Industry Committee on June 7th, 2016

[The Chair, Liberal, Dan Ruimy]

Order. We've already lost about 25 minutes, so we're going to get started.

In terms of the first order of the day, for those of you who don't know, part of the committee went to Montreal on Thursday and Friday. On Friday, on the way back, our clerk Roger fell ill, ended up in the hospital, and had some exploratory surgery. He's fine now, but I think he's going to be out for a bit.

Temporarily, we have a new clerk: Christine Lafrance. We'll have to be nice to her by being nice to me. All right—

[Majid Jowhari, Liberal, Richmond Hill, ON]

It's all about you, isn't it?

[Some hon. members]

Oh, oh!

[The Chair, Liberal, Dan Ruimy]

It is. It is all about me.

We're going to move forward now.

Today, Tuesday, June 7, pursuant to Standing Order 81(4), the Standing Committee on Industry, Science and Technology will be studying the supplementary estimates (A) for 2016-17, referred to the committee on May 10.

I welcome the officials from the industry department. I invite Mr. Enns to present to us the main changes that are proposed in these estimates.

From the Department of Industry, we have David Enns, chief financial officer, corporate management sector; Mitch Davies, assistant deputy minister, strategic policy sector; Lawrence Hanson, assistant deputy minister, science and innovation; and Corinne Charette, senior assistant deputy minister, spectrum, information technologies and telecommunications.

You have 10 minutes, Mr. Enns. Go for it.

[David Enns, Chief Financial Officer, Corporate Management Sector, Department of Industry]

That would be fine. Thank you.

Bonjour, Mr. Chair and committee members.

As you mentioned, Mr. Chair, I'm David Enns. I'm the chief financial officer and the assistant deputy minister of the corporate management sector at Innovation, Science and Economic Development Canada. You've already introduced my colleagues, so I won't do that again.

We're pleased to be here with you this afternoon to provide you with an overview of the department's supplementary estimates (A)s for 2016-17.

Through these supplementary estimates, the department is requesting $604.1 million. The majority of that funding was announced in budget 2016. The majority of it was for infrastructure investments, which I'll speak to in a moment. The remaining portion of our supplementary (A) request is for a number of items to support research, as well as our department's new responsibilities for Sustainable Development Technology Canada.

To begin with infrastructure, then, the largest single item being requested through the supplementary estimates is $500 million under the post-secondary institutions strategic investment fund program. This program will provide up to $2 billion over the next three years to accelerate infrastructure projects at universities to enhance and modernize research and commercialization facilities, as well as industry-relevant training facilities at colleges and polytechnic institutions. The program has already been launched—in late March, shortly after the budget announcement—and project decisions are expected this month.

The department is also requesting $9.6 million in 2016-17, out of a total of $15.2 million over two years announced in budget 2016, to maintain and upgrade federal laboratories and other federal assets at our Communications Research Centre, known as the CRC. The funding will be used for seven projects, but there are two main ones. The bulk of the funding, $4 million, will be used

this year to refurbish one of the centre's existing buildings into a modern, collaborative and innovative office space, in support of the CRC's research mandate. Then, $3.5 million will be spent this year to centralize all of the CRC's existing lab spaces.

The last infrastructure item included in the supplementary (A)s is $2.6 million, out of a total of $5.2 million over two years announced in the budget, for the federal economic development organization for northern Ontario, known as FedNor, to support community infrastructure projects for the celebration of Canada's 150th anniversary.

In support of research, the department is also requesting $24.9 million for two Mitacs programs: the Accelerate program for industrial research internships for graduate students and postdoctoral fellows, and the Globalink program for the delivery of international internships and fellowships.

Of that amount, $7 million is actually a transfer from the Natural Sciences and Engineering Research Council related to a budget 2015 commitment to consolidate federal support for industrial research internships for postgraduate students under a single contribution administered by Innovation, Science and Economic Development.

The department is also requesting $6 million, out of a total of $12 million over two years, to support Stem Cell Network's research, training, and outreach activities and to strengthen Canada's international leadership in stem cell research, as set out in budget 2016.

One of the final items that I will highlight here comes from the realignment of responsibilities for Sustainable Development Technology Canada. Effective November 4, 2015, the Minister of Innovation, Science and Economic Development was designated the minister for the purpose of the Canada Foundation for Sustainable Development Technology Act. That's the legislation that governs Sustainable Development Technology Canada. As such, $57.8 million is being transferred to our department this year from the two departments that previously managed the program, Environment and Climate Change Canada and Natural Resources Canada.

Finally, the department is requesting $2.5 million to increase the analytical capacity needed to support the defence procurement strategy and $1 million to expand the computers for school program, both announced in last year's budget.

That concludes my introductory remarks. My colleagues and I would be pleased to answer any questions you have.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Here's what's going to happen. We'll do a round of questions, and at the end, when we're all okay with it, we will start the votes. We will go through each vote individually, finish all of them, and that will be the end of that.

Mr. Arya, you have seven minutes.

[Chandra Arya, Liberal, Nepean, ON]

Of course, I'll start with my favourite, FedDev for southern Ontario. I see that the supplementary estimates are $22 million compared with the overall previous expense of $231 million. Ottawa and eastern Ontario fall under FedDev. Ottawa has the national capital region. We have 1,700 knowledge-based companies, the biggest concentration of knowledge-based companies in Canada, much bigger than that in Kitchener-Waterloo, Vancouver, or any other place. But the amount FedDev spends in our region is very minimal. I think 75% to 78%-plus is spent in Toronto and the west. A very meagre amount is being spent in Ottawa.

However, my first question is not about my rant here. What is this “Funding for affordable housing and social infrastructure projects”? Why is it under FedDev?

[David Enns]

Maybe I'll start, and perhaps my colleague will want to chime in on that.

This is part of a bucket of funding that was provided under budget 2016 for social infrastructure. The component that has been provided to the regional development agencies, all of them, is for community and recreational cultural infrastructure. This is a continuation of budget 2015 funding: $150 million over two years, and an additional $150 million being provided in 2016-17. This is for projects that will focus on community and recreational—

[Chandra Arya, Liberal, Nepean, ON]

I understand, but why is this particular item under Innovation, Science and Economic Development?

[David Enns]

FedDev is one of the RDAs, but the regional development organization for northern Ontario actually is housed within the department. It's like the other regional development agencies, but its status is a bit different. It actually is part of the department. That's why the money comes to the department.

[Chandra Arya, Liberal, Nepean, ON]

How can we ensure that all this money is not spent just in Toronto and Kitchener, and that other regions, such as Ottawa, get it?

[David Enns]

Well, the component that is housed in the department is for FedNor, so that's northern Ontario. The other regional development agencies—FedDev, CanNor in the north, ACOA in the east, Quebec, and WD—all have portions of this cultural and recreational infrastructure money that they will be using and disbursing for these projects across the country.

[Chandra Arya, Liberal, Nepean, ON]

Sorry, FedDev in southern Ontario: this money is for the region under its jurisdiction, no?

[David Enns]

Yes.

[Chandra Arya, Liberal, Nepean, ON]

That includes Ottawa.

[David Enns]

Yes.

[Chandra Arya, Liberal, Nepean, ON]

Okay. And how can we ensure that FedDev does not spend the entire amount of money in Toronto and Kitchener-Waterloo?

[David Enns]

They will have a process for the selection of projects. The criteria are published. They will follow the eligibility criteria.

[Chandra Arya, Liberal, Nepean, ON]

According to Destination Canada, I know we are investing in and promoting Canada's 150th anniversary in a big way. How is this nation of Canada working with other levels of the government, such as the City of Ottawa? The City of Ottawa is also investing quite a large amount to promote the 150th anniversary. How is Destination Canada working with the City of Ottawa, for example?

[Mitch Davies, Assistant Deputy Minister, Strategic Policy Sector, Department of Industry]

Destination Canada works in close partnership with many partners across the country. Provinces have active programs to bring in tourists to destinations, as do municipalities. I know they partner locally with Ottawa and with other cities that are trying to draw in tourists. The opportunity provided by Canada's 150th anniversary for this region, for the national capital, is extremely important. I think it's something that Destination Canada will be working on and using as a means to draw visitors from abroad. This funding in the supplementary estimates is to enhance their activities in key markets, such as the United States and China, to get overnight stays and long-haul stays into Canada, which has been shown to be highly valuable.

[Chandra Arya, Liberal, Nepean, ON]

That is exactly what Ottawa Tourism is trying to achieve

Going from there, I'm a bit confused on the Mitacs program, the $7 million transfer from NSERC to consolidate federal support for industrial research internships for post-graduate students. I thought that particular thing was one of the focus areas of NSERC. Why has it been taken out of NSERC into Mitacs?

[Lawrence Hanson, Assistant Deputy Minister, Science and Innovation, Department of Industry]

What's happened is that there are other programs that NSERC does operate in this space, but the IRDI program was similar to what Mitacs did, and Mitacs had been delivering the IRDI internships already. This formalized the situation, where Mitacs would continue to deliver these internships, and we would have a sole source for delivering these internships to make it easier for both businesses and potential interns to navigate.

[Chandra Arya, Liberal, Nepean, ON]

Does this amount reduce the NSERC budget? I know it's a small amount compared to the total funding that goes to NSERC.

[Lawrence Hanson]

It does reduce the NSERC budget by $7 million, but the reality was that Mitacs was already delivering those internships, so it doesn't have a material effect on the NSERC budget.

[Chandra Arya, Liberal, Nepean, ON]

My last question is about Sustainable Development Technology Canada. Where was it getting administered? Which ministry was dealing with it prior to its transfer to Innovation?