Industry Committee on Nov. 28th, 2016

[Brian Masse, NDP, Windsor West, ON]

It's the platinum age of automotive. It's not the golden age anymore.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

We had the opportunity to bring in these investments, and I—

[Brian Masse, NDP, Windsor West, ON]

We have driverless vehicles. We have autonomous vehicles. We have new technology. We have record investment across the globe. And Canada is dropping like a stone in a spiral of death related to the auto industry. That's the reality.

When you actually start looking at the facts of it, we see ourselves at 10th in the world globally. I don't understand why you can't join a national auto strategy-type program and show leadership over.... That is not just Ontario; it's across this country.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

Of course, absolutely.

[The Chair, Liberal, Dan Ruimy]

Okay, I'm going to jump in.

That was a lively debate—

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

Very quickly, Chair, if I may, on concluding remarks, we are showing leadership. The auto sector is very important to this government. It's a priority. We've made investments in the budget to reflect that.

I look forward to working with my colleague, as we go to the Detroit auto show, and in Toronto and other places, where we can work together in a non-partisan manner to bring investments here in Canada.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Arya. You have seven minutes.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

Mr. Minister, I think we have quite excellent programs to support research and development, and hardly any programs to support commercialization. Are you proposing any measures to rectify this?

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

That is a clear gap that we have.

We're really good if you look at the innovation ecosystem. If you look at the innovation pipeline, we're really good at basic research, and that's very important. We could do better, and I have a feeling that my colleague, Minister Duncan, will speak eloquently to that.

We're really good at coming up with ideas, but the challenge is how we commercialize those ideas. Too often, the case is that individuals, for example, who come up with the ideas, are also responsible for the marketing plan or the business plan. They should be focusing primarily on the innovation and the invention and the solution, and not necessarily on figuring out the business and the marketing plan. That's the challenge that we've had.

We, as a government, obviously have taken many initiatives to support, through the strategic investment fund, as an example. How we can create an ecosystem of start-up companies to help them commercialize?

One area that I must confess we ought to do better in, and we're not going better, is helping to scale up companies and helping those commercial ideas become global champions. That's an area we are working at, looking at. We will provide some solutions in that area, but with regard to commercialization, clearly there is a gap there when it comes to the innovation agenda.

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

The second issue is that one of the natural concerns is the shrinking in size of the number of medium-sized businesses. Especially in manufacturing, that is a real big concern. For us to have very large companies, I think we should start with the small companies, the manufacturing start-ups.

A lot of manufacturing start-ups have difficulty in getting funding. Manufacturing start-ups are quite capital intensive. It is not like setting up a small company to start, say some new software program.

Do you have any plans to address this problem?

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

The issue of patient capital is really important. The issue of providing long-term support for a lot of these capital-intensive manufacturing initiatives is critical. That's an area we're definitely looking at. We're working very closely with BDC. I believe they can do a better job in that area.

I know you've highlighted that challenge to me in numerous conversations. I understand your concern, and I relayed that to the team there as well. I also believe that the clean tech sector, for example, is very similar in nature. It requires a lot of capital and long-term patient assistance and support. We're looking at measures to provide that, because we need to be able to see those companies grow and succeed, and there is a cash crunch.

We're also focusing on high-growth firms. You're saying the challenges are with the medium-sized companies, and I'm saying that even our larger companies are having difficulty growing at times. If you look at all the companies we have, the high-growth firms, the ones that have 20% year-over-year growth for three years in a row, only about 3.5% have that kind of growth potential.

We need the right data to identify those companies. Then we need to look at all the different tools we have to be able to help them grow and succeed, from government procurement to patient capital financing, for example; in looking with my colleague the Minister of International Trade at how we can help them to brand internationally with the new investment agency we put forward.

We're focused on this, not just on medium-sized companies. In particular, we want to target any company that has enormous growth potential—small, medium, or large—to help it succeed and grow.

[Chandra Arya, Liberal, Nepean, ON]

I'm glad you remember the problems I mentioned regarding BDC. Across Canada during the last 12 months they have funded only 180 small manufacturing companies.

Whenever we talk of the manufacturing sector here, a lot of discussions take place around the auto, aerospace, and telecom sectors. There is no doubt they are important in the Canadian context. I feel we need to focus on advanced manufacturing, those sectors that will become more relevant in five, 10, and 15 years: additive manufacturing, robotics, or even the chemical industry. The chemical industry is supposed to be a world sector, but a lot of investments are taking place in the United States in the chemical industry. One of the emerging things for a place like Ottawa is the different C4ISR industries.

If your ministry can do some studies and publish this information for a lot of small companies and a lot of entrepreneurs regarding the potential that is available in these sectors, that will be quite helpful.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

I know. Thank you very much for that feedback. We'll definitely take that into consideration. I'll follow up with my team to make sure we can implement that example.

Again, you're absolutely right. We have an area where we can show global leadership. I talk about artificial intelligence, which has a vertical capability, and a lot of good work is being done across different jurisdictions in the country in additive manufacturing and quantum computing. A lot of big data and a lot of these initiatives will help in the manufacturing sector.

These technologies are emerging globally as well, and we as a government recognize this is important. We heard back from Canadians in three areas. First, obviously, was people and talent. Second was the adoption and commercialization of these technologies. How do we take these technologies to be more productive, more efficient, and more competitive? That's a focus of our government.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Chair, I would like to share my time with Mr. Frank Baylis.

[The Chair, Liberal, Dan Ruimy]

You have about a minute left.

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

Could you elaborate a bit more on the valley of death issues and how you are looking at that? That would be appreciated.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

You're absolutely right. Unfortunately, there are multiple valleys of death for companies as they start, grow, scale up, become export-oriented, and ultimately become true global successes.

We looked at those gaps in areas, and they face different challenges. One, as I mentioned earlier, is the challenge around acquiring talent. Too often they need a good CEO or someone who has the ability to write a business or marketing plan. That's the first challenge. Do they have access to the appropriate talent and skill sets? Do they recognize that they need that? That's one area we're focused on.

Second is patient capital and financing. We recognize that's another area that's a challenge, because they need that support to grow.

One area we're looking at proactively as a government, to be able to assist them, is procurement. The government has an opportunity to validate a lot of these companies that are starting off with new ideas, new technologies, and new solutions, and to validate those ideas, so when they go abroad they can say that they do business with Canada. That allows them to succeed internationally as well.

Those are the types of gaps we have identified.

[The Chair, Liberal, Dan Ruimy]

Thank you.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

There are many more—and I know I'm tight on time—but that's what we're trying to address with our innovation agenda.

[The Chair, Liberal, Dan Ruimy]

We're going to move on to Mr. Lobb. You have five minutes, please.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Minister, the first question I have for you is, since you talked about the rural broadband strategy, do you have a minimum speed that you could tell the committee that you're giving your department to target toward?

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

As you're very well aware, we had a program called connecting Canadians. This was launched by the previous government.

[Ben Lobb, Conservative, Huron—Bruce, ON]

No, I'm just talking about minimum speed.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

Yes, I'm just giving you context to the speed question. The connecting Canadians program had targets of 10 megabits per second, for example. That's what they were targeting in the past.

What we're trying to focus on in our $500-million initiative is fibre. It is fibre to the institutes and fibre to the last mile. We're saying in order—

[Ben Lobb, Conservative, Huron—Bruce, ON]

When you say fibre to the last mile, do you mean fibre to every last farm? Is that what you're saying with the last mile?