Evidence of meeting #3 for Industry, Science and Technology in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was million.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Paul Boothe  Senior Associate Deputy Minister, Department of Industry
Richard Dicerni  Deputy Minister, Department of Industry
Kelly Gillis  Chief Financial Officer, Comptrollership and Administration Sector, Department of Industry

10:30 a.m.

Deputy Minister, Department of Industry

Richard Dicerni

There are three points. First, I think it's fair to say that the government has over the years taken a number of steps in support of competition, with a view towards enhancing options that consumers have and having a positive impact on price. This goes back to the forbearance decision. It goes back to the direction to the CRTC. It goes back to Mr. Prentice doing a set-aside for new market entrants in terms of spectrum option. There have been a number of decisions made by a number of ministers that I think have been consistent.

Secondly, you mentioned Globalive. It is important to note that each of those decisions is made on an individual basis within that broad framework. When the minister released his Government of Canada decision on this in December, I think it set out the rationale.

Thirdly, the telecom sector, as you say, is a very important one. We are quite cognizant of that. I would refer to the comments made by the minister earlier that there will be consultations with Canadians on this very important matter before any decisions are made.

10:30 a.m.

Liberal

Dan McTeague Liberal Pickering—Scarborough East, ON

Thank you, Mr. Dicerni.

You're giving advice to the minister on this extremely important file. My perspective, as someone who has followed combinations and concentration in a number of other sectors where there has been the promise of a boon to consumers, has in fact been the reverse. I need not mention the oil industry; I won't do that.

What I want to talk to you about, however, is the possibility that, given the lack of competition that currently exists, which gives rise ostensibly to the decision with respect to Globalive, many of these companies could very well find themselves in a combination of Bell merging with Telus, or Rogers merging with Vidéotron, sufficient to be bite-sized for one company to come in and buy them all up. Recognizing the shortcomings of our Competition Act, which I am only too familiar with, as you know, what gives you the assurance and how are you going to assure the minister that we will only see competition in major centres across Canada while the rest of the country be damned?

This is a scenario that I think many of us are concerned about. Have you thought about these things? Are these issues that you've raised with the minister? We certainly have apprehensions about this. It is being sold as a boon to consumers, but in fact it may very well turn out to be the reverse, without new entrants having the ability to get into the market with below-cost strategies and a number of others that are accepted under the Competition Act but are not accepted in other jurisdictions, in the United States and in Europe.

10:35 a.m.

Deputy Minister, Department of Industry

Richard Dicerni

As the minister did mention, this technological economic space is a very complex one. If you look at where it was five years ago and where it will be five years from now, it does require thoughtful analysis to think through what impact it will have in terms of consumers, the impact it will have on companies, the impact it will have on products coming into the marketplace, and so forth.

Obviously we will provide at the right time advice to the minister, and it will be up to him to determine whether he accepts it and then decides to share it with his colleagues. But this is a complex area.

10:35 a.m.

Conservative

The Chair Conservative Michael Chong

Thank you, Mr. Dicerni, and thank you, Mr. McTeague.

Mr. Brown.

March 18th, 2010 / 10:35 a.m.

Conservative

Gord Brown Conservative Leeds—Grenville, ON

Thank you very much, Mr. Chairman, and thank you to our witnesses.

About a year ago at this time, all we really heard about was the situation with the auto industry. Can we get a little bit of an update on how that has been going, the progress that has been made, and maybe hear a little bit about the loans that were made to these companies? I think this was something the government was doing that many Canadians were concerned about. I'll turn it over and you can let us know where we're at.

10:35 a.m.

Deputy Minister, Department of Industry

Richard Dicerni

My colleague Paul, who was the lead person on the auto file, is quite up to date on this.

10:35 a.m.

Senior Associate Deputy Minister, Department of Industry

Paul Boothe

I guess the first thing to say is that the goal that the Prime Minister and the ministers talked about was to prevent a disorderly collapse of the sector. I think it's fair to say that we have weathered the storm in that respect.

This sector is smaller. We think it will probably shake out ultimately at about two-thirds of its pre-crisis size, but we're hoping it will still be strong.

10:35 a.m.

Conservative

Gord Brown Conservative Leeds—Grenville, ON

How many jobs do you think that is going to mean?

10:35 a.m.

Senior Associate Deputy Minister, Department of Industry

Paul Boothe

Of course, it's impossible to measure precisely, but when we think about it internally, we think about the auto sector as comprising, directly and indirectly, probably upwards of 500,000 jobs in Canada. People usually talk about the auto sector as being concentrated in Ontario, and that's right, but really, when you include dealerships, it goes right across the country, and it's very important for small communities in Alberta, my home, and elsewhere, not just Ontario.

As for the two companies that we contributed to the restructuring of, along with our U.S. and Ontario partners, basically our contribution in the case of Chrysler was up to about $3.75 billion. Not all of that has been drawn down. They have not drawn down all of that, and they may not, so they've used less support than we actually made available.

In terms of General Motors, in U.S. dollars, our support was about $9.5 billion. That was all drawn down, but some of it has already begun to be repaid. The company has stated publicly that they're looking to completely repay the loan portion by this summer. Now, there's still investment in equity, of course, but I think it's safe to say that our initial goal, which was to prevent the collapse of the whole sector, has been accomplished, and we are starting to see some repayment of our loans.

We monitor very closely the two companies that the government invested in. We meet with them monthly. I met with Mr. Marchionne, the head of Chrysler, two days ago in Detroit. I think it's fair to say that the dealers.... Earlier this week, I attended a large conference in Detroit with parts manufacturers from both sides of the border. The mood is certainly improving. It got a very big turnout, with over 500 different parts manufacturers attending.

The other thing that's encouraging is that sales in North America are coming back. Canada's sales are pretty strong now, but the U.S. is starting to come back. I visited the Chrysler minivan plant in Windsor, and they are well on their way to implementing the Fiat world-class manufacturing system. I talked not just to the management, but also to workers in the plant, and they're very positive. I think that's pretty encouraging to us.

Just as some indicators, for example, Chrysler minivan now has 85% of the minivan sales in Canada, so it's very strong. They also have some new models coming out. The Jeep Grand Cherokee will be out in the spring, in the first indication of their renewal.

GM has been rolling out new models kind of continuously. As for the models that are constructed in Canada, for example, like the Equinox and Traverse constructed at the CAMI plant, the production in Oshawa, they are among the strongest sellers for GM in North America.

There's still a lot of restructuring to do, but so far, so good. I have to say that I'm pretty encouraged about this. One of the things Mr. Marchionne said in his speech to the parts manufacturers a couple of nights ago was that he was bound to pay the governments back and return himself to a full private sector company.

10:40 a.m.

Conservative

The Chair Conservative Michael Chong

Thank you very much, Mr. Boothe.

10:40 a.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Mr. Chair, can we have a clarification?

10:40 a.m.

Conservative

The Chair Conservative Michael Chong

Yes, quickly.

10:40 a.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Mr. Boothe, you said it was $9.5 billion for General Motors and $3.75 billion for Chrysler. Was that just from the federal government, or was that a combination?

10:40 a.m.

Senior Associate Deputy Minister, Department of Industry

Paul Boothe

That was a combination of the Canadian government's two thirds and Ontario's one third.

10:40 a.m.

Conservative

The Chair Conservative Michael Chong

Thank you very much.

Monsieur Bouchard.

10:40 a.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Thank you, Mr. Chair.

My question is for Mr. Dicerni. I have looked at the budget allocated to Canada Economic Development for Quebec Regions and the Atlantic Canada Opportunities Agency. I didn't see much difference between the budget figures for the two agencies.

I find that surprising because there is a big population difference between the Atlantic provinces and Quebec. I would have expected to see a much bigger difference between the budgets allocated. On what basis are budgets allocated to an agency like the ones I mentioned?

10:40 a.m.

Deputy Minister, Department of Industry

Richard Dicerni

First, the Department does not have a lot to say about or to do with defining the budget envelopes for these regional development agencies. So I suggest that you raise the subject with the other ministers and deputy ministers, or with the Minister of Finance. Industry Canada is responsible for the Federal Economic Development Initiative in Northern Ontario, or FedNor, and the Federal Economic Development Agency for Southern Ontario, or FedDev Ontario. The rest is not within our authority.

10:45 a.m.

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Thank you.

My colleague will ask the next question.

10:45 a.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

Regarding grants and contributions over the fiscal year that is just ending, transfers were made, we can see that, but it is not always easy to get an overall picture of it all. Grants and contributions were probably added, and others eliminated. Overall, was there a decrease in grants and contributions over the last fiscal year?

10:45 a.m.

Deputy Minister, Department of Industry

10:45 a.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

What about the use of the funds?

10:45 a.m.

Deputy Minister, Department of Industry

Richard Dicerni

No, I don't think so. The large amounts of money in the Department's budget are connected with the program that was announced in the budget last year, which relates to knowledge infrastructures. A lot of investments are being made in the cégeps, in Quebec, and in universities. We still have those envelopes. There is still support for the aviation industry.

10:45 a.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

For example, we see the Canadian Textiles Program, or CANtex. We can see that the Main Estimates for the year were $4,513,000 and there seems to have been nothing. Does that mean that this program has been complete used?

10:45 a.m.

Deputy Minister, Department of Industry

Richard Dicerni

I will note your question about that program and I will answer in writing.

10:45 a.m.

Bloc

Serge Cardin Bloc Sherbrooke, QC

In the Main Estimates for 2010-2011, there is nothing. Some people told me there had probably been something that was for substantially the same objectives and that might be in another category for 2010-2011.

Have all programs for the apparel and textile manufacturing industry been abandoned? Is there nothing left?