Evidence of meeting #5 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 industry.
A recording is available from Parliament.
4 p.m.
Conservative
The Chair Conservative David Sweet
Mr. Dicerni, we were actually in overtime when Mr. Julian finished his question, but I wanted to give you an opportunity to give at least a modicum of an answer on that. The NDP can return to that next round if they'd like to get a more fulsome answer from you.
Now it's over to Mr. McColeman for seven minutes.
4 p.m.
Conservative
Phil McColeman Conservative Brant, ON
Thank you, Mr. Chair.
Thank you for taking the time to come to us and get us up to speed. Some of us are new on the committee. I really appreciate the three of you being here.
My first questions are relating to small business and entrepreneurs. As you know, it's popularly thrown out there that small business and entrepreneurs create about 80% of the employment in the country. That's a figure that's often referenced.
You mentioned in your opening comments, Mr. Dicerni, about insuring loans for small businesses. Is there anything beyond that? In the case of a lot of small entrepreneurs and small business people, they have limited time and, frankly, sometimes limited skill sets or resources to be able to access government programs. What does the department do to assist this key sector in our economy other than insuring small loans?
4:05 p.m.
Deputy Minister, Department of Industry
The first thing I would mention is that Mr. Bernier as minister heads a commission the government set up to address the issue of red tape, which is the culprit in regard to small businesses. I have quite a few friends who are small-business people who look at the mammoth bureaucracy and ask, “How do I get through all of this?” I worked with Mr. Bernier when he was Minister of Industry, and I know of no other minister who could bring the degree of passion that he has to this endeavour, and I know he's quite committed to cutting through the paper burden or the red tape to indeed facilitate the activities and the work of SMEs.
Secondly, IRAP, the industrial research assistance program, which is run out of the NRC, is very user-friendly and it has been extraordinarily beneficial to small business. I've been in my job for five and a half years, and it's probably the only program that nobody has ever criticized. I don't know what their magic is. I don't know what these people drink in the morning. And every time I've come to a committee, members from all parties have supported IRAP.
The name of the program in French is PARI.
During the economic action plan, the government invested additional resources, which I think were well used. And we are working with the NRC to see, in terms of our digital economy, how we can again enhance the usage of that program for ICT adoption.
The third thing I would mention is the forthcoming legislative review of the BDC, the Business Development Bank of Canada. The BDC is the Government of Canada's primary instrument in regard to providing capital to SMEs. This is not to say that there's a section 15 constitutional right for every small-business person to get a loan from the BDC, but I think BDC does take that extra step of going higher up the risk curve to provide capital where it's needed.
Lastly, the BDC has a really solid venture capital arm to support that entrepreneur who has a great idea but is having trouble finding traditional financing. If banks won't talk to him and if even by BDC standards it's too risky, there is venture capital, which I think is making a difference.
4:05 p.m.
Conservative
Phil McColeman Conservative Brant, ON
Switching gears to post-secondary and the supports that a lot of institutions receive through the economic action plan, I believe you mentioned that we rolled out $5 billion of infrastructure funding. Would that be the knowledge infrastructure program, KIP?
In the last Parliament I was part of the Conservative post-secondary education caucus. We met with a lot of presidents and a lot of people involved at the leadership level in post-secondary education, at universities, at community colleges, at polytechnics. I think this federal involvement in post-secondary was precedent-setting, and they expressed to us how there is an ongoing need to play a part in the advancement, not only with regard to research chairs, as we have done, but also in terms of the bricks and mortar and infrastructure parts of universities.
I know we closed down the KIP funding because it was time-limited, but going forward do you see that the department would take a look at maybe not so much the allocation of new dollars but perhaps some reallocation of existing resources to meet some of these ongoing needs of our post-secondary institutions?
4:05 p.m.
Deputy Minister, Department of Industry
I was Deputy Minister of Education for a period of my life in Ontario, so I have a certain understanding of the ongoing capital needs that post-secondary education institutions have—and they are ongoing.
With regard to our involvement, the Minister of Finance and the Prime Minister were quite clear that it was time-limited in the context of a specific economic crisis. And I believe it will go down as being one of the most successful investments partially because of the tremendous cooperation that existed between the federal government and provincial governments and the institutions. Everybody stepped up. Everybody met the deadlines they had to meet, and the money will all be spent and I think well accounted for. I think we will look back over that period of time as being the period of infrastructure renaissance across the country.
In terms of the future, the next time you bump into the Minister of Finance, why don't you pop that question to him?
4:10 p.m.
Conservative
The Chair Conservative David Sweet
Thank you very much, Mr. Dicerni.
Mr. McColeman, that was almost exactly on time.
Now it's over to the Liberal Party and Mr. Hsu, seven minutes.
4:10 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Thanks.
Thanks for giving me the chance to listen to you today.
I'll start out with a couple of really quick questions. You mentioned a discussion paper on the spectrum auction. Can I go online and find it?
4:10 p.m.
Deputy Minister, Department of Industry
It's on our website. You'll find both the discussion paper and the comments that have been made by the various participants.
4:10 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Good. Thanks.
Secondly, where on the pie chart is the budget for FedNor?
4:10 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Does it fall under the grants and contributions piece of the pie?
September 28th, 2011 / 4:10 p.m.
Kelly Gillis Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry
Yes. There would be a portion for FedNor under grants and contributions, and also for the running of FedNor within the operating budget of the department.
4:10 p.m.
Deputy Minister, Department of Industry
There's about $40 million in grants and contributions in FedNor per year.
4:10 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
Okay.
This is a longer question. I wanted to ask about your strategy for getting small business, SMEs, to adopt computers. I have worked in a number of situations where computers have transformed businesses. In my experience, it's always been that there's a person who understands business and a person who loves technology and loves to learn and adopt the technology. The transformation happens when that is the same person.
I'm wondering what your strategy is and whether there's some...whether I'll look at the strategy and say “Oh yes, I recognize that, because I've seen it before.”
4:10 p.m.
Deputy Minister, Department of Industry
What I encourage you to do is talk to people at the BDC; I can hook you up for that. What we are trying to do with the BDC...and the president has given speeches on this.
First, they're improving their management consultancy capacity in regard to ICT adoption by SMEs. You have to start by having somebody who can help you connect those two things. They are dramatically increasing their capacity to give consulting advice.
Secondly, they are doing a training program for their loans officers so that the officer will be able to encourage entrepreneurs--because it's a loan, not a grant or a contribution. They have to be convinced that this would be helpful to their growth, that this would helpful to their business. In order to do that, the loans officer has to understand what is available and how to sell it, if you wish, as part of a loan package. There's marketing, there's enhancing the supply chain, and all the things that small businesses have to go through. What we're trying to do is inculcate the fact that there is another dimension: ICT.
Thirdly, we have a federal-provincial process going, because provinces do have tools and levers also. We are pooling our knowledge, pooling our programs and resources, including at the BDC, with provincial governments to come out with something that would be available to SMEs and to say, in regard to the ICT adoption, this is what the federal government can do and this is what provinces can do.
Lastly, as I mentioned, we are trying to get the IRAP folks to focus on this even more.
4:15 p.m.
Liberal
Ted Hsu Liberal Kingston and the Islands, ON
My last question is about the existence of FedNor as a program and not as an agency. What would the costs be, or what would the difference be in operating costs, if it were a separate agency as compared with a program inside Industry Canada? Compared with what we have in FedNor right now, would it be a lot more expensive to operate as a separate agency?
4:15 p.m.
Deputy Minister, Department of Industry
Well, I can't give you a number. You'd have all the overhead.
4:15 p.m.
Deputy Minister, Department of Industry
We look after FedNor in terms of finance, HR. When you have a department such as Industry Canada, you are provided with much more overhead support that doesn't have to be carried out by an independent agency.
The person you should ask about this--he has been asked once or twice about this, or maybe ten or twenty times--is Minister Clement. He has spoken about this and is quite knowledgeable on the subject matter.