Industry Committee on Nov. 22nd, 2006

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

We're hearing a lot of really good suggestions here today, as well as at our committee hearings in the past and as we travel around. A lot of what is suggested, though, takes resources. I guess the question I put out there is what would you prefer that we support right now?

For example, the CAPC support here, the 2005 report card, large-scale investment supports, those are now on hold. The TPC is now being reviewed, so there is nothing from the federal government currently.

Also, with regard to infrastructure funds, do we look toward further tax reductions, do we look for cuts in other sectors, or do we look for the federal government facilitating infrastructure and other types of incentives, sectoral strategies? If you had an option, what would you prefer? At the end of the day it does come down to decision-making about what we do with our resources, and I'd like to hear where you think they should strategically look.

That's to all panel members.

[David Paterson]

I can certainly jump in.

As I said in my remarks, the reality is that there are jurisdictions around the world that are dying to get large-scale manufacturing investments, because of the job flowthrough, the contingent jobs, and industry that comes from the supply chain.

The facilitating factor for all those jobs is assembly plants. If you don't have reinvestments in assembly plants, there will be no supplier jobs. If there are no supplier jobs, there is no trucking industry. If there is no...and on it goes. So the entire industry came together in CAPC, worked together with the government, and made as its number one recommendation the need for us to be competitive against jurisdictions, such as the United States, that provide an incentive of approximately 20% of the capital investment in municipal tax reductions. Effectively, that was the competition rough-in. We spent a decade losing automotive investments in Canada as a result of that.

We entered into that, provided very appropriate competitive investments, and we won $7 billion worth of new assembly investments in a very short period of time. We need to have that as our priority if we want to continue to have the assembly plants. All the other investments flow from assembly plants.

[John Gray]

I think infrastructure and sectoral support are very important, because that paves the way for the future. Obviously we went through a period where infrastructure was really let go in this country, and that has trickled right down to the municipalities. If we could bolster the infrastructure, I think we would put ourselves on a path for the next 30 years. In my presentation I talked about some of the sectoral supports, you know, the energy, and all those sorts of things.

[Bob Malcolmsen]

I would have to concur with my other two colleagues. Sectoral support and infrastructure are the key elements. As I said before, Canada, especially in Ontario, is a manufacturing nation. If you don't have the jobs, well, it's the ripple-down effect. We have to keep moving on the sectoral support and the infrastructure, throughout Windsor.

[Brian Masse, NDP, Windsor West, ON]

To follow up with Detroit--Windsor border, one of the problems we're facing is the number of non-tariff barriers. Monsieur Crête provided the most recent, the Bioterrorism Act, which was unilaterally imposed. The minister only had two weeks' notification prior to it being announced, and he had no real cooperation with the Department of Homeland Security, as well as other departments in the U.S. state government.

I've been dealing with a number of different committees and organizations to try to eliminate some of these non-tariff barriers. Are there any additional things we, as representatives, can do to stop those from coming forward? It seems that it almost has to come from the Prime Minister at this point, because it seems they're unilateral. The western hemisphere travel initiative, for example, is another one, and there are a whole series of others. Do you have any quick suggestions on anything else that can be done from our side, as the legislators?

[David Paterson]

I would suggest one thing. When I last visited the Canadian embassy in Washington, one thing that I thought was an impressive, results-oriented initiative was a sophisticated understanding of Canadian businesses that resides in the United States. They talk with congressional representatives across the United States, particularly the northern states.

There are groups, such as the Canadian Automotive Partnership Council, where you have companies that have bases in the United States as well as Canada. While I certainly agree we need top-level exchanges with the United States to make sure that we harmonize and that our trade continues to flow, as a priority, I think Canadian businesses can add an awful lot if they work in conjunction with their governments and with their embassies, etc. We can only accelerate that if we put more attention to it.

[Brian Masse, NDP, Windsor West, ON]

So that's a specific trade strategy.

[John Gray]

With you coming from Windsor, you would understand that Ontario and the northern United States are actually one economic unit. Believe it or not, we actually have some allies with the governors of the northern states. They understand the importance of being able to move the goods around. When restrictions are put in place, it hampers that flow of goods and of people. That hurts us all. I think that's one of the untapped allies we really haven't explored too much. I see it as a great opportunity.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Masse.

We'll go to Mr. McTeague now.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Chair, I won't have time to float another idea on the EI deductions and how we can use those to, as it were, give companies an incentive: rather than paying the source deductions back, to hire more young people to get them from the trades. This might be something Mr. Rosen would be interested in.

We are in Oshawa, and I think it's important, from our perspective, that we cede the time to Mr. Carrie. It's his riding, and I'd certainly like to hear more questions from him, if I could, with your indulgence, Mr. Chair.

[The Chair, Conservative, James Rajotte]

The Conservatives have the next spot.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. McTeague.

I want to highlight some of the things that are unique to Oshawa. Mr. Paterson, you brought up CREC. I was wondering if you could take another couple of moments to expand on that.

Dr. Rosen, there's this big commercialization gap between getting an idea and bringing it to market. I was wondering what we're doing at UOIT to help close that gap.

[David Paterson]

We have a unique facility amongst the auto industry in Canada, right here in Oshawa. It's our Canadian Engineering Centre, just down the street. In that centre we do a full range of activities for design engineering for vehicles.

To put it simply, when you come through and see the plant, what you quickly find is that there are thousands of components that need to come together and fit under the skin of an automobile, and the automobile has to be tested and certified and must meet all of those types of requirements. That's the type of work we do right here, and it's the very high added-value type of work that makes a big difference.

This centre opened in 2001, and we have hired some 500 Canadian engineers to work in the facility. One of the things we're most proud of is that we have been able to draw and train Canadians of all kinds of heritages and backgrounds. We work 24 hours a day around the globe. Our Mandarin-speaking engineers work in both English and Chinese with our engineering plant in China, and we work through the time zones throughout 24 hours.

What's really important is that the entire supply community—and you see it represented on the maps I provided to you in our presentation—converge here in Oshawa to work with our engineers, because that's where they get the specs for all the products they're about to develop.

The real economy of manufacturing is not even just the massive amount of work that takes place south of the 401 here. It's in, of course, all of those supply companies that are dotting the 400-series of highways throughout Ontario. But they have to develop their products and have the specs for those products set by the manufacturer.

What's unique is that GM is the only company that actually has a major centre here. The first vehicles in Canadian history that were fully engineered and built in Canada were the Chevrolet Equinox and the Pontiac Torrent, for which we did the design engineering work right here in Oshawa. Now those vehicles are being built in Ingersoll.

That has been the foundation of then turning to my friend Marc and to UOIT and asking: “How can we build on that? How can we draw more collaborative R and D together, share it with the supply community, help them develop better products, and develop better businesses and commercialize those businesses in Canada?”

What we're really impressed with is that they're not only providing an automotive engineering degree; you're also going to have great business skills when you come out of that program as well.

[Dr. Marc Rosen]

The innovation gap you asked about is a big issue. We recognize, and I think many recognize, that there are the two solitudes of university research and industry needs, and yes, there is a gap between them. We're trying to resolve it in some ways.

One is, we declared from the very onset: as a new university, let's not just value the typical university output—publish a paper; it gets put on a shelf; no one ever reads it again, except one other person in the world. Rather, let's do things that will be adopted by industry, adopted by the market, and let's work closely together. We've entrenched this as part of our value system at our university, and it's somewhat different from what you would see at others.

Then we're actually implementing it through partnerships with industry. The centre we talked about, the automotive centre of excellence, is owned by us but is going to be used by industry 70% of the time. The academics are going to be there doing work, and they're going to be tripping over each other. You will not be able to avoid hearing what industry needs, and industry won't be able to avoid hearing what ideas an academic might have who just never had the gumption to go and actually tell someone what they're capable of doing for them.

There will be no gap. We have offices in there to bring in world-class people, to bring in industrial visitors who need to spend time, to make sure that interaction goes on. It's a bit of an experiment for us that we think will address the innovation gap in a unique way.

[David Paterson]

I would encourage you. One thing that we found particularly rewarding is we developed this model in Canada of clusters of collaborative research. Our friends at RIM down in the Kitchener area came to us and said we had some pretty good ideas they could build on. We frankly were borrowing a lot of our thinking from what they're doing there as well. I think we have some wonderful examples across different industries of clusters of collaborative research, and what has been missing is someone to buy this stuff. Well, we buy a lot of stuff, so it just makes sense for us to have better stuff to buy. That's where he comes in.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Thank you very much, Mr. Carrie.

Thank you very much to all of the witnesses for being with us today. We appreciate your time and your testimony here. It was very enlightening. If you have anything further you would like to submit to the committee in advance of our report, hopefully completed by mid-December, please do so with the clerk.

Members, for your information, the bus is leaving at 10:45 sharp for our next site visit. Please prepare yourselves for that, gentlemen. Thank you very much for your time here today.

The meeting is adjourned.