Natural Resources Committee on March 4th, 2014

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Okay, thanks.

My second question is about R and D. I'm looking at a report by Natural Resources Canada showing that even among the resource sectors, energy provokes less expenditure than mining and minerals and forestry, at only 0.05% of R and D expenditure, as a percentage of revenue.

Of course, one of the economic benefits to the country, as you've reported, is that we have $100 billion being spent on developing the resources. How much of that money is actually being spent in Canada on R and D, including through pursuing more activity here—upgrading, reclamation, better environmental controls?

I wonder whether Mr. Burt or Ms. Kenny or Mr. McGowan would like to speak to that.

[Michael Burt]

I don't have the BERD numbers in front of me. I assume that's what you are quoting. R and D tends to vary from industry to industry. If you look at pharmaceuticals, it's 10% of the revenues. For other industries it's a very tiny share.

We can certainly look at whether they can spend more. That's a valid policy question. I don't really have an answer for it.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

So you didn't factor that in your report on the benefits of the oil sands industry.

[Michael Burt]

The investment we're looking at here is investment in essentially equipment and things like drilling activity. We're not looking at the R and D activity.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

So spent on getting the product out.

[Dr. Brenda Kenny]

I could perhaps elaborate somewhat. I understand that within the upstream there are some concerns in terms of how the R and D numbers are calculated as opposed to on-the-ground innovation. I would point out that on the TSE, Canada is blessed with the largest number of energy companies in the world by given placement of companies.

My point is, we have a very active innovation ecosystem in Canada because we have a lot of private investment. Certainly within the pipeline space, when you look at the derivative impacts, a large percentage of them are not actually manufacturing, although that's a big part of it. But innovation in terms of financial services, professional, scientific, technical services, and all of those are continuously improving and putting Canadian firms and SMEs at the top of their game for future global exports of those know-hows as well.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

But it's still .5% of the revenue of the industry.

[Dr. Brenda Kenny]

We don't have the pipeline numbers yet and we're working on them. I'm not saying the numbers are high enough but I am pointing out that embedded within the reinvestment numbers is a lot of innovation that is leading to state-of-the-art outcomes in Canada and to SMEs that export their know-how around the world.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Duncan.

Mr. Regan, you can have one short question, or should we get directly to the budget?

[Geoff Regan, Liberal, Halifax West, NS]

Well, I've got a short question. But before I go to that, I hope we're going to hear perhaps from Ms. Block, perhaps by Thursday, whether or not we're likely to hear the minister, have him come to the committee on the main estates.

[The Chair, Conservative, Leon Benoit]

We can deal with that briefly on Thursday.

[Geoff Regan, Liberal, Halifax West, NS]

Ms. Kenny, according to your website, energy pipelines of course generate economic benefits for all Canadians including employment, local procurement, and community investment. Do you have a breakdown by region, province, or community of those benefits that you could provide to the committee, obviously not necessarily today?

[Dr. Brenda Kenny]

The report provided, the energy, mining report, is the one that would look at the actual economic outputs, GDP, jobs, etc.

[Geoff Regan, Liberal, Halifax West, NS]

And it breaks down by....

[Dr. Brenda Kenny]

By province, and if you would like, we can provide that. With respect to community investment, I know we have a rolled-up number. I'm sure there are some data below that, but I don't have those with me.

[Geoff Regan, Liberal, Halifax West, NS]

I'd have more questions if I had time.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Regan.

If the witnesses wouldn't mind, we'll just take a couple of minutes to deal with the budget. I don't think it will take longer than that, and then I'll thank you. Rather than have committee members stand up to chat with at least the two of you who are here in the room before you leave, we'll ask you to just hang on a second.

Everyone, you see the budget in front of you. This is a budget to pay the expenses for the study we're currently undertaking. It is important that we pass the budget so we can actually use the expenses from this particular study rather than from the general committee fund.

Is there any discussion on the committee?

Yes, Mr. Julian and Ms. Moore.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

First off, I have a question because we have asked previously about the number of witnesses that the government saw coming forward. We see an estimate here of 24. I'm not sure of the overall number of witnesses and the number of dates that we see for this study. That would be my first question.

The second is more of a comment and that is, we had real concerns about just seeing one side of this. I think, Mr. Chair, that today we had a very useful discussion. I hope that continues. We're looking at the benefits or net benefits but also looking at costs and concerns. Even though that has been a bit of a fight to get a balanced approach on this study, I think today your chairmanship was good and I hope that's the kind of approach that we'll continue to take in the future.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Julian.

Any discussion on the budget itself?

Ms. Moore, did you have something on the budget?

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Chair, I would just like to add to what Mr. Julian said.

A while ago, I asked the parliamentary secretary to tell us how many meetings we were going to have. I have not yet received any information about the number of meetings they decided we should have on this topic.

I think it is strange that here we have a budget, but we do not even know how many meetings we are going to have on the subject. We haven't even talked about it.

[The Chair, Conservative, Leon Benoit]

I'm sorry, Mr. Julian. I didn't answer your question.

I think we're going to have roughly eight meetings with five witnesses per meeting. The 24 isn't the total number because some witnesses will be appearing by video conference. That's listed separately there, just to clarify that.

I'm sorry, Ms. Moore, did you have a question? I heard your comment.

Mr. Calkins.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Chair.

I understand this is just a budget. One of the things I don't ever remember seeing is an actual cost of what we did. We actually did a study. We pass budgets, but we never bring back the actual expenditures afterwards and see if the actual expenditures marry up with the budget. That would be an interesting exercise in public accountability some day.

But the question I have is on the expense for video conferences. Can somebody please rationalize for me what the video conference individual unit price on a video conference of $500 would be for?

[The Clerk of the Committee, Mr. Rémi Bourgault]

Usually, this is for the link. Usually, we have to rent a studio to—

[Blaine Calkins, Conservative, Wetaskiwin, AB]

—at the other end.

[The Clerk]

Yes, and then also there is a cost to have a bridge. In the case of today, we had two video conferences so both video conferences are going to one place and that place is linking with us. There is a bridge between all of that and there is a cost attached to that.