Finance Committee on Sept. 22nd, 2016

[Phil McColeman, Conservative, Brantford—Brant, ON]

Let me stop you there, on that one, because I do have a limited amount of time.

I want to talk about energy. I've asked this of all the economic development bodies that have been here. Let's be very clear: I'm not asking you to be political here; I'm asking you to give your thoughts on this. If the energy east pipeline were to be approved, to be built, how would that affect the economics of your region?

[Aime J. Dimatteo]

I'm sorry, sir, I cannot offer any comment. I'm not sufficiently—

[Phil McColeman, Conservative, Brantford—Brant, ON]

Okay, fair enough.

The other comment I want to talk about is energy and how important it is in the northern environment, especially the price of energy. I know in southern Ontario, where I'm from, many companies I've met with over the last three months have brought me their electric bills showing me increases of 100%, year to year. Is that happening in the north?

[Aime J. Dimatteo]

I can't offer a comment in terms of whether it's 100% or not. I can indicate that high energy prices are an issue in northern Ontario.

We're working with companies to look at other opportunities to generate their own energy, by using bio-opportunities in that regard, which is reducing their energy costs. We're looking at what the alternatives are. While this is a provincial jurisdiction, we're looking at what the federal government can do to offset some of the costs by introducing new technology.

We're very focused on that front, in terms of helping those companies in that regard.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I appreciate your saying that. I'm going to push you a little bit on this one.

If you're not aware of those costs and you're evaluating business plans, if you're not aware that's the kind of increase Ontario has been placing on electricity for business and for residential customers, then please explain that to me, how you don't know the fact that that is the case.

[Aime J. Dimatteo]

I am sorry if I wasn't clear. Certainly we're aware of the matter. As companies come to us with a business opportunity, they give us their financials. We see that information in their financials. That's not to say we're blind to it. We are aware that it is an issue. We see what the costs are in their financial statements. Where we can provide assistance, we attempt to do so.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I appreciate what you've said. You've said the costs are so high, it perhaps can justify the cost of a generator or something else, another type of electricity provider to the operations. I appreciate your saying that. Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. McColeman.

Mr. MacKinnon.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chairman.

I would like to thank all the witnesses for being here with us today.

I asked the same question to the officials from the other agencies. We will be debating the recommendations we will make to the Minister of Finance. Of course we are looking for areas in Canada with potential for growth and innovation.

If you had more money to invest right now or if you were to invest the money you already have, what are the emerging sectors in northern Ontario that have the greatest growth potential?

[Aime J. Dimatteo]

Thank you very much for the question.

We certainly see great opportunity in northern Ontario. Some examples would include on the health front. We help to fund one of four cyclotrons that exist across the country. We have funded the Thunder Bay Regional Research Institute, which is a world-class research institute on health in Thunder Bay. We did this in partnership with Lakehead University, the hospital, the Province of Ontario, and a number of private sector companies that are now coming together to form a cluster around using isotopes that are formed from the cyclotron and using them at this point in time for non-human testing, but once it can get approval from Health Canada, moving them to human testing. It's a tremendous growth opportunity in that regard.

Similarly, in northeastern Ontario, we are working with the regional health organization and its research institute, and they are doing world-class work on vaccines. They have already attracted some 10 or 12 private sector companies to come and work with them in northern Ontario, and to establish themselves there to continue testing vaccines for the purposes of potentially growing that arm of the business.

Certainly, the mining sector, as I said earlier in my remarks, is a world-class cluster. We provide products and services to the world. If you want to know about robotics, you come to northern Ontario and talk to our companies. If you want to talk about deep mining two or three miles underground and all of the issues that go with that, you come to northern Ontario. While mining is still a fundamental activity in northern Ontario, it is the emerging technology coming from our experiences that are allowing us to continue to grow this industry. That would be another area of tremendous growth.

I spoke briefly about agriculture. It is a hugely emerging opportunity for northern Ontario. There are a million available acres in the Temiskaming area and in the northwestern Ontario, Fort Frances and Rainy River area. We will be able to compete with a lot of jurisdictions in terms of food products and growing food crops for the future. It is a huge area of opportunity for our first nation communities, particularly those that are remote, so they're very interested in partnering. We are working with indigenous communities to help them take advantage of business opportunities related to agriculture also.

[Steven MacKinnon, Liberal, Gatineau, QC]

If the government wanted to invest in regional development through your agency or another one, with a nearly guaranteed return on investment, would the budget have to be increased?

[Aime J. Dimatteo]

The short answer is yes.

Yes, certainly.

If we had more money we would look to make more investments on the innovation front in working with our communities in terms of looking for development opportunities. We try to do the best we can with the budget we have. We have to make difficult decisions. Not all projects get funded. However, at the same time, I think we can stand the test of ensuring that we are providing investments to those activities with the highest level of return and in line with the government's priorities of innovation, clean technology, indigenous communities, and supporting communities, certainly in Ontario, that have previously been single industry dependent and single industry threatened.

[Steven MacKinnon, Liberal, Gatineau, QC]

As I recall...

[The Chair, Liberal, Wayne Easter]

Sorry, Steve, that's it.

For the last series of questions, Ms. Raitt.

[Lisa Raitt, Conservative, Milton, ON]

Thank you for your presentation. We're pretty much at the conclusion of having the regional development agencies come in. I read your testimony when you appeared before the industry committee back in April, and they are much the same comments.

I bring that up because these are pre-budget consultations, and it is an opportunity for a regional development agency to come in and essentially pitch MPs on what you think you need more of. You're not alone in this; I'm just observing your.... Unfortunately, you're the last ones. Maybe you can take it back to industry, but I'm a little disappointed there were not a lot of asks. I think you're the only one to actually point out the fact that you'd like to have more money, thank you very much; it would be better to have more money. I don't think it's a bad thing to ask.

Bearing in mind that I think you're pretty smart people, I do have one question. I'm very interested in single industry towns. I come from Cape Breton. Obviously, we had a single kind of industry town. All the industries left town, so there really isn't anything...and it hasn't rebounded to any extent in 40 years.

Do you have any innovative ideas you'd like to pitch right now on a program, a policy, something for us to look at that may be able to alleviate the problems? You guys are on the ground. You understand what's happening in these small communities. It would be really nice to have, as an MP, an idea of some innovative thinking that's going on within the development agency or in Industry Canada to solve some of these problems. It's our opportunity to tell the Minister of Finance what direction we think he should be going in when it comes to all of these regional economic development agencies.

I want you to be more than a service provider, a pass-through of government funds. Tell me what you think we should be doing.

[Aime J. Dimatteo]

Unfortunately, the majority of our communities in northern Ontario have suffered with single industry collapses, whether they be in forestry, mining, or steel. Sault Ste. Marie is a recent example.

[Lisa Raitt, Conservative, Milton, ON]

Exactly.

[Aime J. Dimatteo]

They're cyclical in nature, to a certain extent. What we're trying to do is say that we know it will occur again, but what can we do in the interim? What better product, what better service, what better business can you do while awaiting the next cycle to come up or down?

I've said this to many companies, “If you're going to come to me and say you want to open another sawmill, good luck, Godspeed, but not here.” If they want to come and talk to me about business opportunities in terms of new products, such as the company in Kenora that I spoke of, or in terms of the biochemical opportunity that we're dealing with at Resolute, those are game-changers. That's taking an industry away from traditional self-reliance, just taking the ore out of the ground, or cutting the tree down for a two-by-four or a two-by-six. We're really focused on that. It is part of this government's innovation agenda.

In FedNor, its flagship program.... One of our three focuses has been innovation. We continue to promote that and continue to look for opportunities where we can make even further investments.

We are working with our five innovation centres across northern Ontario, and we're working with our private sector to come up with new ideas. Unfortunately, it's not usually government that comes up with the ideas; it's the private sector.

[Lisa Raitt, Conservative, Milton, ON]

No, that's not unfortunate; that's actually quite good.

[Lisa Setlakwe]

I'd like to just add to that.

I'm also from a very small town with a single industry that collapsed. I'm from Thetford Mines, Quebec, which had asbestos mining.

Of course, we've never completely rebounded from the shutdown of that industry. I think this is what we're getting better at and that we need to do more of. These one industry towns have a whole supply chain around them. We need to be better at ensuring those supply chains are not solely dependent on that industry. It's about diversification.

That's the role all the RDAs play. That way, you don't have all your eggs in one basket.

[The Chair, Liberal, Wayne Easter]

You have one last question.

[Lisa Raitt, Conservative, Milton, ON]

I have one last question, and it's very simple. Are the ideas coming from within the regional area, or are people coming into the region to pitch you? Do you know what I mean? Are they coming from away, or are they local people?

[Aime J. Dimatteo]

For the most part, it's people from within the jurisdiction who are residing in these communities and who are part of these businesses. They're pitching us the ideas.

Every once in a while we'll get somebody, for example, on the agricultural front, such as the the Cattlemen's Association, either the Ontario one or the Canadian one, who will say, “Oh, a million acres of available land, we'd like to talk to you about that”, and we're always open for both.

[Lisa Setlakwe]

If there's a capacity, as you talked about with health and the cyclotron, then that in and of itself attracts, and it's maximizing on where those pockets are.

[Lisa Raitt, Conservative, Milton, ON]

Thank you, Mr. Chair.