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Standing Committee on Industry, Science and Technology



Tuesday, May 26, 2015

[Recorded by Electronic Apparatus]



     Good afternoon, ladies and gentlemen. Bonjour à tous. Welcome to the 47th meeting of the Standing Committee on Industry, Science and Technology.
    We have with us today the Minister of Industry, the Honourable James Moore.
    You will see on the orders of the day that pursuant to Standing Order 81(4), we are considering the main estimates for 2015-16, and I'll just say “etc.” for the rest; you have it written out in front of you.
    We will begin with the minister's opening remarks, and then colleagues you know that we will do the questions in rotation as usual.
    Please, Minister, go ahead.
    Thank you very much, Mr. Chairman.
    Thank you, colleagues. Joining me are Paul Halucha, Lawrence Hanson, Philip Jennings, and John Knubley, who is my deputy minister, to supplement the answers I give or to answer questions with perhaps more acuity than I may be able to offer, and to provide this committee with the information that you need as you consider the main estimates.


    Good afternoon, Mr. Chair. Thank you for the opportunity to give this presentation before the committee.
    Today, Deputy Minister John Knubley joins me with his team.


    I am pleased to be able to speak to you today about the important work that our government is doing, and how we have delivered on our top commitment in the last campaign, which is to create economic growth, stability, and jobs for Canadians.
    Mr. Chair, Canada's economy is widely recognized as one of the world's strongest, with more Canadians working today than at any other time in our country's history. Since the depth of the recession our economy has created close to 1.2 million net new jobs, which is one of the best job creation records in all of the G-7.


    The vast majority of these jobs are high-paying, full-time jobs in the private sector and in the industry. In addition, Canada's net debt to GDP ratio is now less than half that of the average for the G7 countries.
    Finally, for 10 years, Canada has been first among the G7 countries in terms of economic growth. A result of that kind is no accident.


    Our government has budgeted responsibility, we've kept spending under control, and we've arrived at a balanced budget without raising taxes. Better than that, we're the only country in the G-20 that has balanced its budget without raising taxes but while lowering taxes. We're the only country able to claim that scale of success.
    What has the result been for Canada? The Conference Board of Canada recently said that the Canadian economy will add 187,000 new jobs in 2015. Some 50,000 jobs have been created in Quebec alone this year. The majority of them are full-time. Also, we have some concrete examples throughout the Canadian economy of firms that are growing and adding jobs. Companies from Google, to Lowe's, Siemens, F-Pacific Optical Communications, and Walmart are expanding in Canada.
    There have been some challenging times of course in the manufacturing sector, which I'll get to, and some challenging times in the retail sector, for example with Target. But those jobs have more than been made up for by other firms that have expanded into those footprints and beyond with growth in the retail sector. We are strengthening Canadian businesses and creating more innovation and competition across Canada.
    I want to talk now a bit about manufacturing.


    The manufacturing sector employs 1.7 million Canadians, and most of those jobs are full-time. Sales in this sector have resumed and are up almost 20% since the recession. For our government, the expression “Made in Canada” continues to fuel pride, but we must give manufacturers the tools they need to develop their products and create the jobs of the future.


    That's why in this year's budget, economic action plan 2015, we extended the accelerated capital cost allowance for machinery and equipment used in manufacturing and processing. As you know, this was a sunsetter that had to be renewed habitually. For those of you who have been members of the budget committee and even before here at the industry committee, representatives of the manufacturing sector have come before committee and asked for a long-term commitment from the Government of Canada with regard to the accelerated capital cost allowance. Our government has delivered a 10-year commitment in this budget, precisely what the manufacturing sector has asked for. In this 10-year commitment there is an incentive that will provide manufacturers with $1.1 billion in benefits in the first five years alone.
    We've extended this same tax break to companies operating in the liquefied natural gas sector. LNG has the potential to diversify our energy market, creating jobs and helping grow our economy. Liquefied natural gas as an opportunity, should the industry stand up and grow, is the cleanest form of energy, which can create jobs all across Canada if we sell this product to the entire world. This tax break will help businesses grow in British Columbia and maintain Canada's reputation as a global economic leader and a leader in clean energy.
    Budget 2015 has been praised as well for its targeted support of Canadian manufacturers. The Canadian Manufacturers & Exporters said that our budget has “a number of important tax and investment measures that will have a very positive impact” on manufacturers.
    The Canadian Chamber of Commerce agreed when they said
The measures to support Canada’s manufacturing sector are timely. This sector is evolving rapidly and set to seize new opportunities. The budget will have a positive impact in a sector poised for new growth.
    The auto sector is critical to our economy, and our government is committed to keeping Canada's automotive industry innovative and globally competitive. The industry represents 10% of our manufacturing GDP and 13% of our merchandise exports. It directly employs over 121,000 Canadians and another 390,000 indirectly through our supply chain.
    Economic action plan 2015 announced the launch of the automotive supplier innovation program. This investment of $100 million in this year's budget will help Canadian automotive suppliers gain a competitive edge through new innovative products and processes.
     The Canadian Vehicle Manufacturers' Association said that it “welcomes today's federal budget announcement of the Automotive Supplier Innovation Program. A program which addresses the critical gap in support for industry based product development”.
    I point out these quotes, Mr. Chairman and colleagues, because it's incumbent upon the government to listen to those who are actually in the field and working in these sectors. They come before parliamentary committees, they come before me as Minister of Industry, and present us with ideas. Our departments do work, parliamentary committees do work, as we try to assess these ideas to see if they make sense. We listen to these organizations and we put forward policies, and they respond positively to the fact that we've listened to them and have in place a policy framework and investments that make sense to those who are actually on the front lines trying to create jobs and develop products for global markets.


    This new program complements the automotive innovation fund, created in 2008 by the government, renewed in 2013, that received new votes last year. I am pleased to tell you that the investments are already generating very positive results. Canada's auto production has increased by 61%, and auto exports have increased by 74% since the 2009 recession.


    Let me repeat that again. Since the recession in 2009, Canada's growth in automobile manufacturing has gone up 61%, and our exports have gone up 74%. In fact, over just the past two years, automotive companies have invested almost $4 billion in private sector dollars into the Canadian automotive sector in anticipation of future growth and future opportunities, particularly in Europe with the passing and coming into force of the Canada-European Union free trade agreement.
    I'd also like to talk about two other important manufacturing sectors that are essential to the Canadian economy: the space and aerospace sectors. The Canadian aerospace and space industries account for more than 170,000 quality jobs, and add over $28 billion annually to Canada's GDP. Since the launch of Canada's space policy framework, our government has taken steps to deliver on the priorities of Canada's space industry to ensure that Canada remains a global leader in a fiercely competitive international market.
    Just last year, I announced the creation of a space advisory board to provide policy advice independently to the Government of Canada about Canada's future role in space. The board includes experts such as Colonel Chris Hadfield, retired Canadian astronaut and commander of the International Space Station; John Keating, director of Sandvine and also former CEO of COM DEV; and Dr. Shoukri, president and vice-chancellor of York University, among others. These experts from across a broad field and all of Canada's geography will help lead our space policy conversations for the years ahead.
     We had a meeting yesterday in Toronto, and I'm pleased with the commitment from the board as we work together to ensure a strong, commercially competitive space industry that will continue to inspire Canadians for years to come. In fact, in April I joined the Prime Minister in Vancouver when we announced that our government will be providing $243 million to be a full partner in the 30-metre telescope, an international project that will secure access for Canadian researchers to maintain our scientific leadership in astronomy. Most of this money is going to be spent in Canada, and is going to be creating high-quality jobs in the construction and assembly of key telescope components, of which Canadian firms are global experts.
    Economic action plan 2015 further supports Canada's aerospace and space industries, including an important commitment to extend our participation in the International Space Station. It was widely hoped that Canada would renew our commitment to the International Space Station after the successful leadership of Commander Hadfield at the ISS. It was hoped that our government would make a commitment through 2021. In this year's budget, we've made a commitment that Canada will be a full partner through 2024.
    Budget 2015 also includes an important partnership for Canada in the European Space Agency. Canada is the only non-European country to be a member and partner in the European Space Agency. This partnership has been renewed in this year's budget and will allow for great opportunities for Canada in space, including new investments in the advanced research and telecommunications system program, or the ARTES program, which is a $30-million new investment over the coming five years to extend Canada's participation in the satellite communications sector to create new opportunities for commercialization with regard to space.



    Mr. Chair, our efforts in the auto sector, the space and aerospace industry are bearing fruit. However, we must also ensure the free movement of goods and services within the country. That is why our government has taken the lead to update the Agreement on Internal Trade.


    Canada has made significant progress towards improving trade relations around the world. However, improvements to trade within Canada are not keeping pace. The willingness of provinces and territories to modernize the Agreement on Internal Trade represents a key opportunity to address internal barriers that weaken Canada's economic union.
     In this year's budget our government committed to establishing a federal internal trade promotion office within Industry Canada. The office will act as a federal hub for research and analysis to increase our understanding of the impact of barriers to internal trade, building on the government's internal trade barriers index, which we announced in budget 2014.
    Also, a year ago our government unveiled Digital Canada 150, its plan to ensure that all Canadians can take advantage of the opportunities of the modern digital world. At the core of this plan is connecting Canadians, a commitment that we made in last year's budget to expand and enhance access to high-speed broadband networks at speeds of at least five megabits per second in almost all of Canada. Our goal was to connect 280,000 additional Canadian households.
    Today, 94% of Canadians have access to high-speed Internet. Our goal was to close the gap so it would go from 94% up to as close to 100% as possible. To achieve 98% would mean connecting 280,000 additional Canadian households. This month I approved the first round of projects and I'm pleased to say that we have connected and signed agreements to connect those 280,000 households, and have exceeded that goal by 76,000 households. So 356,000 households will be connected. Our goal was to do this within the budget of $305 million, and we have achieved this goal—by some 76,000 households above our target—and we've achieved it at 40% under budget. That means that we will connect 356,000 households—not 280,000—at a total cost of $186 million and not $305 million. This was only the first round of project approvals.



    Once the Connecting Canadians program is complete, over 98% of Canadians will have access to high-speed Internet services providing sufficient speed to support activities such as e-commerce and high-resolution video broadcasting. They will also be able to benefit from online employment and learning opportunities, as well as many other advantages that Canadians enjoy in urban areas.


    On the wireless sector front, our government has had one goal: to take deliberate concrete steps to create more choice, lower prices, and better wireless services for Canadian families.
    A little over a year ago, nearly 90% of spectrum was held by Canada's largest wireless companies. As a result of our actions, including holding three spectrum auctions in the past year, today new wireless companies now hold over 25% of total wireless spectrum. We have tripled the amount of spectrum in total that is out there in the marketplace to meet the growing demands of Canadian consumers, and since 2006 we have gone from having less than 1% of all wireless spectrum in the hands of non-big three incumbents to now having 25% in the hands of competitors. Again, more competition means lower prices, better quality service, and better connectivity for all Canadians, so there is more competition and prices have dropped since 2007.


    Another priority for the Digital Canada 150 was to modernize the Canadian intellectual property system to ensure it is better adapted to the digital era.
    The balanced and exhaustive approach we have adopted has enabled us to achieve this objective. Last month, I announced that we were going to amend the Copyright Act, which would help us adhere to the Marrakesh Treaty of the World Intellectual Property Organization. This international agreement seeks to help the blind and persons with print disabilities to have easier access to published works. This used to be impossible for them.


    Currently only about 7% of books are available in an accessible format such as audio books or Braille conversion for those who are blind or who have perceptual disabilities. Canadians should not be denied opportunities to read and to be educated simply because they are print disabled.
    The Marrakesh treaty, under Budget 2015, is one major step to addressing this situation. Canada will be the first country to assent to the Treaty of Marrakesh. We expect the treaty to be implemented by the end of this year, which will provide Canadians who are print disabled and who have perceptual disabilities full access to the print materials of their choice.
    In conclusion, Mr. Chair, as promised, our government delivered a balanced budget while cutting taxes for families, for seniors, and for small businesses and while making important investments in infrastructure and supporting job creation across the Canadian economy. By focusing on the priorities I've outlined here today, our government is delivering real results for Canadians.
    Thank you very much for your time.


    I am ready to answer your questions.


    Thank you very much, Minister Moore.
    Colleagues, we can squeeze in four and a half minutes each, and I need to be brutal with the timeframe for questions and responses.
    Mr. Daniel.
     Thank you, Chair.
    Thank you, Minister. It's always an honour to have you here at this committee, and I appreciate your sparing the time to come over here.
    I just wanted to explore a little bit more about Digital 150. Clearly the world is changing and the digital dimension for all of us in Canada is also changing. So forgive the pun, but can you explain a bit more about the Digital Canada 150 program and how it will help carve a path forward for Canadians to take full advantage of the opportunities of this digital age?
    Digital Canada 150 has 39 specific commitments for the Government of Canada to follow through on, and those 39 commitments are spread over five pillars. The first of the pillars is connecting Canadians, which includes rural broadband connectivity and the wireless sector, making sure that we're properly connected, but it also includes some other programs that have received new funding in this year's budget, such as the computers for schools program, which is an important program.
    In the Government of Canada and government agencies and other levels of government, we use and replace computers at a rapid pace. But very often, computers that seem to be out of date in 2015, that were purchased in 2013, are perfectly adequate for non-profit organizations, for students who are doing basic research, for word processing for seniors, and so on. So with the computers for schools program, for example, we take computers from the Government of Canada and refurbish them with the help of students, usually high school students who are planning to go on to a technical college or to get into this field. We give them an opportunity to learn how to refurbish computers and get them stood up, and to make sure that they're virus-free and properly operational.
    So we get a win out of that. Then we take those computers and we give them to aboriginal communities that don't have the resources, schools that need upgrades in computers or are expanding computer terminals. Furthermore, in this year's budget, we're extending that to a number of non-profit organizations such as the Neil Squire Society and others who need specific computers for people who have a particular kind of disability.
    So connecting Canadians, that first of the five pillars, is about a lot things. It's about rural broadband and spectrum auction policy, connectivity, and competition on the wireless side, but it's also about some of that basic infrastructure for communities.
    We also have the digital privacy act, which is part of it as well, because we want to make sure that the digital world is secure and protected online. We also support things like anti-cyberbullying initiatives through our policy.
    The third pillar is the digital economy strategy that Minister Clement worked on when he was Minister of Industry, which tries to take full advantage of the economic opportunities.
    The fourth of the five pillars is digital government. The government needs to walk its talk when it comes to accessibility, which is why we have the Open Data Institute and the open science commitment. We have an across-government effort to try to make everything more legible and easily accessible online for Canadians.
    The fifth and final pillar to me is the most interesting and fun one. Once you've made connectivity a goal, once you've made it more secure, once you're taking advantage of the economic opportunities, and once the government is acting in a more digital way, then comes the fun stuff, the good stuff, which is telling stories to Canadians. This is a piece that came over from when I was Minister of Canadian Heritage. It's why we have Digital Canada 150. The year 2017 is our sesquicentennial, and a big part of the reason that Canada has been able to survive over 150 years of history through incredible challenges and divisions in the early days—east and west, and north and south, and French and English, and aboriginal and non-aboriginal, and Protestant and Catholic—is our respect for each other, our understanding of our shared history, our ability to tell stories, to be connected with one another.
    So that fifth and final pillar is about a digital content effort to get all of our museums to have digital policy, to have more Canadian history minutes, to work with Historica Canada, to tell the stories of veterans, for example, online, and to share more of Canada's stories one to another.
    Anyway, it's a long answer to a short question but it's a comprehensive policy.


    Thank you very much. Do I have any time left?
    That's pretty well it, Mr. Daniel.
    We'll go on to Ms. Nash.
    Thank you, Mr. Chair.
    First of all, I'd like to ask the minister about job quality. The recently released CIBC employment quality index had our job quality at record low levels, Mr. Minister, and according to a recent study published by the United Way in Toronto, barely 50% of workers in the greater Toronto area have job security, meaning as permanent, full-time employees with some kinds of benefits. They also found that precarious labour has risen 10% since 2001. TD estimated that the wage gap between precarious and permanent employment is now up to $18,000 a year.
    Why is it that your government has prioritized tax cuts for the wealthiest families in Canada in its latest budget rather than address the very serious problem of precarious labour and work to attract investment in Canada that will actually help get these precarious workers into stable jobs of some kind?
     Well, I don't know intellectually how you connect one with the other. I don't know how allowing, for example, pension income splitting for seniors denies job creation. I don't understand the correlation between the two.
    Maybe you can elaborate on what you're doing to help the growing number of precarious workers in my city, which is now approaching 50%. It's the largest city in the country, and people can't get living wages or decent secure jobs.
    I was answering your first question because talking about tax relief as it relates to the other is a false correlation.
    I don't think so, but maybe we can just focus on precarious employment.
    If I can finish my sentence, that would be great.
    I was saying that there's no correlation between the two. It's good rhetoric, but it has no policy basis, frankly, number one.
    Number two, with regard to jobs and employment in the long term, yes, we do have a challenging global dynamic. We do have a challenging dynamic within Canada.
    The most responsible thing for the government to do in the macro, and I'm happy to get into specifics, is to do what I said in my presentation, which is to listen to those who actually are creating jobs on the ground, who are struggling to find growth, and who are facing stiff competition in the global environment, and listen to them and talk to them to find out what public policy implements we need to put in place as a government to make sure that we are growing and that we are having success.
    That's why the OECD is projecting Canada to have one of the best job growth numbers in the G-7. That's why the World Economic Forum has said that Canada has one of the best job numbers in the world. It's why Bloomberg has said that Canada's the best place in the world to start a small business, which of course creates jobs.
    When the small business community, which is 90% of all jobs in this country, come out and support our budget and say it's what's best for creating jobs in Canada, I think we've struck a right balance in our government from investment to tax relief to supporting job creation to expanding trade opportunities around the world.


    Thank you, Minister.
    I think you know the challenge is creating quality as well. We're living in an era of growing expenses, and it's difficult for people to make ends meet.
    One of the ways to compete globally is with innovation. In 2013 Canada spent 1.6% of GDP on innovation. France spent 2.2%, Germany 2.8%, and Sweden 3.3%. We were lower than Japan and Australia. We were even lower than Estonia in spending as a percentage of GDP on innovation. We're one of the lowest of the OECD.
    Given that innovation is essential in driving and expanding businesses and job creation, I'd like your comments on our low spending on innovation. I notice that there were recent cuts to CANARIE Inc., the National Research Council, cuts to science and technology. Perhaps you could comment on that.
    It's CANARIE, not cannery, and we have renewed our investments in them, because it's a key instrument or backbone for information sharing across universities, for example, and innovation.
    It's a false comparison between us and those other economies for a number of reasons. One is that, frankly, in part because of our natural resource wealth, we are not isolated like some of the landlocked countries you described and we do have a natural resource wealth that is a huge benefit to the Canadian economy. That is number one.
    Number two, we do invest into research and innovation, and as the Conference Board of Canada has pointed out, the lag is not in Government of Canada investment in R and D. The actual lag is in private sector investment into R and D. That's where the real challenge is.
    That's why we try to do things like the automotive supplier innovation program that I described that's in this year's budget, which is to incent the private sector to draw in and commit themselves to the Canadian economy, to commit themselves to research and innovation, and to commit themselves to Canadian jobs through partnership.
    That's what we do as well with the tech demo program. That's what we do with the automotive innovation fund: try to incent the private sector to make long-term commitments in Canada.
    Look, Ms. Nash, I—
    They're still lower than our major competitors and government spending. That is the reality.
    We're out of time, folks.
    I'll need to go on to Mr. Carmichael for four and a half minutes.
    Thank you, Mr. Chair.
    Thank you, Minister and officials, for joining us today.
    I want to talk about two areas that are related and, in the interests of time, I'll try to bundle it for you, Minister, so that we can address both the manufacturing sector and the automotive sector, which you spoke to in your opening comments. I'd like to offer the opportunity to go a little deeper.
    Clearly, 1.7 million Canadians are involved in the manufacturing sector. I think our government understands the importance of manufacturing to southern Ontario. The automotive sector is no stranger to that importance. Clearly, over a half a million Canadians from coast to coast to coast are employed in that industry, both directly and indirectly.
    I wonder if you could speak to the manufacturing sector. You talked about the accelerated capital cost allowance, but some of the other initiatives are important to ensuring a strong manufacturing sector in southern Ontario and ideally across Canada. But also, when you talked about the automotive innovation fund and the supplier program, you covered two very important programs that I think are critical to keeping automotive manufacturers here.
    To my colleague's comment on quality, manufactured quality in this country, I can tell you in automotive alone we have plants that represent both traditional domestics and import manufacturers building product in this country that are world class and amongst the best in the world.
    I wonder if you could speak to some of the initiatives a little further that our government is incenting to do a bigger and better job.
     I think part of the automotive policy we have put in place, particularly with the supply chain initiative—the $100 million that's in this year's budget—is to broaden out the focus of the Government of Canada into two distinct tracks. For the longest time, the pursuit has always been on mandates, OEMs, the big firms, to plant and to grow and to therefore then have firms that come around them. As the numbers suggest, for every one OEM job, there are four to five supply chain jobs associated with it. We need to continue to pursue those large-firm investments as a tent pole around which other investments will be drawn. We need to pursue those opportunities. It's incredibly competitive, which I'll talk about in a minute.
    On a parallel track, we also need to support the supply chain, because one feeds the other. Among the criteria that OEMs look at when they're considering investing and committing to a footprint, for example in Ontario, is supply chain capacity. They look for infrastructure. They look for tax policy. They look for the regulatory environment. They look for energy cost dynamics in the province of Ontario, which has been incredibly challenging over the past 10 years. They look for efficiency of supply chain.
    What we want to do is continue to pursue the OEM investments on the one hand, and on the other hand ensure that we have an automotive supply chain that is well suited and properly equipped, and that has the right policy framework, in order to show OEMs that they would be operating in a Canadian environment where they have a supply chain that is efficient and nimble and that is ready to provide them with the parts, the supplies, and the capacity to grow in Canada in a cost-competitive way.
    With regard to pursuing OEMs, we've had some challenging news, for sure, but we have also had some good news as well. We have some other good news that we'll be announcing in the near future, with some investments in Canada. We live in a North American environment, in the auto sector, that is extraordinarily competitive. I'm vice-chair of CAPC, the Canadian Automotive Partnership Council. In the group we're reminded all the time that in North America there really are four auto sectors. There's the Canadian auto sector. There's the northern U.S. or midwest auto sector. There's the southern U.S. auto sector, principally right-to-work states, lots of corporate welfare, greenfield sites, and so on. Then there's Mexico, paying incredibly low wages, with massive amounts of corporate welfare. It's very challenging for Canada to compete in this environment.
    How do we compete? Well, we compete by doing things like investing in north-south infrastructure; twinning the Detroit–Windsor border crossing; having the beyond borders agreement with the United States; and to make it cost-competitive in Canada, having a 13-point lower corporate tax than what's offered in the United States. We have funds like the automotive innovation fund, the automotive supplier program that is in this year's budget. We work in cross purposes. We have Jerry Dias of Unifor, Brad Duguid in the province of Ontario, me, plus industry all sitting around a room similar to this size, partisanship entirely aside, really working together to try to find the right mix of policy at all levels of government and the private sector, to ensure that we have a competitive environment in Canada.


    Minister, that's all the time.
    We're doing all we can to make sure that the auto sector continues to find a new horizon in Canada.
    Thank you very much, Minister and Mr. Carmichael.
     Mr. Regan.
    Thank you, Chairman. Four and a half minutes is so short.
    Minister, what is the amount of contribution to Genome Canada in the 2015-16 main estimates?
    I can't remember the exact number.
    John, do you have that?
    Genome is actually funded under three different mechanisms, Mr. Chair, via a grant, a statutory contribution, and a voted contribution. This year there's a decrease in the mains that derives from overlapping funds from previous budget announcements. I won't go into the details. I can provide those details to you, but basically there were changes in Budget 2008, Budget 2010, and Budget 2012 that created this fluctuation.
    The information from the estimates, the listing of transfer payments, indicates that it's $7.5 million, and that in the previous fiscal year of 2014-15 it was $22.5 million. Is that right?
    I believe that's correct. The fluctuations are really based on Genome's cashflow requirements. Specifically, in budget 2008 there was a minus $0.2 million drop; in budget 2010 there was a $7.3 million positive increase; and then in budget 2012 there was a drop of $15 million, which I think gives you the number you quoted.
    At a recent committee meeting, my friend Mr. Carmichael asked a witness about personalized medicine being an area that will be disruptive. In answer, Dr. Danial Wayner said:
The genomics era allows us to understand the machinery that is responsible for our health, our welfare, and our well-being.
    He went on to say this:
There are huge social issues related to somebody else having my entire genome in their hands, but those are the types of advances we'll see over the next decade or two or three. I think that will fundamentally change the way we approach health care and wellness.
    In light of that testimony, Minister, why are you cutting two-thirds of Genome Canada's funding? Whether you call it cashflow or whatever, the estimates indicate that you're cutting it by two-thirds.


    No. Since we formed the government in 2006 we have increased funding to Genome Canada. Let me go back to the beginning of your question. This is a huge part of science and medicine. I know this personally very well. My son has a genetic challenge, and for families to get a diagnosis is incredibly expensive. I know this personally. To get genetic research done, and to be able to have a sense of the horizon of your child's health, and to know what's coming is really important for families. That's funded in part through the Government of Canada, but it's principally led by the provinces and across Canada in 13 provinces and territories. It's a patchwork of what gets funded and what does not get funded in terms of genetic research. You mentioned the personal dynamic on a personal basis. I've worked, for example, in British Columbia with our health minister out there, Terry Lake, to try to get it covered by our MSP—
    Minister, I want you to know that I hope it goes well for you with the situation in your family. I wish you the very best with that. If you'd allow me to go on to the next question.
    In relation to the 2015-16 report on plans and priorities, it indicates the planned spending for science and technology partnerships—which happened to include the transfers to Genome, by the way—for 2015-16 are $298 million, whereas the planned spending for 2017-18 is what? It drops from $298 million to...?
    Offhand, I don't know.
    To $189 million. That's a substantial cut to science and technology partnerships.
    Geoff, you know how budgeting works. There are supplementary estimates that will come in the fall that backstop those investments. Also, I think you're segmenting in specific areas and you're leaving out things, for example, like the brand new investments in things like the Canada first research excellence fund.
    Wouldn't you agree this highlights the need to have a little more transparency in the process so people can figure out where the money is going?
    No, I think it highlights a better understanding of members of parliament to know how the process works.
    Has Industry Canada done any analysis on the impact of cutting a third of the funding from this program for science and technology partnerships, and will you provide that analysis to the committee?
    I don't agree with the premise, but I'm sure Mr. Holder will be glad to come and talk to you about our increased investments.
    Geoff, as you know, when the budget comes out, there's always a torrent of quotes about the budget: it's good, it's okay, it's awful.
    It contains very little information, as you know.
    I can tell you, for example, in the U15 Group of Canadian Research Universities across the country there is broad-based, widespread support and endorsement of this government because of our increased investment in scientific research and discovery.
    That's all the time we have, gentlemen.
    Thank you very much.
    Now we'll move on to Madam Gallant.
    Minister, while the depreciation of our dollar compared to other currencies is very helpful to the exporting businesses in Canada, it is quite challenging to businesses that must purchase major equipment. You mentioned that the accelerated capital cost allowance is being extended. What sectors are restricted from accessing this tax reduction?
    The support for investment in equipment is broad based across the country. Who would be exempt from that? To be honest, I think it's more of a CRA question and a Finance question than ours. It's broad in scope in terms of its application and if we talk to people like Jay Myers of the Canadian Manufacturers & Exporters about the design of the program.... As you know, it's been on a two-year renewal basis for years, and now we have a 10-year window. In each of those two-year renewals we've always adjusted the terms and conditions to try to make it as broad based as possible. You're quite right that we do want to make sure that for firms who are looking to upgrade their equipment and to make intensive capital investments in their firms—given where the dollar is now, I think it's 81¢ or so, and where it has been over the past few months—they take as wide a window as possible in upgrading their capacities to make themselves more competitive.
    Is there any increase in jobs? Have you measured that in comparison to the taxes that have been reduced? We have this initiative, and as a consequence of reducing taxes are we generating more jobs because of this equipment coming in?


     It's not a post hoc ergo propter hoc—the rooster crows and the sun rises, so according to the rooster, it causes the sun to rise—situation. There's no direct line on a graph we can point to. But it's self-evident that firms that are able to upgrade their equipment and expand their capacity and to invest in their capacity over the fullness of time will become more efficient, get their products to market at a more competitive price point, and be able to expand and to sell their products around the world. We know that the Americans are doing this. We know that our European competitors are doing this. We want to make sure that we have the tools in the hands of firms.
    It's so critical, by the way, as a tax tool for investment. As an example, I was with Premier Clark in Vancouver last week. As I pointed out, we've opened up the door for the LNG industry in British Columbia with this public policy in this year's budget. There are 19 LNG projects on the table in British Columbia. Not all of them will go forward, but we hope that some of them will. But for Petronas this is possibly a $36 billion investment for my province, British Columbia. Whether or not that investment goes forward at all is in part based on whether or not they would have this competitive tool. So this standing up of an entire industry and a $36 billion investment in one project could be lost if we didn't have this investment and this provision in this year's budget. There enough is a reason to support Bill C-59.
    How is the Canadian Space Agency being encouraged to utilize Canadian technology and encourage innovation?
     Sylvain Laporte, the new president of the Canadian Space Agency, was just appointed back in April. He's there for a five-year term. This was the principal driving force—there were a couple of them, actually—for the Emerson reports on space policy. Within CSA he is working with the private sector, the aerospace and space industries associations, to ensure they are fully involved in CSA's planning, because it doesn't do a great deal of good, for example, to be partnered with the 30-metre telescope unless you're funded. In this year's budget, there's a $243 million investment by the Government of Canada over the coming 10 years. We want to ensure that there will be some reciprocity for that kind of investment for a globally critical piece of scientific infrastructure. So Canadian firms will be getting the lion's share of that money coming back to Canada in foreign investment. CSA has an entire division within their shop devoted to partnering with industry to make sure that they see economic benefit from our legacy space budgets.
    Thank you, Minister.


    I now give the floor to Ms. Papillon.
    Thank you, Mr. Chair.
    Five years after the long form census was abolished, the worst fears expressed by the scientific community have been confirmed. The government's decision to scrap the long form census not only deprives researchers of reliable data, but also deprives governments of essential references for public policy development, especially in terms of minorities.
    Could you at least recognize that the replacement for the mandatory long form census is less accurate and more costly?
    I don't agree with you. I think Wayne Smith, the chief statistician, has testified before the committee.
    Mr. Chair, has Mr. Smith appeared before this committee?


     That's correct.


    According to Mr. Smith’s testimony, the Statistics Canada team provides quality information at a reasonable cost to taxpayers. It does everything it can to gain the trust of scientists, the Government of Canada and all Canadians. The quality of the 2016 census information will be the same as the previous census.
    The quality of information is partly ensured by the commitments and partnerships that Statistics Canada is entering into with other government agencies to share quality information. The 2016 census will be even better than the last, it will cost less and the quality of information will be more trustworthy than ever before.
    I knew you were going to talk about Mr. Smith's point of view.
    In reality, your answer would leave the most humble researchers stunned. It is not the quantity that matters, but rather the need to ensure that all categories of the population will be represented. In a survey, we want to be able to see trends such as when a barely visible minority finally expands. That is the most valuable part.
    With the way things are right now, we cannot detect a pattern emerging regarding a barely visible minority that is becoming increasingly significant. That is what we want to examine to be able to make predictions.


    I understand your concern. I recognize that it is essential that Statistics Canada and I, as Minister of Industry, seriously understand the existing concerns. Because of the information, current debates and concerns, Statistics Canada is now checking that we have quality information.
    However, the sample is not probabilistic. How can you explain that?
    Excuse me?
    The sample is no longer probabilistic. This creates all kinds of biases, which is a problem.
    Let me give you a concrete example. In the area of housing, an organization has found some surprising data on Quebec City. The results suggest that the condition of housing in Quebec City improved between 2006 and 2011. However, landlords and tenant groups agree that the situation has deteriorated according to the Front d'action populaire en réaménagement urbain (FRAPRU) in Quebec City. Immigrant households appear to have better housing conditions, while the opposite is true. We had never seen this kind of distortion in the past. In terms of the National Household Survey, the non-response rate was 32% compared to 6% for the census conducted in 2006 with the long form.
    Do you understand the gravity of the situation?
    Actually, it is not that simple. The other departments are doing their research. They are looking for good quality information, including from the census. There are other commitments. We are talking about quality information that will be added to the census. This is not the only way information is obtained for the Government of Canada, for Quebec and for all regions. We are talking about quality information and statistics, so that we can make accurate decisions.


     That's all the time we have. It's over.
    Thank you very much, Minister.
    We now move on to Mr. Warawa.
    Thank you very much, Minister, for being here to answer questions regarding the main estimates.
    We all know that the Liberals and the NDP want to raise taxes. They have made a lot of promises, and those promises can only be paid for by raising taxes. We know of the carbon tax, which both parties support.
    Minister, could you elaborate on the government's plan as opposed to the opposition's plan? Also, you got cut off when you were trying to explain funding for Genome Canada and your personal experience. Could you elaborate on that too, please?
     Well, I was just trying to.... I didn't want to get too much into the weeds. Geoff had a bunch of questions that were precise. I didn't mean to go on too long and cut him off, but I was trying to assuage any anxiety you have about whether I get it.
    I get the concerns that Canadians have. We're not cutting back on funding in any way that's jeopardizing people's health. It's a shared partnership for this kind of research that's done between us, the private sector, universities, and of course provincial governments as well.
    You're quite right: there's a whole new universe of scientific discovery and of the personalization of medical information and medical discovery that is critical for all governments to understand and for us to invest effectively in and to work on with other levels of government effectively so that we can have treatments of rare conditions. That is really important.
    As a matter of fact, Minister Ambrose is going to have some good news announcements on some rare disease and rare disorder policies coming up about orphan drugs and having a proper index of these kinds of things, about which this kind of scientific discovery is important.
    Now, about the opposition wanting to raise taxes—
    Some hon. members: Oh, oh!
    Hon. James Moore: Look, I actually think this is a good debate. You pay attention in Parliament to the debate over Bill C-59, over the different parties and the platform. Not to be too analytical about the politics of this, I think there's a very good debate in the country right now. I think there's a pretty clear choice about where we're going. I think Canada is in a very good place. If you look at KPMG's assessment, you see that the costs to create a business in Canada are 46% lower than in the United States.
    I have a quotation that I come to often, by former Secretary of State and New York senator Hillary Clinton, who says:
Canadian middle class incomes are now higher than in the United States. They are working fewer hours for more pay…living longer on average, and facing less income inequality.
    It's true that Canada is doing well. We have incredible challenges, of course. It's a competitive global economy. The manufacturing sector has some very specific and acute challenges in particular sectors. We have to work well with provincial governments, who sometimes are working at counter purposes to us in terms of lowering costs and being competitive. But we have to work together to make sure that we're maximizing the quality of our investments in infrastructure. I say this often, but this infrastructure question is important, which is why it comes up often in question period. It's so essential.
    We're the second largest country in the world in size, but 37th largest in population. That's a gap, but there is also a gap in our fiscal capacity to make sure that we are all connected together as a country and that we're taking full advantage of that connectivity for economic benefit. It's why we have to work really well with provinces to build the infrastructure we need to be economically competitive going forward, east and west and north and south.
    It is really important that we stay competitive, that we be fiscally responsible, that we balance the budget so that we have the fiscal flexibility to have the programs we have, such as the infrastructure program, the Building Canada fund, the gas tax fund, and all these programs, so that we can invest in infrastructure, be competitive, be cost-competitive, have world-class infrastructure, improve our quality of life, and be able to compete.
    The policies, for example, in the auto sector that are in place in Mexico are not something we should be looking to import into Canada—billions of dollars in corporate welfare, lower-than-minimum wage standards of pay for workers. We need to make sure that we have good quality jobs in the auto sector and that we're competitive in other ways, and the only way we're going to stay competitive is if we maintain our fiscal discipline so that we can keep taxes low and can compete in other areas in terms of quality productivity, quality employment, and competitive cost pressures.


    Thank you very much, Minister Moore and Mr. Warawa.
    Now we go on to Mr. Masse.
    Thank you, Mr. Chair, and thank you, Minister, for being here.
    I want to talk a little about tourism. It's an important part of our economy.
    Bill C-290 was passed in the House of Commons three years ago. It allows the provinces to choose, if they want to, to have single sports betting, through a simple elimination of one sentence in the Criminal Code.
    Now, this has languished in the Senate for three years. British Columbia, Ontario, Quebec all want at least to provide a potential product for this, and we're getting expressions of interest. The United States is moving towards this as well.
    My simple question for you, at this point in time, is—because this really affects the revenues going to organized crime, the nefarious offshore betting accounts.... In the last three weeks that we have here, if this bill is not passed, it folds. Will you intervene, or at least attempt with your Conservative colleagues in the Senate, including the sponsor, Bob Runciman, to see whether this bill can pass? It was passed unanimously in the House of Commons.
    It was passed in the House of Commons. I supported the legislation. But it wasn't passed without some serious concern being raised, as you know.
    I just want to cut you off here. The debate around the procedure is a false debate. There were not five members of the House of Commons who wanted to oppose it and hold an actual recorded vote, and we have voice votes that pass in the House of Commons on a regular basis.
     I know it wasn't without its controversy. I remember the story of this very well, Brian.
    But, look, the Senate has its own process, and I'm not going to intervene in the Senate process. As you said, this is related to tourism, and the Senate committee is examining it, and I will leave it to them.
    You're obviously an aggressive supporter of the bill. I've known you for many years, and I know you to be an aggressive fighter for things you believe in, and I encourage you to speak to those senators who are deliberating over the bill.
    I just hope you reconsider because it affects jobs from Canada—British Columbia, Ontario, and Quebec, in particular.
    I'll turn the rest of my time over to Ms. Nash. Thank you.
    Thank you, Brian, for sharing your time.
    I want to ask another question about jobs. The employment rate has dropped to barely 61%. Part-time employment is increasing at twice the rate of full-time employment. I talked earlier about precarious jobs.
    We've seen some high-profile bad news, losing the Camaro line out of Oshawa, and the Jaguar announcement about deciding not to invest in Ontario. We saw the money going from EDC to Volkswagen, which is in fact investing in Mexico. Since about 2012 we've lost 25% of our manufacturing auto capacity.
    So I'd like to ask you again, Mr. Minister, why isn't the government doing more to champion advanced manufacturing, to champion our auto sector, and to do whatever we need to do to keep these good quality jobs here in Canada because if we don't keep the assembly jobs, we're not going to keep the parts jobs. You well know how the supply chain works; you can't have one without the other.
    We're not growing in auto assembly. In fact, we're shrinking dramatically. What are we going to do to increase our capacity here?


    Well, I've used this example before. You pointed out some of the tough news we've had and some of the challenges we've had, but there is also some good news.
    GM is expanding and building the Equinox; 3,000 jobs are going to be secured in Ingersoll. The new Ford GT is being made in Canada. Ford, in Oakville, is expanding. They have 4,500 in total employment and are adding 1,000 new jobs this year because of the Canada-European Union free trade agreement that is going to allow the Lincoln MKX and the Ford Edge to be sold into the European market.
    So I would frankly turn the question back to you. I would hope that the New Democrats would support the Canada-European Union free trade agreement, which is creating jobs in the auto sector. Chrysler is investing $2 billion into the Windsor minivan plant. You mentioned the Camaro. It's true that the Oshawa mandate has been lost, but the engine is going to continue to be built in Canada, and GM is also putting in a new technology park, an investment in creating new jobs, in the Oshawa footprint.
    Your question is, why aren't we doing more on advanced manufacturing? We have the advanced manufacturing fund, the automotive innovation fund, the automotive supplier fund. It's high-level rhetoric to just say, why aren't you doing more?—
    That's all.
    —but I have yet to see you suggest anything other than what we have done in terms of a specific policy.
    That's all—
    You say we should have a strategy, but we have specific policies that are yielding real results.
    That's all the time we have, Minister.
     We're only getting 0.2% of global investment. Clearly we need to do more.
    That's all the time.
    And what would you do, Peggy? Feel free to say something at some point.
    That's all the time, folks.
    Now we move on to Mr. Lake.
    I don't even know where to go with that.
    I recall looking at the NDP platform from the last election campaign where they had tens of billions of dollars in increased spending and various ways of funding it. I don't know if it was completely funded, but I remember a 30% corporate tax rate—30% above where it is right now.
    But apparently we're not spending enough, Mike.
    And actually to that point, if I could, I'll go with that. I remember we had the conversations in 2008, 2009, and 2010, as we considered our options. Every single step of the way the NDP members were calling for vastly increased spending, a vastly higher deficit, actually in partnership with the Liberals at the time. We could not possibly spend enough to satisfy them.
    Maybe I'll start with the point that if we were to have gone down the road the NDP suggested in the last election campaign, with tens of billions of dollars more in spending and a corporate tax rate that would be 30% higher than it is today, what impact would that have had, in your view, on this very strong global reputation Canada has for balancing our budget and being a place to invest?
     Well, look, as a government, we can't take seriously those who argue that we should have Keynesian economics when times are good, Keynesian economics when times are bad, Keynesian economics when times are okay, that at all times we should just spend more and more, that “To heck with the kids. To heck with the deficit. To heck with the debt. Don't worry about it.”
    We actually have to arrive back at a balanced budget. The deficits that we ran were deliberate deficits that were agreed to by G-20 economies as a result of the collapse of the American economy and the global consequences that came from that.
    These were agreed-to deficits on a specific timeline when there was agreed-to stimulus spending going into the Canadian economy. Even with very low interests rates, people were not borrowing money and were not investing in the economy because we had the worst recession since the Second World War.
    These were deliberate deficits, and we've had to take serious, concrete action to reign them back in and to eliminate them. We've gone from a mere $55 billion annual deficit to having a surplus. We've done that in just a couple of years time. We've done that through fiscal restraint, fiscal responsibility, and also by growing the Canadian economy.
    We have to have that kind of flexibility with balanced budgets and surpluses on the horizon so that we can do things and react responsibly to challenges in the Canadian economy.
    The auto sector is the perfect example. We do want to pursue OEM investments in Canada, but we also have to a flexible approach with regard to our policy. We have the fiscal room to either lower taxes or, as has been talked about here, to draw the private sector R and D into the automotive supply chain through partnerships so we can continue to grow. But you can't do that if you are just shovelling more money out the door without any kind of restraint; it requires the fiscal room.


    That's interesting. You quoted Hillary Clinton, and in that same conversation, one of the things she mentioned, in addition to the strength of the Canadian middle class, was that we also have a stronger safety net in this country.
    It seems to me that the stronger safety net is made even more secure by the fact that we have a balanced budget. Unlike other countries, we're not going to have to make the difficult decisions they're going to have to make years down the road, because they continue to spend in unaffordable ways.
    Could you speak to the effects of a balanced budget as you sit at the cabinet table and take a look at making decisions for our future?
    Canadians believe in the ethic of common provision and ensuring that those who need help get help. Of course, our health care system is a central Canadian pillar of that, right? We balanced the budget while increasing health care spending 6% every single year. We've maintained the commitment to Canadians not to balance the budget while cutting health care.
    Other governments didn't make those choices; we made that choice. That was a commitment that I think is core to our sense of compassion for one another. But better than that, we also helped seniors on fixed incomes by increasing the personal deduction. Taking tens of thousands of low-income Canadians and seniors on fixed incomes off the tax rolls altogether, pension income splitting for seniors, these are things that we've done. Overwhelmingly, the tax benefits and tax relief that we've put in place in Canada have benefited those who needed it the most. Those measures are why I think we are arriving at a time of general economic prosperity—yes, with its challenges.
    We've arrived at a balanced budget. We alone in the G-20 have balanced our budget while cutting taxes—
    Thank you.
    —and also protecting those core elements of social stability and social conscience—
    Thank you, Mr. Minister.
    —like our health care system, by protecting those key investments. That's what we committed to doing: being a steady, stable, majority government that would balance the budget without cutting health care spending—
    That's all.
    —while cutting taxes for Canadians.
    To be fair, Minister, that's all the time we have, unfortunately. I was pretty judicious with everybody.
    Thank you very much, colleagues. Minister, thank you very much. To the officials, thank you very much for your time here today.
    We're adjourned.
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