Evidence of meeting #22 for Industry, Science and Technology in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was know.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Richard Dicerni  Deputy Minister, Department of Industry
  • Helen McDonald  Senior Assistant Deputy Minister, Spectrum, Information Technologies and Telecommunications, Department of Industry
  • Kelly Gillis  Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
  • Dillan Theckedath  Committee Researcher

3:35 p.m.

Conservative

The Chair David Sweet

I call the meeting to order.

Good afternoon, ladies and gentlemen.

Good afternoon, everyone.

Welcome to meeting 22 of the Standing Committee on Industry, Science and Technology.

We have witnesses today. First and foremost, the Honourable Christian Paradis, Minister of Industry, is with us, as well as Richard Dicerni, deputy minister; Simon Kennedy, senior associate deputy minister; and Kelly Gillis, chief financial officer, comptrollership and administration sector.

So that you are aware, the minister will be with us for the first hour and the officials will be with us throughout the second hour.

We'll go to the minister now for his opening remarks.

Minister, do you have 15 to 20 minutes of opening remarks?

3:35 p.m.

Mégantic—L'Érable
Québec

Conservative

Christian Paradis Minister of Industry

Mr. Chair, it will probably be less than that.

3:35 p.m.

Conservative

The Chair David Sweet

Okay; please go ahead.

March 15th, 2012 / 3:35 p.m.

Conservative

Christian Paradis Mégantic—L'Érable, QC

Thank you very much, Mr. Chair.

Thank you, colleagues, for having me here today.

This is a pleasure.

I would first like to thank you for giving me the opportunity to speak to the members of the committee today on the main estimates for the Department of Industry.

As you said, Mr. Chair, I am here with Richard Dicerni, Deputy Minister, Simon Kennedy, Senior Associate Deputy Minister, and Kelly Gillis, the department's Chief Financial Officer.

Industry Canada is part of a group of 10 agencies and councils, as well as the department, that report through me and two ministers of state.

As presented in the 2012-13 main estimates, the department anticipates a total of $1.3 billion in spending for the year, and the portfolio organizations together anticipate a total of just over $3.5 billion.

Our goal is to help make Canadian industry more productive and competitive by advancing three strategies: one, supporting business; two, fostering the knowledge-based economy; and three, advancing the marketplace.

Overall, we have made significant progress towards reaching our goals. As government members, we have taken action to support businesses and to create jobs across the country.

During the global recession, we have acted decisively to counter the downturn with a targeted action plan.

More Canadians are working now than before the downturn. Actually, over 610,000 net jobs have been created since July 2009. That is a testament to Canadians' efforts.

Over the past 10 years, the Canadian economy has seen stronger growth than any other G7 economy. And we continue to find ways to give Canadian businesses a competitive edge.

We have cut import tariffs on manufacturing equipment. We have reduced federal corporate taxes to 15%; we have the lowest tax rate on new business investments in the G7, which is also less than half the rate of our American neighbours.

We have extended the 50% capital cost allowance rate through the straight-line method for machinery and equipment.

We have also extended work-sharing agreements to help workers. We continue to support research and efforts to market innovation. Our net debt to GDP ratio is still the lowest in the G7.

Our accomplishments have been recognized around the world. Forbes magazine ranks Canada as the best place on the planet for businesses to grow and create jobs, the Economist Intelligence Unit has rated Canada the number one place to do business in the G-7 for the next three years, and both the International Monetary Fund and the Organisation for Economic Co-operation and Development forecast that our economy will be among the strongest in the G-7 this year and next.

This is all within the context of a low-tax plan that leaves more money in the hands of Canadians.

Today's meeting comes at an appropriate time. Over the past few weeks, we have had the opportunity to set in motion some key initiatives that are going to help us maximize our opportunities.

As you know, Canada is one of the few nations with the whole range of design and manufacturing capacities in the aerospace industry. With almost 80,000 high-level jobs, several of which are in small and medium-sized businesses, this industry has a significant impact on Canada.

The 2011 budget committed our government to reviewing programs and policies related to the aerospace and space industries. That is why we created a committee—which I announced last month in Montreal—to undertake this study. The committee will be chaired by the Hon. David Emerson, who will share with us his vast experience and expertise in the field.

This study will cover key features, such as trends in the global aerospace industry and their impact on the Canadian industry; key opportunities and challenges in this sector; the sector's strengths and weaknesses; and, finally, long-term objectives for a sustainable domestic industry.

Mr. Emerson's study will also deal with the issues related to the space industry. To that end, I have recently announced that Canada intends to renew its participation in the International Space Station. Our commitment will contribute to maintaining Canada's leadership role in space technologies. I am particularly proud that Chris Hatfield will be the first Canadian commander of the International Space Station during its mission, which is scheduled to start in December of this year.

I'll turn now to the automotive sector. It is the largest manufacturing sector in Canada, representing 12% of our manufacturing output and 20% of manufactured exports. In 2011, the auto industry directly employed more than 109,000 Canadians and created another 332,000 jobs indirectly.

That's why we have invested in the automobile sector, including in clean vehicle technologies. These investments are a catalyst for further private sector activity and innovation, and they foster Canadian competitiveness.

Beyond the sectors I've mentioned, we know that our competitiveness ultimately depends on supporting business innovation throughout the entire economy. That is why support for science and technology has been a priority for our government since 2006. To this end, Canada has invested heavily in science and technology. Federal science and technology expenditures reached $11.7 billion in 2011.

We have supported new world-class policies and programs and are expanding private sector participation in science and tech. We are building Canada's knowledge base and are successfully branding Canada as a destination of choice for talented, highly qualified S and T workers and students.

But, as you know, we could get better innovation results in our country. Private businesses in particular are lagging in innovation. That is the case despite our excellent record in research and development by higher-education institutions and despite our strong support for research and development by businesses.

Our government recognized this problem and it received a report this past fall from a panel of experts tasked with reviewing federal support in research and development. Over the past few months, we have gone over the report and, under the leadership of my colleague Minister of State Goodyear, we will soon take action to fix the problems identified in the report so as to strengthen Canada's global competitiveness in a broad range of sectors.

At the heart of the digital economy are information and communications technologies. Technology adoption boosts productivity, accelerates innovation, and generates new products and business models. To this end our government has launched the digital technology adoption pilot program to promote adoption by small businesses using community colleges as partners.

This complements recent initiatives by the BDC, which has set aside $200 million for loans to entrepreneurs to adopt ICTs and has created an online resource centre that offers technology tools for small businesses. We are also boosting our support to increase university capacity in key digital skills disciplines.

I'm also looking forward to this committee's report on e-commerce in Canada.

Speaking of the digital economy, I'd note the swift progress of the copyright committee chaired by our NDP colleague from Sudbury, Mr. Thibeault. I know that Mr. Regan, Mr. Lake, Mr. Braid and Mr. McColeman worked long hours on that committee as well.

Bill C-11 attempts to achieve a balance between the rights of consumers and creators. While all of us know finding that balance has been challenging, this legislation is about strengthening Canada's ability to compete in the global digital economy. It is important for this bill to be passed as quickly as possible.

Turning to telecommunications, just yesterday I was pleased to announce significant decisions for our wireless sector. We understand that Canadian families work hard for their money, and they want their government to make decisions that will help them keep more of it. The measures I outlined yesterday will ensure the timely availability of world-class wireless services at low prices for Canadian families, including those in rural areas.

These measures include lifting foreign investment restrictions for telecom companies with less than a 10% share of the market; applying caps in the upcoming 700 megahertz spectrum auctions; applying measures to ensure that rural Canadians have access to the same advanced services; slowing tower proliferation by improving and extending roaming and tower-sharing policies; and reserving a portion of the 700 megahertz spectrum for public safety users such as police and firefighters.

I am proud of the balance that has been reached with those decisions. As Canadians are increasingly relying on wireless technology, it is important that we make good decisions to provide prompt service with more choice and lower prices.

In addition to the legislative changes I mentioned earlier, we are moving towards strengthening other pieces of legislation and policies related to the economic framework. We have made a commitment to ensure that the review process under the Investment Canada Act continues to promote investment while providing a net benefit for Canadians.

Meanwhile, we are continuing to review the act, especially in terms of transparency, to make sure that it is balanced. We have to be clear that the purpose of the Investment Canada Act is to promote foreign investment in Canada. Our government strongly believes that free trade and the ability to attract investments to our country play a fundamental role, not only in our economic recovery, but also in our country's long-term success. As a result, when we bring forward proposals for change, the changes will be about promoting investment that will benefit Canada.

In addition to the work accomplished on the Investment Canada Act, we have also been successful in introducing Bill C-14, Improving Trade Within Canada Act.

We are also acting on a number of other fronts, such as moving forward with priority trade negotiations, including with the EU and India. We are cutting red tape in order to boost productivity and reduce the compliance burden on businesses, especially the small and medium-sized businesses that drive our communities, whether they are located in large cities like Edmonton—whose Chamber of Commerce I was pleased to meet with in the fall—or rural centres like my own town of Thetford Mines.

In conclusion, Mr. Chair, I believe that those initiatives will contribute to strengthening the competitiveness of the Canadian economy and to support job creation and economic prosperity, which is at the heart of a strong Canada.

Thank you for your time. I will be pleased to answer any questions the members of the committee may have.

Thank you.

3:45 p.m.

Conservative

The Chair David Sweet

Thank you very much, Mr. Minister.

There are a couple of things before I call on Mr. Lake to begin the questioning.

Just to be clear, we are dealing right now with Standing Order 81(4), which means that the main estimates have been referred to us. I'm calling for vote 1 right now.

The minister will be answering questions on his main estimates only. If there are any other questions that can't be dealt with by the officials, we can talk later regarding what other resources you want to have.

Behind me to my left you will see a stationary camera. It will move to the speaker who is dealing with the question, of course, and the answers. I just want you to be aware of that before we start.

3:45 p.m.

Liberal

Geoff Regan Halifax West, NS

Mr. Chair, I must say that I'm pleased that when I'm asking the minister questions, the camera will have my good side. That's good to see.

3:45 p.m.

Voices

Oh, oh!

3:45 p.m.

An hon. member

So will all Canadians.

3:45 p.m.

Voices

Oh, oh!

3:45 p.m.

Conservative

The Chair David Sweet

I resemble that remark.

3:45 p.m.

Voices

Oh, oh!

3:45 p.m.

Conservative

The Chair David Sweet

A number of you have motioned to me regarding the temperature in the room. That has been dealt with. I hope it'll be a more moderate temperature shortly.

Now we'll go to Mr. Lake for seven minutes.

3:45 p.m.

Conservative

Mike Lake Edmonton—Mill Woods—Beaumont, AB

Thank you, Mr. Chair, and thank you to the minister and the officials for coming here today.

I'm going to focus my line of questioning on the most recent announcement to do with the spectrum auction and the loosening of foreign investment restrictions in the telecom sector.

Maybe you could just speak to the benefits to the Canadian economy and to Canadian families of the decisions announced yesterday.

3:45 p.m.

Conservative

Christian Paradis Mégantic—L'Érable, QC

Yes, thank you.

First of all, we had to take some steps to make sure that we could sustain competition. One other policy goal was to make sure that we would enhance investment and innovation. Finally, we wanted to make sure that we could have the newest technologies available to people wherever they are in Canada.

Some steps have been taken. We have lifted the restriction on foreign investment for small companies with a market share of less than 10%. The idea is to make sure that these new entrants, if they want to compete, have access to capital. These are the companies that need it most.

On the spectrum itself, we have put in a cap of one prime block per incumbent. As a result, there will be four prime blocks, and we can ensure that there will be a fourth player in the running, wherever you are in the country, in each of the 14 licensing areas.

When you get into that business, it takes a lot of cash, and becoming cash positive is quite an issue. This is why access to capital is important.

We followed the recommendations of the Red Wilson panel and the competition report that followed.

After that, there were roaming and tower-sharing issues. As we know, more and more people want to have access to wireless, but fewer and fewer people want to see towers in their backyards. We had to deal with that issue, so we will expand the roaming policy for an indefinite period of time. All carriers will benefit from that policy. For tower-sharing, we will consult with the stakeholders, the industry. What we intend to do is ask for more transparency and information sharing.

You know that for both of these aspects, there is an arbitration process. We will make sure that we tighten the rules to make sure that when there is litigation, it is effective. We heard a lot of frustration, so we said that we would tighten the rules to make sure that we have a process for resolving litigation effectively.

I think we will have a balanced approach down the road. We had to get in the game, but we tried to have the least intrusive measures possible. All of this was done keeping in mind that we wanted to achieve the four main goals I mentioned at the beginning of my statement.

3:50 p.m.

Conservative

Mike Lake Edmonton—Mill Woods—Beaumont, AB

With respect to the consultation process that went into this, if I remember correctly, there were three different consultations: one on the 700 megahertz band, one on the 2500 megahertz band,and one on foreign ownership.

Could you maybe speak to that consultation process?