Mr. Chairman, I am very happy to join in the debate tonight. I would like to thank the member for Abitibi—Baie-James—Nunavik for his initiative. Natural resources is a tremendously important sector for my riding of Timiskaming—Cochrane and for Northern Ontario as a whole.
Natural resources represent a very important sector for Canada and account for 11% of our gross domestic product, or $90 billion, $100 billion a year in exports, a positive trade balance of $60 billion. It is the livelihood of close to 3.5 million Canadians in more than 600 communities and represents 750,000 direct jobs, good jobs to boot, and as many indirect ones.
Resource industries are some of those who invest the most in capital equipment in Canada, a majority of their investments going to scientific and technologic innovations. A good number of our resource industries are among the most innovative in our economy and their productivity is growing faster than the average.
This should prove that the Canadian resource sector has nothing quaint about it. These are world class and knowledge-based industries. They have a rich intellectual capital and are part and parcel of the new global economy of the 21st century, which is based on knowledge.
They need it to reduce their operating costs, increase their productivity and competitiveness and overcome the difficult conditions and uncertain success due to the Canadian scene.
Because a strong natural resource industry is so important to Canada, because we have learned to excel, to innovate and to be a leader in almost every facet of this global business, it is crucial for government to lay a solid foundation for natural resources to thrive in the 21st century, guided by the principles of sustainable development.
The Government of Canada is working hard to lay the right foundation for this sector, balancing environmental, social and economic concerns in three ways: by providing sound economic fundamentals, and we have done that in the last seven or eight years; by encouraging innovation and knowledge so we remain at the cutting edge; and by promoting environmental stewardship and sustainable communities. These are the three areas I would like to address this evening.
The first area is sound economic foundations. The most recent federal mini-budget of last October delivered some of the tangible results of the success Canada has achieved in its fight to eliminate the deficit and to restore fiscal responsibility. Canada is stronger today since it is in the best financial position it has ever been in the recent past, as evidenced by the comments made by the International Monetary Fund.
Indeed, according to the IMF, Canada should continue to enjoy sustained economic growth and be able to react well to the economic downturn in the United States.
The new budget brought good news for Canada's mineral industry with its 15% tax credit for flow-through shares investment in exploration projects in Canada.
This measure was put it place as a result of a grassroots campaign led by an effective coalition headed by the Prospectors and Developers Association of Canada, the Canadian Drilling Association and several members on this side of the House. My colleagues from northern Ontario and northern Quebec, including the member for Kenora—Rainy River, the Secretary of State for Rural Development, the member for Abitibi—Baie-James—Nunavik, the member for Timmins—James Bay and myself have understood the benefits of exploration in our communities. I must say that it was not easy to convince the Minister of Finance. We had to work hard to convince him.
We hope this tax credit will attract new investments in exploration in Canada, especially since other levels of government have added their own programs to it. Such is the case in Ontario.
Moreover, PDAC announced that flow-through financing coupled with tax credits and totalling about $30 million was confirmed just before the end of the year 2000. I am told that investments are growing for the year 2001, which looks very promising. I hope that more investors, advisors and stakeholders in the financial sector will take note of this major new incentive in the months to come.
This tax measure makes it more appealing to invest in mineral exploration. Since there is a more favourable treatment of capital gains, which we reviewed in the last budget, and a commitment to fiscal prudence on the part of the government, it can be said that a sounder economic base is in place. The minerals and metals sector, like the Canadian economy as a whole, can conduct its activities in a sounder context, and it is in a better position in the race for capital money on international markets.
This brings me to my second point, the need to focus on knowledge and promoting innovation to be competitive in global markets. Innovation is about making opportunities happen, and without it we cannot succeed in the marketplace. By turning ideas into action, by finding new and creative ways to do things, companies can gain a competitive advantage and become leaders internationally in their respective fields. They can generate greater profits and a larger market share and they can create quality jobs. This is what we have done in Canada with the mining sector.
Innovation is a fundamental characteristic of our natural resources sector. Let us think of our success in exploration and mining, geomatics, remote sensing, mapping, surveying and environmental engineering. Our high tech natural resources industry generates economic, environmental and social benefits right across the country.
As a matter of fact there are more mining jobs in Toronto than there are in rural Canada. People do not realize that there are over 25,000 direct jobs in Toronto related to mining.
This sector builds strong links to other sectors. One obvious example is the sheer volume of commodity traffic that natural resources generate for our Canadian railway system. Where would Canadian National and Canadian Pacific be without natural resources? Canada's natural resources industries also purchase more computer equipment than all other Canadian manufacturing industries combined.
There is this idea in big cities that mining and forestry are backwoods industries and do not belong in a new age economy. That is wrong.
The value of our natural resources, the very nature of the industry, is often misunderstood. Some would have us believe that natural resources have a diminished role to play in a dot com universe because they have not kept up with the times. The reality as we all know is very different. The brain power and the technology used by this sector today are as sophisticated and innovative as any other. We need to get this message out across Canada and around the world. We must promote the innovative nature of our natural resources sector.
I was in Toronto not too long ago at the PDAC annual meeting. I met with members of a delegation from the Japanese mineral and metal association. They were worried that Canada would not continue to produce the minerals that they needed. They had heard the Prime Minister talking about making Canada the most connected country, the most innovative, and being in the forefront of the high tech economy. I reassured them that the mineral industry was still the mainstay of our economy.
Canadian resource companies recognize the importance of innovation. This is why, in the recent throne speech in which the Government of Canada stated its priorities for the years to come, natural resources were put under the theme “innovation”.
The government pledged “to promote innovation, growth and development in all parts of our economy”, including our resource sector. We will achieve that goal by doubling our investments in research and development. These investments, and I am quoting the throne speech, “will directly benefit Canadians in areas such as ...natural resources management”.
Currently, natural resource industries invest heavily in Canadian research and development, including research on the use of state of the art technologies, such as robotics, computer vision, environmental technology and specialized software.
We must go even further. We must invest in the new technologies to maintain a competitive edge and remain a truly sustainable industry for the future. Natural resources must be part of a renewed will to promote research and development in our country.
A good example of how innovative the mining industry has become allows an operator to be sitting in a Toronto office and running a scoop tram in a Sudbury mine using a computer. This prevents injuries to workers, et cetera.