Industry Committee on Dec. 6th, 2007

[Matthew Ivis]

Yes, I'll be very brief.

I think you raised a number of excellent issues across all those questions. It's something we focus on very specifically with some of the programs we have, specifically one called EXCITE, which focuses on 12- and 13-year-old girls to get them excited about science and engineering.

Specifically, as I think my colleagues mentioned, it really focuses on applied learning. It is taking things apart and putting them together and understanding how that's applied in the real world. Then they are provided with mentors through the next couple of years to try to encourage them in science and engineering. Attracting women into science and technology is an issue. I think, from our perspective, that we invest in it because diversity because of gender, in terms of culture, is one of the cornerstones of innovation.

If you don't have the diversity of thought, you're going to limit yourself in the type of innovation you're going to be able to draw out.

[The Chair, Conservative, James Rajotte]

Thank you.

[Marc Seaman]

Mr. Chair, I have just one.

[The Chair, Conservative, James Rajotte]

We're well over time. I'm sorry.

[Marc Seaman]

I was going to say that the teachers at the elementary level--

[The Chair, Conservative, James Rajotte]

I'm sorry, we're way over time. We're two minutes over.

I'll go to Mr. Van Kesteren, please.

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

You'll probably get that question answered in the course of the morning.

Mr. Seaman, you touched on the Web 2.0, and this is fascinating the way things are flowing. I know that in my business, too, this was already starting to happen. I am curious, though. Will this result in layoffs in the industry? Does this new technology mean that you don't have to put people in the field? Will it result in layoffs, and to what degree?

[Marc Seaman]

I think it will have the opposite effect, because organizations like banks can focus on banking and not have, necessarily, an IP shop per se. What it creates are organizations and an ecosystem that Canada can create and not just deal within Canada but globally, where a lot of the services, a lot of the infrastructure, and a lot of the support is managed through them.

I actually think it has the opportunity to create a much greater ecosystem, because it allows organizations to really focus on what they do best and to have the organizations, through the Web, provide that type of back-end support. I think it actually allows it to grow the industry sector and the knowledge economy.

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

That's a real possibility.

Mr. Seaman, I want to ask you what Mr. McTeague was asking. I want to build on that.

Does the lack of IP law hinder companies like Microsoft from investing in Canada?

[Marc Seaman]

Does it hinder us from investing in Canada? No.

We announced in July that we'd be opening a software development centre in the lower mainland of B.C., which we opened in September. It will have approximately 300 employees or software developers by the end of January. Hopefully, that will continue to grow quite significantly.

There's a recognition that the IP regime in Canada is taking shape and that the government is taking it seriously. I think it was under the Liberals, the previous government, with Bill C-60, and I think that, obviously, we're seeing steps by this current government in moving towards that.

I think that decision to invest in Canada was done regardless of the IP regime here. It was done for other reasons, such as the strong infrastructure we have, the quality of life Canada offers, and the better immigration policies we have, because again, we're talking about onshoring people, as Bernard points out. As we have indicated, there's a shortage of skilled people in the computer sciences in North America.

Our goal was to recruit the top 1% or 2% from around the world, wherever they may be, whether they're in Canada, the United States, India, or Trinidad and Tobago, and to bring these people to B.C. to create and innovate and do some software development, recognizing that the IP policies in Canada will become stronger. We're certainly hopeful that this will continue.

No, the decision to invest in B.C. had nothing to do with the IP policies here.

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

Mr. Ivis, is it the same thing with IBM?

[Matthew Ivis]

One of Canada's strengths in general is that it has a very strong legal and policy framework. Can we improve? Yes, we can, and I think we demonstrate a willingness to do that all the time.

We've invested over $3 billion in the last decade in research and development in Canada. It's a strategic note in our global footprint. One of the largest drivers of that investment is access to skills and talent, in addition to the strong foundation we've built in terms of our legal and policy framework.

Moving forward, I think it's very important. Intellectual property is a fundamental. Business models are shifting, but if I had to point to the most dominant or important factor driving that area of research and development, it would be access to skills and talent.

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

Mr. Courtois, what effect do emerging markets in China and India have on Canada's ICT service industries? Is it a positive effect?

[Bernard Courtois]

It's a complex effect, a little bit like the rest of the economy. In other words, companies in our sector operate very globally, and it's important to use the capabilities of those developing nations to be more competitive. The more competitive you are globally, the better your company will do overall.

We would like to see Canada find its place as a place where we do the more advanced work. This is happening throughout our economy. As a society, we have to think about the jobs we want, in that there are going to be plenty of jobs for us--indeed, most developing societies are going to face a shortage of people--and we want to make sure that we have the people and the skills that match the jobs we want, as opposed to the leftover jobs.

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

That leads me to my next question.

We hear all the time that we're shifting away from one industry and moving into another. Some industries have suggested that employment insurance should make a shift as well, and focus on training rather than on unemployment. Would your industry benefit from such a shift? Are there enough people in the manufacturing sector who could be attracted into your industry if they were retrained and if the government would shift that pattern?

[Bernard Courtois]

It's hard to imagine taking people who are quite late in their careers and have never been involved in technology and switching them to become computer engineers, but we're headed for an environment in which people, no matter where they find their careers, should go through the school system and get some training in the fundamentals of technology. In other words, we have to prepare our citizens of the future to be multi-faceted. That's actually the kind of skill that will succeed the most in tomorrow's economy; it will also position them better as the shifts take place.

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

You're saying our schools first of all have to do the basic training. However, could that type of direction in government to make sure we...? If you had some type of tax benefit or something, would that...?

[Bernard Courtois]

It's going to have to be a multi-faceted approach. There is not going to be one magic bullet that will solve everything. To produce what people call the “package” of skills that is better suited to tomorrow's economy, you would be starting with the school system and continuing throughout, but you have to carry that through to lifelong learning and a whole career. As I mentioned earlier, at the moment the programs we have are unfortunately really stuck in what was useful in the past, which is the old economy, and we're quite a bit short when it comes to the new economy.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Van Kesteren.

We'll go now to Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Mr. Chair.

Good morning to the witnesses. Thank you for coming here today.

I'm the mother of three sons who are more techno-savvy than I will ever be, and I held out long enough with my VCR and found that if you wait long enough, you never have to learn how to program the thing, because the technology will change. So I'm kind of astounded that we don't have enough young people who are interested, or who have the skills to get into the ICT sector, because it seems that it is a sector that is fascinating and compelling and that our young people are very engaged in it.

I did hear you say that there were issues with the curriculum of the school system, and I assume that's something on which you're reaching out to the education sectors very early on in public school, and helping to influence university decisions. I was also interested to hear you say that even when there are people graduating with appropriate credentials, it's difficult to get a foot in the door and that our procurement programs may have a negative influence on helping our young people get started.

My question is twofold. How do we correct that procurement issue? That seems to be something that's fairly straightforward. And I guess the bigger question is that at a time when hundreds of thousands of people are losing manufacturing jobs—and I don't for a minute give up on the manufacturing sector, I think we have to really be concerned about that—how do we engage young people, especially disadvantaged young people, and not just inspire them, but help get them into a career that can be lucrative and rewarding and have a real future in the IT sector?

[Bernard Courtois]

Some of the elements are structural. It's not an easy thing, because if it were easy, I guess we would have resolved it. As Marc said, we're not the only country that faces this problem. Most developed countries do.

There's a bias in the system. To help kids advance in the system to the college and university level, there's a tendency to try to recommend that they take easier subjects, those in which they're going to succeed more easily. There's a fear that math and science are more difficult, and that introduces a bias. There's a notion sometimes in people who have seen the crash and the bursting of the bubble in this sector. As I mentioned at the start, we went through the bubble, came back down and have made it up since. It's as if you drew a straight line through it and the bubble went up and down, and you cut right through it. But there's still a perception that lingers there. There's still a perception that the jobs are like those in the year 2000, when everybody had to do a lot of coding.

So those are all messages we're trying to get to the schools. The sort of bias in the school system is harder to deal with, and it has to be done through the provincial education ministries. But also, there has to be dialogue and interchange with the professors and with the career counsellors. It's not a simple thing.

Regarding the rest, as I say, you need to carry that through to lifelong learning and all that. You also made the comment about not giving up on manufacturing. There is still a significant amount of manufacturing in our industry. A developed country like Canada, with the assets we have, does have quite a place in manufacturing, but it's not necessarily going to be the huge massive things that take place in China, closer to a bigger market. We do have our place there, but it's going to be like everything else, moving up the value scale for something that's more technologically advanced and superior. But while we've gone through this change in our economy—it's since the late 1990s when the impact of ICT has really driven productivity in the economy and this shift has been taking place—we've had the lowest unemployment in Canada and the U.S. and many developed countries in years. So that shows that technology is having a positive impact.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I'd like to ask you more on that. We had some of the manufacturing sector here yesterday, and the resource processing sector. The person from the Vehicle Manufacturers' Association said they're facing a category-six hurricane of all of the different forces: the high dollar and competition and a variety of things. He also said they had invested—I forget the figure—many billions of dollars in new technology and new investment, to upgrade that sector.

How much of the IT sector is dependent on other manufacturing? Some people think of manufacturing as kind of old and rusty, but in fact I think of aerospace. There are many sectors that in fact are on the cutting edge of new technology. How much of your field is linked to manufacturing?

[Bernard Courtois]

I don't have a specific number, but it's quite symbiotic. Today there's technology in everything. There's technology in prospecting for natural resources. There's technology in how you run the plants. They're much more automated than they ever were. These are things that are happening. We very much share the concerns of the natural resource and the manufacturing sector. And strange for us, because we understand that the solution has to be in more technology, more use of our technology, we have a problem getting smaller enterprises to adopt technology. They don't have the knowledge, they don't have the resources on staff. They need help to be able to see what technology can do for them and they're under pressure.

Now, at the same time, while we're all very conscious about the pressure on manufacturing and forestry and so on, we must be very conscious that the exact same forces are causing people to look at their investment in R and D labs and in advanced jobs and centres of excellence in this country--and those are Canadian-based companies as well as foreign-based companies--and asking themselves whether they should move them to Brazil or Russia or China or India.

The labs are not as visible as auto plants and that kind of thing, but as jobs, they're the primary jobs that we want at the core of our ecosystem. While Canada has not been seen as a low-cost jurisdiction, we had, and we still have, a cost advantage compared to the U.S.--notwithstanding the dollar--because of a variety of things such as real estate, salaries, etc.

But when there's a shift taking place, like in the value of the dollar, it causes people to relook, and our industry's quite concerned that our big labs are in jeopardy. That's like saying that we don't care about the big auto plants, we only care about the little ones.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.