Industry Committee on April 18th, 2013

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

It says $1 billion, though.

[Gary Goodyear, Conservative, Cambridge, ON]

It's $466 million in this year; there's $1.1 billion in last year's budget.

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

But just from the small slice of your overall spending of about $10 billion, you're losing $1 billion.

[Gary Goodyear, Conservative, Cambridge, ON]

No. What I'm trying to ask you to do is this: if you're going to compare the general from 2006 with where we are right now, then please do that, but don't just compare one year—

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

I'm reading it right out of your Treasury Board document on planning and priorities.

[Gary Goodyear, Conservative, Cambridge, ON]

I just explained to you that in fact it includes and it reflects the end of the stimulus programs, one of which was the knowledge infrastructure program—that's $2 billion. The other answer I can give you is that it does not include this year's budget.

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

Will we substantially increase from the $400 million? Going from $1.3 billion to $414 million is quite a huge drop. Are we going to go back to the levels of $1.3 billion? Can you tell us where we'll be at some point on this?

[Gary Goodyear, Conservative, Cambridge, ON]

A lot of that answer would depend on how you and your party intend to vote on the budget. There's $466 million in the budget.

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

It's through the government, though.

[Gary Goodyear, Conservative, Cambridge, ON]

We would hope that you and your party would support it, because I believe science and technology deserves that money.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Stewart.

Now on to Mr. Carmichael.

[John Carmichael, Conservative, Don Valley West, ON]

Thank you, Mr. Chair, and my thanks to you and your colleagues, Minister, for taking the time to join us today and to answer our questions.

I'd like to begin with a brief discussion about the National Research Council. Economic action plans 2012 and 2013 both expressed significant investments in the refocusing of the NRC, to the extent that in 2012 the investment was some $67 million. In 2013 it was another $121 million over two years. The focus clearly is to help the growth and innovation of businesses in Canada.

Understanding that the NRC is a vital part of Canadian research, can you explain to the committee what is happening with the refocusing of this vital organization, and what it means to overall research in Canada?

[Gary Goodyear, Conservative, Cambridge, ON]

Through you, Mr. Chair, thank you for the question.

You are absolutely correct. The National Research Council, I might want to point out, is one of our councils. We have, as you know, a number of councils. We have looked at this research council and are working to transform this council into more of an industry-facing organization. This is to better align the National Research Council to an area where Canada needs some support, and that is business research and development. It is based on the recommendations from the Jenkins report, the expert panel report that you may recall.

As you point out, the focus will be to help businesses grow. It will be to help high-growth businesses. It will be to help small businesses that do not generally have research capacity on site. This new approach will allow us to offer to businesses in Canada the enormous resources of this National Research Council with all of the expertise and all of the equipment. In fairness, they've done a lot of this in the past.

We are in the process of transitioning it. We are identifying, obviously, those areas and sectors that show the greatest potential and are already strong in Canada. We want our businesses to work more closely with our colleges and universities. We will be announcing more details, if I can say that, in the months to come. This obviously is a large organization. There are a lot of scientists there. There are international scientists who help us with our work, and we cooperate, as you know, with other countries. The process itself should take a little longer than you'd think, but we are obviously working to get this organization up and running as a research technology organization. All that means is it will be the laboratory, if you will, for business in Canada.

That's a very exciting thing. I can tell you, if I'm allowed, that the research council is a perfect example of how they can work. Recently they've been involved in the world's first ever flight by a civil jet on 100% biofuels. You can imagine the impact of this kind of research if we can move that information out into our private sectors. Something like that can have an enormous benefit for the economies not just in southern Ontario in this case, but all across Canada.

So if we can help Canada's businesses in this regard...because as I mentioned many times, we're number one in a number of areas in Canada. Certainly we're number one in our support of post-secondary institutions with respect to research and development as a percentage of our GDP, but we're nowhere close to number one in what's called BERD, business enterprise expenditure on research and development.

Businesses need to spend money on research, obviously, but they do need help in making sure that research is reproducible and ends up being valid and can be supported by other research. They do need a quality research organization. They need a place to test their products, perhaps get certification on their products, and frankly, get assistance in reaching those global markets that we're working so hard to open up.

[John Carmichael, Conservative, Don Valley West, ON]

Thank you. I've got a couple of minutes left and I've got so much to ask.

[Gary Goodyear, Conservative, Cambridge, ON]

My apologies. I'll try to be shorter in my replies.

[John Carmichael, Conservative, Don Valley West, ON]

I want to talk about FedDev, but maybe in context, just to include it if there is time at the end of your comments.

I'd like to hear more about the business initiative start-up on venture capital funding, and also the angel program on the business innovation initiative. As a businessperson, those are important issues to me.

If there's time, maybe you could comment on those, but I'd like to talk a bit about FedDev. Clearly, those of us in business were hit hard in 2008, in the region of southern Ontario. It's a region that has made a large contribution to the manufacturing sector of this country. In response, the Government of Canada acted quickly and created the Federal Economic Development Agency for Southern Ontario in 2009, something which I truly applaud you for doing.

Understanding that the Federal Economic Development Agency is vital to the re-emergence of southern Ontario, would you please give our committee an update on the agency's activities and possibly provide an example of where the money has been invested?

[Gary Goodyear, Conservative, Cambridge, ON]

Before I do that, Mr. Chairman, how much time do I have?

[The Chair, Conservative, David Sweet]

Just over a minute.

[Gary Goodyear, Conservative, Cambridge, ON]

Excellent. I will do my best.

Obviously, the agency has done very well in southern Ontario. That is the reason we are renewing it. The other reason, of course, is that we're not out of trouble. The manufacturing industry and other sectors in southern Ontario face everything from an unstable United States, the global market, pressures around the dollar and venture capital as you mentioned. We did a lot of stakeholder consultations in setting up the original programs and they were designed to assist that.

The venture capital market is also something the Jenkins panel recommended the government have a look at. The government as a whole has taken a serious approach to this with money in the budget for venture capital.

We saw a great possibility to increase the angel investor capacity of the southern Ontario market, so we developed a program to do just that. It has been highly successful.

I will give you an example. I have tons of examples, but I will give you just one. The Ice River Springs water company is a family-owned business that produces private-labelled spring water. The company expressed a desire to become more environmentally sustainable in all of its materials and practices, but they were limited by space.

They came to FedDev. They showed us this opportunity not only to help the environment and buy more locally, but to increase jobs, so we ended up helping them. They have now converted an automotive manufacturing plant, which saw some contraction as you know, into the first food-grade recycled resin manufacturing facility in Canada.

They are selling to foreign markets. They have new products. They've created 36 full-time jobs. That's my best example.

My apologies, Mr. Chair.

[The Chair, Conservative, David Sweet]

Thank you, Minister Goodyear.

Now on to Mr. Regan for seven minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chair.

Thank you, Minister, for coming with your officials as well.

You spoke a few moments ago and you kind of took credit for low interest rates in the past year.

[Gary Goodyear, Conservative, Cambridge, ON]

No, I didn't.

[Geoff Regan, Liberal, Halifax West, NS]

Well, that's what it seemed like. I think you'll probably agree that the recession and the low growth we've seen since then probably had a big impact—

[Gary Goodyear, Conservative, Cambridge, ON]

Absolutely.

[Geoff Regan, Liberal, Halifax West, NS]

—and we, of course, leave most of that to the management of the Bank of Canada which does a pretty good job.