Industry Committee on May 8th, 2012

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

One thing we hear at this committee from time to time is that we do a great job of research in this country, and you have elaborated quite extensively on that. There have been challenges over decades now in commercializing that research. Could you speak to the measures we're taking to address that and increase the commercialization of some of the great ideas that Canadians have developed in their research?

[Gary Goodyear, Conservative, Cambridge, ON]

The initiatives we're taking speak again to what some of my colleagues here have mentioned in terms of opportunities for partnerships, wherein we want businesses to partner with our scientists, if you will. We want our scientists to understand business a bit better, so there's a cooperation and harmony between the two fronts.

On publishing, scientists—and frankly, professors at university—will tell you they are rewarded for publishing. In my view, publishing, while it's a great place to be, is like second base. It's not the home run. When the knowledge that is developed by the scientist, especially if it's funded by federal dollars in any way, is transferred out of the laboratory into something—a process, an application, a product, a different way of treating patients, etc.—that knowledge transfer completes the cycle.

In doing that, you have the medical isotopes that are necessary for the next-generation diseases, you have customized health care that can diagnose situations much faster, more accurately, and then, of course, treatment protocols that are more effective and less expensive.

[The Chair, Conservative, David Sweet]

Right. Thank you, Minister. I'm sorry—

[Gary Goodyear, Conservative, Cambridge, ON]

So the completion of the cycle is imperative.

Thank you, Mr. Chair.

[The Chair, Conservative, David Sweet]

Sorry to cut you off, Minister, it's just that we're over time there.

Now we go to Mr. Stewart for five minutes.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Thank you, Mr. Chair.

Good morning, Dr. Goodyear. It's a pleasure to speak with you this morning.

I just moved to this committee as the critic for science and tech. I think it's a real privilege to work on this file, as I'm sure you will agree.

I've just read through the Jenkins report, an impressive report. The first recommendation is to “Create an Industrial Research and Innovation Council...”. I'm just wondering where you are in terms of moving forward with that recommendation.

[Gary Goodyear, Conservative, Cambridge, ON]

Thank you, and again, that's the science and tech file.

With your permission, Mr. Chair, I'm happy to answer that.

Congratulations, by the way, on your appointment as critic. I think you will find this the most exciting file.

We obviously launched the Jenkins panel based on the fact that businesses were not spending as much as we needed them to on research and the development of that research, despite some very generous programs by the federal government. Mr. Jenkins spent a year with a panel of experts. It was a very comprehensive report. Congratulations for reading it.

The Prime Minister has been very clear, and I've been very clear: While we do subscribe to the diagnosis behind the report, we don't subscribe to all of the recommendations.

The first recommendation, combined with the fourth recommendation, in particular, would amount to significant changes to the National Research Council. My interpretation is that the recommendations add up to eliminating the National Research Council, which we are not prepared to do, simply in order then to build another government organization. We have said in recent months that we are making changes at the National Research Council. We have a new president on side. We are, in fact, changing the organization to do more industry-facing, demand-driven research. That is not to say that the basic research in the country will in any way be diminished. We have a very strong amount of investment going into basic research, from the most pure discovery, from isotopes to neutrons, all the way through to the Perimeter Institute and the Institute for Quantum Computing. All of this continues to be supported.

But when we look at the nation and realize that compared to our partners, our businesses are not using the incentives we have created for them to the degree that they could, changes are necessary. The opportunity to have the National Research Council, with all of its resources and bright minds and great history, really turn its energies into assisting businesses to become more innovative, more productive, more globally competitive to produce growth that results in better quality jobs for Canadians, higher paying jobs, that is the direction we're moving in.

I hope that answers your question.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Thanks.

I have slightly broader question, but still on the report. The focus of the Jenkins report is the link between innovation and productivity. That seems to be the key, with productivity really being the outcome variable that you're most interested in. I know it's important to increase productivity because, really, when we're compared to the U.S., it's been plummeting since the 1980s.

I'm wondering when you would expect your changes to turn around this productivity gap or to narrow it. How can we measure your progress, as a minister, really?

[Gary Goodyear, Conservative, Cambridge, ON]

Of course, productivity, as you've mentioned quite correctly, is a decades-old problem. It is a very costly problem for Canadians and their families. There is a report that I've read—and the name of the report fails me right now, but I'd be happy to get you the report—that does in fact suggest that the productivity gap with the United States is a $110-billion loss to the nation. Clearly, we need to improve that.

It is my belief that, while it's not up to the federal government to improve productivity per se, it is up to it, and governments at all levels, to put in place the tools that are necessary, to create the environment that's necessary, to allow businesses on their own to become more productive through innovation.

We'll have to wait and see whether the productivity level of the nation turns around. I share your angst that it needs to do that, and sooner rather than later. We can only assume that the changes we're making are in that right direction, based on all of the experts I've spoken to.

Am I out of time?

[The Chair, Conservative, David Sweet]

There's 20 seconds left, Minister.

[Gary Goodyear, Conservative, Cambridge, ON]

The one thing I will suggest, as I try say when I speak to.... I believe it's up to all levels of government. It's the whole of government. It's all levels of academia, from kindergarten to beyond graduation. It's all sectors of our society that have to participate in recognizing that we can do better by adopting new technologies, by learning better ways of doing thing. The real competition isn't across the street or on the other side of town, the competition today is a mouse click away and it's in Japan, Brazil, and China. Our companies have to recognize that there is a great need and a change right now that go beyond the industrial revolution into the technological revolution. I believe that's where we are right now, and we have to be ready for it.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Thank you.

It's great to have you on board by the way.

[The Chair, Conservative, David Sweet]

Thank you very much, Minister Goodyear, and Dr. Archibald for your testimony, and thank you to the members for your questions.

We will suspend for a couple of minutes now to give Minister Valcourt the opportunity to get set. Then we'll go on to our second half.

[The Chair, Conservative, David Sweet]

Thank you very much, ladies and gentlemen. We're back now to our 29th meeting. We have before us Minister Bernard Valcourt.

Welcome, Minister. I believe this is the first time you've been before our committee.

We also have the president of the Atlantic Canada Opportunities Agency, Paul LeBlanc.

Minister, go ahead with opening remarks. As I said to Minister Goodyear, we usually leave 10 minutes, but we do give a little latitude to ministers.

[Bernard Valcourt, Conservative, Minister of State (Atlantic Canada Opportunities Agency) (La Francophonie)]

Thank you, Mr. Chair.

First of all, I would like to thank the committee for allowing me to appear today in response to the recent motion by the committee to discuss the main estimates for organizations and ministers responsible for regional development.

As you know—and you may have already heard this, job creation, economic growth and long-term prosperity are the absolute priority of our government. As Minister of State responsible for the Atlantic Canada Opportunities Agency, I often visit all the Atlantic regions and I meet with various stakeholders from all walks of life in the four provinces. I am therefore able to see for myself the concrete results we have obtained for the residents and communities of Atlantic Canada.

With your permission, Mr. Chairman, I will use this opportunity to talk about the exercise undertaken by ACOA in 2010 to ensure more value for taxpayers' money, which is reflected in the main estimates you are considering. I will also say a few words about the priorities we're working on to improve the economic outcomes in Atlantic Canada.

Let me start by stating that Atlantic Canadian families, workers, entrepreneurs and, for that matter, all Canadian taxpayers overwhelmingly agree that their hard-earned tax dollars should be spent wisely, but also, and more importantly, effectively. This is especially true at this time of the year when we have all just have filed our income tax returns. That is why ACOA undertook in 2010, along with 12 other departments, a review of its spending to identify ways it could reduce its spending by 5%. At the core of this process was the importance of maintaining the high level of service that we provide to our small and medium sized businesses, our communities, and other economic stakeholders in Atlantic Canada.

We focused on finding ways we could improve our effectiveness and efficiencies, while ensuring that our programming remained strongly funded and our clients well served. As a result, we were able to implement savings, mainly by rethinking the way we structure and deliver our services.

With the advice I receive from my officials—and, of course, also, from what I see on the ground in Atlantic Canada—I want to assure all members of the committee that the agency's ability to deliver on its legislative mandate from Parliament is as strong as ever. All of ACOA's programs remain solidly funded and the department maintains its strong presence in every region of Canada. The agency is also as active as ever in supporting key government priorities, such as innovation, job creation, and international trade.

Another priority for me, in particular, and the department over the past few months has been to promote our Atlantic shipbuilding action plan. As you all know, the $33-billion initiative to renew Canada's naval and coast guard fleets, with the largest package going to Irving Shipbuilding in Halifax, represents a once in a lifetime opportunity for our region. As minister of ACOA, I know the importance of making sure that our small and medium sized businesses in the four Atlantic provinces, in urban and rural communities alike, are able to capitalize on this opportunity by becoming suppliers in the marine industry value chain.

This is exactly what this action plan is about. ACOA is working closely with our SMEs to help them understand the opportunities and the requirements, such as certification, that this industry has for all its suppliers.

The first step in our Atlantic shipbuilding action plan was to hold supplier development information sessions, which we held in February, March, and April. We organized 10 of these throughout the region. They were a resounding success. We had more than 823 business people from nearly 513 unique SMEs across Atlantic Canada participate.

As that process evolves we will continue to ensure that our SMEs have all the information and support they need. We are also working with our partners to help identify needs and are conducting research and analysis to broaden our understanding of the global marine sector. An important one is skills development and training, which will also draw our attention in the near future as it constitutes another leg of the Atlantic shipbuilding action plan.

I would now like to briefly speak of the support we offer to rural communities. As you may know, this is part of other government priorities. After the north, Atlantic Canada is the most rural region of the country. Just as other regions in the country, rural communities in Atlantic Canada must establish a solid economic foundation to support their residents and to prosper.

During the coming year, ACOA will continue to work with businesses, communities, Atlantic provincial governments, and other partners to create local opportunities. It will continue to support resource industries and rural economies which depend upon it, by investing in activities that improve the forestry sector's competitiveness in the region, diversifying the agricultural sector, increasing the sustainability of fisheries and advancing the technology used for mining and energy.

In all—and this may interest the members of the committee—ACOA invests over $120 million every year in Canada's Atlantic rural regions. This amount represents over 52% of program expenditures. It is used to help SMEs as well as our communities to seize opportunities and meet challenges. This situation is specific to rural regions in Atlantic Canada.

I would also like to briefly touch upon another priority, which is skilled labour. I am convinced you will all agree with me that skilled labour is essential to build a modern and competitive economy. However, before we start importing the skills our businesses need, we must work in collaboration with our community colleges and universities so that they may offer the programs and training our citizens need to get hired as welders, food processors, engineers, financial analysts, human resources specialists, and so forth.

To this end, ACOA is participating in planning and research efforts with the governments of all the Atlantic provinces as well as working with the universities and community colleges. The goal is to address the issues, gaps and trends associated with the available workforce. This collaboration with our educational institutions will help us ensure that our young people can take courses and receive the necessary training to benefit from good employment opportunities and help meet our needs in terms of skilled labour.

Over the coming year as well as the next few ones, our government, through ACOA, will continue to help our small- and medium-sized businesses meet the challenges they encounter. Another of our priorities of course, is increasing international trade. ACOA continues to work with its partners to help Canadian businesses penetrate key international markets such as the European Union, India, China, and of course, Latin America. In 2011 alone, our government helped over 600 businesses and organizations from Atlantic Canada to participate in activities which helped them penetrate international markets or increase their presence there.

As to the primary and traditional sectors, they have not been abandoned. Our government is also helping them increase their productivity and their competitiveness, all the while encouraging the growth of new strategic sectors such as aerospace and defence, life sciences, ocean technologies, information technologies, communications and energy.

We must ensure that our communities continue to diversify and expand. Our businesses must be innovative, productive and competitive. I think we all agree on these pre-existing conditions for our businesses in the Atlantic regions. Of course, we must, as I'm certain Minister Goodyear said before me, focus on research and development, marketing as well as the diversification and competitiveness of our resource and traditional industries. We must continue to promote new promising initiatives, including clean and renewable sources of energy. We have made remarkable progress in Atlantic Canada in that respect.

Furthermore, the Canadian government has committed itself to guaranteeing a loan for the Muskrat Falls project, which represents a clear and tangible commitment to work with other partners to develop renewable energy projects that will allow us to reduce greenhouse gas emissions and create opportunities that will be beneficial for Atlantic Canada's residents, if not all North Americans, for generations to come.

To do so, we are determined to collaborate with our numerous partners, including of course provincial governments, to help our communities invest in the necessary economic infrastructure to attract investments, create jobs and strengthen Atlantic Canada's communities.

Let me conclude, Mr. Chairman, by telling you how convinced I am, being born and bred in Atlantic Canada, that we have an abundance of creativity, leadership, and ingenuity. There's no lack of innovative ideas and talent.

Moving forward, ACOA will continue to identify opportunities for Atlantic Canada's economic advancement and provide efficient and effective programs and services that are aligned with our government's focus on operations and deliver strong and positive results to the people of Atlantic Canada and all Canadians.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you very much, Minister Valcourt.

We'll now begin with seven-minute rounds.

We'll start with Mr. Richardson for seven minutes.

[Lee Richardson, Conservative, Calgary Centre, AB]

Thank you, Mr. Chairman.

Welcome, Mr. Minister. It's a pleasure to have you with us

Being from Alberta, I'm a long way from Atlantic Canada, but I think that Atlantic Canadians are as aware as we are that the energy sector in Alberta has created wealth and economic opportunity across Canada. We're also aware that the exploration of offshore oil and gas in Newfoundland and Labrador and the development of Muskrat Falls are contributing enormously to the potential and opportunities for job creation in Atlantic Canada.

Could you expand a little for the committee on the energy gateway and how this will create jobs and wealth everywhere in the region?

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

Permit me to refer back to about 18 years ago, when I was a minister in a previous government. In those days, when we looked at the potential of Hibernia, there were a lot of naysayers around about the prospect of developing the oil and gas sector in Atlantic Canada, especially in Newfoundland and Labrador.

If you look back almost 20 years later you will see how vindicated we have been about those prospects, because we now have an oil and gas sector and energy sector that has developed and is developing a lot of potential, but what was maybe missing then was the four provinces pulling together and looking at the prospects of economic opportunities and development in the future, with an eye to Atlantic Canada.

ACOA has been instrumental in creating this energy gateway, where you have all four provinces working towards shared goals. ACOA is leading this initiative, which is bringing results, as we have seen. The accord between Newfoundland and Labrador and Nova Scotia, for example, to see the execution of the Muskrat Falls project is, I believe, a result of the good work of the energy gateway.

It creates other opportunities because these supply chains, once established…. In order to partake in them you have to elevate your skills, your competence as small or medium sized businesses. You have to be competitive and adopt new technologies. It creates great potential, which I think will continue for decades to come in Atlantic Canada.

As a matter of fact, in budget 2012, the Coasting Trade Act, which was preventing seismic activity over the North Atlantic, is going to be amended to allow for more exploration in the Atlantic, and thus yield, we hope, better results and other development possibilities of fields that can be exploited.

[Lee Richardson, Conservative, Calgary Centre, AB]

Thank you.

[The Chair, Conservative, David Sweet]

That's all, Mr. Richardson.

We'll move on to Mr. Cleary for seven minutes.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Thank you, Mr. Chair.

Thank you to the minister. And welcome, Mr. LeBlanc.

I'm here as the critic for ACOA.

My questions have to do with long-time Conservatives being appointed to high-profile jobs with Atlantic development agencies like ACOA. They've been well documented in the media. I'm sure you've seen the media reports.

At last count, the Conservatives had hired at least 10 people with links to the party for those agencies since coming to power in 2006. It has been reported that the Public Service Commission of Canada is investigating possible connections between the Conservative government and appointments to ACOA.

My first question has to do specifically with Kevin MacAdam. For those who don't know, he is a failed Conservative candidate and a former staffer to Nova Scotia cabinet minister Peter McKay. On Christmas Eve 2010, MacAdam was appointed to the job of director general of regional operations with ACOA in Prince Edward Island. The job pays between $115,000 and $135,000 a year. Quite the Christmas gift, I guess you could say. The Public Service Commission is still investigating, or that's what I understand. We'll see where that goes.

MacAdam took the ACOA job in February 2011, but from what I understand he has yet to report to work. He immediately took leave to study French here in Ottawa for two years.

My first question specifically is this. Why isn't MacAdam taking French language training in Charlottetown, when it's offered there? There are at least three French language training schools in Prince Edward Island. How come he's not studying there?

[Bernard Valcourt, Conservative, Madawaska—Restigouche, NB]

Well, the hiring of Mr. MacAdam, from what I understand, is pursuant to a competition that took place and that was well in accordance with the requirements of the Public Service Employment Act.

As for the training issue, I am not privy to what the conditions are that determine where you are to take your training in one language or the other. Maybe my president can help me in that regard, but that I can't answer.

[Paul LeBlanc, President, Atlantic Canada Opportunities Agency]

Mr. MacAdam competed in a competition that was open to all Canadians right across the country.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

I didn't ask that, though.

[Paul LeBlanc]

He competed. He won the job. There were a few other candidates but he was clearly the winner.

The language requirements and regulations around the job were such that he was able to compete as a unilingual candidate, and that's because of the history of staffing in P.E.I. So he was found qualified for the job and he was entitled to full-time official language training. At the time that he competed, Mr. MacAdam was a resident of Ottawa and he asked if he could avail himself of the language training at his current residence in Ottawa, and then assume the job in Charlottetown once he had met the education requirements. That was all deemed to be completely in line with the guidelines and the rules, so he was accorded that flexibility and he is in full-time language training in the Ottawa area now.