Government Operations Committee on June 4th, 2009

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much, Mr. Chairman. My first question is for the official from the National Research Council.

In its Economic Action Plan, our government announced a ceiling of $200 million for the Industrial Research Assistance Program, which comes under the National Research Council. This amount includes $30 million to help companies hire approximately 1,000 young post-secondary graduates.

Can you tell me when this funding will be provided to the companies and what will be the effects in terms of promoting innovation and encouraging economic growth?

[Pat Mortimer]

Thank you.

The first question is, when are these funds available? They're available now. They're already being spent. There are 458 firms that have already received approved projects, and 1,700 jobs have been created as a result. Those are projects that are in progress and going on and jobs that are created.

For the graduate program, once again, the youth program is under way. There have been 175 youth projects approved, which means those are graduates who are now in the companies and working.

I'm sorry, I missed the second half of the question.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

You have answered my question for the most part. There are 175 projects for the 1,000 new graduates. So that means about four, five, six...

[Pat Mortimer]

That's just what we've spent so far out of vote 35. We expect to create, over the two years, 1,000 jobs for youth. We have an actual target for that. It'll be about 330 this year.

In terms of the companies, we have set a target, with the new money, of 780 new firms that we will be working with, in addition to our existing group of firms that already would have been funded without the stimulus funding. So that is incremental to that.

The number of jobs will depend on the size of the projects, but it's easy for us to actually count jobs because we pay salaries. So we have the information available. We pay the salaries of the high technology workers they're hiring to do the research and development. And so we know that our money is going to create jobs.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

So you know exactly how many jobs will be created. Will they be throughout Canada or are they mostly in central Canada?

[Pat Mortimer]

The companies are from right across Canada.

We have given a notional allocation of this new funding to each region. We deliver our program in a decentralized fashion in five regions. A notional proportion of the money was given to each region based on their estimate of what the demand would be. And we are monitoring the take-up within each region. We will also be monitoring the number of jobs in each region. Our goal is to move that money, and if it's slower in one region or another, we have the ability to move that across the country.

At the moment, all the regions are very active. If I can say something encouraging, we're very pleased with the amount of energy and the number of small businesses that are coming forward with very good projects. There's no shortage of good ideas for innovation in small business in Canada.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Will this initiative allow the young graduates to remain with these companies once they have finished their internship? Will the initiative help retain them longer? Will it really get their careers going?

[Pat Mortimer]

We've evaluated this program and we've found that, on average, over 90% of the students are actually hired on by the firm afterwards. In many cases, for these very small firms, it's the first time they've had an engineer or a scientist. Once they have one, they realize how useful they can be. We have a retention rate of over 90%. So although it is a youth placement program, in essence what we are doing is creating new jobs and employment for those people.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much. Do I have any time left?

[The Chair, Liberal, Derek Lee]

Thank you.

Next we have Ms. Hall Findlay, for five minutes.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much, Mr. Chair.

Ms. Mortimer, I want to follow up a little bit.

First, I appreciated the effort made for the SMEs in the work you're doing. I would like, if possible, to have a report. I don't know if there was anything written to outline the details that you've been providing us and that you've been providing in response to some of the questions, but if that could be provided to us in writing, that would be very helpful.

[Pat Mortimer]

I can provide you immediately with copies of my remarks, if that's helpful. If there's any additional information that you want on the statistics, we'd be more than happy to provide that.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Terrific. Thank you very much.

I want to focus on Mr. Lindsey, but as a general comment, going back to my earlier question, the clarification of the word “used” was that the money from vote 35 needed to be used before the end of June 2009, that it actually meant being allocated, that the money then does have to be spent in this current fiscal year.

One comment is that it seems, in reaction to that, a focus on jobs. We talked a little bit about the summer jobs. In terms of stimulus, to the extent that there has been incremental job creation, we support that. That was one of the reasons for the stimulus. However, we're very concerned that when we're doing this kind of stimulus, we also need to make sure we are creating jobs that ultimately will contribute as well to Canada's productivity, long-term economic prosperity, and global competitiveness, hence some of our earlier focus on some of the rather desperately needed infrastructure in municipalities.

As a preamble, I now move to Mr. Lindsey. I want to ask about the rural broadband program as an example. I have a number of $83 million-plus in the allocation so far. Can you do two things for me?

One, can you confirm that this is money that will actually be spent in this fiscal year? When it says, “making contributions”, can you tell me not only that this money will be spent in this fiscal year but where it will be spent? In terms of infrastructure that we need, broadband is a great idea, so I will give credit where it's due. I particularly like seeing this kind of thing in the allocations. I just want to make sure it's going to happen. And how will it be spent? Will it be spent this fiscal year, and to whom will the money go? Will it be going to the private sector or will it be going just to government employees, and what exactly will it be spent on?

I'm a little worried about the language of developing and implementing a strategy to improve access. We've been talking about the expansion of broadband for many years, so I want something a little harder than that.

[Kevin Lindsey]

Let me have a go, and I think I can give you some comfort.

First, though, let me confirm the amount of the allocation. It was indeed $84 million, from about $35 million for this fiscal year. The total amount of money allocated to broadband was $225 million for 2009-10 and 2010-11, with a vestigial amount going into 2011-12.

Broadband is a bit different from some of our other initiatives. Take, for example, the infrastructure program. We put out the terms and conditions. We announced the availability of the funding. A recipient with a known location and a known project applies, and we decide whether it's eligible or not. We know where it is.

One of the issues with respect to broadband is this. The undertaking is to connect remaining unserved and underserved Canadians. One of the ways we test that is through a technical test. What is the current rate of their service, if they have it at all? In other words, what is the bandwidth? It takes a while to map out the service, where service is provided, and the level of service across the country.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I'm just going to interrupt, not because I'm not interested in this, but just because I recognize that in this other round we don't have very much time to answer. There were three parts to the question.

The private sector actually does have a lot of that information. They know who they're serving and who they're not.

[Kevin Lindsey]

They do indeed.

[Martha Hall Findlay, Liberal, Willowdale, ON]

There have been a number of studies on this. We have had submissions from the private sector in terms of pushing this out. I am a little worried about the continuing review. If we can get to those three—

[Kevin Lindsey]

I don't want to waste your time. I understand.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I'm not trying to be rude. We're all subject to the same time constraints, unfortunately.

[Kevin Lindsey]

Sure. Here's one of the things that the private sector doesn't know. They don't know who they don't serve and we don't know who they don't serve. We're trying to find this out so that we take this limited amount of money for this project and make sure it gets spent in the right place.

This talks a bit to Madame Bourgeois' question about planning. Broadband is the last of our programs to be put up in the window. The reason for that is that we're taking the time to do the geographical and service level analysis to find out who is in fact unserved and underserved. We expect that the full $84 million will be spent this year.

[Martha Hall Findlay, Liberal, Willowdale, ON]

To whom? Is that going to consultants? Is that going to the private sector telecom companies that are already involved in that? That's a lot of money. Is that going out to the private sector?

[Kevin Lindsey]

It will be a mix. There will be consultants. We need to get help to do the analysis we're doing now, but it's really a rather modest amount. Most of the money will be spent building out in partnership with the private sector. This is a cost-shared undertaking. Most of the money allocated to this program will be spent on building out and on job creation related to building out broadband to the rest of the unserved communities.

[Martha Hall Findlay, Liberal, Willowdale, ON]

In this fiscal year?

[Kevin Lindsey]

Yes.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I'm talking about the $83 million that is in this fiscal year.