Finance Committee on Oct. 16th, 2012

[John Alho]

I would tend to agree as well. There is a lot that can be done, such as additional investments in partnership programming. Take the Connect program and the Engage program that are coming out of NSERC, for example. For relatively small amounts of dollars, new SMEs that have had no history of collaboration with universities are now applying for these dollars and for first-time research projects. They are working together with the academies to come up with solutions to real business problems. We would encourage additional investments of these natures to be made.

The IRAP is another good example of a program that is run out of the NRC and fosters collaboration between industry and our research centres.

Our position would be that we should encourage more of these types of programs.

[Scott Brison, Liberal, Kings—Hants, NS]

You mentioned that the University of Manitoba has a disproportionately high number—I think you said it was the largest percentage in Canada—of aboriginal and first nations students.

How important are scholarships that are aimed at helping break down the financial barriers? What would be some of the examples of the best scholarship programs, particularly those aimed at helping to strengthen business capacity on aboriginal and first nations reserves?

[John Alho]

One of the leading determinants to accessibility at university is the history of families who have gone through the university system. That tends to be the largest single determinant of whether someone goes on to university or not. Unfortunately, in our aboriginal communities we don't have as many examples of that as we would like. I think I mentioned in my presentation that only about 8% of aboriginal Canadians have pursued a university degree.

Putting in place scholarships and measures to support aboriginal education is absolutely critical for the future of the country. When you keep in mind that over the next 20 years 400,000 aboriginal Canadians will be entering the workforce, we need to put in place measures that will provide assistance to encourage them to go on to university.

We have in place what we call reach-back programs that go into the K-12 system. At one point some of those programs were funded through the federal government, but they aren't any longer. We would encourage government to take a look at that.

You mentioned business, and in particular I would refer to the Paul Martin foundation and some of the work the former prime minister has done in that regard. I think members of the committee are familiar with the work they've done. They encourage and provide training for students in the high school stream to go on some business education and business training, as well as providing some start-up funds.

[The Chair, Conservative, James Rajotte]

You can have just a brief question, Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Gomez, in a recent poll, your members indicated that access to skilled labour is critically important to them. How much of a skills gap, in terms of people without jobs and jobs without people, are you seeing in Toronto?

[Juan Gomez]

In a number of our key industry clusters, it's quite severe. We recently heard, as an example, from our food and beverage cluster. A lot of people might not know that Toronto has North America's second-largest food and beverage processing cluster. What many of our members are finding, in particular on the processing side of the food industry, is that there are considerable skills gaps. What we also are finding is that some of that demand is not being met by some of the programs in the colleges and universities. That's something we're currently working on and trying to address with partners in government and post-secondary institutions.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brison.

We'll go to Ms. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Mr. Chair.

I, too, would like to thank the guests for their patience while we went to the votes.

I'm going to start with Mr. Gomez. I note your three items in your presentation. Certainly the Building Canada fund, which goes through to 2014, has been a critical program. A lot of those accelerated dollars are really important. The minister, of course, has indicated that he's sitting down with the FCM and the partners in terms of designing and looking towards what that next infrastructure program is going to look like. That piece of work is in process.

I found it very interesting that Mr. Rothschild was portraying a specific model, and you were talking more globally, in terms of the importance of increased capacity to compete globally and the cluster-based strategy. Can you talk to me a little bit about what your thinking is for moving that agenda forward? Then perhaps Mr. Rothschild could also respond.

[Juan Gomez]

With regard to the Toronto region economy and what our comparative advantage is, we clearly see from the benchmarking we've done that we have some of the leading industry clusters in North America. For example, in food and beverage, health and life sciences, auto parts, and aerospace industries, we're quite strong. We see those as areas we can grow substantially in terms of attracting inward investment. Also, businesses, working together, can improve the competitiveness of those clusters.

In Canada's promotion of its trade-off offer in terms of attracting inward investment, it is important to highlight these industry clusters as areas companies can invest in to grow their businesses and it is important in terms of the export supports we undertake. It's important that they have that regional focus and understand the importance of those industry clusters to the national economy.

In both attracting investment and promoting exports, we really think it's important that regional comparative advantages be understood, just as we understand the importance of energy, for example, in Alberta.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Would you say that you're both trying to achieve many of the same things and that they are just different models?

[Juan Gomez]

Absolutely. We absolutely support the types of partnerships Mr. Rothschild described. A lot of the work we do is to help businesses connect with those types of programs. That approach definitely could work within the Toronto region, through our universities. Part of what we're trying to do is encourage better relationships between business and universities, in terms of collaboration. These types of programs would be part of that mix.

[Henri Rothschild]

In terms of Canadians partnering through technology with other countries and other regions, we have three types of comparative advantages that for the most part are largely untapped. As technology becomes a key to opening up market opportunities, we need to be aware of it and build on it. This is what we've uncovered in the few years we've been running the programs I've described.

The first is demographic, as we've talked about, particularly in responding to the question from Mr. Adler. The immigrant mix we have in our country becomes a very powerful partnering platform.

The second is the quality of our science base. The report recently released by the Council of Canadian Academies shows that in the area of science quality, we are really in the top ranks, based on all the metrics that measure scientific quality.

The third, often overlooked, is the fact that we adhere to good corporate governance. We're a transparent society. Sometimes it can be a detriment, but in the case of partnerships, everybody wants to work with us. This is because in many ways we adhere to terms of agreement on technological sharing, which may seem like a detriment to some people, but to a large degree, particularly in multilateral initiatives, Canada can become an important hub in developing certain advanced technologies that can help our industries and make us more competitive.

[The Chair, Conservative, James Rajotte]

Thank you.

Ms. Nash is next, please.

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

Thank you.

I don't have time to ask you a question, but I want to echo what Mr. Rothschild was saying Canada's advantages in terms of the multinational nature of our citizens, the tremendous human resources we have, and the security we have here in Canada, which is very desirable. I'm a former board member of Invest Toronto, which advocated investment in Toronto, but I think cities right across this country are very strong opportunities for investment.

I want to pick up again on the piece Mr. Gomez raised about infrastructure. Transit is a perpetual football in the city of Toronto. We talk a lot about it. We don't seem to get the needed resources in that area.

Could you talk a bit from a business perspective about what it means for businesses to be, I would say, decades behind where we should be in transit investment in that city? I'm sure it's the same in other cities across the country. What does it mean for the businesses that you represent at the Board of Trade?

[Juan Gomez]

In surveys we've done with our membership on the top policy issues, investment in transportation infrastructure and problems associated with transportation have been consistently our number one issue over the past five years. At a macro level there are studies that have shown—the OECD, and the Conference Board of Canada—the impacts annually. It's about $6 billion of lost productivity.

We know this anecdotally from different businesses. For example, Toronto is a major logistics transportation hub. It's really increasing the costs of doing business deliveries. It affects a lot of our manufacturing industries that rely on just-in-time delivery. There are a number of bottlenecks throughout the transportation system from public transit, rail, and intermodal connectivity between those different types of transportation. It's a substantial impact on us economically.

We've advocated that the solution requires all three levels of government to cooperate. No one level can provide all of the funding. However, our members have said that with the right plan in place and with transparency in ensuring that tax revenues collected through various means, whether the gas tax fund or otherwise, are allocated for transport, they're prepared to pay. That gives you an indication of the priority it is for our members.

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

How serious it is. I noticed as well that the importance you put on indexing funding so that it doesn't lose value and also the importance you gave to having multi-year funding of plans so that there is reliability going forward and businesses and the community know what to expect in terms of the delivery of transit.

I certainly know it's a massive concern for businesses I speak to and for people in the community. I agree with you that it ought to be a priority right across this country. It's a key issue for our economy, the environment, and the community.

I think the Board of Trade has continued to make this a key issue and I really support you on that as we're trying to bring the government along. They voted against a measure that we put forward for a transit strategy, but hopefully they'll have another creative solution come forward so that we can address this important issue. I thank you for raising it.

I want to ask Mr. Alho about two things. First, are we doing enough basic research in our universities, and is that something we need to address? Are we doing well in that?

Second, while many of the training programs are run by the provinces, is there anything the federal government should be doing in terms of training to fit the skills to the jobs that are available?

[The Chair, Conservative, James Rajotte]

Please have two brief responses there, Mr. Alho.

[John Alho]

Certainly.

In terms of investment research, are we doing well? Yes, we're doing well. Can we do better? Absolutely. Do we need to do better to compete internationally? Yes, we do.

In terms of training programs, the federal government does administer some training programs in partnership with other organizations across the country, and we should be looking at that by looking at where the skill shortages are and putting some money into that. Universities provide a broad skill set, and graduates are flexible and tend to be very employable as a result of that flexibility.

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

Thank you.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Thank you, Ms. Nash.

Ms. Glover is next, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair

Thank you to all the witnesses.

I'm going to start with Mr. Alho as well. I'm proud of the University of Manitoba. I had a son who went there for a while.

I'm reminded of a quote you provided following 2012's budget. Here is the quote:Budget 2012 included a number of items of importance to the University of Manitoba. ... Budget 2012 marked a solid commitment to research and innovation. ... Budget 2012 also contained measures to enhance support for high-potential research collaborations between businesses and researchers. ... Budget 2012 also prioritized Aboriginal education and training, committing to introduce a First Nation Education Act to be in place by September 2014. This is to establish standards and structures for strong educational systems on reserves.

Therefore I'm a bit surprised at some of your comments today. There was $37 million put in for granting councils. I need you to explain it to me. Are you asking for more money on top of what's already been committed?

[John Alho]

Yes, that's correct. Those are definitely significant investments, and we were very supportive of them and continue to be very supportive of them. My comments were suggesting that we need to continue that level of investment.

I acknowledged that budget 2012 and other measures were significant steps in the right direction, and we need to continue making those types of investments, both in the granting councils and in aboriginal education. The momentum is going in the right direction, and we just need to continue that.

[Shelly Glover, Conservative, Saint Boniface, MB]

Okay.

The Business Council of Manitoba also receives money from the federal government.

[John Alho]

The business council?

[Shelly Glover, Conservative, Saint Boniface, MB]

The Business Council of Manitoba. Some of your students get bursaries from it.