Evidence of meeting #19 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was additive.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Darrell Toma  Past Chair, Alberta Chambers of Commerce
Martin Petrak  President and Chief Executive Officer, Precision ADM
Farzad Rayegani  Director, Centre for Advanced Manufacturing and Design Technologies, Sheridan College, Polytechnics Canada
André Léonard  Committee Researcher

4:10 p.m.

Past Chair, Alberta Chambers of Commerce

Darrell Toma

Certainly, and thank you.

Mr. Chair, we had sent a brief. I presume everybody got that brief?

4:15 p.m.

Liberal

The Chair Liberal Dan Ruimy

Yes, in English and French.

4:15 p.m.

Past Chair, Alberta Chambers of Commerce

Darrell Toma

Okay, good. There are some other ideas I haven't addressed.

I would concur with the other presenters on the spread of the R and D funds into the top end of the R and D spectrum versus further down the R and D spectrum of commercialization and development. That's one of the messages I hope would be understood here.

One of the other messages that wasn't mentioned but that should be there in broadening the mindset is the awareness of what programs are out there for a lot of SMEs. We have urban and rural manufacturers. Urban manufacturers in Alberta in Edmonton, Calgary, and Red Deer tend to be fairly well serviced, and they are in the pipeline of information on IRAP and BDC, and so on. However, in rural Alberta a lot of them are not aware of those kinds of programs, frankly. Awareness is one of the challenges.

Another idea that I would commend to the committee is we have to look at different ways of delivering the programs, and different tools. Maybe the tools need to be more through incubators that can deliver certain programs, and also through innovation centres. Recently we did a project in Quesnel, a new agri-food innovation centre, because since 1995 the federal government's pulled out of technology transfer in the agri-food system. It's pulled back quite a bit, and the B.C. government has as well, so the City of Quesnel was looking at how to provide innovation supports in their region. They were looking at a new, small-scale innovation centre.

This kind of strategy of using different tools to deliver programs such as small-scale, rural-based, regional innovation centres is an idea that probably would help get some wind under some of the manufacturers.

Importantly, we need to have a strategy around competitiveness. The other two presenters mentioned this. A number of trade agreements are implemented and the Canadian dollar is favourable for manufacturers, but as we implement trade agreements, that allows others to come into the marketplace. If we're not prepared, if manufacturers are not adapting to conditions and not strengthened and do not have scale and scope to respond to competition, they get hammered and go out of business.

Similarly, we need some way of broadening the succession in smaller-scale manufacturers, putting two or three of them together to work in business networks and to collaborate on jointly owning manufacturing facilities or hiring a marketing person or an accountant or someone like that. We need to look at new ways of delivering services to these small-scale people, because they won't survive otherwise.

I've worked in other countries, and it's instructive that others are doing different things and not staying the same. I think we need to re-examine some of these things. We are delivering programs and they are useful, but manufacturers who want to put their own money on the line and then borrow other money need to have other supports put in place.

4:15 p.m.

Conservative

Earl Dreeshen Conservative Red Deer—Mountain View, AB

Thank you. I know that the Canadian Chamber of Commerce has been with the government, or the past government, whenever it was on any trade missions and deals so that they could see what was taking place. I know that there are initiatives to try to make sure that this gets down to the local level as well, so I'm sure that everyone is working as hard as they can on that.

I was interested in the discussion on additive manufacturing that Mr. Petrak and Mr. Rayegani had spoken of. Mr. Rayegani, you mentioned that over the last 10 years there'd been a lot of co-operation as far as this is concerned. Mr. Petrak, you were saying that if we want to be effective in advanced manufacturing, we have to make sure that we've got a handle on additive manufacturing as well.

I'm wondering, Mr. Petrak, if you could talk about what smart investors would be looking for if they were to work into the additive manufacturing area. Are there things that they have to be looking at in terms of shipments across borders, moving into other types of arrangements with smaller and larger companies? What do you foresee would be the main point that would be the hook so that people would want to get involved in additive manufacturing?

4:15 p.m.

Liberal

The Chair Liberal Dan Ruimy

You've got about 30 seconds.

4:15 p.m.

President and Chief Executive Officer, Precision ADM

Martin Petrak

Okay. It's the supply chain that we talked about, understanding this supply chain right from raw minerals pulled out of the ground and your supply costs through to the talent that's around. If you have the talent pool of individuals, the researchers, the engineers who can create those high-value products, you can create these products, from medical spine devices right through to aerospace components. If you have that highly qualified staff, you have the supply chain understood. That's what people want to understand and invest into, because that's where the intellectual property is developed.

4:15 p.m.

Director, Centre for Advanced Manufacturing and Design Technologies, Sheridan College, Polytechnics Canada

Dr. Farzad Rayegani

In 2012, President Obama, in a State of the Union speech, talked about additive manufacturing as a technology. He was the first president of the United States to talk about a specific technology, additive manufacturing, and he ordered the House of Representatives to give $30 million to this project. I turned to my wife and said, “What is he saying? I've already built it in Brampton.” We already had it.

What happened after that was that President Obama pushed that technology by pushing the support of government at every level and created America Makes. Based on that, he said that he would bring manufacturing back to the United States.

We were happy with what we had without any support. Now we are behind. With the CME, I established Canada Makes, which is similar to America Makes, but without real support of the government at different levels, so it is different when we to talk about action. There is a technology that is changing everything, a revolutionary technology, and we are saying, “Oh, we will see what is going on; wait.” We toured Germany for 10 days—a lot of beer, so don't consider that—and we talked about that, but we are behind from that perspective.

4:15 p.m.

Liberal

The Chair Liberal Dan Ruimy

Thank you very much, but we do have to move on.

Mr. Masse, you have seven minutes.

4:15 p.m.

NDP

Brian Masse NDP Windsor West, ON

Thank you, Mr. Chair.

I do have a private member's bill on local domestic craft breweries, but aside from that, we'll—

4:15 p.m.

Voices

Oh, oh!

4:15 p.m.

Liberal

The Chair Liberal Dan Ruimy

You can ask him to continue about the beer, then.

4:15 p.m.

NDP

Brian Masse NDP Windsor West, ON

We'll move on. I'm going to move on to Mr. Toma.

You've mentioned the trade agreements in relation to difficulty in the exportation of manufacturing, and I especially can see the transition. I come from the auto sector in southern Ontario, and we've been through this a few times.

What particular trade agreements are you finding a little bit challenging, the current ones that are being negotiated or the ones that are actually in place now? Is it the the TPP coming up, and that uncertainty? Is it CETA? Even in NAFTA, what people don't recognize in NAFTA is that there are several spots where Americans have privileged trade access into Canada, be it the Jones Act or the the Buy American Act, and there are a few others too.

4:15 p.m.

Past Chair, Alberta Chambers of Commerce

Darrell Toma

Thank you very much for the question.

I'm an economist by training and I chair the Edmonton chamber's trademark and access committee. We have great people on that committee. One of the things that we pushed through this year was support for the TPP policy, because we see it as being the next growth lever for western Canada and for Canada. Notwithstanding, there will be adjustments.

When we look at CETA and other agreements, one of the messages that comes out from our business community is that they don't really understand how these agreements may apply to them. Specific to the TPP, there has not been, to our knowledge, information provided on effects, impacts, or timing and so on. I can understand that, since it's still in process, but regardless, we believe we need to be part of that and we need to understand it. One of the gaps is understanding how this trade agreement will be applied.

As for other trade agreements, I was in Chile with the Alberta college system. I took about five colleges down to Chile. We met with one of the Chilean trade commissioners down there, and the president of the Canada-Chile Chamber of Commerce. I asked them how many companies were doing business down there, and they said one Canadian company is doing a mining sort of thing. Why aren't there more? It's because we just don't understand where these opportunities are. That's one of the gaps in this area.

Conversely, then, adapting a company to be ready to go internationally relies on scale and money. To develop an international market, it takes $100,000 or $200,000 a year. If you're a small-scale manufacturer with 10 employees, you barely have money to pay your bills right now, frankly, and to adapt into these changing environments is going to be difficult. It takes some information, and it's going to take some support and some scale-up programming, I think, to get companies big enough to take on these challenges.

In Canada, just as a sidebar on the Agreement on Internal Trade, we have many barriers in Canada among provinces that restrict our company size in certain industries. That's a problem, and we've got to deal with it. It's been on the books since 1995 or so. These things prevent us from being competitive, and I think that the message of competitiveness is fundamental. Canada is a trading nation. We want to trade. We've got to be prepared, and some of these barriers are in front of us.

4:20 p.m.

NDP

Brian Masse NDP Windsor West, ON

With regard to competitiveness, what sectors in particular are you referring to?

Chile is an example, but what would you grow, or what would you export from Alberta to Chile that would...? It's between shipment and everything else, and as a service industry you have significant geographical barriers to markets, but I don't know the entire....

4:20 p.m.

Past Chair, Alberta Chambers of Commerce

Darrell Toma

Just as an example, I took the college system to Chile because I did a series of applied research projects as a consultant to them. One of the things they have is a strong agri-food industry, and oil and gas and mining resources that need to be developed. Simply connecting people and organizations can give businesses opportunity, because they want to develop their resources. When their students graduate from high school or whatever, they fly to Australia and New Zealand. They don't even know Canada exists. We could be using those people to go into the college system, become trained, and replace some of the people who will be retiring in other industries.

There are industries that would work quite well. In the agri-food industry, you can do the seed stock in Canada and you can replicate it down in Chile because it's a different season altogether; this can happen with canola, for example, and with potatoes and so on. This is how you get trade developing.

June 9th, 2016 / 4:20 p.m.

NDP

Brian Masse NDP Windsor West, ON

The real barrier, I suppose, is more support for Export Development Canada, especially for small and medium-sized businesses to get there.

Ironically you're talking about Chile, and a Chilean peach caused the APHIS fee on our exports into the United States through my area.

Would that be fair? Mr. Petrak, maybe you can add to this. I've seen things over the years and I hear a bit of a different tone now, but I'm looking for the measurables from BDC and Export Development Canada. To be fair, in recent years I've seen more through Export Development Canada than from BDC about supporting small and medium-sized businesses to be empowered, especially into the export market to the United States and others that we have agreements with.

I'll allow all three of you to comment on that if there's time, Mr. Chair.

4:25 p.m.

Past Chair, Alberta Chambers of Commerce

Darrell Toma

I would make a couple of points. One is that we do have ways for industry to connect and do business, but they need an understanding of what is there to do business with or who to connect with. The oil and gas sector has to have some kind of intermediary to facilitate that introduction.

The longer-term strategic one, which is important in the college or university system, is about bringing in graduating high school students from Chile. There are lots of them who are well off and looking for that, and when I was in Costa Rica, it was the same message. If you bring them in and educate them on Canadian technologies, when they go back to their country, they want to work with Canadian technologies. It builds bridges.

Those are two immediate ones that are possible and very doable.

4:25 p.m.

President and Chief Executive Officer, Precision ADM

Martin Petrak

From our end we're just beginning to work with EDC, and they sound very helpful at this point, both on the Orthopaedic Innovation Centre side and on Precision ADM. We will be working with them, but most of our business is in the U.S.

4:25 p.m.

Liberal

The Chair Liberal Dan Ruimy

Thank you.

Have you anything to add in five seconds?

4:25 p.m.

Director, Centre for Advanced Manufacturing and Design Technologies, Sheridan College, Polytechnics Canada

Dr. Farzad Rayegani

No, but regarding Chile, the important thing to know, which we forget, is the time zone. We have only a one-hour time zone difference with Santiago, and nobody thinks about that.

For digital manufacturing work, a one-hour time zone is critical. It means that we can work with Chile every minute. We cannot work with India or China, which have a 12-hour difference, so that is a key element. We forget about the South American relation in manufacturing.

4:25 p.m.

Liberal

The Chair Liberal Dan Ruimy

Thank you. I'm sorry to cut you off, but we have to keep moving.

Mr. Longfield, you have seven minutes.

4:25 p.m.

Liberal

Lloyd Longfield Liberal Guelph, ON

Thanks, Mr. Chair.

Thanks for your flexibility as these conversations are going on. It's like a good hockey game. Sometimes the ref just lets it go.

Thanks to the clerk's office as well for bringing in these types of witnesses from across Canada. We have Alberta represented, and Manitoba and Ontario, so I'm taking a few seconds to say thanks to you guys for coming and thanks to the colleagues around the table for this conversation.

4:25 p.m.

Liberal

The Chair Liberal Dan Ruimy

Thank you.

4:25 p.m.

Liberal

Lloyd Longfield Liberal Guelph, ON

I'm delighted that we're talking about manufacturing. My background is manufacturing. You're actually talking about additive manufacturing, which is even better; you know where manufacturing is heading.

I want to start off with Martin from Winnipeg.

I'm a graduate of Red River College. I've mentioned that to a few witnesses now. Winnipeg is doing some things around additives which I'm looking at. We just came back from Montreal, having looked at aerospace, and we are wondering whether we have the right bridges across the country. You mentioned something about internal trade barriers. Could you maybe mention what we as a committee could look at and include in our report to open up opportunities within Canada?

4:25 p.m.

President and Chief Executive Officer, Precision ADM

Martin Petrak

I think it would be very important to look at Canada as a whole, not as western Canada and then eastern Canada and Quebec.

We see that right now in the aerospace industry. Especially for additive manufacturing, we look at where the resources are potentially going to be going, and it's to those two provinces. In the west, we're feeling a little bit left out, although from an additive manufacturing perspective, I don't think so. I think we've taken the lead. I think, from our perspective, that the federal government saw something that we saw as well as the opportunity to service both the medical and aerospace areas together under one umbrella organization. I think that was a very good step, but I think it needs to be expanded.