Industry Committee on May 28th, 2019

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

I think you'll know that the government didn't just start providing loans for companies in 2017; they've been doing it for decades. If you go to the predecessors of the SIF program, how successful has the government been generally in recouping investments similar to SIF in the recent past?

[Andrea Johnston]

All applicants have been in repayment mode.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

That is positive for taxpayers to hear.

Here is my other concern. I was speaking to one of the local mayors in our area. Obviously we're very excited about the foreign investment that groups such as the Canada Kuwait Petrochemical Corporation, Dow and Inter Pipeline and other groups are making, considering the low costs of propane in Alberta due to our not being able to transport it outside of our borders because of a lack of pipeline capacity.

There is a bit of concern that we have 20 or so projects. Are all projects being considered? We're very concerned that winners be chosen. We want to know that equitable factors are being taken into account when choosing which companies get funding.

Please comment on that and also, if you can answer, on whether, if the funds in SIF are tapped out but there are other companies just behind the deadline and all the funding has been given out, there is any mechanism to top up the funding to ensure that there's equitable treatment for companies in the application process.

[Andrea Johnston]

Well, as you know, in the recent budget we received an additional $100 million for CRIN, which is the Clean Resource Innovation Network. We're in early discussions with those companies, many of them located in Alberta. We expect to have a fairly solid project pipeline out of that $100 million, going forward.

As I mentioned, the strategic innovation fund is a high-demand program. We have to assess the projects on their merits as they go in through the application process. We have about $1 billion in interested applicants, so from our viewpoint, we have a strong pipeline of proposals. Again, we measure them based on the innovation benefits, the economic benefits and the public benefits to Canada.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Oliver.

You have a very quick five minutes.

[John Oliver, Liberal, Oakville, ON]

Thank you. I'll be following up on Mr. Lloyd's questions about the strategic innovation fund.

I notice there was an increase of about $279 million in the departmental plan. There was a focus on two important areas: data application in the health and biosciences sector and automation in digital technologies for the agriculture and agri-food sector. I heard in your answer to Mr. Lloyd some of the criteria that you bring to bear on the decision on who gets the grants and how they're awarded—or the loans, depending on the structure.

I'm curious. How do you, at the departmental level, prepare for that? These are complex, very technical applications, often dealing with very unique science or unique innovation. How do you prepare at the departmental level so as to ensure that you're doing a rigorous independent review and that the right people are awarded?

[John Knubley]

I'll just compliment Andrea on the work she does. We do have five different strains within the strategic innovation fund. They are all targeted at different things. I'll let Andrea explain that if she wants.

When we do our due diligence, we typically do a lot of outreach with other experts, both in the private and public sector, so that we understand what their specific opportunities are with individual projects.

[Andrea Johnston]

You specifically mention health and data. That's under stream 4, where the government launched a challenge to industry. We had several strong applications come forward and we just recently announced the two winning applicants.

[John Oliver, Liberal, Oakville, ON]

How do you prepare, at the departmental level, to do the reviews?

[Andrea Johnston]

In order to make that assessment, we use a whole-of-government approach, which includes departments. We draw particularly on the technical expertise of IRAP in the National Research Council. In this case, we also had four expert advisers who provided input on the applications and enabled us to make an informed decision moving forward. That's under the collaborative networks process, where we use outside independent evaluators to inform our decision.

In general, however, we use the technical expertise that's within the departments—whether it be NRCan, AAFC or the NRC, in terms of IRAP.

[John Oliver, Liberal, Oakville, ON]

Thank you.

I was a bit curious because one area that's of interest to me is innovative nuclear energy. I know there is some quite innovative work happening in Canada. It's in new fields; it's not in the traditional CANDU area. It's in some new science, such as salt ionization and different strategies, which looks really promising for renewable energy and would put Canada back in that nuclear energy leadership role.

This is brand new. It's brand new globally. Really, there are very few companies dealing in this space. How, then, do you prepare yourself for that kind of innovation that is not just domestically, but globally unique?

[Andrea Johnston]

It's a very exciting area because, as you say, Canada has the potential to be leading in this area. ISED has been working very closely with Natural Resources Canada, AECL and the regulators to get a better understanding of the technologies and their applicability in the Canadian market, as well as the global market.

From there, we make a decision going forward as to the companies that have applied under the strategic innovation fund.

[John Oliver, Liberal, Oakville, ON]

Great. Thank you very much.

[The Chair, Liberal, Dan Ruimy]

The final two minutes of the day go to Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'll go quickly over to the Federal Economic Development Agency for Southern Ontario. There is a 40% increase over the previous years. Is there any particular reason for such a large increase? Was there something in the previous year that did not get spent that was reallocated, or is it just an overall increase of 40%?

[John Knubley]

The short answer is that they had actually had an allocation and had basically committed all their funds, so that in 2019-20, $258 million in total funding is anticipated through the main estimates. That's compared to $187.1 million in the previous one. The reality is that they're really being replenished and topped up in terms of their activities.

In terms of the specifics, this includes tourism and the Canadian experiences fund. I think that's the main new element, as I understand.

Steel would be driving that number up as well because of FedDev, and that advanced manufacturing program referred to earlier would be delivering steel.

[Brian Masse, NDP, Windsor West, ON]

On the tourism front, one of the shifts we saw from the Canadian Tourism Commission was away from North American visitation to concentrating on international visitation. Is this tourism initiative because the numbers are down with regard to the border in southern Ontario and in the Niagara region—where I'm from—and others, where we have seen...?

Really, this started through the Vancouver Olympics, when the Canadian Tourism Commission was moved out to Vancouver. It disappeared from the face of the earth here in Ottawa. It is now in Vancouver.

We've seen our travel tourism from the United States become increasingly challenged. Is part of what's happening here to try to localize and make more incentives for tourism to bring those numbers back up?

[John Knubley]

As a deputy minister and having worked in a region, I've seen how important tourism can be for communities. I see a lot of good things happening here.

Specifically, Destination Canada had traditionally been oriented to identifying new markets and advertising orientation to new markets for Canada, which of course continues to be a priority for Destination Canada.

What's happening with this new initiative is that it has also recognized that we need to build specific initiatives domestically to promote tourism within Canada. The regional development agencies do activities in this area. However, what's being added into this is funding for Destination Canada to focus on the domestic market itself.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[The Chair, Liberal, Dan Ruimy]

On that note, thank you again for appearing today. I appreciate your time and your answers to your questions.

Thank you all.

The meeting is adjourned.