Industry Committee on Nov. 24th, 2020

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

Indeed. We must remember that, in the past, the Quebec government made cuts to regional economic development. This prompted us to invest more in this area and to really equip our CFDCs. We're taking a historic step, because we just refinanced the CFDCs for the next 50 years. At the start of the pandemic, the CFDC budget was about $30 million. The budget is now over $120 million. That's a huge amount of money. This will ensure that the CFDC network has a strong impact and, without a doubt, much-appreciated leverage.

Thank you for your questions.

[William Amos, Liberal, Pontiac, QC]

Thank you, Minister Joly.

I want to conclude by saying that we, at the federal level, are in our regions, and this makes me happy. Thank you for your work.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you, Minister Joly, for your presentation and for taking the time to speak with us today.

We'll take a short break so that you can leave the meeting.

Thank you very much, Minister Joly.

We will start with the first round of our second panel. Before we start the rounds of questions, I want to introduce the folks who are with us for the technical portion of this meeting. To save time, I will not read out all the titles. You have them on the notice of meeting.

With us today from the Department of Industry are Simon Kennedy, Paul Thompson, Douglas McConnachie, Mark Schaan, Mary Gregory and Éric Dagenais.

We will start our first round of questions and go to MP Sloan. You have the floor for six minutes.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Thank you, Madam Chair.

I have a few questions for Mr. Kennedy or Mr. Dagenais, whoever would like to answer. I asked some of these questions last week and I just want to dig in a little bit deeper.

There are a few major Internet projects in Ontario, one in southern Ontario called SWIFT and one in my area called EORN, that are looking for over $200 million from the federal government to complete large-scale Internet programs. The issue that we're seeing is that there's funding that's been announced and there are a couple of different streams, but there's some confusion as to which streams are best. In my area, we're looking for over $200 million. The rapid funding has a cap of just over $100 million. The EORN project, of course, is almost like several mini-projects rolled into one, so I just would like some advice, as I'm dealing with the EORN officials, and I know that you guys speak with them as well. What's the best way to navigate these funding streams? There are different deadlines for applications. Is it possible that these funding streams could have been tailored better to some of these large-scale projects?

Would someone give me some comments on that?

[Simon Kennedy, Deputy Minister, Innovation, Science and Economic Development Canada, Department of Industry]

Madam Chair, I don't know whether people can hear me. I know there was microphone trouble earlier. Is this working okay?

[The Chair, Liberal, Sherry Romanado]

I can hear you, but I'm not sure if translation has the capacity. Perhaps you could make sure the microphone is as close to your mouth as possible.

[Simon Kennedy]

Yes. I don't want to eat into the time of the honourable member. Maybe I'll go ahead and translation can let me know if there's a problem.

We are quite conscious of both of those projects. There have been discussions with the proponents of both. I think our position would be that we want to make sure we stream project proponents to the right window. If they're small projects that are—

[The Chair, Liberal, Sherry Romanado]

Unfortunately, Mr. Kennedy, we can't hear you. Could you possibly get a little closer?

[Simon Kennedy]

How's this? Is this better?

[The Chair, Liberal, Sherry Romanado]

It's a little better.

[Simon Kennedy]

Okay. I can turn the gain way up. How's that? That's as high as it goes. Is that all right? Okay.

The rapid response stream is really meant for smaller projects. I would characterize them as a bit more opportunistic, projects on which the government can work with the proponent, swing into action and get something built out relatively quickly. It is not designed for large projects in the tens of millions of dollars. Certainly the universal broadband fund can handle projects of that size, and in fact we anticipate there will be projects of that size. I guess the main advice we would give is that we should keep talking with the proponents to just better understand their needs and their ambitions and how the UBF could help support them.

Just to let the member know, we're already talking to both SWIFT and EORN.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Thank you for that.

Do you feel that the universal broadband fund was rolled out with these projects in mind? There's been some concern with some people I've been speaking to that neither of the funding streams is maybe as tailored as it might have been, and these projects of course have been on the table for years.

[Simon Kennedy]

What I would say is that we anticipate a wide variety of different types of projects across the country. We may wind up partnering, for example, with the Canada Infrastructure Bank on certain very large projects for which there might be, for example, private financing involved, while there would be much smaller projects sponsored by very small communities. At the end of the day, we have a program that's going to be able to accommodate a diversity of different players operating with different scales.

I think we're fairly confident that we have the flexibility needed to deal with different kinds of projects, provided that they're achieving the outcomes that the government is seeking.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Okay. Thank you for that.

I wanted to ask you a little bit about supercluster funding and where the various clusters are at in terms of utilizing the funding that had been previously announced. Can you give us an update on the superclusters initiative?

[Simon Kennedy]

I'd be very happy to do that. I think I'll have to write back to the committee, which I'll be very pleased to do, to give a more detailed accounting.

What I can say is—and it's been noted in the press and certainly noted publicly—that the superclusters took a bit of time to get going. I think in some respects that was anticipated. This is a new kind of policy initiative for Canada. Other jurisdictions around the world have done this, but for Canada this was a relatively new approach and it took some time to build the connections and build the ecosystems.

The funding has really begun to ramp up and the superclusters are committing to projects. The leverage of private sector dollars has actually been higher than the minimum that was anticipated in the program. We feel that these superclusters are producing really good results. There have been some really interesting, important projects that have been done in the context of COVID-19. For example, the NGen supercluster, the Next Generation Manufacturing supercluster, has supported the production of ventilators and face shields and other kinds of needed medical supplies for COVID-19.

Again, I'd be very happy to send that accounting to the committee with details of the current spend.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

I have one last question here for you.

Given some of the confusion that is happening in my riding with some of these funding streams, is it possible that some departmental officials might be able to give a briefing to people in my riding about how the UBF works and which funding streams are appropriate?

[Simon Kennedy]

I certainly don't see a problem with that in principle. We actually would like to make sure that private sector players know about our programming and are able to access it.

We do have a website, which I'm not suggesting is a substitute for an in-person briefing, but it's where private sector players can go and fill out details. It provides a very good pathfinding service for all the available programs and services that business might benefit from. I would be happy to provide information on that as well.

We're conscious that there are a lot of programs out there. We want to tailor the offering to the businesses, so we have a website that does that.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Jaczek.

You have the floor for six minutes.

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

Well, thank you very much, Madam Chair.

Thank you to the officials for being with us again this week.

Deputy Minister Kennedy, one thing that Minister Bains alluded to was the magnificent effort made by our businesses in terms of retooling and producing personal protective equipment so that now, apparently, some 50% is being made domestically. This is something we explored at the health committee this summer. Really, it was a remarkable partnership, in essence, between the businesses and government to ensure that this happened.

Going forward, I'm wondering if you could tell us if there were some lessons learned and how the future looks for increasing the production of made-in-Canada equipment, particularly personal protective equipment, but perhaps with more focus on the domestic market in general.

[Simon Kennedy]

I could give some personal reflections as someone who was closely involved in this initiative and saw it unfolding in real time.

I think the first thing would be that I, personally, as a Canadian, am thankful that we have a manufacturing sector, a really capable manufacturing sector, in Canada. It was very instructive to see how quickly these very sophisticated Canadian manufacturing operations were able to pivot their operations to make very different kinds of products in a time of great national need. We haven't really seen anything like that, I think, since the Second World War. It was really interesting to see it up close.

The important lesson for me was that having that kind of national capacity seems like it's important. Successive governments over many years have supported the manufacturing sector, the automotive sector, the aerospace sector. The fact that we actually have some national capability, I think, provided an advantage.

The second thing is that some of the investments—actually, many of the investments—that were made will have, probably, an enduring legacy. If you look, for example, at some of the investments that have been made in N95 respirator production, you will see that those aren't investments for the next year or two; it's a multi-year investment for a company to put that kind of facility in the ground. That will potentially stand us in good stead for the longer term.

The third thing is that I think these are policy decisions that governments will have to reflect on, but clearly there's a lot of discussion now going on across the country about what some of the longer-term legacies might be of the pandemic and the kinds of competencies and requirements Canada might need for the longer term. Those are reflections that are going on now. I think some of the lessons learned from the made-in-Canada project could be very useful in determining a long-term picture.

I hope that's helpful.

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

Thank you very much.

Minister Bains also alluded to the potential for vaccine production in Canada. We know that there are many universities and private sector players in Canada involved in looking at potential vaccine production. We also know that through PSPC, Canada has already basically entered into contracts with some seven, I believe, companies, and at least three of them are showing very promising results. I'm not sure if this is appropriate to ask you specifically, but is there an opportunity, through those agreements with companies such as Pfizer, Moderna and AstraZeneca, to actually produce the vaccine here in Canada on some sort of licensing arrangement? I am really intrigued by how this could potentially work.

[Simon Kennedy]

I probably won't speak to the specifics of some of the contracts because I'm a little unsure of my footing in terms of what is covered by business confidentiality and what is not. The specifics on those might be directed to Public Services and Procurement.

What I can say is that Minister Bains and the ISED ministry have certainly been involved in this. There has been a great deal of work to build up and support the Canadian domestic biomanufacturing sector. As has already been noted in the media, a number of these leading international vaccine candidates actually have Canadian technology in them. There are actually Canadian players that are kind of part of it.

The government has made investments in companies such as AbCellera in British Columbia is a good example. It is is manufacturing or has discovered and is involved in the production of a leading monoclonal antibody candidate. This has helped deal with the symptoms and the severity of COVID-19. The government has invested in vaccines; domestically, Medicago in Quebec City is perhaps the best example. This technoloy is very well regarded, and there was a major investment in Medicago.

The government has also invested in the expansion of production capacity, for example, at the National Research Council's Royalmount facility in Montreal to be able to produce a much larger number of doses. That build-out is happening right now.

In concert with the work to secure vaccines from the international sphere, there has been a parallel line of work—quite an aggressive one—to build up Canadian capacity and to invest in promising Canadian candidates and in Canadian manufacturing. Obviously, there's been a lot of international press on the international candidates, but this Canadian side of the story perhaps needs some telling as well. It has been a key feature of our work.

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

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much, MP Jaczek.

Mr. Lemire, you now have the floor for six minutes.