Industry Committee on May 26th, 2014

[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.