Industry Committee on May 28th, 2019

[Brian Masse, NDP, Windsor West, ON]

Yes.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

Many of my colleagues here on the Liberal side have also highlighted this. How do we get a level playing field? What are the barriers to entry when it comes to data and the data that has been accumulated by a few? What does this mean for a competitive marketplace?

We look forward to unveiling some of these changes in a timely manner, and I look forward to working with you and others to make sure that we implement the changes to PIPEDA and possibly the Competition Act and the Statistics Act as well. All this is designed to demonstrate that the digital charter is going to be a guiding principle for future legislation programs and policies.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much, Minister.

Thank you to all our committee members for another respectful dialogue today.

We are going to suspend for two minutes while we get our officials back online.

[The Chair, Liberal, Dan Ruimy]

We're back.

We have with us from the Department of Industry, Mr. Knubley, deputy minister.

Thank you again for staying with us.

From the Department of Industry, we have Lisa Setlakwe, senior assistant deputy minister, strategy and innovation policy sector; Philippe Thompson, assistant deputy minister, corporate management sector; Mitch Davies, senior assistant deputy minister, industry sector; and Andrea Johnston, assistant deputy minister, Innovation Canada.

Thank you all for being here. As there are no presentations, we are going to go right into our questions.

Mr. Jowhari, you have seven minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Welcome to the department.

I'm going to start with you, Mr. Knubley.

Based on table 1 of the document from the Library of Parliament, there are a number of federal agencies that have received more funding or requested more funding. I would like to go through a couple of them specifically. I looked at the percentages, and I went across. The department that's apparently requesting the highest percentage is the Canadian Northern Economic Development Agency. It is asking for $63.5 million. That's an increase of about 122%. Can you expand on that one?

I have a number of them, so I can quickly go through them.

Western Economic Diversification Canada has a 106% increase. Then the Federal Economic Development Agency for Southern Ontario has a 40% increase. National Research Council Canada has a 17% increase. Finally, the Social Sciences and Humanities Research Council of Canada has an 18.3% increase.

If you could cover those so that I don't have to keep interrupting you, that would be good.

[John Knubley]

I'll do my best. Maybe I'll just go to the top first and then let some of my colleagues help me out.

Overall, in terms of the main estimates, $8.6 billion is identified for the department and portfolio; $2.9 billion is for the Department of Innovation, Science and Economic Development; and $5.7 billion is for the portfolio.

In terms of the department, there's actually an increase of only $3.3 million. That reflects a wind-down of the PSI-SIF program, which is the infrastructure program for colleges and universities. That's $640 million. Then there's an increase on the departmental side of $643 million related to steel and aluminum. From budget 2018, there is particularly CFI, DRI and the IP strategy. From budget 2019 there are young Canadians, digital strategy and broadband. Then there are some transfers that specifically relate to procurement, BCIP.

In terms of the portfolio, there's an increase overall of $791 million. You identified a couple of RDAs, I think in the case of CanNor the big increase relates to IDEANorth, which is a program, and there's an increase. There's an announcement in the budget of $75 million, so that is reflected in the main estimates.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Sorry, what is the program about?

[John Knubley]

It is about promoting economic development in the north and building capacity around R and D in that particular area, which of course has special challenges in the north.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay.

[John Knubley]

You identified WD as well. In budget 2019, $100 million of new money was announced for WD, and their increase in the main estimates relates to two things: that $100 million of additional funding as well as, I believe, $44 million that was set aside for Churchill and the initiatives related to Churchill.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay.

[John Knubley]

You raised the National Research Council. I believe the increase in the main estimates relates specifically to IRAP and the increases in the funding in budget 2018.

[Majid Jowhari, Liberal, Richmond Hill, ON]

There is also social science?

[John Knubley]

SSHRC, again, I think was in budget 2018, and the government made very significant investments relating to fundamental science. There's an increase related to SSHRC in that regard.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Finally, southern Ontario got another 40% increase, another $73 million. What is that focused on?

[John Knubley]

The issue with FedDev Ontario was that basically their funding had come to an end. In budget 2018 and budget 2019 that was replenished, and therefore the main estimates reflect that re-establishment of their funding.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay.

Thank you. Those are the questions I had.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Albas.

You have seven minutes.

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

Thank you, Mr. Chair. I'd like to thank the deputy minister for making changes to his schedule to accommodate the committee, and also thank the officials. Thank you for what you do for our country.

Deputy minister, just in regard to your official capacity as an accounting officer, can you confirm with the committee that in terms of Treasury Board policies, when it comes to your employees and your direct departments, you're following all policies?

[John Knubley]

To the best of my knowledge, we are.

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

Okay. Thank you.

I'd like to move to a few questions we have with regard to some of the policy development of your department. I'm sure many of the funds from the estimates here are supporting that.

We've heard nearly universal opposition to the hexagon model for determining eligible communities, yet the government is sticking with it. Why not change to a model that actually works for rural Canadians?

[John Knubley]

Well, in the case of broadband, as the minister identified, there are a number of commitments in budget 2019 that include a top-up to the connect to innovate program, a new program that will be launched, a $750-million initiative by the CRTC. There will be money available through the Infrastructure Bank of Canada. We are working to coordinate all of these initiatives and to ensure they are done collectively and based on evidence that we will all share.

One of the issues in the area of broadband is of course the mapping that's done, which uses this hexagon model. We continue to refine that. As you may be aware, there was an Auditor General report on these issues. I think we are following up and responding to some of the recommendations in there, which are to increase transparency of the mapping, to look at other tiers related to the mapping and to ensure that these hexagon models work effectively.

Lisa, do you want to add anything?

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

I do have a few other things here. Maybe in a moment she can jump in, because I'm going to continue talking about this.

[John Knubley]

I'm happy if she jumps in, in a moment.

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

Deputy, you've mentioned the Infrastructure Bank. That's a model where private industry will be expecting a large return. I think it's very cold comfort for rural remote communities to have even the perception that they might attract that. Also, that organization hasn't even set up its policies. It's only approved one loan.

I'd really like us to focus on your department and the CRTC. The CRTC has actually made public that it agrees with the hexagon model. There are whole communities that are not eligible for ISED or CRTC funding because in the corner of a single hexagon there may be one home wired up. Now even though other homes don't have any service at all, you and the CRTC say this grid is all okay; let's move on to the next.

So again I ask: Why is the government remaining behind the hexagon model when it basically eliminates large swaths of rural and remote communities?