Industry Committee on Nov. 29th, 2012

[Geoff Regan, Liberal, Halifax West, NS]

But let's talk about your department, if you don't mind, okay?

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

Yes.

[Geoff Regan, Liberal, Halifax West, NS]

You have the agency of ACOA, which is an important agency in Atlantic Canada. We've seen the cuts to ACOA, to the Department of National Defence, and to the Department of Fisheries and Oceans. We have seen the EI program changes decimating the region. We have seen search and rescue cuts.

In relation to this shrinking of your agency, is it the government's intent to keep bleeding ACOA until it doesn't make sense to have it anymore?

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

If you look at the core funding of the main programs of ACOA, they have been relatively stable since 2006.

You are using the fact that, according to the economic action plan—for example, the community adjustment fund, which is a temporary sunsetting program, the Recreational Infrastructure Canada program—these account for $71 million. These are sunset programs—

[Geoff Regan, Liberal, Halifax West, NS]

I'm just looking at your numbers here.

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

Yes, these are the numbers.

[Geoff Regan, Liberal, Halifax West, NS]

They show it going down, and down, and down.

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

I'm trying to explain to you, but you will not accept “yes” as an answer. Yes, there was a cut: $71 million for sunsetting programs. If you are arguing that we should keep these temporary programs on a permanent basis, make the case.

[Geoff Regan, Liberal, Halifax West, NS]

The point is—

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

But don't say that we're cutting at the core funding of ACOA, because we're not. They're very tiny reductions.

[Geoff Regan, Liberal, Halifax West, NS]

Minister, the point is that you are doing less and less, and in the meantime you're cutting thousands of jobs in Atlantic Canada. Your government is doing that. It doesn't seem to me that anyone is speaking up for the region at the table.

Let me ask about another issue, because you said that ACOA plays of course a central role, a crucial role. in ensuring a strong economy in the region. I wonder if you agree with some of your colleagues in the Senate who think that part of the solution to these issues is maritime union.

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

I think part of the solution is the provinces working together better, which we are doing. Just look at the energy sector, for example. Last September, all four Atlantic energy ministers, along with Minister Oliver and me, disclosed the results of the study that promotes better cooperation among provinces, which would yield great economic benefits for Atlantic Canadians.

There are other sectors. We have the energy gateway that is proving to be a productive look at the agreement between Nova Scotia and Newfoundland and Labrador for the Muskrat Falls project. That is cooperation. Atlantic premiers and ministers at the provincial level are all indicating this desire to cooperate.

[Geoff Regan, Liberal, Halifax West, NS]

I think that's a “no” to Senator Duffy's idea.

[The Chair, Conservative, David Sweet]

Thank you, gentlemen.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much.

[The Chair, Conservative, David Sweet]

That's all the time in that round.

I want to thank you very much, Minister Paradis and Minister Valcourt.

We will need to suspend between ministers. That's all the time we have.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

If I may, I just have a very quick question...?

[The Chair, Conservative, David Sweet]

There is no agreement, Madam LeBlanc. If there were, then I would....

We will need to suspend for three minutes. That will allow the ministers to leave and to have Minister Goodyear come forward.

[The Chair, Conservative, David Sweet]

Ladies and gentlemen, we're back in order now.

Before us we have the Honourable Gary Goodyear, Minister of State, Science and Technology and the Federal Economic Development Agency for Southern Ontario. With him are Bruce Archibald, the president of the Federal Economic Development Agency for Southern Ontario, and Robert Dunlop, assistant deputy minister, science and innovation sector.

Minister Goodyear, please go ahead with your opening remarks.

[Gary Goodyear, Conservative, Minister of State (Science and Technology) (Federal Economic Development Agency for Southern Ontario)]

Thank you very much, Chair.

Good morning, ladies, gentlemen, and colleagues. I want to thank all of you for this great opportunity to be here this morning. It is indeed an opportunity to speak to you, exchange various ideas, and answer some questions from the committee members.

As you know, my honourable colleague, Minister Paradis, has touched on how this government has supported Canada's capacity in science, technology, and innovation to build a knowledge-based, globally competitive economy. I would like to expand a little on his remarks. Given that my portfolio also includes the Federal Economic Development Agency for Southern Ontario, I will address some of its programs, in addition to speaking about our government's overall efforts on the science and tech file.

Since we introduced our science and strategy in 2007, we have worked to leverage the benefits of S and T and innovation. We have strengthened federal support for advanced research in numerous ways through the three granting councils. We have also introduced the Vanier Canada graduate scholarships, the Banting postdoctoral fellowships, and the Canada Excellence Research Chairs program in order to attract and retain world-leading research talent.

These organizations and programs, along with others like the Canada Foundation for Innovation—or CFI—and Genome Canada, have received significant federal investments to support their research mandates. Indeed, this year alone, we announced an additional $500 million over five years to CFI through the economic action plan 2012.

We also preserved and protected funding for the federal granting councils' core programs aimed at supporting basic research and for student scholarship programs. According to the Organization for Economic Cooperation and Development, the OECD, Canada continues to lead the G-7 in higher-education expenditures on research and development expressed as a percentage of our GDP.

Beyond the dollar figure, though, we know these investments are paying off. In fact, last month, the Council of Canadian Academies—or CCA—published a report on the state of Canadian S and T. They came to the conclusion that Canada's research domain is healthy and growing, internationally competitive, and well respected among the world's leading scientists. It included this key finding: among authors of the world's top-cited scientific papers, Canada's research enterprise was ranked fourth overall, behind only the United States, the United Kingdom, and Germany.

Canada is clearly punching well above its weight in its production of scientific papers overall and those referenced by global researchers. This speaks not only to Canada's productivity in science, but also to our reliability as a source of sound knowledge. Discovery-driven basic research remains essential to our government's approach, but we also believe in the transformative potential of science in the marketplace and the need to improve business expenditures on research and development.

Last year's Jenkins panel report—which you're all familiar with—on federal support for R and D in the private sector outlined challenges and made a number of recommendations. Our government is acting on several of them through measures already announced in this year's economic action plan.

For example, we are doubling the size of one of our most successful initiatives, the industrial research assistance program—or IRAP—to significantly enhance support for R and D performed by small and medium-sized companies. We also announced $67 million to help the NRC in its efforts to refocus on industry-relevant research.

Our government remains committed to making investments in basic science as well. We are also working to promote innovation and the commercialization of ideas. One does not have to come at the expense of the other. We know that Canada can become an international leader in both basic and applied research.

As the minster responsible for the Federal Economic Development Agency for Southern Ontario—or FedDev—I can tell you about the initiatives that are having a very positive effect throughout that region as well.

Ontario's economy continues to improve, as is shown by pre-recession employment and GDP levels. To date, FedDev Ontario has directly committed nearly $1.1 billion through core program funding, as well as through other government programs in the region. However, there is still work to be done. Ontario's private sector research and development levels are lower than in many other advanced economies, and commercialization output is not where it needs to be, which is consistent with national trends.

Now, we know the key to innovation and economic growth lies in creating partnerships. They involve small and medium-sized businesses and post-secondary institutions that have vast resources in terms of research capacity, equipment, and talent, so we developed the applied research and commercialization initiative, where we have devoted significant effort to establishing partnerships between post-secondary institutions and the private sector.

The research and testing capacity that 24 participating colleges and universities offer is now helping more than 540 businesses across southern Ontario to develop new products and expand existing market opportunities. This is an enormous success.

We are also addressing challenges that small businesses face in southern Ontario in regard to access to risk capital for new ventures. Through our investing in business innovation initiative, $117.9 million has been leveraged in private sector investments to help start-up businesses in their critical early stages. The number of angel and venture capital investors in the region as a result of this program has risen from 250 to 650. This is another enormous success.

In fact, I'd like to give you an example. With a contribution of approximately $755,000 through this initiative, Wave Accounting Incorporated, a Toronto company that developed online accounting software for small businesses, was able to leverage $1.5 million more from angel investment. It created 46 new jobs, more than four times what we thought they would do. Further, the company has raised an additional $17 million since our first round of funding. It has more than 250,000 small business clients around the world now and is projected to continue strong growth going forward.

Through our prosperity initiative, we are making strategic investments to develop economic growth areas for southern Ontario. These include high-speed computing, advanced material manufacturing, digital media, food processing, and green construction, among others. Through some of our funded projects, post-secondary institutions—again—are working with small businesses to bring to market innovative products and processes that will help put southern Ontario on the map as a place for business in these high-growth sectors.

For example, we recently invested $20 million in the University of Toronto to form a collaborative research innovation platform. This has now brought together a consortium of seven other universities and a lead industrial partner, namely, IBM Canada. The investment is helping develop a high-speed, high-performance cloud computing infrastructure. This will assist researchers and businesses to develop products and services that require the ability to analyze large amounts of data, often referred to by the scientific community as “big data”.

I can tell you that we now have the most powerful computer in the country working in this project. In so doing, this group will address some of the world's most complex problems in fields such as resource management and urban infrastructure, all the way through to and including neurological disorders.

Colleagues, we have committed almost $207 million in 44 projects through this one fund alone, the prosperity initiative, and we have leveraged more than double that amount as a result. It's a total of $577 million, in fact. Investments such as this will have long-lasting results for the economy of the region.

To address the need for improved business productivity and competitiveness, we have collaborated with regional stakeholders, such as the Canadian Manufacturers & Exporters. This has leveraged $95 million, while helping more than 800 manufacturers all over southern Ontario. According to the CME, our support will contribute to the creation of 5,000 new jobs.

FedDev Ontario also delivers some national infrastructure and community-based economic development programs through programs such as Community Futures. We work with partners to ensure that rural communities have access to economic development opportunities.

We are very proud of the progress we have made through direct investments in the Southern Ontario Advantage initiatives. As of August, those initiatives had leveraged $963 million.

As a resident of Cambridge, born and raised in southern Ontario, I know that southern Ontario has incredible people in its communities. I'm lucky enough to see this first-hand through the many visits, round tables, and ongoing discussions with stakeholders that I undertake as a member of Parliament and Minister of State. This enables me to see the potential of this region and the impact of FedDev's work going forward.

Mr. Chair, I'd like to close my comments now and give committee members the opportunity to ask me any questions they may have with respect to the supplementary (B)s.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Goodyear.

Now we'll move to our rotation.

Mr. Wallace again is first up, for seven minutes.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

Thank you, Minister, for coming today. We appreciate your presentation and the work you're doing.

I have a couple of questions on the actual supplementaries and one question for you, or maybe a comment, on your plans and priorities document, which I'm sure you can answer.

First of all, I have a question on vote 70, which is not in the southern Ontario supplementaries, but in the NRC supplementaries. There is $90 million for the increase to IRAP. I know that you mentioned in your speech that we're doubling it. Is that the full doubling or is it partial? Is it just for this year? Can you explain what that is?

[Gary Goodyear, Conservative, Cambridge, ON]

The quick answer—and I'll let Rob go into detail—is yes: it's just the ask for this year.

[Mike Wallace, Conservative, Burlington, ON]

Is that a doubling, that $90 million?

[Robert Dunlop, Assistant Deputy Minister, Science and Innovation Sector, Department of Industry]

Yes, because in terms of IRAP delivering the IRAP program, last year they had $90 million, and this doubling will—