Industry Committee on May 13th, 2010

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Minister.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

[Inaudible — Editor]... before Rio Tinto took over Alcan. It is exactly the same thing.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Bouchard.

Mr. Braid, it is your turn.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chair.

Thank you, Minister, for being here this morning as we all celebrate the victory of the Montreal Canadiens last evening, Canada's team. I'm sure everyone around the table can agree on that today.

Minister, just to begin, if you could help us set the context, in your presentation, you spoke about the importance of improving productivity in Canada. Could you speak about why that is an important priority for our country?

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

Absolutely. As you know, we are emerging as a nation at the front of the line as we recover from the world economic recession. We have a real opportunity to help make an economy that will be more competitive and innovative for the next generation of Canadians.

That means we need to have access to the best minds and capital. We need to make sure that Canadians who have good ideas have the opportunity to bring them to market, to commercialize those good ideas in Canada, hopefully. As an economy we need the next generation, whether it's RIM or Open Text in the ICT sector, auto parts makers, or aerospace giants. We have a lot going well for us as an economy, but we need to continue to invest in the culture of innovation if we're going to succeed in that regard.

Government policy is not the entire story, but it can be of assistance to the economy and to the players in our economy in getting to innovation and competitiveness. That's the prism through which I look at public policy at Industry Canada.

Budget 2010's decision to remove the manufacturing tariffs for new equipment, being the first in the G20 to do that, and fixing the problem with section 116 of the Income Tax Act to allow for more venture capital for our Canadian-based sector industries--that's why all of those things are important.

I don't believe there's a silver bullet, Mr. Braid. I don't believe there's one thing that's going to tell the whole story on competitiveness. But if we do a series of things, they will cumulatively make a difference.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

Minister, you stated today and previously that the government is considering liberalizing foreign investment restrictions, specifically and exclusively with the telecommunications sector, and not the broadcasting sector.

As you know, we've been studying this issue at committee. Some witnesses have suggested to us that we can make a clear distinction between those two sectors--both the Telecommunications and the Broadcasting Acts and the authorities and the protections under each--that we can separate them into two different buckets. Others have suggested that we can't make a distinction and there are complications to consider as a result.

Could you respond to those who suggest that a distinction between the two sectors and those two acts cannot be made?

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

Sure. Look, I'm not saying it's easy, but it certainly isn't impossible to draw the distinction between telecommunications as a field of endeavour and activity and then broadcasting and the content that goes into broadcasting. There is no question about it: there has been convergence in the industry between those who are providing telecommunications and the broadcasting. That's a matter of public record.

But in our view, it is possible to deal with them separately.

As I said in my opening remarks, we're very clear that we're not here to change the Broadcasting Act. We're not here to alter the provisions in place right now that protect Canadian content and culture in that act or generally as a matter of government policy.

Is that going to require some stick-handling? There's no question about it. We are in shades of grey, there's no question, but with good public policy that is clear in its intent and description, we can get to where we have to go to allow the ability for investment to occur in the sector in which we want it to occur.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

Moving now specifically to the satellite sector, could you please elaborate, Minister, on what the benefits to consumers will be to opening up foreign ownership restrictions on Canadian satellite operators, and specifically, benefits with respect to better price, better service, and better quality?

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

I think we're at the point now where we have to level the playing field for the Canadian satellite companies. I'm thinking of Telesat in particular, but others as well. There is an unlevel playing field because they don't have access to foreign capital for their business plans, while all their competitors do.

Right now, Canada is a world leader in satellite technology and satellite deployment. We have to continue to be that. That's a strategic area for this country, I would put to you, and this will allow those companies to, as part of their mix of investment, seek the foreign markets for some of that mix and compete on a level playing field. This allows them to rely on that kind of investment rather than on price points--to be uncompetitive and higher priced in the marketplace. I think that would be a good thing, ultimately, for Canadian consumers.

[The Chair, Conservative, Michael Chong]

Thank you, Minister.

Thank you, Mr. Braid.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, Mr. Minister, for being here today.

In your remarks, you mentioned increasing companies' headquarters in Canada. Why is that important?

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

Look, we're in a global marketplace, so not every company is going to be headquartered in Canada. That said, we do know that if we have a company that can compete on the world stage and win world markets, yet is headquartered in Canada, that can be one way of ensuring that Canadians are able to participate up the value chain in higher management and innovation.

It's not the only way. I think I know where you're going on this, and there are a lot of good examples of foreign companies that have invested in Canada and in Canadians to the extent that we are participating in those sectors as well. But I think any economy--to be fair to you, Mr. Masse--should have a mix of that. It shouldn't be one or the other.

[Brian Masse, NDP, Windsor West, ON]

It just seems completely counter to everything your government has done. Look at the case of Vale Inco right now, where foreign ownership clearly has led to a considerable strike of long duration. You've refused to make public comments on it. What do you think about the situation that's happening there right now?

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

I don't think it's accurate to say that I haven't commented on it. I've certainly said that we wish for the parties to get back to the bargaining table, and we wish them well when they are back at the bargaining table.

Having had numerous conversations with the mayor of Sudbury on this matter, we're at one in encouraging the parties to settle their differences through mediation or through bargaining. Ultimately, of course, this is a provincial matter in terms of labour relations, as you know, but--

[Brian Masse, NDP, Windsor West, ON]

No, I mean you approved--your government did--the takeover there. We could have had an iconic Canadian company, between Falconbridge and Vale Inco, but the government chose another scenario by allowing this to happen.

Have you actually talked to the leadership of Vale in this matter?

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

Actually, I wasn't industry minister at the time--

[Brian Masse, NDP, Windsor West, ON]

I know you weren't, but your government--

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

--so maybe I'll ask my deputy minister to answer that question.

[Richard Dicerni, Deputy Minister, Department of Industry]

I don't think it's fair to characterize these two independent transactions as being the work of the government.

[Brian Masse, NDP, Windsor West, ON]

Well, to be quite frank, Mr. Dicerni, that's your opinion. The end result was that it had to be triggered through this process, by approval. That's the thing.

Have you talked to the leadership of Vale about this issue?

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

Look, I know it's the NDP position that we should inject ourselves into the middle of the strike. I don't think it's our place to do that. I think it's the province's. Mr. McGuinty has made it clear what their position is. They have been involved in mediation.

The last thing this situation needs is another order of government injecting itself when it has no constitutional authority to do so. I don't think that's going to be helpful and, quite frankly, the mayor of Sudbury agrees with me in that regard.

[Brian Masse, NDP, Windsor West, ON]

I'll move on, but you did that to auto workers. You got up in the House of Commons and you talked about them having to make concessions. You said that in the House of Commons, so--

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

Well, let's compare apples to apples, Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

--you've done that on the other side.

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

That was--