Industry Committee on March 13th, 2008

[The Chair, Conservative, James Rajotte]

Minister.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

The launch is the result of current investments as well as aggregate investments on the part of our nation over many years. We are committed to deal with these issues. We have taken leadership in space, and we'll continue to do so.

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

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair.

Minister, as you're aware, Canada is a major leader over the last decade in the elimination of landmines and cluster bombs on this planet. These are terrible devices. They cause 40,000 people every year to be killed or maimed. That's one every 10 minutes of every day of the week.

The purchaser of part of MacDonald Dettwiler is Alliant Techsystems, and they are a major manufacturer of these devices. With this sale, we are enhancing a company that's manufacturing these killing machines. Canada is totally against it. My question is simple, and I'd like a simple answer: is your department working with Foreign Affairs on this conflict in our international obligations?

[Jim Prentice, Conservative, Calgary Centre-North, AB]

The review process—and I won't use up your time by elaborating on how the process works—is a consultative process. It includes input from other government departments and the provinces. These consultations will happen, and they will include consultations with the Department of Foreign Affairs.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Okay.

Mr. Brison is going to continue.

[The Chair, Conservative, James Rajotte]

Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

Minister, MDA is the dominant company in Canada's space industry. There's been a lot of consolidation, and MDA has built a significant presence in Canada's space industry as the biggest player. There's a real concern that selling MDA to a foreign company is akin to a modern-day Avro Arrow in the impact it will have on the future development of Canada's space industry.

Will you guarantee, as part of your evaluation under the Investment Canada Act, that this decision will protect the future development of Canada's space agency, that you will consider it as an industrial strategy for our country as well as a sovereignty issue?

[Jim Prentice, Conservative, Calgary Centre-North, AB]

I welcome your thoughts on this, as a parliamentarian. If you wish to elaborate on these thoughts, I'd be pleased to hear what you have to say.

The Investment Canada Act is a specific piece of legislation. It enumerates, as I recall, six factors that are to be considered by the Minister of Industry in the context of the review. They're quite specific. It includes reference, as I recall, to economic policies and the effect of investment on productivity, industrial efficiency, and technological development in Canada. So I welcome your perspective on this.

[Scott Brison, Liberal, Kings—Hants, NS]

Does the Investment Canada Act give you the capacity to deny approval on this transaction, based on negative impact to national sovereignty? If in fact the sale of this provides to Americans--who may from time to time be in conflict with Canada on an issue of Arctic sovereignty--the tools that can be ultimately used against Canadian interests, it would effectively give the Americans a Canadian taxpayer-funded vehicle to use against Canadian interests.

So, Minister, under the Investment Canada Act, do you currently have the power to consider national interests in the context of Arctic sovereignty?

[Jim Prentice, Conservative, Calgary Centre-North, AB]

The act is quite clear that I, as the minister, have the ultimate responsibility to judge whether the transaction is to the net benefit of Canada. It then enumerates six factors, but at the end of the day it is a determination of the minister as to whether there are net benefits to Canada. Enumerated are references to compatibility with industrial, economic, and cultural policies.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Brison.

We'll go now to Mr. Van Kesteren.

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

Thank you, Mr. Chair.

Thank you, Minister, for attending.

In part of the conversation we're having, we have found that part of the problem with the sale of the MDA is that we had, in past governments, a very poor vision and plan for what we are going to do in science. We have undertaken, after the break, to do a thorough study of science and technology policy. I've spoken to you a number of times, and I'm really impressed with your fresh and excited view on science and technology. I wonder if you could explain to the committee what your vision is for science and technology.

I'm thinking of our government's announcement of the Science, Technology and Innovation Council, headed by Dr. Howard Alper. Could you share with us your vision of that?

[Jim Prentice, Conservative, Calgary Centre-North, AB]

Thank you very much.

I am very excited about science and technology in Canada's policies and where we're headed. I begin that journey as someone who is not a scientist. I freely confess that. We have the capacity as a country to do some very remarkable things.

The Canada science and technology policy has been an issue for many years. Last May 2007, as I recall, we put in place a science and technology policy, which is known as “Mobilizing Science and Technology to Canada's Advantage”. This was done by the Prime Minister and my predecessor, and I have found in inheriting that policy and moving forward on it, it being my responsibility to implement policy, that it is a policy that has received wide acclaim. I have heard virtually no substantive criticism of the policy as a visionary way forward for the Government of Canada. I know Dr. Carty apparently was quite supportive of the policy, and I know he's been previously supportive of the fact that he was included in the development of the policy.

The essence of the policy is to ensure that we define federal research priorities and promote world-class research in Canada; that we achieve global excellence; that we be focused; and that we endeavour to ensure practical applications of Canadian technology, Canadian know-how.

I like to describe the policy in these terms. It consists really of three steps. The first step is to find the brightest minds in the world and get them into Canadian universities and colleges. The brightest minds in Canada is a minimum threshold, but it's not a sufficient condition. We need to go beyond that. We need not only the brightest kids in our own country, we need the brightest young minds we can find worldwide and get them to our country. We have a wonderful standard of living that will keep them here. That's step one.

Step two is to make sure that while they are at our universities or colleges we adhere to global excellence in research; that it is adequately funded; that we are doing things at Canadian colleges and universities that are truly cutting-edge global quality; and that we not simply talk about that, but that that's actually the test.

The third step is that we ensure that we can commercialize the product of those bright minds in our universities and colleges and translate it from the idea stage--from the bench, if you will--right through into business.

I think it would be fair to say that if one examines much of what has been written, it is that third step where we need to focus activity. That certainly has been a priority. It's something we are discussing in terms of venture capitalization and other mechanisms to translate intellectual property from the university or college environment into our standard of living.

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

Excellent.

Mr. Chair, I'd like to split my time with Mr. Stanton.

[The Chair, Conservative, James Rajotte]

You only have 20 seconds left.

Minister, members have requested of the chair that since they're enjoying this discussion so much, they're imploring you to extend if you can, possibly to 12:30 p.m. I don't know whether your schedule permits that, but there are a few more members who want to ask questions.

We'll check the schedule, but I think we'll move on to Monsieur Vincent.

[Robert Vincent, Bloc, Shefford, QC]

Thank you, Mr. Chair.

Minister, under the Investment Canada Act, which determines whether the investment is of net benefit to Canada, which is what we have been talking about for some time now, you have to consider section 20, that is, paragraphs 20(a) to 20(f). I am going to focus on paragraphs 20(a), 20(b) and 20(e), which have to be taken into account for this sale. We will take the time we need so we can see what I'm talking about.

Paragraph 20(a) reads as follows:

20(a) the effect of the investment on the level and nature of economic activity in Canada, ...

The primary reason I see for the government not approving the MDA sale is the loss of jobs. Paragraph 20(a) talks about job losses. This is therefore not of benefit to Canada.

Now we have paragraph 20(b):

20(b) the degree and significance of participation by Canadians in the Canadian business ...

The second reason why the government should not approve this sale is that there will be no participation by Canadians, because there will be no other business in the remote sensing industry.

The third reason why this sale should not be approved is in paragraph 20(e):

20(e) the compatibility of the investment with national industrial, economic and cultural policies, taking into consideration industrial, economic and cultural policy objectives ...

We are thinking that you have not consulted Quebec and the other provinces on this subject.

Those are my questions. These three reasons mean that it is not of benefit to Canada to sell MDA. Have your senior officials brought paragraphs 20(a), 20(b) and 20(c) to your attention? Is there a report or a study by senior officials in your department that demonstrates that the investment is of benefit to Canada? If a report like that exists, is it available?

[Jim Prentice, Conservative, Calgary Centre-North, AB]

As I said, I appreciate your opinion on this matter and the provisions of the Investment Canada Act, and I am taking note of it. If you have other opinions, I will hear—

[Robert Vincent, Bloc, Shefford, QC]

It isn't my opinion I want. I know what my opinion is, and my opinion is that we should not sell MDA, because of the fact that these three points were not taken into account in relation to the sale. It is your opinion that I would like to hear.

I would like to know whether someone has given you a briefing on paragraphs 20(a), 20(b) and 20(e), which show that it is not of benefit to Canada to sell MDA. It is your opinion that I want; I have already stated mine.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

You have an opinion and I have responsibilities under the Investment Canada Act.

[Robert Vincent, Bloc, Shefford, QC]

I understand that, that is what we are talking about, investment. We are talking about paragraphs 20(a) to 20(f). Is the investment of net benefit to Canada? I have listed the three paragraphs of section 20 that lead me to believe that the sale should not take place because it is not of net benefit to Canada. I would like to know whether you share my opinion on those three points.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

I mentioned that you have a letter ...

[Robert Vincent, Bloc, Shefford, QC]

No, section 36 has nothing to do with it.

[The Chair, Conservative, James Rajotte]

Monsieur Vincent, let the minister answer.