls is massive.

We've been talking a lot about the impact of the Canadian dollar on manufacturing because the manufacturing sector not only provides the goods that we need in our economy and that we export, but it provides people with that quality of life--as Mayor Fenik has said--in terms of being able to support families and provide a good tax base for our communities as well. It is a very important part of our economy.

Something that I always try to do in my own community--we have a lot of small businesses--is I'm always urging people to buy local, to shop with their local businesses, because it does make a huge difference.

Mayor Fenik, you raised an issue I would like you to elaborate a bit more on. When Canadian funds--our tax dollars--are being invested in production of defence or whatever kind of procurement, to then see those dollars contracted out to purchase abroad.... There really should be consideration given to Canadian production. Can you elaborate more on how you would see that happening, or what would work in your community in terms of a Canadian component to procurement?

[John Fenik]

Certainly.

In the case of Central Wire, a global company that manufactures welding rod for airplane construction, what they are simply saying is please give us a level playing field. They're saying don't be protectionist on the world global stage, and when we federally subsidize contracts to manufacture something, don't close the doors and say we're only going to stay in Canada. The plant operator was simply saying give us an opportunity to bid on the same contracts; give us an opportunity to stand shoulder-to-shoulder with those eastern bloc countries, with the South American Pacific Rim countries, where we can stand shoulder-to-shoulder and submit the same type of request-for-proposal documents so that indeed the best product and the best delivery is at hand. Certainly he felt that in the huge amount of money spent on federal projects, smaller companies--perhaps because of their small profile--were left out of the ability, as Mayor Staples said, to go up to the plate to swing the bat. He was saying just give us a chance, and we can do the same thing.

[Peggy Nash, NDP, Parkdale—High Park, ON]

On the issue of procurement, you're saying at least give consideration to Canadian procurement. That is not to say you cut out competition, but at least let the Canadian operations into the game and that could make a huge difference for Canadian suppliers.

[John Fenik]

Yes.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thanks very much. That's my question.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

We'll go now to Mr. McTeague.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Chair, I'll be splitting my time with Mr. Simard.

I want to pick up where Ms. Nash left off.

Mr. Fenik, Mr. Staples, and Mr. Struthers, first of all, thank you for being here. It is critical. What has happened to your communities was very much at the heart of why this committee unanimously came forth with those recommendations, and this committee again reinforces the message to the government that all those recommendations should be implemented as soon as possible.

You discussed the question of infrastructure--all of you in your own separate ways. Mr. Fenik, you talked about the water tower. I note that FCM has taken a very strong position with respect to using gas tax and other things dedicated to municipalities. How will this help your current situation if the federal government relinquishes and provides direct funding to municipalities, such that they could build infrastructure that might in fact entice the kind of new development or the kinds of new opportunities that you so wish to have?

[John Fenik]

Certainly any dollars that are afforded our municipality from those types of revenue sources are not spent on initiatives in, should I say, frivolous areas. Those dollars are focused on infrastructure.

Perth is a 100-year-old town. We have an assessment base that isn't growing. Primarily senior citizens reside in this town. We can't raise any more dollars.

The success of our manufacturing and good job base is in being able to supply affordable water and road systems in our town. We are continually having to increase our water and sewer infrastructure costs to industries and to our residents, so those dollars are greatly needed.

With the fuel tax, we were afforded $97,000, which doesn't seem like a lot, but for a town with an operating budget of $6 million it goes a very long way. Those dollars are spent for infrastructure design and enhancement.