Industry Committee on March 15th, 2012

[Geoff Regan, Liberal, Halifax West, NS]

What you proposed yesterday—

[The Chair, Conservative, David Sweet]

When you cross-talk like that—

[Geoff Regan, Liberal, Halifax West, NS]

It's hard to interpret that, isn't it, Mr. Chairman?

[The Chair, Conservative, David Sweet]

It's very hard, so maybe we could just have a question and then an answer. I know the time is short, Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

I'm sorry about that. It is very short.

The difficulty I have is this. Basically, the results of what you did yesterday mean that the large companies, for example, will each take one of the four good blocks that they're going to want, and then, only if they take one of the lower-quality blocks as well, do your requirements about having to do a rural build apply. As a result, there's a disincentive to them to actually buy any of those lesser, lower-quality blocks, and it's therefore unlikely you're going to get the kind of rural development you're looking for.

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

I would say two things.

First of all, don't overlook the lower blocks. I think they will be attractive.

Second, there was also a mention about the fact that if you have network sharing, you are under this rule. This means that if Bell and Telus, for example, share their network—they do share a network— and they go with two blocks, they will have these requirements to meet. After that, what could happen is what also happened in the past. There were some partnerships, for example, with MTS and Rogers, so a situation like this could trigger these requirements. As you said, if the three incumbents do it, there will already be a trigger with Bell and Telus.

[Geoff Regan, Liberal, Halifax West, NS]

In fact, when you take three incumbents taking three-quarters of it, that leaves only one quarter.

Anyway, let me go on—

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

No, but we are talking about the quarter sharing, so this is exactly the fact here....

[Geoff Regan, Liberal, Halifax West, NS]

—and talk about another topic.

The Standing Orders of the House of Commons of course require this committee to consider your department's report on plans and priorities in conjunction with the main estimates. We would normally have your plans and priorities report in our hands at this point when we have the main estimates, but the government is refusing to table those until mid-May.

The question is this: will you commit to return to the committee once your department's report on plans and priorities has been tabled so that we can fulfill our mandate and our responsibilities under the Standing Orders? I hope you would agree, in terms of what your priorities are, that the priority of coming here and becoming accountable before this committee, before members of Parliament, would be one of your high priorities.

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

First of all, I'm here today. I think within my notes it was quite complete about what our priorities are. I will let the DM go on this specific point.

[Richard Dicerni]

I'm given to understand that the requirements from Treasury Board, because they are the ones that establish the timelines, are that we have to submit that document, I believe, within the next two or three weeks, and I believe the government-wide schedule is for those to be tabled around May. We are not the people who set rules as they relate to those timetables.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much. I question whether the Minister will commit to coming back when those are before us.

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

I'm here to talk about the priorities. I had a twelve-minute speech and I tried to wrap this up to leave you time for questions. You had my priorities.

[Geoff Regan, Liberal, Halifax West, NS]

I don't get more than seven minutes regardless, Mr. Minister.

How much time do I have left, by the way?

[The Chair, Conservative, David Sweet]

It says 7:06, 7:07. Thank you very much, Mr. Regan. I try to be diplomatic in that regard.

We're on to the second round now, and we'll go to Mr. Carmichael for five minutes.

[John Carmichael, Conservative, Don Valley West, ON]

Thank you, Chair.

Minister, thank you for coming today. We are glad to see you here.

I come from a small business background, a small medium-sized business, and as you know, in the last several years credit crunches and finance crunches have made it difficult for small and medium-sized businesses to compete with access to financing, access to credit, etc.

Could you tell us in a few minutes what our government is doing and has done to improve access to financing, particularly for small businesses but also medium-sized businesses?

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

I'm afraid I won't have enough time.

We did a lot. First, we—

[John Carmichael, Conservative, Don Valley West, ON]

You went three minutes less on the priority side, as you said.

Take your time; I'm glad to hear it.

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

With regard to the fiscal framework, for example, as you know, we just lowered taxes. Now it's 15% for businesses, and even small businesses will have some more good advantages. The tariff and the accelerated capital cost allowance are good measures. Everywhere I go in the country, even in my pre-budgetary consultations, everybody's delighted about it.

Of course, as you know, we had the red tape commission. A minister of state was in charge of that, and he submitted a report to the Treasury Board to find a way to reduce red tape. As you know, we want to make sure that when there are new rules, we get rid of old rules, so this is very interesting.

We also have an important vehicle in the BDC. How can we encourage productivity for our small businesses? BDC put aside an amount of $200 million to help SMEs to invest in digital technology, and aside from this, there is the digital technology adoption pilot program led by the NRC. The SMEs are eligible to apply; it's a program that helps to explain how you can increase your productivity and what the smart things to do would be. This program is very appreciated.

Also, as you know, the SMEs are a huge part of the R and D policies that were announced by my predecessor. We want to phase in R and D for the SMEs and make sure they can be a direct or indirect part of the value chain.

I also addressed the procurement process with the pilot project we had in budget 2012. We also want to encourage innovation on this. There were some opportunities there.

Of course, this topic was studied by the Jenkins report, and I understand that our colleague, the Minister of Public Works, is now looking at the conclusions.

Practical things like this are good—not higher taxes and the creation of programs that are not effective. We'd rather go with the low fiscal framework and make sure we can go with targeted investment where it is necessary, as in innovation.

[John Carmichael, Conservative, Don Valley West, ON]

When you talk about access to financing and some of what you're doing with BDC, will some of the incentives and initiatives be directed at the main chartered banks as well, to free up credit and financing?

As you know, conventional small businesses in this country really don't have access to BDC on a regular basis. They deal with the five main chartered banks.

I'm wondering if there will be access to financing or if there are any initiatives that would incent the big banks to cooperate with BDC or the federal government to free up financing or to incent financing for small and medium-sized business.

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

First of all, we have a program at Industry Canada called

…the Canada Small Business Financing Program.

It helps the SMEs get credit from the traditional sector. This is a guarantee from the government. We invested in this and it is effective.

On the BDC side—and I mention this example here because I think this is great news for the SMEs—we put funds to help SMEs have access to digital technologies and we identified a specific fund of $200 million that is totally dedicated for the SMEs. I think this is a good way to go. When you combine all of this, it is a good thing.

[The Chair, Conservative, David Sweet]

I'm sorry to interrupt, Minister, but time is pressing. I know you only have a short period of time, so I want to make sure I give Mr. Thibeault his five minutes.

Go ahead, Mr. Thibeault.

[Glenn Thibeault, NDP, Sudbury, ON]

Five minutes, and five minutes only—I've been saying that quite a bit over the last little while on Bill C-11. It all comes back, I guess.

Thank you, Minister, for being here today. Usually it's just the minister in the hot seat, but with the temperature in this room, I think we're all in the hot seat right now.

I'd like to continue a little on the spectrum. We've been studying, in this committee, e-commerce and mobile payments. One of the things we all agree upon is that without the spectrum, which is basically the next round of infrastructure for this, Canadian consumers and companies will be left behind, so it's an important issue for all of us.

One of the things we've been talking about a lot in this committee is rural areas and how to make sure that rural Canadians get access. Of course, it's great to hear that there will some commitment to rural Canadians and rural businesses, but on this side we'd like to see a little more. We're looking to the ministry to explain or talk about how we can come up with some of these other ideas that others are talking about.

You've given the structure of the rules: incumbents can only buy one block of prime spectrum and there's a limited spectrum available, so it's five usable blocks at only four.

It is quite possible that no operator, none of the telecoms, will fall subject to the rural access rules, and even if one operator does, there will not be competition, and consumers in rural areas will possibly continue to suffer.

Maybe you can give me your comments on that initially.

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

I will begin with the role of government. As you know, I cannot address the spectrum.

We worked a lot with the provinces on the broadband program. A mapping exercise has been done. I just want to point out that there is a federal-provincial meeting this weekend. It begins on Sunday, March 18, and goes until Monday, March 19. This will be partly to see where we are now, just to make sure that in our mapping we all on the same page. This is a matter of collaboration in terms of deployment for the government roles and the public infrastructure.

There is also the technology. Some companies now go with satellites. There is technology we wouldn't have talked about a few years ago, because it was not effective in terms of megabytes per second, for example. Now it's increasing more and more, so it is our role to see if there is any targeted investment help we can make in these strategic sectors. That is one part.

Going back to the spectrum, we want to make sure we have the winning conditions for rural deployment. That is why we have put in the extra requirements that weren't there back in 2008. The three incumbents will likely have one block each. If Bell and Telus share a network, with two blocks they will have this requirement. I cannot speculate, but it's kind of obvious.

Once again, as was addressed by Mr. Regan, don't overlook the other block. There is a block there, and I believe the players will develop technology to optimize it. The spectrum is there, it's available, and there might be something very interesting.

[Glenn Thibeault, NDP, Sudbury, ON]

The question I would ask, then, is why didn't the government make rural Canadians more of a priority by imposing stronger rural build-out requirements on more of the companies?