Industry Committee on March 18th, 2010

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

There are a lot of examples that speak to the fact that we are supporting the forestry sector. For example, we have committed ourselves to providing a billion dollars under the Pulp and Paper Green Transformation Program, to help guarantee a greener and more sustainable future for the industry. Pulp and paper plants in Canada are in fact eligible for funding to invest in green technologies that can improve environmental performance, for example. There are other things in the 2009 budget to support the sector, to open more markets, and also to develop new products. We are supporting this industry as we are doing for the others.

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

It's all very well to propose measures, but what you are telling me doesn't create jobs: companies are still closing down, jobs are still being lost.

I will come back to my question. You talked about forestry. I wasn't looking for an answer dealing solely with forestry. I wanted to talk about the manufacturing sector. There were 11,000 jobs lost in Quebec in February. I am telling you it is urgent to propose a research and development credit refund, rather refundable credits. This measure would help the manufacturing sector. At present there are non-refundable credits. If you make them refundable, for research and development, that would really help the manufacturing sector.

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

Certainly we have other views. Nonetheless, I can say in terms of support for innovation and research, for example, we are supporting the companies operating in those areas. In terms of the other things we have done,

As I said, I think reducing the manufacturing tariff down to zero is going to be very important for this sector in the future, and in terms of the Business Development Bank, for these smaller enterprises, the support we're providing for advancing credit and assistance with startups will be helpful, not only in information and communications technology but also in manufacturing.

When we look at it from its totality, you and I may disagree on the specifics. You have some different ideas than we do. But it's not true to say that you're proposing something and we're doing nothing. We're doing some things that you disagree with—that's fair—but we are doing things and we believe they're making a difference.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Bouchard.

Thank you, Mr. Minister.

Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

And thank you, Mr. Minister.

In your opening statements you mentioned targeted investments to attract capital, boost innovation, and position us for the economy of tomorrow. I'm interested in hearing a bit more about these initiatives.

In the area of competitiveness, commentators from around the world have commented that Canada is going to come out of this in one of the most competitive positions among industrialized countries. I think it was the World Economic Forum that said Canada will be one of two industrialized countries to come out of the recession in a more competitive position than when we went in.

Some have described our Budget 2010 as an industry-innovation budget. Could you outline what measures in the budget promote innovation and place Canada in that better position to succeed in a competitive global marketplace?

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

Thank you for the question. I think it has been identified worldwide that Canada is leading the G7, for instance, with our support for higher education, R and D. Certainly as a percentage of our economy, that is the case. We're not standing pat; as a government we're making other investments as well, in world-class research and researchers.

I mentioned the granting councils getting an extra $32 million in Budget 2010. There's the new $45 million Canada post-doc fellowship program. That is a multi-year program--$45 million over five years. That wasn't just a eureka moment for this budget. This builds on previous investments in Budgets 2006, 2007, 2008, where we had an additional $2.2 billion in funding for science and technology. The big bang was Budget 2009. When you added it all up, it was about $5.1 billion in investments, either in capital or people or commercialization projects.

I can talk about Genome Canada. I can talk about RADARSAT for the Canadian Space Agency. I can talk about our investments in medical isotopes and technology clusters. All of these are being invested in right now, and they'll make a big difference in terms of our innovation and competitiveness for the future.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I had the opportunity at the end of June last year to attend a conference in Ottawa on the digital economy. It was one of the most fascinating things I've done in the four years that I've been a member of Parliament. It was fantastic to see all those people come together to talk about Canada's role in an area that is increasingly growing stronger.

I know we referenced the digital economy in the budget and the Speech from the Throne. I'm wondering how the government plans to continue to engage stakeholders in making sure it addresses their needs as we move forward.

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

We'll be launching a discussion paper very shortly that will go to the country. In fact we are doing some things already. There is the 100% capital cost allowance rate for computer hardware and system software. Of course we continue to support the National Research Council's IRAP program--an extra $200 million over two years. So these things are happening.

The fact is, and let me stress this point from my opening remarks, government is doing its bit, academia is doing its bit, but the problem is business in this country. Business is not adopting innovation to the extent of our competitors and our trading partners. That's a problem.

We want to be part of the solution as a government. I've talked to many university presidents and their organizations; they want to be part of the solution. We are starting to engage big business, small business, medium-sized business to see what we have to do to increase adoption.

One of the cores of the digital economy strategy is to have better adoption of ICT. It also requires us to be the best in the world. That's a stretch target, but a good target when it comes to other aspects of the digital economy. Making businesses and people feel comfortable online--doing their business online, their civic life online, make an economy more competitive, and that's what we'll be shooting for.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I want to change direction a bit to the area of foreign investment. We've talked a lot about opening up Canada to more foreign investment in the telecommunications sector. Many sectors are already open and seeing the benefits of increased investment. I wonder if you could talk a bit about the successes in this area, both current and maybe future successes.

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

The fact of the matter is that all the studies are in, and independent of government studies, they indicate that keeping our economy open so that Canadian companies can partner with foreign capital--or foreign management, in some cases--makes our economy more competitive, gives consumers lower prices, and allows our companies to invest overseas. This is the part that people sometimes forget: keeping an open economy means that other economies have to be open to us as well.

Our Canadian companies are champions at investing overseas. They are creating jobs at home, but they're creating new markets for themselves overseas as well. It's a net plus when you look at companies like Bombardier, SNC-Lavalin, RIM, or Open Text. These are world-beaters. They are taking on the world and bringing new markets to themselves and therefore to Canada. When we have foreign investment here, it's a net plus for us, when done properly and by the rules; it means that new jobs and new opportunities can occur for Canadians.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I talked a little bit about some of these organizations. I talked about Canada leading the way out in competitiveness. One particularly interesting quote I remember coming out of the meeting of the G7 finance ministers was from Christine Lagarde, France's finance minister, who said, “I think we can be inspired by the Canadian situation”, and there were some people who said they wanted to be Canadian coming out of that meeting of the finance ministers. I found that to be an interesting quote.

How did we get here? Obviously we're in a period of global recession right now, but what steps were taken before the recession that you would credit with putting us in that competitive situation as we move forward?

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

I think it's important to build the context, as you are doing, and the context is that our financial regulation is the best in the world and is now seen as a model for financial institutions. We are becoming perhaps a place where financial institutions want to do business and house themselves. That's an interesting trend that we'll be following very closely.

I think it's our low tax regime here. We're not trying to overtax Canadians or Canadian businesses. We want them to be tax-competitive. That's a crucial comparative advantage that we face. It's the fact that we are the best in the G8 as a percentage of our economy in terms of public sector investment in R and D. That's a good thing. As I said, there are some challenges with innovation adoption, but overall it's a good thing for our economy, and it's working.

[The Chair, Conservative, Michael Chong]

Thank you very much, Minister.

We'll now go to Mr. Gravelle.

[Claude Gravelle, NDP, Nickel Belt, ON]

Thank you, Mr. Chair.

Mr. Minister, I'd like to turn your attention to FedNor. On this issue, you and I have different views.

On one hand, you are more than happy to proclaim the benefits of the Atlantic Canada Opportunities Agency or Western Economic Diversification Canada or Canada Economic Development for Quebec Regions or the southern Ontario development agency.

On the other hand, your favourite pat answers to northerners' requests to have our own stand-alone agency is that we don't need more bureaucracy. Which is it? Usually what's good for the goose is good for the gander, so when will you give northerners their own stand-alone economic development agency?

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

Thank you, Mr. Gravelle. Of course, the NDP has been...to be charitable, may have been very consistent on this message.

To me, northern Ontarians are neighbours. They are my communities, your communities. They don't care whether it's a stand-alone agency or it's a division of this or that, or whether it's a director or a captain, or whether we call the executive director of FedNor the Queen of Sheba. It doesn't matter. That isn't what matters.

What matters is that we're delivering high-quality services in partnership with communities and with businesses. That's what matters to northern Ontarians. That's what FedNor does. Its mandate shifts over time, depending upon the economic situation. It's shifting again as we're focusing on job development, job growth, and transformation of the economy in certain northern towns and cities. That's its focus right now.

It has the ability to do that because we're nimble. It's not in a straitjacket of legislation that says this is all it's going to do. We have broad terms and conditions and we allow FedNor to shift and tack with the economic exigencies at the time. I think that's what northerners really care about.

We keep having this debate year after year. Every year that we have a budget, the NDP comes back and says, "Why don't we have a stand-alone agency?" The Liberals do it too. The fact of the matter is that no one really cares about that debate. It's a sterile debate because it's not really speaking to what northerners need. They need a partner in the federal government to deliver jobs and opportunity in a way that is collaborative and effective, and that's what FedNor does and should do.

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Minister, with all due respect, if the people from northern Ontario didn't care about this issue, I wouldn't be here today asking this question. I'm asking the question because people from northern Ontario would like to make decisions about what affects northern Ontario. That way we could get a lot of projects started much faster. If it's good enough for the other regions, it should be good enough for northern Ontario.

My next question is on telecom. Minister, you talked about changes to allow for greater foreign investment in Canada, including in the area of telecom. I have significant issues with relaxing further rules around foreign investment in Canada. In northern Ontario, foreign ownership has actually resulted in foreign companies breaking their contracts with the federal government, laying off hundreds of workers, and trying to break unions by their attacks on bonuses and pensions. You've done absolutely nothing to stop them. Are you going to hold them to their contractual obligations with the Government of Canada?

With respect to the telecom industry, will you conduct an open, transparent process akin to your process for copyright, or will you sneak it into next year's budget like you did with the previous changes to Investment Canada?

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

Thank you for your additions to this debate. I obviously and clearly disagree with your characterization of how we have managed foreign investment in this country since achieving power in 2006.

Let me talk directly to your question on telecommunications. Certainly, it's my intention to have a consultation with the public and with the industry about how to move forward with liberalizing telecommunications investment, allowing telecommunications companies to access foreign investment, if they so choose, or allowing for at least the possibility of Canadian and foreign companies collaborating more closely. Of course, the goal is presumably something the NDP would support, which is better choices for consumers and lower prices. If we're going to have an innovative economy, we cannot have high prices for telecom products. We need lower prices for telecom products, better choice, and more competition. These are good things for an economy to have.

It is bad when an economy doesn't have competition. When an economy is closed rather than open, when it is not open to new ideas and new capital, that's bad for an economy. It actually costs jobs; it doesn't create jobs. So I'm hoping the NDP will look beyond its ideological blinkers and will actually participate with an open mind on this process.

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Minister, we're not against foreign investment and we're not against competitive prices, but we are against foreign companies coming into Canada, taking over our Canadian companies, and trying to implement their third world ideologies on our workers. It's no good for Canada, and it's no good, especially, in my community of Sudbury. It's no good for Port Colborne or Voisey Bay. Is this the same type of reaction we're going to have from these foreign companies that take over our telecommunications companies? Are they going to have the same attitude as these two companies, Xstrata and Vale Inco?

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

I guess I would respectfully disagree with your own self-characterization. The NDP was the party that introduced in Parliament a “made in Canada” bill, which would have created responses by other countries we had signed treaties with to close off their own markets to Canadian products. So the protectionism offered by the NDP would actually have cost jobs and markets. It's like the nickel sector. No one in the world believes that if we close off markets to our nickel, Canadians can buy enough nickel to support what is mined in Sudbury. We have to trade with the world.

That's something you say rhetorically you agree with, but your actions in Parliament are very different.

[Claude Gravelle, NDP, Nickel Belt, ON]

The nickel produced in Sudbury is not produced anywhere else in the world. The quality of nickel is only produced in Sudbury--

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

I agree.

[Claude Gravelle, NDP, Nickel Belt, ON]

--so the foreign countries can't go to Japan to get nickel, because the only nickel they want is in Sudbury. What you're saying doesn't work.

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

No, but your actions actually belie your words.

[The Chair, Conservative, Michael Chong]

Okay, thank you very much, Mr. Gravelle.

Thank you very much, Minister.

We'll now go to Mr. Rota.

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

Thank you, Mr. Chair.

Thank you, Mr. Minister, for coming out.

I hadn't planned on talking on FedNor, but Mr. Gravelle brought it up.

I just want to comment on the response that you gave him about what northern Ontario needs. It really enforced the stereotype and paternalism that Torontonians have towards northern Ontario. I just want to say that I don't appreciate it.

The other thing is that in some of your other comments, where you attributed our economic success to 13 strong years of Liberal rule prior to the Conservatives taking over...I just want to thank you for that.

I'll give you some bad, but I'll give you some good as well.