Finance Committee on May 19th, 2022

[John Clayton]

Yes. It was great to bring her to your office to talk about these details and to meet an example of someone who's trying to access charitable resources and can't do that under the current system. This new system would make it that much more difficult.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

Now we'll hear from MP Chatel for five minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

I would like to join my voice with my colleagues' and acknowledge that I will be sorry not to be working on this committee with Mr. Fast. He was very knowledgeable and a real asset to this committee. He was tough, but fair.

Ms. Groulx, I'd like to ask you a few questions.

[The Chair, Liberal, Peter Fonseca]

She left.

[Sophie Chatel, Liberal, Pontiac, QC]

That's right; she left at noon.

I'll still ask my question, and it can be sent to her in writing.

There are two indigenous reserves in my riding. Last year's budget included $2.2 billion to accelerate the work of the national action plan in response to the National Inquiry into Missing and Murdered Indigenous Women and Girls' calls to justice and the implementation of the Truth and Reconciliation Commission of Canada's calls to action.

This money has been and will be used to fund cultural revitalization and preservation projects, combat racism and discrimination in the health care system, among other things, create culturally appropriate police services, improve access to justice for indigenous peoples and support families and survivors.

Can my question be sent to Ms. Groulx? It's very important to me. Is she seeing the impact of this investment in indigenous communities?

I'll now turn to Mr. Schiavo.

Would you be able to tell us a little bit more about the impact you believe that the proposed Canadian council of economic advisors would have?

[Nicholas Schiavo]

I might actually have my colleague handle that one.

[Dana O'Born]

Thank you, Nick.

This is something that CCI has been calling on for a long time. Generally speaking, this is about capacity-building and so we have had a number of initiatives from across the government related to innovation with the creation economic panels.

We saw the strategic economic table stood up and provide recommendations in 2018. Then we saw Dominic Barton's panel stood up and also provide recommendations on finance, the economy and innovation. Then we saw the stand up of the economic group led by Monique Leroux. All of those panels had been effectively established to create recommendations for government, which probably served their purpose at that particular point in time, recovering from COVID, etc.

The opportunity here with this particular council is to create something that has permanence and that can actually be a bit of a sounding board for government on making decisions on a regular basis related to the economy and the data-driven innovation ecosystem. Unlike previous programs or patterns that we have seen with the government on initiatives related to this, we would hope that this particular council would be something that brings together experts from all fields.

In particular, we would encourage the government to pull together experts who are really examining the data-driven economy and the 21st century economy to be a part of this economic council. We understand that there are more details to come in the fall economic statement, and we look forward to engaging the government on that.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you.

Mr. Schiavo, you raised at the beginning the list of recommendations on talent to retain the talent and skills in Canada to be successful in tomorrow's digital economy.

Could you just give us three main recommendations from that list?

[The Chair, Liberal, Peter Fonseca]

Make it a very short answer, please.

[Nicholas Schiavo]

Work with provinces to support students in helping them pay off student debt.

Ensure that we don't touch the current regime for employee stock options, which is incredibly important for employee retention by small and medium-sized enterprises.

There are also other ideas in the budget like employee trusts that we are currently exploring that could be used to retain employees.

There are a number of recommendations using a talent lens.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chatel and Mr. Schiavo. It was very succinct.

Members, we are moving into round three and we have MP Patzer.

Welcome to our committee, MP Patzer. You have five minutes to ask questions.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much. It's great to be able to join the committee here today.

I'm going to start with the Council of Canadian Innovators. I've seen you guys at committee a few times and from listening to you quite a bit I would say there has been a common theme that has emerged, which is that there is an issue with getting our start-ups to scale up. We've seen in provinces like Alberta, for example, that government reduction of red tape has encouraged even more start-ups to pop up and to be looking to grow.

How can the federal government be more like Alberta and work with these companies in the private sector to be able to get them to not just to start but to scale up?

[Dana O'Born]

Alberta is a really interesting use case right now. Their tech unemployment rate is at zero and they're crying for tech talent.

Minister Schweitzer out in Alberta has done a pretty good job at working with innovators across the board, and they recognize that there is this necessary transition that needs to take place from old economics to new economics and, credit provided where credit is due, they have engaged on a number of initiatives, including a data strategy and an IP strategy, thinking about how to bring venture capitalists into the mix and starting to have conversations about what investment looks like there. Its creating, as I've mentioned today and in several committee sessions before, those marketplace frameworks for what it's going to look like for foreign direct investment to set up in Alberta and, to be honest, championing local domestic technology companies.

AltaML is a great company out in Alberta that has just led the way and is taking start-ups under their arms and building that ecosystem of network effect that is really critical.

If I could sum it all up, it is really about just championing local domestic technology companies and saying that we're open for business, that we're ready.

Then just to your point on reducing some of the regulatory burden, there have been a number of conversations on what that looks like. I think those certainly need to continue as things move forward in Alberta, and, of course, with the federal government as well.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

I have a two-part question for you. The first question is a pretty simple one, and that's how important is broadband to innovation?

On the second one, we've seen multiple announcements of funding for broadband, which is fine. It seems that there are constant announcements over and over again, but in touring around rural Canada and talking to colleagues all across the country, it seems that we haven't really seen a lot of development of broadband access for people. In the last two years, we've really seen the exacerbation of the need for very strong and robust access to broadband.

I wonder if you want to touch on that, because I think there's $2.75 billion available in the budget. What do we need to do to get out of the way so that the private sector can get these dollars into production so people can have broadband access?

[Dana O'Born]

Those are great questions. I think they're heavily correlated, and I'll respond with two correlated answers as well.

I think we certainly need to have a decision on Huawei. That has been something that the government has been pushing off for the last few months, and Canadian companies that are able to deliver analogous services are waiting in the wings to find out what that decision will be.

The second thing is this remote shift, with people leaving urban centres to working wherever they need to. It's a phenomenon that is taking place all over the world. The need for rural broadband, I think, is only exacerbated by that. There are some companies that have already started delivering some of those services through satellites. It's great technology. We need to make sure that we're doing it right and serving people correctly.

If the government is going to be entering into some of these larger contracts, it's going to be really critical that there be transparency around those contracts and what that means for Canadians living in rural parts of Canada.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

I have 30 seconds left, Chair. I'm going to cede my last 30 seconds because my next questions will take much longer than that.

If Dan wants it, Dan can have it.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I will do the same thing as MP Chatel with the Native Women's Association, and thank them for coming and ask if they were they consulted on the budget this year and if any of the items they recommended to government are reflected in Bill C-19.

Thank you.

[The Chair, Liberal, Peter Fonseca]

MP Albas, the clerk will reach out with those questions on behalf of members.

We are now moving to the Liberals and MP Baker for five minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Chair.

Thank you to our witnesses for being here today.

I'm going to focus my questions on the Council of Canadian Innovators. It's great to see you both again.

Dana, it's great to see you again. To you and to Mr. Schiavo, in your response to the federal budget, I think I read that you wrote that this is an innovation budget through and through.

Am I getting that right, and if so, can you tell me what you meant by that?

[Dana O'Born]

Certainly. You are correct. It's on the record. Our media release did say “through and through”. I think the narrative behind the intention of how we wanted to celebrate this budget was really that it's a signal to the economy, and the innovation economy more specifically, that we are turning a corner on recovery. We are turning a corner on COVID. It's not that it's completely over for a lot of communities across the country, but there's an acknowledgement that where we are starting to turn our gaze as a country is around this idea that we need to start digging our heels in and thinking about what's good for Canada's prosperity.

I think what was really interesting in Minister Freeland's comments around the budget in the media after her speech in the House, namely, the recognition that Canada does have a productivity problem. I think that is simply a result of antiquated policy around innovation. It was obviously exacerbated by this rapid acceleration of people having to work from home and what that looks like for the digital economy.

Certainly we were very pleased to see a number of initiatives that were in the budget, as my colleague Nick mentioned. SR and ED reform is a huge piece, as is funding to go towards cybersecurity, which I think the government certainly recognizes as a serious issue now, and considerations around skilling, re-skilling, upskilling and attracting talent, and more mention of IP and, of course, some nods to the fintech and clean-tech sectors.

We always say that the devil is in the details or the proof is in the pudding, and I know that there are some initiatives that need to roll out sequentially. We're waiting for some more details to come in the fall economic statement, but we were very pleased to see a number of initiatives in this budget. We would underscore that it's critically important to consult with Canadian innovators to ensure that a lot of the implementation is done in a way that will support the growth of Canada's innovation ecosystem.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Fair enough.

My next question is linked with what you just said.

Can you tell us about some of the measures that Canadian innovators have been pushing for and that have appeared in the budget? Perhaps you just listed them, but can you go through them again?

[Dana O'Born]

Absolutely.

We always house our advocacy in four main buckets: access to talent; access to capital; access to customers, which is about procurement and international trade opportunities; and the marketplace frameworks that I've mentioned today.

Working backwards, the marketplace framework piece, as I mentioned, in digital sectors is the fintech initiative to launch a financial sector legislative review focused on digitization of money, namely digital currencies. Interestingly enough, at this particular moment, it will include cryptocurrency and stable coins.

There are also some of the clean-tech initiatives around creating investment taxes for organizations that are focused on net-zero technologies and battery storage. In cybersecurity, there is a massive investment of $875 million over five years. This definitely indicates to the market that the government is getting serious about cybersecurity. Tax updates related to SR and ED are still under way. Then there is access to customers and developing new tools and guidelines to support green procurement and money going towards health technology procurement, which is a huge barrier for Canadian technology companies that are in the health space in terms of their accessing their own markets. Access to capital was interesting, and I think we've already talked today about the innovation and investment agency and how that will be very critical to get right and will need to be steered by experts in how that is set up operationally and what that will look like for outputs in the Canadian economy. The Canada growth fund was also mentioned by one of your colleagues earlier today, aimed at attracting the right kind of investment to Canada, and it will also be very critical.

I hope that's a helpful list on that front.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

That's a fulsome list.

Thanks, Dana. I appreciate it.

[Dana O'Born]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

We'll now move to the Bloc with MP Ste-Marie for two and a half minutes.