Madam Speaker, I am glad to have the attention of the minister while I speak and I thank him for being here. I am also happy to see that the spokespersons are here for the opposition parties.
I am pleased to participate in the debate at third reading of the bill to establish the Department of Industry. Those who have followed the debate know that this bill concerns the organization of the Department of Industry. The minister and the department have been given a broad mandate: industry, science and technology, consumer and commercial affairs, communications and investment. All are brought together under the responsibility of a single department and a single minister.
The bill, as I was saying, concerns the organization of the department and the responsibilities it has been given. It is a housekeeping bill, if I may use that expression.
It is perhaps more important to know what the department will be doing. What is the minister's vision with respect to economic development? He made an important statement earlier this week that answers this question and gives us an idea of where he is headed. In his statement, he says that the government does not accept that Canadians must choose between high unemployment and stagnation of their incomes. Nor does Canada want to accept the American approach of low unemployment and a large number of low-paying jobs. But neither do we want to adopt the European approach, which is characterized by a relatively low number of low-paying jobs and a rate of unemployment that is chronically very high. The government believes that we can move forward on both fronts, employment and income, at the same time. In other words, the government would like to create good jobs that pay well. This is an objective to which all Canadians would give their approval. But you will agree that it is not so easy to put into practice.
In his statement, the minister observed that although Canada is a large trading nation, it has not yet acquired a large trading mentality, particular with respect to small and medium size business.
The report of the Special Joint Committee reviewing Canada's Foreign Policy, which was also tabled in the House a few weeks ago, is even blunter. It reads: "Canada is a trading nation but has not yet proved itself to be a nation of traders".
We are reminded in this report that only one in ten Canadian manufacturing companies exports and that automotive, natural and energy resources trade account for three quarters of our total exports. The picture is brighter for trade in services and high-tech products, but 25 per cent of total trade in these industries is done within three companies. Furthermore, exports to the rest of the world, outside North America, account for less than 10 per cent of our exports.
In short, the natural resource industry is doing well. It has its ups and downs, but for the time being, it is doing well. The current price of resources on the world markets is high. The automotive and automotive products industry is also faring well, in southwestern Ontario in particular, but in Sainte-Thérèse, Quebec, as well. While high technology is somewhat successful, we have a substantial trade deficit in that area. This means that we import far more high-tech products than we export.
To sum up, we have not managed to put in place the fully developed structure of an industrial economy. As everyone knows, the wealth of Canada comes mostly from its natural resources. So, if we want to get somewhere, we need to know where we stand so as to determine where we need to go from here.
I think that we will also have to take a realistic view of the role of small and medium size businesses in the Canadian economy.
While it is true that many jobs have been created by small and medium size businesses over the last 10 years, they are not the be all and end all of our economy. Many small and medium size businesses exist because of the existence of large companies. They are suppliers to these large companies.
Second, as I have already noted, few Canadian small and medium size businesses are exporters. Small and medium size businesses contribute only 9 per cent of total exports and less than 8 per cent of manufacturing exports.
Third, the contribution of small and medium size businesses to manufacturing in Canada is anaemic. In 1990 manufacturing firms with less than 100 employees were responsible for only 32 per cent of manufacturing employment.
In Japan I understand that small and medium size businesses account for 75 per cent of manufacturing employment. That is quite a difference, 32 per cent in Canada of manufacturing employment accounted for by small and medium size businesses versus 75 per cent, over twice the proportion in Japan.
In the report that the industry committee tabled several weeks ago on financing small and medium size businesses, we referred to the role of such businesses in today's economy. We referred to the significance of these businesses. We remarked that globalization requires a rapid response capability in design, production, marketing and other activities. We added that flexibility, innovation and technological capability are critical. This applies to all firms regardless of their research intensity or the nature of their product. It applies just as well to firms in the traditional sectors of our economy.
As a result, finely subdivided, highly specialized linear production processes are no longer advantageous and the large, traditionally structured firms do not achieve the best results. We noted that small, knowledge intensive firms are moving into the vacuum.
However, we noted that in Canada we have few new competitors. New competitors are the firms which are characterized by managerial and technological capability, by flexibility in their production processes, by the emphasis that they place on developing and nurturing their human resources. We need more new competitors if we wish to maintain our high standard of living.
The industry committee made a number of recommendations which relate to such new competitors, to those Canadian firms that have set themselves national and international goals. Our whole focus on venture capital is the solution only for firms with growth potential. Therefore, our focus on venture capital is directed to those firms.
We also made, for example, a recommendation that the government establish a limited working capital guarantee for small and medium size business exporters, again because of the importance of exports to our economy and because of the fact, as I mentioned earlier, that so few Canadian businesses and small and medium size businesses are exporters.
Recently, two young men came to my riding office and asked me to help them find work here in Canada. They are both doctoral students in the same field, engineering. One of them wants to do research in robotics. They approached me independently a few months apart. One came to see me in September, perhaps, and the other more recently, in October. By coincidence, one of these students is from Saint-Henri and the other from Westmount, the two parts that make up my riding. I must say that the riding also covers all of downtown Montreal, but those are two important parts of my riding.
These two young men applied to the Canadian Space Agency, but unfortunately opportunities are limited now. They have looked all over. They applied for work in the private sector, in Quebec and elsewhere in Canada. Unfortunately, they have not had the desired success. One of these young men recently
accepted a job in Philadelphia and I was told that the other might go to Detroit.
I was told that many of their engineering classmates from Concordia and McGill universities had to go to work in the United States.
I firmly believe that the Canadian government is on the right track by emphasizing employment and growth. However, it is regrettable that the Government of Quebec does not have the same priorities. Once again, we will waste so much energy debating existential questions instead of dealing with the real needs of Quebecers.
The Canadian government must stay the course. We must continue to emphasize the economy and growth with the policies which have been announced since the last election, following the direction taken by the industry committee and with the same priority for growth and jobs that underlies and is in fact the main theme of the action plan tabled this week by the Minister of Industry.