Industry Committee on Feb. 18th, 2016

[The Chair, Liberal, Dan Ruimy]

I think this is a great example of how we should continue to move forward and not be afraid of conflict as we try to achieve consensus. The whole point here is to keep the dialogue open, and we're not always going to agree. As we continue to go forward, we'll have our say and we'll try to pass the motions and the majority will rule, but I think we want to keep that open mind.

So if it's okay, I'm going to go back to reading my little spot here.

Coming back to the industry portfolio, I'm just going to start again. Twelve federal departments and agencies make up the industry portfolio. Together these organizations are uniquely positioned to further the government's goal of building a knowledge-based economy in all regions of Canada and to advance the government's jobs and growth agenda.

Industry Canada works in partnership with the members of the industry portfolio to leverage resources and exploit synergies in a number of specific areas, and there are four.

First is “innovation through science and technology—helping firms and not-for-profit institutions more rapidly turn ideas into new products and services”. That's something that I heard around the room, so that's a really good thing.

Second is “trade and investment—encouraging more firms and more sectors to export to more markets, and helping Canadian firms attract a larger share of foreign direct investments”.

Third is “growth of small and medium-sized enterprises—providing access to capital, information and services”. Again, going around the room, we have a lot of business people here who bring a great perspective to the table.

Finally, the fourth area is “economic growth of Canadian communities—fostering new approaches to community economic development based on community strengths and information infrastructure”.

When I was reading this, my first thought was, who are we? What do we really do? What can we do? What's the potential? How can we actually take this and change the way we do business in Canada?

The industry portfolio includes the Business Development Bank of Canada, the Canadian Space Agency, the Competition Tribunal, the Copyright Board of Canada, Destination Canada, the Federal Economic Development Agency for Southern Ontario, Industry Canada, the National Research Council of Canada, the Natural Sciences and Engineering Research Council of Canada, the Social Sciences and Humanities Research Council of Canada, the Standards Council of Canada, and Statistics Canada.

This is an incredible portfolio and we have an incredible opportunity to think outside the sandbox, and maybe play a little bit differently. What I think we should do right now is maybe talk about potential future business and how it can apply in this strategy.

I'd like to open the floor up for discussion.

Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair. Certainly you've set the stage for our discussion. Given all the different agencies that are part of our committee's responsibilities, I think that's extremely critical.

From my experience in other committees, it was very important to have the ministers present the information they had in order to get things rolling. They more or less set the stage so that we knew where they were going and what things they had done. In the case of a mandate letter, we knew how they interpreted it, because those are all public documents. I think that's really one of the key issues.

Perhaps later I will take an opportunity to place a motion to have Minister Bains come here as soon as possible. I don't know whether it would be best to do it now, because I do want to say a few other things before we get to that stage, but that's really, I think, one of the critical parts.

We also have two other ministers. We should have an opportunity for them to explain what is important, what they've seen, and what their goals are. The reality is that we, as members of the House of Commons, are not within their ministries. We need to know from them what it is that is important and where their goals are going to be.

That's the first part. I'll come back to it again in perhaps a more formal way in a moment.

Other studies and other things that I know are critical in rural areas are broadband connectivity and the ability of businesses to expand. We have an amazing operation that takes place in my riding, in Olds, Alberta. It has the highest connectivity in the country, and that's basically because there are some businesses that have done some amazing work. Every course at Olds College, an agricultural college in my region, is completely linked in in terms of computer systems analysis. Amazing things have taken place there. That is an area that I believe we could be taking a look at, and we could look as well at how we could commercialize some of this technology and move it into other areas.

Those are the areas that I'd like to see us study. In order to get the ball rolling, we could ask about the availability of the minister, and I would be prepared to put a motion forward if that is in order, Mr. Chair. The motion that I have—

[The Chair, Liberal, Dan Ruimy]

Well—

Oh, sorry. I thought you were finished.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

I was just asking if it is in order for me to—

[The Chair, Liberal, Dan Ruimy]

I think we should just take the time, go around, and see what motions or proposals are out there. Then we can have a discussion about them. You're right; there are so many things.

Go ahead, Mr. Nuttall.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

I have a few that I was thinking about since we got the agenda.

First of all, not to belabour the point—I was speaking with Mr. Masse earlier about this—but as of yesterday in Bombardier's announcement there was both some positive and some very negative news as well. I would like to see them before this committee. I'd like to understand what it is that they are facing right now, and what it is they're looking for from the government, whether it's just from a regulatory perspective or also a monetary perspective, because sometimes those things go hand in hand. Sometimes you can change one and it changes the other in terms of the need. That's something I'd like to see as soon as possible.

Secondly, I would like to see at some point a study of the repayable loan program, whether it's through FedDev or Western Economic Diversification. Governments in the past, including Conservative governments, have essentially purchased portions of companies. I'd like to understand the effect of that on the marketplace as well as on the government side.

Then there's something we've seen over and over again, which is in the minister's mandate letter, and hopefully we can talk to him about this when he gets here. There's a statement in there regarding the transition of manufacturing economies into some other economy. I'm not sure what that is, where those jobs are going, what that's going to look like, and how many jobs we're looking at. What are our goals, specifically in southwestern Ontario, to be very precise? The Prime Minister said that as well in the past, which was reiterated in the mandate letter.

I'd also like to understand what types of training programs would be provided to those people as we “transition” them out of manufacturing jobs, as well as what the government would be looking at in terms of interim financial support to these people for whom we're trying to find other industries to go to.

The final one is a study of BDC. I'll tell you that one of the most frustrating things I've seen in our finance sector is when you have a private institution doing business against a taxpayer-owned crown corporation. It shouldn't happen, not in this economy, not in this country. One of the most frustrating things I've seen is when you have a private-sector finance company, credit union bank, tier one bank, going up against a publicly funded, publicly owned crown corporation like BDC for business.

That is not their mandate. Their mandate is to supply capital into the marketplace where it does not currently exist so that they can spur economic development, not replace dollars that the private sector's already putting forward. I can give you 100 different scenarios over the past five years that I've been involved in, and I've heard of others before that, where it blows your mind. It's just a poor use of taxpayers' money. That's certainly something I want to see us drive right down into.

If we can encourage BDC to free up funds to invest in areas that actually need capitalization and can't get it today, instead of being in places they shouldn't be, that can have a very strong economic benefit, specifically in the manufacturing sector.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Longfield.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks.

If we're brainstorming about where we go with this—and it is big with three ministries involved, a dozen agencies, and then other agencies that tie in—and knowing where to start with things, to be forward-looking, speaking with the ministers about what their visions are going forward, the three ministers who have mandate letters that attach to the work of this committee, is important.

Also, backward-looking, to say where we're coming from through the 12 agencies, the agencies themselves will have their own vision on what they see as blocks to innovation or competitiveness.

I'm on the agriculture committee as well. We've had some similar discussions about crossover in other areas—areas that may not be directly the work of this committee—things like transportation infrastructure and how do you get product to market? How do the border agencies work in order for us to move product back and forth over international borders? We could find other agencies as we go forward.

Right now, if we're trying to stay close to the treetops, to look at the top, and hopefully come to some types of motions as we have a discussion around the table, I'd like to see us thinking about getting input from the agencies that are attached, and other, let's say, barriers to business growth.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Masse is next.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

I think it's critical to get the ministers in here as well to hear what they want to set as priorities. I think it's helpful for the minister as well. It's an important two-way dialogue that can also help shape us in terms of our work.

I like the idea of doing another manufacturing study. The reason I suggest it is that you can separate it, as we did, into different components. You'd have innovation as a component. You would have, for example, automobile manufacturing and aerospace. You can define all these different types of things, and it would be good groundwork. We did a couple of reports that were very good.

We have four years. One of the most difficult things about this committee is narrowing down from so many different topics, but a general study on manufacturing gives us plenty of opportunity. We could have one meeting on that subject and one meeting on another subject and get from that what their interests and priorities are. From there, we can move forward.

We had a series of recommendations. Some of them everybody will agree with and some of them we may not. We could have a supplementary report. Instead of a dissenting report, what I'd prefer to call it is a supplementary addition. It's not seen as negative, as a dissenting opinion is. It's just a difference of opinion. Sometimes they're necessary and sometimes they're not.

One thing outside the sandbox is studying food pricing through the retailing and distribution of it. I've met with a couple of food suppliers who have inefficiencies in their systems. With the price of food going up, there's an opportunity to discuss that. It includes the border and it includes producers' relationships with retailers.

There are all kinds of other things that can come up, but those are just a couple of ideas. Of course there's Postmedia as a smaller thing. That's important, as well as Canadian takeovers. We're looking now at the situation related to Rona, for example.

At any rate, that's why I like the general idea, in particular, of manufacturing, and then agreeing on the different components and having special meetings on each section of those components and building a really good report that could lead to recommendations and some other study deriving from that.

We're also very conscious of the fact that the minister eventually is going to have legislation that comes here. We understand that's a priority for the committee to take care of.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Go ahead, Ms. Gladu.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

I agree that the scope is very broad. In addition to getting the ministers here and finding out what the departments are already doing that we don't need to do, you may want to have the parliamentary analysts take a look at what the committee previously was working on that still has further work to be done so that you can consider whether you'd like to do anything there.

There are only two other items that I would add. We have an issue in Canada in getting adequate venture capital at the right risk portfolio to move businesses ahead. I'd like to see us do something on that. As well, we certainly have more interprovincial barriers to trade than I think we have with other countries. That might be something to look at also.

I apologize. I have to go and speak in the House, so I have somebody to sub in for me.

[The Chair, Liberal, Dan Ruimy]

Thanks.

Mr. Arya is next.

[Chandra Arya, Liberal, Nepean, ON]

To start off, there are several issues I would like to discuss. We can use the analysts here to give us briefings on things like IRB, now called ITB. For those people who don't know, this was industrial and regional benefits; now it's called industrial and technological benefits. These are the commitments made by defence suppliers or contractors to the government, equal to the contract value that they are supposed to invest or spend in Canada.

The definitions have been changed. Now defence contracts under $100 million are exempted from the ITB. I would like to know more about it, because that is an excellent tool to stimulate economic growth here in the country.

Then there are the economic development agencies, such as FedDev, FedNor, and the western one. I think we will get a feeling that the investments they are making are not uniformly spread across the various regions. As for Ottawa, the FedDev investment per capita in Ottawa is minimal compared to the amount they are investing in southern and western Ontario. I would like to look into those things.

Then we have a strategic aerospace and defence initiative. Huge funds are there to help aerospace and defence companies to invest in R and D. I would like to know the progress that has been made. We don't know the total fund that is available under this program and how much is being used.

Finally, coming to the main issue of small and medium-sized manufacturing companies and the lack of capital that is available, today in this country if I want to start up a manufacturing company to manufacture this pen and the start-up costs are $20 million, trust me, even if I have 25%, 30%, or 40% of the capital, there is no commercial bank that will be willing to fund me. There is a lack of financing available for small and medium-sized companies.

Just to contrast, 15 years back Canada was number two or number three in the world in aluminum manufacturing. In the last 15 years we have just had one tiny aluminum smelter set up here, and during the same 15 years, oil-rich Arab countries have set up five world-class aluminum smelters in a radius of 1,000 kilometres. We have to examine why.

I can tell you that one of the reasons manufacturing companies are flourishing there is that state-owned industrial development banks are there to step in and take part of the risk along with the entrepreneurs. We don't have an industrial policy here. Those oil-rich countries, like us, are rich in oil, but they don't have technology, they don't have expertise, and they don't have the market. We have all those things, but what they have is a clearly stated manufacturing policy or industrial policy with an objective of growing the share of the manufacturing sector in the GDP from 0.01% to a modest 3% to 4%. With that policy in hand, they have created state institutions to back that up, and they are implementing it.

Those are the kinds of things I think we should look into.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Gentlemen, if I can try to make it a little easier here, a lot of the stuff that's coming out is really great stuff. I think meeting with the ministers is something that should happen, although I'm not sure what their time frame is like.

Mr. Nuttall, you mentioned the Business Development Bank. I've had my own dealings with the Business Development Bank. I was a consultant for them for 12 years at the time.

The challenge is that we have all these agencies here, but we really don't know what their mandates are. We really don't understand where they are coming from—their goals, their opportunities, even how they relate to innovation.

I find it difficult to try to understand how we move forward from that without getting an understanding of the individual agencies—maybe not all of them, but perhaps some of them. That might help us to clarify where they stand and what their issues are.

Go ahead, Mr. Nuttall.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

The one thing I would say—and I agree with you 100%—is that they need to come here. They need to determine what their mandate was over the last number of years, where are they at in that mandate, and if they are near the end of it, what they are going to do differently going forward to have even better results, or in some cases good results where they have had bad ones.

However, I would say this. Government is a top-down organization, specifically when you have a change in government. There are mandate letters put in place that will affect those things moving forward, so I think we should go to the organizations and ask what they are planning to do.

We first must say to those who are going to be in control of those organizations what it is that we want them to do and then move on from there. We may be able to provide some great critiques on where the specific minister and staff are going, or we may just say that it all looks like we're on the right path so let's keep going. I think the most important thing is to find out from the ministers how they plan on using these agencies, because the agencies could come in and then two weeks later they could have a completely different mandate.

[The Chair, Liberal, Dan Ruimy]

Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much, Mr. Chair.

I think we've all had an opportunity to present some ideas for future study. I'm not sure exactly what the process will be there, but I know that the clerk will be able to manage that as we go forward.

This is one of the things that I mentioned earlier, and I am now taking this opportunity to make the request that the House of Commons Standing Committee on Industry, Science and Technology invite the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, to appear on Tuesday, February 22, 2016, to present his mandate, and that the meeting be televised.

That's the motion I have.

[The Chair, Liberal, Dan Ruimy]

One of the challenges, because the government is still a new government, is putting the date down. He might not be able to make that date. If you change the motion to not put in the date or a suggested date, that would probably make a little bit more sense.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

What if it said “earliest convenience”? That's our next meeting.

[The Chair, Liberal, Dan Ruimy]

Yes, I'm fine with that. However, Mr. Baylis has something he wants to say.

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

I think it's a good idea to have the minister here at some point, but I would say that I'm very much bottom up as opposed to top down. I think that we might speak to these departments and they might tell us something that they want to tell us instead of saying, “Well, the minister has told us this.” We want to hear from them first, unvarnished, so I would strongly suggest that we first do a review of the major departments—maybe all of them or not—and have them in here and listen to what they have to say.

Once we've heard their points of view, then I would look at it and say, “Okay, we've heard what they have to say, but what is the minister looking for them to do?” I would not do the minister first at all. I would very much start with learning what's going on. There's a tremendous amount of stuff that we need to be brought up to speed on, and I'm not there.

[The Chair, Liberal, Dan Ruimy]

Mr. Arseneault is next.

[René Arseneault, Liberal, Madawaska—Restigouche, NB]

Mr. Chair, he said what I wanted to say.

[The Chair, Liberal, Dan Ruimy]

Okay.

Mr. Masse.