Industry Committee on Nov. 19th, 2020

[The Chair, Liberal, Sherry Romanado]

Good morning, everyone.

I now call this meeting to order.

Welcome to meeting number five of the House of Commons Standing Committee on Industry, Science and Technology.

Today's meeting is taking place in a hybrid format, pursuant to the House order of September 23, 2020. The proceedings will be made available via the House of Commons website. Please be aware that the webcast will always show the person speaking rather than the entirety of the committee.

To ensure an orderly meeting, I'd like to outline a few rules.

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of floor, English or French.

For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.

Before speaking, please wait until I recognize you by name. If you are on video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. I remind you that all comments by members and witnesses should be addressed through the chair. When you're not speaking, please mute your microphone.

With regard to the speakers list, the committee clerk and I will do our best to maintain the order of speaking for all members, whether they are participating virtually or in person.

Pursuant to Standing Order 81(4), the committee is meeting today to commence its study on the main estimates 2020-21.

As is my normal practice, I will hold up a yellow card when you have 30 seconds remaining in your intervention, and I will hold up a red card when the time for your intervention is over.

I'd now like to welcome our witnesses.

Today we have the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade. We also have the Honourable Maryam Monsef, Minister for Women and Gender Equality and Rural Economic Development. From the Department of Industry, we have Simon Kennedy, deputy minister; Paul Thompson, associate deputy minister; and Douglas McConnachie, assistant deputy minister and CFO.

Each witness will present for up to five minutes, followed by rounds of questions. We want to be able to get two rounds in for the first hour with the ministers, so I will be very rigid on the clock.

With that, I will turn to Minister Ng. You have the floor for five minutes.

[Mary Ng, Liberal, Minister of Small Business]

Thank you so much, Madam Chair.

It's terrific to be here with my honourable colleagues. I appreciate the opportunity to meet with you today on the occasion of the tabling of the 2020-21 main and supplementary estimates.

Madam Chair, without a doubt, this year has been filled with challenges. I'm very happy to be joining you during Global Entrepreneurship Week. It's a chance to celebrate and thank entrepreneurs for their hard work, their innovative spirit and their resilience.

From the smiling faces at your favourite cafe to the mechanic running that auto repair shop on the other side of town, or the innovator who is running the local clean-tech company or medical device company, our entrepreneurs make our communities more vibrant and welcoming places to call home. This is why, since the very beginning of this pandemic, our government has taken immediate action to support Canadians, and we're making crucial investments in small businesses and entrepreneurs now, so that we can build a stronger and more sustainable Canada for everyone in years to come.

Our Canada emergency wage subsidy has helped businesses keep over 3.8 million hard-working Canadians on the payroll.

Over 780,000 business owners have taken advantage of the Canada emergency business account, otherwise known as CEBA, to keep up with their costs of doing business and their operating expenses. We've also helped 3.2 million entrepreneurs keep more money in their pockets by deferring the GST, HST and customs duty payments.

Over 12,000 businesses and 95,000 Canadian workers have been supported through the regional relief and recovery fund, a $1.6-billion investment to support businesses through this crisis.

The Canada emergency commercial rent assistance provided rent relief to over 130,000 business owners, helping 1.1 million employees stay in those businesses, and the recently announced Canada emergency rent subsidy will provide direct rent and mortgage support for even more small business owners who need it the most.

As we rebuild our economy, we are committed to ensuring that our economy is inclusive and works for everyone.

That is why we recently topped up our women entrepreneurship strategy amid COVID-19, a nearly $5-billion investment that breaks down systemic barriers to economic success by providing access to financing and to networks of support for women across this country.

It's also why we recently announced Canada's first-ever Black entrepreneurship program, an investment of up to $221 million, which will help break down barriers and help thousands of Black-owned businesses across the country to grow their businesses and to thrive for years to come.

It's why we're investing over $300 million to support indigenous entrepreneurs through this crisis and to address their unique needs and realities.

Madam Chair, I have just covered some of our emergency supports for small businesses, but make no mistake, our government is working beyond our borders to make sure that Canadians have every opportunity available to them for economic recovery. This pandemic has only underscored how interconnected our world truly is and how much we depend on each other.

Trade accounts for nearly two-thirds of Canada's economy and supports 3.3 million jobs, or one out of every six jobs. We need to focus on the fundamentals: open and rules-based trade to give predictability to our businesses; diversification to create new exporting opportunities for entrepreneurs; strong supply chains to allow for essentials to flow, like food and medicine for all Canadians. At the centre of our approach is ensuring that Canadians see the full benefits of trade.

It's why we've worked hard to position Canadian businesses of all sizes for future growth and success by giving them the tools they need to scale up, to access those new markets and to benefit from international trade opportunities. Our revamped CanExport program is providing $75,000 to help entrepreneurs expand their e-commerce presence at 10 virtual trade shows and navigate new COVID-19-related trade barriers.

These are the kinds of investments we need to set our businesses up for success now, and into the future.

It's just one example in what I like to call our trade tool box, which includes our entire trade commissioner service network, Export Development Canada, the Business Development Bank of Canada, Canadian Commercial Corporation, and Invest in Canada. All of these supports are here to help our businesses succeed here at home and abroad.

We will get through this. Canadians are resilient and they're strong. Small businesses and all Canadians can count on this government. We'll continue to do whatever it takes to help entrepreneurs and small business owners rebuild, adapt and thrive for years to come.

Madam Chair and committee members, thank you so much for your time. I am happy to answer any of your questions.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Minister Ng.

We'll now turn it over to Minister Monsef.

You have the floor for five minutes.

[Maryam Monsef, Liberal, Minister for Women and Gender Equality and Rural Economic Development]

Thank you very much, Madam Chair.

Hello, colleagues. Boozhoo. Aaniin. As-salaam alaikum. I join you from Algonquin territory. I hope that you're all doing okay, that your teams are okay and that your loved ones are safe.

Madam Chair, if it's okay with you, I'll spend the time I have in my introductory remarks talking about three things. First, I want to talk about my BlackBerry Pearl and tell you the story of my red BlackBerry Pearl. Second, I'd like to pick up on where Minister Ng reflected on connections and connectivity. Third, I want to talk about how the universal broadband fund can not only respond to COVID but also create the foundation for a resilient economy in the post-pandemic world.

I've been working since I was 12, so I was the first in my peer group to have a cellphone. I had a variety of flip phones until the smart phone phenomenon began. I remember that in 2008 I was able to afford my very first smart phone—the red BlackBerry Pearl. It was beautiful, with the shiny knob in the middle, with access to high-speed Internet, or so I thought at the time. I could connect to my homework, my work, my family and my friends while spending long hours on Peterborough public transit.

It allowed me, for the first time ever, to become more productive in a way that I couldn't have imagined. It allowed me to connect with networks that I would not otherwise have had access to. It allowed me mobility, so that transportation didn't impede my ability to make a difference. It also allowed me to look for other opportunities. I was raised by a single mom, so not only was I proud that I could afford this on my own, but I was really proud that I could get ahead and make a difference in my community through the networks that this little device afforded me.

There are millions of Canadians right now in some of the most remote and rural regions, including indigenous Canadians. I have spoken with them. They're not able to tap into their full potential and access the opportunities that exist for them, because they don't have access to high-speed Internet and they don't have access to cell service.

Those connections are vital. Those connections have never been more important. Those connections have been the strength of our response to COVID. Those connections are what's going to keep our country united, and those connections are going to help us build back better on the other side of COVID.

The universal broadband fund is the second part of our government's plan to connect every Canadian to this essential service. It has been developed by Canadians for Canadians. Many thanks to every single one of our colleagues—in all parties, by the way—who have helped to shape this plan so that it's responsive to the needs on the ground, and particularly to my brilliant parliamentary secretary, Gudie Hutchings, who is a force of nature and a force for good.

The universal broadband fund includes $50 million set aside to address cell gaps, particularly in indigenous communities. It includes a rapid response stream worth $150 million, so, colleagues, if you have projects in your communities that can address issues of lack of connectivity to 50/10 in the near future, let's talk, because we should be working with you to connect your communities.

It also includes the core broadband fund. This is for fibre projects and for longer-term projects, and of course there is the partnership with the Canada Infrastructure Bank, an agency of the Crown, an arm's-length organization that will help invest in and support larger, higher-impact projects.

This is the plan that Canadians asked for. It is a plan that they have been waiting decades for. This is the single largest investment that the Government of Canada has ever made in connectivity, and we're doing it because it's the right thing to do. We're doing it because it will improve health and safety, it will address economic gaps and it will also even the playing field. We want to make sure that this big, beautiful country is connected and united, because every time Canadians have been able to stay connected and united, we've been able to achieve big things.

I thank you, Madam Chair and colleagues, for giving me a space on your committee. I know you're doing really important work and time is precious, but I'm very much looking forward to spending a little bit of time with you today to see how we can work together to connect every Canadian to this essential service.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, Minister.

We will now move to our first round of questions. Our first questions go to MP Nater.

You have the floor for six minutes.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Madam Chair.

If I have a bit of time at the end of my round, I will pass it to Mr. Sloan.

Good morning, ministers. Thank you for joining us.

I want to start with the universal broadband fund, the rapid stream. The deadline for applications is January 15, 2021. How quickly will those applications be adjudicated?

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

That's an excellent question, Mr. Nater. The answer is, as quickly as possible. We have a team of engineers and project managers—the other side of our concierge service—waiting to process these applications as quickly as possible.

Our wonderful deputy minister, Simon Kennedy, is here. He and his team have spent the last year—if not more, but the last year that I've been working with them—preparing for this. We're ready to go.

[John Nater, Conservative, Perth—Wellington, ON]

Can you give us a timeline—six weeks, four weeks?

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

I would hope much less than that, MP Nater.

[John Nater, Conservative, Perth—Wellington, ON]

Great. Thank you.

Following up on a similar issue, in November 2016 the connect to innovate program applications were due. To date, four years later, there are still outstanding applications that haven't been adjudicated.

Can you commit to adjudicating and finalizing all of those applications that are outstanding four years later?

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

The connect to innovate program is supporting over 200 projects in close to 1,000 communities across the country, including about 190 indigenous communities. We have worked as diligently as we could have. My officials have been on this to move as many projects as possible forward.

Where projects get stuck, these very complex infrastructure projects, is related to a range of issues. It could be related to the fact that broad community support isn't there; it could be related to environmental assessments, to indigenous consultations, a range of factors—

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Minister. I'm going to have to interrupt you, because I only have so much time.

So, there is no commitment to adjudicate the remainder of those projects.

Earlier this year, your parliamentary secretary tabled an OPQ response, stating that of the 8,500 households that were to be connected through the connecting Canadians strategy, none of these projects have reported completion, now over a year and a half after those were announced. Can you give us assurances that those approved through the rapid stream will, in fact, be completed by November 2021?

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

Will you give me a little bit of time to clarify your first question?

[John Nater, Conservative, Perth—Wellington, ON]

Be as quick as possible, Minister.

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

I will do my best.

The reference you're making is to the top-up to the connect to innovate program. The $585-million program was so well received and so needed that we were able to receive a top-up for it. By the end of this year, tens of thousands of households will be connected because of it. By the end of next year, over a quarter of a million households will be connected because of it.

For colleagues who are interested in submitting applications to the rapid response stream, you have my commitment that we're going to do everything we can to process every application as quickly as we can, with the due diligence required to do so.

[John Nater, Conservative, Perth—Wellington, ON]

I would just note that your parliamentary secretary, in her response, actually noted 8,500 households total. I will leave that there.

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

MP Nater, I think your question in the OPQ was specifically about the top-up, so that's the response you received.

[John Nater, Conservative, Perth—Wellington, ON]

Yes, and we're still, a year and a half later, without those projects being completed.

In the third quarter of this year alone, the major telecoms had a profit of over $1.8 billion, which is higher than the total value of the universal broadband fund.

Can you give this committee an assurance that these three major telecoms will not take the bulk of the funding through this program, leaving many of the small, local ISPs across the country in many of our rural ridings out in the dark?

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

In rural ridings, in mixed rural/urban ridings like mine, and across the country, we know that there is a need for a mixed range of options. Connect to innovate funds were divided into thirds. One third supported indigenous projects; one third supported small ISPs; and one third supported larger ISPs.

With every single application that comes forward for the universal broadband fund, there's a requirement particularly for backbone projects to ensure that there is open access. For all of them, affordability is a key factor.

[John Nater, Conservative, Perth—Wellington, ON]

I just hope the major telecoms don't gobble that up.

I'm going to ask one more question and then turn it over to my colleague.

The SWIFT project is an important project in southern Ontario. Will you commit to funding it?

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

The SWIFT project and the EORN project are examples of aggregator projects that connect regions. I have been in conversation with both the Eastern Ontario Wardens' Caucus and the Western Ontario Wardens' Caucus, as well as the team at EORN and the team at SWIFT. What we have spoken about with them was, first, how exciting their projects are, and second, how important it is to connect their communities and their regions. Third, my team and I will do everything we can to find ways to support their projects.

As you can appreciate, MP Nater, it's hard to commit to a project that we have not fully seen. That due diligence is a really important part of investing these dollars wisely but, of course, we will give due consideration to every project that comes forward.

I am getting the yellow card from our wonderful chair.

MP Nater, if you ever want to talk about these projects and how we can work together on an issue that crosses every single jurisdiction in our country, my virtual door is always open.

[John Nater, Conservative, Perth—Wellington, ON]

Is there time for Mr. Sloan to ask a question?

[The Chair, Liberal, Sherry Romanado]

We have three seconds, unfortunately. We'll have another tour at the next chance.

I will now turn it over to MP Jaczek. You have the floor for six minutes.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you very much, Madam Chair. I will be sharing my time with that force of nature, MP Hutchings.

Minister Monsef, there's a real problem, not only in remote and rural areas, but even in ridings such as mine, Markham—Stouffville, in terms of what I would call under-connectivity. I have a community in southeast Markham, Locust Hill. It has 37 houses and their Internet connection is extremely slow, to the extent that they cannot participate in Zoom conferences. Even during the spring, students could not access online learning from this community. They have done everything they could in terms of approaching the telecoms and so on, and they were simply told that it was not economical to run fibre to that community. This is a community within three kilometres of Markham Stouffville Hospital and a very large subdivision, which is, of course, fully connected.

How will the universal broadband fund help communities like Locust Hill?

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

Thank you so much, MP Jaczek.

Of Canadians who live in urban centres, 98% have access to high-speed Internet; 2% don't. Of those living in rural communities, 41% have access. That leaves 59% without. About two-thirds of indigenous communities don't have high-speed access either.

What we've heard with the work we did for connect to innovate, the work that Bernadette Jordan, my predecessor, did in developing Canada's first connectivity plan.... We spoke with service providers, community leaders and colleagues in the House of Commons, of course. The conclusion we arrived at was that the federal government could play the role of connecting the underserved and underconnected communities. Those communities where the business case for the private sector to do so...simply was not there for population density.

That's what the universal broadband fund is meant to do. The Government of Canada believes this is an essential service, critical to our health, safety and economic well-being. We are supporting projects that will connect those where the business case simply is not there.

For small communities like yours, MP Jaczek, I think this is an example of the kind of project we should probably speak about with our experts. If they don't have access to 50/10 right now and if the solution could be something as simple as putting antennas on roofs, for example, then that project—if it could be completed by next November—would qualify for the rapid response stream.