Government Operations Committee on April 28th, 2009

[Pat Martin, NDP, Winnipeg Centre, MB]

That sounds like real leadership.

[John Reid]

If we were to look at that as a model within Canada, you must have guidance from the very top.

[Pat Martin, NDP, Winnipeg Centre, MB]

Are you saying that the Office of Small and Medium Enterprises doesn't do those things?

[John Reid]

Not at all.

[Pat Martin, NDP, Winnipeg Centre, MB]

Really? That's a disappointment.

[John Reid]

You just have to look at what our neighbour to the south is doing, and also at comparisons in Europe. We did a significant study on supply chains, with examples of how different countries are helping to create a richer fabric of small companies and large companies within their nations—with the small companies being part of large supply chains, but also with governments being a significant customer. So when Canadian companies go abroad, they'd be very proud to say they have a customer in Canada, and that's the federal government.

[Pat Martin, NDP, Winnipeg Centre, MB]

That would be a vote of confidence, wouldn't it?

[John Reid]

But we're just not hearing that. It's just not there.

[Pat Martin, NDP, Winnipeg Centre, MB]

I can see that would be very helpful to have on your list in your portfolio, that one of your clients is in fact the Government of Canada. It adds great credibility to your presentation.

I'm delighted to hear the last point you're making: buy from Canadian companies first. One of the procurement problems we've run into—not in the high tech sector but in the acquisition of troop carrier buses for the Canadian military—is that there are only two manufacturers of these buses in Canada, one in Quebec and one in Winnipeg, where I live. And there has to be three for the made-in-Canada policy to kick in, so they bought German. All our NATO allies get the message that if you want to buy a good troop carrier, you should buy German, because that's what we did, even though Quebec makes great buses and Manitoba makes great buses. This is appalling.

So there's something clearly broken in the three rule to prove competition.

[John Reid]

If I can add this too, we're in unique economic circumstances, and you can count on it that every other country is going to be vigorous in the amount of industry it engages with and keeps as part of its national economy. I mentioned the automotive industry. People are thinking about the old car technology. It is a significant technology opportunity. There's a different methodology and technology for gas stations. I was meeting with the Ontario government. They're trying to get that located in Ontario.

So we have to be very progressive and aggressive in getting some of those technology industry jobs in Canada as a base, because when the economy turns around—and it will—what are we going to be left with? I mentioned that I work for the mining industry; it's in the ground. We have to get different things in the ground, and the best way to do that is to have customers, to have leading clusters. Maybe it's green technology, maybe it's automotive, maybe it's different applications, but the number one thing is that we should be a proud customer of many Canadian technologies, and we're not. And we should aggressively pursue and negotiate with the multinationals that work with us to expand their R and D mandates to give them access to those innovation tax credits. And there are difficulties there too. We're meeting with the CRA on Thursday, because we're not delivering those efficiently.

The difference between Canada and other groups is that we're very much for the innovation nation. This is not an appeal for a special interest group. We want to see other flagships in this country 10 years from now, and the mix of policies, conditions, and terms we've set out now within the nation is simply not good enough.

[The Chair, Liberal, Derek Lee]

Thank you, Mr. Martin.

We have approximately ten to twelve minutes left before we break. We'll have to suspend in order to set up the transmission.

However, if we have twelve minutes, that would allow for three four-minute rounds. So I'm going to suggest we do that ,and I would recognize Ms. Hall Findlay, Monsieur Roy, and Mr. Warkentin, each for four minutes, pretty strict time.

Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much.

Could you give us a specific description of what you don't like about set-asides? I know my colleague asked, but if you can just say “we don't like them because”, that would be great.

Secondly, your alternative was that you want more opportunities. Just some concrete suggestions on how to create those would be great.

And then some concrete suggestions.... OSME is not doing enough, does not have enough of a mandate. It's the same thing: if you can provide some concrete recommendations—all in less than four minutes—it would be very helpful.

Thank you.

[Charles Duffett]

I think you should take the first one, John, if you can.

[John Reid]

I was going to take the last one: the office of small business--why can't it have a mandate to actually be a test bed of some new Canadian technologies? Experiment with them; see how they work; be a customer.

Secondly, why don't they engage in communications, if you give them permission to do so, so we can remove the uncertainty and ambiguity in the marketplace? We would use our database of 30,000 to help communicate those messages. No one ever calls us to work with us to improve the communications. They do within the CRA, where we're educating on tax credits. Why wouldn't you call one of the largest high tech communicators in Canada, probably the largest, to work with us?

I don't want to get these calls from my members with complaints and concerns, asking what we're doing about them. I'd much rather be an ally and a partner, and that would be good.

Charles, I'll pass over to you now.

[Charles Duffett]

On the question about encouraging Canadian technology--and I think John hit it--I'd give them the opportunity. Part of the mandate of the PWGSC would be to bring in this equipment or technology they're using, have a place for them to purchase it, and to review the product and make a recommendation on it.

[Martha Hall Findlay, Liberal, Willowdale, ON]

And then, finally, why we don't like set-asides.

[Charles Duffett]

I don't know that much about set-asides. I'd like a policy that encourages Canadian technology. That's what I'd like. I see technology as a huge wealth creator. If you can get that machine running and keep it running, it creates a lot of wealth in Canada. Whatever you can do to do that would be a great thing.

My understanding of a set-aside is that it's very limiting for companies. It could be that if you set 20%, well, maybe they could do 80%. To me, setting a limit seems to be the wrong thing to do. But again, I'm not an expert on set-asides.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I think it's part of the group's desire to support SMEs where possible, in the larger context of the government having to be efficient both in terms of getting the job done, but also cost-effectively.

We did ask representatives of ITAC--a couple of whom in their other lives had represented large companies--about set-asides. They were very open to say they'd be more than happy if that was a requirement in an RFP, but in some cases that might increase the cost of the program.

We're not at this point deciding whether the government should be willing to incur greater costs, but we have been having that discussion. I just wanted to follow up and hear your perspective.

Are we running out of our four minutes?

[John Reid]

Can I pick up on that?

[The Chair, Liberal, Derek Lee]

You have 20 seconds.

[Martha Hall Findlay, Liberal, Willowdale, ON]

You can have the 20 seconds.

[John Reid]

You mentioned that it may incur a greater cost. Really, the guidance in the context should be value. It might cost more, but the value in terms of creating technologies, export earnings, customers is more than just cost. I think you have to keep that in mind at all times.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much.

[The Chair, Liberal, Derek Lee]

Thank you.

Monsieur Roy, quatre minutes.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chairman.

Earlier, I was listening to you when you described a firm in Vancouver that has invented a new system. I also have an example of something that has been a great success. It involves a firm on Vancouver Island that has developed a system of dockside monitoring of fish landings. Using cameras, this computer system is able to carry out remote monitoring and determine the exact size of the landed fish, the species, and so on. Fisheries and Oceans supported that firm in that project. It is a pilot project.

In your notes, you say: “Managers within the public sector fear exercising their delegated authority”. I am not sure about that. Let me give you an example. Why was it decided, at one point, that Public Works and Government Services Canada should merge? I put that question directly to the Deputy Minister. Public Works and Government Services Canada have been subject to the same cuts, in terms of their operations, as have all the other government departments. At some point, its ability to manage and deal effectively with a larger number of firms is bound to be severely affected. So, the solution, given the lack of staff and the cuts that have been made year after year, is to deal with as few companies as possible, so that you end up having less work.

My perception of what Public Works suggested to us is that, if you are only dealing with one company or with two or three companies, there is a lot less work involved than if you have to deal with 200 or 300 of them. It is as simple as that. Also, Public Works and Government Services Canada is currently having problems recruiting staff. So, in addition to the cuts that have been affecting them for years, departmental employees are unable to bring in new staff to manage procurement. As a result, a kind of panic has set in. I do not think it is because of a lack of good will, but I do think the message in that regard has been anything but clear.

I would be interested in hearing your views on that.