Industry Committee on May 5th, 2009

[Richard Dicerni]

The government made a commitment in the Throne Speech to consider the issue of copyright. That's one of the files currently under review, in the context of a number of other files. So it's one we have in view.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I would also add that, in the summer of 2009, I'm going to announce that there will be an opportunity to gather input from all industries, from all stakeholders in this matter.

[The Chair, Conservative, Michael Chong]

Thank you, minister and Mr. Vincent.

Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Thank you, Mr. Minister, for appearing before us.

You probably know there's a subcommittee that's been struck to look at some of the challenging issues and what Mr. Vincent was talking about, the forestry. One of the things that drives me absolutely crazy is to view an industry like the forestry industry. When everything's said and done, we're going to have our trees and we're going to have our minerals and we're going to have our vast resources. It always perplexes me when I see that we missed the boat years ago in not becoming a world leader in the forestry industry. When we talk to the forestry people, we ask them where they get their technology from. Well, it's from Finland.

Now, we've had some success stories as well, and one of the success stories we've embarked upon is the aerospace industry. I know we've made substantial investment there. I wonder if you could expand on that, tell this committee where we're going, what we can expect in the future and how we can continue to grow that industry, which has proven to be such a valuable and important part of Canadian industry.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Thank you for that.

It's a very critical industry, one I do spend a lot of time concerning myself with. It is critical, again, to our industrial base, and it's critical because there's so much R and D that goes on in this particular industry.

We have something called the strategic aerospace defence initiative, or SADI, which levers private investments in order to pursue R and D right here in Canada, using our Canadian companies. For example, I made a recent announcement with CAE, which is a world leader in its area, of course, in flight simulators. We invested $152.8 million and they put in $714 million, so that's a huge investment. It means that Canada will continue to build and produce state-of-the-art flight simulators that are used all around the world. That's a great example. Bombardier has secured a $1.5 billion order for its C Series jet with Lufthansa and almost $1.5 billion for Lease Corp., so that's 50 firm orders for their C Series.

These are the kinds of things that keep that industry going, and certainly I see the investment that governments have made in research and development paying off in terms of jobs and opportunities. We must continue down that road, and we will continue down that road.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I want to switch quickly to the knowledge infrastructure program.

I come from Leamington, which has the largest collection of greenhouse growers in North America. And when I ask these people where their technology has come from, it has come from the Netherlands.

I wonder if you could tell us what that program consists of, where some of the money is being spent, and can we expect to see more of that happening? Where we see an area in Canada where we're the leaders, will we start to support that area with our institutions? I wonder if you could simply tell us about some of the projects that are under way right now.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Yes.

Definitely, the ones that I've seen so far in B.C. and Nova Scotia are excellent projects. Really leading-edge research will continue in those institutions in the announced provinces.

One of the things I want to emphasize, though, is how important it is to continue with the basic research, of course, but also with a view to commercializing the research. This is where Canada has fallen down in the past. The most recent STIC report that came out today, the Science and Technology Innovation Council report, said we do a great job on basic research, well supported by public funds, excellent, world-class, but we still have that gap between getting the research from the basic research page to a product that is marketable in Canada and around the world.

Some of what we do is excellent. Look at RIM. Obviously, that's a wonderful example of basic research that has translated into a worldwide product. So it can be done by Canadians, in Canada, and we've got to do a better job of that. That's what the science and technology strategy that we announced in 2007 is all about, and that's why these funding envelopes that we're announcing are so important as well.

[The Chair, Conservative, Michael Chong]

Thank you, Minister.

Thank you, Mr. Van Kesteren.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I want to return to the issue over the Canadian Institute for Scientific and Technical Information. Biomedical Commercialization Canada worked with a company called Fermion on creating security measures for airports after 9/11. They've actually commercialized the product and it has gone to the United States quite often.

What I really get concerned about is why we would want to bring in a whole new regime at a time when stability is really one of the biggest assets companies are asking for right now. On the strategic review that was initiated and that has led to this decision of cutting the fund by 50%, and then having another 20% spun off into a private company, has that been completely signed off on, or is there a chance to revisit this?

I am really concerned. You're right, because we're into the patents in Canada. We have very few patents in Canada that actually go to market. Maybe you can provide a little more information on that.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Look, we all know there's downsizing and then there's dumb-sizing. None of us want to be involved in dumb-sizing. If necessary, if the program isn't achieving its goals, then of course we have the right to review those programs.

I've said this before and I'll say it again. Any politician or any government that says that a program is funded forever, regardless of its results, regardless of how it's contributing to the Canadian economy, that is the antithesis of the scientific method. That isn't what science and technology funding should be all about. We should always be reviewing what we do in a reasonable, responsible way to ensure that our money is well spent, that it leads to the desired results, and that the margin of utility—if I can use the economic term—of using it there is better than somewhere else. I will defend to the death the right of every government to review programs to make sure they are being used well.

Having said that, we don't want to make mistakes. Certainly I'll take a look at the situation; I'd be happy to do that. I think it would be a sad day in this country if politicians started to say “We are going to fund this project forever”. That is the wrong way to react to the situation.

[Brian Masse, NDP, Windsor West, ON]

I'm not aware of any politician that says that. This is Canada's national public library for hospitals, universities, and business. That's why at a time right now I'm concerned about it.

I thank you, and I know you'll do a fair review. That's all I'm asking.

I'll move on to the auto credit facility. When will we see something come out of that?

One of the things that's disturbing in terms of the way it might roll out is that the Minister of Finance has been very explicit about the fact that this is going to be a revenue generator for the finance department, meaning that their interest rate is going to be a return. This is Canadian taxpayers' money that is going to be used to hopefully get vehicles, leases, purchases out there to stimulate the economy. I'm worried about the profit range the government is going to try to make from the citizens' own money. That's one issue.

Secondly, with the approximately $40 billion still on the ecoAUTO “feebates”—the tax that was introduced on automobiles that is still coming into your coffers—why can't that money, as Ford has suggested, be moved into a credit facility in a revolving fund right now, perhaps not permanent, for low-interest purchasing and leasing of automobiles?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I can tell you that we're almost there. For BDC, which is the repository of the secured credit facility, this was a new program for them. They didn't have in-bred expertise in this area, so they acquired some expertise. They went out and consulted with the industry; they consulted with the likely partners. They have completed that consultation. I think it was responsible for them to do that consultation, quite frankly.

It is a commercial-rate kind of program. I think that is defensible to the taxpayer, because it's taxpayer money that is being engaged. I think we're almost at the stage now where it will be rolled out. We're anxious to get it rolled out, the finance minister and I. When you inject the possibility of $12 billion of extra credit for vehicle and equipment leases, that is going to have a very positive impact on the economy.

[The Chair, Conservative, Michael Chong]

Thank you, Minister.

Thank you, Mr. Masse.

Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

I want to talk a little bit about the longer term. We talk a lot about shovel-ready projects and the need for stimulus right now because of the global economic crisis. You wouldn't know it from question period if you watch it every day, but there are a lot of commentators talking about how relatively strong Canada is. Canada is kind of the envy of a lot of countries in terms of our position going forward. The recession will be felt less deeply here and we should come out sooner and stronger than other countries. Commentators like the IMF and the OECD and Newsweek, The Wall Street Journal, The Economist, and The Telegraph have all commented on Canada's relative strength. Maybe you could talk about initiatives that we've put forward, particularly in the industry portfolio, that are creating the conditions for that strength moving forward in the long term.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Sure, I'd be happy to scroll down a few of those things.

Obviously, I already talked about changes to the Investment Canada Act and to the Competition Act, because I really do think it is important that Canada remain open for business but at the same time have rules that are in place for businesses that everyone knows will lead to a properly functioning marketplace. The last thing we need is for our businesses to come to us and say that they want to compete as much as the next business, but these guys aren't playing by the rules, so they can't compete with that. That's why the Competition Act is so important, because it does weed out those companies that are using anti-competitive, abuse-of-dominance, or other price-fixing cartels and these kinds of things that are injurious to the consumer but also to the legitimate businesses out there.

The Investment Canada Act changes are important because this sets the foundation for us to say to the world that these are the rules of the game. We have the right to protect our national security, but if you're here to invest in jobs and opportunities that will employ Canadians, we want to be open for business. I think that's an important message to send around the world. In the few trips that I've taken, for instance to India in February, that was my message. I met with over a hundred businesses, and my message was the same: Canada is open for business. So those are important.

As I mentioned, our work in the broadband sector, in knowledge infrastructure, in keeping our tax credits lush and our business taxes low, will have a long-term impact on our competitive behaviour as a country and of course our ability to create jobs and opportunity in the future. So to me, it's not just about fighting fires. I consider myself the competitiveness minister, the one who concerns himself day in, day out with Canada's long-term competitiveness. I view things through that prism. Even with our short-term issues, we've got to look at the long-term impacts that will be positive for us. That's how I see everything that I do.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Right.

I'm thinking about our international reputation or how we work with the international community. My understanding is that we were behind in how we dealt with spam. We've just introduced legislation to change that. Maybe you could elaborate a little bit on this.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Sure. I think that this bill that we have before Parliament is critical. I didn't know this until I sort of delved into this subject, but 17 of the world's top 40 spammers are companies or individuals that reside in Canada. We were becoming a haven, a magnet for spamming and for all of this behaviour that affects not only us as Internet users, but obviously businesses who have to invest in more anti-spyware and more filters and so on. It's a huge cost--$3 billion a year in costs to Canadian businesses--to combat spam. We were becoming a magnet for spammers and the ne're-do-wells who are involved in this. So this puts us in line with the other G-7 countries. We can go with clean hands to institutions like Interpol, the international police, and work with them in collaboration so that we can go after the international syndicates that are behind some of the most injurious spam. I think, both in terms of economic policy and also for the consumer and consumer safety, this is very important legislation. I encourage all members on this committee to support it.

[The Chair, Conservative, Michael Chong]

Any further questions, Mr. Lake? No? Thank you.

Madam Coady.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you, Minister, for coming here this afternoon.

My questions are going to centre on science and technology. You said that you felt it was crucial for the development of our country, that you thought it was an integral part of our long-term strategy, and that it was essential to Canada's long-term competitiveness.

Your government and previous Liberal governments have always supported innovation. In these particular estimates, in this particular budget, you've put a tremendous amount of money towards infrastructure. There is the knowledge infrastructure program. You've put money towards equipment and investment on deferred maintenance. All this has to be matched money. I support putting money towards infrastructure. I think it's very important that we have the best labs. I had a genomics laboratory in my previous life, and I know how expensive they can be. However, you've also cut basic funding for research—$148 million to the granting councils. There is no new money for Genome Canada. There is no new money that will be invested in future genomics projects, and that's of great concern. All this is having a tremendous impact.

You've seen the letter written on behalf of 2,000 scientists that was sent to the Prime Minister of this country, asking to restore this critical funding. It's great to have nice laboratories, but if we have nobody in the laboratory working, and we don't have the world-class scientists, then how are we going to maintain our ranking? You will have seen in yesterday's Globe and Mail Anne McIlroy's article talking about Dr. Sekaly, who's heading to Florida. This is probably just the start of world-class scientists leaving our country.

It's of great concern. How does your government hope to maintain Canada's global status in research and development, competitiveness, and innovation when you have 2,000 scientists calling for additional money? How do you see us being ranked well in the world, when you're not putting money towards the very things that we need most?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Thank you for the question. It gives me a chance to put my view of the situation on the record.

I've been criss-crossing the country, as has Gary Goodyear, talking to university presidents, researchers, people on the front lines of some of the very research that you mentioned. To a person they have said that our government is doing the right thing, that we ought not to listen to all of this barking and complaining, which doesn't represent how scientists and organizers of scientists feel about the situation. They've told us they know we are putting more in than ever before, more into the granting councils, and more in multi-year funding for Genome Canada.

This time last year, I was in San Diego, announcing a multi-million-dollar collaboration with the California government on cancer stem-cell research. We are the best in the world in this field, and that's multi-year funding. What they are telling us, what they're telling the Prime Minister, what they're telling their own confrères is that this government is putting the money in, and that we're doing it in a sensible way that will have a long-term positive impact on our ability to compete.

The STIC report came out today. I encourage you to read it. This is the Science, Technology and Innovation Council report, which said we were doing a great job in innovation and basic research. Our problem is commercialization, which is the exact antithesis of the editorial position of the Globe and Mail. I'm sorry, but if I have to choose between the two, I think the Science, Technology and Innovation Council probably has it right.

Since 2007, our government and the S and T strategy has said that this is the area where we have to do better. We have to make sure that all the wonderful basic research that we do actually gets to market, actually helps our health care sector, our businesses, and our innovators, the RIMs of tomorrow. That's what I passionately believe in. I know you have your impression; I just think it's wrong.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you for that. I guess 2,000 scientists also have it wrong.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I'm happy to meet with all 2,000 of them and to show them the facts.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

I'm sure you will over time.

That was an interesting comment about commercialization, because I'll give you an example of commercialization. Genome Canada did funding with Memorial University of Newfoundland and Labrador. They did discover a very important gene. It was Newfound Genomics, a company that I owned, that actually developed that for the marketplace. We developed the diagnostic to put into the marketplace. That's an example of commercialization and good science and how it gets to market. Today it's saving lives. It's a simple test that can save lives. It's very important.

You talked about President Barack Obama and how much money he's putting towards it, saying that there are some challenges in the dollar amounts in terms of whether or not he's investing in true science or education, for example. Currently 2.68% of their GDP is put towards science and technology, and that's moving towards 3%. In Canada it's less than 2%. How do we maintain our international competitiveness?

Last week, for example, President Barack Obama, speaking about the current global crisis with the H1N1 flu, said that if there were ever a day to remind us of our investments in science and technology, this would be the day.

Those kinds of investments in science and technology are incredibly important. Would you comment on the percentage of GDP?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I'm sure President Obama would have been briefed on the fact that a lot of the basic research that's going into the H1N1 is actually occurring in Winnipeg. We're educating the Americans, and the World Health Organization, through the national laboratory in Winnipeg, a level 4 facility, first in class, best in breed. That's the kind of research that we have to continue to be a part of. We have people like Dr. Frank Plummer. We're known around the world. We're blessed to have people like that. They love working in Canada. Yes, we always lament when somebody leaves this country, but let me tell you, there are many people coming back to this country.

Let me give you one example--the CERC grants that we're doing, the centres of excellence research grants. The criticism--which, by the way, found its way into the nation's newspapers--was that there was too much money going into these programs. There was $10 million per grant, and how dare we spend so much money on such elitist professors. I don't know what we're supposed to do. One minute we're accused of cutting and the next minute, when we put $10 million in per program, we're accused of spending too much money. But we're doing the right thing, and that's how I can sleep at night.

[The Chair, Conservative, Michael Chong]

Thank you, Minister.

Thank you, Madam Coady.

Mr. Lake.