I call this meeting to order.
Before we begin, I'm sure you will join me in sending our thoughts and prayers to the Canadian Armed Forces members and their families. Following last night's tragic helicopter accident off the coast of Greece. To our fellow military families, we are with you.
Welcome to meeting number 11 of the House of Commons Standing Committee on Industry, Science and Technology. Pursuant to the order of reference of Saturday, April 11, the committee is meeting for the purpose of receiving evidence concerning matters related to the government's response to the COVID-19 pandemic. Today's meeting is taking place via video conference and the proceedings will be made available via the House of Commons website.
Members and witnesses, I would like to remind you that, before speaking, please wait until I recognize you by name. When you are ready to speak, please unmute your microphone and then return to mute when you are finished. When speaking, please speak slowly and clearly so that the interpreters can do their work. As per my normal practice, I will hold up the yellow card when you have 30 seconds left in your intervention, and the red card when your time for questions has expired.
I would now like to welcome our witnesses. With us today we have the Honourable Navdeep Bains, Minister of Innovation, Science and Industry; Mr. Simon Kennedy, deputy minister of the Department of Industry; and Mr. Paul Thompson, associate deputy minister, Department of Industry.
Minister Bains, you have 10 minutes to present, after which we will move to the rounds of questions. The floor is yours.
Thank you very much, Madam Chair.
I want to thank all the committee members for inviting me here today.
I’ve worked closely with this committee over the last four and a half years, and I appreciate the excellent work you do on a range of important issues that impact Canadians and Canadian businesses.
Before I begin, I would like to recognize the efforts of all Canadians to follow the recommendations of public health officials and keep everyone safe.
This is a collective effort by all governments across the country. I've never been prouder to be part of team Canada. My thoughts are with the people who are suffering or who have lost loved ones to this pandemic. I also want to recognize the tremendous work of our front-line workers: the health care providers, the emergency responders, and the many, many Canadians who keep our homes safe and filled with food.
I also want to recognize the contributions of companies big and small, as well as those of our exceptional research community, and thank them for their ongoing work.
Let me start by addressing the restart of the economy.
We know there will be real impacts while the shutdown measures are in place, but we cannot lose sight of the significant gains we have made in keeping people safe. We need to restart the economy only when the time is right, when we are certain we can maintain the health and confidence of Canadians. There needs to be coordination based on science, data and expert advice to realize our shared ambition of seeing our country through this.
I’ll also address Canada’s industrial response to the COVID-19 pandemic.
Over the past month, we have put the full weight of the federal government behind a plan to recalibrate industrial policy and supply chains. We have deployed industry and innovation programming, such as the industrial research assistance program, the strategic innovation fund, the innovation superclusters initiative, innovative solutions Canada and many other programs, to rapidly scale up industrial production of masks, ventilators and other urgently needed goods.
Industry has answered our call. Through our online portal, we have heard from nearly 6,000 Canadian companies that have stepped up to offer their capacity and expertise. These firms are now pivoting towards making face shields, gowns and other much-needed goods to help keep front-line health care workers safe.
The mantra is simple: It’s buy, buy, buy and build, build, build to meet the needs of a pandemic on a scale the country hasn’t seen since Canadian industry mobilized to support the greatest generation overseas, and we are now starting to see the results of these partnerships.
Contracts are now in place for more than 30 million medical gowns. Well-known companies such as Bauer, Stanfield’s, Canada Goose and General Motors have begun producing personal protective equipment and we are working on contracts with 14 different companies to deliver millions of face shields.
Companies such as StarFish Medical have teamed up with key partners to produce ventilators using intellectual property first developed right here in Canada. More than a million litres of ethanol will be provided by Canadian distilleries through the hand sanitizers manufacturing exchange. As well, 55 million masks have been ordered, and we are working to step up mask manufacturing domestically so that we can assure Canada’s access to these vital pieces of personal protective equipment.
This shift has allowed us not only to respond to the need for protective equipment but also to keep many Canadians on payroll.
We've contacted every company that put its hand up. We're working with the other levels of government to leverage Canadian industrial expertise.
These partnerships highlight the innovative and collaborative spirit of Canadian industry, and we continue to challenge industry to come up with new and even more innovative solutions.
Throughout this process, companies of all sizes and all types, from every region of the country, have stepped forward with passion and commitment to do everything possible to help us fight the virus and keep Canadians safe.
In addition to working with industry, the government has been supporting Canada’s world-class scientists, medical experts and researchers in fighting COVID-19.
We're investing aggressively to develop a safe and effective vaccine. We want Canadians to have access to the vaccine and to treatments as soon as they're available.
Ultimately, we want to deliver a vaccine and other treatments so Canadians can return to their regular routines. We want to get the economy moving again and to pave the way for a smooth rebound in the aftermath of this pandemic. Whether we're talking about Canadian companies or world-class researchers at our universities, the co-operation has been excellent.
We all just want to get the job done. That is, after all, the Canadian way.
That concludes my remarks. Again, thank you for the opportunity to speak with your committee today. I'll be pleased to answer your questions.
Sure. Thank you very much for that question.
On face shields, with respect to how many we've purchased, it's close to 35 million, and deliveries have already started.
With regard to gowns, it's 30 million gowns that we've purchased, primarily from a lot of Canadian companies like Stanfield's and Canada Goose that have stepped up in a big way, and many other apparel companies as well. Those deliveries have started.
On hand sanitizer, again, it's 79 million units, with a significant amount being produced domestically as well.
For N95 masks, we have again ordered in the millions, and over five million have been delivered so far.
For surgical masks, over 300 million, again, have been purchased or have been ordered, and we've received 18 million thus far.
With regard to ventilators, this is an issue that's obviously of concern and that has received a lot of attention. We have produced or plan to produce over 30,000 ventilators in Canada, made-in-Canada solutions. Those deliveries have started as well.
Those are some numbers I can share with you today.
Thank you, Madam Chair.
I want to thank Minister Bains for joining us today.
First, I want to introduce my colleague , our new innovation and science critic. Mr. Bains, you may know that I'm the new Bloc Québécois industry critic. , our international trade critic, and , our communications critic, are also with us. Mr. Champoux will round out my first remarks.
First, I want to talk about land use and the essential matter of access to the cellular network and the Internet. During the current crisis, many workers are teleworking, especially teachers and parents, who must continue their children's education at home. In Abitibi-Témiscamingue, some families need three Internet connections, if we count their cellular connection and their basic network. They need a landline and a cell phone. This situation results in significant additional costs. During this crisis, data limits are being exceeded, the network is becoming significantly overloaded and costs are exploding.
Minister Bains, as part of your mandate, you must ensure that Canadians have both affordable and high-quality Internet, mobile and media access. In this situation, can you commit to carrying out this task?
Do you find it normal that a member from a region such as my area must purchase a satellite phone to keep in touch with people throughout their constituency?
My concern is that the overall culture of manufacturing in Canada has been treated poorly over the last number of decades, resulting in a massive decline not only in jobs but also in GDP contribution to the country. Now it's being trumpeted because it's needed. My concerns come in line with some of the investment happening.
I think of Connaught Labs, for example, which was the Canadian laboratory responsible for working on the polio cure and which dates back to 1913. It was [Technical difficulty—Editor] entity.
I think of Nemak. As you know, Mr. Minister, we invested in Nemak, a manufacturing facility here in Windsor, but the research and development are now going to Mexico, and public money that was announced by your government is now being used to produce for Mexico. The work is being moved there right now.
When we're doing some of these contracts and supply initiatives, what is being done to protect that investment to keep it in Canada, including the intellectual property and the investment in the machinery, so that when this is done we will continue to have that investment in Canada? Are those stipulations part of the deals?
One of the challenges we've had in the past with the SR and ED tax credit, for example, has been that it has created micro economies for our researchers and consultants to apply for the grants for companies, and they get a cut of that.
With regard to the contracts we're doing now for the supply chain that you're enhancing, there are some very good stories, which you were really good at outlining. There are many hundreds and thousands of others taking place.
What percentage is being allocated to fees or third party administration? Are they being handled right through by Industry Canada officials themselves directly with the employers, or are we also having part of the government support going to either consultants, advisers or administrators in third party groups?
We are dealing with the companies directly. As I said, we have a portal and over 6,000 companies stepped up and identified opportunities to scale up and support Canadian efforts to build made-in-Canada solutions for personal protective equipment. On many of the initiatives we've put in place we deal with them directly, as I said.
If you want any particular numbers around how much we have allocated through the different programming, we can let you know, but some of the key programs are innovative solutions Canada, as I highlighted in my opening remarks, the strategic innovation fund, and the industrial research assistance program.
I know that SR and ED is still a very popular program, which is administered, of course, by Finance, and we deal very closely with industry to understand their concerns.
On April 29, in a press conference, the confirmed that the federal government would consider using or promoting contact tracing apps. Companies like Palantir and Clearview AI have said that they're doing this work pro bono. In fact, they've gone out of their way to stress this.
The problem is, Canada's primary federal privacy law, PIPEDA, only applies to commercial activities. Given this gap, if a company builds a contact tracing app for free, at any level of government what is the mechanism that would be used to ensure that the health data they collect on us would not be monetized or sold after the pandemic?
Thank you. That didn't answer my question, but I'm just going to go on to the next part.
You're talking about the fact that PIPEDA exists. I'll draw your attention to an article that The Star published on April 29, 2019. It's called “Facebook is laughing at Canada's toothless privacy laws”. The article states that Canada's law doesn't give the Privacy Commissioner “the power to actually tell Facebook to do anything”. It says, “If, and it's a big if, Facebook is actually found to have violated Canadian privacy law, the maximum fine it could face in this country is $100,000.”
If an application developed pro bono is used, even on a voluntary basis, in contact tracing efforts, would you say it's a fair characterization to say that functionally nothing really exists to prevent this data from being sold to, say, an insurance company, for the use of, let's say, premium setting, given that Canadian health data is worth considerably more than $100,000?
Thank you, Madam Chair; and thank you, Minister.
In your opening remarks, at least the way I understood it, you stated that the restart of the economy depends on two factors: One was that the time had to be right, and the other was the need for close coordination between the provinces, territories and municipalities, as well as the data and evidence, on which I believe you were pointing to the public health authority.
My colleague talked about the testing vis-à-vis the capacity and the supply. As we're launching these initiatives for small businesses and the economy, they're taking root. Now we are to focus on the restart of the economy, and it was very interesting that you opened your remarks on that aspect. Is there a road map? Are there clear roles and responsibilities for these various levels that you've talked about? Are there some timelines that need to be developed? Do we have some guidelines to monitor?
Let's start with the roles and responsibilities that you believe the different levels of government have to play to be able to put this road map together.
This is going to require a collaborative effort. We have to work with the provinces. We have to work with them when we're sequencing things. We also have to work with industry.
Let me just illustrate some examples that highlight that need, because the situation is very different across the country in each and every province.
Let's take the fisheries as an example, out east and out west primarily. When you're on a boat, social distancing is a bit of a challenge, so you need certain protocols in place for that. We want to make sure that's done in a very thoughtful way to protect people in the fisheries industry.
Then we can also focus on, say, the automotive sector. There's a fair amount of automation and a fair amount of space between the workers already, and workplace safety standards have made it very clear that they need to keep a certain distance from one another. Therefore, it's—
I'd like to acknowledge all my colleagues. I want to take a moment to ask all my colleagues to use the headset. It makes a real difference in terms of sound quality. There has been a major discussion on the viability of technology in the parliamentary setting. This would be a good opportunity to lead by example. Thank you in advance.
Minister Bains, thank you again for being here. You mentioned in passing the idea of investing in the automotive industry. However, we can see that the oil industry is currently experiencing difficulties as a result of the economic crisis and war. This is a lose-lose situation. When the price of oil is low, consumers are very tempted to purchase a huge amount of it. There's no incentive for energy conversion in relation to the industry. High oil prices lead to a significant amount of investment, because we see this as a business opportunity.
Has the idea of an ecological transition, as it has often been referred to in the industry, been dropped because of the crisis?
What type of investments will be made in the automotive industry that you referred to earlier?
Thank you very much, Madam Chair; and thank you to the minister for being here today.
Minister, quite frankly, Canadians are at a stage now where their confidence is being strained. We're getting a lot of flowery words from the government of things that are happening, but what we see in rural parts of the country is convenience stores that are open and small businesses that are being shuttered. We have packed parking lots at big box stores, but everybody else has closed because of COVID-19. The products that would normally be sold in these communities are being purchased now in the big box stores because they happen to have food associated with them, but this is certainly the way to destroy the backbone of rural Canada, so that's really a critical part that we have to keep in mind.
I'll go back to a discussion that I believe the Bloc member brought up in talking about oil and gas. Quite frankly, your mandate letter makes it clear that you don't even have oil and gas in that mandate, and it's frustrating to see that it would not be in the mandate of an industry minister. Of course, some of the actions we've seen from this government have proven that there is a major lack of concern.
Meanwhile, Canadian companies are at the forefront of innovation and breakthroughs that could help us in the current battle against COVID-19. To me, it's a mystery why the Liberal government has decided to turn its back on Canadian high-tech start-up companies by excluding them from eligibility for the Canada emergency wage subsidy.
Could you talk about why some of these high-tech start-ups are finding it so difficult to engage in that program?
I can start with the last point that you raised in terms of high-tech companies. We've introduced a $250-million program through the industrial research assistance program, to help high-tech companies, start-up companies, pre-revenue companies, companies that are scaling up, SAS enterprises and so on. When we have broad-based programs, we recognize that some companies might not necessarily get the support they need, so we quickly pivoted and supported our start-up ecosystem through that initiative. If necessary, we will scale that up.
In terms of the challenges that businesses are facing, we have put forward record liquidity measures through the Business Development Bank of Canada and Export Development Canada, as well as by working with our financial institutions. Right now, hundreds of thousands of loans have been issued to small businesses.
The point I want to underscore there is that for many communities, small businesses are too big to fail. Prior to COVID-19, we had over one million small businesses, employing over eight million Canadians. That is why we are working around the clock to support our small businesses through the different measures we've introduced over the past several weeks.
Very quickly, because you raised the point, when it comes to the oil and gas sector, I work very closely with Seamus O'Regan to make sure that we look at investments to not only see that sector thrive, because they are facing a set of challenges, but also to focus on the small and medium-sized enterprises and how we can help them transition this energy sector to a low-carbon economy.
I think the point you just made is one of the issues that people are understanding: that this is the attitude of this government. We can shut it down here in Canada if you like, if that's what the government plans, but it is simply going to come from other places in the world that, quite frankly, don't care about the environment.
I know we've had this discussion many times, so I certainly understand where this government is coming from in that regard.
Getting back to small businesses being too big to fail, going into more debt is not going to help them. They're going into debt while other companies are able to keep their doors open because they might be selling some food in that area. All the things that need to be purchased are being purchased from these larger companies rather than the small companies. We're going to see the hollowing-out of small communities as a result. We keep saying all these flowery things about how we're really helping, but if all you're doing is giving debt and more debt to these small companies, they're not going to be able to get ramped up again. We have to recognize that.
When everyone asks if they can borrow some money from BDC or EDC, which of course small companies aren't going to be able to do, this is very hollow for the small mom-and-pop shops that have never had a salary. Quite frankly, the money many of them send out for salaries is more than they get from their business. I think it's something you have to think about.
Thank you very much.
Very briefly, Madam Chair, because I didn't have the opportunity to respond to the questions from the previous round, when it comes to rural and remote communities, we've invested significant amounts of money in the regional development agencies, and these agencies exist across the country to help small businesses with the health care crisis we're dealing with.
Again, I want to underscore that the oil and gas sector is going to be part of the transition. We work very closely with them, and I have a great working relationship with as well. We understand this area has been hit hard, not only by the health care crisis, but also with regard to the price war between Russia and Saudi Arabia. The sector is facing many challenges that are not necessarily within our control.
To respond to the questions asked by the parliamentary secretary around science and science mobilization, I think it's a remarkable story. As a government we believe in science. We reinstated the mandatory long-form census. Our government made historic investments in science. We have some of the best world-class researchers and scientists, and they are empowered and engaged with vaccine development, therapeutics and other countermeasures. All of it is designed to help and protect Canadians, and we're very excited about the work they're doing.
VIDO-InterVac, the one that was highlighted, is the international vaccine centre in Saskatchewan, where they are now looking at building up clinical trial capacity.
We've made sure we not only mobilize scientists but also give them the resources for clinical trials for the development process, and ultimately we want to focus on broad biomanufacturing production as well. We've invested over $1 billion in this initiative to complement the investments we've made in the past.
We've also ramped up our production facility at the National Research Council.
These are part of the different initiatives that were announced by the and by as well, on top of the testing initiatives, the immunity task force, and Genome Canada. They are all designed to mobilize the science community and our researchers to deal with this incredible challenge we're facing.
Privacy is important, and I can't say that often enough, because Canadians say that to me and I have no hesitation in saying it. That is a priority of ours—
Hon. Michelle Rempel Garner: What are you—
Hon. Navdeep Bains: —and that's why we advanced the digital charter.
When it comes to consent, as you highlighted in your remarks, plain and simple language is one of the initiatives we put forward through the digital charter as a way to make sure that we empower Canadians and that they have more control over their data.
When it comes to any particular solution, I'm not aware of any specific initiative that we have endorsed at this stage. Therefore, it's a hypothetical. I again want to underscore that protecting Canadians' privacy has been, and will continue to remain, a priority for our government.
Thank you for sharing your time, MP Longfield.
I have a comment for Minister . My brother lives in Taiwan. They're not testing a lot of people there. If you look at the world stats, it's 2,600 tests per million there, compared to 20,000 here in Canada.
Their solution is very simple. They had their first presumptive case on the same day that Canada did. They're down to 429 cases. They've had only six deaths. They just have masks. Everybody wears masks. You can get three masks at the pharmacy. They're like the surgical masks, not the N95, but like those that are made with the K10S pulp that's produced here in my riding, at Harmac. You get three masks a week. In every building you go into, there's hand sanitizer where you enter.
They're not using contact tracing. They're not testing everybody. My brother teaches there. The kids all wear masks, and he wears a mask. They shut down the school for two weeks, and that was it. We need a solution like that here in Canada, so that we can produce masks for citizens and get the economy up and running again.
I also want to know what's being done about the issue of the Internet. I have some constituents who live half a kilometre away from a major development, and Telus and Shaw are saying that it will cost $5,000 for them to get high-speed Internet half a kilometre down the road.
These are two issues that I'm interested in hearing about.
I could talk briefly about the work we're doing on testing specifically.
ISED's primary role is to work to try to build the Canadian industrial capacity for personal protective equipment and testing. Members will have seen that global supply chains have proven themselves to be very challenging in this environment.
With regard to testing in particular, in our main role we work with the Public Health Agency, the health ministry, the procurement ministry and some of the sectoral ministries to identify all of the components needed to do the testing at volume. That's with regard to both the lab-based test and the point-of-care test.
For example, as the minister mentioned, we ran a competitive process to identify Canadian companies that could make point-of-care tests, and we had a jury that looked at whether a company was able to scale up quickly, whether the technology would be approved by Health Canada and whether it had good tech that would deliver a good test result. We're going to be moving forward shortly to try to scale up some of those firms. That's just one example.
Well, obviously, I think we want to move as quickly as we can. There is a substantial amount of money that has been devoted to broadband, and the onus is on us to try to move as quickly as possible.
I will say that in some cases these are what amount to large capital investment projects, so there is a bit of due diligence in having an application period and then adjudicating to make sure that the best projects are selected first, the ones that yield the biggest bang for the buck in reaching citizens in rural areas. Then, sometimes, you have to work with the telco and the communities to move the equipment and actually build out the projects.
Sometimes these can take a fair chunk of time. It's kind of the nature of the project, but I would agree completely with the member's view that we have to do this as quickly as we can, and as the minister said, this crisis is just underlining some of the challenges around lack of connectivity, so I think the ministry would completely agree with the need to try to execute as fast as possible.
Yes, Madam Chair, I'd be happy to do that.
This was just additional guidance. It's not actually changes to the legislation, but guidance on how we will apply the legislation. That came out a number of weeks ago.
The specific concern is just to make sure that market participants, the investment bar, the people who advise firms, are put on notice that we'll be watching for concerns about what I would maybe call “predatory behaviour”. We're aware, for example, that there are firms that have depressed valuations because of the crisis and we wouldn't want to have very important Canadian companies necessarily be taken out because they happen to be in a weak position or there happens to be a vulnerability related to the crisis.
Just to note, we also have particular concerns on all of the issues around the supply chain for medical goods, services and products. We have particularly pointed concerns with regard to certain strategic assets, if you like, in the health sector. We want to make sure there as well that the market takes note that it's an area we'll be looking at a little more closely. I would say there's a particular focus on state enterprises and non-commercial actors who might be engaged in those kinds of purchases. If it's a private transaction and it's driven by the market and it's the sort of thing we would have seen before the crisis, we may be less concerned, but if it's a strategic acquisition perhaps for non-economic reasons, that's something that would be more worrying.
I would simply note that other jurisdictions have done something similar. The honourable member may be aware that Australia put out guidance that is very similar to what we have done. So a number of our peer countries have taken similar steps.