Industry Committee on Nov. 19th, 2018

[Paul Halucha]

It's half of the $250 million that was allocated to the strategic innovation fund.

[Brian Masse, NDP, Windsor West, ON]

Okay, so where is that money going to go?

[Paul Halucha]

What was announced on July 1 was an additional allocation, as I noted, of $250 million for the strategic innovation fund, to support primary steel and aluminum producers.

[Brian Masse, NDP, Windsor West, ON]

You've collected $350 million. Are you returning this $125 million directly to those you've collected the money from?

[Paul Halucha]

I don't know that dollars that come in through duties are tagged somehow and returned through another funding program. I think the Department of Finance could better answer that question. Effectively, the dollars coming in are a source of funding, but they're not the source of funding that we—

[Brian Masse, NDP, Windsor West, ON]

If they've had $350 million taken from them from duties imposed on doing business in Canada, I don't think they really care whether it comes from your department or the finance department, especially since it's their money. Of the $125 million, how much is going directly back to steel companies that have been tariffed, and are there other monies going to administration and other policies?

[Paul Halucha]

We did not increase our administration of the money for the strategic innovation fund at all. We have Innovation Canada, and Mitch Davies is the head of that organization. We are effectively managing it through existing administrative resources.

[Brian Masse, NDP, Windsor West, ON]

How much of those resources has been given back to the companies to date?

[Paul Halucha]

The minister announced an agreement with ArcelorMittal for $50 million about three or four weeks ago. That was the first announcement that was undertaken. We have about six or seven other proposals in advanced stages right now, and we're working very quickly with the companies.

The feedback we got is that we were ready with the program extremely quickly after the announcement on July 1. As you can imagine, these are complex investments—

[Brian Masse, NDP, Windsor West, ON]

I would argue that you're not ready.

On August 15, we made a proposal to the department and also to the minister to reimburse those funds.

Let me be clear: $350 million has been taken from companies. You're asking for $125 million more, but you've only reimbursed $50 million of it, and you've provided no funding at all to increase supports and services to get that money out the door. You're sitting on a $300-million cash cow from the backs of steel and aluminum workers across this country.

[John Knubley]

I'll just simplify the answer by saying that although we're only asking for $125 million this year, it is over two years, so it's $250 million in total. We are looking at support for some smaller and medium-sized businesses. We're still working on that.

[Brian Masse, NDP, Windsor West, ON]

You're still going to keep $100 million out of that and that's going to take two years, when companies get this loss on their steel products in a matter of days.

How long does it take to take the money from the steel and aluminum companies?

[John Knubley]

We remain fully committed to supporting the steel and aluminum sector in the context of the Trump administration, and we're doing our best to do that.

[Brian Masse, NDP, Windsor West, ON]

You're fully committed to do that. That's fine. I appreciate that. But you're not allocating any resources whatsoever to increase the bureaucratic process and the distribution process for that. You're doing it with the existing staffing and components.

[Paul Halucha]

The objective was not to take a top-up of the money and move it to pay for public service management. We had sufficient resources—

[Brian Masse, NDP, Windsor West, ON]

No. Your government could take that outside of that. They don't have to take it from the funds you've taken from companies to begin with, but you could figure out how to bankroll to get that out the door because you have hundreds of millions of dollars lying on the table from steel and aluminum workers.

[Paul Halucha]

Sir, with all due respect, we have not been the holdup on any of those projects moving forward. We have met with the companies on a regular basis from the moment we announced it, and as the projects have been developed.

You have to remember that these are capital expenditures by the firms. They need to undertake engineering studies before they can make commitments because we can only pay for projects. There has been a lot of work on the side of the companies, but we have been working with them extremely diligently and on a real-time basis throughout the summer. I've heard a couple of the companies saying that this is one of the first times the government has been moving faster than the companies are ready to move.

[Brian Masse, NDP, Windsor West, ON]

But you're sitting on some money here and you're still not even getting the full amount back to the actual companies. Is that the plan?

Right now, I think you have about $250 million planned over two years, but you've already collected $350 million, plus more tariffs to come. Is that how it's going to evolve?

[John Knubley]

That's not the plan.

[Brian Masse, NDP, Windsor West, ON]

Are the companies the problem, then? All kinds of companies and others are claiming that their process is still taking far too long. You can collect in a matter of days from them, but their disbursement isn't there.

Isn't there any backup plan to do this, other than what you have? I appreciate what you're saying, but it's not what I'm hearing, especially from the smaller and medium-sized companies.

[Paul Halucha]

I think you're thinking of.... Over there, it's the duty drawback and relief programs, and there's also the remissions process. Both of those are run through the Department of Finance. It did take some time for decisions to be made there, but now there has been funding through both of those envelopes as well.

The difference with those funds is that you're effectively requesting to simply have the money returned to you if you were not required to pay. For example, if you imported aluminum or steel solely for the purpose of exporting, then there is an ability to get a duty drawback repayment. Effectively, there is no process around that, other than putting in your claims and getting your money back.

The strategic innovation fund is a classic innovation capital investment program where we had to receive project proposals and we had to do the full due diligence because we're deploying taxpayers' dollars there. That required significant work on the part of the companies to identify their capital expenditure plans and to make sure they aligned with the program priorities of the fund. They have been working extremely closely with us, so I think—

[Brian Masse, NDP, Windsor West, ON]

I have shops that are closing up—

[The Chair, Liberal, Dan Ruimy]

Thank you.

[Brian Masse, NDP, Windsor West, ON]

—and I just hope you can streamline the process. Thank you for your work.

Thank you, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Graham. You have seven minutes.