Industry Committee on May 18th, 2017

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

How much time do I have, Chair?

[The Chair, Liberal, Dan Ruimy]

Fifteen seconds.

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

We actually increased funding for the Canadian Space Agency. In the first budget we put in $379 million. In the recent budget we included another $80 million for the Canadian Space Agency. We've been increasing funding there. I'm really excited about the recruitment campaign for the astronauts as well. We're going to be announcing our final two astronauts in the coming weeks.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Masse.

You have five minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, Mr. Minister, for being here today.

One concern, though it has had successes in many respects recently with our output, is auto manufacturing. Thank you for the Ford investment; it was long sought after. I think it was an important movement, and we will continue to see the footprint remain for that facility. The reality, though, overall, is that changes to the auto innovation fund, to this new strategic innovation fund, are a little bit troubling in terms of how auto fits in. Specifically, the auto innovation fund was $500 million. The auto parts supplier fund was $100 million, for a total of $600 million. Now we have $1.2 billion—

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

It's $1.3 billion rounded up.

[Brian Masse, NDP, Windsor West, ON]

—fair enough—for everything, but that includes these new sectors.

My concern is that we now have all these new sectors in innovation, which don't seem to be described so much in the parameters. How can I feel confident that auto innovation will not be diluted more? We had specific funds following a long-fought battle to get separate funds, and now they're lumped back in together with other things.

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

That's correct. I think our commitment to the automotive sector has been very clear. As you mentioned, rightfully, we extended the automotive innovation fund, and then we changed the profile to a grant model. Then we saw recent successes with the $41.8 million invested in the Honda facility, which helped secure jobs there and brought close to half a billion dollars' worth of investments there.

I was proud to be with you at the Ford announcement as well, which was very substantial. It had two components to it, which I think are really important for people to understand. One was, obviously, the jobs at the engine plant, but there is also the R and D facility and a lot of the R and D that's taking place as well.

The objective of the new fund, the strategic investment fund, is to be open to all sectors, but that also means the automotive sector has more money to tap into. If there are better projects that they come forward with, if they have R and D, if they can create jobs, if they can increase their footprint in Canada, if they can invest in building the cars of the future and invest in that kind of technology, our door will always remain open. We're actually very engaged with other automakers right now to look for additional investment opportunities.

I can assure you that we're committed to the automotive sector. It contributes $18 billion to our economy. It employs close to half a million Canadians, both directly and indirectly. We're very focused on getting additional investments. That $1.26-billion strategic investment fund will actually allow the automotive sector additional opportunities if it chooses to pursue them. We're very engaged with the sector.

[Brian Masse, NDP, Windsor West, ON]

I'll leave that part of it there.

Is your government looking at the fact that under NAFTA currently auto investment money is being relocated from Mexico to the United States? Trump claims it's because of him. The company claims it's not. It doesn't matter. At the end of the day, will your government set some goals since of the three partners in NAFTA, we're getting the least amount of auto investment?

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

We're very sensitive to investment opportunities, particularly in the automotive sector. That's why we changed it to a grant model. We recognized that we were losing out to Mexico and we were losing out to southern parts of the U.S. in the past, and that's why we really stepped up our game.

I can tell you something right now, and I would like your thoughts on this. I've made the pitch that I think the automotive sector is very critical to our innovation agenda. I think people see automotive as very much a traditional industry; I don't. I see the potential around connected and autonomous vehicles and the software. The fact that GM has hired 1,000 engineers in Canada speaks to a very bright future here. When I talk about the automotive sector, I talk about it as part of our innovation agenda. As long as we present it in that manner, the opportunities will present themselves.

[The Chair, Liberal, Dan Ruimy]

You still have about 50 seconds.

[Brian Masse, NDP, Windsor West, ON]

I think the transfer of technology capabilities in the auto sector is huge.

The last thing with the auto sector is the border, obviously. We're waiting for the three bids on the third stage of the Gordie Howe bridge to come back in. Is there a backup plan? The government's doing a P3, a public-private partnership. Is there at least consideration of a backup plan if, say, the consortium comes back and it's not favourable?

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

I'll be engaging with the Minister of Infrastructure to better understand what those options look like, but I can assure you the message I conveyed to Governor Snyder at the Great Lakes forum, which you attended as well, was that we are very committed to that project. It's so critical. As I stated when I went to Odette and the University of Windsor, those 10,000 trucks over the Ambassador Bridge are a big issue for us.

We need to have the Gordie Howe International Bridge moving forward in a meaningful way. It's a priority for our government, we're committed to it, and I work closely with the Minister of Infrastructure on this project.

[Brian Masse, NDP, Windsor West, ON]

That's 10,000 trucks per day.

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

That's a very good point.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Sheehan, you have five minutes.

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

Thank you very much, Minister, for that presentation. In the Soo and in northern Ontario, retaining and attracting young people is a key priority. How will the innovation agenda support that priority?

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

I'm glad you asked that question. I was delighted to be in the Soo with you when I visited, and to have the opportunity to look in particular at all the investments for diversifying the economy there.

Obviously, we were talking about Algoma Steel, and that's such a key employer there. We were talking about the Canada-U.S. relationship because of the proximity to the border, but the investment in clean tech—and the fact that there was such an effort in that area to take advantage of diversifying the economy in clean technology—is a very promising area.

You and I visited a lot of clean tech start-ups, and we had a round table with clean tech companies to talk about their concerns. Because of those conversations, we presented a budget that dealt with those issues, from early-stage commercialization through more investments in Sustainable Development Technology Canada—that's $400 million. Above and beyond that, there is $1.4 billion allocated for working capital—to look at long-term, patient capital—and then, ultimately, through Export Development Canada getting those products outside of the Soo, into the U.S., and more importantly into other international markets as well. That's another promising area.

When it comes to young people, as you know, we're very focused on investing in young people. They're very creative. They're very thoughtful. Early initiatives like those on coding, learning how to develop the skills of solving problems, and digital literacy are very important, as is work-integrated learning.

I mentioned that in my remarks as well. Mitacs is such an important initiative. This will provide meaningful opportunities to young people in post-secondary education, especially in the Soo, to get that work experience. When they have finished their studies and the employer says, “Do you have any experience?”, they can say yes and they can hit the ground running.

I learned the hard way. When I did my studies I didn't have that experience, but then I was part of a co-op program at Windsor and that really opened up a lot of opportunities. I started my career at Ford Motor Company of Canada, so I have a bit of an auto bias, which you heard from the previous set of remarks as well.

It's very promising. We're very focused on the Soo in terms of supporting steel and some of those very important key anchors of job creation, but also focusing on clean tech. There is a lot of opportunity there as well.

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

Before I pass my time to Lloyd, I want to thank you for the increase of $25 million for FedNor, our regional economic development agency. It's very much welcomed.

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

Thank you very much.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Terry.

Thanks, Minister, for being here. It's always a pleasure.

I wanted to build on some comments that Mr. Dreeshen was leading into. I always forget your background in accounting, so I want to draw on that a bit. My background is engineering, so you know we need you.

For the Canadian Space Agency, the estimates show a decrease of $78.6 million. We're looking at a cash flow statement, sort of, with the estimates.

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

Yes.

[Lloyd Longfield, Liberal, Guelph, ON]

There's also a GL, which we don't normally see in the government, and then there's the balance sheet.

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

That's right.

[Lloyd Longfield, Liberal, Guelph, ON]

In terms of normal business analysis, it's hard to do, but we are looking at the investment in broadband—which is something that Mr. Dreeshen has really been wanting our committee to get into—and decreasing RADARSAT in any way having an impact on our ability to achieve broadband goals.

The other area is when we look at IP, another study that we're looking at coming forward. There is a lot of IP attached to the aerospace industry that gives us value in our economy.

Could you comment on where we are in terms of the Canadian Space Agency and how the programs there will be looked at going forward, so that we're not going to be losing at the end of the day?