Industry Committee on Nov. 24th, 2006

[The Chair, Conservative, James Rajotte]

We'll now go to Mr. Scott, briefly.

[Allan Scott]

My comment on this is that obviously it's going to be a complex world, and maybe in golf clubs we're ultimately not going to be able to compete, but I think our ace in the hole is our ability to innovate, our ability to quickly adapt, and the environment we have here. I think we have to protect that, and we have to stimulate that across the spectrum. That, in the final analysis, will give us the opportunity to compete worldwide. We have to remember that, and that's why I think we need to move quickly to create the incentives so that everyone across the spectrum can have the opportunity to compete.

Hopefully, Mr. Svendsen's company can use that, and others can use it, some to a far greater degree. I think if it's put in across the spectrum, it will give us an opportunity to strengthen the total economy.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Shipley.

We'll go now to Mr. Van Kesteren.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Thank you for coming. It's been very interesting. As my colleague says, what a perspective we're getting.

I want to talk about that PING thing and to bring it back to something else too, or something we discovered in Windsor. Oftentimes we talk about the unfair trade practices of China, but we're discovering—and I think one of you alluded to this too—that multinationals and, in some cases, large Canadian companies are just as guilty, if not guiltier. What they're actually doing is what we called in wartime.... I forget the terminology, but they're taking your products and actually bringing them—the moulds and such—to China. Is that happening here too, in Edmonton and Calgary?

I'm just going to open it up. I apologize, as I wasn't expecting to take the next round, so I didn't prepare myself as to....

Mr. Svendsen, you mentioned PING or talked a little bit about that. Is that happening in your industry? Are we seeing more of that taking place?

[Mel Svendson]

In our particular industry, in aftermarket products typically, we're seeing things being moved around the world in that manner with some impunity.

If I were to look at some of the multinationals, I think they are guilty of transferring the knowledge. As we've stated about the golf clubs, you wouldn't have a golf club problem if the multinationals hadn't moved so much of the golf club manufacturing to China. We probably wouldn't have, in North America, as much of a bicycle problem if Schwinn hadn't said, hey, I'm going to quit manufacturing; I'm going to quit research; I'm going to quit this and that, and I'll buy my stuff out of Taiwan with a Schwinn name on it.

We have a term at our company: No Schwinning.

[Some hon. members]

Oh, oh!

[Mel Svendsen]

We have to do a lot of this stuff ourselves; we don't want to lose that edge.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I think we've fallen asleep at the wheel. We're talking about a whole culture that's evolved around our industry. You mentioned it: advertising. That's a huge cost. We're taking that out.

I'm hearing a lot of other things: we heard about energy, about the Shanghai Three Star Stationery Industry Corp. in China, and we heard about productivity. But I'm surprised that until we got to Windsor, and also heard from you today, we hadn't heard about intellectual property and patent rights, those things that we understand. We understand why we pay more for a pair of shoes that have the big name.

I'm concerned about this, and I'm surprised that nothing's happened.

Peter.

[Peter Ouellette]

Mr. Svendsen's earlier reference to the steel industry and the concentration of power is a great example, but we no longer have any Canadian steel industry ownership; the industry is owned now by the Brazilians and East Indians and South Africans, by other countries. When you have the ownership, you transfer the technology, you transfer the ideation, and you transfer all of the previous innovation. In the setting of the last five years, where we've had the effects of the rising Canadian dollar so that we can't trade, these multinational managers have the responsibility to continue that innovation. They relocate the idea, so they can continue to produce and ship.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

So there may be another problem.

Do I have a few more minutes?

[The Chair, Conservative, James Rajotte]

You have one minute.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Just quickly then, you brought up something else, the fact that we've lost these industries. But in a sense, possibly, we aren't too sorry to see them go—maybe with the steel industry, which has a lot of pollutants. Now, of course, these companies are producing these things. They don't have the same restrictions. And we're hearing a lot of pushing for carbon credits and those sorts of things.

I see Mr. McDougall shaking his head. Maybe he just wants to comment on that too.

[John McDougall]

[Inaudible--Editor]

[Peter Ouellette]

That steel industry is a fundamentally strong industry because, remember, for every job in that industry there are four others servicing the industry. As much as it possibly has not kept up with technology, there is still some room for it to improve. We have some world-class steel production in Canada and some world-class steel products that ship globally. You don't recognize that if you only focus on the Hamilton production; but if you focus on the entire steel industry, there are definitely some world-class examples.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Did Mr. McDougall have a chance to respond?

I have a quick one.

[The Chair, Conservative, James Rajotte]

Mr. Svendsen, briefly.

[Mel Svendson]

I have one concern about the carbon issue. I have travelled to China extensively, and I have travelled to Mexico fairly extensively. Somebody is going to do this job. Somebody is going to make our cars. Somebody is going to make our steel. Somebody is going to do it. If they can stop all that pollution at the border, they'll have done one hell of a job. My guess is that it will continue to blow around the world and we'll still have it.

The thing is that the rules and regulations we apply in Canada make us do the job better. We will do a better job. If you look at some of the huge improvements manufacturers in this country have done to reduce carbon emissions, it's phenomenal. When the jobs are moved to those third world countries, where there are no rules or the rules are not enforced, we will continue to have pollution. It will just get poured onto the other side of the ocean instead of here in a cleaner fashion.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Van Kesteren.

We'll go now to Mr. McTeague.

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

Mr. Chair, I think I speak for all members of Parliament. We wouldn't be here without your help in providing the perspective. I can tell you that every member who has asked a question has received an interesting and very helpful remark. Given your background and your harassing us on things like productivity and commercialization and innovation, I think it's fair to say, from everyone's perspective, that we'd like you to take the next questions, if you don't mind, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McTeague.

It's a rarity. As the chair, I'm generally the one allocating questions, not asking them. I thank all of you for allowing me the time, especially in my hometown.

First of all, I have a question that was actually provided by one of the members. It's a very tough question. He wanted it directed to Mr. Scott.

This is going to put you on the record on this one. How long will the economic boom in Alberta last?

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Forever.

[The Chair, Conservative, James Rajotte]

It's a good thing we're retiring soon, because this could be front page of the Journal tomorrow.

That was Monsieur Crête, by the way.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

It's not the objective, to be in the newspaper.

[The Chair, Conservative, James Rajotte]

No, I know.

[Allan Scott]

How do they say it in the economic textbooks in Latin? Ceteris paribus, all other things remaining equal, we will continue for some period of time.

For those who have lived through previous crude oil price increases, going from $3 to $12 in 1973 was a tremendous jump. Immediately, because of decisions made on the other side of the world, people in Alberta were substantially better off. In 1978-79, when crude oil doubled again, from $14 to $29 a barrel, obviously that was a tremendous jump. But we all remember the 1986 period when crude was down around $11 a barrel and the tough times in the energy sector.

If the emerging economies of China and India continue to grow and evolve and continue to require more and more energy, if there are no significant geopolitical upsets, we will probably have a period of sustained prosperity. There will be ups and downs in the industry, but we have the opportunity to continue to become a larger supplier--I will use the term “globally”. Obviously a lot of the energy will go to the United States because of geographic proximity. It's a Canadian opportunity.

I would make the comment that I think the initiatives of the Quebec relationship and perhaps the most recent Ontario trip out here are important. I believe there can be Canadian solutions to help this part of the country maintain that prosperity and competitiveness that will allow this period of prosperity to extend for some considerable period of time.