Evidence of meeting #60 for Industry, Science and Technology in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was connectivity.
A recording is available from Parliament.
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
Essentially.
NDP
Dan Harris NDP Scarborough Southwest, ON
Okay.
That brings up another question about how to fix that. Certainly the wireless spectrum option that's will be coming up in November should be a component of that. LTE networks should be a component of that, particularly in rural areas, where putting in wired connectivity is more challenging and more costly for business and consumers.
What would you like to see the government doing to address that rural-urban divide?
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
There needs to be some government involvement, both financially and policy-wise, presenting those options to private companies that will build those networks. I'm not sure I can go into much more detail than that. That's going to have to be between government agencies and those individual companies. But that's how much of the infrastructure has already been built. Private investors have looked at a market opportunity. You need to give them enough of a private opportunity to warrant the investment.
Dan Harris NDP Scarborough Southwest, ON
Well, they're going to go where the money is. When the current wireless providers in previous auctions bought up areas that were partially urban and partially rural, they ignored the rural because there wasn't a big enough customer base; they go where the money is. Certainly, providing that incentive for them to actually service the rural areas is critical.
With regard to Madam LeBlanc's questions earlier, you mentioned having to go back to your members to ask them what they would think about using some of the money gained from the wireless spectrum auction to actually reinvest in some of that infrastructure. I think we'd be very interested in hearing back from the chamber on that question after you've had a chance to go back to your members. They could certainly help, but perhaps not necessarily for this study, to guide us down the road.
In regard to rural business, I know that the chamber—in your top 10—has some serious concerns within the tourism industry. Much tourism happens in rural areas. Are there any points you'd like to add that are specifically relevant to this study on how tourism industries could be helped by enhanced connectivity or other efforts?
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
That's a difficult question to answer. I can see some opportunities for some remote areas of Canada that would certainly benefit from increased connectivity from a tourism perspective. People visiting have an expectation now that they will have connectivity wherever they go, and the reality is that there are some areas of Canada where you're just not going to get that.
Yes, from a tourism perspective there is some opportunity there.
Conservative
Conservative
John Carmichael Conservative Don Valley West, ON
Thank you, Chair, and thank you for joining us today, Mr. Smith.
You mentioned a number; I heard $4.2 trillion. Was that the volume of business passing by?
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
Yes.
Conservative
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
No, pardon me, that's the volume of business available online, so it's not what's passing Canada by.
Conservative
John Carmichael Conservative Don Valley West, ON
So there's $4.2 trillion. What was the number you mentioned earlier, when you mentioned that there was a certain volume of business that's passing by those who are not connected? I think you were referring to small business.
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
Correct.
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
What I said was there is $4.2 trillion worth of business out there that is passing Canada by. It's not necessarily that Canada could actually capitalize on $4.2 trillion.
Conservative
John Carmichael Conservative Don Valley West, ON
Okay.
I listened to Mr. Harris, who obviously has a background in this business, and he mentioned that in a previous capacity, going into a storefront, a small business, a $500 exercise to get somebody hooked up was like pulling teeth. It was a very difficult challenge convincing somebody that the $500 was worth spending.
You also mentioned that so many small businesses aren't profitable or aren't achieving a level—I can't recall quite how you put it—but that to be able to afford to connect there has to be a baseline where it makes sense. Profitability strikes me as the baseline that you're playing with.
I'm looking for some information, some leadership, from you on this one. When you deal with your membership, which, I presume, is predominantly business.... Here, I'm not quite sure how you define small business as a measure, but small business is predominantly entrepreneurial. These are the people who go to work every day because they have a vision to make something happen and grow their business. Profitability is critical to it; they have to make it happen in order to pay the bills, let alone hook up on the Internet.
If somebody in an entrepreneurial environment—and I'm really just looking for your feedback on this—just doesn't get it, doesn't see it, doesn't want it, how can you as a chamber motivate that person to get involved, to grab hold of this thing?
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
I think what you're saying, and I would agree, is that there are many small businesses that don't see the value because they don't understand what's beyond. By accessing the Internet and putting their business online, they're accessing a global market. They don't see how their local product can translate into something that's valuable globally.
So they're reluctant to spend any money. They don't have a guaranteed market. There's a risk there. It's that risk that they're adverse to. They know their own market. They know their own locality. Many small businesses in small towns are quite happy with a retail or a small production where they're selling locally.
It's opening their eyes to that global value chain and being able to systematically get them there with less risk than they would have if they did it on their own. It's about collaboration.
Conservative
John Carmichael Conservative Don Valley West, ON
I guess I'm thinking about small business in particular. You mentioned that 70% aren't connected today. I think your opening line was that Canadian business is not online. I'm not chipping away here; I'm just trying to understand how we as a committee add value to a study or to a report of some sort, to bring value to small business. You've got 70% that are not online or not connected. We've heard about tourism, heard about some other ideas. I can see some of those perhaps having an opportunity.
If you've got a small business where an entrepreneur, somebody who's got a vision for a business, and is driving their business every day and doesn't see the value in it.... We've got the infrastructure pretty much in place across the country, I would think from everything I understand of it. It's just a matter now of developing, rounding out the connection across the country. But if you've got small businesses that don't see it.... I understand what you're saying. How do you motivate 70% of the people who don't want anything to do with it because they're saying it just doesn't bring value for the cost, for the dollar, to their business in their community?
Conservative
The Chair Conservative David Sweet
That will have to be the end of that, Mr. Carmichael. We're over time there.
Now we go on to Mr. Stewart for five minutes.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
Thank you, Mr. Chair.
We've been talking about rural connectivity. I'm interested in cities. We have been talking about Canada in comparison to other countries. I'm just wondering about cities, because that's really where the action is in terms of productivity. How do Canadian cities stack up against other cities internationally?
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
There are a few Canadian cities that actually stack up quite well and can be made examples of. We actually have a report specifically on smart cities. Again, that's available on our website. If you're looking for it, I can send you the links.
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
The example in Canada is Stratford, Ontario. That may come as a surprise. For the second year in a row, the Intelligent Community Forum ranked Stratford as one of the top seven cities in the world for creating “uniquely powerful innovation ecosystems on a foundation of information and communications technology”.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
When I think of some place like Seoul, Korea, where you have access to the highest speed broadband through wireless networks for $11 a month and anybody can access this, it must significantly lower business costs for that kind of provision. Singapore has the same thing, and so does Brussels. So many cities have these networks. I'm alarmed that it's Stratford. I'm glad for it, but I'm alarmed that it's not Toronto, Vancouver, and Montreal.
Director, Intellectual Property and Innovation Policy, Canadian Chamber of Commerce
I think the challenge for cities that already exist and haven't built those networks is that there is a barrier to entry in terms of cost. But the benefits are significant, as you mentioned, particularly when a municipality actually adopts the ICT necessary to change its processes. It builds efficiency. Having everything done online improves efficiency for everything and reduces costs—for instance, transportation infrastructure, how you pay your taxes, etc.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
That's a good suggestion. It's almost a procurement policy, or something, by the municipality.
How about from the federal angle? Is there something we could do to, say, put Vancouver in the top 10 connected cities in the world? Can you think of something that the federal government could do right away?