Evidence of meeting #35 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was economic.
A video is available from Parliament.
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
Thank you.
Just to clarify, when you were talking about your report in the beginning, you ad libbed at one point. Did you say that you're expecting to be short 40,000 skilled workers? Was that the number I heard?
6:30 p.m.
Director General, Federal Economic Development Initiative for Northern Ontario
Yes.
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
On page 2 of your report, you're saying it was difficult to find skilled workers to replace retiring employees. Was that number 40,000?
6:30 p.m.
Director General, Federal Economic Development Initiative for Northern Ontario
Yes, that's correct.
The report in northwestern Ontario looked at, over the next five years, the number of mines they expect to be opening, plus the age of the workforce in northwestern Ontario. They felt that over the next five years they're going to need 40,000 people to take these new jobs and the retirement jobs.
It just happened to be by coincidence there was a similar number in a report that was done in northeastern Ontario, which also looked at new mines coming on stream plus people retiring. It happened to be a similar number. We were struck by the size of those numbers.
The Ring of Fire alone is talking about creating 5,500 jobs, if and when it gets off the ground.
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay. Thank you very much, Mr. Dimatteo, Ms. Setlakwe, and Ms. Perreault.
6:30 p.m.
Director General, Federal Economic Development Initiative for Northern Ontario
Thanks, Chair.
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
We will suspend for a few minutes while the Canadian Northern Economic Development Agency comes forward.
6:30 p.m.
Liberal
The Chair Liberal Wayne Easter
We'll reconvene.
Welcome Ms. King, who is president of the Canadian Northern Economic Development Agency. With you is Mr. Miller, who is chief financial officer and director of corporate services, and Mr. Spence, who is director general of the northern projects management office. Welcome.
You have the floor. I assume you have a presentation, and then we'll go to questions.
6:30 p.m.
Dr. Janet King President, Canadian Northern Economic Development Agency
Mr. Chairman, thank you for the invitation to appear before this committee.
As noted, my name is Janet King, and I am the president of the Canadian Northern Economic Development Agency, more commonly known as CanNor.
I am here to talk about Canada's North, specifically Yukon, the Northwest Territories, and Nunavut.
I am also here to speak of the work CanNor is doing to respond to the challenges the region is facing and to support opportunities.
The north covers approximately 40% of Canada's land mass. It includes 75 communities and 119,000 people, or 0.3% of Canada's total population. Forty-nine per cent of the population lives in the three territorial capitals, while the balance live in small and very dispersed communities.
The territorial economies are dominated by the public sector, which contributes 30% to the territories' GDP, and resource extraction, which contributes 19%. The balance is a mix of smaller sectors, led by construction, real estate, and transportation.
The territories experienced substantive GDP growth rates in recent years, spurred in particular by the mining industry. However, their growth is expected to be much more modest for this and the coming years, largely due to low commodity prices.
The recent territorial economic outlook from the Conference Board of Canada forecasts that real economic growth is expected to average only 1.8% over the period 2016-20, with Yukon's economy the hardest hit with the closing of its last large-scale mine. However, their longer-term outlook is expected to improve again as commodity prices recover and new mining projects come on line.
These cycles exemplify the importance of the resource industry as the current economic driver for the north, but also the importance and need to diversify.
The north is a region with much opportunity. About 23% of its population is under 15 years old, compared to 16% elsewhere in Canada. This young and vibrant population has much potential for the future, and is already advancing to productive roles and leadership positions.
The north also has a vast land area, with a rich and diverse resource potential still to be sustainably harnessed. The north also has wide-ranging opportunities to innovate, to diversify its economic activities, and to build on its natural assets. For example, the value of the fishery in Nunavut has more than doubled over the last 10 years; biomass and wind energy industries are being established in the N.W.T. and Yukon, contributing to green growth; and specific tourism segments, such as the market for viewing northern lights in the Northwest Territories, have been increasingly successful in recent years.
That said, there are real challenges to Northern economic growth.
The north has a significant infrastructure deficit that remains a fundamental barrier to growth. Over half our communities do not have year-round road access and, despite facing on two oceans, there is a lack of port facilities, large or small, to support marine-based activities.
Connectivity infrastructure is also lacking. Internet speed continues to lag behind levels elsewhere in Canada, and the cost of these services for users remains much higher.
As well, only half of working age Northerners—and only a quarter in Nunavut—have a grade 12 education, limiting their ability to participate fully in the economy. This leads to a lack of skilled professionals, and many businesses still depend on a fly-in fly-out workforce.
Mr. Chair, I will now take a few minutes to discuss how CanNor works to build on the north's opportunities and help address its challenges.
Created in 2009, CanNor has an annual budget of $55.4 million and a staff complement of 80. It is headquartered in Iqaluit, with offices in the three territorial capitals, as well as a liaison office in Ottawa. About three-quarters of our staff are based in the north, and one-quarter are indigenous.
The agency's mandate is to strengthen Northerners' ability to seize economic opportunities in the North and to foster the development of key economic sectors in the region.
Allow me to provide members with an overview of CanNor's current funding activities and how we are investing to foster economic activity and diversification in the north.
Through our strategic investments in the economic development program, known as SINED, a program focused on promoting economic diversification and growth, CanNor supported 60 projects totalling $17.4 million in contribution funding this past year. This also allowed the agency to help new and emerging industries, as well as capacity building in small and medium-sized enterprises.
Funding in these sectors leverages investments from our partners. We work routinely in partnership with the territorial governments, indigenous organizations, and the private sector, allowing impacts to be maximized. Last year, for example, this meant leveraging investments close to a ratio of 1:1 with our northern partners.
CanNor also invests directly in the growth of indigenous businesses through our northern aboriginal economic opportunities program, which is funded at $10.8 million per year. In 2015-16 alone, we supported 63 projects, including three equity funds to be used to support indigenous businesses across the north, delivered through local service partners already established in the communities.
Demand is increasing and we believe that CanNor funding makes a difference. Mr. Chair, I'm pleased to report to this committee that 79% of the indigenous businesses that CanNor helped with foundational support are still in operation today.
Through our northern adult basic education program, delivered with the three northern colleges, CanNor has invested in improving the literacy, numeracy, and other essential workplace skills of indigenous adults. To date, this program has helped over 3,400 northerners gain important skills needed to participate more fully in the labour market.
CanNor also delivers regional components of national programs, such as the Canada 150 Community Infrastructure Program.
Mr. Chair, I will now discuss a business line unique among the regional development agencies: the northern projects management office, referred to as NPMO. This office supports efficient and transparent environmental assessment processes in the north. It does this through coordination of federal regulatory departments' involvement, advisory and pathfinding support, and coordination of federal crown consultations.
The NPMO is currently working with over 50 companies and tracking over 30 major projects engaged in environmental assessment processes. These projects represent the potential for more than $22 billion in capital investment and more than 10,000 jobs for the north, if realized. The NPMO also works very closely with the communities to help them plan and prepare for nearby resource development so they can maximize the economic benefits and manage the impacts the projects may have on them.
In closing, Canada is stronger when our north is stronger. CanNor's goal is to foster and support a prosperous and resilient north. We will continue to invest in development and diversification and to assist with effective environmental assessment processes.
I thank you for the opportunity to speak with you today. I will be pleased to answer any questions you may have.
Qujannamiik.
Mahsi cho.
Thank you.
6:45 p.m.
Liberal
6:45 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Thanks to you, Madam King, and to your colleagues, for coming here today.
First and foremost, let me congratulate you on your support for indigenous people. I'm very pleased to hear that 79% of the companies you're supporting are still in business with that particular focus.
I want to confirm a few things. Was your budget $54 million?
6:45 p.m.
President, Canadian Northern Economic Development Agency
It was $55 million.
6:45 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
How much of that is committed for ongoing projects from year to year?
6:45 p.m.
President, Canadian Northern Economic Development Agency
We have about 50% multi-year commitments of two to three years, not longer than that. We have been working largely on a continuous intake process as well. It is maybe 50% committed at this time.
6:45 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
I've asked every development agency this question. For the $55 million, is there a metric that's used to see how much, dollar for dollar, is invested back or creates economic growth? For example, for each dollar invested, you get a $5 return in GDP.
September 22nd, 2016 / 6:45 p.m.
President, Canadian Northern Economic Development Agency
We are working toward those kinds of measures. Our measures right now are very project focused. Over the last two years, we've been working to build more comprehensive measures so that we can build toward that understanding.
6:45 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
I would highly encourage making it a priority for the agency. Metrics are incredibly important to justify the funding you get, because the next question is this: if we give you more funding, are you guys currently oversubscribed? What's the value of projects coming in? Are there really good projects that would create economic opportunities in the north but are being turned down because you've already maxed out and you're unable to fund them?
6:45 p.m.
President, Canadian Northern Economic Development Agency
I think our best example right now is that in June we released a call for expressions of interest for clean technology projects across the north. We received over 60 applications. We're now working on due diligence for 11 of those. That gives a sample of the kind of demand that's out there.
6:45 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
One of the challenges, you said, is the lack of infrastructure. I think everybody around the table would agree on that, and again on education, so I don't think you need to have any concerns there.
The fly-in, fly-out is of concern to me. If we solve the first two challenges, which are the infrastructure and the education, how do we maintain the population in the north in order to keep on building in their regions? In Atlantic Canada, as Mr. Chair was telling you as well, young Canadians who are growing up there might stay for post-secondary education, but if they don't, they move to the bigger cities such as Toronto, Calgary or Montreal. What are your thoughts on that issue?
6:45 p.m.
President, Canadian Northern Economic Development Agency
I have several thoughts. Some of the fly-in, fly-out is very much cost-based as well as skills-based, where to find the skills and knowledge that are needed to run those enterprises, activities projects, whatever they are. Fundamentally, it's building local skills capacity and how to achieve that.
That being said, for parts of the north as well, people who were born and raised in those communities would prefer to stay. They would like to work near the communities, with their communities, so retaining people in the north is not the critical issue.
6:50 p.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Thank you. I appreciate that.
Can you give us an example of the ideal project that your agency has funded, the poster child for your agency?
6:50 p.m.
President, Canadian Northern Economic Development Agency
I can think of several.