INST Committee Meeting

37th PARLIAMENT, 1st SESSION

Standing Committee on Industry, Science and Technology

EVIDENCE

CONTENTS

Tuesday, May 21, 2002

¹

1540

The Chair (Mr. Walt Lastewka (St. Catharines, Lib.))

¹

1545

¹

1550

¹

1555

º

1600

The Chair

Ms. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian Alliance)

Mr. Claude Drouin

º

1605

Ms. Cheryl Gallant

Mr. Claude Drouin

Ms. Cheryl Gallant

Mr. Claude Drouin

Ms. Cheryl Gallant

Mr. Claude Drouin

Ms. Cheryl Gallant

The Chair

Mr. Brian Fitzpatrick (Prince Albert, Canadian Alliance)

Mr. Claude Drouin

Mr. Brian Fitzpatrick

Mr. Claude Drouin

Mr. Brian Fitzpatrick

Mr. Claude Drouin

Mr. Brian Fitzpatrick

Mr. Claude Drouin

The Chair

Mr. Serge Marcil (Beauharnois—Salaberry, Lib.)

º

1610

Mr. Claude Drouin

Mr. Serge Marcil

Mr. Claude Drouin

The Chair

Mr. Paul Crête (Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques, BQ)

º

1615

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

º

1620

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Mr. Claude Drouin

Mr. Paul Crête

Ms. Jocelyne Girard-Bujold (Jonquière, BQ)

The Chair

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

The Chair

º

1625

Mr. Claude Drouin

Mr. Guy St-Julien

Mr. Claude Drouin

Mr. Guy St-Julien

º

1630

Mr. Claude Drouin

Mr. Guy St-Julien

Mr. Claude Drouin

Mr. Guy St-Julien

The Chair

Mr. Rajotte

Mr. Claude Drouin

Mr. James Rajotte

º

1635

Mr. Claude Drouin

Mr. James Rajotte

Mr. Claude Drouin

The Chair

Mr. Rajotte

Mr. Claude Drouin

º

1640

The Chair

Mr. Larry Bagnell (Yukon, Lib.)

Mr. Claude Drouin

Mr. Larry Bagnell

Mr. Claude Drouin

Mr. Larry Bagnell

º

1645

Mr. Claude Drouin

Mr. Larry Bagnell

Mr. Claude Drouin

The Chair

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

The Chair

Ms. Jocelyne Girard-Bujold

Mr. Drouin (Beauce)

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

º

1650

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

The Chair

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

The Chair

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)

Mr. Guy St-Julien

Mr. Claude Drouin

º

1655

The Chair

Mr. Brian Fitzpatrick

Mr. Claude Drouin

Mr. Brian Fitzpatrick

Mr. Claude Drouin

Mr. Brian Fitzpatrick

The Chair

Mr. Brian Fitzpatrick

Mr. Claude Drouin

The Chair

Mr. Brian Fitzpatrick

»

1700

Mr. Claude Drouin

The Chair

Ms. Jocelyne Girard-Bujold

Mr. Claude Drouin

The Chair

---

CANADA

Standing Committee on Industry, Science and Technology

---

NUMBER 083

l

1st SESSION

l

37th PARLIAMENT

---

EVIDENCE

Tuesday, May 21, 2002

[Recorded by Electronic Apparatus]

¹  (1540)  

[English]

    The Chair (Mr. Walt Lastewka (St. Catharines, Lib.)): Order, pursuant to the order of reference of the House dated February 28, 2002, main estimates for the fiscal year ending March 31, 2003. This will be concerning votes 60 and 65 under Industry.

    It's our pleasure today to have the Honourable Claude Drouin, Secretary of State responsible for the Economic Development Agency of Canada for the Regions of Quebec. He will introduce the guests he has with him.

    First of all, I'd like to welcome you, Secretary of State Drouin, to your first meeting with the industry committee in your new position. As we get close to the 20-minute mark, I will be asking you to wrap up, so please judge yourself accordingly.

    I would ask you to begin, please, and to introduce your guests.

[Translation]

    Honourable Claude Drouin (Secretary of State (Economic Development Agency of Canada for the Regions of Quebec)): Thank you very much, Mr. Chair.

    First of all, I would like to congratulate you on your election as Chair of the Industry Committee. I think that this committee is a very important one. You have demonstrated, over the year, your commitment to this department and I just wanted to congratulate you.

    Dear colleagues, good afternoon. This is the first time I have appeared before the members of the Standing Committee on Industry, Science and Technology, and I'm very pleased to be here. I see this appearance as an excellent opportunity to give you a synopsis of Canada Economic Development's role and purpose. I also plan to give you an overview of the initiatives we are planning and, especially, their anticipated results.

    In short, my goal in addressing you this afternoon is that you come away from this meeting with a clear idea of the impacts Canada Economic Development activities have on the regions of Quebec. Having sat on various committees of the House, including the Industry Committee in my capacity as parliamentary secretary, I'm well aware that this requires a lot of time and energy. I would thus like to take this occasion to thank all of you for your dedication and your contributions.

    Before continuing, I would like to introduce the individuals who have accompanied me here today. On my left, Mr. André Gladu, Deputy Minister. On my far left, Ms. Suzanne Tining, Assistant Deputy Minister, Operations. On my right, Ms. Jocelyn Jacques, Assistant Deputy Minister, Policy, Planning and Information. Behind me, Mr. Pierre Bordeleau, Director General, Resource Management and Mr. Jean-Pierre Thibault, Director General, Communications.

    Mr. Chair, I would like to underscore the wonderful work done by these people who are accompanying me here today as well as the whole Canada Economic Development team, who are genuinely committed to assisting people and regional development. I could never thank them enough. Several of them are here today, and I would like to congratulate them.

    Canada Economic Development's mandate is to promote the economic development of the regions of Quebec, paying special attention to those experiencing slow economic growth and inadequate employment, with a view to the enhancement of prosperity and employment in the long term. In carrying out this mandate, the agency focuses of two main areas of activity.

    The first area of activity is to promote enterprise development. The second is to help improve the environment for economic development of the regions.

    Mr. Chair, I would now like to give part of my presentation in English. However, if you find it too difficult to understand what I'm saying in English, just let me know and we can communicate through the interpreters, who, as always, provide an excellent service.

[English]

    I would like to take a few moments to report on several major interventions carried out since the report on plans and priorities for 2001-02 was tabled. In November 2001, my predecessor, the Secretary of State responsible for Canada Economic Development, announced that the innovation area of activity of the IDEA-SME program would be broadened to include a productivity component. We are thus aiming to improve the performance of SMEs, particularly those in traditional sectors. This initiative, with a $110 million budget envelope over the next three years, was introduced following the transfer of credit from the Canada Jobs Fund to Canada Economic Development.

[Translation]

    I would like to point out that special emphasis will be placed on remote regions, far from urban centres. Indeed, we will provide support for testing and experimentation activities related to natural resources because the latter play such an important role in the economy of many regions in Quebec. This new component is already bearing fruit.

    In February, for example, I had the pleasure of announcing a contribution of $985,878 to the Centre de réparation hydraulique Hydrep inc. in Jonquière. With the agency's help, this Saguenay firm will design an aluminum electro-hydraulic piece of equipment used in rail transportation. This project, which combines technological innovation with industrial research, will further enhance the Saguenay--Lac-Saint-Jean's privileged position in secondary and tertiary aluminum processing. It is important to note that representations are underway in Germany with a view to obtaining new contracts for this wonderful innovation.

    Canada Economic Development will also be supporting the Quebec Industrial Research Association, known under the acronym ADRIQ, to establish a network of advisors dedicated to promoting innovation-oriented programs and services, notably text credits for research and development, and to make it operational for two years, so as to foster innovation in Quebec SMEs.

    In another vein, in August 2001, Canada Economic Development announced its financial participation, to the tune of $80 million, for a project to establish the Papiers Gaspésia inc. paper mill in Chandler, in the Gaspé Peninsula. This project gives concrete expression to the commitment made by the Government of Canada, in recognition of the exceptional nature of the socio-economic situation in the Gaspe Peninsula and the Magdalen Islands.

    In 2001-02, the Regional Strategic Initiatives (RSIs) maintained their high standing among Canada Economic Development activities. By implementing the Regional Strategic Initiatives Program, we seek to support the development of strategies and action plans to foster the emergence of a socio-economic environment that will strengthen the assets and competitive advances of Quebec regions. Essentially, the RSI Program allows us to support major initiatives that are likely to have a growth-generating impact on the regional economy.

    In June 2001, Canada Economic Development announced funding of the North Shore RSI, with a budget envelope of close to $10 million.

    And in October 2001, the Central Quebec RSI was announced; its implementation will require investments of $22 million over a five-year period.

    Once more, the Lower St. Lawrence SRI was renewed for a four-year period with a budget of $26.2 million, as I mentioned previously.

    The results of the RSIs currently underway are very satisfactory. During 2001- 02, these programs allowed us to contribute $134.5 million in financial assistance to 188 projects. In turn, these projects generated over $542 million in investments in the Quebec economy and helped create or maintain more than 2,000 jobs.

    I would now like to say a few words about the Canada-Quebec Infrastructure Works Program. The objective of this federal-provincial agreement is to allow municipalities to upgrade, replace or construct water supply, sewer or waste water treatment infrastructures. It also fosters implementation of new technology experimentation projects or projects to develop, renovate or construct infrastructure with an economic, urban or regional impact.

¹  (1545)  

    This far-reaching program should generate $1.686 billion in infrastructure works between now and 2005.

    When this agreement was signed in October 2000, Canada Economic Development was designated to act on behalf of the Government of Canada as the federal agency responsible for implementation in Quebec.

    As at May 16, 2002, the Quebec government had received 3,017 applications for assistance from municipalities and government agencies, but had forwarded only 714 files to us. We have already approved 84% of them, representing 583 projects, and the remaining 16% are currently under study.

    Therefore, since the Canada-Quebec Infrastructure Works Program was signed, some $241 million have been spent on supporting various projects in localities throughout Quebec with a view, notably, to enhancing their residents' quality of life.

    On another topic, as regards improvement of its client services, Canada Economic Development signed a three-year memorandum of understanding with Canada Heritage under the Interdepartmental Partnership with the official language communities to foster the establishment of lasting partnerships for the development of Quebec's English-speaking community.

    I would now like to take a few moments to describe the context in which the Agency carries out its activities in Quebec.

    The industrialized economies are currently undergoing a period of major structural change. Witness, for example, the fast pace of globalization, the liberalization of trade, growth of the knowledge economy, electronic business, and the growing use of technology. All are phenomena which demand unprecedented adaptability.

    To remain competitive, enterprises have to react rapidly in order to respond effectively to the constant, rapidly-occurring changes stemming from this new environment. In today's context, enterprises' performance increasingly depends on their ability to innovate.

    In our view, development of a culture of innovation among enterprises is at the core of a modern vision of regional economic development. To that end, the Agency will be supporting Canada's innovation strategy, notably by organizing a consultative tour throughout Quebec. In all, 10 summits will be held between May 22 and September 26, 2002.

    We will also continue to support the development of enterprises seeking to enhance their competitiveness, either by implementing new business practices or by marketing their products internationally.

    To illustrate, the Agency is participating in the Technological Development Assistance Program, usually called Opération PME, a project of the Ordre des ingénieurs du Québec aimed at improving enterprises' innovation capacity and productivity, notably by defining and filling their needs for skilled human resources, such as engineers.

    Finally, the growth of technological enterprises and the development of small and regional enterprises, through a special partnership with Community Futures Development Corporations, will also remain Agency priorities.

    At the local and regional level, Canada Economic Development will continue to pay special attention to regions experiencing difficulty adapting to the new world economic environment. We intend to make every effort to ensure that new development opportunities benefit every Quebec region. The Agency thus fulfills the Government of Canada's commitment to promoting equality of opportunity for all Canadians and fostering the economic development of regions.

    Canada Economic Development will continue in the years ahead to build on two main areas of activity, namely, as I mentioned earlier, enterprise development and improvement of the environment for economic development of the regions.

¹  (1550)  

    Canada Economic Development will divide its efforts between its two areas of activity as follows: 60% of the contributions and grants budget will be devoted to enterprise development, representing an amount of $373 million over three years. The remaining 40% of the contributions and grants budget will be allocated to the improvement of the environment for economic development of the regions, representing an amount of $248 million, over the same three-year period.

    Our efforts pertaining to these two main areas of activity are anything but abstract. We have made specific commitments geared to achieving our desired results and I would like to take a few moments to describe a few of them to you.

    I will begin with the strategic outcomes we expect to achieve in our first area of activity, which is to foster enterprise development. In this new economic context, in which the rules are changing at a dizzying pace, it has become increasingly important to build on the competitiveness of SMEs. Accordingly, in order to improve enterprises' access to information likely to inform their business decisions, we will process 800,000 requests for information over a three-year horizon.

    We will also work to support the establishment of enterprises in economic activities deemed strategic for a region's development. We anticipate that in terms of this priority, 600 entrepreneurs will have completed their pre-startup or startup project for new SMEs.

    We also want to foster construction, expansion or modernization of plants or workshops by enterprises deemed strategic for a region's economic development.

    It was in this context that on February 11 of this year, I announced a $500,000 contribution to the firm Métal 7 located in Sept-Îles, in the North Shore region. The Agency's support applies to a project to develop a new product range of welded chromium carbide coverings and acquire high-performance equipment. This will enable Métal 7 to increase and diversify its export market share and enhance its productivity. This project will also allow the firm to consolidate the 75 jobs it currently offers as well as create 24 new high-skill ones.

    Furthermore, to increase the number of enterprises embracing new business practices to maintain and reinforce their competitiveness, we anticipate that by the end of three years, some 2,600 SMEs will have been aware of or developed competencies in these new practices, including electronic business practices or will have adopted new business practices.

    Another target we have set for the period 2002- 05 is to increase the ability of enterprises to adapt and test a new or improved product, service or production process. We will channel special energies into this sector so as to make 3,000 more SMEs aware of technological innovation and productivity.

    Since a picture is worth a thousand words, let me give you an example of the type of project we are talking about. On September 11, 2001, I announced a $1,672,750 contribution to Action PME Beauce inc. This contribution from Canada Economic Development is aimed at assisting the organization in its mission to support the technological development of small and medium-sized manufacturing firms in the Chaudière-Appalaches region, notably through activities to improve manufacturing processes and electronic business projects.

    In addition, the Agency supported an initiative of the Groupement des chefs d'entreprise du Québec to organize a provincial forum, which took place on May 2 and brought together some 500 business leaders. This gathering enabled the participants to exchange views and discuss matters related to the productivity of Quebec SMEs as well as to find ways to increase their productivity.

    In keeping with a priority of the Government of Canada, Canada Economic Development also intends to increase innovating enterprises' ability to market their product internationally. Our goal is to have 8,000 SMEs made aware of development of international markets and marketing and 700 export projects carried out by SMEs.

    The last priority we set ourselves in the area of enterprise development is to foster, with the invaluable cooperation of the CFDCs, the growth of small local and regional enterprises. The results we hope to achieve under this priority include 500 Aboriginal SMEs being informed and accompanied in their approach and 300 young entrepreneurs assisted in their enterprise projects through the CED-CFDC Youth Fund.

¹  (1555)  

    Let's now move on to our second group of strategic outcomes, that is to say, those we anticipate for our second main area of activity, namely, improvement of the environment for economic development of the regions.

    First of all, we want to increase local and regional stakeholders' ability to elicit the emergence of projects to create or reinforce a region's distinctive competitive advantages. By the end of the 2002- 05 period, we would like to see 4,000 economic players informed and mobilized to energize the development of the regions. We will also be placing special emphasis on making more young people and students aware of business career opportunities.

    A prime example of an Agency achievement in this regard is the 1,340,000-dollar contribution to the Eastern Townships Tourism Association which I announced on March 4th. Over the next three years, this support will enable the local tourism industry to promote the range of regional attractions likely to draw an international clientele.

    The association's efforts should lead to a 32% increase in international tourism spending, bringing the current figure of $49 million up to nearly $65 million. At the same time, it is expected that the number of jobs in the Eastern Townships that depend on international tourism will go from 860 to approximately 1,140 over a three-year period.

    Secondly, we set a priority to support implementation of projects to create or reinforce assets likely to generate a strategic impact on a region's economy and have substantial downstream effects on economic activity in a community, region or economic sector.

    Once again, I would like to give you an example of an initiative we supported in this respect. It involves the conservation sector for boreal biodiversity at the St-Félicien Zoo, which was awarded a financial contribution of $9,996,000. This major project will help position the Saguenay—Lac-Saint-Jean region within the world class niche of biodiversity conservation. It is important to mention that this project will also make it possible to consolidate 175 existing jobs at the zoological garden and create 170 new jobs throughout the regional economy. Lastly, this project will generate an estimated $10 million in additional tourism revenues.

    The last priority in our second field of activity is to support implementation of knowledge-related infrastructure projects and transfer activities likely to have significant ripple effects on economic activity in a community, region or economic sector.

    By the end of 2002- 05, we would like to have played an active part in the establishment and expansion of 10 research or technology transfer institutions.

º  (1600)  

[English]

    On this score, I'm pleased to tell you about another agency initiative that supports attainment of this goal. Late last month, we announced a contribution of $8,080,000 from Canadian Economic Development for the new Montreal Genomics and Proteomics Centre. This institution will become a hub for biomedical research in Quebec. Its establishment will create and maintain 200 research and development positions. These centres will help build a technological environment conducive to the growth of the biotech and pharmaceutical industry in Quebec. Last but not least, this project will position Quebec, and especially the Montreal area, within the Canadian genomic and proteomics network.

[Translation]

    I would like to conclude this part of my address to you today by saying a few words about a third group of outcomes we anticipate for this third and last priority. Canada Economic Development intends to contribute to upgrading municipal, urban and rural infrastructure in Quebec, as well as enhance Canadians' quality of life.

    We sometimes forget it, but quality infrastructure, adapted to the needs of communities and their populations, continues to be a critical economic development factor today. That is why we intend to make every effort over the next three years to ensure that 300 projects, for example, are carried out in component 1 of the program, which focuses on upgrading drinking water and wastewater infrastructure.

    As I mentioned earlier, implementation of this program has now reached cruising speed and I am convinced that we will achieve all of our objectives in terms of results. To date, and solely under component 1 of the Infrastructure Canada Program, we have approved 263 projects for a total of $87 million in federal contributions.

    In our ever-changing economic environment, the ability to adapt to new demands, whether by Quebec enterprises or by organizations like ours that support their development, is key. With respect to the major national strategies, Canada Economic Development has always been sensitive to the distinctive realities of each Quebec region and proposed solutions that take them into account.

    Our priorities and action focuses clearly attest to this.

    Canada Economic Development is proud to be at the core of this new economy and to actively contribute to the growth of the enterprises and regions of Quebec. It is a goal we fully intend to pursue.

    Thank you for your attention.

[English]

    The Chair: Thank you very much, Monsieur Drouin.

    I'll now begin questioning.

    Ms. Gallant.

    Ms. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian Alliance): Minister, as you may or may not be aware, my riding of Renfrew--Nipissing--Pembroke is adjacent to the Pontiac region of Quebec. We share a common resource, the Ottawa River. Many of the challenges we face on the west side of the river are also faced on the east side with our friends and neighbours in the Pontiac. However, when it comes to cooperation for the greater good of the Ottawa Valley as a whole, we have municipal, county, and civic government, and two provincial governments, with the federal government sitting on top, making it very difficult for anything to get done.

    In fact, my office has participated in a meeting from both sides of the river regarding the Rocher Fendu. This is the project that would construct a recreation corridor across the river. I understand from the businessman promoting this project, Mr. Joe Kowalski, that he's been promoting this project for over 20 years.

    So my question to you is, have you and your federal cabinet colleague from Ontario, doing the same things as you in Quebec, ever contemplated greater cooperation between Quebec and Ontario in this particular regard?

[Translation]

    Mr. Claude Drouin: We have never experienced any difficulties and we will always be open to an opportunity of working with a neighbour agency. We have done this in the past on several occasions, and, if necessary, I can assure you that we will give you our full cooperation, but this has to fall within the parameters of our program and meet our criteria, naturally. But when it comes to economic development, we are able to build a bridge between two regions.

º  (1605)  

[English]

    Ms. Cheryl Gallant: So, Mr. Minister, are you saying it is only through the context of working in a program framework that we can get cooperation between the provinces for a project such as this? It has to be within the context of a program?

[Translation]

    Mr. Claude Drouin: I am saying that we are prepared to cooperate with the other agencies. Nevertheless, our program requirements must be met as well, but that doesn't mean that we cannot work together to find solutions. There are no problems in that regard. I think that the project that you have alluded to is a major one involving many stakeholders. We are but one player, however, we have always demonstrated a lot of open-mindedness and a willingness to cooperate with the other partners in the various projects.

[English]

    Ms. Cheryl Gallant: As you can appreciate, the Pontiac feels neglected and isolated by Quebec City. How is the federal government addressing the problem of rural development in the Pontiac region?

[Translation]

    Mr. Claude Drouin: We have a rural business concept in the Pontiac region. We have a regular program plus the tools required to help develop this sector.

[English]

    Ms. Cheryl Gallant: Can you think of any project or effort that's being made toward the Pontiac region at all?

[Translation]

    Mr. Claude Drouin: There are, for example, 56 CFDCs in Quebec, including one in this region, which assists startup companies. You can obtain up to $15,000 through the Youth Strategy. In addition, we must not forget about the regular programs provided by Canada Economic Development, which, through IDEA-SME, assess businesses in carrying out their projects, be it in the area of innovation, exporting or productivity. We have the requisite tools and we assess the applications as we receive them. It is still up to the proponents to submit the applications; the agency does not do that for them. The proponents submit applications and, in accordance with our program, we provide support and help them carry out their initiatives, create jobs and contribute to the economic development of the region.

[English]

    Ms. Cheryl Gallant: Thank you.

    Mr. Chair, I'd like to share the rest of my time with Mr. Fitzpatrick.

    The Chair: We normally don't do that, but you have one question.

    Mr. Brian Fitzpatrick (Prince Albert, Canadian Alliance): There is a project in Chandler, Quebec, with a paper mill. What type of paper mill is that?

[Translation]

    Mr. Claude Drouin: It's glazed glossy paper. This is not newsprint per se; this is a specific project that involves a European technology that we imported and is enabling us to supply the North American market with a new product. This is a very promising project which is creating jobs and furthering the economic development of the Gaspé region, which has been hard hit over the past few months.

[English]

    Mr. Brian Fitzpatrick: Am I correct in saying that the financial assistance to that plant is an $80-million contribution from your department?

    Mr. Claude Drouin: No.

    Mr. Brian Fitzpatrick: How much is it?

[Translation]

    Mr. Claude Drouin: It should be kept in mind that this is an 80-million-dollar loan that the company has to pay back.

[English]

    Mr. Brian Fitzpatrick: Are the terms of loan conditionally repayable? Is this a conditionally repayable loan?

[Translation]

    Mr. Claude Drouin: The agreement that was signed with the company stipulates that this is an 80-million-dollar loan that it must pay back.

[English]

    Mr. Brian Fitzpatrick: Can I have a copy of the loan agreement with the company?

[Translation]

    Mr. Claude Drouin: We will make sure to send it to you as quickly as possible.

[English]

    The Chair: Thank you, Mr. Fitzpatrick.

    Mr. Marcil, we'll let you have the first question since you were not able to have questions last time.

[Translation]

    Mr. Serge Marcil (Beauharnois—Salaberry, Lib.): Thank you very much, Mr. Chairman.

    Welcome to our committee, Mr. Secretary of State. Since this is the first time that you are appearing before us, I would like to also congratulate you on your appointment. Mr. Minister, I would like you to talk a bit about the Regional Strategic Initiatives. How can people initiate such projects? What are the department's criteria for determining whether or not a region should implement an RSI? Is it tied to the unemployment rate or the weak economy of a given region?

º  (1610)  

    Mr. Claude Drouin: Thank you, Mr. Parliamentary Secretary. I would like to congratulate you on your nomination as well.

    The program focuses on four areas: development of the technological capability of the regions, tourism development, support for the drawing power and international visibility of Quebec regions, and support for the adjustment capability of the regions. But the Strategic Regional Initiatives have really been designed to meet regional needs. It is by working with local communities and through their efforts that we are putting in place the best tools, and we are working with the strengths and particular characteristics of each region.

    So there are not necessarily two SRIs alike. Every region has an SRI tailored to its needs so as to guarantee that the tools are flexible and well suited to regional needs. In the four months since I have been in this position, I have travelled around much of Quebec, although I have not yet been everywhere. I have been able to see how useful the SRIs are and how economic development is perceived locally. It is really wonderful.

    Mr. Serge Marcil: When you set up the network of CFDCs... A few have been added but not a lot. Usually a problem region is identified and then helped, through the establishment of a CFDC, to find solutions and to support or promote the development of SMEs in the region.

    When we talk about SRIs, I always try to compare the situation now to earlier times when we used to organize regional economic summits in Quebec and regions could develop recovery plans starting with the sub-regions and working up to the overall region. Then the ministers would come to the region, which would enable us to involve all the departments, in fact. We would thus be able to create a development plan for the whole region.

    Should the SRIs not be aimed at regions where the need is greatest? The Montérégie region, for example, is probably one of the most dynamic regions in Quebec in terms of economic development. In the core part of Montérégie—we are talking about the second largest region in Quebec, with a population of 1.2 million—the farther one goes toward the southwest, the more economically weak the sub-regions become, with fairly high unemployment and drop-out rates; I could talk to you for a long time about the problems.

    Why would it not be possible to adapt the SRIs to regions that are looking for an identity or that want to kickstart their economy? Regional consultations could be held and an action plan developed for economic recovery. Is there compatibility between the intended purpose of the SRIs and the problems that I am talking about?

    Mr. Claude Drouin: What you are talking about is exactly what is usually done to create an SRI. If necessary, we will see whether other SRIs need to be created. In Quebec, we have 56 CFDCs, 13 CEDCs and 9 BDCs. So we have tools in each region to promote economic development and, if more needs to be done, we can look at new possibilities. I think that we have good tools, since we also have our 14 regional offices across Quebec that are located in the regions to provide direct help. They can meet with people and discuss problems in order to try to find solutions. This work is ongoing and I believe that we have the right tools for the job.

[English]

    The Chair: Thank you very much.

    Monsieur Crête, I understand you're going to begin questions.

[Translation]

    Mr. Paul Crête (Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques, BQ): Thank you very much, Mr. Chairman.

    I would like to thank my colleague, Ms. Girard-Bujold, for giving me a chance to speak. In the question period, earlier, I asked about the plant in Notre-Dame-du-Lac, where the economic situation is difficult because of a fire that affected 450 direct jobs and around 150 indirect jobs associated with the company.

    I would like to know whether there are specific programs that can help the company get back on its feet, taking into account the fact that it was a company [Editor's Note: Inaudible] in a specific area, but it was also adding processing capacity; in order for operations to resume, the company will need customized equipment that will have to come mainly from outside Canada.

    In the circumstances, are there particular programs that can be identified?

º  (1615)  

    Mr. Claude Drouin: After discussing the situation with one of the company owners, I told him that we were very sorry to hear what had happened. It is terrible for Notre-Dame-du-Lac and the other municipalities nearby, as well as for the whole region. We do not have specific programs for companies destroyed by fire. However, we can help companies through our programs. If the company needs to buy new equipment with new technology, we will be able to help.

    Our regional office in the Lower St. Lawrence region contacted Mr. Vincent Breton today. I spoke with the mayor and told him that we were prepared to help within our program mandate. We will do everything possible to help this company so that the 400 direct jobs and 150 indirect jobs are not lost.

    Mr. Paul Crête: As far as how this will work, has someone from your department been delegated to follow up on this? The company mentioned that it wanted to avoid having to go from department to department to apply for different things. For Quebec, two officials have been identified: one at the municipal level, for funding, and the other in the Quebec Agriculture Department, for the company. Has this been done at the federal level?

    Mr. Claude Drouin: Our director general has gone there on behalf of Canada Economic Development. He can receive applications that will be submitted to the federal government. We will make sure that everything is coordinated and that adequate answers and as much assistance as possible are given, within the limits of our program mandate, but it will be done through our director general and his team.

    Mr. Paul Crête: That means that Mr. Roberge will get requests from the company itself on this issue.

    Mr. Claude Drouin: In fact, Pierre must have spoken to Mr. Breton today.

    Mr. Paul Crête: Yes.

    Mr. Claude Drouin: There is a very important meeting at 3 o'clock this afternoon between the employer and the employees, I believe, and if he was able to contact them before 3 o'clock, I am sure that he spoke to them. If not, it will happen tomorrow at the latest.

    Mr. Paul Crête: Fine.

    I called Mr. Roberge last week and the director of the Canada Development Bank, since this is a sector that they may want to invest in. That is why my question today dealt with... We have had very good cooperation from the officials at HRDC and elsewhere, but it is important for these people to feel that the political will is there. I am very pleased to know that you contacted people. It would be good if that could continue...

    Mr. Claude Drouin: Yes.

    Mr. Paul Crête: ...in a context where they would have both the Quebec and the federal tool box at their disposal to help spur growth.

    Thank you.

    Mr. Claude Drouin: Yes. In fact, I've already spoken with the mayor, Mr. Voisine, and I asked him to get in touch with me with regard to federal assistance, be it through yourself or directly; I assured him I was entirely at his service.

º  (1620)  

    Mr. Paul Crête: Moving right along, I have a brief question on another subject. I would like to know what the latest developments are with respect to the building of the Rivière-du-Loup arena. I know that the olympic rink issue is still up in the air. Don't you think that June 4 would be a perfect day for you to visit Rivière-du-Loup, or will we have to wait even longer, or will we have to be satisfied with the basic project, which is nevertheless interesting, but which does not settle the matter of the olympic rink?

    Mr. Claude Drouin: We've been wanting to make an announcement at Rivière-du-Loup for a long time, but the Quebec government changed its position. Originally, it had committed itself to 50%, but then changed its mind in favour of the one-third—one-third—one-third formula.

    Mr. Paul Crête: To qualify for the Canada-Quebec Infrastructure Plan.

    Mr. Claude Drouin: Yes, but it would also have been possible for the Quebec government to commit itself to 50% and the federal government would have contributed 33% under the Canada-Quebec Infrastructure Plan, with Quebec committing to other projects which the federal government would not have been involved in. That was another alternative, but Quebec didn't seem to be interested. In any case, we are committed to our share.

    I told the Mayor, Mr. D'Amour, that my problem was that my envelope had already been committed. Therefore, it's hard for me... We already agreed to the initial request for nearly $300,000. It's not easy, but I haven't entirely closed the door, except that the ball is in Quebec's court with regard to that particular project. Sometimes, the ball is in our court, but in this case, it's in Quebec's.

    Mr. Paul Crête: Fine. So, as it now stands, the original project can go ahead, minus the olympic rink.

    Mr. Claude Drouin: But which was improved.

    Mr. Paul Crête: Yes, but minus the olympic rink.

    Mr. Claude Drouin: However, that does not prevent the Quebec government from supporting the initial project. If it wants to go ahead with it, that's fine with us. We're open to that option.

    Mr. Paul Crête: Thank you very much.

    Mr. Claude Drouin: You're welcome.

    Ms. Jocelyne Girard-Bujold (Jonquière, BQ): I'll take over from where my colleague left off. Like the parliamentary secretary, I would like to congratulate the new Secretary of State.

    Mr. Claude Drouin: Thank you very much.

    Ms. Jocelyne Girard-Bujold: I had sent you a letter of congratulations which included a request to meet with you to speak about your vision of regional development. However, five months later, I still haven't heard back from you.

    I'm a country girl, and in its latest issue the Revue québécoise de science politique said that the federal government does not have programs like the government of Quebec in that basically no federal program is adapted to the regions. That's what the publication says.

    The government of Quebec has set up CLDs and CRCDs, which hold ongoing discussions with the regions and local citizens, and they have truly adapted themselves to regional realities. It would have been interesting to have a discussion with you on the subject, because, as you know, regional development in Canada focuses on four areas: Ontario, Quebec, the Maritimes and Western Canada. In our case, that is, in the case of the sub-regions, economic development has traditionally depended on large corporations such as Alcan and Abitibi-Consolidated, which assured their growth. But today, changes have to be made because these big companies are not creating jobs anymore. Today, small and medium-sized businesses are taking over.

    I also noticed that in the budget you tabled, that more and more...

[English]

    The Chair: You are also running out of time. If you're finished, we'll let the secretary of state answer the question.

[Translation]

    Ms. Jocelyne Girard-Bujold: Yes, I'll ask my question now. I was merely making a couple of comments and I would now like to put my questions to the witness. He will then be able to answer them.

    Mr. Claude Drouin: It would be a pleasure to answer your questions. I just want to tell you that time does indeed fly, but I haven't been in the job five months yet. I've only been in my position for four months last week. However, you will understand of course that I haven't yet had time to meet with you because I felt that my first important task would be to visit the 14 regional offices to meet my colleagues and to meet my entire team. I do not think that it would be appropriate for me to meet the Economic Development Canada people 8 months into my appointment. However, that doesn't mean that I don't want to meet with you.

    Secondly, you mentioned a periodical. I would just like to point out that agencies such Economic Development Canada have created this system to bring us closer to the regions and to enable us to adapt to the needs of specific regions, despite what you might read in this brochure. In addition to that, we have the CFDCs, which are federal institutions providing economic development assistance for the various regions. Consequently then, we do have tools at our disposal. One of our priorities for your particular region was the Centre des technologies de l'aluminium. We invested $57 million in this secondary and tertiary processing plant. This was a wonderful project. I visited your region on three occasions and people there greeted us with open arms. They told us that our initiative was wonderful and that they were very pleased to see the federal government getting involved. Then there was the Saint-Félicien project. We provided funding to promote economic and tourist development in the region. This was a marvelous initiative and people were very appreciative of it.

    These are only two examples of what we have done. I could give you a lot more where we have assisted companies for example. These are just two examples of the priorities set out by your particular region. We were only too happy to agree to assist them.

    Ms. Jocelyne Girard-Bujold: I have never said that they weren't. I've always said that...

[English]

    The Chair: Thank you very much. We'll move on now to Mr. St-Julien, but we'll be back.

[Translation]

    Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.): Thank you, Mr. Chairman.

    First of all, I would like to make a brief comment. I would just like to thank you for visiting Abitibi-Témiscamingue. I am aware that over the past four months, you were recovering from an operation and I'm glad to see that you are now well again. I know that this has not been an easy time for you and I would just like to thank you for coming to Abitibi.

    On February 14, as you are all aware, Paul Martin stated in Acadia that the upcoming budget would focus on resource-oriented regions and major urban centres. I would like to know whether the statistics used by your department are solely based on the 1996 census?

º  (1625)  

    Mr. Claude Drouin: No, not at all. My department should be wrapping up a study on peripheral regions by mid-June, if I'm not mistaken. This study will give us a more up-to-date picture of the situation and will enable us to focus our initiatives where they're needed.

    Mr. Guy St-Julien: You know that Quebec covers an area of 1,500,000 km² and that the Abitibi--Baie-James--Nunavik territory covers nearly 875,000 km² which is more than half of the province of Quebec. In vast geographical areas, things are difficult. With regard to forestry resources, 68 per cent of our raw material is processed in Montreal and in large urban centres. This means that we must transport our raw material.

    It is the same in the mining sector. We have been on a continuous economic decline for the past three years. What is happening now is really serious. Despite rising gold prices, temporary closures are being announced in the mining sector, such as the closure of the Bell Allard mine in Matagami. We are trying to find solutions.

    You mentioned a study. I know that a study was launched in December 2000 and that there is a background paper. For us, it is important to know your new Regional Strategic Initiatives plan for Abitibi-Témiscamingue and northern Quebec. The area is enormous and includes Montreal and Abitibi. We are trying to find new ways to ensure that our people can benefit from the coming economic boost that has already begun in other regions and in large urban centres.

    I am talking especially about regions with resources, like Abitibi or other regions in Quebec. Are you going to do what Paul Martin said? Are you going to separate those entities? We know that Montreal gets a big share of your department's budgets. The Montreal region, with places like Westmount or Outremont, is granted $24 million. We would like to know more about what you are doing for regions with resources.

    Mr. Claude Drouin: Thank you, Mr. St-Julien.

    With regard to the forestry problem, we visited you a few weeks ago. We went to Senneterre to visit PLC; that has nothing to do with the Parti libéral du Canada. It is a lumber enterprise that got help from us. It is building very advanced new machinery for processing wood.

    Mr. Guy St-Julien: And it sells them all over the world.

    Mr. Claude Drouin: In fact, it has plants all over the world and does an excellent job. I think that they create more than 200 jobs, and 250 jobs during the peak periods. Thus, they are very productive. Elements like that help us, with the RSI... In passing, you mentioned that your RSI would expire in June. We will renew it.

    Mr. Guy St-Julien: It has expired.

    Mr. Claude Drouin: Well, it will officially expire in June and we will renew it. I have already begun planning this, and we are holding discussions to find ways to adapt it and make it even more flexible and responsive to regional needs. Our ears are open for solutions, given that it is such a vast region, as you pointed out so well.

    Mr. Guy St-Julien: Your officials are doing a good job. Their task is not an easy one in the regional offices. Metal prices are going up and down like a yo-yo and that has an effect on Abitibi. On the news, on April 27, 2002, we were told that the major problem today was that the majority of producers are facing a drop in production and their stockpiles and that they are facing increasing production costs.

    In my region, we have a project involving the university, the Noranda mine, the Association des prospecteurs du Québec and the mining industry. This project is called MegaTEM. This file was referred to your agency a long time ago. They are missing a million dollars. I mentioned this issue to Minister Dhaliwal at the committee meeting a week and a half ago. This issue has been going back and forth between us ever since. This is a really marvelous project. I think that your officials will have to decide how best to promote mining exploration in my region and how best to be able to retain jobs.That's the important issue here.

    Mr. Chair, the Association des prospecteurs du Québec has forecast that, within a few years, if nothing is done to promote mining exploration, we stand to lose 1 700 jobs, not to mention those that will be lost in the forestry industry. MegaTEM is a very serious project. We want to know when we're going to see the colour of your money. I am putting myself in your hands. I know that you are working very hard and have been for several weeks now and I am depending on you to work with me to find a solution.

º  (1630)  

    Mr. Claude Drouin: I would like to pick up on a point that we talked about earlier on. It concerns budgets. Forty-one percent of our budget is earmarked for resource-oriented regions, even though these particular regions only account for 12% of the Canadian population. This fact demonstrates that Economic Development Canada is very sensitive to the importance of resource-based regions.

    Secondly, we are not far from finalizing a study on MegaTEM. In about a month, Economic Development Canada will be in a position to table a definitive position on MegaTEM.

    Mr. Guy St-Julien: On the issue of the Strategic Regional Initiative, we know that under this initiative the Abitibi--Baie-James--Nunavik area is divided up. The most northerly region is located 2,000 kilometres north of my hometown, which is Val-d'Or. Don't you think that it would be better to amalgamate these two initiatives into one? To get to James Bay you have to go through Val-d'Or, Amos and Matagami. You have to take the same route if you want to go to Lac-Saint-Jean, and there you have to travel through Lebel-sur-Quévillon. I have to go through Chibougamau to get to Mistassini. These areas are managed by officials in Montreal, Abitibi and the North Shore. Don't you think it would be much more reasonable to have one single initiative covering the whole of northern Quebec?

    Mr. Claude Drouin: Well that's an off-the-cuff request and I think that it does deserve to be looked into. I always attempt to come up with solutions which are as workable as possible. We'll look into what you have suggested and we will try to establish whether this solution could improve efficiency. If we determine that it would not, we will let you know why we don't think that this is the best solution and we'll see if we can't put something else on the table in its place. What is important, however, is that any initiative be functional and adapted to the needs of the people who live in that particular area. And, I know that you are a great advocate of developing your region. I think that we can work on that.

    Mr. Guy St-Julien: Thank you. I trust your judgment.

[English]

    The Chair: Thank you.

    Mr. Rajotte.

    Mr. James Rajotte (Edmonton Southwest, Canadian Alliance): Thank you, Mr. Chairman.

    Let me join in with my colleagues and welcome you here today, Minister, and congratulate you on your new role. I note you are a former member of this committee. This committee seems to be a stepping stone to the cabinet, although I'm a little disappointed that the promotions are only restricted to one side. We'll see if that changes in the future.

    Some hon. members: Oh, oh!

    Mr. James Rajotte: I have a couple of specific questions, particularly in response to your comments today. The first one is in regard to page 6, in which you talk about the enhancement of client services and about a “three-year memorandum of understanding with Canadian Heritage under the interdepartmental Partnership with the Official Language Communities to foster the establishment of lasting partnerships for the development of Quebec's English-speaking communities”.

    I must admit, I was surprised by this. I'm not certain why a federal regional development agency should be giving money to the English minority community in Quebec for its development. I don't see the rationale for that, and I'm wondering if you could explain it to me.

[Translation]

    Mr. Claude Drouin: Mr. Rajotte, I invite you to move to the other side if you want to get promoted. You are most welcome.

    Voices: Oh, oh!

    Mr. Claude Drouin: Let's be serious. The purpose of this project is to respond to the needs of our minority anglophone community, which are sometimes different. That shows we are flexible and willing to meet their needs. We would like the minority francophone community to get the same attention. Perhaps it has already, and I am convinced my colleagues have dealt with that issue. We are often accused of coming up with a one-size-fits-all solution. Our response to that is that we are flexible and that if the anglophone minority sees things differently, we want to be able to respond to its needs. Projects totalling $200,000 have already been approved to encourage entrepreneurship in the anglophone community.

[English]

    Mr. James Rajotte: As a follow-up to that, my perspective is like that of former Premier Bourassa, who said the English-speaking minority in Quebec was the most privileged minority in the world. And that's debatable, but frankly, as an English-speaking person from western Canada, I guess I don't see the rationale in funding the English-speaking minority in Quebec.

    In answering that, perhaps you could provide a specific program falling under this category so we can examine some specifics of what this does.

º  (1635)  

[Translation]

    Mr. Claude Drouin: Bear in mind that in resource-based regions, there are often anglophone minorities that do not have the tools to flourish. Our duty is to assist those people, regardless of where they are. If you live in a major city, you have every tool you might need, but in resource-based regions, such as the Gaspé, where there is an anglophone community, the tools you need to get a project off the ground may not necessarily be available. The projects put forward by that group are as good as anyone else's. So there are tools specifically designed to meet those people's needs.

    That shows that the Canadian government, through the Economic Development Agency, is willing to help anglophones and meet their needs. I agree with you that anglophones, like francophones elsewhere, do not need all sorts of privileges, but we must recognize that there are regional differences. When people in outlying areas have trouble getting services because there are fewer of them and there is a language barrier, through the agency we can help them more readily and can meet their needs. I think that is positive, rather than negative.

[English]

    Mr. James Rajotte: Just as a follow-up to that, you talk about specific tools and needs of, say, an English-speaking person in rural Quebec. What are the specific tools provided to this person, and how is language an obstacle to their development? What is the specific program this person would be able to access that would remove the obstacle this person is encountering in Quebec?

[Translation]

    Mr. Claude Drouin: Thank you, Mr. Rajotte. That will enable me to give two examples. It is an approach that encourages official language communities living in a minority situation to carry out activities that fall under the Community Futures Program. It is our standard program that is tailored to minorities.

    You asked for examples. Let me give you two. The Townshippers' Association wants to set up an interactive Internet site to list all of the tourist attractions in the Eastern Townships. It is a $70,000 project. The Quebec-Labrador Foundation wants to have bilingual interpretation signs along the Jacques-Cartier trail, on the Lower North Shore. Those are tools we give them to meet their needs. As you can see, it helps promote tourism and attracts anglophones to those regions. It fosters growth among Canada's minorities, be they francophone or anglophone, and helps them to thrive. We give them an additional tool to assist them. I think it is very positive.

[English]

    The Chair: One short one, Mr. Rajotte.

    Mr. James Rajotte: Thank you, Mr. Chairman.

    The last question I have deals with the whole purpose of regional development agencies. I'm of the view, shared by your Manitoba colleague, Mr. Reg Alcock, that these agencies should be eliminated, because the functions performed by these agencies would be better performed by other government departments or agencies.

    I think BDC would perform the functions on pages 9 to 11 very well. In terms of pages 12 and 13, specifically in regard to that, it says, “By the end of 2002-2005, we would like to have played an active part in the establishment and expansion of 10 research or technology transfer institutions.” I don't understand why that's done through regional development and not Industry Canada.

    My last specific question deals with the funding, of over $8 million, for the new Montreal Genomics and Proteomics Centre. We have an agency, Genome Canada, that does this. Why do we do funding for genomics through this agency as well as through Genome Canada? Why don't we just funnel it all through Genome Canada? It seems to make sense that it go through that one agency instead of two or three or four different agencies. I mean, researchers themselves say that it's much better to funnel this type of research though one department or agency.

[Translation]

    Mr. Claude Drouin: Thank you, Mr. Chairman.

    Why do you think the Americans use the Canada arm? Because it is more effective. Why are the economic development agencies there? Because they are effective in the field. They are somewhat of an extension to Industry Canada; its complement, in the field. I said earlier that we have 14 regional offices, a team of 373 people in Quebec who work on economic development in the field and are there to meet people's needs, to guide them and to do the follow-up.

    Since my appointment, on January 15^th, I have often heard that people really appreciate the professionalism of Canada's Economic Development Agency, because we don't simply provide people with tools, but we also do the follow-up and put the people in contact with various players to ensure the project is a success. That is what's important. I have not seen or read Mr. Alcock's statements, but based on my personal experience—the experience I acquired when I was a member of Parliament, and I have even more now, some might even say I have a bias, as Secretary of State— it has been proven over the years that our work and our level of expertise are important and have both contributed to excellent results. I am convinced that if you get the chance to come to Quebec, and I invite you to do so, Mr. Rajotte, you will see what kind of work the Economic Development Agency does in the field and, just like me, you will be convinced of the importance and relevance of what the agency does and of the need to keep it for many years to come. Thank you.

º  (1640)  

[English]

    The Chair: Thank you very much.

    Mr. Bagnell.

    Mr. Larry Bagnell (Yukon, Lib.): Merci, and congratulations, Mr. Minister.

    Having directed international trade programs for Canada, I know it's the responsibility of the international trade department. I'm curious to notice that your report mentions that you're helping...you're innovating companies to market internationally. I mention...the province of Quebec gets international trade as well.

    Is there good coordination of these extra players over and above Canada's international trade's primary role in helping Canadian companies export?

[Translation]

    Mr. Claude Drouin: The Economic Development Agency tries to encourage business development. That is our main goal, because with today's globalization, it is important for our businesses to diversify their markets, to be able to target new markets and to keep their staff. If we do not react to globalization, we will miss the boat. That is why the Agency works the way it does. I hope I understood your question. The Agency helps businesses find new export markets, using a direct sales approach, among others.

[English]

    Mr. Larry Bagnell: I just have to correct something said earlier that suggested that regional development was for the four regions--the west, the east, Ontario, and Quebec. Of course, that leaves out half of Canada, including my constituency of the north.

    We're looking at getting into this area. Obviously you've had many years of success, and created thousands of jobs, which of course gives more tax revenues, gets people off social assistance, and reduces the national debt because of all these tax revenues, etc.

    From your agency's experience, what are the most successful things you suggest we should incorporate in new regional development programming in the north?

[Translation]

    Mr. Claude Drouin: That is a very good question. I do not have any full-proof recipe. However, if you create territories, doesn't that automatically mean having a government in place that is tailored to meet regional needs? Perhaps that is the first step towards developing the Canadian North. I do not know whether their government and ours can study the situation afterwards. As my deputy minister reminds me, our partnership with local authorities means we have the tools to help develop the Canadian North.

    I think creating territories is a huge step towards economic development. I hope it will be worthwhile. We have people on-site, living with the locals, who are serious about developing the Canadian North.

[English]

    Mr. Larry Bagnell: Perhaps you would comment on your relationship with municipalities and any projects you have with municipalities that are related to economic development. Does Quebec still ask municipalities to donate to help their province, whereas in other provinces they actually provide a subsidy to municipalities for operations?

º  (1645)  

[Translation]

    Mr. Claude Drouin: I do not know if I fully understood your question. Are you talking about the Canada-Quebec Infrastructure Works Program? Since municipalities come under provincial jurisdiction, they must submit their requests to the Quebec government who then transmits them to us for review. Chapter M-30 of the Loi sur le ministère du Conseil exécutif du Québec states that the federal government cannot deal directly with municipalities. Under this legislation passed by the Quebec government, every application made by a municipality must be filed with the Quebec government, and after that we receive the application that the federal government classified as priorities 1 and 2. We review them and, if they meet our criteria, we can provide a subsidy under the Canada-Quebec Infrastructure Works Program. A protocol was signed with the Quebec government and a joint announcement made.

    Mr. Larry Bagnell: Do you have any projects for aboriginals?

    Mr. Claude Drouin: Yes, and I mentioned some of them. There is a budget, but I cannot remember how much, and there is a lot of focus on entrepreneurship among young aboriginals. The Economic Development Agency also targets aboriginal communities through its programs.

[English]

    The Chair: Thank you, Mr. Bagnell.

    Madame Girard-Bujold.

[Translation]

    Ms. Jocelyne Girard-Bujold: Thank you, Mr. Chairman.

    I would like to add to what Mr. Rajotte said. I think you are challenging the Official Languages Act with this program that you are carrying out in partnership with Heritage Canada. Did you know that a federal civil servant must be bilingual? There is even a bilingualism bonus. I wonder why you are investing money like that. There should be help from federal employees.

    Mr. Claude Drouin: There is no Canadian law that forces people to be bilingual.

    Ms. Jocelyne Girard-Bujold: Come on! What is the Official Languages Act about?

    Mr. Claude Drouin: You did not listen to my comment. There is no Canadian law that forces citizens to be bilingual. So if there are some who are not bilingual and who cannot be served in their language, as a country, it is our duty to serve them in their language. We must serve the two minorities, and that is what we are doing. That is what is expected.

    Ms. Jocelyne Girard-Bujold: That is not it, sir.

    Mr. Claude Drouin: Well, yes it is. If there is an anglophone minority in a region, and these people cannot get service in their own language, we can take the necessary steps to provide this service. Does this run counter to the act? No, on the contrary, it is very much in keeping with our act. We want to serve minority anglophone communities in Quebec in their language, and we hope that this will be done for French outside of Quebec. That is the objective of the Official Languages Act.

    Ms. Jocelyne Girard-Bujold: That is not what I mean.

[English]

    The Chair: I want to make sure I hear the question and the answer, so please....

[Translation]

    Ms. Jocelyne Girard-Bujold: I am sorry, Mr. Chairman, but I think we do not agree on this.

[English]

    Mr. Claude Drouin: Good point, Mr. Chair.

[Translation]

    Ms. Jocelyne Girard-Bujold: You say you want to provide service in English to the anglophone community located throughout Quebec. I think the officials who do so are supposed to be bilingual. So why are we spending additional money on this? All the services required are in place.

    Mr. Claude Drouin: Section 41 of the Official Languages Act states:

41. The Government of Canada is committed to enhancing the vitality of the English and French linguistic minority communities in Canada and supporting and assisting their development; and fostering the full recognition and use of both English and French in Canadian society.

    That is why we established this program.

º  (1650)  

    Ms. Jocelyne Girard-Bujold: I think this is money very badly...

    Mr. Claude Drouin: It creates jobs, Ms. Girard-Bujold.

    Ms. Jocelyne Girard-Bujold I would like to come back to the estimates. In your 2002-2003 estimates, the grants totalled $3,580 million, and the contributions totalled $454,511 million. Increasingly, your department is becoming a bank. In the past, grants amounted to 8% of the total, and now everything has become refundable contributions. Grants now account for only 0.8% of the budget. So your department is almost like a bank.

    Last year, your predecessor, Martin Cauchon, said that of the amounts you had loaned, $21 million had been paid back. How much do you expect to be repaid this year by the firms to which you have lent money?

    Mr. Claude Drouin: We are expecting approximately $20.5 million, but we must remember that the companies that pay back their loan were very happy to receive it. They were pleased that the Government of Canada provided them with assistance and they are pleased to pay us back. These companies used the money to create jobs and promote economic development. That has been the mission of Canada Economic Development since 1985, Ms. Girard-Bujold. Our mandate has not changed.

    Ms. Jocelyne Girard-Bujold: I have another question for you. Your budget also refers to $77 million that came from Human Resources Development Canada. This money was formerly used for the CJF, which has been abolished. Formerly, this money was used to create jobs; direct grants were provided for job creation. You have invested this money in a program that does not have the same objective at all. It has become a contribution that must be paid back. You did not go to Parliament to change the criteria of this program, which has been transferred to your agency. That means that you are making money with the money that had been earmarked for job creation.

    Mr. Claude Drouin: The money that was transferred from the Canada Jobs Fund had to be used for our regular programming. We provide repayable loans in the case of private companies.

    Second, we have to be careful, because with free trade, we now have to avoid grants. The Americans are doing everything they can to cause trouble for us, particularly in the case of softwood lumber. If we provide repayable contributions, we allow companies to expand, create new jobs and promote regional economic development without breaking any rule whatsoever. That is what is so good about this program. That is what the government said when it transferred this money from HRDC to our agency. We have to use it for our usual programming.

    Ms. Jocelyne Girard-Bujold The CJF program provided direct grants to workers, not to companies.

    Mr. Claude Drouin: It is important that you listen to the answer.

    Ms. Jocelyne Girard-Bujold: I am listening.

    Mr. Claude Drouin: When this was transferred, we were asked that the funds be adapted to Canada Economic Development's programming. It provides for repayment of a contribution when we deal with private firms. We should not forget that this is taxpayers's money. Some taxpayers think that the private sector can manage on its own. Our view is that sometimes it needs help, but in those cases, it should pay us back.

    If you were to do a survey, you would find that people appreciate the way we operate. It produces good results. We have created many jobs and we reinvest the money we get to create more jobs. This is all part of the economic development cycle. I find it very positive.

    Ms. Jocelyne Girard-Bujold I would like to turn to another question. How would you describe your directors at Canada Economic Development? Are they political staff or public servants?

    An hon. member: No, they do not work as...

    Ms. Jocelyne Girard-Bujold: Was I speaking to you? Two funds are missing in your area.

[English]

    The Chair: Let's keep it in order here.

[Translation]

    Mr. Claude Drouin: I find this a rather petty question. Our regional directors are public servants who work with other officials on our programming. I can assure you that they are not involved in politics. I have not seen any regional directors involved in any political activities. If they speak to us to give us advice on regional development, are they engaged in politics, or are they just doing their job?

    Ms. Jocelyne Girard-Bujold: Why is it then that they speak only to MPs who belong to the government party? They do not give us any information, and when we submit files to them, we have no right to see what is being done. It is strange that the others do have that right. I do not understand what is going on. I would like to see their job description and I would also like to have them testify before the Industry committee if they continue to work in this way.

    Mr. Claude Drouin: Are you telling me that provincial public servants answer liberal MLAs questions and provide them with all the information that they require?

    Ms. Jocelyne Girard-Bujold: I can say yes to that.

    Mr. Claude Drouin: That is something new. I've never seen that myself. I was in provincial politics for 11 years, and I never saw that.

    Ms. Jocelyne Girard-Bujold: I was too, Sir.

    Mr. Claude Drouin: In any case, we will give you the job description; and you will give me the job description for the provincial officials.

[English]

    The Chair: With that, we'll conclude this questioning and go to the other side.

    Mr. St. Denis.

    Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chair. Actually, I would like to give my time to my colleague, if that's okay?

    The Chair: Okay.

[Translation]

    Mr. Guy St-Julien Thank you, Mr. Chairman.

    Earlier, Minister, I spoke about the mining sector. Now I am going to speak about forestry, and softwood lumber. We know that we are facing the “GWB” tax, that is the “George “woods” Bush American Tax”. Will your department be involved in the effort to save the forest industry in Quebec in light of the commercial terrorism of the Americans and this new tax?

    Mr. Claude Drouin: That is an excellent question. In any case, that is a new definition of the tax, one I have not heard before. We are very concerned. We have made some recommendations and we are working on some files with Industry Canada, with our colleagues from International Trade and Natural Resources and with all the stakeholders who are affected in any way by this matter. This is not an easy issue. The 27% tax means that we will have to find new approaches, without providing subsidies, because I believe that is what they claim we do, wrongly, in my view. So we have to find some new approaches.

    I think the steps we have taken to date are a good initial indication of what the Government of Canada wants to do to assist the forestry sector. We are working on research and development, and increasing productivity, and, at the same time, we are trying to open up new markets. We have invested $5 million in China. Mr. Pettigrew was in India a few weeks ago, and, together with the industry, we are working a great deal with Europe, to try to open up some new markets and work on secondary and thirdly processing. I think the steps we are taking will be in keeping with the NAFTA and WTO rules and will enable our industry to get through this difficult and deplorable situation. Thank you.

º  (1655)  

[English]

    The Chair: Mr. Fitzpatrick.

    Mr. Brian Fitzpatrick: In providing financial assistance for something like the mill at Chandler, Quebec, I would presume it's fairly elementary that there would be a market assessment done before that assistance was granted. I would ask, sir, if you could table or undertake to provide me with a copy of the market assessment. Should that be a problem?

[Translation]

    Mr. Claude Drouin: We worked with the Department of Foreign Affairs and International Trade to ensure that the procedure was properly followed. Moreover, as I mentioned earlier in answering your first question, this is a process that does not exist here in Canada. It is a new process that has been imported, but one that allows us to create jobs here, using a new technology for high-quality paper, and I think that is very positive.

[English]

    Mr. Brian Fitzpatrick: But all I asked for is a report, that's all. I don't want to get into a debate over the merits of it.

    I take it this is a loan. What's the interest rate on the loan? It's a very simple question. Is it 6%, 7%, prime plus one? What is the interest rate? Can you provide that to me?

[Translation]

    Mr. Claude Drouin: We will look at the market study and we will get that for you. The interest rate is prime plus two.

[English]

    Mr. Brian Fitzpatrick: Okay. And could I have a copy of the repayment schedule for this loan?

    The Chair: I should remind the member that at any time a party or a member would like to have an update from the department, the department is willing to provide that--

    Mr. Brian Fitzpatrick: Yes, but it's on the record here, Mr. Chair. I find one of the problems in this town is to get information, and discovery is a big problem here.

    The Chair: I was just trying to be helpful, Mr. Fitzpatrick.

    Mr. Brian Fitzpatrick: I would like you to also provide me with a list of the firms engaged by the Economic Development Agency of Canada to monitor and assess your performance outcomes and such over the last two years.

[Translation]

    Mr. Claude Drouin: You think it takes time, except that in case of such relevant, specific questions, we should at least be given some advance notice so that we can provide the answers. However, we will get those answers for you, there's no problem there.

[English]

    The Chair: Do you have any more questions, Mr. Fitzpatrick?

    Mr. Brian Fitzpatrick: There's one other thing I'm curious about. A lot of this seems to be designed to provide small and medium-sized businesses with information. Now, in this day and age...and I think Marshall McLuhan predicted things quite well. We're in the global information age, where information is at our fingertips and accessible to everyone. The biggest problem is dealing with the information problem.

    It bothers me that businesses are preoccupied with trying to get information from government. If you're in a business, you want to find your market and your customers and sell your product and get on with things. Why would a business be preoccupied with trying to get information from the government?

»  (1700)  

[Translation]

    Mr. Claude Drouin: That is a good question. This type of information allows a company to get information about how things are done in other countries, if there're interested. That is one thing that may be done. Companies do not have full knowledge and expertise for all markets. We can refer them when the question does not apply to us directly. They often turn to us to find out whether we have any programs that meet their needs in areas such as expansion, technological development or increasing productivity. That is the first objective.

    However, because of our contacts and the knowledge of our officials, if companies have specific needs that do not come under our mandate, we can direct them to the right place. That is why many people turn to us. They know that our bureaucrats are competent and knowledgeable. I can tell you that from first-hand experience.

[English]

    The Chair: Thank you, Mr. Fitzpatrick.

    I believe you had one short question.

[Translation]

    Ms. Jocelyne Girard-Bujold: Some files that come under the Canada-Quebec Infrastructure Works program took you six to eight weeks to review before responding. I think you know about the case involving the new municipality of Saint-Jean-de-Matha. That was a project that came under part 3 of the program. This application was analyzed by Quebec. For 20 years now, Quebec has been doing studies on plants and fish. There are discharges into 500 residences in the spring, and into septic tanks, which then end up in Lac Noir. At the moment, you are asking again for some very complicated studies, even though studies have already been done. Birds are the only thing left, because they come under federal jurisdiction.

    Why are you asking for another, completely new study on plants, fish and birds. This study will cost $16,000 for this municipality with a small population. I would like to know whether you have looked at this matter closely and whether you can reduce the time, because the work must be done between August and October.

    Mr. Claude Drouin: As far as Saint-Jean-de-Matha or any other file under the infrastructure program, the problem we have is that the Quebec government does not recognize the federal Department of the Environment. Legislation was put forward by Mr. Lucien Bouchard when he was here, in the government. He said that it was an excellent piece of legislation. Today, the law is still good, and we have to work with it.

    The fact that the Quebec government does not transfer its data to us forces us to ask the municipalities—and this is where costs are involved for the municipalities—to provide us with information, and to work with a firm to ensure we comply with our environmental standards. I can tell you that in the case of all the files we have under the Canada-Quebec Infrastructure Works program, we have an excellent record; we respond very quickly and...

[English]

    The Chair: I will have to conclude now. Thanks for the short questions at the end.

    You can see, Minister, that the questions will be even harder next year. I want to thank you very much for coming today for your first appearance before the industry committee on a review of your department. I wish you well in your recovery, and I hope that everything comes out all right.

    I would like to conclude this meeting by thanking everybody.

    The meeting is adjourned.