Industry Committee on Nov. 29th, 2012

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

In addition to the manufacturing sector, you mentioned in particular the aerospace sector. We are eagerly awaiting the Emerson report to find out what is happening in that regard. Do you have consultations with those sectors? According to some of their representatives, this report may have a fairly significant and sudden impact.

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

There have indeed been some consultations, with Mr. Jenkins' group of experts and also with Mr. Emerson's group. Personally, I had consultations and held roundtables throughout the summer, particularly with people in the manufacturing sector.

With regard to the financial sector, my colleague Jim Flaherty has also consulted with various groups. As I told you, the Jenkins report contains other conclusions and recommendations that have been fully evaluated. As we speak, Mr. Emerson’s report is being announced. So it is a step towards the reform we want to make. However, basically, the problem of low private investments had to be addressed.

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

Savings are going to be made in this area. Transfers have probably been made to the IARP, perhaps in the

venture capital.

There is still a shortfall of $500 million. What is going to happen? What does the future hold? What can we expect for the manufacturing sector, which needs predictability so that it can plan for the future?

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

When we talk about predictability, it is important also to talk about consistency. That is why we took the trouble to turn to external resources to get a proper understanding and identify the issues. This is a big area. There are sectors and sub-sectors. We are talking now about the Emerson and Jenkins reports.

What is important is to put in place the new tax credit reform for research and development, to evaluate its impacts and see how the future looks. There are reforms at the National Research Council Canada. My colleague Gary Goodyear is going to come and talk to you about that. As I have already said, the report contains other recommendations that are fully evaluated and studied. We are going to go ahead with that.

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

Thank you very much, Mr. Paradis.

I would like to give the floor now to Mr. Cleary.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

My questions are for Mr. Valcourt and the Atlantic Canada Opportunities Agency.

Mr. Valcourt, right at the beginning of your opening statement you talked about how you are pleased to report on how your government “is going to create jobs” and “stimulate the region's economy”. I find that ironic in that, right off the bat, you have been killing jobs at ACOA and you have been cutting back on grant money. There was a 25% cut—this is a well-known fact reported in the media—to ACOA grants last year alone. That 25% is $78 million. A further $7 million was allocated to be transferred, but it wasn't given out. You talked about stimulating the economy and creating jobs at the same time you are killing grants and killing jobs.

You were asked about that in the media just a little while ago. You were asked about the fact that ACOA has been cutting back left, right, and centre. You talked about how the federal Conservatives have “unprecedented” federal investment in Atlantic Canada through the $25-billion Halifax shipbuilding contract. Now, don't get me wrong: the $25-billion shipbuilding contract is a wonderful thing, but it's not the be-all and end-all for Atlantic Canada, and it's certainly not going to help every nook and cranny in Atlantic Canada—places like Newfoundland and Labrador.

My question is a pretty broad one. What is your overall plan for ACOA and are you still committed to ACOA? For the second part of my question, I'm sure that in terms of the asks, the number of businesses that actually ask for grant money from ACOA...I'm assuming that isn't down, but your refusal rate must be down. Is it? So again, there are two questions.

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

Well, first of all, when you talk we should be clear about the terms we use. When you call for grant money, we are not in the business of providing grants to businesses in Atlantic Canada—

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Loan money—sorry.

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

We are in the business of helping small and medium-sized businesses try to be more productive, try to succeed in this global economy, and this we do through repayable contributions—

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you, Mr. Valcourt. I don't need a lesson in ACOA. Can you please just try to answer the questions?

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

Your question was whether or not we are committed to ACOA: the answer is yes. This agency is I think doing what it is mandated to do, which is to try to help businesses and Atlantic Canadians improve their earned income—which is our actual mandate.

But when you talk about the actual spending and what you refer to as cuts, if you compare the spending of 2011-12—it was $330 million—to the actual spending of $408 million in 2010, that is a decrease of 19% or $78 million. The variances in actual profiles are due to a decrease of $700,000 in operating expenditures and a decrease of $77.3 million in grants and contributions.

The variance in grants and contributions, which you seem to deplore, has to be understood, because it is mainly attributable to the completion of initiatives under the Canada economic action plan, which represents decreases as follows. I mean—

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

I'm sorry—

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

No, no—

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

I'm sorry to—

[The Chair, Conservative, David Sweet]

Order.

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

You asked a question. Can I give you an answer?

[The Chair, Conservative, David Sweet]

Actually, do you want to know what? Because of that intervention, I was allowing you to try to finish, Minister, but we're way over time.

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

Okay.

[The Chair, Conservative, David Sweet]

I was giving the opportunity to the opposition to hear the answer, but now that we've broken, we need to go to the next member.

We'll move to Madam Gallant for seven minutes.

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

Thank you, Mr. Chairman.

What is the impact of the strategic aerospace and defence initiative on the economy?

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

It's huge. I have some numbers here that are worth mentioning.

First of all, there is support for 26 projects with an authorized assistance of $827 million. It is expected to leverage an additional $1.6 billion of investment into the economy. As of now, 21 projects have already entered into a wide area of collaboration with various universities, colleges, and affiliated research institutes.

Fourteen projects have successfully completed all or part of their R and D, resulting in the development of new or improved products, services, or processes. Any projects that have successfully commercialized the results of their R and D or put into use a new process innovation are supported by SADI.

Simply put, we are leaders in aerospace. We are fifth in the world. This program helps generate investments and helps maintain our competitiveness in the world. These are the tangible benefits.

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

How has our government helped to improve and support the aerospace research and development industry?

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

Of course, we want to optimize the investments here. This is why I mentioned at the outset that I'm very keen to receive the report launched this morning by David Emerson and his team. On what we've done so far, I think SADI has demonstrated that we have good payback on investments, but we can always improve things to do business.

Of course, we also have improved our policies in terms of IRBs. We want to have more partnerships with universities and SMEs.

We have a lot of tools we can use to make sure we can leverage all of this stuff. As I said, I would like to see the report to make sure that we can optimize all of the tools we have in our possession and go further ahead with this.

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

Why is the government conducting a review of the aerospace and space sectors?

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

I think David Emerson was crystal clear at the press conference when we launched the review 11 months ago at Saint-Hubert. First, I want to commend his team for coming back with a report 11 months after that. They've done a great job.

The idea is to say, “Yes, we are a leader.” We have a lot of Tier 2 companies and we have Tier 1 companies, but I think it would be a mistake be to say, “Let's rest on our laurels.” We cannot do that, because this is a highly competitive sector.

There are a lot opportunities coming up. The report will help us make sure that we can better position ourselves, not in terms of the present situation, but in terms of where we want to be two, five, 10, and 20 years from now. If we want to remain a leader in this sector, we need to fully evaluate what the opportunities are.

This is why, in this report, as I mentioned, a lot of key points were evaluated. There was a lot of involvement from the industry, but also from academics, provinces, and other federal departments to make sure that we can all streamline together and make sure that this sector remains a leader.