Industry Committee on Nov. 28th, 2016

[The Chair, Liberal, Dan Ruimy]

Welcome, everybody, to meeting 36 of the Standing Committee on Industry, Science and Technology. Pursuant to Standing Order 81(5), we are dealing with supplementary estimates (B) 2016-17, referred to the committee on Thursday, November 3, 2016.

Appearing before us today is the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development. With him is Kelly Gillis, the associate deputy minister, and John Knubley, the deputy minister.

Without further ado, Mr. Bains, you have the floor.

[Navdeep Bains, Liberal, Minister of Innovation]

Thank you very much, Chair.

I'm delighted to be here again. It's great to see a lot of familiar faces and a few new faces as well. I'm very grateful for the opportunity to address this esteemed committee.

I'd like to welcome ministerial colleague Dr. Kirsty Duncan, who will be joining you in the next hour to update you on her role and her mandate as the Minister of Science.

Not here today but an integral part of our ministerial team is the Honourable Bardish Chagger. In addition to her critical role as government House leader, Minister Chagger is working with us to drive economic growth in the small business and tourism sectors.

I would also like to acknowledge my deputy minister, John Knubley, and Kelly Gillis, our associate deputy minister.

I've been invited, as you mentioned, to update the committee on the content of the latest round of supplementary estimates that we've recently tabled.

Innovation, Science and Economic Development—the ISED portfolio—is presenting an increase of $409.6 million, resulting mainly from new funding under budget 2016. The highlights are as follows: $249.3 million to the post-secondary institutions strategic investment fund to enhance and modernize research facilities on Canadian campuses; $64.8 million to support investigator-led research under the research support fund and the grants and scholarships programs; and $40.6 million to the Canada first research excellence fund. I suspect that my colleague Minister Duncan will speak to these specific investments.

We've also invested $20.8 million to support internships under the youth employment strategy; and $10 million to support cutting-edge research and development through the European Space Agency's advanced research in telecommunications systems programming.

I'd also like to give the committee an idea of what we've been up to since my last appearance here in April.

My main focus has been leading the development of an inclusive innovation agenda.

The inclusive innovation agenda is our government's plan to drive economic growth by making Canada a global leader in innovation. It will create well-paying jobs for the middle class and for those working hard to join it.

The first and most important phase in developing this plan was to hear from Canadians. As you know, Chair and colleagues, the government does not have a monopoly on good ideas. Over the summer, we held 28 round table discussions. We invited Canadians from coast to coast to visit our website and to comment on social media. In all, we received more than 1,500 ideas on how to make Canada a global leader in innovation.

I want to take this opportunity to quickly highlight three themes that came from those conversations and discussions.

First, we heard about the need for more people with the right skills and experience to drive innovation.

Second, we heard about the need to harness emerging technologies to achieve big things.

Third and last, Canadians told us it was important to develop the next generation of globally competitive companies.

In the coming months, those ideas will help inform our government's work as we prepare the budget.

It is also worth noting

that Budget 2016 made several important down payments in support of the innovation agenda.

It allocated $2 billion to renew university and college campuses across the country. The budget also committed $800 million over the next four years to strengthen innovation networks and clusters. More than $1 billion is being invested in the development of clean technologies. These are bold investments designed to drive economic growth through innovation and to create, again, good-quality jobs for the middle class.

The consultation process for the innovation agenda has given me the opportunity to travel to many communities across the country.

I am always impressed during these visits with the work being done by our regional development agencies to support the economic growth of communities across the country.

Our government has chosen to align all the regional development agencies under one portfolio. The goal, and I've said this on numerous occasions, and I'm glad we're succeeding in doing this, is to elevate their importance and make them part of our government's overall agenda for economic growth. I'm pleased to report that this change has resulted in the alignment of priorities and best practices amongst the agencies.

The focus of these agencies now includes developing young companies, so we want to have a strong pipeline of companies, but we want to identify opportunities for these companies to scale up and grow, one of the key themes we heard from Canadians. Diversifying our regional economies still remains a priority because we understand the unique nature of each of the respective regions. Other goals are promoting clean technology and supporting our indigenous communities.

This theme of collaboration informs all our actions as a government.

In June and earlier this month, I chaired meetings of my provincial and territorial counterparts. These were the first meetings of this kind in 12 years, and they set a new tone for constructive engagement. Again, we recognize that not only do we not have a monopoly on good ideas, but also that it's going to require a collective effort and that it's important that we work with provincial, territorial, and municipal counterparts. That spirit and that partnership also resulted in the Atlantic growth strategy that we launched over the summer. This strategy will target actions to stimulate the economy of all four Atlantic provinces.

Another historic result of our collaboration with the provinces and territories is our work to renew our framework for internal trade. We are on the cusp of concluding negotiations for a new Canada free trade agreement.

This agreement will provide an ambitious and modern framework for the free flow of goods and services within Canada's borders.

Our work to conclude this agreement is all the more significant at a time when the rest of the world is talking about putting up more barriers to trade. We recognize that rise in protectionism.

Another key value of this government is inclusion.

That's why we tabled a bill to promote corporate transparency and diversity. Among other things, Bill C-25 aims to increase the number of under-represented groups on corporate boards and senior management teams. Corporations will be required to make public their diversity policies, and those corporations without diversity policies will have to explain why they don't have one.

While we know that security regulators have focused on gender diversity policies, this law goes farther. The goal is to attract the best and the brightest from as wide a talent pool as possible. That's how Canada can make full use of the competitive advantage granted to us by the extraordinary diversity of our population. When we say diversity is our strength, we truly need to take advantage of that.

Also on the idea of inclusion, we've taken steps to bridge the digital divide. In today's modern age, it is critical that all Canadians have access to the Internet.

In particular, Canadians in rural and northern regions need better access to high-speed Internet.

Improved broadband connectivity can unlock tremendous economic potential, leading to the creation of new jobs, products, and businesses. I know this issue is of interest to committee members, and I've had many of you reach out to me about this. I'm pleased to let you know that very soon we will be launching Connect to Innovate, a $500-million investment that will extend high-speed Internet service to rural and remote communities.

We know that inclusion and diversity mean casting a broad net in our search for talent. We recently announced Canada's global skills strategy as part of our fall economic update. Again, this is something that we heard consistently when we engaged Canadians on the innovation agenda. The number one issue was talent and people, and this is one recommendation that we heard loud and clear. This strategy is a key part of the innovation agenda. It will make it faster and easier for Canadian firms to attract the best and brightest from around the world.

The global talent can drive innovation and help Canadian firms to grow and prosper, leading to more jobs. That's a key element. This initiative will help create more Canadian jobs.

I am excited to be working with my colleague, the Minister of Immigration, Refugees and Citizenship, on this important initiative.

Mr. Chair, I'm also aware that the committee has been engaged in a study of Canada's evolving manufacturing sector. I look forward to receiving your report. I know a lot of hard work and effort has been put into that initiative. We really look forward to the recommendations you will be presenting. I note with interest that the Canadian Manufacturers & Exporters have set the ambitious target of doubling Canada's manufacturing output and value-added exports within 15 years.

The government stands ready to be a meaningful partner to strengthen this foundational sector.

Rest assured that the innovation agenda will address many of the challenges faced by the manufacturing sector in today's global and digital economy. The innovation agenda will make the most of partnerships with universities and colleges to advance research and development. It will enable the commercialization of promising research into new products and services. It will work with industry to make skills and training a priority.

In the year ahead, my officials and I will work with Canadians to finalize and implement the innovation agenda.

We will also act on our commitment to reinforce the independence of Statistics Canada. We have already reinstated the mandatory long-form census, a decision that was received with great enthusiasm by Canadians. The 2016 census results reflect that enthusiasm, with an unprecedented response rate of 97.8%.

We will also continue to work with our regional development agencies to make strategic investments that diversify and strengthen the economies of each part of this great country. As well, we will continue to support key sectors that drive economic growth and innovation.

Mr. Chair, colleagues, I am proud to serve a government that listens to Canadians and responds to their needs.

As a government we embrace a partnership-driven approach to innovation. I think the results we have achieved during our first year point to the effectiveness of this approach.

Merci beaucoup.

[The Chair, Liberal, Dan Ruimy]

Thank you very much, Minister Bains, for your opening comments.

We're going to move right into questions from Mr. Sheehan.

You have seven minutes.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much, Minister Bains, for that presentation. I appreciate it.

My first question is going to be around the post-secondary institutions strategic investment fund. Recently you visited the riding of Sault Ste. Marie and announced $5 million for Sault College, almost $3 million for Algoma University, and $5 million for the Shingwauk Education Trust for the aboriginal discovery centre. I thank you for that.

I have a great interest in this particular program. The report talks about $249.3 million extra to that particular fund. Can you talk about the short-, medium-, and long-term gains that this amount of money could achieve?

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

As per our last budget, one of the key investments we made as part of our overall innovation agenda, as part of our overall demonstration that we want to step up our game when it comes to building the partnership model that I talked about in my concluding remarks, was to create a better collaborative environment with our universities, and colleges, and academic institutions from coast to coast to coast. We introduced a $2-billion strategic investment fund that you alluded to and that I was fortunate to make some local announcements on in the Sault. It was really well received by the college and university, and by the aboriginal community.

The objective of that fund is not only to make these investments, but also to leverage the provinces and territories, and the institutions. The hope is that $2 billion actually turns into $4 billion when it's properly leveraged from across different levels of government across the country.

The objective of that, again, is to help create world-class facilities to really help focus on areas where we can innovate and to create an environment where Canadian students have some of the best opportunities to learn in a state-of-the-art facility where they do research. This will allow us the ability to attract some top talent from around the globe as well. That's what I was talking about in terms of the global skills strategy.

Also, the benefit with that is the short-term jobs created with infrastructure, so as you put a shovel in the ground and you make these investments, that will create short-term jobs as well. It also creates an environment to focus on areas around STEM, science, technology, engineering, and mathematics, where we can create long-term jobs as well. The objective of this initiative was to make sure that not only do we make these investments, but they will be complete by 2018.

The original allocation of the funding of this $2 billion was $494 million in the first year, $1.25 billion in the second year, and $245 million in the third year. Because we work very closely, and we have a really good working relationship with our provinces and territories, we had to adjust the program funding profile to $744 million in the first year. That includes the supplementary estimate numbers that you see here, plus what was in supplementary estimates (A). When you combine the two, that's roughly $744 million in the first year, and $995 million in the second year, and we're still maintaining our target for the third year at $245 million.

This again speaks to the fact that we have a program that's really well received by the academic institutions. We have a really good working relationship with the provinces and territories. We're getting the money out in a timely manner to create jobs. We're also strengthening our academic institutions to help Canadians who are studying domestically, and to allow us to attract some of the best and brightest, which is so critical in terms of the talent piece of our innovation agenda.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

This year we'll be celebrating Dr. Roberta Bondar's 25th anniversary as Canada's first woman in space. I noted in your report the $10 million to support the cutting-edge research and development through the European Space Agency's advanced research in telecommunications systems program. Can you explain exactly what kind of benefit there would be from that particular program?

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

As you know, the Canadian Space Agency received an investment of $379 million in our 2016 budget. This was a significant investment in space, and we connected it with our commitment to aerospace as well. There's a lot of innovation taking place in this sector, and that commitment was really a reflection of our long-term plan on the International Space Station, and looking forward to how we can continue to work with NASA and other partners and allies to make sure that we have a presence when it comes to space.

We take a lot of pride in the Canadarm and how that has direct applications now in industry. For example, a lot of that technology, a lot of those robotics, are being used at the surgery tables in our hospitals. We're seeing not only these applications in space, but a direct correlation in some of the key sectors like the health care sector in Canada.

The $10-million commitment with respect to the advanced research in telecommunications systems is really with respect to what we're doing with our European allies. The idea, again, is how can we collaborate on research and development? We want to provide an opportunity for industry in particular, and SMEs, to have access to the R and D so they can be on the cutting edge of new solutions, and they would be able to compete with some of those new technologies. A major benefit of this initiative is to create that R and D partnership so it benefits industry as well.

One of the challenges we have, and we see this across different sectors—mind you, space and aerospace are the exceptions—is there's a decline by Canadian companies in research and development, so we feel now is an opportunity for the government to show leadership in this area. This $10-million investment with Europe really helps us to build that partnership with industry so they have access to research and development.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

That's good.

I have just a minute left, so this will have to be very quick.

You also met with a number of companies around the clean tech industry in Sault Ste. Marie while you were there. In the time remaining, do you wish to expand a little bit on the support that's available for all companies in Canada?

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

As you know, our government has been very clear that we want to reach our ambitious targets and achieve our climate change goals from COP21 in Paris, but we recognize that now more than ever we have a responsibility to explain that the environment and the economy go hand in hand. When we're trying to achieve these targets, we can create an economy that actually creates jobs. It's not simply about the environment but about the environment connected to the economy in a meaningful way.

We talk about blue-collar jobs or white-collar jobs, but we also have a responsibility to promote green-collar jobs. These jobs prevail in every single sector.

When we were in the Soo, we saw how this prevailed in so many different sectors, not only in renewables but also in how companies were more efficient in terms of their use of energy and how they were being more efficient in terms of the outcomes they were getting.

Keep in mind that we made an investment of $1 billion—

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

On a point of order, Mr. Chair, I believe we're about 20 odd seconds over. Unfortunately, that will end up hurting the New Democrat's opportunity to ask some questions to the minister.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Bains, we're going to move on—

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

The billion dollars we allocated in the budget for clean technology speaks to the fact that we want to build partnerships. The government already, for example, ranks ninth amongst the OECD countries when it comes to government-led R and D with industry. We want to continue to send a clear signal to the market that a low-carbon economy is a priority for this government. It's not only good for the environment and good for our health, but also good for creating jobs.

Just to put things in perspective, I had the opportunity to travel to India, to take a mission there and to really take our information and communications—

[The Chair, Liberal, Dan Ruimy]

Sorry, Mr. Bains. I'm going to have to cut you off there.

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

Yes.

To make a long story short—

[Brian Masse, NDP, Windsor West, ON]

Mr. Chair, I have a point of order. I want a clarification. The minister was late to the meeting here, and we've gone over time for the government's time. I want to be assured that I will get my full allocation of minutes at this committee hearing today.

Are you going to guarantee that I will get that? It's not my fault. I was here, and the time allocation is there. I want to make sure I have my time.

Can you clarify at this point in time to ensure that's going to be the case?

[The Chair, Liberal, Dan Ruimy]

That will depend on how the rest of the meeting goes, I guess.

[Brian Masse, NDP, Windsor West, ON]

So it will just depend upon whether or not you extend time for—

[The Chair, Liberal, Dan Ruimy]

The more time we take for this conversation—

[Brian Masse, NDP, Windsor West, ON]

Don't blame me now.

[The Chair, Liberal, Dan Ruimy]

I'm not blaming you for anything.

[Brian Masse, NDP, Windsor West, ON]

It's out the door, because we didn't start on time, and then at the same time you extended the time we're allowing the minister.

It's hard to blame me now for intervening because I'm losing time.

[The Chair, Liberal, Dan Ruimy]

We're going to move to Mr. Nuttall.

Go ahead, please.

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

Thank you.

Mr. Minister, you will be happy to know I don't have any motions to table today. I also want to say thank you for taking the time to join us and for the work and service you provide for our country.

I hope you will realize it's not me being rude if I do interrupt you. I have only seven minutes, and I want to ensure I'm respectful to the people I represent in those seven minutes.

In 2016, it was said that the innovation agenda would be released within one year. That was obviously in March of this year. We are 400 days plus since the election.

Can you give us an exact date for this to be released?

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

As you know, the innovation agenda is a core part of my mandate, and it really speaks to our government's commitment with respect to not only investments in infrastructure but looking at innovation policies to drive growth and to really create opportunities for businesses to succeed.

As I mentioned in my remarks, we went out to Canadians in June to engage and to get their feedback. We had unprecedented support with over 1,500 submissions.

After we received that, I went back out in very public forums to talk about the feedback we received. I highlighted the three elements: people, technologies, and helping companies scale up. I alluded very clearly to this being an essential part of our budget process that should be integrated into our budget development process.

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

Will it be released prior to the next budget, and will it be released before March 31, 2017?