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Standing Committee on Industry, Science and Technology


NUMBER 009 
l
1st SESSION 
l
42nd PARLIAMENT 

EVIDENCE

Tuesday, April 19, 2016

[Recorded by Electronic Apparatus]

  (1550)  

[English]

     Thank you, all, for coming today.
     Our apologies for being late. We had votes in the House.
     Welcome, everyone, to meeting number nine of the Standing Committee on Industry, Science and Technology.
     Today we have witnesses from the Department of Western Economic Diversification. Welcome, Daphne Meredith, deputy minister; and Cathy McLean, executive director, finance and corporate management.
    We have from Canada Economic Development, Pierre-Marc Mongeau, acting deputy minister/president; and Marc Lemieux, chief financial officer, and acting vice-president of operations.
    Finally, we have Atlantic Canada Opportunities Agency, Denise Frenette, vice-president, finance and corporate services; as well as Janice Nishikawa, director general, enterprise development.
    Welcome, everybody. Thank you for coming.
    We're going to get right into it. As with other meetings we've had, we'll let everybody do their introductions and then we'll start on our line of questioning.
    Ms. Meredith.
    For over 25 years, Western Economic Diversification Canada, or WD, has supported the diversification of the western Canadian economy through business development, innovation, and community development.
    WD's roles, like those of other regional development agencies, focus on providing regional intelligence and strategic advice, convening regional stakeholders to expand business opportunities and develop regionally sensitive development strategies, pathfinding to sources of business and community support, co-investing in innovation and other federal priorities, and acting as a quick and agile delivery agent for federal programs.

[Translation]

    I will speak first to the programs Western Economic Diversification Canada offers and how they are delivered. I will then comment on our priorities going forward, as part of the innovation, science and economic development portfolio.

[English]

     I should first note that WD is headquartered in Edmonton and has some 287 employees in offices in Vancouver, Edmonton, Calgary, Saskatoon, Winnipeg, and Ottawa.
    Focusing on our plans for the coming year, Parliament has approved $173.4 million in the 2016-17 main estimates to support innovation, indigenous economic growth, trade and investment, and small and medium-sized enterprises in defence procurement.
    WD also has funds for the delivery of the Canada 150 infrastructure program, for which we will be seeking an additional $23.1 million, as announced in budget 2016.
    WD has the following programs: first, the western diversification program for not-for-profit organizations; second, the western innovation, WINN, initiative targeting SME commercialization; and third, the Canada 150 infrastructure program to improve existing community and cultural infrastructure.
    WD also provides indirect funding for business through the Western Canada business service network of organizations that offer loans and other resources to create and build small businesses across the west. WD funding to this network supports more than 100 points of service in rural and urban communities across western Canada.
    In 2013, WD changed its approach to administering its investment program, moving from a continuous intake approach to a call for proposals application process. Under this new approach, WD does extensive outreach to stakeholders prior to a call, including conducting face-to-face sessions to ensure the funding criteria, for example, regarding eligibility, funding priorities, and leveraging, are well understood by stakeholders. Those seeking support can apply within a fixed period, after which WD assesses the proposals on a comparative basis.
    To date, the department has managed two intakes for both programs. The experience has been positive. Both programs are oversubscribed. We receive six applications for each one we're able to fund under our not-for-profit program and more than 11 applications for each one funded under our for-profit, or WINN, program.
    In total, since 2013, under the WINN and the not-for-profit program, WD has approved some 162 projects, with $178 million in WD funding, leveraging an additional $268 million in support of our priorities.
    These programs are expected to have a significant impact, including the creation or expansion of more than 1,000 businesses, the employment of more than 4,500 newly skilled workers, $800 million generated in sales of newly commercialized technologies, and $500 million generated in international sales.
    WD is also focusing on ways to support the needs of the west through our pathfinding and convening activities.

  (1555)  

[Translation]

    Western Economic Diversification Canada is partnering with other organizations with our portfolio as well as other departments to respond to ways to respond to investment needs of western stakeholders.

[English]

    Beyond making strategic investments in projects, WD takes pride in its role as a partner, pathfinder, and advocate and will continue its work by promoting innovation through support to areas important to the ISED, innovation, science, and economic development, portfolio, including to high-growth firms, clean technologies, business innovation, and cluster support.
    WD's focus on regional networks positions it to bring together stakeholders to collaborate on economic priorities and opportunities in western Canada. For example, the department has convened western innovation fora in the past two years to connect western Canadian industry with innovation-driven investment, partnership, and business opportunities. The fora include presentations and panel discussions and, perhaps more important, more than 250 business-to-business and business-to-government meetings, as well as providing an innovation marketplace.
    I will now turn to how WD is supporting initiatives announced in the 2016 federal budget. To celebrate the 150th anniversary of Canada's Confederation, budget 2016 provided regional development agencies with funds to deliver investments that will support projects to renovate, expand, and improve existing community infrastructure and cultural infrastructure.
    Over the next two years, subject to parliamentary approval, WD will deliver an additional $46.2 million in Canada 150 infrastructure program investments across western Canada, as committed to in the budget.
    Budget 2016 also highlighted the Government of Canada's priority on increasing support for clean technology activities in all regions of Canada and is looking to regional development agencies to substantially increase clean technology investments in the regions we serve.

[Translation]

    Recent data from 2013 indicates that there are over 300 clean technology companies in western Canada.

[English]

     Western Canada also has a strong research network. It includes 10 universities that conduct 1.9 billion dollars' worth of clean technology research annually. WD will be focusing on advancing the clean tech sector in western Canada through its program investments and activities associated with our other service offerings, such as pathfinding and convening activities.
    For another budget 2016 initiative, helping high-impact firms to scale up, WD, with its RDA colleagues as well as other federal departments and agencies, will coordinate and tailor their services to help firms grow and become more competitive internationally.
    WD is also well positioned to support the Government of Canada's priority to support economic development and create jobs for indigenous peoples. WD will be seeking to invest in projects that promote wealth creation opportunities, increase the number of indigenous entrepreneurs and businesses, improve labour market participation, and ensure that indigenous communities in western Canada are well positioned to capitalize on significant economic opportunities.

  (1600)  

[Translation]

    In closing, Western Economic Diversification Canada is in strong alignment with government priorities.

[English]

    WD and other regional development agencies have an important role to play in delivering on national priorities like clean technology at the regional level. The integration of RDAs into a single portfolio under a single minister will ensure our alignment with national priorities and better enable our federal government partners to capitalize on our networks, our local knowledge, and our reach.
    Thank you.
    Thank you very much.
    We will now move to Canada Economic Development.
     [Inaudible—Editor] and come back to you afterwards. Sorry, Mr. Chair.
    We'll jump from the west to the Atlantic.
    Go ahead, Ms. Frenette.
    As vice-president of finance and corporate services at the Atlantic Canada Opportunities Agency, I'm here to talk to you about ACOA's strategic efforts to help build a competitive economy in Atlantic Canada. I am joined today by ACOA's director general of enterprise development, Janice Nishikawa.

[Translation]

    Since its creation in 1987, ACOA has played an important role in developing and implementing a broad suite of policies and programs that strengthen Atlantic Canada's economy. The agency's policies and program tools have evolved since its inception, but the overall goal remains constant. ACOA is dedicated to helping the Atlantic region realize its full economic potential in terms of innovation, growth, productivity and competitiveness.

[English]

    This is achieved by direct, proactive engagement with communities and businesses in the region and through a nimble and flexible approach to respond swiftly to economic changes and emerging opportunities.
     The agency has a strong presence in the Atlantic region. It is headquartered in Moncton, New Brunswick, with a regional office located in each of the provincial capitals and 23 local field offices throughout the Atlantic region. ACOA also has a small office here in Ottawa.

[Translation]

    ACOA, like the other regional development agencies, is a member of the portfolio of the Minister of Innovation, Science and Economic Development.
    Our focus is on continuing to provide relevant programs and services to entrepreneurs and communities that support the government's innovation, economic development and diversification objectives, and that ultimately help the Atlantic economy grow and prosper. Given our agency's powerful track record and strong ties to the region, we are well equipped to translate the government's economic development priorities into tangible outcomes in Atlantic Canada.

[English]

     ACOA works with a variety of partners throughout the region to help businesses grow, innovate, and export so they can create quality jobs in vibrant and robust communities. The agency uses an adaptable, multi-pronged approach to deliver on this strategy through three core programs.
    ACOA's business development program, BDP, assists businesses at every stage and helps them improve their competitiveness, with an emphasis on developing innovative ideas and improving productivity.
    The Atlantic innovation fund, AIF, encourages partnerships among the private sector, universities, colleges, and other research institutions to develop and commercialize products and services.

  (1605)  

    The innovative communities fund, ICF, invests in strategic projects that build on the strengths of Atlantic communities and provides the tools needed to identify opportunities available for their sustainable economic growth.

[Translation]

    ACOA is now working to ensure that its existing programming is even better aligned than it has been with the government's commitments on innovation, high-growth firms, clean tech and inclusive economic development.
    When it comes to innovation, our programming tools will allow us to respond quickly to the commitments outlined in Budget 2016.

[English]

    In 2014-15, the agency invested over $105 million to help businesses bring new products and technologies to market, become more productive and competitive, and access support through incubators, accelerators, and commercialization networks.
    Moving forward, ACOA will also target its investment to companies that demonstrate a strong potential for growth through investments that help small and medium-sized enterprises with innovation, productivity, and growth initiatives. ACOA is also an early partner in developing the high-impact firm initiative announced in budget 2016, and we are working with our partners to ensure Atlantic firms participate in and benefit from this pilot.

[Translation]

    To support the clean growth shift, ACOA is developing a strategy to guide its work on this new key national priority. Starting in 2016-17, the agency will contribute to the goal of doubling investments by regional development agencies in clean technologies from $50 million to $100 million.

[English]

    Indigenous businesses will also be a clear focus for ACOA. Over the past five years, the agency has invested over $22 million in 103 indigenous projects and has built and maintained networks with the indigenous community. Furthermore, ACOA is committed to implementing the Government of Canada infrastructure programs in our region until March 2018, including the Canada 150 community infrastructure program. As of March 31, 43 projects representing more than $8.7 million have been announced throughout the four Atlantic provinces.

[Translation]

    Members of the committee, as you can see, ACOA plays many roles in helping to build and promote Atlantic Canada's economy.
    Like other parts of the country, our region does face some challenges such as productivity gaps, lower oil prices, and a shortage of skilled labour. The agency is tackling these issues by continuing to work closely, on the ground, with its partners, communities and businesses to develop solutions and opportunities, and to build economic capacity in our region.

[English]

     The agency has a long-standing commitment to collaborating with various partners, such as 17 universities and numerous community colleges in the region, other levels of government, as well as businesses to ensure that the federal programs that support innovation and commercialization, scientific research, and entrepreneurship are creating lasting and meaningful impacts in our economy.
    Our record shows that the agency is successful. In fact, Statistics Canada data show that the business survival rate for ACOA-assisted firms stands at 76% after the crucial fifth year following start-up, and this is for the period of 2002 to 2012, which is 9% higher than unassisted firms. Additionally, our data indicate that each dollar invested directly into businesses through ACOA from 2008 to 2013 resulted in over $5.40 in gains to Atlantic Canada's gross domestic product, GDP. These are results that we are very proud of, that point to the positive outcome of our agency's activity.

[Translation]

    Thank you again for your time today, Mr. Chair.
    Janice Nishikawa and I will be pleased to take your questions.

  (1610)  

    Thank you very much.

[English]

    Now we will go to Canada Economic Development, Monsieur Mongeau.

[Translation]

    Thank you, Mr. Chair.
    Members of the committee, thank you for inviting me here today. It's with great pleasure that we are with you today to speak about Canada Economic Development for Quebec Regions, or simply CED.
    I would also like to thank my colleagues at Western Economic Diversification Canada and Atlantic Canada Opportunities Agency for their presentations.
    In the next few minutes, I will be giving a brief description of CED's activities before answering your questions.
    CED's mission is to promote the long-term economic development of the regions of Quebec by giving special attention to those where slow economic growth is prevalent or opportunities for productive employment are inadequate. To do so, CED works with Quebec businesses and communities, contributing to projects that generate significant economic returns for Quebec as well as Canada.
    CED carries out its operations through various programs. First, there is the program to help businesses, the Quebec economic development program, or QEDP. Second, there is the community futures program, or CFP, a national program delivered by CED in Quebec. Last, we develop ad hoc and targeted initiatives, such as the economic recovery initiative for Lac-Mégantic and the Canada 150 community infrastructure program, which my colleagues spoke about.
    I would like to demonstrate the impact of our activities by sharing some examples with you.
    In 2014-15, CED approved 724 projects, for a total investment of $317 million.
    Still in 2014-15, more than 9,800 businesses received support from CED or an organization that CED supports. Through leveraging, every dollar paid out by CED generated an average additional investment of $2.88 by promoters and other financial partners.
    More than 3,400 of the businesses we supported received funding for marketing and export projects.
    Again in 2014-15, 32% of the approved assistance was provided for businesses targeting communities with low growth potential. These communities make up 21% of Quebec's total population.
    When it comes to business start-up and succession, CED clients have a survival rate of 67%, versus 50% for other businesses.
    In terms of productivity, businesses supported by CED saw, on average, a 72% increase in sales, compared to 47% among other SMEs.
    And lastly, according to the most recent information available from our Office of Client Satisfaction, 94% of our clients are satisfied with CED's programs and program delivery.
    In addition, CED has a rigorous project analysis and approval process. In accordance with grant and contribution management legislation and policy, the process includes documented criteria and procedures for file processing.
    CED's new priorities for the coming year are aligned with those of the government.
    We will continue to help Canadian businesses expand, innovate and export their products to enable them to create quality jobs and ensure the prosperity of Quebeckers and Canadians.
    We will continue to build close partnerships with businesses and industries to support efforts to boost productivity and innovation.
    We will also contribute to supporting transition and diversification in communities that, in the past, have been economically reliant on a single industry.
    To do so, CED is targeting three major priorities. First, it supports business expansion, innovation, clean technologies and exports. This is followed by supporting the economic diversification and transition of communities, including indigenous communities, by building on their competitive advantages. Finally, it focuses on building on CED's innovation culture to boost performance.
    In order to better understand economic and regional development issues and challenges, in January 2016, CED launched its Dialogue on the economic development of Quebec's regions. This dialogue with the public began with a call for ideas on the Web—a first for CED—which received responses from 624 people and organizations from diverse backgrounds and all of Quebec's regions.

  (1615)  

    Since mid-March, CED has been confirming and supplementing this information by holding roundtable discussions on seven regional economic development themes. They bring together hundreds of key economic development players from all of Quebec's regions, including businesses, universities, municipalities and varied organizations, as well as within the Government of Quebec. The outcomes of these dialogues will be used to develop the new CED 2016-21 strategic framework.
    In conclusion, I would like to mention that, as indicated in the Main Estimates, 2016-17, CED's total for grants, contributions and operations expenditures was $303 million. Of that amount, $260 million is to be invested in contributions for economic development projects for our regions.
    Thank you for your time. We will be happy to answer your questions now.
    Thank you very much for your presentations.

[English]

     If we keep everything tight, we should have enough time to do one complete round.

[Translation]

    We'll start with Mr. Arseneault.
    You have seven minutes.
    I would like to thank all the witnesses. What fine presentations, what a fine bunch. We find it stimulating and encouraging. Good economic development is coming to our country.
    Since I'm from New Brunswick, you might guess that my first question is for Ms. Frenette and Ms. Nishikawa of the Atlantic Canada Opportunities Agency, or ACOA.
    Ms. Frenette, in your opinion, what are the main challenges to economic development in the Atlantic provinces?
    It's important to understand that Atlantic Canada is mainly a rural region. It depends greatly on SMEs to grow its economy. Because of globalization, global competition puts pressure on our businesses. In fact, foreign businesses offer solutions at very low cost. Therefore, it's difficult for manufacturers, especially, and businesses in the resources industry to be competitive in such an environment. Prices are another challenge. The Atlantic region needs to focus on work to improve its productivity and competitiveness.
    I would add that, in addition to the challenges I mentioned, Atlantic Canada also has an aging population. We have to get ready to deal with the new conditions better. Innovation will certainly be the key to success for us. We also need to take care of marketing and improving processes within businesses. Skills development will be extremely important to prepare our businesses to face the challenges. Market diversification is also very important.
    The aging population is a sensitive topic in Atlantic Canada. A lot of industries are seasonal, since they involve natural resources like forestry, fishing and maple syrup. It may seem insignificant, but maple syrup brings in several million dollars in my region. In terms of tapholes, the largest maple sugar operations in North America are in Saint-Quentin.
    How can ACOA provide particular assistance in the context of all these challenges, including those facing industries that exploit what we call seasonal natural resources?
    The seasonal aspect is certainly another challenge.
    Having said that, we are working closely with the businesses to improve their productivity and to create products. We need to be innovative when making choices. We need to think about added-value products, which might lengthen our seasons and improve our revenue during production periods.

  (1620)  

    Thank you for addressing that.
    We often hear that manufactured materials are our biggest shortcoming. We have excellent raw materials in Canada, and lots of them, but we send them elsewhere. Take wood, for example. We buy tables made in China. I'm giving wood as an example, but it could be another industry.
    Has the agency held programs or conducted studies to encourage this seasonal industry to get into manufacturing? It could be primary or secondary manufacturing of products from the seasonal industry.
    We are working with every main sector in the Atlantic region. We are working with the industries in these sectors to learn more about possible challenges and opportunities. We want to focus on more innovative approaches, which represent more value-added and might help us face these challenges.
    Perhaps my colleague would like to add something.

[English]

     One of the most important areas is in the area of innovation. We have worked with our partners and with our universities to look at ways of adding value.
    In the resource industry we have seen a lot of collaboration and a lot of working together to try to add that value. It's about transformation even in our research sectors, and how we get the most out of those resource sectors.
    Definitely through innovation through the Atlantic innovation fund we can help small businesses establish and grow their businesses. We can help them with skills development through strategic management initiatives. We can help bring the right person at the right time in the management area to help them elaborate on their plans. We take companies to market. We spend about $15 million on missions trying to expose these companies to the whole global marketplace, which eventually will make them much more competitive.
    We can have programs that go from start to exporting, innovation, and that whole virtuous circle that we find. When companies innovate, they export. When they export, they compete. It's about intervening at all different times and at the appropriate times when it comes to helping businesses, but also in collaboration with our research institutes. We have a—
    Universities, colleges.
    Right. We have the Wood Science and Technology Centre at the University of New Brunswick. They directly work with businesses to try to add value.
    It's a collaborative effort and full engagement across the whole spectrum of players.
    Thanks.
    You still have 30 seconds. Make it quick.
    Very quick.

[Translation]

    Have you seen any shortcomings that affect the four Atlantic provinces and that should really be addressed to ensure the economic development of the region?
    I'm not sure we can target one shortcoming in particular. However, I'd like to come back to the fact that it really is possible to capitalize on our resources, our know-how and our networks to benefit from innovation and manufacturing opportunities that are on our doorstep in the Atlantic region.
    Thank you very much.
    Mr. Godin, you have seven minutes.
    Ladies and gentlemen, thank you for taking part in this exercise.
    I listened to your presentations, and I can tell you that the structures put in place are working well. We can be proud of them. I think they provide good support to economic development, which is very important in our region.
    Last October, there was a change in government. But where there's a change in government, there's a different direction. Has the mission been changed?
    Since last October, what written, clear and specific instructions have you received from the minister regarding the agencies?

  (1625)  

    The issues being raised here almost all have to do with green technology. We were already covering this area, but we are going to push this activity even further. We are also considering how we can grow our organizations and the companies we oversee.
    I would say that there is also a change in our governance. As mentioned earlier, we are now all under the same umbrella, which improves the integration of our roles, our responsibilities and our outcomes. Now that we are together, we probably speak more.
    I'll stop there to give my colleagues a chance to speak.

[English]

     I support absolutely what Pierre-Marc said.
     Obviously, clean technology is a common focus for us all, and we all have a common goal for 2016-17, which is to invest $100 million in clean technology across the country. That's a goal we share, and we will work out exactly who does what to meet that goal.
    Also, we've been discussing how we meet some of the other government priorities, including indigenous economic growth. We've had different approaches to that in our agencies. The special value-added that is brought by being in a portfolio is it makes for an easier conversation around who's doing what, and what we can learn from each other. That's one of the topics.

[Translation]

    I'm sorry, but my question was: what clear and specific instructions has the minister sent to the agencies? Has there been a change? Have you received any clear instructions from the minister since he arrived in office and established the new structure? I'm quite familiar with the structure: there's one minister who is responsible for five agencies. Are there clear, written instructions?

[English]

    The instructions are for us to align with the government's priorities. That's something we can do through our programming without detailed instruction. We are expected to align with the government's priorities. There are some mechanisms for us to do that, which is what we're doing.

[Translation]

    Okay.
    I would add that the minister's mandate letter clearly established the priorities that the minister must meet. We were told that the economic development agencies had a major role to play in meeting these priorities.
    As mentioned, Budget 2016 sets out very clear commitments to green technology. My colleagues didn't mention it, but it would be worthwhile to point out the efforts made with Aboriginals. We are going to work closely with those communities. Lastly, there's the additional funding for Canada 150.
    Thank you very much.
    Since the new minister took office, has the signatory process changed? Have the instructions changed in terms of the signing authority for projects? According to the information I have, the signatory used to be the minister in the past for a wide range of projects. Has there been any change in the range of authorizations that you are able to provide as senior officials in the process for obtaining grants?

  (1630)  

    The process in place is pretty much the same.
    So there has been no change. Okay.
    How much time do I still have, Mr. Chair?
    You have one minute and a half.
    I have another question.
    The Canada 150 community infrastructure program—150CIP—is more for Quebec, but the other two agencies are probably experiencing the same reality.
    In our ridings, we have a number of organizations and institutions that applied under 150CIP before June 2015. What stage is the process at? Have all the organizations been contacted with an answer, whether positive or negative? Could you summarize the 150CIP situation?
    I think that is mainly directed to me, so I will start.
    But the others are experiencing the same realities.
    In terms of 150CIP, we launched a call for proposals last summer. We had the election, but now we have started reviewing the many applications again. We have gone over almost half of the applications. In the coming weeks and months, we are going to speed things up to approve the applications. I am personally setting that as a priority. I recognize that the process is a little slow, but now it is up and running and we will have good news soon.
    What can we tell our organizations?
    Mr. Godin, your time is up.
    I'm sorry.
    Thank you very much.
    Ms. Moore, you have seven minutes.
    My first question is specifically for the officials from the CED for the regions of Quebec.
    Could you tell me what is happening with the agreements with the CDECs? There are also some CFDCs that work in the same offices as the CLDs. There have been significant cuts at the provincial level, which slightly disrupted the way we work. What is happening in cases where there were federal-provincial partnerships and where two development organizations were connected? Do you have any news on that?
    If the question is about the organizations on the ground, it will be a bit more difficult for me to answer it, because all those organizations followed their own counsel. It is up to them to make their decisions depending on the direction they want to take.
    I can tell you that right now we are working very hard with the CFDCs to ensure that they continue to receive support. In terms of the CDECs you mentioned, some will also continue to be supported by the CED.
    Are the agreements with the CDECs scheduled to be renewed soon?
    Not all the agreements with the CDECs will be renewed. In Montreal, there were three partners: the City of Montreal, the Government of Quebec and the CED. The Government of Quebec was mainly handling employability, and the City of Montreal, entrepreneurship. As for us, we act as a type of link in the community, but in line with the other two levels. The City of Montreal was primarily at the forefront.
    Last November, the city completely changed its methods and its actions. It created the organization called PME MTL, which is made up of six large organizations from all over Montreal. It then stopped funding the CDECs. The Government of Quebec partnered with PME MTL. Based on the proposals that we will be receiving from the city or the government, we will continue to support all companies in Montreal.
    Quebec City, Trois-Rivières and Sherbrooke also had agreements. In those three cases, the other two levels, the municipal and provincial, have continued with the same kinds of activities. Since the same issues were at stake and the same partners had decided to stay, we decided to stay with those three cities for another three years.
    Is the agency looking at the possibility of joining PME MTL?
    We still respond to requests we receive from the private sector or from non-profit organizations. We are on standby. The restructuring will probably be completed very soon. We are waiting to see what kind of help the city will need.
    Despite everything, we continue to support other organizations in the City of Montreal, such as Innovation Quebec. We provide a lot of support.

  (1635)  

    Thank you. You have provided some good answers.
    My next questions are for the representatives from the three agencies.
    What do you do in your organizations to keep ongoing consultations with communities? How do you ensure that you are always meeting the needs of the communities? How do you help local players interact to ensure that you are meeting the local needs?
    How could the various agencies ensure better transparency? When the first wave of the community infrastructure program in Quebec took place, the minister’s riding coincidentally received the most funding. That surely makes people wonder.
    How can we ensure that there is adequate transparency in the selection of projects, while maintaining the confidentiality promoters are entitled to expect? What can we do to improve transparency?

[English]

     If we were to take the Canada 150 program as an example, the purpose of which is to enhance community infrastructure across all communities, whether they're rural or urban, we have to use our networks, which are quite extensive, to reach out to communities, including those that are in the far reaches of the region.
    We have the Community Futures organizations and other network organizations. More than 110 of those organizations exist right across the region, from Manitoba to B.C., north and south. We can use those networks to get the word out about the opportunity. We also use email blasts to our networks. Some of the numbers would be that over 10,000 emails go out to our network organizations, which can then communicate further so that people know the opportunities.
    Do you have a lot of response?
    We did one intake last summer, as one example, and we received well over 2,000 applications, which covered the territory. Then it's a question of which are the best projects, if you were to look at ridings, for example, that cover the whole region. There are lots to choose from.

[Translation]

    Mr. Mongeau, you have 30 seconds.
    Thank you, Mr. Chair.
    Let me just quickly go back to one issue. In my presentation, I mentioned that we were carrying out an extensive consultation exercise with the regions, businesses, universities, municipalities and indigenous groups. We truly want to know what the various players expect from the CED, in preparation for our next five-year plan from 2016 to 2021. That is currently under way.

[English]

    We're going to go to Mr. Arya.
    You have seven minutes.
    Thank you, Mr. Chair.
    My question is for all three agencies.
    I would like to know whether you support new manufacturing companies. Specifically, suppose an entrepreneur enters your office with a business plan to set up a new small manufacturing company. Do you have programs to support them?
    From ACOA's perspective, our programs allow us to support businesses at every stage in their life cycle. We do support the start-up of companies. We do it through primarily the business development program.
    If, for example, it was a start-up company that wanted to undertake a significant innovation project, depending on the project, we would have the option of using either the business development program or the Atlantic innovation fund.
    No, I'm specifically saying the entrepreneur comes in with a business plan to start manufacturing a product with a commercially proven technology.
    Okay. Then we would use the business development program for that.

  (1640)  

    Approximately how many small manufacturing companies have you assisted during 2014-15 and 2015-16?
    I don't know that I have the answer for you today, but I can provide it, certainly.
    That's fine. You can always send it.
    And CED, please?

[Translation]

    We pretty much have the same types of programs. We support start-ups, companies that have already proven their technological abilities and have already done work in research and development. If the projects are interesting, we are going to support them. Our assistance is not for product development, the basics, if you will. However, once the product has been developed, we may contribute to setting up the plant.

[English]

    I'm sorry, I'm a bit confused.
    Mr. Chair, once again my question was about an entrepreneur who comes in with a business plan to set up a manufacturing company—say he wants to manufacture the pen I'm holding—and he has brought his equity. Do you have programs to support that?

[Translation]

    I would be very pleased if those kinds of companies came to meet with us. Some have done so before and we are currently supporting them.

[English]

    Do you have an approximate number of the new manufacturing companies you've supported during the last two years?

[Translation]

    I will have to give you the same answer as my colleague: I don’t have all the data here. However, a lot of high-tech companies also come to us. We could forward that information to the committee later, if it so wishes.
    It would be good if you could provide those figures to the clerk, so that we can have an answer to that question.

[English]

     Thank you.
    Ms. Meredith.
    Yes. In our case, unless that company were innovating in some way through a new process or a new product—you're saying it depends on our new product—we would not support them directly. We would be inclined to suggest other means of support, but we would not provide direct financial support.
    In that case, you partner with other federal and provincial agencies. Which federal agency or any other agency can this entrepreneur go to to obtain support?
    If they're looking for a business loan, it would be the Business Development Bank of Canada, or other financial institutions.
    If they're looking to check their business plan to see if it's good and whether any other support from other agencies is available. we have our Canada business network offices. We partner with the provinces on those, so we would direct them to that office to get advice on other avenues of support.
    If they're living in a rural area or if it's a woman-led business, for example, we have the women's entrepreneurship fund that could help them or—
    If you could kindly send the number of existing manufacturing companies you have supported, that would be great.
    Once again for all three, what are the manufacturing industries of the future you see in your region?
    Anybody can jump in.
    One of the exciting clusters in western Canada, and it's very strong in British Columbia as well as Manitoba in particular, is composite material manufacturing. It's an area we've invested in. In Manitoba, for example, we have facilities that test the strength of hemp and other materials, fibres that can be used in aerospace. And there's a lot of activity on—
    You said there's a cluster? That's quite interesting.
    Yes. A number of companies and research organizations are linked to share their discoveries and practices.
    That's one.

[Translation]

    Quebec has a major aerospace industry that operates as a cluster. They share information about the development of alloys and composite materials, aerospace products.
    Let me also point out that Quebec City is showing interest in the optophonic sector—I’m not sure whether that’s the right word. INO, a company in Quebec City, develops state-of-the-art laser technologies that help identify, among other things, the potentially dangerous powder in envelopes received through the mail. In terms of the optronic photo—I forget the name for that—

  (1645)  

[English]

[Translation]

    I knew Mr. Baylis could help me out.
    You have 15 seconds left.
    That is a very important initiative in Quebec.
    Ms. Frenette, do you have something to add?
    Yes. Like the other economic development agencies,

[English]

we also have opportunities in manufacturing in aerospace and defence, in composites and other products, and in food processing as well.
    Thank you very much.
    Mr. Dreeshen, you have five minutes.
    Thank you very much, Mr. Chair, and welcome to all our guests.
    I'd like to start off by talking a little about the way in which the regional offices are going to be functioning now that there's just one minister responsible for the various offices throughout the country. I'm wondering whether, when you're getting information from the minister, you're finding it more complicated versus having someone in the area. When we talked about the mandate letter, that's one aspect of it, but then there have to be directions, and we would like to know whether or not that has come through.
    For example, Ms. Frenette, when you speak about the high-impact firms initiative, do you have any idea where that is going, what has to be dealt with? I know it's a pilot project. I'm curious whether or not you're getting that type of feedback from the minister that you would perhaps have had if you had a minister in the particular region.
     I think what's happening with one minister is that we're having more collective dialogue, and we are working with ISED and all RDAs to have these discussions. We have the big themes, the big objectives, and we are working together to define how these objectives will be met, packaging this information, and then having a dialogue at the ministerial level as a more unified coherent national approach.
    Therefore, could we expect to see more things on your website as to what you're doing, where you're going, what the plans are for creating jobs, because job creation is part of what is involved with the mandate, and taking a look at what other previous plans and projects have been committed to? Is it going to be website-based for people to be able to look at it, or is it simply something you're dealing with in-house?
    I have to say that since we're still working on the initiatives, and responding to budget 2016 priorities, the communication strategy hasn't been fully developed.
    Okay, that's great. Thank you very much.
    I'd like to talk about western diversification. I know that in the notes you were talking about the co-investing in innovation and other federal priorities, and that WD had the ability to get dollars out through federal programs.
    Certainly back in 2009 and 2010 this was so important, to be able to get dollars out when the stimulus was required. All of the agencies worked extremely well in order to ensure that was taking place. Some of the other funding that you have.... You talked about the hemp fibre coming through the investment with the clusters. That's about the only agricultural aspect of things we've seen so far from the government, but this is simply a continuation of the type of research we've been engaged with.
    With the women's enterprise initiative, I notice there's $3.9 million for that. I don't see that in the other agencies, but it's great to know we continue to look at the great work our women entrepreneurs are doing, and it expands in that regard as well.
    On another point, from looking at the brief you have given us, you talk about the $800 million generated in sales of newly commercialized technologies and the $500 million generated in international sales. As we move forward with trade initiatives and that type of thing, I think that becomes so critical because trade is such a key component.
    I'll finally get around to asking a question.
    You have about 30 seconds.
    Yes, thanks.
    We can look at the clean technologies investments over the last decade. In western Canada there has been so much that has been done with regard to clean energy, and I think sometimes it gets a bad rap, as though the rest of the country is alone in being innovative.
    Do you have any comments about where you see the continuation of the work that has been done with clean energy initiatives?

  (1650)  

    Thank you for the question, Mr. Chair.
    I don't have time for the answer?
    Oh, yes, you do.
    Okay. It's very strong in western Canada. I mentioned 300 clean tech companies. If you look at our innovation program, 47% of it went to clean tech, and that was based on what the best projects were. Clean tech was very strong in that and was supported in other areas as well. Every province has its specialties. Hydrogen fuel cells, for example, are very big in British Columbia, along with many other technologies. Part of what we're doing is putting the strength in the clean tech sector together with areas of need, including in the oil and gas sector as well.
    Thank you very much.
    I apologize, Mr. Chair.
    It's come to be expected.
    Moving right along, Mr. Longfield, you have not more than five minutes.
    Mr. Dreeshen, I feel your pain. It's hard to get these conversations in, in a few minutes.
     It's so exciting to see what you're doing and hear the different regions working together.
    In Guelph we worked on a program in 2009, coming out of the recession, to diversify our economy, so I'm going to be asking some questions around diversification. We actually used Calgary as one of our example communities in Guelph, something that was going on in Calgary that we could learn from. In Guelph we're looking at clean tech, advanced manufacturing, biotech, ag—which we haven't talked about much here today—ICT, entrepreneurship, including women's entrepreneurship, and then investing in outreach so that we understand what the rest of the world is doing and how we fit in.
    The result for us is the lowest unemployment rate in Canada. We have businesses coming to Guelph. That's a goal for Canada, really, and something that we're all wanting to work on together.
    I'd like to look at the different RDAs and how you might share information. I know the University of Guelph is quite involved in Atlantic Canada regarding soya meal for fish and working on fish development. Personally, I've done a lot of work with Sherbrooke, which is doing some fantastic things around advanced manufacturing support.
    Could you speak to whether your strategic framework is developed to the point of knowing your key collaborations between your agencies that you could see working on? I'm looking at the west, because I'm thinking you have some really good stuff going on there.
    Well, thank you. We are proud of it.
    Maybe there are a couple of things I could answer with. One is the collaboration we do with each other to find out exactly what we're doing. Those conversations are happening with more frequency than they were before, whether it's aboriginal economic development, potentially women's entrepreneurship, or whatever. It's best practices in terms of what we do and how we approach our stakeholder group.
    The other thing I think that's important certainly at our agency, and I'm sure it's the same with my colleagues, is to get those whom we support to collaborate with each other. Often a condition of our funding will be, “Yes, but you must collaborate with X, Y, and Z”. Yes, we emphasize western collaborations—that's kind of good—but also, of course, taking advantage of expertise across the country. Now we're positioned better to figure out exactly where that expertise is, share that knowledge, and get those collaborations going.
    That's terrific, thank you.

[Translation]

    We are actually starting to work more with universities, but non-profit organizations are also major players. For instance, we support Écotech Québec, an organization that connects small businesses that develop clean technologies with larger promoters that could use those new technologies, such as heating, ventilation and air conditioning systems.
    That is along the lines of what Daphne was saying, meaning that we are extensively using the networks of the organizations we support financially. However, we must ensure that we obtain results. It is not just a question of money; it is a question of a final product. We want to make sure that the organizations comply with specific indicators.

  (1655)  

[English]

    That's great, thank you.
    Very briefly, could you add just a little bit? I have another follow-up, if I could squeeze it in.
    You have one minute.
    I'll just provide two examples where's there's been collaboration that goes beyond Atlantic Canada.
    The first one is that we have an organization in Atlantic Canada called Springboard. It's a network of universities and colleges that work with industry to commercialize research. This organization connects across Canada with other universities and colleges to make the advancement. We recently worked collaboratively with DEC, our sister organization, on the spruce budworm initiative.
    Thank you.
    We're just about to embark on a manufacturing study. Part of the study is going to include innovation and what's being done. When we're getting into that study, we'll be looking for where your success points are, not only with your RDA, but Ontario, to try to see how we can help our manufacturers to know some great ideas going on in Atlantic Canada, or western Canada, or Quebec, or Ontario. Are you tracking that, or is it within your plans to track success by sector, or key successes that we would be able to take to the manufacturing study?
     Very quickly, give us a yes or no answer. We are done.
    Yes. We all have some we are ready to share with you.
    Voices: Yes.
    Thank you very much.
    We are going to move to Mr. Lobb. You have five minutes.
    My first question is for CED.
     On page 5 of your presentation, you have 724 projects for a total of $317.7 million. Are those grants, repayable contributions, or a combination of both, and can you break down how that works?

[Translation]

    I can start answering the question.
    Yes, it is always a combination. We lend money to a company, and the company has a certain number of years to pay the loan back without interest. In some cases, such as non-profit organizations, the contribution is non-reimbursable. If memory serves, that happens in about 45% of cases. Reimbursable contributions represent around 55% of cases. Those figures are approximations, but they give you an idea of the relationship between the two categories.

[English]

    Okay. Great.
    What is the success on loans over the last couple of years? I guess you would call them your non-repayables or your lost loans, or what have you. What is the default rate on those loans?

[Translation]

    I will let my colleague answer. However, I can tell you that the non-payment rate is very low and comparable to that of the industry.
    If we feel that we are unable to recover the money owed, we write off those amounts from our ledgers. But I think that, in the last 10 years, the agency has written off less than 4% on average, which is not very high at all.
    However, for some of those 10 years, the reimbursement is not due yet or has not been completed. Generally speaking, for maturity years, the loss rate is close to 15%.

  (1700)  

[English]

    Okay. Very good.
    The next question is for WED, and it's about the Canada 150 infrastructure funding.
     I am wondering if there has been any consultation with the Federation of Canadian Municipalities, and what their thoughts are on $23 million going into recreational and cultural centres, maybe another $23 million going into that. Has there been any consultation at all on that?
    I think you were addressing that to us. Thank you for the question.
    I will have to check exactly what has been communicated to the federation. I will have to get back to you on that. Normally, they would be part of our outreach network, of course, and would obviously be aware of the previous investment. The question is how much engagement has happened since budget 2016.
    Okay. Fair enough.
    The last question I have—and I am coming up against the clock here—would be on indigenous economic growth. I know it was listed in both presentations.
     I am curious how you are engaging with members of the indigenous communities. What kind of programs are you rolling out to help entrepreneurs get going? What successes or failures are you seeing with that at this time?
    Outreach is very much part of what we need to do to make sure they're aware of the opportunity to receive our investments. We are strong on outreach. We also use website information for people to understand our priorities.
    In addition, we have a network, the Community Futures organizations. Several of them, actually 15 of them, are aboriginal in nature. We use them to get the word out on the opportunity. As a result, we've had some $13 million in investment in the last two calls or intakes that we've had for investment. We have a number of projects on the go with those communities and we're supporting as well others that we do through what we call the strategic partnerships initiative. There's another $7 million in investments there.
    Since we've really put a focus on this in the last two years, we're seeing stronger and stronger uptake each time. It's growing. We're also engaging aboriginal groups to talk about business opportunities. In particular, we had a large engagement in Saskatchewan that drew a number of first nation leaders in Saskatchewan and Manitoba to talk about even opportunities in the defence procurement world and some of the practices happening through to the Maritimes engaging aboriginal business.
    Thank you very much.
    We move on to Mr. Baylis. You have five minutes.

[Translation]

    Mr. Mongeau, in your presentation, you talked about supporting economic growth, innovation and diversification.
    What do you think the best three investment opportunities would be for Quebec?
    We work a lot with industry clusters. There is a great deal of optimism. For instance we are venturing into the aerospace industry. A lot of Quebec companies are developing composite materials and they are improving by the day.
    I also talked about INO, an organization from Quebec that provides services in optics-photonics. They use laser and light for unique detection. That market is growing fast.
    For the rest, we would like to continue to expand in a lot of areas. In Quebec, we have 12 business offices and each has a three-year strategic plan to identify the strengths in their region. That enables us to have a better overview and to better target our investments in various regions.
     I was talking about the first two clusters, which are probably the strongest. The second cluster, the one dealing with optics, should grow.
    In terms of the others, we are exploring a variety of avenues in our various business offices. We adapt to the communities in which we work.

  (1705)  

    So your main goal is to include the companies that wish to be part of those industrial clusters.
    I was talking earlier about non-profit organizations. Those are very structured organizations. I don't know all the names by heart, but there are organizations that specifically deal with networking and with supporting the companies that manufacture aluminum, for instance. There are also some that work more in innovation. Those non-profits help create a network in Quebec for specific products and materials. So there is a lot of hope.
    You have also talked about the innovation culture at the CED. Could you tell us more about what you have in mind for that?
    We are focusing on green technologies. We will also focus on supporting indigenous groups and small businesses that are already robust, but that we would like to further develop.
    Quebec had the gazelles program a few years ago; today, that's the PerforME program. That is for companies that are fairly well established, but that need additional support to achieve high performance. We are working a great deal on that right now.

[English]

     Okay.
    This is a quick question for everybody. As you're now under one umbrella, I would see this as an opportunity to start to share best practices. Am I correct?
    Maybe you could say a little bit about that, Ms. Meredith.
    Certainly.
    We've already identified some areas concerning which we have had conversations, including with other members of the portfolio.
    For example, the head of Destination Canada came to us in a group and talked about what they are doing—that was before they got $50 million of budget 2016 money—on the marketing end and how we might support them in terms of product development within our regions. ACOA is very strong in that area, and so we can learn from ACOA and we intend to do so through more conversation about how they are doing things.
    As to aboriginal economic growth, we have a very structured approach at WD, with a project charter and a project team and being very much metrics-based. We can share that with our colleagues as well to make sure we're all giving focus to it.
    Thank you very much.
    Finally, we will go to Madame Moore.

[Translation]

    You have two minutes.
    That is great.
    First, I would like to perhaps allow the representatives from the Atlantic Canada Opportunities Agency to answer my question about community consultations and the transparency strategies in place to improve it.
    I will give you the time to answer the question you were not able to answer.
    The Canada Opportunities Agency is a very decentralized organization that is very present in the communities. As a result, being on the lookout and really trying to understand what is happening in the communities is first attributable to our structure. We have 23 offices in the communities and one office in the capital of each province. We maintain an ongoing dialogue with universities, businesses, colleges, research institutions and industry associations. In addition, we hold round tables on a fairly regular basis, discussions and meetings to which we invite people from the business community and other institutions to take the pulse of the people.
    In terms of transparency, we have always showed a great deal of it in our activities. We are very open and we publish on our websites all the decisions we make about projects. Under the new government, I think we are going to be even more transparent.

  (1710)  

    Are most of the assessment grids used to select the projects made public? Can the public find out what tools the officials are using?
    The assessment grids used to evaluate the projects are not made public. That being said, we have an access to information system. On request, we release any information that is not protected under the Access to Information Act.
    Are you talking about blank or completed grids? Are you talking about the assessment once it is completed or the criteria used for the assessment?
    In terms of the assessment criteria, we are transparent. However, it can be difficult to share information about the detailed assessment of a project, because it always contains confidential information.
    Okay. That's fine. I just wanted to clarify that I was talking about the assessment grid, not the actual assessments of the projects.
    Thank you.

[English]

    Did you get it answered?
    Yes. They are wonderful.
    Excellent.

[Translation]

    On that note, thank you very much to all the witnesses.

[English]

    We are four minutes early, but we are going to suspend, and then in about five minutes, we'll reconvene in camera for 15 minutes.
    Thank you very much.
    [Proceedings continue in camera]
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