Industry Committee on April 25th, 2013

[Dan Harris, NDP, Scarborough Southwest, ON]

That's fine.

Also, earlier, in regard to the ICT investments and the productivity gap, you mentioned that in some sectors Canadian companies spend more and in others they spend less. Do you have data on this that you could provide to the committee? I think I might have seen a graph or something there. I think that would be very useful for us, because it might actually provide some context as to which sectors are doing better than others.

Then in terms of finalizing that study on productivity, even if it comes later than this study itself, I think it would also be very useful for the committee to see it. I say this because the productivity gap that we do have is one of those alarming things and has a number of different causes. Some of it is caused by the ICT investments, while the other reasons have to do with more physical things like gridlock and congestion in cities. All of it has some impact on the larger picture that affects businesses.

Going back to what Mr. Carmichael raised about broadband costs and accessibility, has the cost of broadband actually dropped much for consumers and businesses in the last five years?

[Alain Beaudoin]

I referred earlier to access to broadband and wireless. Since 2008, when the government put in the AWS auction, which allowed for the entry of four players throughout the country, if you look at the overall average costs of wireless subscriptions, there has been an average savings of 18%. These are new figures that just came out. So there's been downward pressure on costs overall of 18% for wireless subscriptions.

[Dan Harris, NDP, Scarborough Southwest, ON]

That's in the last five years.

[Alain Beaudoin]

Since 2008.

[The Chair, Conservative, David Sweet]

Before I go on to Madam Gallant, I just wanted to let members know that all parties recommend witnesses; there's no secret to them. There are some things that we don't belabour you with as far as lists are concerned, but if you'd like all the lists as far as the witnesses go, we can transmit those to you. We have no problem doing that. You can see that for each study they get rather cumbersome, but I have no problem providing you with that, so just please—

[Geoff Regan, Liberal, Halifax West, NS]

On that, Mr. Chair, the key thing and my concern would be that no member of the committee gets it ahead of any other member of the committee, and no department of government would get it ahead of members of the committee.

[The Chair, Conservative, David Sweet]

Sure.

Now, on to Madam Gallant for five minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

Some of the questions that have been directed to you have been regarding what government can do to encourage more digital uptake by businesses. But already the CRA will be requiring people in businesses to do their annual tax filings online. Companies are being required to submit electronically their monthly source deduction remittances above a certain amount. We have the accelerated depreciation of computer ware as an incentive to bring people online.

In my riding, we have a new dairy. A young family didn't want to let the business go under when the owners decided to retire, so they took it over. They wanted to be more efficient, and they're only using a certain capacity of it. But through leveraging with the eastern Ontario development program and IRAP, they were able to take a $150,000 project that essentially allowed the truck driver for the milk delivery to take an order, send it to the dairy, have everything put into production for the next day, and have delivery. Training as well was involved, so it was quite costly. They could have done it themselves, totally, but it would have been a much longer process.

Here we have an example of government doing something already to help them over that huge cost of becoming more efficient. Over time their investment will be paid off through bigger sales, and the government will get its money back through higher tax revenues.

Another company, Deslaurier woodworking and cabinetry, had a fire on New Year's Eve a number of years ago. They could have taken the insurance money and run, and just retired nicely. Instead, they had a commitment to the 150-odd employees who worked there, and they found another location to do their manufacturing.

When they did so, they were able to obtain a grant as well. They got this CAD software and upgraded their system stabilization. Now when an order comes in and somebody decides on what they want, every component in that kitchen or washroom or whatever cabinetry system gets a bar code as it's produced. Waste is minimized, because the pattern of what needs to be cut out overall is fed into a computer and scanned. A saw cuts it in the most efficient method so that the least waste comes out from the board, and so on down the line. It's put together by hand, and then eventually put out on the lot and sold. The taxes and everything due are all in one, streamlined. It's just wonderful.

So here we're doing that as well, and my question is this: we're doing so much already, what else is there besides what we're already doing? We have the stick and the carrot in place through programs and forcing people to do their tax remittances online. What else do you think we can do that won't necessarily be an overall cost to taxpayers, but where they'll recoup the money?

[Alain Beaudoin]

Thank you for your question.

I will refrain from offering new ideas that the government could undertake, because that's the prerogative of the government and the minister.

One thing I want to emphasize, though, is that, as I said in my presentation, we think the private sector has a key role in playing into this. We hope that some of the success stories referred to earlier, and the positive outcomes that will be spurred on from the investments in BDC and IRAP, and I earlier referred to CANARIE as well, will be useful for the private sector, for various organizations themselves, to raise awareness among their own members and with companies so that they can see the benefits of investing increasingly in ICTs, in digital technologies.

Like some of the great examples you referred to, they're already doing this. For example, the Canadian Chamber of Commerce has a very large network, as do both Canadian Manufacturers & Exporters and Information Technology Association of Canada. They, essentially as providers of those technologies, are trying to increase awareness throughout the economy, but this will, we think, have to increase in order for people to see these benefits.

We hope that those pilots, those initiatives that we've put forward, will have a spillover effect as a whole. Those federal organizations are already working, for example, with organizations and colleges. IRAP, with the digital transformation program, has a number of partnerships with colleges across the country in order for those colleges to provide the type of advice and expertise that these firms require. At the same time, it helps develop the type of skills and talent we need in colleges, and then they can transfer that knowledge to firms in order to benefit everybody as a whole.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Beaudoin and Madam Gallant.

We'll now move on to Monsieur Blanchette.

You have five minutes.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

Thank you kindly to our witnesses.

Mr. Beaudoin, thank you for mentioning CEFRIO, a Quebec City-based organization. I am always delighted when an organization in my city serves as a reference. At the same time, it highlights the fact that we are lacking the information to make decisions.

Speaking of facts, the federal government held consultations on the digital economy in 2010. I recall ministers at the time engaging in considerable discussion. The process was supposed to lead to a digital economy strategy or policy—the term used would change depending on the day. In any case, there was a strong commitment at that time. The ministers appeared to be very sure and very serious.

But nothing came of it, truly nothing. Could you tell me what emerged from those consultations and what came of the results? If we could have obtained that information, I think the committee would have been further along in its study.

Where does that stand?

[Alain Beaudoin]

It's important to look at the initiatives brought forward by the government and the many elements supporting the digital economy that came about in direct response to issues raised by the various stakeholders. For instance, I mentioned the importance of ICT adoption and use.

[Denis Blanchette, NDP, Louis-Hébert, QC]

I understand all that.

[Alain Beaudoin]

There is also—

[Denis Blanchette, NDP, Louis-Hébert, QC]

Forgive me for interrupting, but I asked a very specific question. The federal government held consultations on the digital economy. There were websites that mentioned it. There was even one called “Plan for a digital Canada”, which is no longer available; I checked a little while ago.

The consultations were supposed to produce policies, information and a picture of Canada's digital economy. Now, there is nothing to speak of. And you didn't even mention it in your presentation.

So I would like to know what came of it. That, right there, is my question.

[Alain Beaudoin]

As I told you, the government introduced various initiatives, such as the spectrum auction announced by the minister in March. I also referred to a number of initiatives brought forward to support ICT adoption and use.

In the past few years, the government also made a financial investment, doubling IRAP's funding. Telecommunication, information and communication companies rely heavily on that program.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Very well. Thank you. I can see that you don't want to answer the question. That's fine. I will move to another sector.

Earlier, you talked about social networks and websites. To my mind, you shouldn't choose between one or the other; you need both. In other words, it is paramount that SMEs have the ability to offer their products and services online and, from a marketing standpoint, to communicate with people online.

With that in mind, what is your view on encouraging small and medium-sized businesses to sell their wares online? Travel agencies were mentioned earlier. That's a great example. What are you doing to push small and medium-sized businesses in that direction?

Like it or not, even though the diagram on page 6 shows an improvement, the reality is it is happening slowly, not quickly. And that puts us behind other big economies.

What are you doing on your end to ensure that we don't fall behind while others move forward?

[Alain Beaudoin]

Thank you for your question.

As I mentioned, three initiatives directly targeting SMEs have been introduced since 2011.

I referred to the IRAP pilot project, which represents an $80-million program spanning three years. Basically, it is designed to provide advice, information and funding to businesses to help them increase their use of information technology.

I also talked about the BDC, which offers a free online service that can evaluate a business's website. I mentioned the fact that more than 20,000 Canadian SMEs had already had assessments done.

In addition, the BDC has earmarked $200 million specifically to help these businesses acquire the equipment they need to increase their use of information technology.

[Denis Blanchette, NDP, Louis-Hébert, QC]

I am going to rephrase my question.

What is the department's strategy? What areas does the department plan to invest in to help our SMEs remain competitive in the global marketplace? Doing something now is key. From their perspective, it's either an investment or their demise. In a globalized market—

[The Chair, Conservative, David Sweet]

Mr. Blanchette, you're way over your time. If you want to be succinct, I'll let Mr. Beaudoin go ahead, but you're over your time.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

What areas of activity does your department intend to focus on to help our SMEs?

[Alain Beaudoin]

I mentioned three initiatives that all come under the department's portfolio, IRAP, the BDC and the CANARIE program. We use those programs and initiatives to assist small and medium-sized businesses in adopting ICT or expanding their use of the technology, and by the same token, increasing their level of productivity and innovation.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Beaudoin.

Now we'll go on to Mr. Lake.

Just for transparency's sake for the committee, because we're finishing one five-minute round and going to the third, Mr. Lake's time will be two five-minute rounds, so I don't need to interrupt him. He can expend the 10 minutes.

Go ahead, Mr. Lake.

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

I don't know if I'll use the whole 10 minutes anyway.

I have to say that I do find the NDP approach of Mr. Blanchette and Mr. Lapointe in both of their lines of questioning to be quite astounding. For a party that would love to be in government one day, the lack of respect for the officials we have here today is quite something, I must say. We're talking about officials—

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

A point of privilege, please.