Finance Committee on Oct. 16th, 2018

[Kim Rudd]

I'll keep that in mind. Thank you.

Sven, I want to come back to your presentation.

I'm from Ontario. As you know, we reduced our emissions significantly because we got rid of coal plants. Over 60% of the power in Ontario electricity generation comes from nuclear.

I'm going to follow up on something my colleague Mr. McLeod talked about in connection with some of the rural and remote communities and the off-diesel program, on which Natural Resources Canada has a lead in terms of various options for going off diesel.

To your point, it's different everywhere. There is no one-size-fits-all solution for any of this. There are a couple of things I want to mention and maybe get some feedback from you.

Let me make a comment first. In terms of the elimination of the coal plants, the data has been accumulated since 2012, and we're seeing around 7,000 fewer hospital visits for asthma and other respiratory problems. The anticipated savings to the health care system are about $1 billion over a 10-year period. These aren't insignificant results of a policy around reduction of pollution, which is exactly what this is. As you know, we're very committed to our cost-of-pollution policies.

In terms of making this more available in other parts of Canada, such as in our indigenous and northern and remote communities, do you have any comment about providing support for the small modular reactors that are about to go into demonstration phase, and in fact, in some cases, have gone into demonstration phase in the U.S.? It's not just about a community that....

You may know that in Ontario, 16 indigenous communities have come together to buy a power grid, to create a power grid for those 16 communities, with Fortis as a partner. Their intention is to eventually buy Fortis out of its 49% over the next number of years.

We're looking at creative options, but energy generation in the north and in remote communities is also about economic development around mining, which also uses diesel, unless there's a good source of hydro power next door. They're very much looking at these SMRs, these small modular reactors, as an option. Do you have any comment on that?

[Sven Biggs]

Generally, nuclear has higher costs than other renewables, and the nuclear waste problem has yet to be adequately addressed in a way that makes sense. I would suggest to you that run-of-river hydro, solar or geothermal options are probably better investments for communities and taxpayers.

[Kim Rudd]

Can I just make a comment, Mr. Chair?

[The Chair, Liberal, Wayne Easter]

Go ahead.

[Kim Rudd]

One of the interesting things we need to keep in mind is that in operations like mines, it's about safety. It's about a reliable source of energy that can operate that mine, so intermittent sources.... We're not even close to the battery power, and in the northern communities where there's no sun, as my colleague suggested, I think we need to keep an open mind about what those unique solutions are for unique operations.

[The Chair, Liberal, Wayne Easter]

Mr. Kelly is next, and then Mr. Julian.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Mr. Chair.

Mr. Wilson, in response to Mr. Jeneroux's question, you mentioned Bill C-69. It seems that every time I end up in a discussion about this bill, I learn something new about how this bill may prevent projects from being built or prevent products from getting to market.

The committee is charged with receiving submissions for pre-budget consultation with an eye on competitiveness in the Canadian economy. Your port is one of the most important parts of an export-driven economy, in terms of access to markets. I'd like you to perhaps continue in that vein and explain the responsible way in which you have been able to expand and build your port and the ways in which this bill will perhaps prohibit your ability not only to expand your own port but to have customers for your port and to be able to deliver product.

[Duncan Wilson]

Thank you.

There are two types of projects on which Bill C-69 will have a major impact. One type is those port authority-led projects, such as our proposed terminal 2 project in Delta, which is currently undergoing a CEAA panel review under CEAA 2012. Even under CEAA 2012, we are three years delayed in that process, and container capacity on the west coast of Canada will be restricted for five years. We will lose that business to the United States. It's as simple as that. That's even under CEAA 2012.

Therefore, we're quite anxious. We know that Bill C-69 is well intentioned. The desire is to be able to adhere to timeline. Our confidence is somewhat shaken, given that the previous legislation was also intended to do that but unfortunately failed. We're still experiencing the consequences.

The second thing is what I mentioned in terms of the major projects list. From our perspective, if Canada wants to bring additional projects into the CEAA review processor or into the impact assessment review process, frankly I'd say we should learn to walk before we run. Rather than adding to the workload of the CEAA and the agent and the NEB or the new impact assessment agency, whatever it will be, let's get the stuff that they're already handling right, and then maybe let's look at those things. If it's not broken, don't fix it.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Nobody likes the idea of excessive regulation that simply prevents things from getting done, and yet we layer it on at every opportunity, it seems.

Competitiveness of the Canadian economy is our theme, Mr. Chair. I'll end with a comment that we've heard at this committee before: The differential on Canadian crude and world prices, mostly being a function of our distribution channels leading only to Cushing, Oklahoma, costs the Crown billions and billions of dollars in lost tax revenue. When transportation bottlenecks prevent us from being able to receive tax revenue, that affects the competitiveness of the Canadian economy. The record of the analysts in their preparation of the report needs to bear this in mind, since last year's budget assumed that the differential was going to shrink rather than grow.

[The Chair, Liberal, Wayne Easter]

We'll leave it there and go to Mr. Julian.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thanks very much, Mr. Chair.

I just have one final question for Mr. Wilson regarding the clean transportation innovation fund.

I think it would be helpful for the committee to know what kind of green innovation other port authorities worldwide are putting into place that you're aware of, particularly in other countries. How would the importance of having a clean transportation innovation fund—a clean energy innovation fund—help the port authority get those best practices that other port authorities have in other parts of the world?

[Duncan Wilson]

Thank you, Mr. Julian.

Where we see a lot of innovation in our sector is, frankly, in Europe. There's a tremendous amount of investment by both the European and state-level governments in terms of innovation in these sectors. There's a huge opportunity.

I talked about data sharing, for example. One of the things that can be done—and we've actually done this quite successfully here in Vancouver, working with Transport Canada, the railways, shipping lines and terminals—is with respect to the bulk sector and looking at ways of bringing a supply chain visibility project...basically, to understand the movement of cargo so that we can innovate our way to greater productivity.

Things like that are lower-hanging fruit. Then there are places where we really need technology help. We need to invest in innovative technologies and take some risks in terms of some of those investments, as the chair was talking about earlier. We're not going to be able to achieve our targeted objectives without it. Given that the emissions profile of transportation is 30% of greenhouse gases, I think the port sector is a great guinea pig, if you will, for some of these innovations.

Thank you.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Do you want me to talk about refining capacity?

[The Chair, Liberal, Wayne Easter]

No.

I do want to ask a question on immigration and skills. That's something we hear about everywhere. How do we make that system work to get the skilled people in place?

It's kind of a Catch-22, and I get this all of the time at home: You bring in temporary foreign workers because companies can't get workers to work in fish plants or drive trucks, etc. Then the local community is angry because they claim they're taking their jobs, yet the business doesn't have the workers to do the jobs.

How do we deal with that problem? What needs to be done from a federal perspective to make skilled and non-skilled workers work? You can't run a business without the labour or skills in place to run the business. We have a serious mismatch at the moment, and it takes forever to get people in through immigration.

I'll give you an example so you know what it's like in my area. Fish plants need 400 workers at the time they're fishing. They're fishing for lobsters for 60 days. The application process starts in February, and the plant is running for two weeks before they even get those workers in, no matter how quickly they start.

How do we deal with that problem, from your perspective? You mentioned it in your submission. I don't have it right in front of me, but I think you mentioned it.

[Anthony Ariganello]

Thank you, Mr. Chair.

For us, it's having government support the immigration of skilled workers, particularly with respect to certain jobs in the unskilled area, but also in the skilled area; there's a shortage of that as well.

You touched upon the temporary foreign worker program. I believe a number of improvements can be made at that level. For example—and in our submission we reference this—including a trusted employer element in the temporary and foreign worker program is, I think, one of the areas that can really improve. This would mean ensuring that employers register....

As an example, in B.C. they are discussing this as we speak. They're looking to have employers register if they're looking to bring in temporary foreign workers, in line with the federal program. It would add an element of trust, and also among the population, in knowing that this employer has done due diligence with respect to bringing in the workforce only because they can't find Canadians to do that work.

That is specific. You mentioned the farming industry in Canada. Whether it's in British Columbia or in Quebec, not being able to get the workers to pick the crops, etc., is a huge issue for farmers.

I also believe that improving data collection and analysis and communicating that analysis to the population would go a long way. As you mentioned, there's an element of distrust, an idea that perhaps employers are turning towards the temporary foreign worker program because they don't want to hire Canadian. That's not not necessarily the case, but I think providing data supporting that analysis would actually help the population believe it.

Also, I think we need to ensure that we support businesses and stakeholders who are looking to ensure that they have the workforce to turn the corner. I mentioned earlier the Global Action Networks. I think Canada, and specifically stakeholders within Canada, should be joining the Global Apprenticeship Network. As I mentioned, it was created by the Organisation for Economic Co-operation and Development. A number of organizations have joined it. A few of them are PricewaterhouseCoopers, IBM, Microsoft, Accenture, and so on. I don't believe any Canadian company or stakeholder has joined that network, and I think that would help as well.

[The Chair, Liberal, Wayne Easter]

Thank you very much for all your presentations, your submissions earlier and your answers to our questions today.

We will suspend for about 10 minutes to go to panel two.

[The Chair, Liberal, Wayne Easter]

We'll reconvene.

Welcome to the witnesses. We appreciate your making the effort to come.

As you know, this is a pre-budget consultation in advance of the 2019 budget. I might mention, for those who have made their submissions prior to August 15, that we have them on our units and people and members will be referring to them from time to time.

Just before we start officially, I'll go around the room and ask members to introduce themselves so you know where they come from and who they represent.

I'm Wayne Easter. I'm a member of Parliament from Malpeque, Prince Edward Island. That's pretty nearly as far away as you can get from here, but not quite.

[Michael McLeod, Liberal, Northwest Territories, NT]

Welcome. My name is Michael McLeod. I represent the Northwest Territories.

[Kim Rudd]

Thank you for joining us today.

I'm Kim Rudd. I'm the member of Parliament for Northumberland—Peterborough South. For context, that is a rural riding in southeastern Ontario.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

I'm Pat Kelly, the member of Parliament for Calgary Rocky Ridge. That's the northwest corner of the city of Calgary.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

I'm Peter Julian. I'm the NDP vice-chair. I just came from the other side of the pond, New Westminster—Burnaby.

[The Chair, Liberal, Wayne Easter]

Thank you all.

We'll start with the Chamber of Shipping. We have Robert Lewis-Manning, who is president, and with him is Bonnie Gee, vice-president.

[Robert Lewis-Manning, President, Chamber of Shipping]

Thank you, Mr. Chair and committee members. Thank you for the opportunity to speak today and provide a bit of perspective from a marine transportation context.

The Chamber of Shipping represents the interests of shipowners, agents and service providers responsible for moving people and commodities globally to and from Canada. Commercial shipping results in $30 billion of economic activity annually, and at 1.8% of the Canadian economy, ships move more than 200 billion dollars' worth of goods to and from global markets. We support significant industries, such as manufacturing, mining, agriculture, construction, energy and tourism.

Overall, there's a sense of optimism regarding the industries that marine transportation supports in the Canadian marketplace and for Canada's efforts to stabilize, expand and diversify our international markets. Notwithstanding that, there are some concerns from marine transportation companies regarding Canada's supply chain. Its regulatory framework has become overly complex and at times unpredictable. Our supply chain is becoming less competitive and suffers from challenges of efficiency and productivity.

In certain instances, cargo destined for Canada is being diverted to the United States as a result of limited berth capacity. A shortage of new industrial land, together with continuous growth in cargo volumes, creates an operating environment that demands a high level of coordination to maximize efficiencies and berth utilization.

For Canada to be a preferred trading partner globally, we must ensure that our supply chain is fluid and resilient in order to handle the increasing volume of cargo and people through our coastal gateways in a sustainable manner. The Transportation 2030 vision is a solid strategic plan, and with the tools provided in the new Transportation Modernization Act, Transport Canada has started the process of identifying key performance indicators for the supply chain.

We encourage that work on the supply chain visibility pilot project to continue, and to be expanded to include all commodities and key partners. This work will help to identify data gaps, constraints and areas for improved productivity.

While a significant effort is under way to better understand performance metrics, it's important to recognize that trade corridors should include marine transportation. This is not always the case in Canada. Through the oceans protection plan, progress has been made on elements of the marine safety framework and coastal protection. When it comes to marine transportation, supply chain fluidity and protecting the environment must go hand in hand. Continued investment in ocean science, adoption of new technology and marine training programs under the oceans protection plan should be a priority.

I'd also like to echo the comments of Mr. Wilson in the earlier session in his request of support funding for programs like the ECHO program to protect marine mammals. Canada needs a whole-of-government approach through a coordinated body that is responsible for overseeing supply chain performance and providing advice on infrastructure investments and on recovery or mitigation strategies when appropriate.

The overarching goal would be to ensure that all commodities have a reasonable probability of getting to market in a timely and cost-effective manner. We encourage a review of the suite of regulations, policies and procedures that affect marine transportation, many of which no longer serve their intended purpose or have become ineffective and cumbersome. This should include a review of jurisdictional boundaries between federal departments, which have become increasingly confusing to ship operators. This type of effort is under way in the United States, and we must ensure that our gateways remain competitive.

The national transportation strategy must drive innovation that makes our marine transportation framework nimble and adaptable so that it can fully support the coastal protection initiatives while remaining competitive. Understanding Canada's supply chain holistically is essential to our economic competitiveness. This can be enabled with a continued and accelerated investment in identifying, collecting and integrating supply chain data. Good data will facilitate improved decision-making at every level of both the private and public sectors.

As ports play a vital role in facilitating trade in our gateways, they need to be continuously striving for increased throughput, innovative management of vessels and cargo operations, and peak levels of productivity from a highly skilled workforce. It is not clear yet if the ports modernization review will take a holistic examination of Canadian ports and benchmark them to other competing ports. This should also be a priority.

The health and protection of Canada's coastal waters is critical to the success of Canada's marine transportation corridors, and therefore a top priority for our member companies. A robust coastal protection regime should also provide for an equally strong and predictable operating environment for commercial marine transportation companies.

The Government of Canada should continue to advance the oceans protection plan and now begin to facilitate a more holistic approach to coastal protection that includes the integration of risk and impact assessment, risk mitigation and planning for sustainable growth.

Thank you for the opportunity to speak with you. We look forward to answering your questions.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Lewis-Manning.

Turning to the Foresight Cleantech Accelerator Centre, we have Ms. Jackson.

[Jeanette Jackson, Managing Director, Foresight Cleantech Accelerator Centre]

Thank you for having me here.

My name is Jeanette Jackson. I'm the managing director of Foresight, western Canada's first clean tech accelerator. I'm delighted to be here with recommendations that support economic growth and ensure Canada's global competitiveness.

Our mission at Foresight is to accelerate Canadian transformative clean-tech companies from launch through commercialization. We started just five years ago with the support of Innovate BC. This kicked off our launch program to help early-stage companies complete market and technology validation and prepare a viable business model in 12 of our core clean-tech sectors.

Western Economic Diversification Canada and other partners funded our challenge program, which connects industry sustainability problems with top innovators. We have run six successful challenges, and stakeholders are now investing millions of dollars to adopt these technologies.

Due to scale-up challenges, this year we launched our growth program to help companies grow from $1 million to $5 million through operations planning, business development, embedded industry experts and, of course, funding strategies.

Every Foresight program capitalizes on experienced CEOs, executives and advisers. To date, we have supported 100 start-ups, partnered with over 25 organizations, and helped secure over $100 million in funding to commercialize Canadian clean tech, but it's just not enough.

We have seen first-hand the problems caused by lack of funding. Canadian companies are competing on a global stage. International competition accesses 10 to 100 times more public and private funding. A few of our high-potential companies lost large international deals over $500,000 in missing funds. Closing this gap will result in better terms for Canadians in the form of economic growth and jobs.

In 2017, $2.3 billion was allocated to clean tech, though just a small amount has been disbursed. We need to ensure funding gets invested in a timely manner. We hear this every day from companies, mentors, partners and all other stakeholders that we connect with through Canada and the U.S. and internationally.

The real problem is that companies do not know how to access the funding. The process is complicated and fragmented and often does not work for start-ups, because you need money to get money, such as training grants, tax credits and research dollars. Companies often reach a certain stage but are forced to stall, sell or even close when funding cannot be obtained.

Canada is investing in clean tech because that is where the global economy is headed. One Canadian economic strategy table recently acknowledged that clean tech could become a Canada top-five export, reaching $50 billion in 2022 if we can accelerate growth, access global markets and help technology procurement processes, not to mention the recent UN report on global warming.

We are doing good things, but a major gap remains, and this gap negatively impacted Canada's share of the global market by 12% in 2018.

How can we ensure Canada's competitiveness?

First, support the development of the skills and knowledge required to successfully obtain funding. Early-stage companies need a comprehensive structured program that ensures they have the vision, technology, plan, and team to succeed. At Foresight we do this; however, when it comes time to access appropriate government funding, entrepreneurs report that the environment is complicated and decisions are slow.

Small companies are run by small teams, and a complex process means that 75% of their precious time is spent looking for money instead of finding customers and getting to market. It would be ideal to have a streamlined process to access federal funds best suited to the technology, market and needs of the business. The process could also guarantee that subsequent funds would be released when key success milestones are met.

Second, provide financial support for the development of a program to help clean tech access funding. Though several government organizations such as BDC, SDTC and the NRC have available funds, companies need special hands-on training to ensure they understand the systems and how they work. They need insights into funding readiness, matching fund strategies, public funding life cycles and success monitoring, to name just a few. Foresight has the opportunity to dig deep, but everyone in the ecosystem needs to understand how the programs work together to push this ecosystem ahead.

Three, allocate human resources to assist in the development and delivery of a program to help clean tech access federal funding. As a start-up, finding advice, talent and expertise that you can trust is hard. The support you need for fundraising is multi-faceted and expensive. Organizations like Foresight are well positioned to help companies navigate the path to funding, but we need clarity on the long-term process, expectations and requirements to help our companies successfully navigate the network.

As we look forward to the next five years, we will continue to champion Canadian clean-tech companies through collaboration and partnerships. We are fiercely passionate about clean tech and support an ecosystem that strives to position Canada as a global leader.

Foresight is also taking a unique approach with our dynamic mentorship model and international sector panels that will help vet, validate and support the international scale-up of companies in our 12 sectors.

In closing, I strongly encourage you to allocate funds to provide intensive training on how to access federal funding and to streamline the funding process and ensure the $12.5 billion earmarked for clean tech is invested in a timely fashion.