Industry Committee on April 30th, 2013

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

I have to tell you that I would not like you to stop the work that you are doing. Statistics Canada serves all Canadians and you serve small and medium-sized businesses. It would be useful to have that data, because they are processed in depth and they are categorized in various ways. They can be analyzed. They can be useful to you, but they can also be useful to all Canadians, especially to parliamentarians who have to make decisions on the issue.

I am also interested in something else. On page 11 of your presentation, if I understand correctly, the first program no longer exists. That was the accelerated capital cost allowance for computers and software. You made an excellent suggestion and I have taken careful note of it. It seems that the program, valued at $350 million, was definitely designed for the entire wide range of businesses. Clearly, somewhat larger companies took advantage of it. Do you find that the government is good at communicating when it comes to programs that are of real interest?

Do you feel that communication is good and that information on government programs gets to smaller businesses? Are they aware? Are the programs widely publicized? What is the situation there?

[Corinne Pohlmann]

This particular program of the accelerated capital cost allowance was well used by our membership. I wouldn't say the government is the best at communicating its programs, but certainly we try to do our best—and I'm sure other groups, such as the chamber, do their best—to make sure that the programs that are out there and of benefit to them are being communicated to them. We certainly do our part to do that.

The accelerated capital cost allowance program for computers and software was definitely a program, as I said, that had good uptake by at least our membership. We did see in our statistics a little bit of an increase in those investments during this particular period.

This was, as you may recall, during a downturn in the economy, a fairly severe one at that time, and they were still investing even more. We believe this had something to do with making sure those investments kept happening.

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

I think that is deplorable, in a way. Before a program really gets going, and while everyone is getting organized, all of a sudden, they are told that it is over. They hear no more about it and something else comes up.

I noticed something in your presentation. When we had people from Industry Canada with us, they were very proud of the BDC innovation financing program. I feel that it is a good program. But from what I see, I wonder if people took advantage of it. The “no” line is pretty long. The same goes for the Industrial Research Assistance Program, the IRAP.

Could you explain that to me? How is that these programs, which the government seems to be promoting as the be-all and end-all at the moment, do not seem to be embraced by entrepreneurs?

[Corinne Pohlmann]

Yes, that would be true. There's BDC, for example, though it's more of a lending place of last resort. Not that many of our members will tend to go to the BDC; they will go to traditional sources of financing on these types of things. So this is not unusual.

IRAP, which is the other one you mentioned, is a really good program for those that can access it, but it is a very targeted type of program that only certain types of companies are able to access, or are willing to access.

The accelerated capital cost allowance is one that is very broad in nature, and therefore a lot more firms are able to take advantage of it. That's exactly why you see that. IRAP is a very specific thing, so for those that can get it, we would agree it is a fairly decent program. But only a very small minority can get it.

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

In any event, I find that that slide in your presentation speaks volumes.

It speaks volumes.

Now I would like to speak to Mr. Smith.

You mentioned that small and medium-sized businesses are lagging in terms of the adoption of technology and that it will be an obstacle to our competitiveness and our ability to increase productivity. There are gaps between small businesses and medium-sized businesses and between urban areas and more remote regions. At the moment, it seems that we have no long-term plans to reduce those gaps and to encourage small and medium-sized businesses to embrace and adopt digital strategies. Did I understand what you said correctly?

[The Chair, Conservative, David Sweet]

Be as brief as possible, please.

[Scott Smith]

A couple of things need to be pointed out here. We talk about how many companies have a website. I think the more important question is how many are actually using that website to enter the global value chain. The challenge for most SMEs is they have limited access to that global value chain. They need to be able to participate in that.

One of the key advantages that has been talked about in just the last few minutes is the capital cost allowance. I would agree wholeheartedly that it is a great incentive for the adoption of ICT, largely because the technology changes so quickly. If that program were implemented long term, it would allow companies to have more turnover of the communication technology they're purchasing.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Smith and Madame LeBlanc.

Now on to Madam Gallant, for seven minutes.

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

Thank you, Mr. Chairman.

I'm quite familiar with the Canadian Federation of Independent Business. I find the surveys and the responses quite helpful in staying on track with the interests of small businesses in my community. I just wish more of them would put their names on the reply cards so that I could call them and speak further about the issues and points they wanted to make.

Last day, we had Industry Canada testifying. As discussed, we have a number of programs: IRAP helps digitization: FedDev has a series of programs. They're saying that in order to take businesses to the next level, it's not just about government but different organizations.

Earlier you had said that you are promoting it. But are there any hands-on ways you're encouraging your members to go to that next level and digitize?

[Corinne Pohlmann]

Certainly. We're currently looking at offering online types of services to our members so they can actually go in and create their own websites and e-commerce types of websites. We're currently looking at partnerships there so that we might be able provide our members with access to these services at lower cost than they would otherwise would be able to do. We're also looking at developing an online database, where our members can go and promote their firms electronically and encourage them to use social media in a more active way to promote themselves as well as the database that we're trying to put together. We're doing that in partnership with Interac.

There are things that we're trying to do to encourage the greater use of social media, online tools, and so forth among our membership. We're just starting to explore that more as an organization. These are just some of the things that are still under development right now but are a part of our initiative to make sure that our members are actively thinking about how they can use online tools to promote and expand their businesses.

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

You mentioned Interac. Are you providing a group blanket special rate for Interac or PayPal or any others?

[Corinne Pohlmann]

No, we're not. Like most organizations, we do have a special service on the side that we provide to our members as a discount fee through a processor. That's not our partnership with Interac; this is more about working with Interac to help promote small businesses in Canada and the importance of independent Canadian businesses online. They've joined us in helping to do that.

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

For Pelmorex, how do the Weather Network and Pinterest actually make their money?

[Paul Temple]

In terms of our digital media products—that is, our web and applications—they're solely supported by advertising. We're very reliant on being able to reach as many people as often as possible who check the website. We try to monetize that by selling advertising. For the conventional television service we have a subscription fee, which we also have, that's charged and added to your cable bill, but not for the digital media.

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

Almost everybody has the Weather Network in their favourites column.

[Paul Temple]

I hope so.

[Voices]

Oh, oh!

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

It's very important in planning for packing.

In terms of public safety messages, you mentioned several hundred or thousand that you have done in the past several years. How does one receive one of those public service messages? I certainly haven't received any through the Weather Network, unless it was posted and I just happened not to be there that day.

[Paul Temple]

We have an arrangement with Environment Canada and with all of the provinces and territories. They can access our system and distribute their public safety messages. On a typical day, we'll get a hundred of so public safety messages from Environment Canada alone. Some of them are just frost warnings. Not all of them are threats to life. If you have our applications on your smart phone, and if there's a warning for Kitchener and you're on the Kitchener city page on our website, or if you're looking at the Kitchener weather, you'll see that warning scrawled across the screen of your computer or your smart phone. We distribute every public safety message that Environment Canada issues. The special aspect of this dissemination system is that we also make it available to anyone in Canada. So any broadcaster can access it and pass on those messages. It's free. We provide the service at no cost to government, and we provide it at no cost to anyone who wants to redistribute those messages.

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

So it's passive? It's not something that somebody can sign up for and get the breaking news for this week?

[Paul Temple]

You can sign up for our email and text-messaging services. We have text messaging. We have email. We're going to be putting it on Twitter. For any product we provide, we include public safety messages. Unfortunately, other broadcasters have not been as enthusiastic in picking it up, even though the service is available free to them.

I just got—and this wasn't rehearsed—a snowfall warning for Dauphin, Manitoba.

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

Too bad for them.

Mr. Smith, we're looking at different devices here. I see one person is with one carrier, and he's got four bars and has been able to work. I have one bar and haven't been able to work all day online.

To what extent is the unreliability of connectivity hindering small businesses from going digital and doing more business online?

[Scott Smith]

I'm not sure you can make the connection between small business having difficulty with connectivity and one bar in one place versus three bars in another. The different carriers have different access to the spectrum, and it depends on the carrier whether you're going to have challenges or not. There's sufficient competition in each market to be able to get what you need.

I'm not really following what your questions is.

[The Chair, Conservative, David Sweet]

Sorry, but our time is up.

Thank you, Madam Gallant and Mr. Smith.

We'll now move on to Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman, and my thanks to the witnesses for coming.

Mr. Temple, it so happens that just over an hour ago I was on the Weather Network website and I was looking at the 14-day forecast for Ottawa. As a matter of fact, I like the new look of your website. When I looked at the 14-day forecast I must say that the next few days look much better than next week. So if you could work on next week.... I have to acknowledge that while you've been in the room things have brightened up considerably outside, so that really is marvellous work.

What should the Government of Canada be doing? You talk about the experience of your firm, but what do you think the government of Canada could do so that other firms could adopt digital technology and e-commerce?