Industry Committee on Dec. 4th, 2014

[The Acting Chair, Conservative, David Sweet]

Good morning.

Good morning, ladies and gentlemen. Welcome to the 31st meeting of the Standing Committee on Industry, Science and Technology.

Today I feel a bit like the Speaker of the House, saying that we're going to see the clock as of a couple of days before, considering the supplementary estimates have been passed, but we're here in that regard.

We have with us the Honourable James Moore. He will be presenting, and then we'll go to our regular round of questions.

You did see it correctly. It was 9 a.m., to facilitate the minister's schedule, so we have only an hour and forty-five minutes. I'll do the math in that regard as far as our rounds of questions go. The minister will be with us for one hour, and then the officials will stay with us for the remaining 45 minutes.

Minister Moore, please proceed with your opening remarks.

[James Moore, Conservative, Minister of Industry]

Thank you, Mr. Chairman, and colleagues.

Merry Christmas. It's great to be here.

I know that I'm here on main estimates but I know this is a time at the end of the fall session where a lot of topics are obviously open for discussion. I'm here to talk about the issues that are of curiosity to you. With that in mind, I'm going to talk about a number of things in my opening remarks and then, of course, I'll pass it on to you for questions.

My deputy minister John Knubley is here with me, along with assistant deputy ministers Kelly Gillis, Mitch Davies, and Phil Jennings.

When I last appeared before this committee, as you know, I spoke about our government's plan for the digital economy, our future in space, and our commitment to creating jobs and opportunities for Canadians.

Today I am pleased to speak to you about the important work that our government has been doing since then to deliver on our top priority of creating jobs and economic growth for Canadian families.

Of course, the growing economy means having a clear, measured plan for the digital economy. Canadians live in an increasingly digital world where access to high-speed Internet means access to e-commerce, video streaming, employment, distance education, and health services. The lack of high-speed Internet denies rural Canadians the same opportunities that most of us have come to expect in our daily lives.

That's why this past summer I launched the connecting Canadians program. Under this program we will connect 280,000 Canadian homes in rural and remote regions with high-speed Internet access.

Access to high-speed Internet will open opportunities for the North and remote regions of the country. We often need to remind ourselves that Canada is the second-largest country in the world in size, but 37th largest in terms of population.

To be able to provide high-speed Internet access and connect 98% of all Canadian households in a country that is as large as Canada is truly an ambitious target, but I am pleased to say that Industry Canada is now accepting applications for projects under this program, and we expect to announce the first recipients in the spring.

I would also add about the connecting Canadians program, the rural Internet policy that we put in place—and I appreciate the support from the opposition parties when we announced it—when it's spoken about on the international scene, for example, among the Internet champions of the EU, it is seen as an international standard of achievement that is without parallel.

Connecting Canadians also involves making the right decisions to ensure that Canadians have access to vital resources, like wireless spectrum. Last March I announced the results of a 700 megahertz spectrum option, the highest quality spectrum for wireless services ever auctioned in Canada. The total revenue generated from this auction was $5.27 billion, proving critics wrong and earning the most ever for a wireless auction in Canada.

Since then our government has taken deliberate action to offer consumers more choice, lower prices, and better services in our wireless sector. We have delivered on our promise to cap wireless domestic roaming rates. We have introduced legislation to end paper billing fees. Next year we will be making more spectrum available to Canadians than ever before by holding two more spectrum auctions with the AWS-3, a 2,500 megahertz band.

This is of course on top of the initiatives that we've had on tower-sharing policy, and on top of the initiatives that we've had in concert with the Federation of Canadian Municipalities on community engagement whenever cell towers are built.

With all of this taken together, we know that these actions have had a positive effect on our wireless industry. In fact, there is more competition today, and wireless rates have fallen 22% since 2008, according to the Wall report.

One area of the economy where we have seen tremendous growth since the recession is in manufacturing. Throughout the fall, I have met with representatives of some of Canada's leading companies to learn more about how we can do better.

Manufacturing accounts for more than $166 billion of Canada's GDP, representing about 10% of all of our economic activity. The industry employs close to 1.7 million Canadians, and almost all of them enjoy full-time, well-paying jobs.

One of the most important and certainly one of the largest manufacturing sectors is the auto industry, which is seeing positive results. In fact, recently Canada posted the largest trade surplus on auto exports since the start of the recession.

Our government support for the auto sector has focused on projects that secure high-value jobs and deliver long-term economic benefits to Canada. Last month Ford announced the creation of 1,000 new jobs at its Oakville plant, thanks to our government's investment and partnership with the firm.

We are confident that Canada's suite of policies, low taxes, global trade opportunities, investment policies, investment in infrastructure, such as twinning the Detroit-Windsor border crossing, and the establishment of a skilled workforce will keep Canada's auto sector among the global leaders. Canada is a great place to build cars.

I would also like to briefly talk about our aerospace industry, which is another cornerstone of Canada's manufacturing sector. It comprises over 700 companies, is responsible for more than 170,000 Canadian jobs and contributed $28 billion to Canada's GDP last year alone.

Canada ranks third in the world in terms of civil aircraft production. Aerospace manufacturers export nearly 80% of their products to diverse markets around the world. And we will continue to support this key sector of our economy through the technology demonstration program and the strategic aerospace defence initiative.

Earlier this year I also announced a new space policy for Canada, a framework that will guide our future in space. Since then some of Canada's very own companies were involved in making history by contributing to the European Space Agency's Rosetta mission.

Canada's success in space is something to be extremely proud of.

To build on this success, I recently announced the creation of the Space Advisory Board. Members of the board—including Colonel Chris Hadfield and former Canadian Space Agency President Walt Natynczyk—will provide expert, unfettered advice to our government on Canada's role and future in space.

Mr. Chair, when Canada's Agreement on Internal Trade was signed in 1994. Canada had free trade agreements with two countries in the world: the United States and Mexico. Today Canada has free trade agreements signed with 43 countries around the world, constituting 52% of the global marketplace. As Canada signs on to more international agreements, we must ensure that Canadian companies and Canadian consumers have the same opportunities here at home. We have too many barriers to commerce, to trade, to mobility, and to growth within Canada.

Over the last 10 months, I have engaged businesses, premiers, provincial and territorial ministers across the country about the urgent need to free up trade within Canada.

Our proposal for change is called “One Canada: One National Economy”. This proposal outlines two paths to advance a modern internal trade framework. One involves making targeted reforms that address priority areas of concern, including labour mobility and education credits.

The other is more comprehensive, a complete redesign of the agreement to bring it in line with recent international trade agreements. At this summer's Council of the Federation meeting in Charlottetown, Canada's premiers agreed unanimously to undertake a comprehensive renewal of the outdated Agreement on Internal Trade. I look forward to working with my provincial and territorial counterparts to see this through.

Mr. Chair, our government has promised Canadians that we would return to a balanced budget by 2015. We promised Canadians that, if they entrusted us with a majority government in May 2011, our principal focus would be the Canadian economy. By focusing on the priorities that I've outlined today, we will continue to deliver jobs, opportunities, and economic growth for Canada's economy.

I am happy to take your questions now on any of the matters I mentioned in my speech,

or other matters that are of interest to committee members. Thank you very much.

[The Chair, Conservative, David Sweet]

Thank you, Minister Moore.

With the time that we have, we'll go with five minutes per person all the way through.

Mr. Lake, for five minutes.

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

Thank you to the Minister for coming.

I'm going to stay high level here and talk a bit about the middle class and some of the claims that are made from time to time about the state of the middle class here in Canada by the opposition members.

I will start by reading an interesting quote by a well-known Conservative champion, Hillary Clinton, who said:

Canadian middle-class incomes are now higher than in the United States. They are working fewer hours for more pay, enjoying a stronger safety net, living longer on average, and facing less income inequality.

I found that to be an interesting quote because it's the exact opposite of the claims made daily by the opposition members.

I want to talk a bit about our policies and how they relate to the middle class, and give you an opportunity to contrast that with some potential opposition policies. I think about our telecom policy, the manufacturing policy that you talked about, the steps we're taking to end pay-to-pay billing practices, and the connecting Canadians program, all those measures that we've taken. Perhaps you could talk a bit about their impact on strengthening our middle class further in Canada.

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

Hillary Clinton's comments were built on the study that was reported on the front page of The New York Times, which we as a government were very quick to trumpet, which was the declaration that Canada has the strongest and healthiest middle class in the world.

But it's true, I think it's fair to say, not only on some of the items that you mentioned, like ending pay-to-pay billing in the wireless sector, or for example, anti-spam legislation, or the bringing into force of the Fairness at the Pumps Act, which we've done as well, or the drive for more competition in the wireless sector which puts more money in people's pockets, or even frankly, things like augmenting the universal child care benefits, that people have a little bit more money in their pockets to make choices about how they want to live their lives.

These policies, lassoed together, provide tremendous benefit to Canadian families. As you know, not including the new UCCB benefits that we're planning on bringing into force in the new year, the average Canadian family of four has $3,500 in their pockets which they didn't have prior to 2006. We're very proud of that. It's not one big national monumental policy that has arrived at that; it's a series of policies, which bit by bit shift government policy, to the benefit of the average Canadian family. It's principally, of course, middle-class families, those with kids, who have benefited from this suite of policies.

The Canadian economy in general, and by extension of that, average families....The greatest challenge the Canadian economy and all of us face is actually very simple and it's straightforward. It can be defined in one word and that's “complacency”. The assumption is that we will always have better, that we will always grow, that we will always have a better quality of life, and that everything will be fine in perpetuity. That is the greatest challenge that we have in Canada with our economy: complacency.

We have to ensure that we remain competitive, that we continue to grow, that we're establishing opportunity in world markets, that we're developing our resources in a responsible way, that we're managing the Canadian economy as effectively as we can, that we continue to consult, have our eyes open, be mindful of what the rest of the world is doing in auto policy and try to match it in a competitive way.

We have to be mindful that the rest of the world is catching up to us in aerospace and space policy. We have try to stay ahead of the curve and move forward. Complacency is the greatest challenge that we have. We need to make sure that we're vigilant.

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

Along the same line, we have an election campaign coming up within the next year and there will be really tough choices to make.

I'm taking a look at the NDP policy. I was looking at the platform the other day. Don't hate me for that. I noticed a fairly significant amount of carbon taxes in that last platform. A 30% increase in taxes on job creators, going from 15% to 19.5%, and obviously significantly increased EI costs to employers and workers.

What kind of impact do you think those would have on the progress that we've made?

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

They would be unhelpful, and you won't find any of those policies—

[Peggy Nash, NDP, Parkdale—High Park, ON]

On a point of order, Mr. Chair, I'm confused. I'm flattered that the member is reviewing the NDP platform. There are lots of very good ideas in there and he's well-advised to read it carefully. However, I am confused as to why that would be pertinent when we're reviewing the estimates and the minister's time is so valuable here. Why are we debating the NDP platform, as flattering as that is, and as positive and constructive for Canadians as that is?

[The Chair, Conservative, David Sweet]

I try to give a lot of latitude, Ms. Nash, and I do the same for everybody. I'm certain that Mr. Lake will get to the point that he's trying to draw in respect to the estimates.

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

I'll be glad to hear, in fact, how well the NDP structure their questions to be exactly in line with just the estimates only. That should be interesting.

[The Chair, Conservative, David Sweet]

Minister Moore.

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

I'm against the NDP platform.

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

Maybe we could have a vote on that.

Minister, could you take a few seconds to elaborate on the support for the manufacturing sector that we've provided?

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

As you know, manufacturing is an umbrella phrase, but it actually covers a number of different areas of the Canadian economy, all of which have their own unique challenges, unique pressures, and which are geographically housed in different provinces in the country which have their own policies which challenge our effectiveness in order to compete.

Think about, for example, the auto sector in Ontario, with energy costs and the challenges that imposes on the auto sector. Those are a unique set of challenges that frankly don't exist in other parts of the country.

Think of our capacity to partner and work with the Province of Quebec on the aerospace sector. That's a unique set of policies, and a geographic and physical environment that is different, for example, from working with Kelowna Flightcraft or Viking out on the west coast of Canada.

It is important to have policies that make sense. When one talks about manufacturing, you then very quickly have to put on a geographical lens and see what it means for shipbuilding in Atlantic Canada versus the Pacific coast. Do you get my point?

It's a complex policy, but we do our best to stay competitive.

[The Chair, Conservative, David Sweet]

Thank you, Minister Moore.

Ms. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Good morning, Minister, and thank you for being here.

You talked about jobs and economic growth. I wanted to ask you about the advanced manufacturing fund. Albeit sales are up in some areas of the manufacturing sector, we're in fact down about 400,000 manufacturing jobs, which by your own account are good-quality and for the most part full-time jobs.

Since the first intake in early December of 2013, the advanced manufacturing fund has released no money, and there have been no agreements executed as of November 6. Since October 1 of this year, you've taken credit for the advanced manufacturing fund no fewer than six times, and yet no money has left the fund.

I'm wondering if you would agree that it's just a bit disingenuous to claim victories across Ontario when in fact you've not spent a dime.

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

Well, not quite. As a matter of fact, we've received 14 projects and we are doing that assessment. As you know, there's a volume intake. We assess the projects, and then we move forward with them. As a matter of fact, we'll have some announcements on that front very soon.

If I've spoken about the advanced manufacturing fund in a proud way six times, that's to my failing; I think I should have spoken about it with more pride more often than that. This fund has been well received across Canada by provincial NDP, provincial Liberal, and provincial Conservative governments who have welcomed this investment and what it will mean for advanced manufacturing moving forward.

But it's a fair question. Minister Holder is administering the fund, and he will be more than happy to be here with Minister Goodyear to discuss the fund: what we aspire to achieve, what the timelines are. We do have announcements coming very soon, and we do have 14 applications for 14 projects, many of which will receive funding, which will be a very good day for Canada.

[Peggy Nash, NDP, Parkdale—High Park, ON]

So you've confirmed that no money has left the fund, and you have answered a question that I didn't get an answer to when I put the question on the order paper, which was how many companies have applied for the fund. Would it be possible to get the rest of the answers? It was Question No. 671 on the order paper. I'm hoping you can supply the rest of those answers to the committee through the chair.

I wanted to ask you about the long call for proposals and the extended examination period of the advanced manufacturing fund. Do you think they respect the pace of investment decisions made by multinational corporations, which I'm told happen very rapidly? As you said yourself, we face global competition, and yet this fund is taking a very, very long time to make decisions.

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

I will take a look at Question No. 671 and make sure we've answered it to your satisfaction.

In terms of the number of firms, it's 14 projects. On the number of firms that are implicated in the 14, I don't know the global number, but if you invite to the committee Minister Goodyear, who's responsible for the administration of the fund, I'm sure he'll be more than happy to answer the question.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Okay.

About the time lag, do you think the time it's taking respects the pace of investment decisions in manufacturing around the world?

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

It's more important to make effective investments that meet the spirit of the fund and help manufacturing than to just rush money out the door so you can say you've rushed money out the door.

[Peggy Nash, NDP, Parkdale—High Park, ON]

We've heard criticism from business about how long these projects are taking to get approved.

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

I'm sure that's true, because they would like us to rush the money out the door to them.

[Peggy Nash, NDP, Parkdale—High Park, ON]

We're anxious to get jobs created, Mr. Minister.

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

Everybody is.