Evidence of meeting #22 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 need.
A recording is available from Parliament.
September 21st, 2016 / 4:45 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
It's nice to see you too, Mr. Chair. It's been a long time.
4:45 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Thank you, Mr. Chair. Through you, I have a few questions. I could perhaps start with Ms. Sullivan.
In terms of the technology you're talking about where you might be able to expand into rural areas, one of the things I've heard from our operators in the agricultural industry, our farmers, is that the technology on their equipment is getting to the point where they can, in some places, do the work without being there. In other places they can't because they don't have the capacity in terms of access to wireless Internet.
We asked this question before, but you said you're two years away....
Has the company you were talking about gone to the federal government yet to ask for funding to talk about this subject? We're going to be doing a study, I think, at some point on rural broadband. If you came to us, it sounds like you would save us a lot of time.
4:45 p.m.
Dean, Faculty of Engineering, University of Waterloo
I think the better person to ask is either Leslie Klein himself, who is an engineer, the idea guy, but the technology development was provided by Professor Ali Safavi-Naeini, who is an electrical engineer in Waterloo.
The depth of the technology has been developed over five years. I'm not an electrical engineer. However, one of the things that was extremely amazing, when I saw what they did in the lab in Waterloo, is that Ali Safavi-Naeini is not a materials engineer and he was able to work with other professors in the area of materials to develop this IC system. What I would like to do is to get a 3D printing professor, Professor Ehsan Toyserkani , who I believe is the top guy in Canada, very well renowned, and ask him to print the circuit board so it would make millions.
4:45 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
I had the opportunity to meet with a 3D printing company today.
I would ask both of you this question. What is preventing more widespread hiring? I heard from you, Leah, that you're seeing increases in the number of employed people in the agricultural manufacturing sector, but we're not seeing that reflected in the results on manufacturers. For instance, we're down about 40,000 jobs this year. The decade before, we were down over 300,000 jobs. I don't necessarily understand it right now because of the lower dollar.
The manufacturers are telling us that the lower dollar is there; they're busier than they've ever been, but they're not hiring. Is it taxation? Is it instability due to not knowing what those taxation issues are? Is it instability related to the general feeling in the economy?
4:50 p.m.
Dean, Faculty of Engineering, University of Waterloo
Leah, please go ahead.
4:50 p.m.
President, Agricultural Manufacturers of Canada
Okay.
In terms of the numbers for agricultural equipment manufacturers and our employment figures, we're a small slice within manufacturing. In some of the larger aspects of manufacturing, those employment numbers, 1%, say, in the auto industry hits those numbers much more than would 1% in our industry. That disconnect there, I think, is because we are such a niche market, and a good and happy niche market.
In terms of the dollar and the impact on our guys, it's almost as if the border doesn't exist. As for the inputs into Canadian-made ag equipment, there's still a certain section that will be coming across that border. There's a variety of things that will go back and forth across the border, so the lower dollar doesn't have the big impacts that it used to, if you will, because the input costs are so diverse.
4:50 p.m.
Conservative
4:50 p.m.
President, Agricultural Manufacturers of Canada
It really depends on how much. Last year, Ontario ag equipment manufacturers exported more than any other province in Canada. They exported over $748 million of product, and much of that went to the U.S. They saw a $100-million jump to the U.S., whereas in Saskatchewan and in Manitoba those exports to the U.S. actually went down. It was the type of ag equipment being produced that influenced it. The dollar is absolutely a factor, but it's one of other factors that influence those exports, and again influence the employment figures.
4:50 p.m.
Liberal
4:50 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Welcome, Dr. Sullivan and Ms. Olson.
I'm going to pick up where my colleague left off, on exports and on trade.
You indicated in your speech, Ms. Olson, that in 2015 agricultural equipment manufacturers exported about $1.8 billion. In the same period, we actually imported about $4.6 billion. That's a negative trade balance of about $2.7 billion. To what do you attribute that negative trade balance?
4:50 p.m.
President, Agricultural Manufacturers of Canada
On ag equipment, I would have to look at whether we're making an apples-to-apples comparison because if you take the manufacturing of all agriculture equipment, it's slightly different, but if you look at agriculture equipment implements, it's the short-line guys. That might be one of the factors. I can't really comment on that without knowing where—
4:50 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Can you comment on the imports? Are we in a surplus then? Are you suggesting that we are in a surplus when it comes to the Canadian agriculture manufacturing on imports?
4:50 p.m.
President, Agricultural Manufacturers of Canada
I'll get back to you. I'm not sure. The numbers that I've seen have suggested that we're net exporters of ag equipment, but I'm not sure in terms of—
4:50 p.m.
Liberal
4:50 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Let me jump to the second question.
On the SR and ED program, you encouraged the government not only to streamline the process, which hopefully will reduce the costs, but also to work on the understanding of the auditors about the industry. We've heard that a number of times before.
Could you expand on that, please?
4:50 p.m.
President, Agricultural Manufacturers of Canada
Yes, I'm happy to expand on that.
Within the agriculture equipment industry, there are a variety of manufacturers. One of them was asked to produce a larger tractor from a seeder. A seeder is a piece of equipment that looks like a spider. It precisely puts the seed in, followed by the fertilizer. This is using GPS. It's an amazing piece of technology. The seeders are getting bigger, so the seeder manufacturers asked a variety of tractor manufacturers if they could build bigger tractors, because once the machinery hit hills, the tractors were sticking and not able to continue pulling. From that perspective, applications have been made.
What I know of this situation is that the SR and ED auditors didn't understand the importance of a 400-horsepower tractor. They said it wasn't new, wasn't innovative.
I am a farmer. I have run a combine and I've used our GPS systems, and they are great. They ensure that we seed as we think and that we don't duplicate by going over it. The 400-horsepower tractor is what enables us to get to that next piece of equipment. Without something that can pull the seeder, you can't use the seeder. That was a bit of a disconnect, because as I understand it, all the auditor has said is that it's simply a larger tractor. That one larger piece of equipment enables so much more throughout modern farming.
Again, I will offer to take you out to farms, to take you to ag equipment manufacturing facilities, because there are some really important, seemingly small steps that enable the leaps and bounds, which is how we can feed the world.
4:55 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Is it fair to say that the auditors' understanding of innovation might not be properly...they don't understand it as well when it comes to modification?
4:55 p.m.
President, Agricultural Manufacturers of Canada
Yes.
From a life sciences perspective—big pharma, medical leaps and bounds, new discoveries—it's science. On agriculture, there's a lot of science that's happening, and on the ag equipment manufacturing side, there are a lot of things happening. As I said earlier, our R and D is not done in an isolated facility; it's done with the farmer.
