Industry and Technology Committee on May 25th, 2026

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you, Chair.

Hello, Minister.

The government has produced a series of domain-specific strategies covering domains like defence, auto and electricity, which you talked about earlier. Can you walk us through how these strategies intersect to help build Canada strong for our economy and particularly for our workers?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

Thank you for that.

We have worked to protect jobs and create jobs and also attract talent and investment. They have been the three pillars, the three priorities, we're working on. On the protect front, what we want to do is, obviously, auto...a fundamental 500,000 jobs impacted potentially. We're working night and day on protecting our auto sector.

I was with Premier Ford on Friday. We spent an hour going through all the different investments, and I must say that our auto strategy is working. We have now a third shift in Windsor, at Stellantis, where Kathy is coming from. We also have new investments that were announced a month and a half ago by GM in St. Catharines, with $690 million for their engine facility.

We have the two new battery plants, one in Windsor, which has been opened and launched and has started production, and the one that is being built in St. Thomas right now. That's for auto. Also, there were investments that I announced in Hanover, for Siemens in Oakville. That's for battery production as well. That's one thing.

When it comes to steel and aluminum, I've talked about it a lot, because of course we need to adapt every time the Americans are changing their interpretation of tariffs. We're seeing that the plan is working, but what I really think is different from past years is that the defence industrial strategy is our way to be able to empower the manufacturing sector and potentially help in the auto, steel and aluminum sectors by really being able to repurpose some of the plants or transition some of the workers towards the defence industry.

We know that the support we're giving to the Canadian Armed Forces can also be used as an important economic stimulus to protect the businesses that are affected by the tariffs, and we certainly intend to do that.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you, Minister.

Colleges, polytechnics and similar industry training institutions have recently received $165 million in investments from the government. These institutions work directly with industry to deliver and train the next generation of Canadians. Can you help us understand why colleges and institutions are so important in developing Canadian talent?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

They are, because they do a lot of applied research. Since they do so, they're able to train a lot of the students who will eventually work in the different sectors of the manufacturing sector. I was with Doly, your friend, in Scarborough, and we announced an important initiative whereby—across the country, basically—we would be reinvesting in applied research. I think it was well received.

Doly and I were hearing so many testimonies, so many stories, of students who may be working in AI right now or working in order to eventually get the right education to be able to work in the transportation industry or the aerospace industry or the auto sector. These are just examples of what we're able to support through our science funding.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you.

I think you mentioned this earlier. Given the current fracturing world order, the government has worked to diversify Canada's trading relationships. What actions has the government taken to develop, maintain and deepen our relationships with old and new international partners?

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

What is really important right now is that we have to work on two fronts. We have to work to create new trade agreements. That's definitely what the Prime Minister is working on—52 trade agreements. It's really important.

At the same time, all countries are reacting to protectionism. All of them, including, for example, the European Union, are closing their borders to, for example, steel and aluminum, because they're reacting to U.S. protectionism and section 232 tariffs on steel and aluminum.

What we need to do, and I've been working with the EU on this, is make sure that Canada is not a collateral victim of that protectionism and that we basically have a common market on steel and aluminum with the EU. We need to do that with Japan. We need to do that with other countries around the world. That's just an example of actually being able to align industrial policies, which is more than free trade. It's being able to have the same approach when it comes to our market economies, and also the same type of support.

That will have an impact because Algoma Steel, for example—I was at Algoma in the Soo on Friday—plans to export steel to Europe. It has a new electric arc furnace, which would obviously comply with the European requirements.

It's the same for aluminum. Aluminum is an important product that NATO will need. A lot of aluminum products are made either in northern Europe or in Canada. We need to have access to the European market.

I must say, my colleague Stéphane Séjourné—the industry minister of the European Union—and I have had very constructive conversations. He's coming to Montreal in two weeks, and I intend to continue the EU-Canada dialogue on this. I really think we can do more together.

[Michael Ma, Liberal, Markham—Unionville, ON]

Thank you, Minister.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ma.

Colleagues, that brings us to the end of our first hour. We're going to suspend momentarily in order to—

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

I was ready to continue for another hour, but Mark is happy to be here for me.

[The Chair, Liberal, Ben Carr]

I believe some ears perked up there, Minister. I suspect there will be plenty of side conversations.

With that, I'm going to suspend briefly. We'll come back, and Madame Huot and Mr. Schaan will stay with us, although we may have a reduced second hour.

[The Chair, Liberal, Ben Carr]

Colleagues, let's start. We're going to cut the time down a bit here. We're already about 35 minutes behind as a result of the votes, and I have a couple of pieces of committee business that we have to deal with at the end. It won't take us too long, but we might call a bit of an audible midway through here.

Nonetheless, we have four officials from the ministry joining us here today: Valerie Huot, acting chief financial officer and assistant deputy minister; Mark Schaan, associate deputy minister; Stephanie Tanton, assistant deputy minister, Innovation Canada; and Samir Chhabra, director general, marketplace framework policy branch.

We'll go right into the first line of questioning. That will go to our Conservative colleagues.

I'll turn the floor over to you, Mr. Falk. Go ahead, sir.

[Ted Falk, Conservative, Provencher, MB]

Thanks, Mr. Chair.

Thank you to the department officials for coming to committee today to answer some of our questions and certainly satisfy our curiosity about things.

I want to start with a few questions about Spaceport and Maritime Launch Services. We've heard some very interesting numbers out there, and we've read some of these numbers. They've entered into a 10-year, $200-million lease on a property that Maritime Launch Services has secured for roughly $13,500 a year. Was it your department that did the due diligence on that $200-million lease?

[Mark Schaan, Associate Deputy Minister, Department of Industry]

No. It was not our department.

[Ted Falk, Conservative, Provencher, MB]

Which department would that have been?

[Mark Schaan]

The Department of National Defence would have done that.

[Ted Falk, Conservative, Provencher, MB]

It's not at all under your purview.

[Mark Schaan]

That's correct.

[Ted Falk, Conservative, Provencher, MB]

Okay. Good. Then we will move on.

In 2025, 30.4% of performance indicators were met, while a large share were unmet or not measurable. That comes from the results performance management program for executives for 2024-25.

Can you explain to Parliament why this level of performance would be acceptable?

[Mark Schaan]

Thanks so much for the question.

The performance management framework as a whole looks to try to establish both credible and ambitious targets for executives to ensure that their performance is well understood within the context of the public service. I think what we need to understand when we look at overall executive performance is that many of those metrics are individualized and are dynamic to a very changing and often agile kind of environment. Insofar as those measures either could not be recorded or were not met, it may be very much an indication of the fact that they evolved over the course of the year or the fact that there were changes to the nature of the work.

[Ted Falk, Conservative, Provencher, MB]

According to the Treasury Board Secretariat's 2025 results for the executive performance management program, almost $6 million was spent on performance pay within ISED. If so few performance indicators are met, why are executives continuing to be rewarded? Who makes those decisions on performance pay?

[Mark Schaan]

The overall performance pay framework is under the jurisdiction of a mixture of our senior personnel and the Privy Council Office, and then by the Office of the Chief Human Resources Officer at the Treasury Board Secretariat. Individual allocation decisions for executives are made by the deputy head of the organization, who is the departmental accounting officer.

Performance pay is a mixture. It's worth noting that a good chunk of it is withheld pay for the purposes of basic performance. In very, very exceptional cases, additional performance pay is allocated on an individual executive basis.

[Ted Falk, Conservative, Provencher, MB]

As well, 316 out of 318 executives from ISED, or 99.4%, received bonuses in 2025, while only 30.4% of performance indicators were met. What is the reason for such a great disparity between success and reward within the department?

[Mark Schaan]

As noted, there are two aspects of performance pay for executives within the overall rubric of the public service. It's probably worth having a conversation with the office of the chief human resources officer and the folks at the Treasury Board who set the overall framework.

However, as I noted, the vast majority of performance pay for executives is actually withheld pay for basic performance, and that is allocated on the basis of meeting your overall basic assumptions of work. Then there are a very select number of individuals who receive bonuses on the basis of very exceptional performance indicators and an exceptional performance in a given year.

[Ted Falk, Conservative, Provencher, MB]

It would appear that 99% of executives receive bonuses, while only 30%—

[Mark Schaan]

I would have to double-check your numbers. However, Mr. Chair, my understanding is that the 99% is reflective of the folks who would have received the basic amount of performance pay, which is the withheld pay for any given executive on the basis of base performance.