Industry Committee on May 28th, 2019

[John Knubley]

This is a very good question. Again, the reason I'm referring to all of the programs is that what we're trying to do as we move forward is to use the different programs and the bank to address different areas.

I suspect you know the overall target is 50/10, and we are moving between now and 2030 from the 85% level to as close to 100% as we can. In order to do that, we actually need to use different tools.

I think what the CRTC is doing is addressing areas that really are remote and trying to focus on those. I think then we will look at the other instruments, which include connect to innovate, our new program, as well as the bank to try to fill in the other elements of the map, if you like, that go from 80% to 100%.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

But again in terms of the hexagon itself, Deputy Minister, I've met with small Internet providers that have said your funding does not apply because in one small corner of a large area where there's a large number of users, if one household has received connectivity, they assume that the whole hexagon does. This is a real oversight.

[John Knubley]

So that's the CRTC's decision and that's the way it is proceeding. We are examining our other programs. I would suspect that we are not going to use the same criteria in other programs.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Well, again the Auditor General pointed out—

[John Knubley]

And again, we are very sensitive to the issue of the small service providers and we've been talking to them and consulting them on how to move forward.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

But again, Deputy Minister, you say that we all have this target for minimum upload/download speeds, and yet you have a policy in this government that makes it so you can't be nimble and quick and respond to these things. I think it's a little disingenuous when we have your minister coming here and saying that universal access is part of his digital guidelines, and then suddenly on the flip side, you have a policy like the hexagon, which is actually making it more difficult for people in rural and remote areas to be able to get connectivity. I think that's a real shortfall, and I really would encourage my colleagues to write letters and to show their support for a change to this policy, whether it be at the CRTC through a legislative change through government or from the government's own policy for their own programs.

[John Knubley]

To clarify, though, the CRTC has decided that, when using the hexagon, which maps all elements of the Internet activity, in its own individual program, if it has that one user, then it is not an area that is remote. But that is a specific condition of its program.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay.

[The Chair, Liberal, Dan Ruimy]

Mr. Masse, you have seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I want to follow up a little bit with Crown copyright, not specifically, but indirectly to a successful thing that took place in the estimates, increasing the Copyright Board of Canada's financial capabilities. This was good news, I think. I want to find out how it's going to be followed up because, in brief, the Copyright Board has been known to not be able to meet deadlines or at least have quick turnarounds with decision-making. And similar to Crown copyright, where we heard a universal frustration with regard to that issue, was the Copyright Board's incapabilities to respond adequately to artists and even disputes and so forth. Even people on both sides were saying they just couldn't get a decision.

The good news is there was an increase in the budget, if it is for the improvements to turnarounds. Could you maybe give me an update as to how that's going or if there's going to be measuring of this? I just find this is low-hanging fruit and hopefully will bear some good results.

[John Knubley]

My understanding is that their budget overall is $4.2 million. I think there was a 30% increase in the main estimates.

A number of steps were taken by the government to address some of the issues you raised, specifically, ensuring that the chair and vice-chair are in place, and that there are new processes to try to respond to the backlog in terms of their practices.

[Brian Masse, NDP, Windsor West, ON]

Is it possible, as this particular sitting Parliament winds down, that a response to the chair about the implementation of that could be disseminated amongst members? Whenever you can, update this and send it to the chair. I'm interested. It was under Bill C-86 that the changes were enacted. The budget includes some increases. I would think that all members here might be interested in seeing how that's progressing to the Copyright Board. We're going to continue to receive a lot of advice from people who are interested in this matter.

[John Knubley]

Sure, we'll be happy to do that.

My colleague, Philippe, has something to add.

[Philippe Thompson, Assistant Deputy Minister, Corporate Management Sector, Department of Industry]

Yes. The increase in the budget for the Copyright Board is $900,000, and it's for the intellectual property strategy.

[Brian Masse, NDP, Windsor West, ON]

I'd really appreciate that. I think that would be good.

I would like to move to the Canadian Space Agency. I know there were some increases with regard to that, but right now, there's a decision-making process. We've been participating in the Hubble telescope, and the Webb as well, but we're not part of the next one. Are there decisions about that? Have there been budgetary allotments to allow them to participate in that?

As well, there are going to be some new initiatives on core component designs and partnerships. I'm just wondering whether the Canadian Space Agency is receiving support to do more work, in terms of outreach, and how Canadian companies can engage in international competitions for project procurement.

You may not be able to answer this now. It might be a bit too specific, but I'm curious, in terms of the budgetary allocations for the Canadian Space Agency, whether those include more comprehensive support for them to win contracts for Canadians companies, or to be engaged themselves in competition for joint initiatives.

[John Knubley]

The government has announced, in the last year, its commitment to the space sector, of $2.6 billion overall, and a strategy in support of that. A big part of that was the commitment to the lunar gateway project, which involves, of course, robotics, and the next generation of Canadarm.

In terms of SME development, the space agency does have some small programs, which we complement in the Innovation, Science and Economic Development space. It tends to be a combination of the Canadian Space Agency and ISED, which work with the SMEs to help them respond to procurement opportunities.

[Brian Masse, NDP, Windsor West, ON]

There's been increasing stress on Canadian consumers with regard to competition issues. I didn't notice any improvements to the Competition Bureau, from the estimates. I was wondering why that wasn't considered, especially given that we've had a ruling from the CRTC, with regard to Canadians being affected by the predatory practices of the telcos—pricing, engagement with consumers and so forth. I think their decision is still another 10 months away. I believe they announced that it would take a year to decide on the penalties for that. Has there been anything allocated to the Competition Bureau I may have missed that would enhance their capabilities to deal with—

[John Knubley]

No funding has yet been allocated. However, this is an issue that the Competition Bureau is examining in some detail. It is doing that in consultation with other OECD countries. There's a committee it's a part of, which is looking at the digital issues. I was in Paris at the release of the OECD study on digital, and competition policy is a big part of that.

I understand, as well, that the Competition Bureau is holding a consultation—an event. It may be right about now, or early in June, when it is spending two days with stakeholders, looking at these issues.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Hardie.

You have seven minutes.

Welcome to our committee, Mr. Hardie.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you very much, Mr. Chair. I am really impressed with how deep a dive the colleagues who are on this committee full time can do on this. I'm a visitor, so my questions will be a little bit more high level.

I wanted to talk about the rollout of program funding. In your ministry and others, you're a catalyst. You say, “Here's the program; here's the money” and then you wait for people to take it up. I'm surprised, actually, that my colleagues haven't asked you what that take-up has been. The question that quite often comes up with other infrastructure is whether the money is going out the door. What can you speak to in terms of the take-up of the programs that you're offering?

[John Knubley]

I would say that our department and portfolio and other government departments are all working to implement the innovation and skills agenda as quickly and effectively as possible. There are four components to that. One is around people and skills. You heard the minister talk earlier about the CanCode program and our STEM initiatives. It would also include the global skills strategy, where there has already been immediate action to, for example, provide a two-week period in specific sectors for visas to be approved within that two-week period. That's particularly important to the IT sector. That's block one, if you like.

Block two is around technology and science. There has been a huge investment in fundamental science of $10 million and Minister Duncan will have an opportunity to speak to you about those investments in program superclusters.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Yes, we're making these dollars available, but it also requires organizations and companies, etc., to step forward and say that they want to participate. My question was more about the level of participation.

Another way of looking at this is this: What is your situation with respect to lapsed funding? When you come to the end of a year, are you turning money back over to the government or is the take-up there for what you're offering?

[John Knubley]

I'll let Philippe Thompson, my CFO, talk to the lapsed funding issue. Let me say, broadly, that we're very proud in the department about the take-up. We've really reached out and engaged in initiatives. In the area of SIF, we have 44 projects and $1.2 billion.

We've launched the superclusters and they are about to announce a series of projects where businesses are coming forward in collaborative ways to promote ecosystem developments. We have these programs in the area of fundamental science that are also moving forward.

Philippe, do you want to talk about the actual lapse?

[Philippe Thompson]

In the strict term of expenditures, the department has been going on a higher tangent over the last few years. We went from $800 million in expenditures in 2015-16 and we reached $1.8 billion last year. We are expecting to spend $2.2 billion this fiscal year.

In terms of the lapses, we are currently anticipating a public accounts lapse of $846 million. Of that lapse, $4.9 million is for the operating budget of the organization. It is less than 1% of the budget of the organization, which is pretty good.

We are expecting a lapse of $1 million or 12% on the capital budget. In terms of the grants and contributions budget, it's $841 million.

That being said, we remain committed to spend all the grants and contributions funding that have been provided to the organization. We rarely lapse the funds. We profile those funds into the future years. We are, of course, honouring the budget commitments and ensure the programs are delivered effectively with the best value for Canadians.

All this funding that is in grants and contributions has been re-profiled and approved.