Industry Committee on Feb. 10th, 2009

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Booth.

Monsieur Rota, you have the floor.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

I'll be sharing my time with Mr. Garneau.

Minister, strictly on a technical basis, is it easier to eliminate a program or an agency?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Well, I've never done either, so I don't know how to answer that question.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Maybe one of your colleagues who knows the technical end of things could answer that question then. Maybe we could have Mr. Dicerni.

[Richard Dicerni]

Where there's a political will--

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

No, I said on a technical basis, Mr. Dicerni. It is on a technical basis, not on a political basis.

[Richard Dicerni]

Well, it depends on whether there is, I would submit to you, legislation that grounds a program. There are some agencies that are set up by fiat of the government. There are programs that are set up by fiat of the government. I think the key variable is legislation.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

So there's no difference between the two. Or is there a difference?

[Richard Dicerni]

If you have a legislative statutory base, then it becomes an act of Parliament to change it, as distinct from having the executive branch make a decision.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

I'm not sure I like the answer I got, but rather than dig down into it, I'm sure Mr. Garneau has some questions for you as well.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you.

Mr. Minister, under science and technology you spoke about the $2 billion national university and college infrastructure program, and I assume you'll confirm for me that this covers all of university infrastructure and not just science and technology infrastructure, whether it's an arts building or some other part of the university.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

It's research and development in the broadest sense. So it could be scientific research or non-scientific research.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Okay.

I'd like to ask you a question about Genome Canada, because I think there is a great deal of misconception here. You know, if an organization like NSERC or SSHRC doesn't get new funding, they still have the $900 million or $600 million that they had the previous year and they can work with that. In this case, there will be cuts because of efficiency and focusing cuts that are in your budget; nevertheless, they have some money. In the case of Genome Canada, if there is no money this year, there is effectively a hole in their planning cycle, because the money that is given in previous years is money that Mr. Godbout and his organization provide to the private sector and to scientists to allocate, and these are multi-year programs.

Effectively, if there is no money now, in 2009, it does create a hole in that planning cycle for allocating to future research. Would you agree with that assessment?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Richard, do you want to say something? I might say something after you're done.

[Richard Dicerni]

They received multi-year funding in the previous budget. Multi-year does imply “multi-year”. They do have money against which they can plan for a number of years. So if one were to give them annual funding, then one could perhaps acknowledge the fact that in this year, they didn't receive it. When I reread Monsieur Godbout's comments that were subsequently posted on their website, I believe he clarified the point that Genome Canada did receive in last year's budget multi-year funding that permitted them to fund subsequent calls.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

You know, there's nothing preventing Genome Canada from coming to government with a plan for new investments that would be considered in another budget segment.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Agreed. The point being, however, that there is an interruption in the planning cycle for the next series of research projects that involve getting in the private sector and providing money to scientists who are going to work on future projects. The multi-year funding is effectively tied up, because these are multi-year projects that are planned and put into the mill. They're not projects that get done in one year, and then the next year you decide what you're going to do. They have long-term funding.

We know, for example, in the field that I was involved with, the space field, you give us money, but we tie up that money for the next six years--the time it takes to complete a project. So it's effectively locked in, and it doesn't allow new initiatives to occur. I think that clarification is very important. I don't think the media understand it, but I would hope it is something you could clarify for the media.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Well, they have two multi-year budgets and they are in year three...year two in those budgets. So either they have made multi-year commitments or they have set aside certain moneys for future investments. That's up to them, once the money has flowed.

But again, I want to stress to Genome Canada and to other agencies that are in the same position that if they have a good case to be made for other research projects, the door is open to listening to that.

[The Chair, Conservative, Michael Chong]

Thank you, Minister.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Garneau.

Our last questioner today will be Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you, Mr. Minister, again.

I'd like to move to the issue of Xstrata. I'd like your take as to what happened there, why there was the decision to let them basically move past the agreement. I've been through the Investment Canada Act several times in this committee, and I'm just disappointed with what's happening with regard to the budget. We've had a series of issues that have been brought forth a number of different times in this committee over the years.

Perhaps you could provide the reason for your decision. You mentioned in The Toronto Star that Xstrata is committing $680 million over the next couple of years on investment in Sudbury. Could you explain that and what type of commitment you got from them?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

With the nickel market down to $4, from.... What was it before?

[Brian Masse, NDP, Windsor West, ON]

It was $24.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Yes, it was astronomical. Clearly the market has suffered. One could postulate that Falconbridge, as it then was, is better off as part of a company that has other mineral interests around the world than it would be if it were solely focused on nickel. Again, there's a silver lining in the cloud we see right now.

Xstrata would make the case that they're not in violation of their undertakings. Given the current economic meltdown in nickel markets worldwide, they believe they were entitled to do what they did. I had a discussion with them, as did my officials, to see what it would mean to them if I took a contrary position. As a result of those discussions, we were able to get further undertakings to the tune of a further investment in the Fraser Morgan project and the Fraser mine, as well as the Nickel Rim South mine, the big one. It was on their books, but they hadn't really committed to it.

Now we have about $290 million to $390 million worth of commitments, depending on how the research goes, on the Fraser mine. This will keep jobs going and perhaps expand jobs in the future. I believe this is the best deal, given the current state of nickel, that we could get for Sudbury. Again, we'd rather not have to have these discussions with Xstrata or anyone else, but the reality is that I was on the side of the workers and we've done the best we could for them under the circumstances.