Industry Committee on March 15th, 2012

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

I think we made it a priority and we put standards in that could be achieved. If you go too far, your elastic can break. This is why consultations were held by the officials and also by myself to just get the temperature and fully understand what the issues are. Frankly, we are convinced that we have a good balanced approach here. Once again, 98% of the households have access to wireless, and it's the same thing for broadband.

We can argue that, yes, some territories are not covered. First of all, it's not a lot of people, but we would like these people to have access to technology, and I agree with this idea. However, new technologies are appearing more and more—satellites, for example. There are new discoveries in the area that are very interesting.

[Glenn Thibeault, NDP, Sudbury, ON]

Those 2%, though, seem to fall into my riding, because I'm hearing from them constantly. We've got to ensure that—

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Yes, and I used to hear from them. You know, I was exactly where you are, I would say three years ago, hearing constantly about that. The way it was solved was with new technology. With the broadband program and new technology, and now with extra spectrum coming, I am confident that we will achieve it.

[Glenn Thibeault, NDP, Sudbury, ON]

You've been talking about the “use it or lose it”. I believe you talked about—

[The Chair, Conservative, David Sweet]

I'm sorry, that's five minutes and 20 seconds now. I was looking for a natural gap, so—

[Glenn Thibeault, NDP, Sudbury, ON]

I was trying to jump in very quickly so you couldn't cut me off.

[The Chair, Conservative, David Sweet]

I know. You learned nothing from your experience.

[Some hon. members]

Oh, oh!

[The Chair, Conservative, David Sweet]

We go to Madam Gallant for five minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman,

Minister, my great riding of Renfrew-Nipissing-Pembroke starts just outside the limits of Ottawa, yet we still have farmhouses that are not serviced by the major land line provider, so when it comes to emergency services, the wireless spectrum is very important. Yesterday the chief of paramedic services for Renfrew County, Mike Nolan, asked me to extend his heartfelt thanks for what you did in yesterday's spectrum announcement.

Would you please tell us about the designation for public safety?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Yes, this is something for which there was a lot of appetite. We made a commitment in our last electoral campaign to address that issue. We know that in the United States they have done this.

I have to specify, first of all, that all of the stakeholders in the industry agreed that we have to align with the structure in the United States. You have the blocks, and then you have the public safety issue, so, yes, we designated a block for public safety. This will be a huge opportunity to address an uncertainty that has been there for awhile. Now it is a new era, and we will be fully compliant with the United States. It will be fully compatible, so we will now have a North American approach. Given our territory and the new technology, we might even have economies of scale in developing new products and new technology to make sure that our first responders are well equipped, so this was great news.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

This news also speaks to jobs. Right now, especially in this committee, our number one focus is jobs and ways whereby we can emphasize that. Small businesses especially tell me, and the record shows, that when we reduce taxes for them, they end up getting busier and hiring more people. From that standpoint, what is government doing to reduce taxes on small businesses?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

On small businesses, as you know, we have been the lowest regime since January 1. It's 15% for small businesses. As well, we have our capital cost allowance, the red tape reduction, and access to capital. I pointed out that BDC....

I hear exactly the same thing. A lot of companies said, "Look, if there was nothing there, we would be in real trouble. Now we can get through the economic slowdown. We are recovering and now we can hope to hire people." We also lowered the GST. We have been talking sometimes about the price of gas going up and down; the GST can soften the impact. When you add it all together, this is good. I think this is good way to go.

I hear a lot about this in my riding too. People are saying, "Let us do business instead of coming up with cumbersome regulation. This is not what we want." Frankly, as Minister of Industry, this is exactly the direction I have tried to make.

When we talk about the manufacturing sector, we know there is a challenge there, but in the automotive sector, for example, with the automotive innovation fund we can help our manufacturers to develop new products and find some new niche markets. These are good targeted investments that will help to develop innovation.

What is saleable first is innovation. If you want to be first, innovate, and then you'll be able to sell first. This is exactly what we should continue to do. This is why we do it in the aerospace sector also. This is also why we took that decision yesterday with the rules of the spectrum auction: to make sure we can have the best technology for all Canadians, wherever they are.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

The numbers show that the more we're reducing business taxes, the greater the overall revenue for government, so we should keep our taxes low.

We talked about existing business, but what about entrepreneurship? What is the government doing to encourage entrepreneurs?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

As you know, we have the Canadian Youth Business Foundation that we have put $20 million of further investment into. Also, young entrepreneurs can obtain up to $15,000 in start-up capital, and this is an additional $10,000 for expansion in financing—

[The Chair, Conservative, David Sweet]

Thank you, Minister. We'll probably have to listen to the next chapter of that some other time.

I'm conscious of your time. Can you take another round of questions at this moment, Minister?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

It was one hour. I have to go. I am on duty.

My colleague has covered for me, but I have to be there in the next five minutes. Guys, you know what duty is.

[The Chair, Conservative, David Sweet]

All right, then, Minister. Thank you.

We'll suspend for two minutes to let the minister leave.

Minister, thank you very much for appearing before the committee.

[The Chair, Conservative, David Sweet]

Ladies and gentlemen, we're back in session.

Now we'll have Mr. Dicerni on the hot seat, and just in case my humour was misinterpreted by anybody, of course I didn't literally mean that Mr. Thibeault didn't gain much wisdom from his experience; it was simply the humour of the moment. I was very grateful to learn how you were very strategically looking away from the chairman, which will help me to deal with the committee in the future.

Thank you very much, Mr. Dicerni and Madam Gillis, for being here.

We'll go on to...has our order changed? No, it hasn't.

Ms. LeBlanc has the floor for five minutes.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Good afternoon, Mr. Dicerni, Ms. Gillis and Mr. Kennedy. Thank you for coming to answer our questions.

I would like to talk about the mandate of the NRC and NSERC in particular.

People want to change the NRC's mandate to make it a research services provider for industry. We don't necessarily want to change it, but rather have its direction be focused more on research for the industry. At the same time, we see in the budget that NSERC will receive $300 million for knowledge transfer.

What is the government's overall plan for the various research and development institutes, particularly the NRC and NSERC? Is there not some kind of overlap in the budgets and mandates for these two institutes?

[Richard Dicerni]

I don't think there's an overlap between the two.

The first is a granting agency that supports university research. The agency receives applications from university researchers, it evaluates them, particularly through peer evaluation, then it allocates research funding that is usually spread out over two or three years.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Are we talking about basic research or directed research, meaning research meeting the needs of industry?

[Richard Dicerni]

The granting agency has an overall budget of about $1.1 billion, and it is divided into three main components. The first supports what we call basic research, where researchers submit proposals, and where the research is not based on any particular topic. Another component of the budget focuses on partnership and innovation. Again, the applications are submitted to the agency for evaluation, but they are targeted to facilitate partnership between academia and the industrial sector. The third component supports talent development through Canada research chairs, scholarships and so on. So, a third of the budget aims to increase partnerships and respond to the needs of the industrial sector. These are the three components of the budget for the Natural Sciences and Engineering Research Council.

As for the National Research Council of Canada, it currently has about 15 targeted institutes that aim to develop expertise in very specific sectors, such as aeronautics.

NSERC also has a parallel program, the Industrial Research Assistance Program, which aims to provide grants on a case-by-case basis to small and medium enterprises and to create a link with academia, a link that the Jenkins report looked into and made recommendations about to the government. The government is currently considering how to improve that connection.

In short, I wouldn't say that there's any overlap, but we need to improve the connection between these two bodies.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

The minister, who has unfortunately left, mentioned innovation. He also said that innovation came from the private sector. We know that the Conference Board of Canada ranked Canada 14^th among OECD countries when it comes to innovation.

Is the current direction to abandon basic or exploratory research so we can put all our eggs in one basket and focus the research on helping industry?

[Richard Dicerni]

I have a few random comments about this. I don't think it would be a good idea to put all our eggs in one basket, in part because Canada is a big country. We are much better off targeting more regional intervention niches. In my opinion, trying to centralize everything would not necessarily be a step in the right direction.

You also mentioned the Conference Board of Canada report. It's true that if we compare the investments in research and development with the gross national product, Canada's performance isn't very good: it represents about 1.8%. China has almost surpassed us.

So we need to do better in this area, especially since, as Mr. Paradis said, there is a tax credit that costs taxpayers $3 to $3.5 billion a year. With that type of intervention, we should be getting better results. That was the objective set by the Jenkins report.