Industry Committee on May 26th, 2014

[The Chair, Conservative, David Sweet]

Bonjour à tous.

Welcome to meeting 24 of the Standing Committee on Industry, Science and Technology.

We have the great privilege of having the Minister of Industry before us, the Honourable James Moore. Accompanying the minister today, from the Department of Industry, is John Knubley, deputy minister; along with Robert Dunlop, assistant deputy minister, science and innovation sector; Johanne Bernard, director general, resource planning and investments branch; Paul Halucha, director general, strategic policy branch; and Lawrence Hanson, assistant deputy minister, spectrum, information technologies and telecommunications.

Folks, we have one hour today. We'll let the minister begin with his opening remarks, and then we will determine what time we have left. I'll give you an idea of the amount of time each member has for the question rotation.

Minister, please begin.

[James Moore, Conservative, Minister of Industry]

Thank you, Mr. Chairman.

Thank you, Mr. Chair.

Thank you for the opportunity to make this presentation before the committee today. I am joined by my Deputy Minister, John Knubley, as well as other individuals whose names you just mentioned.

I'm pleased to be able to speak to you today about much of the important work that our government is doing, and how we have delivered on what we've said was the top priority for Canadians in this session of Parliament, which of course is creating jobs and economic growth. This work begins building the groundwork for our economic future, which I believe is a digital future for Canada.

Last month, in Waterloo, I was pleased to launch Digital Canada 150, an ambitious plan for Canadians to take full advantage of the opportunities in the digital age. It's a plan that sets clear goals for a connected and competitive Canada by the time we celebrate our 150th birthday in 2017. Digital Canada 150 is based on submissions that were received by thousands of Canadians during consultations that were held all across the country. There are five pillars, 39 new initiatives, and one national plan for 35 million Canadians. It's a broad-based plan that will guide Canada's digital future, and I'll give you one example.

In Digital Canada 150, we connect over 280,000 households with access to high-speed Internet at five megabytes per second. That's fast enough to stream high-definition video, enable e-commerce, and connect Canadians with educational and career opportunities in all parts of this country. It's a bold plan when you consider that Canada is the second-largest country in the world in size, but 37th largest in population. To be able to tie us altogether with that digital infrastructure is something that I think we should all be very proud of.

Our plan is also based on and has been praised for its vision. Google Canada called Digital Canada 150 a plan that “will accelerate digital adoption and technological innovation among Canadian businesses, which is essential if we are to remain a global economic power.”

The Federation of Canadian Municipalities published the following statement:The rural businesses, communities and residents need sufficient bandwidth to participate in today's global economy and today's announcement is good news for Canadians in those regions.

Finally, OpenText, Canada's largest software company, called Digital Canada 150 “the foundation for a connected and competitive Canada”.

Of course, connecting Canadians also involves making the right decisions to ensure access to wireless spectrum. Canadian consumers increasingly rely on their iPhones, their iPads, their smart phones, tablets, and BlackBerrys, to stay connected with loved ones, to work, to organize their businesses, to organize their studies, and to use it for every aspect of everyday life.

In March, I announced the results of a 700-megahertz spectrum auction, which is the highest quality spectrum ever auctioned in Canada. A 700-megahertz spectrum travels longer distances, it requires fewer cell towers, penetrates building walls, elevators, and even through underground parking lots, which of course means better connectivity, fewer dropped calls, and more effective use of technology.

As you will no double remember, consumers were of course the big winners following the auction results. Ten Canadian companies, in over 100 rounds of bidding that lasted five weeks resulted in a total of 97 licences being awarded to eight Canadian companies. Quality wireless spectrum was acquired by Rogers, Telus, and Bell, with a fourth wireless player obtaining spectrum capacity in every region of Canada. The total revenue generated from this auction was $5.27 billion, proving the critics wrong and earning the greatest return ever for a wireless auction in Canada.

That was one of the many strategic decisions made by our government in the wireless sector in order to achieve a very clear objective—that of delivering more choice, lower prices and better service for Canadian consumers.

In pursuit of this goal to offer consumers more choice, lower prices, and better services, we have taken deliberate action on a number of fronts in the wireless sector.

First, we will not approve any spectrum transfer request that decreases competition in our wireless sector.

Second, we liberalized foreign investment rules in our telecommunications sector.

Third, we also believe that communities need to have more say in how cell tower locations are identified and how they move forward. That's why we introduced new rules to require wireless companies to share cell towers whenever they can, so that fewer towers are needed in our communities. We, of course, also mandated community consultation on all cell tower construction to ensure communities have a voice in how new cell towers are offered and introduced into their communities. The Federation of Canadian Municipalities welcomed this and joined me at my announcement. These changes are already making a real difference in communities all across the country.

We've also capped wholesale wireless roaming rates to promote greater competition. We've also empowered the CRTC to impose financial penalties on wireless carriers that don't play by the rules. In 2015, we will also be holding the 2,500-megahertz spectrum auction with rules specifically designed to benefit consumers, particularly those Canadians who live in rural communities.

Simply put, we are connecting Canadians like never before both with our broadband strategy and with our wireless policies. Of course, Canada's information and communications technology sector is one of Canada's key economic drivers, generating $155 billion in revenue each year, contributing over $67 billion to Canada's economy, and creating over 570,000 well-paying jobs all across this country.

To sustain these considerable contributions, our government is committed to ensuring our employees, students, researchers, and businesses all have the skills and opportunities that are necessary to succeed in our global economy.

Digital Canada 150 will invest $200 million to help small and medium-sized businesses adopt digital technologies. An additional $300 million will be invested in venture capital for digital companies.

Forty million dollars will be allocated to support 3,000 internships in high-demand fields. An additional $100 million will be provided in funding for the Canada Accelerator and Incubator Program. In total, $36 million will be earmarked for the Computers for Schools program, so that public libraries, not-for-profit organizations and aboriginal communities can be provided with the equipment students need to access the digital world.

Recently, I travelled to Silicon Valley, just south of San Jose and San Francisco, to discuss Canada's digital advantage with some of the world's leading technology companies, including Google, Twitter, Microsoft, and Facebook. There I hosted a digital innovation forum where I partnered with Canadian entrepreneurs to sell Canada as the Silicon Valley of the north. I was told first-hand how Canadian companies across Canada are leading digital technology innovation and positioning Canada as a top investment destination.

Mark Barrenechea, who's the CEO of OpenText, Canada's largest software company, put it this way. He said that they choose Canada because of the highly educated workforce, Canada's strong university partnerships, and our robust and innovative start-up communities. “The digital economy is the engine that will drive [Canada's] growth and prosperity. Technology and innovation is the fuel that will power this engine”.

Of course, our government understands that a strong digital economy requires strong protections for Canadians when they surf the web or shop online. In this Parliament, we've tabled the digital privacy act. Our digital privacy act will require organizations to inform consumers when their personal information has been lost or stolen. Companies that fail to do so, or deliberately break the rules, will face fines of up to $100,000.

The new measures also establish stronger rules to ensure that vulnerable Canadians, particularly children, fully understand the potential consequences of companies collecting and using their personal information.

The Digital Privacy Act will also vest in the privacy commissioner improved powers to take the necessary enforcement action and hold offenders accountable.

Before the bill was introduced, I met with the acting Privacy Commissioner, Chantal Bernier. I want to thank her for supporting the measures our government has implemented.

Here's what the Privacy Commissioner said about the digital privacy act. She said that “there are some very positive developments for the privacy rights of Canadians”, that she is “pleased” that the government has addressed issues such as breach notification, and that she welcomes the proposals in this bill. Of course, this committee will have an opportunity to study that legislation and offer suggestions on how the bill might be improved as we go forward.

On science, we are working on a renewed science and technology and innovation strategy, a long-term plan to position Canada as a globally recognized leader in research and business innovation. We're making record investments, as a country, in these areas to push the boundaries of knowledge, increase prosperity, and improve the quality of life of Canadians.

As a result, Canada leads the G-7 in research and development investments at universities, colleges, and in research institutions, and has one of the most educated populations in all the world. Canadians who witnessed the extraordinary success of Commander Chris Hadfield as commander of the International Space Station and his mission will know that Canada has an extremely proud history of accomplishment in space. We were the third country in the world to put our own research satellite into orbit and the first to have our own communications satellite.

Earlier this year I announced a new space policy for Canada, a framework that will guide our future in space. I was very pleased to have the support, I must say, of not only Commander Hadfield, and current and past astronauts, but also Marc Garneau, a colleague of ours in the House of Commons to whom we reached out prior to tabling this, who offered his support for our policy as well.

As we approach our 150th birthday in 2017, we want to ensure a strong and commercially competitive space industry that will continue to inspire Canadians for years to come, and of course, all the associated sciences.

Canada has a dynamic aerospace and space industry, which provides more than 170,000 individuals with highly paid positions, and it contributes over $27 billion a year to the Canadian economy.

The Aerospace Industries Association of Canada applauded our plan, saying that we have recognized the important role Canadian innovation and our proud heritage play in the space sector.

Chris Hadfield himself said, he's “glad to see the new Canadian government support for the space industry”, which will contribute to new jobs in the space economy.

On the auto sector, Mr. Chair, the auto industry is, of course, one of the cornerstones of the manufacturing sector of the Canadian economy. It contributes $16.1 billion annually to our economy, which represents about 10% of Canada's total manufacturing GDP. Our budget this year nearly tripled our investment in Canada's manufacturing sector, with an additional $500 million in support to Canada's automotive industry through the automotive innovation fund.

I'll give you an example of how this has worked thus far. Last year I announced a $72 million loan to transform Ford's Oakville assembly plant. Today that plant has the flexibility to produce 11 of Ford's high-volume, mid-sized vehicles, including the newly redesigned Ford Edge and the Lincoln MKX on one platform. This will make this plant one of only five Ford facilities capable of doing this work worldwide.

Sales have increased and are now 20% higher than they were during the recession. A recent report shows that our government is on the right track, with the Canadian manufacturing sector's revenue reaching almost $51 billion in the month of March—the highest it has been since 2008.

In conclusion, Mr. Chair, our government has promised Canadians that we would return to a balanced budget by 2015, and our government is working diligently to move forward with these measures and others to stand up for our consumers, to strengthen Canada's digital economy, and to boost our financial position through innovation and research. By focusing on these priorities that I've outlined here today, our government is delivering the results for Canadians, for which we asked the mandate to deliver on.

I would now be happy to answer any questions the committee members may have.

Thank you very much for your time.

I am looking forward to answering your questions.

[The Chair, Conservative, David Sweet]

Thank you very much, Minister.

Colleagues, with some simple math you can tell that we have five minutes per member with very little flex time, so I just want to say to our witnesses as well as my colleagues, please forgive me in advance if I interrupt you because we'll have to keep it pretty tight in order to be able to finish within the timeframe that we have allotted to us.

Mr. Lake, it's good to see you. You have five minutes, please.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair, and thank you, Mr. Minister.

I'm going to start with rural broadband, if I could. One of the challenges—and you touched on this in your opening comments—that we have in this country is 34 million people spread over a very wide geographic area, which obviously creates some challenges.

We've done some big things in that area. We have invested in successive budgets, again in budget 2014. Maybe you could talk a little bit about the importance of rural broadband and what the government is doing to address those geographic challenges we have.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

One of the reasons I call it Digital Canada 150 is that, as I said, at the time of Canada's Confederation what was next for connecting and building this country was the railway. Of course, since then we've built the Trans-Canada Highway, ports, airports. We've done all kinds of things to connect this country. Of course, that requires maintenance. It's not cheap in a country as large as ours, with a climate such as ours, but what's next, in my view, is the digital gap that exists across this country. We've taken action as the government in the past. Previous governments as well have taken action in the past to try to gap this divide. It was interesting having a conversation with former industry minister John Manley about the challenges that he had not that long ago, by the way, in trying to overcome some of the challenges this country faced. But because of such rapid adaptation, and because it has been a priority for governments, where we are today is, I think, a real position of envy around the world.

When you go to far-off aboriginal communities and to very rural and remote parts of this country—people who are working in parts of our country in natural resources—you realize very quickly how you can be stranded technologically. The gap that causes in terms of learning opportunities for kids, delivery of health services, economic opportunities to participate in world markets with local goods and services that are offered around the world, creates a massive divide, and it has to be fixed.

We are proposing a $305-million, one-time investment over the coming five years, which will shorten this gap. By the way, there's a specific reason that we say five megabytes per second. It's because five megabytes is considered the floor of the international standard of what constitutes high-speed Internet around the world. It allows for the streaming of the 720p HD video on any device in that footprint that has that download speed. The capacity and the speed are important, and it raises Canada to an international standard. We say that's the floor, and when we work in partnership with the private sector to build this infrastructure going forward, that's going to be the minimum standard. It's essential that we connect communities and that all Canadians feel part of the digital future that's on its way, and we have to prepare for it. Building this infrastructure is the responsibility of all of us, collectively.

Some people were critical of this when we announced this in the budget. They asked why this is the role of the government, and said the private sector could do this. We've been waiting, I think, for a very long time for the private sector to step up, and ante up, and build this infrastructure. Frankly, it hasn't happened.

There is too steep a divide between urban and rural. It's too large a gap, and communities are being left too far behind in these opportunities. So the way in which we are going to invest this money, moving it forward in partnership with the private sector, when we announce the details soon, you will see that we are pushing this country forward in a way that I think makes perfect sense, to ensure that we stay competitive in all parts of our country.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

In my experience here in Parliament, few areas of government engagement would be more commented on than the digital economy. Maybe talk a little about the stakeholder consultation process and the feedback that was received since then.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

The consultations began back in 2010. Here we are in 2014. Of course, a number of things happened between the receipt of consultation. Principally, first was the global recession and our fiscal capacity to invest in a project as large as this. Second was the 2011 federal election campaign, which caused a time gap as well. Also, now that we are post-recession.... We talked in the early days, back in 2009, 2010, about a digital economy strategy. That language made sense at that time, given the dynamic of the conversation that was being had. But if you look at the Digital Canada 150 program before you, it has five pillars. One of the five is the digital economy strategy, which is getting maximum economic benefit from the digital universe, but there are four other pillars as well. To broaden and frame all the benefits that come to Canada from our taking full advantage of the digital facts as we head into 2017....

The digital economy strategy is part of securing and protecting Canadians online as well. Ensuring that we are telling Canadian stories, so the content on the digital platforms.... We've created the Canada Media Fund. We're supporting the NFB and Telefilm Canada as they make more Canadian content available all around the world. It's the filling out of all five of these pillars and all that they constitute, making the Government of Canada itself more digital, and connecting Canadians. Those are the five pillars in total, and they have 39 specific action items in all of them. Taken together, this makes a very comprehensive plan that has been very well received in all parts of the country—

[The Chair, Conservative, David Sweet]

Thank you, Minister. I'm sorry your time has been closing in on us.

Ms. Quach, the floor is yours for five minutes.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Thank you, Mr. Chair.

I want to thank the minister for joining us today.

I have several questions. The first one is about Statistics Canada.

We know that a number of economists and experts have expressed their views on the change made at Statistics Canada. They said that income inequality has not decreased, on the contrary. Your government is claiming that it has decreased. However, the government is basing its statements on incomplete data from the National Household Survey. This voluntary survey replaced the mandatory long-term census.

Could you at least recognize that what your government implemented to replace the mandatory long-form census was less precise and much more expensive?

In fact, it was found that 11,000 subdivisions were not identified in the form the Conservative government had submitted. It was also observed that the cost was $29 million higher than it was for the previous long-form questionnaire.

Will you reconsider your position regarding this and reintroduce the Statistics Canada long-term questionnaire?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Your question is timely because I just met with Wayne Smith, Statistics Canada's Chief Statistician, this morning. We discussed the next national survey that will be conducted in 2016. We talked about ways to improve on the 2011 outcome.

That said, we have useful and usable data representing 97% of the Canadian population. Although it is a voluntary survey, the NHS had a response rate equivalent to that of other household surveys. I think that we have received necessary, usable and quality information we can certainly use going forward.

During each of those censuses....

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Allow me to interrupt you, Minister.

The NHS's non-response rate is 31.4%, compared with 5.5% for the census conducted in 2006 using the long-term questionnaire. For instance, the response rate is so low and the data is so imprecise that, we are told, in Grosse Île, near Quebec City, less than 5% of people filled out the questionnaire.

This census cost $29 million more than the mandatory questionnaire. I do not think that's effective. Many social science professors and specialists are saying that this approach is totally ineffective.

I do not know what you will bring in to replace this NHS program. Companies and municipalities are saying that they will not even be able to use that data to work on their community's most vulnerable populations. For instance, teachers—and I am a former teacher myself—evaluate students to try to find ways to help them with their learning process. However, since the Statistics Canada form is so mediocre, they can no longer use the data accurately or scientifically.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I do not know where you got your figures. You say that only 4% of people....

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Yes, that was the figure for Grosse Île, near Quebec City. The proportion is only 20% in Cumberland House, Saskatchewan, and 28.3% in McAdam Village, New Brunswick.

I could certainly provide you with those documents.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

You need to understand that it's important to note that other past censuses also had difficulties with rural communities. So that is not due to the changes implemented in 2011.

For 2016, Statistics Canada is currently looking into those specific cases in order to resolve any problems. Canada is the world's 2nd largest and 37th most populous country. So every census has its own difficulties and concerns.

I am sure that, if you were to ask Mr. Smith, the Chief Statistician, to appear before this committee, he could tell you about what they are doing to address the concerns that have come up regarding the 2011 census.

Mr. Knubley may have something to add about this.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

The Auditor General recommended....

[The Chair, Conservative, David Sweet]

Madam Quach, there are only 30 seconds left.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

I just have one last comment to make, Mr. Chair.

The Auditor General even recommended, if possible, to look into ways to better meet users' needs in terms of data on small regions and subpopulations. I think that is very clear.

When it comes to scientific research, the Conservatives have cut $500 million in tax credits for scientific research and experimental development. All the manufacturing industries I have consulted are saying that this cut has had a very negative impact on their international and national performance, and that they need the funding for scientific research you have cut.

[The Chair, Conservative, David Sweet]

Madam Bateman, you have five minutes.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Thank you very much.

Thank you so much, Minister, for being here.

It's always exciting to hear from you. It doesn't matter what ministry you have, you're making changes and making things happen.

There are a couple of things I'd like to follow up on. Certainly, the $5.27 billion wireless auction result is one of them.

First, if I could start with how in Digital Canada 150, which is a wonderful nation-building exercise in my view, you're not only addressing the business requirements—and we obviously are very motivated to create jobs, and growth, and long-term prosperity—but you have linked this 150 digitization with our history, with our nation's history, with our cultural history. You're making that more accessible for all Canadians. I still remember the travelling show of King Tut's artifacts when I was a little girl and it came to the Winnipeg Art Gallery. But you're making that accessible, you're making all kinds of things that we have in vaults right now accessible.

Could you talk about that? It clearly is saving us as Canadians lots of money.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Coming from Winnipeg you know what great institutions look like when they're well organized. Of course, there's the Manitoba Museum with its brilliant display of the Hudson's Bay Company, the new Canadian Museum for Human Rights, which will be opening very soon, and of course the Winnipeg Art Gallery is a brilliant building. Winnipeg, certainly for a city of its size, is host to some of the great cultural institutions of Canada.

You're quite right, as we go forward to our 150th birthday—and part of Digital Canada 150 is about that—once you build the infrastructure and you connect Canadians, once you make it more secure, once you take advantage of the economic opportunities, and once government is acting in a more digital way, which are the first four pillars, the fifth one, which to me is the most fun one, the more interesting one, is you fill all of that with Canadian culture, Canadian content, and Canadian stories going forward to our 150th birthday. It's the responsible thing to do.

We have created the Canadian Museum of History, which was formerly the Canadian Museum of Civilization, given it a new mandate, $25 million new dollars. They have three million items in their collection, and over 90% of them are sitting in storage. We want to get that stuff pulled out of there and moving all across the country through museum partnerships in all the museums of all sizes in all parts of this country, so that local museums can tell stories of either local or national history, develop their own narratives but have access to those three million items in the national collection that are sitting in storage, and get Canadians thinking about, talking about, and building thematics that make sense for local museums all across the country.

Again, contrary to the partisan attacks, it's not us telling museums but giving museums access so that they can tell whatever story that they want to tell and get things moving around this country.

In a digital context, here's one thing that I'm most proud of. I was told about the Memory Project early in 2008, when I became minister. I got very frustrated by the intransigence of, at that time, the Department of Heritage and what it was not doing to support this project. Here is the project in simple form. It makes brilliant sense when you think about it.

In 2011, I believe it was, we sadly lost the last surviving veteran of the First World War. The average age of a World War II veteran today is 91, and the generation is sadly passing away quickly. We failed with the World War I generation to properly catalogue and tell their stories and to treat them as the treasures that they are for future generations.

The Memory Project came from the Historica-Dominion Institute, now just Historica Canada, and they had a very simple, very cheap but very effective idea. They said they wanted to work with veterans organizations and legions all across the country and go to them and reach out to veterans of the Second World War and invite them to tell their stories. They would go to them and digitize their stories, with a video camera if they were comfortable, or just audio if they were comfortable with that. They could tell of whatever aspect of their time in service that they were comfortable with, if it was their training, their time in battle, their time after the war, or maybe they met the love of their life, maybe they experienced the most traumatic loss of their life of a friend.

Whatever aspect of their service that they wanted to share, in whatever format they wanted to share it, they would go to them and they would meet and share the story, digitize it, protect it forever, and house it at the Canadian War Museum, which is also part of the Canadian Museum of History. They've done that now, and we've provided extra funding for that to make sure it was complete. Now they're extending it as well to the Korean War generation, from 1950 to 1953, and that generation is also of course getting older as well. We want to digitize and protect, and for a very small amount of money we've been able to do that.

Digital Canada 150 is not just about cell towers and PIPEDA and intellectual property law, it's greater than that. You build the infrastructure and you connect Canadians together. Why? To take advantage of the economic opportunities, of course. But most importantly for me, the great task of any government is always to leave this country more united and prosperous than the way in which it found it. It's the forever challenge of Canada, making sure that this country stays united and strong going forward.

We can't stay united and strong when young Canadians don't know our history, when we can't name our previous prime ministers, when we don't know the sacrifices that people have made, and we don't appreciate our collective history, not just our individual history. We need to be able to tell our stories one to another. That's why we built the history museum, that's why its a central piece of the Digital Canada 150 policy, to make sure that we're telling our stories to one another in a comprehensive way.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

And in a cost-effective way.

[The Chair, Conservative, David Sweet]

That's all the time we have. We're way over.

Madam Sgro, you have five minutes, please.

[Judy Sgro, Liberal, York West, ON]

Thank you, Mr. Chair, and thank you very much, Minister Moore, for coming. We appreciate that very much.

I have three questions for you. I hope you can position your answers so I can get my three questions in.

The digital strategy is not really as forward looking in my opinion, as part of the opposition. As you indicated, we were waiting for it in 2008, while other things were moving very quickly. As an example, the government has promised to allocate $200 million to support small and medium businesses, but when used over the promised five-year period, it comes out to nothing more than $1.14 per Canadian. How are we going to be able to assist Canada's businesses in the digital economy when we have money for F-35s and for jails, but we only have $1.14 for something as important, as you indicated earlier, as the digital strategy? Even if it took five years to get it, I appreciate the fact that you've released it, but I don't see it as forward looking when only $1.14 per Canadian is going to be allocated.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

If I may, that's a very narrow way of looking at all that we're doing for small business. That's one envelope. Of course, we have the venture capital action plan as well. We also have the suite of programs that are offered through BDC. We also, of course, offer one of the lowest costs of starting up businesses in Canada. We have the lowest taxes in Canada in 55 years. We've lowered taxes, as you've heard us say many times, over $3,000 for the average family. This has been praised by and supported by the Canadian Chamber of Commerce, the Canadian Federation of Independent Business. Those who represent small businesses that you're describing, have said that Digital Canada 150 is a huge step in the right direction in supporting small businesses and encouraging their growth.

We can disagree and partisanship being what it is, you can flick a jab at me if you like, but those who are in the business of advocating for small business like what we're doing.

[Judy Sgro, Liberal, York West, ON]

It is a step. I think it's not a big enough step. But again, everybody has their own viewpoint. It doesn't even have to be partisan.

Your strategy also promises that BDC will spend $300 million on venture capital. As an example, Samsung spent more than $400 million on U.S.-based ads alone in 2012. Apple spent $333 million in 2012. How are we going to be a world leader when single companies spend more in a single year and we're spending so very little.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

We could spend more, but I think it would betray our commitment to Canadians to balance the budget. I don't think this is entirely a role for the state or for government. We have funds set aside through the BDC and they do spend money and spend it efficiently, but they support enterprises in a way that commercial banks don't. They have a unique mandate in the way they support small business; I believe well over 90% of all their grants go to small businesses, which are defined as businesses under 20 employees. The amount of support they're giving us is quite extensive.

We could do more but I think part of the answer lies in your question, which is if you look at other jurisdictions around the world, whether it be Samsung or others, these are private sector investments in enterprises in the future. It is a challenge for this country, and has always been—it was under your government; it is under our government—to get a greater return and a greater investment into skills training and into growth and into venture capital by the private sector. That's why we are.... Joe Oliver, I know it's a central part of his mandate that he's spoken about as finance minister and the Prime Minister to incent the private sector to further invest in Canada in the way that they are in other jurisdictions around the world.

It is a challenge, and it's not entirely of course the role of the government to direct all this. One of the best things the government can do is get out of the way and provide the conditions for more attractive investment, not to direct investment.

[Judy Sgro, Liberal, York West, ON]

I don't want to interrupt but I'm waiting for the chair to cut me off very quickly.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Sorry, you have your third question.

[Judy Sgro, Liberal, York West, ON]

The billions of dollars that are being spent on advertising for programs that don't exist—

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Billions?

[Judy Sgro, Liberal, York West, ON]

Billions, and various other capacities when you advertise.... Look at them all when it comes to program advertising, would it not be better, instead of spending all that money there, to focus those advertising dollars more? I'm not talking only on the digital strategy side but in all other areas that you want to promote. Rather then spending $10 million...or $100 million, actually, was spent on advertising programs that didn't exist. It was more about advertising the government than it was advertising solid, straight programs.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

People can be critical of some particular advertising campaigns or not. But if you are critical of government advertising, then you should be happy that we're spending less than your government did, which I think is a good thing. I also think the government is putting forward a number of initiatives, whether it's the tax-free savings account or particular support for particular industries or shifting from a five- to a 10-year passport, or.... You take my point.

When the government introduces new aspects of regulation of government services, of new opportunities for Canadians, we have to make sure Canadians are informed. I suppose it gets stigmatized by the opposition as always being partisan or government padding on its self-advertising, but it certainly isn't the case. If you look at the suite of advertising that we've put forward as a government, we think it's perfectly reasonable. All levels of government do it. Your government did it and spent more than we did. We think it's important that Canadians know what programs are available that they're paying for.

[The Chair, Conservative, David Sweet]

Thank you, Minister.

Now we'll go to Mr. Van Kesteren for five minutes.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Chair.

Thank you, Minister, for coming here. I echo what was said by my colleague. I think you bring a passion and a vision to this, and I think that's something that sometimes is sadly lacking, this vision. I commend you on your endeavour with the digital processes that are being put in place.

Down in my neck of the woods, in Chatham-Kent—Essex, of course, it was once known as the auto sector, and we've lost a lot of that due to, I think, what happened in 2008 to what was formerly known as the “Big Three”, and now the “Detroit Three”. You mentioned in your opening remarks how that was still an integral part of this government and your ministry's mandate, to maintain that sector. I wonder if you could just elaborate for the committee on what you're doing and what industry is doing to help make sure that this is going to be something that's here for a long time.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Thank you.

There's a lot to be said. Obviously, this is an industry that has had its challenges, but we, I think, have responded effectively as a government over the years to the challenges of Canada's auto industry. Of course, the Canadian taxpayers were very generous to the auto industry during the recession. The money has come back from those firms, largely. It is a real challenge, particularly when you counterbalance that with what we're facing in the United States. When the dollar is near par, that creates a real stress and challenge for Canadian industry. When, frankly, straight-up corporate welfare.... As the Government of Canada we have the automotive innovation fund, which is a repayable loan that is taxable, and it comes back to Canadian taxpayers.

There was an example in the state of Kentucky, just the one state, where $700 million in cash and a greenfield site were offered to an auto assembly-manufacturing plant to go to the state of Kentucky. That is a policy with which we should not and cannot compete as a country. What we can do is other things that are, in my view, more fiscally responsible, are more conservative, and more effective.

First is that we sign the Canada-Europe trade agreement, CETA, the Comprehensive Economic and Trade Agreement. CETA will create 500 million new customers for any automobile that's manufactured in Canada. That's an advantage for an auto assembler-manufacturer in Canada, which does not exist in the United States.

Canada has a 13% lower corporate tax rate here than they have in the United States. We also have, frankly, socialized medicine in Canada, a financial burden on firms in the United States that doesn't exist in Canada, which is a big economic advantage.

We have an educated and thoughtful workforce in Canada. You look at the Brampton plants of Chrysler and others that are operating past 100% full capacity, and they're turning out phenomenal, award-winning products around the world. Add to that the fact that we're twinning the Detroit-Windsor border crossing. We have the beyond the border initiative so that cars that are manufactured in Canada have easier access to the United States.

You take all those things together—support through the recession, lower taxes, the European free trade deal, advantages on social programs and training, making the border more seamless with the United States—all of that taken together, plus the automotive innovation fund, creates a very effective package of public policies that support industry, versus what's happening in Mexico or versus what's happening in the United States, where they're driving forward with greenfield sites, straight corporate welfare, driving to “right to work” states, in a way that frankly we can't compete with in Canada, and we ought not to, certainly on the financial side.

We have our challenges with the auto industry. It will continue to be a file that we'll have to watch going forward, but there are some good stats. The auto industry posted its best April sales ever with a 4% jump this year from April of last year. Chrysler recorded a rise in sales of 6%, its best April in over a quarter of a century. Nissan Canada posted a 30% sales gain in April. So we do have some good news from the auto sector. We're going to continue to be challenged because of the dynamic in the United States, but we'll react effectively because it's a critical part of the Canadian economy.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Very quickly, you touched on some of the good work that's been done by this government with the trade deals, but we have some serious issues, and it's been an ongoing issue, I think, with the trade barriers that exist between provinces. I wonder if you could just address that quickly.

[The Chair, Conservative, David Sweet]

Very briefly, Minister, please....

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Maybe I'll come back to it, then. The Agreement on Internal Trade, the AIT, which was first put in place by the Liberal government in reaction to the FTA, has had some successes, but it's time for a refresh. I am working on it. The AIT committee, which is the 13 provinces and territories, and myself, so 14 people, is chaired this year by Minister Oswald of Manitoba, and we're working aggressively with them. Frankly, we're waiting for the Ontario provincial campaign to resolve itself, and we'll know who the government is there and we'll have an opportunity to move forward.

[The Chair, Conservative, David Sweet]

Thank you very much, Minister.

I now yield the floor to Mr. Nantel, for five minutes.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you, Mr. Chair.

Good afternoon, Minister. I am very happy to see you again. It's been a long time since we last saw each other.

I will not talk to you about culture right away. I want to discuss the aerospace sector. Obviously, the Saint-Hubert Space Agency is now part of the City of Longueuil, and that large district.

The aerospace industry is a major sector for Canada. Our country ranks fifth in that field internationally. However, with Budget 2012 introducing some major cuts in this industry, and despite the 2014 framework you announced, the field is still looking for results.

How can the Technology Demonstration Program support the industry with only $30 million over three years when the Emerson Report was calling for $90 million?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

That is one of the steps. I think the Emerson Report issued 16 recommendations. We agree with fourteen and a half of them. The one half represents the amount suggested in one of the recommendations.

Frankly, this is due to our fiscal capacity being limited. The approach we have implemented should be considered.

You are familiar with Suzanne Benoît, President of Aéro Montréal. She said the following:

“The measures announced are a positive response to the recommendations issued in the Aerospace Review report”, the Emerson report. She also says, “They are great news for Quebec...and will support innovation and development in future space technologies.”

So those involved in this sector in Quebec and in Montreal—individuals who are participating in that aspect of our economy—strongly support what we are currently doing.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

This is definitely a high-tech sector that needs a lot of support.

I want to come back to the Canadian Space Agency, which suffered cuts of $89 million in 2011-2012 and 2012-2013. The funding for the demonstration of new space technologies has gone from $20 million to $4 million a year. However, that is a very natural synergy with companies across Canada.

How do you plan to help the Canadian Space Agency continue to innovate and remain competitive on an international stage with such holes in its budget?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Things are not that simple.

When you look at the figures, there is an annual investment amount that is not always accompanied by a corresponding request every year.

For instance, our investment of approximately $54 million in Bombardier's C Series is ending now. Does this mean there is a cut or a lack of investment on the part of the government or taxpayers in this sector? No. That is not the case. This means that short-term projects are ending and that we are looking to the future for other opportunities.

I can tell you that grant applications in this sector are certainly not lacking. However, the funding approach must respond to the market demand effectively.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

At the same time, Minister Moore, it is clear that a quick response is needed because things are moving increasingly fast. I hope to have an opportunity to talk to you about the report on digital issues that was published in 2011. The reaction time is extremely long.

I would now like to discuss intellectual property. In the omnibus bill on budget implementation—Bill C-31—you made amendments to the Trademarks Act under the pretext of wanting to align the efforts while respecting treaties like the Madrid Protocol.

A number of stakeholders have come to talk to us about this. They testified before the Standing Committee on Industry, Science and Technology and before the Standing Senate Committee on Banking, Trade and Commerce.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Who testified before those committees?

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

There were some representatives from the Canadian Chamber of Commerce and the Canadian Manufacturers and Exporters. They expressed profound reservations regarding this legislation, including the elimination of the requirement for a trademark to be used in order to be registered. They said this change would lead to additional costs for SME's and open the door to trademark trolls. Legal action related to intellectual property is to be expected.

Speaking of reactions, will you listen to witnesses' suggestions and withdraw this amendment to the Trademarks Act?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

We are always listening. Do not forget that this treaty was signed in 2001. Many discussions have been held about this. We have held discussions, and we have definitely consulted people on the issue.

We think that those international protocols and treaties are very important for helping small and medium-sized businesses because they are the ones taking a hit owing to this.

I think it's appropriate, if I may, just to go through the three treaties in Bill C-31 that you are referring to. The Madrid protocol allows for the registration of trademarks in multiple jurisdictions through a single international application that is filed with the international bureau of the World Intellectual Property Organization.

The Singapore treaty, the second of the three, establishes standards and rules related to procedures in national trademark offices to clarify what they can and cannot require from applicants. The third, the Nice agreement, governs the Nice classification, a list of different types of goods and services for which businesses may use a trademark and is required for accession to the Singapore treaty and the Madrid protocol, which are also—

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

However, the difficult part is clearly....

[The Chair, Conservative, David Sweet]

Monsieur, that's all the time we have. Sorry, but we're over. I apologize, Minister and Mr. Nantel.

Mr. Warawa, you have five minutes.

[Mark Warawa, Conservative, Langley, BC]

Thank you, and it's a very interesting discussion. Minister, you wanted to complete your statement, and then I'll have a question for you.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I just want to say I appreciate the concerns that have been raised. As the official opposition you're doing your job and being a megaphone for the concerns that have been raised, but frankly we don't agree. These are IP treaties that make perfect sense, and I can understand why some, particularly the Canadian Bar Association, aren't terribly big fans of this.

By the way, there's a reason why these protocols are also consolidated in our Digital Canada 150 plan, because if you're a Canadian innovator and you want to get a patent and you have to hire a patent lawyer and it costs between $3,500 and $5,000 to secure a patent for your idea, you want to make sure a patent troll doesn't sit on your idea and steal it, because information is instantly global.

If you file a patent in Canada, we want it to be protected around the world. Patent lawyers who can charge you $3,500 to register a patent in every country in the world are going to be upset, but guess who benefits? Small businesses that have to register patents and protect their IP are going to benefit greatly from these reforms. The idea here, of course, is very simple, which is why all other countries that are signatories have ratified these agreements. They're ahead of the game. We're behind the game. We need to ratify these agreements, so Canadians whose livelihoods are dependent upon the protection of their intellectual property have the capacity to protect it internationally, and not make it impossible for them to protect themselves.

Colleagues, as Bill C-31 moves forward—and I guess it's considered over at the finance committee and not this committee—if the NDP has suggestions on how we might amend this, bring them forward. First, I think it's a pretty straightforward idea to protect Canadians' IP on an international level and not just domestic. Second, I think it's pretty easy to understand why those who are opposed to it are opposing it: their self-interest.

[Mark Warawa, Conservative, Langley, BC]

Thank you, Minister.

I'm quite impressed that the NDP have asked questions on this. Chair, when we had the witnesses, we heard the opposite, that the vast majority support Canada coming in line internationally with the trademark standards. It provides effective efficiencies and is good for business in Canada, and the NDP didn't have any more questions on that issue.

Minister, you're here, and the TV cameras are on. We have had some questions and some good answers, and we heard from the marketplace that this is what Canada needs to do to be competitive. I was looking at the three mandated strategic outcomes that are necessary from Industry Canada. First is that the Canadian marketplace is efficient and competitive. Minister, that's exactly what the action we're taking is accomplishing. Second, advancements in science, technology, knowledge, and innovation strengthen the Canadian economy, and third, Canadian businesses and communities are competitive. Again, this is what you're doing. You started your comments saying you want to create jobs and economic growth, and you're doing that.

Could you elaborate on the importance of international trade and also, fairness at the pump? That's another great success of the government, making sure that Canadians are paying less and we have more efficiencies and businesses are being more competitive.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

The Fairness at the Pumps Act we adopted in Parliament, and It's been well received. We provided new powers for its independent application. We put in the regulations to make it a reality and to enforce it. Inspections have happened and some violations have been found and I think these regulations have been enforced effectively.

On the trade side—as British Columbians, we often say it, but I don't think we can say it enough—when Stephen Harper became Prime Minister of Canada, Canada had five free trade agreements with five jurisdictions around the world: the United States, Mexico, Chile, Israel, and Costa Rica. Today, we have free trade agreements with 43 countries around the world. As British Columbians we should be particularly enthused about the Canada-South Korea Free Trade Agreement. Over 50% of Canada's trade with South Korea comes from the province of British Columbia.

South Korea is the size of New Brunswick with almost double the population of Canada. It's a focused market in a strategic area of the world and for us to have signed that FTA, which of course will have to be ratified by the Parliament of Canada, is a tremendous step forward for the Asia-Pacific. Premier Clark and others who talk about the Asia-Pacific gateway.... We built the infrastructure at home and we're making sure we have access to markets around the world and it'll be a big step forward for us in seeing success with the Trans-Pacific Partnership or possibly with a Canada-Japan FTA in that region of the world.

[The Chair, Conservative, David Sweet]

Thank you, Minister, and thank you, Mr. Warawa.

Now on to Mr. Masse, for five minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you, Minister, for coming here today.

It's a very interesting project with the veterans you are going to undertake there. I think you're going to get a lot of footage of veterans saying they didn't want their veterans office closed like the one in my riding.

I would like to know, though, how much did it cost for the commercials? You come and paint quite an interesting picture about wireless service in Canada, but you spent how many millions on commercials to Canadians?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

The exact number I don't know, and I don't want to mislead you. Treasury Board can get that for you. But I do know what we were counteracting, by the way, a $5.5 million ad campaign by incumbents who didn't like the idea of us having a policy that might have created more competition. It was a $5.5 million ad campaign that was patently dishonest, misrepresented government policy on a number of levels, and we had an obligation I think to push back to make sure Canadians who were being misled by this ad campaign about the substance of our wireless policies....

This is not, by the way, a side thing. This is a section of the Canadian economy where it has a 25% growth in jobs in the wireless sector over the past five years or thereabouts, according to Stats Canada, so it's a growing fact to the Canadian economy. Everything you do, and I do, that we all do, is migrating onto digital phones. Phones cost more than computers now. Everything is migrating onto mobile devices. When you have three large incumbent companies pouring millions of dollars into an ad campaign to deliberately mislead the public about a government policy, it requires push back, so we pushed back.

[Brian Masse, NDP, Windsor West, ON]

Now I want to move on to the border file. The Windsor-Detroit corridor, the border there is the busiest international crossing. Work's being done. Billions of dollars have been spent to provide a new roadway to the crossing, but for the crossing itself in Detroit there has been no secured funding for the American plaza.

What do you think about this situation, and what is the government actively doing on it?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I can tell you it's a concern. I've certainly spoken to Minister Baird about it. We do all the stuff. I remember when you and I were on the transport committee back many years ago, and I remember the Ontario Trucking Association had their famous presentation where they said you can go from Windsor to downtown Miami, and en route you'll go through exactly 17 stop lights, and 16 of the stop lights are in Windsor.

We don't go through the process of cleaning all that out and building these effective routes of transportation in twinning the Detroit-Windsor crossing, especially with all the funding that's been offered, without making sure it's seamless and effective.

I can tell you this has been raised directly with Ambassador Heyman. Because it's an international borders issue not an industry issue, Minister Baird, I can tell you, is front and centre to ensure this goes forward effectively.

[Brian Masse, NDP, Windsor West, ON]

Yes, because the reality is that your government has signed an agreement with the Americans that requires us to pay for it if we don't get that from the federal government. It has to come from the new consortium and the tolls so we would actually be fronting 100% of the cost of the new border crossing, which is rather unusual.

I want to move over to trademarks. There are some serious concerns about trademarks. I know there is some self-interest. Everybody has self-interest in this game. But there was testimony at the Senate finance committee that related that the challenges to trademarks would go up to at least 7% or 8%. Some argue it would be even higher, but that was some of the testimony.

Are you aware of that? Right now it takes nine months to actually get a hearing for the challenge. It's nine months now. If it doubles and triples what are you going to do to be prepared to expedite these things?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I'll let my deputy answer the specifics on this one.

[Paul Halucha, Director General, Marketplace Framework Policy Branch, Department of Industry]

There's not an expectation that there is actually going to be an increase in challenges. That has happened in a couple of countries around the world, in particular in the European Union, and in the European Union there isn't an examination process by which a lot of the weeding out of the poor quality trademarks happens. That process is going to remain as Canada accedes to these treaties.

[Brian Masse, NDP, Windsor West, ON]

So you're saying Darlene Carreau's testimony is incorrect?

[Paul Halucha]

I'm saying there's no.... We've talked to intellectual property offices around the world as we looked at how countries were implementing it, and there has not been a dramatic increase in the type of trolling behaviour focused on trademarks that some of the people who testified are claiming will happen in Canada.

[Brian Masse, NDP, Windsor West, ON]

Okay. We'll quickly move to the Auditor General with regard to his comments with regard to the concerns raised for wireless in the remote communities. What's your government and your department going to do to address the concerns the Auditor General has raised?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

In terms of wireless to remote communities, we have aggressive...for example a 700-megahertz spectrum, which constitutes the entirety of the footprint of Canada because of the success of the auction. One, there are very aggressive rollout times, more aggressive than any other country in the world, by the way, more aggressive than even the AWS auction we had in 2008 in terms of rollout for rural communities. Two, the new rules we announced for the 2,500-megahertz spectrum auction, which takes place in the first quarter of 2015, also is tailor-made to ensure rural communities are served very well as well.

It is a concern. We know it. I know it. You know it. Any time you travel.... Even in British Columbia when I go up and down Highway 97, as soon as you turn off and go 10 minutes down the road on either side you lose your signal. That's not adequate, and we need to do better than that.

I'm not sure if Lawrence—

[The Chair, Conservative, David Sweet]

That's all the time we have on that question.

Now we'll move to Madam Gallant for five minutes.

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

Thank you, Mr. Chairman.

Through you to our minister, I'm going to ask a question about the impact of high-speed Internet in rural Canada. Back in 2007 it was recognized how important it was to get rural Canada connected, especially those parts with very challenging topography. We had a pilot project then; all churches in the community used their steeples to make sure there was line of sight, and all our schools finally became connected.

Now you are building on this with the rollout, filling more broadband gaps. The concern is being raised that particularly in rural Canada, as we become more connected we do online banking, the need for tellers...the few jobs we have in small-town Canada become obsolete.

On the weekend we had a symposium of community colleges at Algonquin College in Pembroke, and the keynote speaker, Ken Coates from the University of Saskatchewan, was telling us that there is a toilet on the way—it's already in Japan—that will do a urinalysis and send an email to your doctor if anything is amiss. The doctor will send an email to your pharmacist, and the pharmacist will send an email to you to let you know that you have to pick up a prescription.

[The Chair, Conservative, David Sweet]

Madam Gallant, I'm sorry to interrupt you but it's been the policy of the committee that immediately when the bells go we adjourn to go to the House. I was hoping you'd finish quickly.

Thank you very much, Minister.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I'll just wrap up by saying you're quite right. These services to rural Canadians, which are often taken for granted in urban centres, need to be extended through wired and wireless Internet and all that. These communities have been left behind for too long. That's why we have this program.

I will be announcing this in greater detail very soon. I'd be more than glad to come back to the committee and talk about it when we have that opportunity.

Thanks to all parties for this opportunity.

[The Chair, Conservative, David Sweet]

Mr. Lake, do you have an intervention? No?

Okay, colleagues, we'll adjourn and then we need to come back and deal with the votes. We'll be suspending for the vote and be returning.

[Proceedings continue in camera]