Public Accounts Committee on May 13th, 2010

[The Chair, Liberal, Shawn Murphy]

Go ahead, please.

[Richard Dicerni]

So the part on risk analysis, at page 16, you deem this to be not sufficiently quantifiable and too poetic. Is that about it?

[David Christopherson, NDP, Hamilton Centre, ON]

Well, those are much nicer words than I used, but yes, the point is the same.

[Richard Dicerni]

Point taken: we could enhance risk. Part of the challenge we have is a time lag. If I'm talking to you today about the risks as to when the framework was set and the report against which this document was prepared, there's a bit of a time lag.

If you had asked me last year what my risks were, I would have focused on proper delivery of the knowledge infrastructure program. I would have focused on delivery of the marquee tourism, but that was not captured in print because the budget came out in January. That's what we started focusing on.

If you want to ask me what the largest risk facing the department is, it's the recruitment and retention of senior officials, because the ongoing challenge of a demographic nature is to have the right people in the right jobs with the right formation. training, and so forth. That's probably the largest risk that you could put in my department's document for the next five years and that's where we devote a lot of attention.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

Thank you, Mr. Dicerni.

Mr. Dreeshen, you have five minutes.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair.

Thank you, ladies and gentlemen, for being here this morning.

Actually, Madame Faille spoke earlier about some of these strategic outcomes as far as summary of performance is concerned. I had spoken of the competitive industry and sustainable communities and the fact that it looks as though we are perhaps declining there.

But perhaps to have a balanced presentation, as was suggested by Mr. Christopherson, you could explain the two strategic outcomes where we've actually been improving.

Strategic outcome number one is “a fair and efficient competitive marketplace”, and outcome two is “an innovative economy”. Perhaps you could explain the types of things that you have seen there, and help us in that regard.

[Richard Dicerni]

Okay. Can you point me to the particular page?

[Earl Dreeshen, Conservative, Red Deer, AB]

Pages 12 and 13.

[Richard Dicerni]

As you may have noted, at the front end we approach the overall mission of the department using a triangle, because we believe that each of the three major volets of the department are interconnected and reinforce each other.

The fair and efficient competitive marketplace is fundamentally the framework. It's the baseline. If we don't get this right, nothing else will matter.

In that context, the government launched the panel chaired by Red Wilson, which looked at a number of initiatives that could be taken to enhance the competitive marketplace. These were adopted by the government and passed in the previous budget, which led to changes and improvement in regard to the Competition Act and the Investment Canada Act.

There are other areas that we are currently working on, such as copyright, intellectual property, that tend to reinforce the competitive marketplace. Other initiatives include the recently held auction for new spectrum, which permitted a number of new market entrants to bring product to market.

So that is our table stakes: if we don't get this right, if we don't keep improving and making sure that we have a fair, efficient, and competitive marketplace, then the rest will not work as well.

In terms of the innovative economy, a number of initiatives have been undertaken to support this. A couple of days ago, as a matter of fact, Minister Clement launched the digital economy strategy, which is at the next wave of initiatives.

Looking back, the government launched the Canada Excellence Research Chairs program, which was designed to bring to Canada 20 of the top-notch researchers in specific fields, so that if we can bring talent.... These were unique chairs of $10 million each. The results should be announced shortly.

This was a worldwide competition. We were able to establish a worldwide panel, which included the president of the University of Hong Kong and the dean of engineering from the University of Cambridge.

So we are going to be able to bring to Canada 19 or 20 top-notch scholars.

We have the Vanier scholarships, which again are bringing to Canada top-notch students. It will be on a par at some point, we hope, with the Rhodes scholarship in terms of its quality and the amount that we bring to it.

Overarching all of this, however, is the science and technology strategy, which identified key areas that the government should invest in and on which we are getting gradual buy-in from other provinces as they also start focusing on those similar areas to establish critical mass.

Overall in terms of an innovative economy, there's an evolution from what it was 10 or 15 years ago to an area where there's concentration in key areas that will be the platform for Canada's future economic growth.

[Earl Dreeshen, Conservative, Red Deer, AB]

That's great. Thank you.

Included in that would be our KIP funding as well, I suppose, and the significance of what it has done.

I'm not sure whether this ties in exactly to what you were discussing, but I noticed that on page 26 you talk about “piloting educational tools for university students in science and engineering faculties, prototyping IP data research tools”, and so on. I wonder if you could perhaps comment on some of that information.

[Richard Dicerni]

KIP, the knowledge infrastructure program, I think will prove to be one of the most substantial investments in post-secondary education in this decade, for a long time.

I was former deputy minister of education in Ontario, which is where I initially met Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

The good old days....

[Richard Dicerni]

Pardon me?

[David Christopherson, NDP, Hamilton Centre, ON]

Those were the good old days.

[Richard Dicerni]

They were both good and they were both old--

[Voices]

Oh, oh!

[Richard Dicerni]

And capital was always the forgotten child--upkeep, refurbishment--because it's always more interesting, if you wish, to launch a new wing, to launch a new university. But as people who have houses know, it does need upkeep.

This will permit Canada to bring up to an extraordinarily high level the quality of infrastructure of our post-secondary education system. The key point is that it's not just our money; it's not just the $2 billion the Government of Canada put into it. Because all of these funds were matched, and in some cases, even more so. So you're looking at an investment of about $4.5 billion to upgrade the post-secondary capacity.

Because the roof is not going to leak anymore, I think this will be a solid underpinning with which our Canadian researchers and the researchers we bring to Canada will be able to do their stuff.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Dreeshen.

Now we're going to go to Mr. Dion.

Monsieur Dion, vous avez cinq minutes.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Thank you, Mr. Chair.

Good morning, Mr. Dicerni.

You were not here when I made my comments to your colleague in Transport Canada. I would reiterate a lot of them.

First, I think this report should be discussed at the industry committee, Mr. Chair. I think we should mention to them that these reports exist. It is for them to review, because we have no time here, and it's not the role of this committee to review the industry policy of Canada. It's more to give you our reaction to this report. Is it workable? Is it easy to read?

I would tell you that it's a work in progress. A lot of the criticism I made to transport, I would reiterate to you. We are in the middle, between a classic ministerial report, where you describe your activities and your programs in a very boring way, and indicators. The link between the two is difficult to make.

I agree that it's a bit better than Transport's report, but I still think it would be important to have a strategy of buildup when you write these reports. Each year we should see where we are. We start from scratch year after year. We should see where the direction for the country is.

And I would say that it's dangerous to put everything on the same footing. You have said a lot of interesting things since you have been here with us. They're not in the report and there is no way that we will find them.

Where is Canada strong? Where are we weak? What is your department doing to address our weaknesses and to keep up our strengths, to make us stronger? There is no way to know. Everything is on the same footing.

Yes, we will discover what your minister just said, which is that we are falling behind, if we are not careful, on some key part of the innovative economy, but we need to discover that it's on page 26 in the table. It should not be on the same footing. We should have a direction. We should see what is important and what is less important.

There is no sense that clean tech will be a big part of the economy when you read this report. It's not part of your three pillars. Yes, you have programs here and there, but how will it stop Canada from falling behind, as many reports have said. This part of the economy may become as big as the automotive industry in the coming decades.

I will just give some examples in the few minutes I still have.

On page 19, in the section entitled Barriers to competition, it says that Canada ranked 5th in 2008 and 11th in 2003. Canada ranked 8th in the world in overall competitiveness in 2008, up from 10th in 2007. In one instance, the report refers to 2003 and in the other, 2007. But it does not say why. It may be because the methodology changed, and therefore it is not possible to go back further. We do not know, but the report should explain it.

There should be uniform standards year after year. We should be able to see where we are going. We should not change from one indicator to another unless there are valid reasons. It's an example that I give you.

[Richard Dicerni]

I agree with you that if we use different years as reference points, we should explain whether it is due to the fact that data is now available that did not used to be, and so forth. That is indeed a shortcoming, I will agree.

I also agree that, when governments and public servants have to be accountable to Parliament, it would be advisable to look at how a sectoral committee such as the industry one could join forces with this committee to analyze performance. I can tell you, in all honesty, that we are doing our best to meet the demands and requirements of both parliamentarians and officers of Parliament. The contribution of the various officers of Parliament cannot be overlooked or underestimated, especially that of the Auditor General, who works to enhance transparency. But, basically, I agree with you.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

I am simply trying to suggest that you take a different approach next year, one that will be more useful to you, to us and to Canadians.

On page 27, it says that R&D spending in Canada dropped as a share of the GDP. We should be able to see whether that is part of a pattern and how we rank against other countries. You know, as well as I do, that it is a problem, not in terms of public R&D, where we are one of the leaders, but in terms of private sector R&D. Private enterprise is not investing in R&D, despite the option to amortize the capital and the considerable efforts of the provinces, especially mine, Quebec.

We are way behind, and this report should tell us what the problem is. Your minister just gave a presentation. There were indications in your report that the minister was going to give such a presentation. The reader just happens upon that information by checking a table. You already have to be familiar with the subject matter to understand when a particular table is critical and when it is not.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Dion.

Mr. Dicerni.

[Richard Dicerni]

You are right. There is a gap between when the framework for this kind of document is established and when the document content has to be completed. Then there is the ad hoc component. We try to meet the challenge by drawing on other procedures, including the estimates.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

There is a table on machine-tool investment that I find very troubling. Given that the loonie is at par with the U.S. dollar, we need to invest in that sector. It is critical. And it is mentioned just in passing.