Industry Committee on April 25th, 2013

[Alain Beaudoin]

That's a very good question.

As I said, we are currently carrying out a study and working with an organization that specialized in these issues. We hope that approach will help us learn more.

However, the data is not optimal in certain cases. It does not provide us with all the answers to our questions. We are trying to find out more. We will probably have more information in a few months.

I also mentioned the Statistics Canada survey that is currently being conducted. The sample size is 17,000 Canadian companies. That is a very good cross-section that will help us provide significant findings.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Beaudoin.

Thank you very much, Madame LeBlanc. We're well over time on that one.

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

Thank you very much.

[The Chair, Conservative, David Sweet]

Now we'll move on to Mr. McColeman

You have seven minutes.

[Phil McColeman, Conservative, Brant, ON]

Thank you, Chair Sweet.

[Geoff Regan, Liberal, Halifax West, NS]

Sweet Chair....

[Voices]

Oh, oh!

[Phil McColeman, Conservative, Brant, ON]

I want to pick up on a little bit of the questioning of my colleague, Mr. Carmichael. When I look at page 5 of the deck on the “Investment per Worker” and the two graphs, the first one tells me something.

Although my favourite subject at grad school was not stats, when I look at the second graph as investment per worker, on the surface it sounds fairly relevant, but there are so many variables here that I'm just wondering what it really tells us, if anything. If the traditional 10% multiplier between Canada and the United States were applied to it, perhaps it would tell us something.

Can you give us a little more insight on how that is relevant?

[Alain Beaudoin]

It's an excellent question.

I referred previously to the study that we have right now with the Centre for the Study of Living Standards, for example, which we hope will help us answer some of those questions. What we're trying to do is to disaggregate that number and understand exactly where the big gaps are, where the delta is.

Is it explained, for example, in the higher adoption and use of ICTs or bigger expenditures in some specific sectors? Is it explained, for example, by the different structure of the industry? For example, in Canada we have fewer big firms. Does that explain the big gap in some cases?

It's something that we're trying to understand, because when you look at the aggregate data, it's only an aggregate number, which doesn't tell us the extent of the story. It's one thing that we hope we'll be in a better position to understand. But we know, for example, that part of the explanation might be because of some sectors being much more ICT intensive, thus investing much more in these fields. Whether or not it's because of the scale of the firms, we're not entirely sure yet, but we hope to have better answers in a couple of months from now.

[Phil McColeman, Conservative, Brant, ON]

I appreciate that response to my question, because to me it's almost a dangerous graph, a dangerous statistic to use, in that I don't know what it's really telling us, given the other data. That's not to criticize that we have it, but there's this psychology that goes with looking at it and saying, “Oh, we're not doing as much as we can”.

In the graph above that, “Total ICT Investment in Canada”, we at least see an upward trend since 1990, and then your next slide actually gives us a snapshot of a period of time, from 2007 to 2011.

Do we know the total U.S. dollar value of investment compared to what is represented here in Canada? What would that graph look like in billions of dollars if it were for the United States?

[Alain Beaudoin]

Is that graph 6?

[Phil McColeman, Conservative, Brant, ON]

It's graph 5, on page 5, the top graph, “Total ICT Investment in Canada”. It shows this in billions of dollars from 1990 to 2010. Do we know what the United States experience is here in terms of how many real dollars they're spending and what their graph would look like?

[Alain Beaudoin]

I don't have the answer to your question, but what we will do, if the chair agrees, is get back to the clerk to provide you with that answer.

[Phil McColeman, Conservative, Brant, ON]

Thank you. I appreciate that, because I think it would be more indicative of whether or not we are keeping at the pace we should be as a country if we used the United States as the benchmark.

That leads me to my next question. How are we compared to other countries? How are we compared to the EU and other developed economies?

[Alain Beaudoin]

That's an excellent question.

We tend to compare ourselves to the United States first, south of the border, but at the same time, it's because they tend to be the most ICT intensive. At the same time, if you compare us to other countries, we actually compare relatively well overall.

For example, our ICT investment as a share of GDP in 2007—because these are the latest figures that we have for making some comparisons—is very comparable to what's going on in Japan. As a matter of fact, it's higher than Germany's. Some people might be surprised by that.

But everybody is facing the same challenge. The United States is the leader, but when you look at it afterwards in terms of the countries and the gaps and the differences between them, the intensity is much smaller than one would expect. Actually, this is where Canada fares relatively well in and of itself.

[Phil McColeman, Conservative, Brant, ON]

Thank you for that.

My last question will be about the literacy of SMEs on this front. We continually talk about the skills shortages that exist, but more so in terms of individuals who are ICT literate.

From your look at where we are today, how are SMEs doing on that front in terms of the amount of people who are literate within SMEs and who can actually adopt this kind of policy? Are there any data on that?

[Alain Beaudoin]

We don't have data on that. To perhaps build on your question, though, in order to do better matchmaking between the needs of the industry and also in terms of the skills, I referred earlier to the $500-million initiative in the last budget. That is meant to address in some ways that particular issue.

One other thing that I would say I am cautiously optimistic about is that as younger people are entering the marketplace and starting their own firms, they are, by default, digitally literate. They are much more used to digital technologies because they have been dealing with them since they were young kids. They are very familiar with the importance of it, but they're also very familiar with the benefits of it.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Beaudoin.

Thank you, Mr. McColeman.

Mr. Regan, you have seven minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chair.

Thank you to the witnesses.

I'm going to follow along the line of questions that Mr. McColeman was asking in this area, because I think they're important questions.

First, though, can you tell me how many employees there are in Industry Canada? Is it 5,000, or 8,000...? Do you know?

[Alain Beaudoin]

We would have to get back to you on that.

[Geoff Regan, Liberal, Halifax West, NS]

It's better for the deputy minister, I suppose, to answer that. He'd know, of course—or Mike could tell us later.

It strikes me, looking at the charts on page 5.... You noted that the American numbers may be skewed by a small number of companies doing a lot of adoption.

It seems to me that you'd look at the Dow Jones Industrial Average of 30 companies. Among those 30 companies are 20 or so that spend a lot on R and D, and probably on information and communication technology, and do a lot of research and produce a lot of new products that keep companies like Procter & Gamble and so forth going. So it would be important to take out the large companies.

As you know, what we're studying here is the adoption of digital technology by small and medium-sized Canadian enterprises. What I guess I would want to see, then, is something that compares the situation of SMEs in Canada in terms of the adoption of ICTs in digital technologies compared with the U.S. What we have is Canadian companies overall.

Are you telling me that nowhere in Industry Canada are you able to get us the information I'm talking about, that actually compares apples to apples, Canadian SMEs versus American SMEs, and that takes out not only those big 20 but the big companies generally?

[Alain Beaudoin]

That's an excellent question.

As I referred to earlier, part of the challenge is the access to data and to make sure that we have sufficient granularity in order to undertake that analysis. When you look in terms of Statistics Canada, they do not collect investment figures by firm size. That's part of the challenge.

That's why I referred to the study earlier that we're undertaking with the Centre for the Study of Living Standards, where we're trying to get more answers on that particular issue that you've just pointed out. We're going to try to segregate some of the assumptions to try to see if there are some explanations that we can find by segregating some of the bigger firms, for example, or the bigger-sector.

[Geoff Regan, Liberal, Halifax West, NS]

I think it's fair to say that we on this committee think this is a very important topic, the adoption of digital technologies. This is why we're having this study.

In terms of assessing what this information is telling us....

I will wait until you are ready.

Okay.

If you look at page 6, you will see that the data comes from different sources in the two surveys. However, this does not mean that the figures are invalid.

How is web presence defined? Did both groups measure the same thing in 2007 and 2011? What is your definition of web presence?

[Alain Beaudoin]

That's a very good question.

We need to check what definition Statistics Canada used in 2007 and what CEFRIO used in 2011. Mr. Chair, we could check what those definitions were and send you the information.

However, I should mention that what is seen as web presence in 2013 is very different from what was seen as web presence in 2007. That has changed a lot. That's one of the challenges all analysts and stakeholders have to contend with, given the fact that technology is moving extremely quickly. We are talking about the web, cloud computing and all the other elements of the information technology ecosystem. We cannot necessarily learn about the future by looking at the past. We are aware that we don't know what the future holds for information technology.

[Geoff Regan, Liberal, Halifax West, NS]

I ask because it's not at all rare for me, when I'm looking for some of the businesses in my own riding or elsewhere, to go on the web and find a reference to a business, some site that shows you where restaurants or other kinds of businesses are. There will be an address for it, but that's the only reference. It has no real presence itself.

If that is considered a web presence for that business, then I am much less impressed when we say 70% of our businesses actually have their own web presence. So that's why that question is particularly important to me.

Let me ask you this. We've heard from people like Thorsten Heins of BlackBerry and others about how important mobile technology and its adoption are. What is the government's strategy to encourage the adoption of mobile technology?