:
Thank you very much, Chair, and thank you for the opportunity to be here with the members of the Standing Committee on Industry, Science and Technology.
Before I begin, I'd like to introduce my team. There is my able and hardworking deputy minister, Richard Dicerni, and my senior associate deputy minister, Paul Boothe. And Kelly Gillis is the CFO. Certainly they can answer any technical questions that I cannot answer.
Let me start by just of course reminding you that last year was a period of considerable economic turmoil. As you know, the global economic situation had seriously deteriorated and Canadians and their businesses were caught in the crosswinds, as it were, facing weakened demand, eroding cost competitiveness, uneven access to capital, and major restructuring in some sectors.
Now, in the face of this global downturn, we coordinated with our G20 allies and we acted decisively, investing almost $30 billion to support the Canadian economy through our economic action plan. This was instrumental in stimulating growth, creating jobs, assisting individuals, renewing our infrastructure, and supporting businesses and communities.
We also focused on building a long-term advantage, based on competitive taxes, renewed infrastructure and skills, a tariff advantage, reduced red tape, and our emergence as a global financial sector leader.
Through these efforts we positioned ourselves to emerge from the recession with a stronger economic advantage than before.
[Translation]
I'm pleased to report that our plan is yielding results—Canada has now returned to economic growth. But given the fragility of the global recovery, we know the job is not yet done. Budget 2010 aims to strengthen this recovery and sustain Canada’s economic advantage. It recognizes that we must continue to seize economic opportunities, create jobs, develop new products and find new markets.
The Budget has three broad goals. Firstly, it confirms $19 billion in federal stimulus to implement Year 2 of our Economic Action Plan. Secondly, Budget 2010 lays out a plan to return to fiscal balance. Finally, it introduces several targeted investments to attract capital, boost innovation, and position us for the economy of tomorrow.
[English]
My department, Industry Canada, is active in overseeing and implementing initiatives in support of these goals. Some of the top-of-mind issues that we have been dealing with, and will continue to deal with, include science and technology, manufacturing, and support for small business.
Certainly we're attempting to create a climate that encourages business, innovation, and productivity, and this type of climate is what will allow us to innovate, to move up the global value chain, and to succeed in the competitive global marketplace.
Let me touch briefly on some of these issues. The first is science and technology.
Now, I don't have to tell you that S and T and innovation are at the heart of Canada's value proposition as a player in the international marketplace. Our government has recognized that research and development is a key driver of long-term economic growth and that discoveries stemming from research help improve the quality of life of Canadians.
Canada ranks first amongst the G7 countries in terms of expenditures on research and development in the higher education sector as a share of the economy. Canada's economic action plan built on this strategy by providing an unprecedented $4.9 billion in additional funding for research infrastructure, research, highly skilled people, and commercialization.
[Translation]
Budget 2010 continues this momentum by providing additional funding to support world-class research and researchers. This includes new investments in our universities and colleges to help Canadian researchers make transformative discoveries that contribute to our future well-being and create short-term economic activity and jobs.
[English]
From the pacemaker to insulin, Canadian researchers have made discoveries that have changed the lives of people around the world.
To ensure that we continue to be innovation leaders, we have substantially increased funding for Canada's federal granting councils, our most direct means of support for academic research. With Budget 2010, we have increased the funding to the Canadian Institutes of Health Research, the Natural Sciences and Engineering Research Council, and the Social Sciences and Humanities Research Council by $32 million. These funds will enhance our support for new and promising researchers and sustain our overall support for researchers at Canada's universities, colleges, and research hospitals.
Other support initiatives from Budget 2010 include $8 million per year for the indirect costs of research programs to help post-secondary institutions support the additional research activities to be funded by the granting councils and $45 million over five years to the granting councils to establish and administer the Canada post-doctoral fellowships program. When fully implemented, the program will annually fund 140 new, taxable, two-year post-doctoral fellowships valued at $70,000 each per year.
Then there is $15 million per year to the college and community innovation program to support additional research collaborations between businesses and colleges. There is $222 million over five years to support research and commercialization activities at TRIUMF, Canada's premier national laboratory for nuclear and particle physics research. There is also $75 million in 2010 for Genome Canada to allow it to launch a new targeted research competition in a priority area and sustain funding for the regional genomics innovation centres.
Our government recognizes that increasing business investments in research and development will be crucial for our long-term competitiveness. Accordingly, Canada's economic action plan provided $1.1 billion over two years to commercialize technological advances and encourage businesses to invest in innovation. This includes: $200 million in enhanced funding for the industrial research assistance program; $400 million to support advanced clean energy research, development, and demonstration; $400 million to accelerate the adoption of transformative clean technologies in the forestry sector; and $63 million to support advanced technology development by Canada's space industry.
Government investments constitute one part of the equation. The other part, of course, involves the private sector adopting innovative technologies that can help advance their businesses. Budget 2010 builds on these investments with over $260 million in new funding to encourage Canadian businesses to invest in research and development and to commercialize these innovations into new products and services.
New resources provided through Budget 2010 include: $135 million over two years to foster regional networks of innovation across the country through the National Research Council technology cluster initiatives program; $30 million over two years to enable applied research collaboration between colleges and local firms through the college and community innovation program; $40 million over two years for a pilot small and medium-sized enterprise innovation commercialization program, under which federal departments will demonstrate the application of innovative products and technologies developed by smaller companies; and $8 million over two years to extend the international science and technology partnerships program, which provides seed funding for private sector partnerships on industrially oriented science and technology projects with commercialization potential.
[Translation]
As many Canadians recognize, some of our best applied science comes from our efforts in regards to Space. For modern economics, space technologies are an increasingly critical element of basic infrastructure transforming our work and leisure activities and the government's ability to protect sovereignty and the safety of our citizens. To support enhancements in space technology, Budget 2010 announced that $497 million will be invested over five years in the RADARSAT Constellation Mission (RCM), Canada’s next generation of Earth observation satellites.
RCM is being built by Canada’s space sector, providing industrial opportunities, enhancing global competitiveness, and securing knowledge-intensive jobs in Canada. This Government’s investment in space will strengthen Canadian Science & Technology excellence, foster industrial innovation and commercialisation, and position Canada for continuing economic growth in the global knowledge economy.
[English]
To ensure that federal funding is yielding maximum benefits for Canadians across the country, the government will be conducting a comprehensive review of all federal support for R and D to improve its contribution to innovation and economic opportunities for business. The review will inform future decisions regarding federal support for R and D. In moving the economy forward, we're determined that Canada be a leader in the digital economy, and this will take the concentrated efforts of governments, academia, and business all working together.
We will focus on enabling the ICT sector to create new products and services, to accelerate the adoption of digital technologies, and to contribute to increased cyber security. As a key step, Budget 2010 announced that the government will launch a digital economy strategy. As part of our broader strategy to make the Canadian economy more competitive, our government will also open Canada's doors further to foreign investment in some key sectors, including the satellite telecommunication industry, giving Canadian firms access to the funds and expertise they need to compete effectively on the global stage.
Our government is also committed to strengthening the competitiveness of our manufacturing sector. If S and T innovation is at the heart of our economic growth, our manufacturing, of course, is the backbone. Canada's manufacturing sector directly contributes about 15% of our GDP and employs close to 1.9 million Canadians, mostly in full-time jobs. I don't have to tell this committee that the sector has faced some challenges recently. But we are looking forward and are taking action on a range of critical measures to further investments in productivity-enhancing equipment and machinery.
The elimination of 1,541 tariffs on manufacturing inputs and machinery and equipment will position Canada as the first country among its G20 partners able to boast that it is a tariff-free zone for manufacturing.
[Translation]
This means that Canadian manufacturers will be able to import goods for further production in Canada without the burden of tariffs and the costs of complying with certain customs rules such as rules of origin.
Estimates from standard economic models suggest that these measures could help create 12,000 jobs over time.
[English]
When combined with other Canadian advantages, such as a solid financial system and the lowest overall tax rate on new business investment in the G7, this initiative will make Canada an even more attractive place for business investment.
Mr. Chair, I think I have a couple of minutes left, so I will scan through the rest of my notes. I will certainly take any questions you have about small businesses--perhaps I can leave that to the Q and A--and how we are addressing small business issues and making sure that the needs of these credit-worthy businesses are taken into account as the economy recovers. I can certainly talk about the vehicle and equipment financing partnership being undertaken by the BDC as well, and talk a bit about venture capital, if the committee so desires.
I just want to close by thanking the committee.
[Translation]
I'd like to thank you for your time this morning.
Let me reiterate that I think Budget 2010 sets us on the right course. My department is working diligently to deliver on these priority initiatives. We will ensure that due diligence is completed and that our actions are accountable to the Canadian taxpayer.
And we will continue to pursue measures that best position Canada to be a leader in the economy of tomorrow.
[English]
At this point, Chair, I am interested in answering any questions the committee may have. Thank you.
Thank you, Mr. Minister, for coming out.
I hadn't planned on talking on FedNor, but Mr. Gravelle brought it up.
I just want to comment on the response that you gave him about what northern Ontario needs. It really enforced the stereotype and paternalism that Torontonians have towards northern Ontario. I just want to say that I don't appreciate it.
The other thing is that in some of your other comments, where you attributed our economic success to 13 strong years of Liberal rule prior to the Conservatives taking over...I just want to thank you for that.
I'll give you some bad, but I'll give you some good as well.
Some hon. members: Oh, oh!
Mr. Anthony Rota: This morning I want to talk about the community access program, which has been cut. It really hits people in their homes and their small communities.
You understand the program. It allows Canadians affordable public access to the Internet, and it helps Canadians with education, with health, and with business. We talk about business developing, and you have to have access to a lot of the electronic equipment that's out there. Unfortunately, when you're in isolated communities, or you're in rural communities, you don't always have that access.
Letters went out indicating that the funding had been cut. When asked about the funding, both you and Minister Goodyear gave exactly the same answer, which was that the program had fulfilled its mandate.
What did you mean by that?
:
Of course, it's impossible to measure precisely, but when we think about it internally, we think about the auto sector as comprising, directly and indirectly, probably upwards of 500,000 jobs in Canada. People usually talk about the auto sector as being concentrated in Ontario, and that's right, but really, when you include dealerships, it goes right across the country, and it's very important for small communities in Alberta, my home, and elsewhere, not just Ontario.
As for the two companies that we contributed to the restructuring of, along with our U.S. and Ontario partners, basically our contribution in the case of Chrysler was up to about $3.75 billion. Not all of that has been drawn down. They have not drawn down all of that, and they may not, so they've used less support than we actually made available.
In terms of General Motors, in U.S. dollars, our support was about $9.5 billion. That was all drawn down, but some of it has already begun to be repaid. The company has stated publicly that they're looking to completely repay the loan portion by this summer. Now, there's still investment in equity, of course, but I think it's safe to say that our initial goal, which was to prevent the collapse of the whole sector, has been accomplished, and we are starting to see some repayment of our loans.
We monitor very closely the two companies that the government invested in. We meet with them monthly. I met with Mr. Marchionne, the head of Chrysler, two days ago in Detroit. I think it's fair to say that the dealers.... Earlier this week, I attended a large conference in Detroit with parts manufacturers from both sides of the border. The mood is certainly improving. It got a very big turnout, with over 500 different parts manufacturers attending.
The other thing that's encouraging is that sales in North America are coming back. Canada's sales are pretty strong now, but the U.S. is starting to come back. I visited the Chrysler minivan plant in Windsor, and they are well on their way to implementing the Fiat world-class manufacturing system. I talked not just to the management, but also to workers in the plant, and they're very positive. I think that's pretty encouraging to us.
Just as some indicators, for example, Chrysler minivan now has 85% of the minivan sales in Canada, so it's very strong. They also have some new models coming out. The Jeep Grand Cherokee will be out in the spring, in the first indication of their renewal.
GM has been rolling out new models kind of continuously. As for the models that are constructed in Canada, for example, like the Equinox and Traverse constructed at the CAMI plant, the production in Oshawa, they are among the strongest sellers for GM in North America.
There's still a lot of restructuring to do, but so far, so good. I have to say that I'm pretty encouraged about this. One of the things Mr. Marchionne said in his speech to the parts manufacturers a couple of nights ago was that he was bound to pay the governments back and return himself to a full private sector company.