Good afternoon, ladies and gentlemen. Bonjour à tous.
Welcome to the 62nd meeting of the Standing Committee on Industry, Science and Technology.
I am going to introduce our guests in just a moment, but I want to advise you of something. We had a request for documents last time when we had the chief statistician, Wayne Smith, with us. There was an article called “Nonresponse Rates and Nonresponse Bias in Household Surveys”, from which he had quoted some data. The article is 30 pages long, so it falls outside the parameters of translation. As a consequence, we are not going to be distributing it to members. They can access it themselves, I believe, via the Internet, if they want to reference this information. But I just wanted to advise you of that as far as our capability of being able to distribute it is concerned.
Now I'll go on to our witnesses. I'm going to introduce them briefly in the order they appear on the orders of the day.
We have the Minister of State for Science and Technology. He is also responsible for the Federal Economic Development Agency for Southern Ontario. Minister Goodyear, thank you very much for being here.
From the Federal Economic Development Agency for Southern Ontario, we have Bruce Archibald, president, as well as Clair Gartley. From the Department of Industry, we have Richard Dicerni and Kelly Gillis. And please, if I mispronounce your name, catch me right away so that I can correct it for the rest of the meeting. And from ACOA, the Atlantic Canada Opportunities Agency, we have Kent Estabrooks and Peter Hogan.
Do I have all that correct? Very good.
Other than the minister, does anyone else have opening remarks?
Okay, Minister Goodyear, please go ahead and proceed with your opening remarks. Again, welcome.
Thank you very much, Chair.
Good afternoon, ladies and gentlemen.
With me today is Dr. Bruce Archibald, the president of FedDev, and Clair Gartley, vice-president, business, innovation and community development. As well, on my right is Richard Dicerni, deputy minister, and Kelly Gillis, chief financial officer for Industry Canada.
As many of you know, Prime Minister Stephen Harper launched FedDev Ontario with a $1-billion, five-year mandate to deliver economic development and growth to the region by addressing the unique needs and priorities of workers, our businesses, and our communities in southern Ontario.
The global economic recession has had a significant impact on every region of Canada, including southern Ontario. As Canada's most populous region, it has been hailed the engine of our national economy since the 19th century. But the recession was very difficult, and we are now at a crossroads in our history. The economic downturn hit our manufacturing sector particularly hard, forcing plant closures and widespread layoffs. We were challenged by the impacts to a greater degree than other regions throughout the nation.
With the establishment of FedDev in 2009 our government set out to work with the communities, businesses, and residents of southern Ontario to help reshape the region's economy. Although economic recovery is clearly under way, the economy still remains fragile. We have been working hard to position the region once again as the backbone and driving force of the Canadian economy, and we've accomplished a great deal so far.
We began providing immediate assistance by launching the southern Ontario development program to address short-term, immediate realities by making long-term investments. Through Canada's economic action plan we introduced programs to give families, businesses, and communities a much-needed boost.
I'm very pleased to tell the committee that we have committed more than half a billion dollars in economic funding, which has resulted in some considerable successes in all of our communities. These include support for local arenas and small businesses, and improvements to roads and sewers.
For example, in Windsor, a region hit particularly hard by the recent economic downturn, we helped bring to life a state-of-the-art MediaPlex for St. Clair College. This project has created approximately 250 jobs.
In Guelph, with our help Melitron Corporation, a leading supplier of advanced manufacturing solutions, has implemented lean manufacturing processes, and Hammond Power Solutions has expanded its operations developing leading-edge technologies.
And we've reached out to our communities, our families and children by supporting renovations at the Boys and Girls Club in East Scarborough, as an example.
I could, Mr. Chair, go on literally for days citing examples of the positive impact that FedDev Ontario is having on the southern Ontario economy.
Now, thanks in part to our government's economic action plan, some 240,000 more people in Ontario are working today than in May 2009. While the economy in the region and across Canada is doing better than many other countries, we realize that it isn't just about numbers. It is, in fact, about people. It's about our families, our businesses, and their financial security.
As the economy grows stronger in southern Ontario we are expanding our focus on creating better, longer-lasting, better-quality jobs. We are building on our accomplishments so far by investing in innovation, projects that will help businesses increase their productivity and production and reach new markets here in Canada and around the world.
Our goal now is to develop the right tools to make sure that our businesses and communities can continue to innovate, to grow, both now and into the future. To do this, ladies and gentlemen, we are working right now on what we call the southern Ontario advantage. To ensure regional growth, attract the smartest minds, build and bring to market the most promising ideas, we are now focusing on four key areas.
First is our people advantage. Ladies and gentlemen, you will agree with me that the people of southern Ontario are indeed our greatest asset here. They are knowledgeable, experienced, and talented. But we continue to face pressures from an aging population. We have fewer workers in the skilled trades and we are struggling with the need to retrain employees to use the more technologically driven products to fill those more technologically driven jobs.
While we have a world-class post-secondary education system in southern Ontario, indeed across the country, we fall far behind compared to other OECD countries in degrees that foster innovation. These are degrees in sciences, engineering, and mathematics.
We are building our future talent pool of scientists, engineers, and business leaders through training and mentorships. We're helping graduates prepare for their first interview and at the same time giving local business access to the technical skills and knowledge of these students who can help fuel their innovation capacity.
We are also developing the skills and potential of our people by turning their ideas into products that are competitive in a global marketplace. This is what we're accomplishing through, for example, our new scientists and engineers in business initiative. We are working with not-for-profit organizations and post-secondary institutions that support skills development for recent graduates of sciences or engineering to improve their success at starting up new companies.
The second pillar of our southern Ontario advantage is the knowledge advantage.
Canada, ladies and gentlemen, is ranked 16th among the OECD countries in business expenditures on research and development, as a percentage of our GDP. We recognize this, and there are a number of reasons for this. Mostly what we are hearing around the province is that businesses, small businesses for example, just do not have the research capacity on-site nor the skills to bring innovative products to the marketplace.
We are addressing this through our applied research and commercialization initiative. This is a recently launched $15 million project that will help post-secondary institutions, our colleges and universities, bring new innovations into the marketplace by building partnerships to use their research capacity with our small and medium-sized business sectors.
We are also working through another new program called the technology development program, designed to further bridge the gap that exists between research and commercialization and put in place the conditions where ideas can be nurtured and high-quality jobs can be created. It encourages greater collaboration among post-secondary institutions and not-for-profit groups to bring advanced technologies with commercial potential to the marketplace.
The third pillar on the southern Ontario advantage is wrapped around our entrepreneurial advantage. Our stakeholders have been very clear with us that we need to provide entrepreneurs with access to proper funding to support their ideas and foster a renewed confidence and commitment from the investing world.
We responded to this great need with the launch of a new $190-million investing in business innovation initiative. This is designed to help start-ups bring new products, processes, and practices to market faster, by leveraging angel and venture capital investments in southern Ontario.
But we're also focused on the big picture, the overall picture, of what it will take for Ontario to be competitive with the Chinas and the Indias of the world. This is why we invested up to $210 million to launch the new prosperity initiative. This initiative is designed, of course, to create jobs and strengthen the economy in southern Ontario, but it is doing so by giving our businesses the tools they need to expand into promising new areas, generate opportunities for communities to diversify their existing economies, to help families and individuals as well as small business.
Mr. Chair, I have had the opportunity and pleasure to hear about the challenges facing businesses, industry, and community leaders throughout southern Ontario. Over the last year and a half I think it has become very clear that FedDev Ontario is committed to continuing to respond to the needs that we see around our provinces and build on the initiatives that we now have.
Thank you very much, Mr. Chair and colleagues, for this opportunity. I'm happy to answer any questions you may have.
Thank you, Secretary of State, for being here, as well as the others. We appreciate your being here.
I'm going to touch on a regional issue, which I bring up every time the minister comes, and I don't get any answers on it. It is regarding FedNor. It's a program, not an agency.
And congratulations to all of you on getting an agency. It's something that northern Ontario would really appreciate, but we seem to be locked up in second-class-citizen status.
The issue I'd like to ask you about is this. I've asked for numbers on FedNor a number of times, and the minister has said yes. He always says we'll get them to you, and he never gets them to us. We got a nice brochure with beautiful pictures from beautiful northern Ontario, but nothing else.
We went to the Library of Parliament and asked if we could get some numbers there. Do you know what the interesting comment from the researcher to my staff was? It was “You know, it would be a lot easier if it were an agency as opposed to a program, because then we could get the information.” So we didn't get much from them.
I am going to ask for a commitment. I was hoping to ask the minister, but I'm sure the secretary of state would be able to commit to this. Could I sit down with the Industry Canada officials for one hour without political staff present, so I could get honest answers and real answers without any source of intimidation? I wonder if I could have that commitment.
I'd be happy to do that. Thank you very much.
As I mentioned earlier, when FedDev was initially set up, the crisis was pretty imminent, and the instruction from the Prime Minister was to create jobs as quickly as possible. I'll give you some examples of what we did.
There was the community adjustment fund, for example, of which FedDev took on the southern Ontario portion of this national program. We looked for applications, and we got a lot of them that would in fact create jobs the next day, such as replacing water treatment facilities. I'm sure in your ridings, as in mine, there were roads being repaved, and curbs, etc. These were jobs that were created immediately.
We also looked for opportunities to partner with folks who already had a finger into the economy, like IRAP and Yves Landry and some of these other great programs. But we travelled around the province as well. We spoke to literally hundreds if not thousands of mayors, economic development folks in communities, and university presidents. We spoke with people who were employed and people who were not employed. We continued to do that. We would take the feedback and start to look at our programs. We did in fact tweak the programs to the current needs.
So in the community adjustment fund, CAF-1 was actually a little different from CAF-2. If we were going to pave a street under CAF-1 because that's what a city wanted to do, under CAF-2 we would look for paving a runway at an airport, which might allow for future economic progress. As the economy continued to pick up, we changed again, and then again.
Just last November, we launched seven new programs. All of them are designed of course to create jobs as quickly as possible. The one I can tell you about is the graduate enterprise program, where we saw the need to put skilled folks into small and medium-sized businesses. We married that with graduates coming out of school into a weaker job market, and we saw the opportunity to put graduates into businesses. So we developed a program to do that. We saw the need for businesses to use more R and D to create, again, new processes or become more efficient, and to become more competitive, which all leads to more jobs.
So we developed a program called the applied research and commercialization initiative, where we said to colleges and universities, “Here's a pot of money, $15 million over two years. The way to get it is to go out and talk to small businesses around the province and help them be better.”
Recently I launched one of those programs where a luggage manufacturer needed to find a better way to produce aluminum luggage, and with the help of a college and their skilled students and laboratories, they did exactly that.
We launched seven new programs. They are for graduates. They're for small businesses. They're for not-for-profits. They're repayable contributions for profits. They're for venture capital folks to help our entrepreneurs, all the way up to the serious jobs of the long-term future, which is our youth STEM initiative.
This is again seeing an opportunity. From the science and technology file, I am hearing that scientists could probably do a little better at business. With the decline in R and D by the private sector, we felt that businesses could probably learn a bit more about the value of science. We can start that after people graduate from university, and I just mentioned that we are. But I believe the way to start that is actually in grade three, grade five, grade nine, and this is what we continued to hear on the ground.
So the youth STEM initiative is a $20 million initiative for folks who already do programs with kindergarten through to grade 12, to get them interested in those key subjects that we know will lead our innovation, which we know will improve our productivity and which we have seen other countries are beating us on. That is, PhDs and graduate degrees in science, technology, engineering, and mathematics.
Our programs now have gone from creating jobs tomorrow by improving infrastructure—they've been extremely successful—to creating jobs today, and longer-lasting, better quality jobs of tomorrow in that knowledge-based economy that we are facing as the global economy has changed.
Thank you, everybody, for appearing before us.
Minister, I get all excited when you start talking about all these programs. I get excited about them because, as you know, a number of them have been in my riding as well. There's the KIP program, knowledge infrastructure program, at St. Clair College. I think the community adjustment was another program you're responsible for. We have a huge sports complex.
When you mention St. Clair College, of course, there's a St. Clair College in Chatham as well. I have visited there a number of times. It is just abuzz and excited about what's happening. We were commended by the president, Dr. John Strasser, for the work the government has done. I would like to convey to you just how happy they are.
I would be remiss if I did not tell you about Ridgetown College. I think you are aware that Ridgetown College is involved in a number of projects for new biofuels. This also would have been impossible without the funding provided by your ministry. We have two projects in southwest Ontario. There's a vast array of them.
I wonder if you could give us an update on how many projects are out there, and how many you feel will be completed by the October deadline, and the stages of these projects. Before I sign off, I'm going to give you an open invitation to come down to southwestern Ontario and see the beautiful stuff happening there.
As far as the number of projects goes, we could probably sit here and list how many projects there are. There are literally hundreds. There are so many programs. CAF-1 had approximately 90 applications that were agreed to, out of some 597 that were sent in. The SODP program had some 1,800 applications asking for $1.6 billion. We had about $100 million under that program. We could list all the programs. The ARC program has 24 current applications. They are all different, and we would be more than happy to get you the data.
I will say, though, on your second point, if you want the number of applications under each program that has closed, we can certainly provide that. I do want to make sure that you know that many of these programs are currently open and ongoing.
We're very proud of the fact that we're flexible, and in a sense agile. I do remember going down near your riding into Leamington one day, when they had a tornado whip through and destroy the docks, which threatened an entire tourist season. As a result of the program and the fact that they had an application in there, I flew down, I think it was the same day or the next day, and then came back to Ottawa and we sat down and got to work. We were able to fix that, and offer them the opportunity to save their tourist season.
The program is very flexible. I appreciate that it has been everywhere. I can't remember all of the applications, although when they're mentioned to me I do think, oh, yes, I remember that one. These go to the department, and we need to credit the folks at FedDev who see these applications by the hundreds, and who make sure they're in the right program, that they fit the criteria and the terms specifically of the program. We do get so many applications and so much surplus that we do have the ability to make sure we get money out where it's most needed and out quickly.
Madam, gentlemen, Mr. Minister, good afternoon.
Since the Department of Industry is in charge of science and technology, when we deal with the totality of grants and contributions for these components including research, all of that is managed within this department. If, for example, there are scientific and technological research programs that have to do with the environment, requests can be made by the Department of the Environment, but the budgets will be included in the grants and contributions of the Department of Industry, if I understand correctly.
Earlier this week, in a Sherbrooke local newspaper, there was an article about the Canadian Foundation for Climate and Atmosphere Sciences at Sherbrooke University. There were people who are working at the PEARL laboratory in the Arctic. We know that within the framework of Canada's economic action plan, the government gave a $1.8 million subsidy to the PEARL laboratory. At that time, of course, the researchers at Sherbrooke University believed that the program was on a sure footing. We know now that last year, their budget was reduced.
I wondered why, on the one hand, investments are made in the laboratory as such and on the other hand, people are already envisaging its possible closure. I was trying to look through the various elements. I had some difficulty finding these sums of money. There are great variations involved in the research at the PEARL laboratory. Therefore I wanted to know what the government intends to do. Why, on the one hand, are they investing in the laboratory, and on the other hand, reducing funding for research, including funding for the researchers working on this project at Sherbrooke University?
To respond to your question, the particular project you're talking about is under the Department of the Environment. I note that if the research is in the north, it's the Minister of Northern Affairs; if it's under health, then it's the Minister of Health.
Our role as the science and tech.... I'm a minister of state inside Industry Canada. We would provide funding for the laboratories. The laboratories are permanent structures. Under the economic action plan, we provided $2 billion to rebuild research capacity all across the country, and that had to be matched.
The good news is that it was matched—by the Province of Quebec, in your case. In some cases it was matched by the private sector. The $2 billion actually grew to $5 billion, rebuilding the laboratories and research facilities across the country.
In the same year, we also put $750 million into CFI. Part of that money goes to put the equipment into those laboratories. The research councils actually make the decisions on which researcher or which research project gets funding, and I should say that the decision is made by scientists, not by me. These are independent, peer-reviewed panels. Most often, it's scientists saying, this is a good scientific project, these are good scientists, and so on.
So we have the capacity to move money into the councils, who make the final decision. Since we have been in government, we've increased funding to the councils by about 23% on average. I will say that no government in the history of this country has provided so much funding for scientific research. The Prime Minister himself has said that science powers commerce, and that's why we're at $11.7 billion of annual funding for science and technology.
On the Arctic and polar research side, we also put just over $80 million into a number of research labs in the north. For the research that goes on inside those labs, the funding actually comes from another source.
Deputy Minister, in the front of this book and in your own estimates here, there are transfers between departments. There's a transfer here with the RCMP, for example. What I don't understand is why we cannot find a way, from a management perspective, to transfer money around within your own overall budget to cover....
I'm not happy that we have supplementary estimates (C). We're going to be at the end of our fiscal year in a few weeks and we're still approving expenditures.
Then when I look at the actual.... Now, this is a year old, because it gets to be a year old, unfortunately, when we get the Public Accounts for 2010. I'm picking on you because you're here; I would do the same at any other committee. When I look at what you were allocated and then at what you spent, you saved a whole bunch; it wasn't all spent. What we don't see in the estimates, whether it's in the mains or in the supplementaries, is the actuals. We always see what you're estimating—what you plan on spending—and then have to go to a whole other set of books, which is way behind, in my view, when we get it, to see what you actually spent.
I'm looking at this and I'm new at it. I've been at it for five years and I'm still new at it. You're not spending everything. I don't understand what we need to do.... Tell me what as a government we need to do—I don't mean us on this side, but government in general—to change the process to allow us to say: we have given this department, this ministry, x amount of dollars; now move it around to make it happen, but don't come back to us. And we would do a good job of scrutinizing how much you get at the beginning, and then “leave us alone” for the rest of the year.
I get frustrated that when I look at the amount of money that you came back for in supplementary (B) and that is due to changes in budgets, and blah, blah, blah....
I'm looking for your advice, sir. Is there something we should be implementing from a public service management point of view to allow this to be cleaned up?