Industry Committee on May 19th, 2016

[Darren Praznik]

Canada's been very good about it. I think we're a well-regulated industry. There are always little things that can get in the way of import—there are a couple of issues we're working on now—but generally speaking, we've done a pretty good job.

There are a few issues around product classification. In fact, we do such a good job that I've included a list of 70-some countries that ask for a certificate of free sale that we issue, saying that these products could be freely sold in Canada, which they require for exports—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

They call it country of origin.

[Darren Praznik]

Yes.

There are a few issues, but generally we have a pretty good system.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So we're not the actual problem. You'd like to see our people taking a leadership role when they go out into the world and say, “Look, can we can all talk and work towards alignment?”

[Darren Praznik]

Absolutely, and it's probably more in our interest—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

—because we're exporters. I understand.

[Darren Praznik]

Right. You got it.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Okay.

I'm going to bring that over to Mr. Champagne, then, because he also talked about regulations, but in a slightly different way.

If I understood correctly, your concern with regulations is not with the export aspect but the import aspect. We have better, stricter, and higher standards here, as you pointed out in your example of brakes with asbestos, yet we're subject to competition that our regulators don't deal with.

Could you elaborate on that?

[Jean-François Champagne]

In fact, there are no product standards for aftermarket parts in Canada. If we build a car in Canada, Transport Canada has a set of requirements as to how this car would be produced, but once they're actually sold and on the road, there aren't specific product standards that would apply to the manufacturing or the importing of aftermarket parts.

That's the analogy of the analysis of the brake pad with asbestos in it: it becomes something that the industry has to do on its own in making sure that we do the right thing—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You would like the government to step in and start looking to regulate—

[Jean-François Champagne]

That's right.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

—or apply existing regulations to the aftermarket.

[Jean-François Champagne]

Essentially, the existing sets of regulations apply to finished vehicles. They would not apply specifically to the parts themselves, so it would have to be a new set of standards that would apply to the parts themselves.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You mean using regulations to protect our quality manufacturers, whatever way we choose to do that.

[Jean-François Champagne]

That's correct.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

If they choose to be at a higher level, then we've got to protect them, versus....

[Jean-François Champagne]

That's right. The example of specific products such as asbestos is a great example of low-hanging fruit. They're very easy to address to ensure that we get good-quality products that are not harmful.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Okay.

I'm going to change lines now. Very quickly from all three of you, is research important or not important to your specific industries? Do the R and D programs we have help or not?

We can start with Christyn. Very quickly, how critical is research in your particular industry?

[Christyn Cianfarani]

It's absolutely critical, especially if we're at the front end and pushing things through into procurements and major platforms, given that we keep our equipment in defence for 40 years. In the innovation chain, research and development programs—the strategic aerospace and defence initiative being one of them, and BCIP being one of them—are absolutely critical. We're talking big research dollars that have to go into making this kind of equipment. If we're not doing it, we're certainly not going to be world class, as we are today.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You're happy with the research part. You just want to make sure, if we're researching something, that we're going to actually procure it.

[Christyn Cianfarani]

I want to get it connected. We have the commercialization gap in this country, right? I think we all know that. We've got the dead zone after we create something. We don't know how to get it to market. We want to connect up to get it to market.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Okay.

Darren, in your business, which is much higher volume, is research as important, or not really?

[Darren Praznik]

Absolutely. The lifeblood of our industry, quite frankly, is innovative new products. Probably one of the world's best colour labs for colour cosmetics is located in Toronto, and it produces for a world marketplace. It's a little-known fact, but it's true.

What we have found is that because our products are not often protected by specific patents, etc.—they're general ingredients in development—last year some of the regulatory changes that Health Canada brought in around drug information number approvals and posting them, even before there was a product on the marketplace, created some issues about exposing confidential business information out in the marketplace to competitors. It put at risk that lab and that company in doing their business in Canada. We worked with Health Canada to come up with a solution, but it wasn't even thought about when the original underlying policy was created.

Yes, research is important, and sometimes how we apply rules is critical.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Can we hear from Mr. Champagne for a minute?