Industry Committee on June 9th, 2016

[Sheri Benson, NDP, Saskatoon West, SK]

Oh, you're so kind.

[An hon. member]

We all have three minutes.

[Sheri Benson, NDP, Saskatoon West, SK]

Now it's going to take me three minutes to figure out that three-minute question.

Actually, Mr. Toma, maybe I'll leave my question—and it will probably end up being just one question—with you.

I wonder about the transportation infrastructure and whether it's benefiting our manufacturing sector or detracting from it. I wonder what role the chamber plays in looking at how goods are getting to where they need to go, and whether that is a challenge. I'm looking just for some general comments and some specifics you might have from your vantage point.

[Darrell Toma]

Well, many parts of western Canada are landlocked, obviously, and it's a distance to market, and then a distance from there to a port, and then to wherever the international market is.

Transportation includes international airports, which the major cities typically have; it will include pipelines, which is part of the market access bottleneck in the energy industry, which you all understand, probably; and then there's the highway system, with truck transportation and so on.

One of the problems with provinces is running rates for trucks between provinces. That has been brought up before. The interprovincial trade barriers are still a bit of a problem on transportation there. Perhaps I'll leave it at that.

[Sheri Benson, NDP, Saskatoon West, SK]

I'm going to stick with you, Mr. Toma. I wonder whether you might talk about the role that a chamber, and your chamber specifically, plays in what is certainly an issue in my province of Saskatchewan: working with companies and the economy around diversification and toward a non-energy economy, which we are talking a lot about.

What role do you play? How could we support it? Is there support there that people aren't accessing? If it's not you, what group would be in charge and would be moving that economy into what we see as the next thing for many communities?

[Darrell Toma]

It's a great question. Diversification is in front of our premier and in front of the cabinet right now for sure. Is it a destination, or is it a process to get to the end point? It can be both, but practically, the reality is that business people are the ones who are actually going to make it happen, and they need access to a whole bunch of things. It probably starts with market access. If you don't have access to a market, it's awfully hard to do.

I'll give you an example. One thing that should be among your topics is procurement, I think. I brought it up earlier. There is a medical device that was invented in Edmonton by a U of A prof with an ex-military doctor. It's a clamp to clamp on a bleeding part of an arm or whatever. I met with this guy about two years ago, and he said he was going to commercialize it in the States. He has a company down there. He started up in Austin with 27 employees, whereas in Alberta he has two employees. He said the reason he can't commercialize it in Alberta to create diversified products is that he can't sell it to Alberta Health Services, the AHS, because of procurement standards and so on.

This is an idea of procurement barriers. We create all this stuff, and then we can't sell it locally, so he has to leave the country to go ahead and commercialize it. There are lots of barriers in the diversification debate, for sure.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Here's where we stand. We have one minor housekeeping matter, which will take about two minutes, so we have time for three questions of five minutes each.

When I say “five minutes”, I mean five and not seven, okay?

Mr. Baylis, you have five minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I have two questions. For the first one, I want to swing back to the Bombardier question.

A few years back, the largest, most successful high-tech company in Canadian history was Northern Telecom, which at its peak represented $300 billion of value and employed 94,000 people in high-tech jobs. The previous government had $10 billion to lend to U.S. car companies but didn't lend $1 billion to the biggest, most successful Canadian company ever. Granted, it was getting into problems.

In that light, did you agree with that decision to let Nortel die and not lend it the $1 billion?

We'll start quickly, yes or no, with Mr. Toma.

[Darrell Toma]

Well, I guess under the do no harm—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Yes or no?

[Darrell Toma]

Probably...yeah, “no”.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Yes, you agreed to let Nortel die. Okay.

Mr. Petrak, I'd like a yes or no.

[Martin Petrak]

I think some of the decisions—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

No, I'd like a yes or no.

[Martin Petrak]

I would say yes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you.

Now I'm going to move on to another set of questions, going back to Mr. Rayegani.

You mentioned something about temporary students, temporary workers, and said that they come and bring a lot of value but that we're not able to integrate them into the system. Could you expand a bit more on the value of this knowledge base and how it can help our companies be more successful?

[Dr. Farzad Rayegani]

Again, I think that there are few mechanisms for immigration and refugee and talent acquisition. When international students finish the two years, there is no process, really, to see their value added to the whole ecosystem. We are not guiding them, we are not driving them, and there is no innovation hub or centre to bring them and another system together.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You would like us to be able to keep them, if possible, if they head back.

[Dr. Farzad Rayegani]

Of course I would, because we are missing the talent. You don't have a skill gap if you.... You have a skill gap, yes, but it is a skill gap that Canada has in certain areas.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

We should use them, then, to fill a gap and should find a way to keep them.

[Dr. Farzad Rayegani]

Yes.

The other thing is people in the 35-plus category. What happened to them? We are always saying that we need expertise and experience. Those who are 35 plus who want to come here have a difficulty in immigrating because they are older.

We are talking about women in technology in Canada. I always see in the paper items about women in technology and our wanting to have more. Look at Majid in Iran: 60% of the Iranian women are in STEM, in science and technology. Call with an invitation and all of them will come here.

There must be an objection to go to—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

For the last part I'd like to swing back to another point you raised.

You said that 97.5% of post-secondary funding is going to universities and only 2.5% is going to colleges. If we were to direct more of that towards colleges, how would you see us directing it, and to what applications, to have an impact upon manufacturing?

[Dr. Farzad Rayegani]

That is very simple. Look at the chart. Look at the percentage of research that is happening. You were talking about Bombardier. I wanted to ask how much of the R and D at Bombardier is happening in Canada. Two percent of Bombardier work is research; 97% or 98% is manufacturing and product development and assembly and so on.

If we look at the whole spectrum, we see that 95% of the manufacturing activity is not R and D in Canada. Please—it is applied research, product development, commercialization, and all of that. When you want to put the money there and you see that 95% of these organizations don't do R and D in Canada, why should we put the 97.5% of our money for research into that area?

Polytechnics are helping the other 95%, so—

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So it would be applied research, product development, and what else?

[Dr. Farzad Rayegani]

Of course. That is where the money must go, because that is where all those activities are going on—