Industry Committee on April 18th, 2013

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Speaking of the past budget that was recently tabled, you indicated in your opening comments.... For example, there's an investment of $60 million over five years to help outstanding and high-potential incubator and accelerator organizations or centres in Canada. Could you elaborate on this particular new program, the purpose it will serve, what it will achieve, why it's important, and when that funding may begin to roll out?

[Gary Goodyear, Conservative, Cambridge, ON]

Let me start at the front of it. Colleagues, accelerator incubators are an opportunity for businesses to get some mentorship from other businesses, and in some cases academics as well. This has been proven to be an extremely valuable step up for our businesses. It decreases their start-up costs, and it improves their probability of successfully remaining in business.

We have invested and supported a number of accelerator incubators around the country. As is the case in any multiple group of organizations, you tend to have a variety of performance metrics. Truth be told most of these are operating extremely well. Some of them are quite superior to the others.

We want to provide additional support to get the plan, the approach, and the strategy right of what an incubator and accelerator will do.

The Minister of Finance, Mr. Flaherty, in his wisdom, and I completely support it, has provided some funding so we will be looking at some of the most exceptional incubators in a pilot program to see how we can get them to move to the next level.

I should stop right there because that's about the end of the knowledge I have of that program. It looks as if I'm getting the signal that I'm done anyway, but hopefully that will answer your question. As always, the budget has to pass first and then of course we will consult to see how to roll this out and ultimately which ministry will be responsible for this program.

[The Chair, Conservative, David Sweet]

Thank you, Minister.

Colleagues, it's 4:30 so we will suspend for a moment. Minister, I understand you are here from 3:30 to 4:30.

[Gary Goodyear, Conservative, Cambridge, ON]

I am. Unfortunately I have to go. Colleagues, I want to thank you for the opportunity to share some time with all of you. It is the most important file, and I know you agree. I'm very excited about it, and I'm here to answer questions.

Thank you very much, Mr. Chair.

[The Chair, Conservative, David Sweet]

Thank you.

We'll suspend for three minutes.

[The Chair, Conservative, David Sweet]

Ladies and gentlemen, we're back for questions to the officials now. It's Mr. Harris's slot at the moment, but he will return momentarily so I'll let Madam Gallant go ahead, and we'll have them switch spots.

Madam Gallant, you have the floor for five minutes

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

Thank you, Mr. Chairman.

Our government has made significant investments in science and technology since 2006. We often hear the minister highlighting different investments we've made.

When the global economic downturn occurred, everyone had to make adjustments. How have the measures this government has taken impacted on your portfolio?

[Robert Dunlop]

Thank you for the question.

Mr. Chair, as the minister was explaining, what the government chose to do in their regional economic action plan primarily for science and technology was very stimulus based with the idea this is something that would begin and it was something that would end, with the idea of leaving a tangible legacy at that time.

The minister highlighted the knowledge infrastructure program. That was $2 billion for infrastructure in universities and colleges. As the minister said, the program was completed on budget and on time; 554 projects across the country increased the capacity of universities and colleges to do research. Also a significant number of those projects were related to things like energy efficiency. As the stimulus ends, the savings to the institutions begin, and instead of having created an ongoing problem that has to be funded, you have created savings and ongoing advantage.

There were other elements as well, but again, we're stimulus based so the intent was for them to end, as well as to have an impact at a time when the economy was in dire straits.

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

Recently I had the opportunity to do a presentation announcement to Pillar5 in Arnprior. It was formerly a pharmaceutical manufacturer, but the community got together to keep the plant open. Now they package different over-the-counter items, one of them being Visine.

In this announcement it was a fully repayable loan to purchase a machine that would help with the sterile aspects of an ophthalmic solution.

Could you tell us about that program, about how well it has been received, and about whether or not you've been able to measure the positive effects in terms of number of jobs created or that are anticipated to be created once the equipment and training have occurred?

[Robert Dunlop]

Mr. Chair, I believe that program is administered by FedNor....

Is that an Industry Canada program? That's one of yours? Okay.

I'm sorry.

[Dr. Bruce Archibald]

Mr. Chair, I'll ask Clair Gartley to talk about that particular program.

[Clair Gartley, Vice-President, Business, Innovation and Community Development, Federal Economic Development Agency for Southern Ontario]

Thank you, Mr. Chair.

The Pillar5 project that was recently announced was funded under what we call our prosperity initiative. When Minister Goodyear was here, he mentioned the suite of southern Ontario advantage initiatives that were developed several years ago to fund a number of different programs and projects.

One of those initiatives is the prosperity initiative. We've had a lot of interest in that initiative. It does a number of things. It supports business productivity. We've worked with people like the Canadian Manufacturers & Exporters in supporting productivity in businesses. It also supports diversification of regional economies, and it helps build economic clusters.

Pillar5 was one of the many projects funded under that initiative. They're basically moving into more of a knowledge economy, creating high-value jobs. Certainly they were a good fit for the initiative.

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

I understand that this particular project is anticipated to generate another 50 jobs at a plant where there's already 100.

Overall, do you have any numbers yet on what the projected increase in employment will be under that particular program?

[Clair Gartley]

First of all, I should mention that for all our programs that we deliver, we have in place performance measurement strategies. We're tracking a number of different performance indicators right from the output level to the longer term outcome level.

It's still pretty early days—FedDev has only been in existence for three and a half years—but we have a five-year evaluation plan for our programs. We have already started to do quite a bit of evaluation work. Part of that was due to working towards renewal of our funding.

Some of the evaluation on many of the projects we did in our first couple of years, 2009 to 2011, would indicate something over 25,000 jobs as a result of the projects funded just in those first couple of years, and then—

[The Chair, Conservative, David Sweet]

Thank you, Mr. Gartley. I'm sorry, the time is away on us.

Now, because of our adjustment, we will have two spots.

We'll go to Mr. Harris for five minutes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for staying with us for the second hour.

Ms. Liu spoke earlier about productivity and the challenges we face. Another aspect of that is investments into the IT sector. Currently Canadian businesses are only spending about 58% of what their counterparts in the United States spend in the IT sector. Of course, this is a major barometer for productivity and investment and innovation.

I'd like to know what in the budget is actually seeking to correct that, to bridge that gap in terms of IT sector funding and business.

[Dr. Bruce Archibald]

In the budget, as the minister mentioned earlier, the agency was renewed for $920 million over the next five years. Over the course of the next months, we're going to conduct a number of round tables across southern Ontario and talk about areas of programming that we may want to design as we go forward for the next five years. Certainly the area of information communication technology is one that is going to be of great interest.

Also in our funding there was an allocation designated for the advanced manufacturing fund of $200 million over the course of those five years. Clearly one of the sectors that we're very interested in from a manufacturing point of view is the whole ICT space. We will also be consulting on the design and delivery of that program. Those are areas that we're going to look at.

In the past though, we did some investments in the area of ICT. We made a number of investments through our prosperity initiative to look at high performance cloud computing; we've made an investment of about $20 million to date. We've also made a number of investments in our investing in business innovation initiative to actually create start-ups of ICT firms in southern Ontario. There has been some activity in the first years of FedDev, and I expect we'll continue to work in that space going forward.

[Dan Harris, NDP, Scarborough Southwest, ON]

Cloud computing, which is still largely misunderstood by a lot of people, is one of those growth areas in the future. However, here in Canada, with the strict limitations on bandwidth that are placed on consumers and businesses, that severely restricts and limits the ability of business to take advantage of that. When you only have, say, 60 gigabytes of bandwidth per month, you're not going to be able to go beyond that, otherwise the cost becomes prohibitive. However, that's more a question for Minister Paradis when he comes on May 2.

You mentioned the round tables. Really, it is important to come together with a plan as to how to properly spend the money to actually have the greatest effect. What kinds of stakeholders are going to be included in those round tables? Has there been a decision as to how many and where they're going to be, or has that plan not been put in place yet?

[Dr. Bruce Archibald]

We haven't formalized any plan at this point. We've had some conversations internally within the agency and some preliminary conversations with the minister, but I think we've actually used round tables very effectively in the past. They've actually been a very good way to assemble a lot of people from a variety of different experiences and backgrounds fairly quickly and to get some good input. We've used that very much in the design of our early programming. As we did some refinement, we brought those together.

Our expectation is we're going to do the same over the next few months as we try to go back out and seek guidance on what went well in terms of programming, and what the areas are where there are still some gaps that we may want to look at, what the areas are where we may want to reallocate resources because there are other people working in those spaces.

[Dan Harris, NDP, Scarborough Southwest, ON]

Are you planning on doing more than round tables in order to get the information required or just round tables?

[Dr. Bruce Archibald]

No. We're also planning to work with our colleagues in other levels of government. Obviously being based in a regional agency for Ontario and southern Ontario, we have close ties with the provincial government. We've established good working relationships with them in the past. We've done some interesting projects in various regions of the province. Obviously we'll be consulting with our colleagues there, as well as with key trade associations. We've had a lot of good discussions with people such as the Canadian Manufacturers & Exporters and the Yves Landry Foundation. We'll also do some consultations with associations as well.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you very much. I'm out of time.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Harris.

Now we go on to Mr. Stewart for five minutes.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Thank you, Mr. Chair.

Thank you to the witness for answering questions.

The NRC was allocated $67 million in financial year 2012-13. I'm wondering what that's being used for. If you could be specific, that would be great.

[Robert Dunlop]

That money was used, as said in the budget, to facilitate the transition which the NRC management has been working on, and which, as the minister said, would be announced shortly.