INST Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Industry, Science and Technology

EVIDENCE

CONTENTS

Tuesday, May 6, 2003

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1540

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

The Honourable Allan Rock (Minister of Industry)

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1545

¹

1550

¹

1555

The Chair

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance)

Mr. Allan Rock

Mr. James Rajotte

Mr. Allan Rock

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1600

Mr. James Rajotte

Mr. Allan Rock

Mr. James Rajotte

Mr. Allan Rock

Mr. James Rajotte

Mr. Allan Rock

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1605

The Chair

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.)

Mr. Allan Rock

Mr. Dan McTeague

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1610

Mr. Allan Rock

Mr. Dan McTeague

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1615

Mr. Allan Rock

The Chair

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

Mr. Allan Rock

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1620

Mr. Paul Crête

Mr. Allan Rock

Mr. Paul Crête

Mr. Allan Rock

Mr. Paul Crête

The Chair

Mr. Paul Crête

Mr. Allan Rock

Mr. Paul Crête

Mr. Allan Rock

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1625

The Chair

Mr. Larry Bagnell (Yukon, Lib.)

Mr. Allan Rock

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1630

Mr. Larry Bagnell

Mr. Allan Rock

Mr. Larry Bagnell

Mr. Allan Rock

The Chair

Mr. Brian Masse (Windsor West, NDP)

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1635

Mr. Allan Rock

Mr. Brian Masse

Mr. Allan Rock

Mr. Brian Masse

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1640

Mr. Allan Rock

Mr. Brian Masse

Mr. Allan Rock

The Chair

Mr. Andy Savoy (Tobique—Mactaquac, Lib.)

Mr. Allan Rock

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1645

Mr. Andy Savoy

Mr. Allan Rock

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1650

The Chair

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

Mr. Allan Rock

Mrs. Cheryl Gallant

Mr. Allan Rock

Mrs. Cheryl Gallant

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1655

Mr. Allan Rock

Mrs. Cheryl Gallant

Mr. Allan Rock

The Chair

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

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1700

Mr. Allan Rock

Mr. Brent St. Denis

Mr. Allan Rock

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1705

Mr. Brent St. Denis

Mr. Allan Rock

The Chair

Ms. Jocelyne Girard-Bujold (Jonquière, BQ)

Mr. Allan Rock

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1710

Ms. Jocelyne Girard-Bujold

The Chair

Ms. Jocelyne Girard-Bujold

The Chair

Mme Jocelyne Girard-Bujold

Mr. Allan Rock

Ms. Jocelyne Girard-Bujold

»

1715

Mr. Allan Rock

The Chair

Mr. Andy Savoy

Mr. Allan Rock

»

1720

Mr. Andy Savoy

Mr. Allan Rock

The Chair

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

Mr. Allan Rock

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1725

The Chair

Mr. Brian Masse

Mr. James Rajotte

Mr. Paul Crête

Mr. Allan Rock

Mr. James Rajotte

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1730

The Chair

Mr. Allan Rock

The Chair

Mr. Allan Rock

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CANADA

Standing Committee on Industry, Science and Technology

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NUMBER 041

l

2nd SESSION

l

37th PARLIAMENT

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EVIDENCE

Tuesday, May 6, 2003

[Recorded by Electronic Apparatus]

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[English]

    The Chair (Mr. Walt Lastewka (St. Catharines, Lib.)): The order of the day is, pursuant to the order of reference of the House dated February 26, 2003, the main estimates for the fiscal year ending March 31, 2004, votes 1, 5, L10, L15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85, 90, 95, 100, 105, 110, 115, 120, 125, 130, and 135, under Industry.

    Having that now documented, I'd like to welcome the Minister of Industry, Mr. Allan Rock. Minister, I understand you have some opening remarks for around fifteen minutes, and then we'll go right to questions. Welcome back to the industry committee.

    The Honourable Allan Rock (Minister of Industry): Thank you, Mr. Chairman. I appreciate the opportunity to appear and to take part in this exchange with colleagues this afternoon.

    I also want to begin by introducing the people who are with me from Industry Canada. I've invited to join me today Andrei Sulzenko, who is a senior assistant deputy minister; Jennifer Benimadhu, who is the corporate comptroller; Johan Rudnick, who is the director of Operations, Industry Portfolio Office; Dawn Lumley-Myllari, who is the senior policy advisor for the Industry Portfolio Office; and Guy Bujold, who is assistant deputy minister for Policy and Communications of the Office of Infrastructure Canada.

    Before anything else, Mr. Chairman, I want to thank you and the members of the committee for the extraordinary work of this committee over the last year. You've taken on some extremely complicated and important issues, and you've provided the government with some excellent advice.

    I want to speak particularly about the report we received on April 28 with respect to foreign ownership in telecommunications infrastructure. That's not an easy issue, but the committee approached it directly, dealt squarely with the tough questions, and provided us with some very good advice.

    Some of my colleagues have been pressing me for a response, but I've made clear we're going to talk about that in caucus and in cabinet before we arrive at any conclusions we're going to make public. I must say, part of that is to demonstrate respect for the work of the committee. You went very deeply into these questions, and I don't think a superficial response is good enough. You deserve a considered response and that's exactly what we're going to give you, but I do want to thank you for the hard work you've done on that and on other issues.

[Translation]

    I would like to begin this afternoon by speaking about a topic particularly important to me, as Minister of Industry, which will give you an idea of the priorities we have in my department. The topic is innovation.

    You have looked at all aspects of innovation over the last two or three years, preparing and submitting detailed reports on the issue, which describe what Canada has to do to continue growing economically, gaining a competitive edge and ensuring that we maintain our standard of living and quality of life here in Canada.

[English]

    Based on many of the recommendations contained in the last two or three reports of the committee, we prepared and circulated last year two papers, one prepared by Industry Canada, based largely on your work, and the other prepared by Human Resources Development, dealing with innovation and learning.

    We did that in February of last year, and that sort of kicked off a 10- or 11-month process of discussion around the country in an effort to enlarge awareness of the urgency of making ours a more innovative economy. We tried to enlist the participation of every sector of the economy--universities and colleges, labour unions, the not-for-profit sector--and as well to identify concrete targets we could agree are appropriate in this country for the period between now and 2010.

[Translation]

    We invited some 10 million Canadians to join us in regional meetings held across the country between February and November 2002. We discussed the content of our reports at great length and met with each sector to find out if they believed that our targets were appropriate and realistic. The process ended in November in Toronto with a Canada-wide summit to discuss what we had learned as well as the final plan for the future, from now until 2010.

[English]

    Coming out of the national meeting in Toronto, we had a strategic plan with a number of important elements and concrete targets, and it boiled down into four basic messages. These you'll find familiar because these are the messages you've been sending us as a result of your innovation work.

    Number one, focus on research and development. As a country we can't afford to simply rely on a low dollar and a proximity to the American market in the context of North American free trade. We have to rely on more than just price differentials if we're going to succeed in the long run. Spend the time and spend the money to find the new process, the new product, the one no one has thought of before. Become globally competitive by offering something no one else can, and make it in such a way that no one else can compete with you. Find unique value, the competitive advantage, and make Canada a base for globally competitive companies through investing in research and development and coming up with the new product and the new service.

    That engages a whole bundle of recommendations, from increased government spending on R and D to private sector spending on R and D to an effort to move the fruits of R and D from the lab into the marketplace by providing venture capital, by developing receptor capacity, and by nurturing an entrepreneurial class, all those things that make it possible for us to not only develop great ideas but bring them to the marketplace.

    The second feature had to do with skills development.

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[Translation]

    We must ensure that Canada has the skills and knowledge we need to compete in the 21st century. Unfortunately, we have a demographic problem in Canada. By 2010, we will not be able to meet our own needs for skilled workers. We will have to have an immigration system that attracts skilled workers, people with specialized skills, from outside Canada.

[English]

    We need a strategy so we'll be in a position to do that.

    The third item was regulation. Government shouldn't be a drag on the entrepreneurial spirit, it should facilitate it by regulating in the public interest but in an efficient way so we protect the public interest without impeding investment and economic development.

    The last item was community development, to look to our communities, build upon their strengths, develop clusters where that is possible to do, invest in our strengths, build on what's already there, and make of Canada a series of globally competitive clusters in areas where we can truly take on the world.

    Now, Mr. Chairman, in the budget of February 18, the Government of Canada followed through on many of the priority items that came out of that process. We listened when people said we had to regulate more efficiently, and we created a smart regulation external advisory committee to look critically at the way we regulate and to make good suggestions as to how we could improve it.

    We listened when people said that burdensome capital taxes impede investment and economic development, so we announced that we're taking them off over a period of time, starting with small and medium-size businesses to give them the boost they need.

[Translation]

    We listened when people said we had to invest more in research and development, and we announced more money for granting councils.

    We also created a permanent system for helping universities with the indirect costs of research .

[English]

    We increased the budget for IRAP. We took a number of steps to follow through on the recommendations of the innovation strategy.

    My point, Mr. Chairman, is that this process is now in full stride. We have done our consultation. We have developed broad consensus throughout the economy. We've identified a strategy. We've targeted specific goals. We've taken the first measures. We're on our way to ensuring that Canada remains a country with a growing economy for the balance of this decade, a magnet for investment and talent, and a place where we can preserve our standard of living and our quality of life.

    We're indebted to the committee for framing this whole discussion through the hard work you did in your seminal reports.

[Translation]

    Innovation is a key priority for me and for the government. Clearly, it is the foundation of this government's economic policy.

    I would like to end by discussing some of my priorities in the Department. I would like to mention four sectoral priorities.

    First the auto sector.

[English]

    We cannot underestimate or understate the importance of the auto sector to our economy. One out of every seven Canadian jobs, one out of six jobs in Ontario, depends on the auto sector. We've become a world-class centre for auto production, with some of the most productive and the highest-quality assembly plants in the world. We should be very proud of what we've achieved in the last 30 to 40 years, Mr. Chairman, but we can't take it for granted and we have to build on it. It's a fiercely competitive world out there.

    Last year, 2002, we ranked third in the world for the level of investment compared to all other competitor countries. We ranked only behind the United States and China, with some $6.2 billion in investment in the auto sector. That was the creation of new lines in existing plants; it was a transformation of existing plants to create what they call flexible manufacturing so more than one vehicle can be produced in the same plant at the same time. It was the expansion of existing facilities.

    But none of it included the creation of new plants in greenfield locations. That continues to be a challenge we must address, and, Mr. Chairman, I want to talk to the committee about that and get the benefit of your views.

    In the auto sector I created something called the Canadian Automotive Partnership Council, a table to which we've invited the 19 different interests that are relevant to the auto sector from the federal government to provincial governments to parts manufacturers to dealers to assemblers to labour unions. They're all at the same table, talking all at the same time about the overall strategy for maintaining and building on the prosperity of the auto sector in this country. If you'd like to discuss that in more detail, I'd be delighted to do that.

    The second sectoral priority is shipbuilding. Unlike some others, I don't regard shipbuilding as an industry of the past. I regard it as an industry of the future for Canada. I think we have remarkable opportunities in this country to take generations of knowledge and skills and put them to work to the competitive advantage of the country. That means looking for niches in international markets. We cannot compete with some countries who lavishly subsidize their shipyards, but we can look at parts of the market we can be competitive in and put our skilled workforce to the task to our national advantage.

    I created something called the Shipbuilding and Industrial Marine Advisory Committee, which meets periodically to help me develop policies that are more likely to help us do that. Again, I'd be happy to talk to you about it.

    There are just two others. The first is life sciences and biotechnology.

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[Translation]

    Life sciences and biotechnology are extremely important to Canada. Last June, we hosted Bio 2002 in Toronto, and welcomed some 16,000 delegates from 45 countries who attended this annual conference. The event is usually held in the United States, and has only been held elsewhere twice; once in Vancouver in 1994 and last year in Toronto. The conference was a golden opportunity to show the world what a powerhouse Canada is in the area of life sciences and biotechnology.

[English]

    We should be very proud of what we've achieved. We have the second-largest concentration of biotech companies in the world. We have remarkable depth in our research capacity and our scientific skills in this area, and I believe it is for Canada one of the key sectors of the future.

    And last, Mr. Chairman, we have information and communication technology and telecommunications, where Canada has already developed a global reputation for excellence in innovation.

[Translation]

    We have to invest in telecommunications if we are to remain a world leader in this essential sector.

[English]

    Mr. Chairman, I think I have just about the best job in government--or maybe the second-best job in government, after chair of the industry committee. But you know, it's endlessly interesting and it's a wonderful opportunity to learn so much more about this wonderful country, its diverse economy, its great strengths, and its fantastic future.

    As you know, the industry portfolio is very vast but it's extremely important to Canadians, to their economic and indeed to their social future, because this is directly connected with the quality of social services in this country as well. We won't be able to enjoy them if we can't afford them. We'll only be able to afford them with an economy that's firing on all cylinders.

    So I'm delighted to have the chance to be here today to talk to my colleagues, to respond to questions, and to engage in discussions about so many fascinating topics that are relevant to my portfolio. I know we'll just touch the surface, but I look forward to the exchange and I thank you for the opportunity to be here this afternoon.

[Translation]

    Thank you, Mr. Chairman.

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[English]

    The Chair: Thank you, Mr. Minister.

    We'll lead off with eight minutes apiece. Mr. Rajotte.

    Mr. James Rajotte (Edmonton Southwest, Canadian Alliance): Thank you very much, Mr. Chairman, and thank you, Minister, for appearing before us today.

    You talked a lot about innovation and you talked about the consultation that went into that process. I want to talk about another process that was very important, certainly, to industry over the last year, and that's with respect to the ratification of the Kyoto Protocol. You're probably aware that this committee has undertaken a study of the implementation of the Kyoto Protocol, and I want to quote from a witness we heard, Richard Paton, who is the president and CEO of the Canadian Chemical Producers' Association. Regarding the process, he stated on December 10 that:

if this is the kind of process we can expect government to lead to make big decisions, it really isn't going to be very useful for the country or for Parliament. We have a serious problem. We end up at the end of this process with several provinces that are very unhappy, with industry feeling totally left out with no real consultation, with no real independent analysis of costs and options, and with no real plan.... That is really not a very good position for us to be in as a country.

    Now, you as a minister are a member of the ad hoc cabinet committee on climate change. Your ministry is going to be responsible for a lot of the money in this fund that's set up, the $1.7 billion fund--

    Mr. Allan Rock: I hope so.

    Mr. James Rajotte: --to dole out all sorts of money. It's going to have a very significant impact on the private sector. We're finding out in hearings on the Kyoto implementation that the government doesn't have any sort of plan whatsoever .

    You are the Minister of Industry. You're supposed to address the concerns of the industries, yet during the whole process you said absolutely nothing in public I can find except for two comments you made in Alberta expressing concern about the whole accord, during which time you were campaigning for the leadership in a province like Alberta, which had strong opposition to the accord.

    So I want to ask, Mr. Minister, and get you on the record, were you pleased with the Kyoto process? Did you hear any of the concerns from industry as you were going through this process? And why did you fail to address any of their concerns in public or express any of their concerns in the context of the treaty itself or the process itself?

    Mr. Allan Rock: You see, I regard the whole environmental movement, including the Kyoto Protocol, as an extraordinary opportunity for Canada, Mr. Chairman. We have a chance to lead the world in the development of environmental technologies, and I want to see us take that opportunity.

    When my colleague said my department would be responsible for a significant part of that $1.7 billion described in the budget, I said, I hope so. I hope we are, because I discussed it with my caucus and cabinet colleagues and we decided to invest a large part of that in research and development for environmental technologies.

    I believe Canada is already a world leader in technologies like fuel cells. I believe that the hydrogen economy is going to become a reality in our lifetime. I believe that Canada is in a position to demonstrate leadership in renewable energy, in technologies like carbon sequestration. I believe we can demonstrate the value of ethanol and other substitute fuels as interim measures, and I believe there's not only environmental advantage to be gained but there are also economic opportunities.

    So, Mr. Chairman, I will indeed be arguing that Industry Canada should be a prominent player in the strategy to implement our plan on Kyoto, and a large part of that is going to involve investing in developing environmental technologies.

    I was in Japan two weeks ago, and I took the opportunity to visit some of the installations in Japan that are involved in developing hydrogen fuel cells. I can tell you that Japan is catching up; Canada cannot sit on its lead.

    We have developed a worldwide reputation through the Ballard fuel cell breakthrough, and there are now dozens of Canadian companies involved in that technology. We're in a position to crack some of the tough issues like, how do you produce hydrogen in an environmentally sustainable way? How do you store it safely? How do you distribute it efficiently? Those are the tough questions that are going to be involved in the hydrogen economy.

    I believe we should be focusing on those questions now so 10 or 12 years from now we'll still be in a position to continue to lead the world in these new technologies. So I see Kyoto as a great opportunity both environmentally and economically.

º  (1600)  

    Mr. James Rajotte: With respect, Mr. Chairman, the question was, did you hear any concerns from any industries? From the answer, we can't determine whether they did or not. Obviously, we at the committee have heard concerns on this issue from almost every industry, including the auto industry, the oil and gas sector, and the chemical producers, and they were very disappointed that the Minister of Industry had failed to voice any of their concerns.

    I will move on to a second issue, and that is the issue you raised first, which is the question of foreign ownership in telecommunications. Frankly, it was you who asked the committee to study this issue. Your department was the first set of presenters. You asked all of us to push all our motions and agendas back so this could be studied.

    Surely, after all these hearings and all these companies appearing before the industry committee, you have an opinion on whether those recommendations are correct or not. They are very clear and bold recommendations, and I applaud the other side of the committee as well for making those sets of recommendations. But I think you should go on the record and state your opinion as to whether you agree with these or not.

    I will read the second recommendation:

That the Government of Canada prepare all necessary legislative changes to entirely remove the existing minimum Canadian ownership requirements, including the requirement of Canadian control, applicable to telecommunications common carriers.

    Now, do you agree with this recommendation, do you not agree, or do you not have an opinion as yet formed on this recommendation?

    Mr. Allan Rock: Just to pick up on the previous question as refined by my colleague, Mr. Chairman, indeed I did meet with a number of sectors on Kyoto prior to ratification, a dozen or more. The ones that spring to mind at the moment are the Energy Pipeline Association, the steel producers, and the auto sector. In fact, in the auto partnership council one of the six working groups is the Kyoto Working Group, for implementation in the auto sector. As a member of Parliament and a member of cabinet, I very carefully took into account the disparate views of the industries and the different sectors of the economy in Canada through the process of discussing Kyoto.

    However, if my friend confuses being active on the issue with being in the headlines of a daily newspaper, I'm afraid he's using the wrong criterion by which to judge.

    Coming to the other--

    Mr. James Rajotte: It would have been nice for you to say something about it.

    Mr. Allan Rock: --question about foreign ownership, Mr. Chairman, whether I personally have a view or an opinion of your recommendations is not the important issue here. What you're entitled to as a committee is a government response within 150 days, and that's exactly what you'll have, Mr. Chairman, you will have a government response.

    In caucus, Liberal members of Parliament will discuss the recommendations. We will reach consensus. In cabinet, Liberal members of cabinet will discuss the recommendations; we will reach consensus and make a decision, and then you shall have your response, and not, Mr. Rajotte, a moment sooner.

    Mr. James Rajotte: Well, then, let me follow up on this. I'll read another recommendation:

That the Government of Canada ensure that any changes made to the Canadian ownership and control requirements applicable to telecommunications common carriers be applied equally to broadcasting distribution undertakings.

    Perhaps you can enlighten me on the procedure in caucus and in cabinet on this. You are the minister who is going to present this. You're going to walk into the cabinet room and say, well, we have this report from the committee, we have these recommendations, but I don't really have an opinion on them, so let's decide what we're going to do about them. Do I understand that to be what you are saying?

    The fact is, issues like this require leadership. They require leadership from a Minister of Industry who is willing to put his name and his political capital on the line to ensure that these things are done. That is what the Minister of Industry should be doing. The Minister of Industry should not be saying, well, I don't really have an opinion; we'll see what my department says in 150 days, and then we'll see where we go from there.

    The committee didn't do that. The committee took this issue on, went full speed ahead, and made some bold, clear recommendations. The members deserve to have a clear answer from you as to whether you support these recommendations or not.

    Mr. Allan Rock: And the committee will have a response from the government within 150 days. Mr. Chairman, let me tell you, I'm fully aware that the committee made recommendations on these issues and addressed them very squarely, and they're not easy issues, as I've said. I think it's important that this committee, we as parliamentarians, and the government be prepared to look at these tough issues.

    You know, we've come a long way over the last 30 years when it comes to foreign ownership. There's been a real change in this country. We've come from the Foreign Investment Review Act, which served as an impediment to investment, through to Investment Canada, which tries to attract investment.

    I spoke earlier of the innovation agenda. One of our targeted measures before 2010, Mr. Chairman, is to double Canada's share of foreign direct investment bound for North America. We're not going to do that if we set up barriers to investment, so I think it's extremely important to look at the barriers that are in place and to ask the question of whether any of them represent protective measures for truly strategic interests. Is our sovereignty threatened if we remove that impediment? Is something intrinsic to our country imperiled if we don't have that restriction in place? That's really the exercise this committee went through, and I laud you for it.

    I think we sometimes confuse shareholdings with sovereignty, and we shouldn't because what we should do is protect the strategic interests of the country, our sovereign interests, and that's not always the same as shareholdings. You've taken on a tough question, and now it remains for us to form a government response, which we will do and provide within the time limited by Parliament.

º  (1605)  

    The Chair: Thank you, Mister Rajotte.

    Mr. McTeague.

    Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): Thank you, Chair, and thank you for being here today, Minister.

    It's your second time before this committee. We're certainly covering a lot of territory, as you rightly pointed out, and I compliment all members of this committee as well.

    Last year at this time, Minister, we accomplished our task and finished the report on changes to create a different model for the Competition Act in this country. It has been four or five months since your department responded--and I dare say, rather favourably--to many of the recommendations that were there. There have been concerns raised in the media and other places most specifically with respect to the need for administrative monetary penalties, a dual-track approach to conspiracy or collusion under section 45, ensuring the pricing provisions find their way into the abuse of dominance provisions.

    But I want to zero in on something I think we all as a committee agree with, and I can say with some certainty that there is a strong feeling in terms of some of the great work that's being done with new legislation dealing with deceptive telemarketing. This is notwithstanding the weak sentences that are being provided, which I think send the wrong message to those out there who are engaging in predation on people who are vulnerable, particularly seniors.

    Now, you're not the first minister this has been raised with, but I hope my question here will help. One of the concerns that has been raised and that continues to baffle this committee is the fact that we are short some $12 million in terms of effective enforcement from our Competition Bureau. It receives about $33 million but it needs about $45 million.

    By any measure, any investment we have put into the bureau has come back to the public treasury, not just in terms of the fines that are allocated but more importantly in terms of providing real protection for Canadians. I want to know what your position will be next time you come here and how successful you will be in ensuring that we have a watchdog with real teeth.

    Mr. Allan Rock: You're quite right. The Competition Bureau does extraordinary work with the budget it has but it does need more money. To signal my own concern, I've had my department reallocate $3 million from other purposes to the Competition Bureau; it now has $33 million but would have had $30 million but for that reallocation. Frankly, we can't reallocate any more without imperiling our ability to do our work in other areas.

    But Mr. Chairman, my colleague has a point, and the Competition Bureau should be properly funded to meet its important responsibilities. It's a point I've made myself on behalf of the Competition Bureau. I know the commissioner was here yesterday and he made reference to it, and I'll continue to advocate for the Competition Bureau being funded to appropriate levels.

    In the meantime I'll continue to reallocate, but I must say that we were not successful in getting the levels of funding we had hoped for in the last budget. We will continue that effort, and I'm continuing that effort in the interim as well as for the next budget, so we're going to work away.

    Mr. Dan McTeague: Minister, if there is anything you think you need from this committee to come to that by consensus, please ask. Notwithstanding the differences we have, we do agree on this point, and it's rare you see that kind of unanimity of purpose. I also commend you for the amount of effort you did put forward.

    On a very small but important area, dealing again with consumers, there is a lot of discussion today about the overall implications to the Canadian economy of the drawdown in energy reserves in Canada. It is such that in the next two to three years Canada may continue to face unusually and, for those of us who represent constituents, unacceptably high levels of cost for energy simply to keep ourselves warm, this in a country that is supposed to be blessed with an abundance of energy.

    I'm interested in getting your thoughts on that and also, perhaps at the same time in the same context, on the double whammy of the quickly rising Canadian dollar.

º  (1610)  

    Mr. Allan Rock: In terms of energy, you're right, North American reserves are unusually low at this point, which I think is one of the factors that contributed to the spike in prices over the winter. At the same time, I think that was one of a number of factors that converged, including the crisis in Venezuela with the dispute among workers, a particularly cold North American winter, and the uncertainty engendered by the conflict in Iraq, which was anticipated for some time before it actually occurred. Those factors served to drive up the cost of energy for North Americans in general.

    The state of the reserves is a subject of continuing concern. The Minister of Natural Resources, I know, is aware of that and, I'm sure, is developing strategies to deal with it. From my point of view with respect to the consumer, our interest is always in competition and making sure there's a marketplace where Canadians are getting access to goods and services at competitive prices.

    You heard the commissioner yesterday describe the work that's been done recently in the area of competition as it relates to oil prices, and you heard him express his conclusion. So at least from the point of view of the bureau, which is surveying the marketplace continuously, there doesn't seem to be any reason to suspect anti-competitive activity. Then, as I'm at pains to point out on a regular basis in question period, to go beyond that to the actual control of retail prices is something that's beyond the scope of the federal government's jurisdiction but of course is open for provincial governments to do.

    On your second question, which has to do with the dollar, we can all, I suppose, see in it what we'd like, whether the dollar's rise is a reflection of the spread of interest rates between Canada and the United States, whether it reflects a weakening American currency generally in world markets, or whether in fact it's a recognition by investors of the underlying strength of the Canadian economy. Whatever the reason may be, we have seen an extraordinary, relatively rapid rise in the value of the dollar.

    That of course presents both challenges and opportunities for Canadian business. The challenges are in the sense that, for those companies that do rely upon the price differential based on the currency's value, that advantage is diminished proportionately to the rise. At the same time, it's an opportunity for those companies who purchase machinery and equipment in foreign markets, so companies in Canada that may have been delaying or deferring the acquisition of such equipment to make themselves more competitive or productive might find it more attractive to do so now.

    Let me just close by saying, in any event, isn't the point of the innovation agenda to make this country one in which we don't rely upon currency valuation as a competitive advantage but rather rely for our prosperity on developing the most innovative and sought-after products and services? This is due to the ingenuity we bring to bear in their creation and due to the attractiveness they have on world markets because they're Canadian, because they're something different, because they have added value, because they are desirable.

    So long term, Mr. Chairman--long term--I want to see a Canadian economy that derives its prosperity and constant growth through innovation and not because of currency differentials.

    Mr. Dan McTeague: Thank you for that, Minister.

    I also wanted to compliment you on the position taken with respect to looking at new technologies under an innovative agenda.

    You touched on sequestration in terms of coal, and we heard from people from Natural Resources Canada about the possibilities that exist there. I want to ensure that your department does everything it can to contact and serve as a facilitator for members of Parliament, certainly the ones around this table, whose constituents may come forward with some great ideas. I refer to the new technologies, the new productivities, the new wonder, miracle energy sources, including hydrogen, for instance, as you've mentioned. Then there is the zero coal emission we have seen in the United States, many of the patents being held by Canadians who couldn't find jobs in Canada and who are doing that kind of productivity down south of the border.

    I want to ensure that you take this position very seriously, ensuring that individuals who have new ideas have ready and open access to the Canadian government to ensure not only that these new technologies meet the Kyoto commitments but that we also meet our commitment to Canadians to have an affordable energy infrastructure in this country.

º  (1615)  

    Mr. Allan Rock: Those ideas are going to come from one source, Mr. Chairman, and that's the imaginations and the creativity of Canadians. I know my colleague isn't suggesting that government is the only way those ideas are going to be brought to market; the private sector has a huge role in that too.

    The government is there to play its proper role in providing the proper assistance, and I think, for example, of Technology Partnerships Canada, an Industry Canada program. It has now invested well over $2 billion since its creation in 1996 to fund pre-competitive research and development in emerging sectors of the economy, including environmental technologies. When no one else would provide funding but funding would make all the difference in the development of the idea and bringing it to market to create Canadian jobs and opportunities, TPC has been there. It has maintained or created now over 43,000 jobs, leveraging $11 billion in private investment to make a real difference in the competitive marketplace.

    So I agree with my colleague; we will be there to do our proper part, and I look forward to working with him in that regard.

    The Chair: Monsieur Crête.

[Translation]

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

    Welcome to our committee, Minister. I congratulate you on your growing proficiency in French. Your progress is noticeable.

    However, I'm rather disappointed that you have not set as one of your priorities taking on the role of guardian of economic ethics, particular on the issue of gasoline prices. I' wish you would stop shifting the burden of retail pricing to the provinces. The federal government is responsible for maintaining genuine competition within this sector.

    Today, I received a copy of a letter from the Competition Commissioner in which he clearly states the following, and I quote: If the Minister so orders pursuant to section 10, the Commissioner will proceed to launch an investigation.

    I'd like to move beyond the legal aspects of the Competition Bureau, Minister. Let me give you an example. In his 2001 annual report, the President of Valero Energy Corporation, Mr. Bill Greehey, made it abundantly clear that he was not interested in increasing the number of refineries on line or their output. Specifically, he noted the following: “Since 1981, the number of refineries in the US has dropped from 315 to 155.” And he goes on to say this: “In the meantime, demand is up and no new refineries are coming on line”. He later adds that this is fine by him. Oil companies set prices based on what is happening in the sector in the United States.

    In light of these facts, are you prepared, given the authority conferred upon you, to launch an investigation into gas pricing, to delve further into the situation and ultimately, to resolve a major problem that has existed for the past 10 years? We've seen one investigation after another, and every single one has failed to convince the public that there wasn't some kind of problem with the industry. Shouldn't we making sure that collusion isn't an issue here, that information is more transparent and that, in this captive gas market, the public is getting value for its money?

    Mr. Allan Rock: Yesterday, Commissioner Konrad von Finckenstein shared his views with the committee. He made references to studies and investigations carried out by the Competition Bureau over the past several years, as well as to the recent study done by the Conference Board of Canada. He even presented to committee members an update of the Conference Board of Canada's study.

    According to the Commissioner, no one has yet demonstrated the need for the Competition Bureau to conduct another investigation into this matter. Mr. von Finckenstein observed that gas prices in recent months have been affected by factors other than competition.

º  (1620)  

    Mr. Paul Crête: Minister, during the first three months of 2003, company profits soared to unacceptably high levels. Shouldn't the government be taking steps to ensure that this doesn't happen again?

    Evidence such as this justifies our taking further action to prove collusion within the industry. Would you not agree that simple explanations no longer suffice where this sector is concerned? Would you not say a more detailed explanation is warranted or even a study, as Mr. von Finckenstein himself suggested yesterday?He suggested that an investigation be conducted by an independent body, not by the Conference Board, as oil companies are members of the organization, but by a truly independent body. Wouldn't this be one way to settle this debate once and for all and to avoid our having to rehash this question every six months or every year?

    Disproving charges of collusion is one thing. It's equally important to demonstrate transparency in this process, to show that there is a genuine market and that consumers are not prisoners of what is currently a captive market. Yesterday, someone used flowers as an example. When consumer buy gasoline, they are not buying flowers, but rather a product critical to the operation of their automobiles.

    In your capacity of economic ethics watchdog, does this not fall under your area of responsibility? You mentioned increasing the budget of the Commissioner's office, but shouldn't you start by showing the leadership on this matter, instead of merely tolerating the situation and hiding behind a technical explanation?

    Mr. Allan Rock: First of all, speaking as a consumer, when I fill up at the pump, I too am frustrated by gasoline retail prices. Sometimes, it's very difficult to understand the rationale behind the high prices. However, it's important to consider global events. During the first quarter of 2003, all countries experienced a similar situation because all where grappling with the same circumstances: the war in Iraq, whether real or anticipated, the crisis in Venezuela resulting in the shutdown of the country's oil industry, a bitterly cold winter and low reserve levels in North America. All of these circumstances combined to affect prices in the United States, Canada and Europe.

    Mr. Paul Crête: You're the Industry Minister. In all sectors of industry...

    Mr. Allan Rock: That's true. I can't deny it.

    Mr. Paul Crête: As Industry Minister, in all sectors of industry...

[English]

    The Chair: Mr. Crête, please let the minister finish.

[Translation]

    Mr. Paul Crête: You're the Industry Minister.

[English]

    Mr. Allan Rock: It's just a pause, Mr. Chairman. He can go ahead.

[Translation]

    I was simply pausing for a moment.

    Mr. Paul Crête: As Industry Minister, it's your responsibility to ensure... As it happens, the international price of crude oil is rising. At the same time, instead of accepting smaller profits to provide the best possible price, all companies have significantly curtailed their output at the refinery level. Such behaviour is unheard of in the case of other products on the market. As a rule, when the cost of raw materials increases, companies move to increase productivity in order to market their product at a more affordable cost.

    This anachronistic state of affairs should be reason enough for you to order an investigation. Refinery output is being controlled, as we can see from the evidence given, in particular by Mr. Greehey of Valero Energy. Companies are voluntarily choosing to increase their profits by shamelessly reducing output. Don't you think this is reason enough to order a truly independent inquiry by the Competition Bureau or by some other body? Isn't it your duty to call such an inquiry, so that we don't continue rehashing the issue for the next decade?

    Mr. Allan Rock: Over the past four or five years, and even over the past two decades, the Competition Bureau has carefully examined the situation and conducted some investigations. Each time, it's come to the conclusion that there is no evidence of anticompetitive pricing practices. Even yesterday, Mr. von Finckenstein made it abundantly clear that in his opinion, given the information available to him, there was no evidence to suggest anticompetitive pricing practices. I may indeed be the Industry Minister, but I have to rely on the advice of experts, that is on the advice of Mr. von Finckenstein and the Competition Bureau. Yesterday, he shared his views and conclusions with us. He stated his position very clearly.

    Mr. Paul Crête: He stated that...

º  (1625)  

[English]

    The Chair: I'm sorry, I must go on. I did give you a little bit of extra time for that short question.

    Mr. Bagnell.

    Mr. Larry Bagnell (Yukon, Lib.): I'm just carrying on with that topic--oh, and thank you for coming, Mr. Minister.

    Either I was at a different meeting or I read the data wrong, because my sense was that it had been studied quite a bit, that the price for crude fluctuated as the graphs handed out showed, and that there was no suspicion of a problem in all those studies.

    One of the problems we might have identified was the communication factor. Along the lines of what Mr. McTeague said earlier, if there were more money for the Competition Bureau, maybe we could get some of this information out to the public so they'd realize some of the good work the Competition Bureau does. The Competition Bureau said they didn't have a good budget for such information.

    My second comment before I ask my question is, I just want to commend your department on the national infrastructure manual the National Research Council does, something most people don't know about. It's a great, modern tool for municipalities and provinces building infrastructure.

    My question is related to the north. Of course, you know my riding is the Yukon, and I think it has the third highest unemployment rate in the country or in that order somewhere, and I'm wondering if you have any suggestions on how we can improve the economy in my neck of the woods.

    Mr. Allan Rock: I'd be very presumptuous if I pretended that I had the answers to that difficult question, but let me respond, Mr. Chairman, by referring to some of the things this very member sometimes raises in discussions with me and others about the north and his riding in particular.

    Infrastructure is a very grave need, whether it's roads or whether it's hospitals and schools. Infrastructure is necessary not just in the physical sense but also in the electronic sense. Access to high-speed broadband connections are crucial. They permit the delivery of health services at a distance so you can have radiologists, consultants, psychiatrists, and sometimes even surgeons in distant southern cities providing services in real time to patients who are in front of screens in the territories or in the northern parts of the provinces. Not only that, high-speed Internet access allows you to provide government services online to communities that are remote or distant from major centres.

    High-speed Internet access provides you with an opportunity to make continuous learning available in specialized areas when people change careers or prepare themselves in aspiring to a new job. Of course, Internet access on a high-speed basis encourages and permits small and medium-size business to use e-commerce to more efficiently manage the supply chain to deal with customers and market their products. Broadband is the key to so much opportunity, economic development, and prosperity for all of Canada, but particularly for rural and northern Canada.

    So my first point would be infrastructure, and the member has spoken with me numerous times, Mr. Chairman, about the need for infrastructure in the north and particularly in his riding, the Yukon. We're working very hard on that, and I hope to be in a position very soon to make some encouraging announcements about broadband in particular in the territories.

    Mr. Chairman, let me conclude because I know time is short. On this important question I come back to the essential elements of innovation, which are as relevant in the north as they are in any other part of this country. They are research and development; providing for an infrastructure of schools, colleges, and universities in and near the Yukon; developing the skills among the trained workers we're going to need for the future; making it a place where people want to invest because they feel they can get a return because the economy functions smoothly; looking at regulation to see if it can be improved; and finally, the competitive strengths and advantages in the territories.

    I think those are the keys to economic development. I know the territorial government is working very hard on all of those areas, and I'm proud to be their partner and to be working with this member in the same cause.

º  (1630)  

    Mr. Larry Bagnell: Thank you. You've answered my second question as well, and now I will go to my third question.

    We have a wonderful microbrewery that makes Chilkoot, Amber, and Arctic Red, beautiful beers. The microbreweries across the country have for the last two federal budgets put forward a proposal related to excise tax--I'm sure you've heard about it--to make them more competitive with their counterparts in the marketplace around the world. I realize it's a Finance issue, but I'm hoping you might be a champion in speaking with the Minister of Finance to move that forward, maybe for the next budget or any time it's possible.

    Mr. Allan Rock: I should be happy to put it on my list, Mr. Chair.

    Mr. Larry Bagnell: Thank you.

    Something that's related too is, we had a recent event where part of the country turned out to be not attractive for tourists in some people's opinion. I'm not sure how involved you are with the details, but I'm hoping that the Canadian Tourism Commission, which comes under your jurisdiction, will in such times make sure that the whole country is not affected as far as tourism goes and that the great and unaffected parts of a huge nation are still welcoming for tourists under any....

    Mr. Allan Rock: Mr. Chairman, as the health effects of the SARS crisis diminish--the disease is now under control, the numbers of cases are diminishing, and the worst of the episode is past--the attention is shifting more and more to the economic consequences of SARS. I believe the hardest hit sector of our economy as a result of this whole episode has been tourism and travel, and as the member points out, tourism is within the portfolio of Industry.

    Ten days ago I invited all provincial and territorial ministers of tourism to join me in a conference call on a Sunday afternoon to talk about what we could do together when the time was right to go into the field and aggressively market all of Canada, particularly Toronto and Ontario but all of Canada, post-SARS. We agreed among other things that we would meet in Toronto on May 9 and 10, which is this coming Friday and Saturday. I'm looking forward to that meeting.

    In the meantime we've had officials from all these various departments in the provinces and territories and federally working closely with the Canadian Tourism Commission to try to plot out a strategy. We need one that's aggressive, that's targeted, and that we can take out in the short term by pooling our resources and operating in a coordinated way to overcome what SARS has done to our tourist and travel industry.

    Yesterday I was in New York City to address some 230 editors and journalists from travel and trade publications throughout the United States who came to one place at the invitation of Canadian tourist operators to listen to what we had on offer this season throughout Canada. Our people were there, 130 of them from across Canada, from fairs and other tourist events and regions. It was a great opportunity for them to speak directly to the people who are influencing and making public opinion in the United States about tourist destinations.

    I took the opportunity to remind people Toronto is safe, Ontario and Canada are safe, we're open for business, we have the most attractive tourist destinations in the world, and we want the business from the United States and around the world.

    We're going to continue that effort, Mr. Chairman. We're going to be spending money, time, and effort working together to tell the world that there's no reason at all to resist the lure of Canadian tourist attractions and that businesses from all over the world ought to be able to start permitting their employees to come here for business purposes. Yukon and the territories are included in that message so we can restore the level of economic activity needed to keep those jobs.

    The Chair: Thank you, Mr. Bagnell.

    Mr. Masse.

    Mr. Brian Masse (Windsor West, NDP): Thank you, Mr. Chair, and thank you, Mr. Minister, for coming to committee today.

    Although I'm tempted to carry on with Mr. Bagnell's discussion about beer, I'm going to move us to auto policy.

    Some hon. members: Oh, oh!

    Mr. Brian Masse: I know that a year ago you had the summit in June and came away with some comments there. I'm glad to hear you note we shouldn't rely on currency differentials, but at the same time you've used that many times almost as a crutch with respect to attracting investment to compete with the United States, because they're providing literally hundreds of millions of dollars to attract businesses to new greenfield sites.

    One of the most recent ones that's happened is in Michigan, where they've secured the hybrid plant for alternative fuels that will probably produce all the DaimlerChrysler engines for the next decade. From discussions with them we understand they're not likely to open a plant over in Canada, although it depends on need, but even that is not promising.

    What I'd like to know is, what specific things can you show us and the Canadian public for the last year you've been working on auto? What things do we as a nation have as a position for auto policy?

    Right now NAFTA allows for this behaviour. I've asked the government to challenge the United States and their NAFTA dispute resolution, but that has not even been ventured into. What are we going to do? The situation has become, I think, quite desperate now that it's not just the South offering incentives, it's Michigan and Ohio. How do we deal with that situation? What specific things can you identify that we as Canada will provide to attract this industry to our country?

º  (1635)  

    Mr. Allan Rock: There's a good reason the major automobile manufacturers of the world have chosen to put so much of their business in Canada, in Ontario and Quebec. It's not because we're nice people, although we certainly are. It's not because of our beautiful scenery, although we certainly have it. It's because we make great cars. It's because we have a productive workforce. It's because we produce quality vehicles. It's because we have great parts manufacturers, and it's because our prices are competitive.

    This is because of the investment climate we've created, whether it's through public health care, which brings down the cost to the employer; whether it's through competitive tax regimes, which make it more attractive to invest here than in the United States of America; whether it's because of quality infrastructure, so they can rely on safe highways and easy access to the international border; or whether it's because they can manufacture here and still have access to a market of 400 million people south of the Canadian border.

    Yes, they invest here, and as I mentioned earlier, Canada was ranked third in the world last year. We got $2.11 billion dollars of investment in the auto sector, third only to United States and China.

    My friend makes reference to some southern states and some other jurisdictions that provide cash incentives to encourage investment. Mr. Chairman, I don't know if the individual American states who provide cash incentives can be challenged under international trade obligations; those incentives are made available at the state level, not the national level, and state actions are not covered by the international accords. But I can tell you that I believe Canada can compete and will compete successfully with all those jurisdictions because we offer a better investment climate.

    We're at the table constantly with potential investors. I mentioned my visit to Japan. On that visit I met with the chief operating officers and the chief executive officers and the chairs of four major auto manufacturers. I made the case for Canada. I described the investment environment. I talked about how strong our economy is and how productive and capable our workforce is. I talked about our competitive advantages and I talked about the fact that if those manufacturers invest additionally in Canada, Mr. Chairman, they will get better value for their dollar than in any other marketplace in the world.

    I believe that's true, and I believe we will win the competition with American states. I believe we will win the competition with other countries because of the advantages we offer.

    It's not easy, but you know, the Canadian Automotive Partnership Council is a single table with every disparate interest that's involved in the auto sector all devoted to that objective. We're working very hard in a very focused way on developing policies and approaches that will allow us to succeed, and I believe we will.

    Mr. Brian Masse: So after a year you have nothing on paper you can show the Canadian public about where we stand on an auto policy.

    Mr. Allan Rock: That's not true. If the member would look at the website of Industry Canada and Strategis--it's hotlinked to the Canadian Automotive Partnership Council--he will see on the website--and I'm surprised he hasn't looked at this already, given his apparent interest in the sector--the documents that come from the six working groups of the partnership council, including investment policy, including Kyoto, including infrastructure, and including fiscal and tax arrangements. I urge the member to look at the websites and get the information. That's where we're developing the policy for the auto sector. I'm surprised he's not aware of it.

    Mr. Brian Masse: I'm surprised the minister would come in front of the industry committee here and just refer us to websites as opposed to providing the specifics of where our position is. The fact of the matter is that right now greenfield plants are not developing in our country.

    I'll give an example. In Windsor we're looking for the new DaimlerChrysler plant, as you know. There's a recent report in the paper again that the federal and provincial governments are about $100 million away from what DaimlerChrysler sees as making something happen. You wouldn't have to go to Japan to see a greenfield site, it would actually be in our country.

    What are we doing specifically? What are we offering them? Have you actually entertained or provided some type of a package, and what specifics have they, then? Is it training, is it infrastructure? Can you give us an idea about how you categorize those investments and according to what particular features?

º  (1640)  

    Mr. Allan Rock: First of all, Mr. Chairman, we're interested in investment from all over the world--from Japan, from Germany, from the United States, from wherever we can get it. I'm just as happy to have auto manufacturers from Japan open new assembly plants in this country as I am to have manufacturers from any other jurisdiction do it. We are an equal opportunity acceptor when it comes to international investment.

    So far as DaimlerChrysler is concerned, we're always trying to attract investment from all the major car companies, and in doing that, Mr. Chairman, we rely upon a number of factors. We rely on the competitive advantages I've already referred to, which come from a productive, highly skilled workforce. We have some assembly plants that are the most productive in the world and have been recognized as such. It also derives from public health care, which reduces the cost of doing business; from tax reductions in the last ten years that make us highly competitive; and from infrastructure that enables them to get goods to the factory and then products to the market in a competitive time.

    And, we are always open to discussing anything, whether it's investments in infrastructure or research and development through instruments like Technology Partnerships Canada. I assure you, Mr. Chairman, when we go to the table with these countries, we go with our best case, identifying the advantages of investing in this country and doing everything possible to attract those investments.

    Mr. Brian Masse: Right now on the Natural Resources web page there are 17 or 19--I can't remember which one it is offhand--identified vehicles it encourages Canadians to purchase because supposedly they are environmentally the best for our country; they're pushing for Kyoto, and the tailpipe is so important on that issue. Three of those vehicles are produced in Canada and two of them are co-produced in the United States. Does it not concern you that the production of the environmentally improved tailpipe emission vehicles are not currently happening in our country?

    You noted--and I give you credit for it--that we're not getting greenfield plants right now. Greenfield plants will produce the new vehicles for us to meet our Kyoto commitments and also improve our economy, providing jobs so people can afford to replace those vehicles that are going to have to get off the road if we're going to improve our emission targets.

    Does it not concern you? What are you going to do specifically about that strategy, to identify and develop a greenfield process so we'll actually win those plants instead of losing them to other countries?

    Mr. Allan Rock: Well, I can save some time. I won't repeat what I've already said because I think I've answered the question as to what our plan is.

    As to environmentally friendly cars, as the member points out, three of them are produced here in Canada. If the question is whether I want to see more of them produced in Canada, the answer is obviously yes. The very reason I created the Canadian Automotive Partnership Council, Mr. Chairman, was to make sure we had all interests from the sector rowing in the same direction in a coordinated way to produce strategies that would allow us to attract additional investments in the sector.

    Last year was a very good year in that regard. We want to make this year even better, and we're working very hard for that result.

    The Chair: Thank you very much, Mr. Rock.

    Mr. Savoy.

    Mr. Andy Savoy (Tobique—Mactaquac, Lib.): Thank you very much, Mr. Chair, and thank you for coming, Mr. Minister.

    I'd like to touch briefly on the BRAND program, which is a broadband rollout in rural Canada. As you said earlier, it's a very critical initiative for rural Canada, and as chair of the rural caucus of course I'm fully supportive of it.

    For example, in my riding we have 14 municipalities, and many of them have consulting firms and small technology firms who presently can't get access to high-speed. We're looking at roughly $105 million over three years for an investment. By our calculation, we're probably looking at 30 years to roll out broadband at that rate.

    Can you shed some light on where we're going in terms of funding on BRAND? I know in New Brunswick, for example, we're looking at $30 million for the entire province, so it's a third of the entire moneys. Do you have any idea where we're going in funding on that issue?

    Mr. Allan Rock: Yes, Mr. Chairman, the member refers to something called BRAND, which is a program funded, as he says, to $105 million and which is intended to provide funding matched with money from the private sector or other sources to allow broadband high-speed Internet access to be put in place, we hope, in about 9,000 communities across the country.

    We made it available to communities last fall and the way it works is, we say, what we want you to do is to aggregate demand, work with neighbouring communities, work with hospitals and schools locally, work with a private sector partner who is prepared to do the actual delivery, and we will help you with the capital cost of putting the broadband in place.

    For communities that had difficulty putting a business plan together, we offered up to $30,000 to assist them in putting a business plan in place. We received hundreds of applications, many of which were put together with the $30,000 of assistance, and sometime in the early summer we hope to be in a position to announce which communities are going to get the money. It was never intended that this $105 million was going to meet the overall need in fulfilling our commitment to provide by 2005 access to high-speed Internet connections to every community in the country. It was only a small part of it.

    We're also going to use the infrastructure money to achieve that goal. Strategic infrastructure is a fund that's now at $4 billion, and we're going to use the strategic infrastructure fund to follow through on that commitment as well. It may be that BRAND will take us part of the way, but we'll fulfill the commitment overall with the additional sum from infrastructure, and we will be funding backbone segments that don't exist at the moment, whether in the north or in Newfoundland and Labrador.

    It may be that we'll extend BRAND more broadly to other communities, but one way or another we'll get there through the combination of those funds.

º  (1645)  

    Mr. Andy Savoy: Great. Thank you very much. It's good news.

    On the issue of innovation--and I applaud your goals, the strategic objectives we have. Having worked in the product development milieu, I see that a big issue in Atlantic Canada has been access to capital. I look at Atlantic Canada, really, as a microcosm for Canada in the international capital market. Atlantic Canada has difficulty accessing capital, especially in the high-risk areas.

    I'm going to go back to something Mr. Rajotte brought up. I look at innovation, connectiveness, and the marketplace, because this access to capital for telcos and cablecos affects connectiveness in terms of their being able to invest in those sectors in the marketplace, building a fair, efficient, competitive marketplace. Then there's investment, prudent conditions for investment in Canada. It seems that lifting these restrictions would help us meet many of those strategic objectives, that is, lifting the direct foreign ownership restrictions in telcos and cablecos in Canada.

    We have a perfect understanding of the access-to-capital problem in Atlantic Canada because we face it regularly in the product development life cycle and in our research and development. You know my opinion on this, that I don't think we can put up with hindrances or deterrents to accessing capital on the international market for telcos and cablecos. Do you believe generally that we have to try to lift as many of the hindrances or deterrents to access to capital as we can?

    Mr. Allan Rock: In relation to telecommunications, that's the very reason I asked the committee to take on that work, because I thought it was a question well worth examining. I am grateful for your report and we'll respond as quickly as we can.

    But speaking more generally, I must say that access to capital is one of the main impediments to our becoming the innovative economy we want to be. Last year we went around the country and spoke to 10,000 Canadians, attended 35 regional meetings, conducted 80 round table sectoral meetings with different parts of the economy, spoke to entrepreneurs, spoke to people who were trying to start a small business, and spoke to university researchers trying to bring an idea to the marketplace. Again and again and again we heard that a major impediment in this country is access to capital, capital at all stages--pre-seed, as it's called, seed development, mezzanine, at all stages--and until we overcome that problem, we're not going to be able to achieve our objectives.

    One of our targets is to achieve by 2010 the same access per capita to adventure capital in Canada that exists that year in the United States. Now, that's a pretty ambitious goal. One thing we want to do is try to encourage our pension funds to become more active in risk capital.

    I've met with some of the proprietors of our major pension funds to find out what the reason is that Canadian pension funds aren't as active as American ones are. I don't think there's any legislative impediment. I don't think there's any tax disadvantage. I don't think there's any structural or regulatory problem. I think in large part it's attitudinal, about our preparedness to take risks. It's about an openness to devoting a certain percentage of capital to developing markets. It's almost a mentality, one that I think has to change.

    We've taken some steps in the last 12 months, Mr. Chairman, in this regard. Last June I announced some $200 million would be made available to the Business Development Bank of Canada exclusively for a biotech venture capital fund to permit and encourage the development of new biotech companies throughout the country. In the budget on February 18 we announced another $190 million investment in BDC, which for the most part will be used for venture capital. We have been encouraging institutional investors to broaden their percentage of risk capital in the marketplace.

    A lot of this is part of the global effect of the March 2000 transition, the meltdown in the high-tech sector. The years 2001 and 2002 generally were not good internationally in terms of the availability of capital, especially in emerging sectors of the economy. I can say we're keenly aware of this challenge and we're doing everything we can to address it, and if this committee has additional ideas, we'll be most happy to hear them.

º  (1650)  

    The Chair: Thank you, Mr. Savoy.

    Ms. Gallant.

    Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian Alliance): Thank you, Mr. Chairman.

    Communities are suffering from the 27.9% duty imposed on Canadian softwood lumber exports to the United States, and for the record, sawmill owners do not want government handouts. They want the issue resolved.

    Now, assistance under the $100 million softwood industry and community economic adjustment initiative, as announced by the minister, is only triggered by a layoff announcement. As a consequence, here in Ontario and particularly eastern Ontario those mill owners who responded to the 27.9% tariff by making adjustments to their businesses, adjustments like implementing reduced hours or work sharing or harvesting unaffected species rather than laying people off their jobs, are being penalized.

    So this program has the effect of rewarding those Ontario mills that do lay off workers because of the way the assistance is triggered. Mill owners are telling me that this program encourages layoffs, and we'd like to know if you would change the requirement in this program, where assistance is only triggered by layoffs.

    Mr. Allan Rock: Well, rather than have me answer quickly, let me take that under advisement. I'll look at the situation and give you a response when I've had a chance to consider it and discuss it with officials.

    Mrs. Cheryl Gallant: Thank you very much.

    Now, another aspect of this, Minister, is that while your department has identified the northern Ontario region in this province as being the most severely impacted in the softwood lumber dispute, the Pembroke and Bancroft areas in eastern Ontario are also identified as having significant employment in logging and sawmill activities. Yet FedNor, which has been designated as the agency to deliver the softwood industry and community economic adjustment initiative, does not cover those areas.

    The problem is not just with the initiative but with all the FedNor programs. What we'd like to know is, will you now include those areas of eastern Ontario such as North Hastings, Haliburton County, and Renfrew County, which are currently outside FedNor, as eligible for FedNor programs, particularly when it comes to dealing with unemployment and economic growth?

    Mr. Allan Rock: One of the realities we've dealt with over the last number of years is that outside of the north, Ontario doesn't have a regional development agency. When regional development agencies were created, they were created in Atlantic Canada, in the west, in the northern part of Ontario, and in Quebec, but not in southern Ontario, and that anomaly has sometimes created difficulties. When in the past we've had programs that apply to the country generally and we've used development agencies to deliver them in other parts of the country, we've typically asked Industry Canada to deliver those programs directly in southern Ontario.

    Why don't I find out more about the specific case of the softwood lumber program in the communities you've referred to and give you a more detailed response in writing? I believe that delivery is done by Industry Canada in those communities, but are you saying that those communities are not included in the program as affected areas?

    Mrs. Cheryl Gallant: Or it may be through the community futures program.

    Part of the problem is that they're not really in southern Ontario. Parry Sound-Muskoka is farther south on the map than Renfrew Country, for example, yet Renfrew does not qualify for the northern programs even though it's farther north. It's also less populated and the average earnings are less than those of the people in Parry Sound-Muskoka. So when you are looking into that, if you would, please take a look at designating these regions as northern as well.

    I was really pleased to hear you talking about the hydrogen economy, and key to the economic production, making it economical, is our neutron technology. Now, today during question period I asked a question in regard to the ITER project, but it seemed as though not a single minister present in the House knew what I was talking about. That would lead me to believe that cabinet is not going to go forward with funding on this project.

    But there is another project cabinet has approved, and that's the Canadian Neutron Facility. That does have cabinet approval and it is key to making the hydrogen economy an economic goal reality. Can you confirm that we will indeed be going forward with this program?

    Also with the Canadian Neutron Facility there is the aspect of materials analysis. This is the creation of new materials so we can get to the next level with our innovation; that's what we're missing right now. This does fall under your purview with the NRC. Can you give me any assurances that we're finally going to get this project on the go?

º  (1655)  

    Mr. Allan Rock: Let me just deal briefly with ITER before I move to neutrons because ITER is very much on our minds. It's a major proposed investment. It's an international effort to produce a new fusion technology, as you know. It offers real opportunities for Canada but it also involves a major investment, and we have a decision to make as to whether that's the place we want to put our money in future years or whether there are other areas that will produce better returns for us.

    But don't think we're not focused on it; we are. It's been the subject of discussion in caucus, I can assure you, and it's been the subject of discussion in cabinet. The Minister of Natural Resources is leading that discussion, and he's now coming to a conclusion after having looked at the pros and cons and will be in a position to announce a decision when he's finished that process. But it's very much on our minds.

    The Canadian Neutron Facility is something I don't know enough about, frankly. I can't answer your question about the future investments in that facility at the moment, but again, I'll be happy to look into it, get information, and provide it to you when I can.

    The Minister of Natural Resources is also taking a lead role in that matter, so I'll consult with him and his officials and get you information as soon as I can.

    Mrs. Cheryl Gallant: We would be happy to have you in the riding at the Chalk River Laboratories and show you what neutron science is doing. Perhaps after seeing it you'll understand how important it is to the whole innovation agenda.

    Mr. Allan Rock: Thank you.

    The Chair: Your questions are also applicable to the secretary of state for science and technology. We'll make sure you ask those questions there also.

    We'll go now on to Mr. St. Denis.

    Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chair, and thank you, Mr. Minister, for being here with us today.

    At a very recent round table meeting with some of the chiefs from the first nations in my riding, the discussion came around to employment in our first nations communities. It soon became obvious to all of us--and we've heard it in our federal budgets and we've heard it in speeches made by you--that education is the key to prosperity and quality of life for our country. It has been in the past and will be in the future. I think the short answer out of our discussion with the chiefs was that not only for first nations but for communities right across the country, it's education.

    I'm just wondering, from a philosophical point of view, do you see a time where the provinces might be a little bit less possessive of the education portfolio and see their way clear to working more closely with the federal government? It could be in science or in the broad range of education, the humanities and liberal arts; it doesn't really matter. Do you see where they might be more willing to partner with the federal government, to tie in to our innovation agenda, and to see that for the future of this country we'll have to work together?

    I'm just wondering if you have any comments from a sort of philosophical point of view on education and federal-provincial cooperation.

»  (1700)  

    Mr. Allan Rock: I think the innovation agenda is one area where the federal, provincial, and territorial governments have worked extremely well together. Last June I held the first meeting of ministers of innovation across the country, ministers of industry, in Vancouver. We spent a day and a half agreeing with each other, which was a new experience for me at a federal-provincial meeting. There was absolute agreement on the substance of the innovation agenda, on the means we have to take to achieve it, and on the need to work very closely together. The development of skills and the education of our children and young people were clearly recognized as essential elements.

    I don't regard the provinces as acting exclusively when it comes to education. My experience as Minister of Industry has been that they're very open to coordinating their work in education with the federal role, particularly in science, technology, and research. In fact, the federal government has developed a sort of traditional role in financing post-secondary education through transfers and direct investment in research, whether through the granting councils, the creation of the chairs of excellence under the Canada Foundation for Innovation, or contributions to indirect costs of research by universities. More recently, in the budget this last February, there was the creation of graduate fellowships in master's and Ph.D. studies.

    In fact, since 1997 we've invested $11 billion in the research enterprise of the country, much of that going into colleges and universities. The provincial governments, I believe, have been acting consistently in that in preparing people for the colleges and universities through the primary and secondary education in their jurisdictions.

    I think it's been a good partnership in that respect. I know the provincial and territorial governments are very much aware of the importance of education if we're going to succeed in achieving our goals for prosperity, and I've been very happy with the professional relationship we've established.

    Mr. Brent St. Denis: I'm very encouraged to hear you say that. I think the Canadian public, just as much as they want to see and are seeing cooperation between the federal and provincial governments on health care, likewise want to see it in education, so I'm very encouraged by your comments.

    One of the ideas or concepts in the innovation strategy is this notion of technology clusters. I know, for example, the Sudbury community would like to see a mining technology centre there, and hopefully they'll be successful. It seems to me that when these are successful, you have industry working side by side with academia and you can get a synergy that is not as easily possible when people are spread apart.

    I'm just wondering if that notion is still a good idea in the wake of several conferences and whatnot and whether you still feel that is part of a reasonable strategy for the future of this country.

    Mr. Allan Rock: Mr. Chairman, among the goals we've identified for 2010 is that Canada will create 10 additional world-class clusters throughout our country. I think it's pretty well accepted now in modern economic theory that clusters offer an opportunity to accelerate economic growth through synergies. Where you have collocation of people who generate ideas in an area, people who provide raw materials, people who do the manufacturing, and people who do the development all working together in a coordinated way, you have a far more economically efficient and faster growing site than when you spread those same forces out over a larger area. The very fact of geographic proximity seems to accelerate economic growth.

    We have clusters in Canada, many of which are world-class. We have an auto cluster that includes many parts of Ontario. We have a financial services cluster in downtown Toronto. We have a biopharmaceutical cluster in Montreal. We have an increasing cluster in media and new media in Vancouver. We're developing clusters in nanotechnology in Alberta and with the Canadian Light Source and Synchrotron in Saskatchewan, and we could go on and on. We want to see those clusters grow and develop and we want to see additional clusters form.

    Government can't go out and create a cluster, Mr. Chairman. In our view, what government can do is observe that the elements of a cluster are emerging and then get behind it to permit it to grow through providing infrastructure, through working with local government to clear away the zoning regulations that are standing in the way, through making it easier to attract investment to build on what's there, and by opening new markets for the products that are produced.

    Clusters are an important part of our strategy. Whether it's Sudbury and mining, whether it's Ottawa and proteomics, whether it's Quebec City and nutraceuticals, or whether it's P.E.I. and marine biosciences, we are looking for opportunities to create more of them around Canada.

»  (1705)  

    Mr. Brent St. Denis: Thank you very much, Minister, for that.

    I know that there are various sector councils, advisory bodies, and agencies that provide advice on science to you in various ways, including through your secretary of state for science. I'm just wondering, some countries have what I might call in the vernacular a science czar, some person who reports either to Parliament or to the minister. It's a sort of office that pulls it all together and that can give guidance on directions for science from a big picture point of view to parliamentary committees, to Parliament, to the minister, and to cabinet.

    I support education in all areas, but we're talking about industry, science, and technology here today. I'm just wondering if the feedback is coming back from the science community in a sufficient way to assist you and the government.

    Mr. Allan Rock: Yes, one of the devices we use to great advantage is the Advisory Council on Science and Technology, a committee that advises the Prime Minister. I chair it, the secretary of state for science and technology vice-chairs, and we meet periodically to take advice, which we transmit to the Prime Minister. He meets every so often with the committee as well.

    This is a collection of people from across the country who are interested in science and technology matters, whether information and communication technology, life sciences, or even banking, providing capital for development in these areas. It's a disparate group, one that provides very good advice, and we think we're well served by it.

    Between the granting councils, who provide us with advice, Mr. Chairman, and of course the committee, I think we have what we need to put together a winning strategy for the nation.

    The Chair: Thank you very much.

    Madame Girard-Bujold, s'il vous plaît.

[Translation]

    Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Thank you, Mr. Chairman. Thank you, Minister. I have four very pointed questions for you.

    You're responsible for the Office of Infrastructure. Nine months ago, you visited my region. Nine months later, you have yet to sign the memorandum of understanding to widen Highway 175 to four lanes. I'm quite concerned, despite the commitment you made, because...

    Mr. Allan Rock:Highway 175?

    Ms. Jocelyne Girard-Bujold:Yes, Highway 175 that cuts through the Parc des Laurentides. You made a commitment to pay for half of the cost of this project, which has been pegged at $650 million. I'm looking at the Main Estimates for 2003-2004 and I don't see any money in the infrastructure budget for this initiative. All I see here is a $5 million allocation. Nine months after the fact, I'm concerned that the process may have stalled. What concerns me even more is the fact that this afternoon in the House, in response to a question from a Bloc member, the Prime Minister noted that with respect to aboriginal issues...Mr. Martin said he would not enforce the provisions of the bill on aboriginal self-government. I have to wonder about your Prime Minister's intentions.

    Therefore, can you tell me if you plan to sign this agreement any time soon, and if so, when exactly might that be? My constituents are concerned about this issue.

    Mr. Allan Rock: First of all, Mr. Chairman, we made a commitment in Chicoutimi last summer and we intend to follow through with it. Highway 175 is a priority for the government. This road is vitally important to the region's economy and to the safety of people travelling between Chicoutimi and Quebec City.

    In fact, Mr. Chairman, after last August's caucus meeting, I travelled Highway 175 between Chicoutimi and Quebec City and observed first-hand the importance of committing funds to this project. The trip was rather difficult because visibility was hampered by fog on that particular day.

    Ms. Jocelyne Girard-Bujold:Something else to worry about!

    Mr. Allan Rock:In any event, if the memorandum is not signed yet, it should be very shortly. Officials are likely ironing out the details, but I can assure you that our commitment is unwavering.

»  (1710)  

    Ms. Jocelyne Girard-Bujold: I'm happy to hear that, Minister.

    I have another question for you.

[English]

    The Chair: Madame Girard-Bujold, we'd like you to stick to the estimates as closely as you can; don't try to go too far away.

[Translation]

    Ms. Jocelyne Girard-Bujold: It concerns the estimates, Mr. Chairman.

[English]

    The Chair: I just wanted to give you a little bit of a warning.

[Translation]

    Mme Jocelyne Girard-Bujold: Specifically, it concerns Vote 100 in the estimates.

    My question is this: Vote 65 in the estimates -- see, I'm sticking to the estimates -- pertains to the Economic Development Agency of Canada for the Regions of Quebec. I note that total grants and contributions are down $50 million in this year's Estimates.

    People are leaving our regions in droves. Funding is being cut by $50 million. You stated that tackling demographic problems was a top priority of your department. My region is experiencing demographic problems.

    Funding is being cut by $10 million to Ontario and to the Maritimes as well. Quebec is not the only region targeted. As I see it, the Estimates do not reflect your priorities. I want to know why the Estimates call for a 14 per cent cut in the economic development budget for the regions.

    Mr. Allan Rock: Mr. Chairman, your committee is slated to hear from the Secretary of State for Economic Development Agencies and you'll have an opportunity at that time to ask him some specific questions.

    However, in response to the question, I would just like to say that the votes before the committee for consideration reflect the sums that in our opinion, must be invested to promote economic development in each of these regions, including Quebec. Our investments in Quebec will come not only through Economic Development Canada.

    We've already mentioned infrastructure. Quebec will receive approximately $620 million through our Strategic Infrastructure Fund, with money for Highway 175, as well as for Highway 30 in the Montreal area and Highway 185.

    The government is committed to these initiatives. We will be investing further in Quebec in partnership with the Government of Quebec.

    Ms. Jocelyne Girard-Bujold: Minister, with respect to strategic infrastructures, you're looking at the next 10 years. I'm talking about the situation here and now. I'm very concerned because my region is deeply affected by the softwood lumber dispute. Money is in short supply. You haven't yet initiated phase two of your plan for resolving this crisis.

    That worries me a great deal. We pay federal taxes and I don't feel that the regions are getting value for their tax dollars.

    There was only one automobile parts plant in Quebec and it has shut down. In my region, there are plans to open an aluminum parts processing plant over the next several years. I want you to realize that the regions are going through some technological changes. I also would have liked to see the budget somehow address this problem.

    Since the government has a sizeable surplus to play around with, this might have been the year to act, but I don't see any indication that the government intends to move in this direction. Perhaps we'll see some indication of this down the road, but our regions are facing problems right now. Now is the time to take action to address their problems.

»  (1715)  

    Mr. Allan Rock: On the softwood lumber issue, as you know, Mr. Chairman, the government has earmarked $110 million for assistance to communities and forestry workers, including workers in Quebec.

    I have personally visited some of the communities impacted by the softwood lumber crisis, communities such as Saint-Fulgence, Saint-Honoré, Saint-Thomas-Didyme and L'Assomption. All of these small communities have been very hard hit. I saw first-hand how communities were developing strategies to change their economies and take advantage of federal government funds to bring in other sources of economic development. I'm confident that these investments will bear fruit.

    The Honourable Member also broached the issue of investments in general in Quebec. With respect to the auto sector, Quebec's Industry Minister is a member of our auto sector partnership council. She has attended council meetings and I hope the government will continue to participate in this initiative so that Quebec can receive its share of investments in this sector.

    Whether funding is provided through EDC or the infrastructure fund, or through our strategy development partnership aimed at attracting investment from other sources, I realize full well that governments can work together closely and effectively to further the economic development of these communities in particular and of Quebec in general.

[English]

    The Chair: Thank you very much. I must move on.

    I'm going to split some time over here. Mr. Savoy, you can finish off your questioning, and then I'll go to Mr. Marcil for at least one question.

    Mr. Andy Savoy: Thank you very much, Mr. Chair. I appreciate the additional time.

    I'll go on a bit of a different slant. Since 9/11 we've had an agenda of security with the U.S., and I think the proper approach is in terms of looking not only at security but at commerce as well, looking at trade with the U.S and making sure that trade is not jeopardized in the wake of 9/11. What has Industry Canada been involved in to that end, in terms of potentially facilitating commerce with the U.S. at the borders--just from Industry Canada's perspective--something so critical to the future of our trade and investment with the U.S.? We realize where we're coming from on the security front, but in facilitating commerce, what initiatives have come out of Industry Canada?

    Mr. Allan Rock: Let me mention two in particular, Mr. Chairman. The first one is border infrastructure, which is intended to solve some of the bricks and mortar or concrete and asphalt issues that come from border crossings.

    As you know, my colleague the Minister of Finance has been negotiating with the American government the issues on smart border access and how to use technology for processes to get goods and people across the border efficiently. For border infrastructure we've set aside $600 million to address the actual concrete--if you'll forgive the pun--issues of getting people across the border.

    How can we move the trucks and traffic across the Windsor-Detroit gateway more efficiently, with less conflict with the communities in Windsor, to satisfy the demanding requirements of just-in-time deliveries in production facilities, whether it's in automobiles or in some other sector of the economy? How can we deal with moving forest products across the border between B.C. and Washington and between New Brunswick and Maine? We have been working hard with members of caucus, regional ministers, provincial governments, and the private sector to use that $600 million to advantage in clearing away impediments to the smooth and efficient traffic across the border. It's one of the most important issues our economy faces.

    We're very close to agreement at the Windsor-Detroit crossing, I believe. We have also announced some $90 million in British Columbia for the crossing at Douglas to improve the road access there. We've also come to an agreement for about four or five other border crossings with provincial governments and sometimes with the private sector to make improvements. That's number one.

    The second thing is, while my colleague Minister Pettigrew is responsible for selling Canada's goods abroad, my responsibilities include attracting investment from abroad to Canada, so I take opportunities outside the country to make the case for Canada and for investing here.

    I mentioned the visit to Japan, where we met particularly with the auto sector, but we also met with people involved in the hydrogen economy. We met with a major gas company that is transforming gas, taking the hydrogen and using it for stationary fuel cells to cogenerate heat and power for houses. There are some Canadian partners in that project; we want to partner with them in using that technology and have them bring investment to Canada to advance it here.

    I was in southern California last June working with our consul general in Los Angeles, dealing with biotech companies and asking and looking for partnerships in research in the bio sector, and some of those efforts have borne fruit.

    I was in London after the budget, dealing with the financial sector in England and in the European Union, carrying the case for Canada with respect to the extraordinary investment climate we've created and asking people to take a second look at Canada as an investment destination.

    I was at the Farnborough International Airshow last year and I'll be at the air show at Le Bourget in Paris in June, again trying to increase the profile of our own aerospace sector but also to attract additional investment into Canada in that regard.

    In terms of trade with the United States or others, we've been very active and aggressive in trying to open new markets, trying to make people aware of the great advantages of investing in this country, and taking our case around the world.

»  (1720)  

    Mr. Andy Savoy: When you are talking investment, when you're trying to attract investment to Canada in specific sectors and you are sitting with 16 or 17 other OECD countries, do you find it's a deterrent that we have foreign ownership restrictions in the telcos and cablecos, or does that come up?

    Mr. Allan Rock: You say “deterrent”, but countries around the world have their own ways of protecting their own strategic interests, and often they involve restrictions in shareholdings in various sectors. I think the important thing is to constantly ask critically whether those restrictions are justified in terms of current circumstances.

    Always make sure your restrictions reflect your strategic interests, and that's the very exercise you embarked on with your study in telecom. That's why we so much appreciated your report. We'll consider it very carefully and provide our response as soon as possible.

    The Chair: Mr. Marcil, as you know, we're splitting time, and I'm giving you a chance as parliamentary secretary to ask one question.

[Translation]

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

    Minister, in your introduction, you made only a passing reference to one particular sector of significant importance to Canada, especially to Quebec and to the Maritimes. That sector is marine transportation and shipbuilding. What is the future outlook for this sector in Canada?

    Mr. Allan Rock: The national outlook seems quite promising, as far as this sector is concerned. As I mentioned already, I consider the marine transportation sector to be the sector of the future. Some rather significant global opportunities present themselves to Canada and our shipyards are competitive as far as certain sectors and products are concerned. We can't compete with some countries where shipyards are heavily subsidized by governments. However, we have demonstrated, whether on the West Coast or in Atlantic Canada, that we can produce and deliver very attractive and competitive goods and services.

    Several months ago, I set up an advisory council for this sector. Another meeting is scheduled for June in St. John's, Newfoundland at which time we will discuss at further length a Canada-wide strategy. We will consider ways of improving our current strategy to attract more investments and secure additional contracts. I'm optimistic. In my opinion, this sector will experience optimum growth and if we implement our strategy wisely and prudently, we will be successful.

»  (1725)  

[English]

    The Chair: Because we are running out of time, Mr. Masse, I wonder if you could ask your question, then Mr. Rajotte is going to ask a question, then Mr. Crête, and then the minister can finish up with his remarks. Make it short, please.

    Mr. Brian Masse: Thank you, Mr. Chair.

    I'd like the minister to provide assurances that if there is going to be a deal on the Windsor-Detroit border, the municipalities will be consulted in that area. There's great concern about the integrity of the process that has happened over the last 223 days. Will the minister give his word, as the Minister of Transport did yesterday, that the final decision will involve the municipalities and will as well address the problem that the short-term solutions being proposed could potentially bring the next 100 years of traffic growth within two kilometres along the Detroit River, of three crossings in particular? Can he assure us that's not going to happen but that good urban planning with a good, sound strategy and wider investment is going to happen at the end of the day? If I could get the minister's assurance that local people will be involved, I'd appreciate it.

    Mr. James Rajotte: Mr. Minister, I have two questions, and one you can answer later; it's fairly specific, regarding Technology Partnerships Canada. You have stated on a number of occasions that this has created 35,000 jobs, and this is the one I'd like answered specifically at a later date, which is, where do you get these figures? Which companies have created how many jobs, and when were they created? If you could provide that to the committee, I'd be very appreciative of that.

    And second, I'd just like to know why it is you feel taxpayers should not be able to see how much companies are repaying under the Technology Partnerships Program. Do you think it is indeed right that taxpayers, whose money is being used to fund these companies, do not in fact see how much is being repaid--if any at all?

[Translation]

    Mr. Paul Crête: Mr. Chairman, I'd like to the Minister to confirm the amount that will be invested in Highway 185. Earlier, he stated that funding would probably be forthcoming pursuant to the Strategic Highway Infrastructure Program. I'm curious as to the amount of the federal investment in Highway 185 and I invite the Minister to travel for himself the highway between Rivière-du-Loup and Edmundston. That would be quite an adventure.

    Mr. Allan Rock: It's a hodge-podge. With respect to Highway 175, I can't tell you the exact amount, but I will verify the numbers with my officials and get back to you in the next few days. However, we have committed money to this project.

[English]

    On the question asked by Mr. Rajotte, the figure I've been using is 35,000 but it's out of date. I'm advised by Technology Partnerships Canada that given the investments made over the last year, it's actually 43,000 jobs that have been created or maintained as a result of these investments. I'll be happy to provide the breakdown as to how the officials came to that number. We'll give you all the detailed information we can.

    On the question of taxpayers seeing what's repaid, my fundamental philosophy is that we should tell taxpayers everything except if there's some privacy concern or some competitive concern. We do report, as you know, in the annual reports we file with Parliament, Mr. Chairman, the total amounts repaid through TPC through royalties or some other form of repayment.

    That is accelerating very rapidly. It doubled last year compared to the year before. It's going to double again this year compared to last year, and for the next three years we expect it to double every year. We're really on a dramatic upward curve as these long-term investments, which started in 1996, begin to bear fruit.

    We will provide that information about the jobs. I think taxpayers should get all the information we can give them. I believe there may be some competitive concerns if we report what's specifically repaid company by company; I think that's the concern the officials have.

    Mr. James Rajotte: Then why does the company take the money in the first place if they're concerned that somehow, in announcing how much they're going to repay, this is going to put them at a competitive disadvantage? The fact is, they're accepting taxpayer moneys, and the fact is--and I think you accept this as well--taxpayers have a right to know whether the money is being repaid or not. It's as simple as that.

»  (1730)  

    The Chair: Maybe I can intervene here. I've told people from Technology Partnerships that when they're ready, we should have them come to the meeting and explain all that. Mr. Minister, I think that is something we will be putting on our agenda in June for the fall.

    Mr. Allan Rock: I don't want to leave the impression taxpayers aren't told what money is being repaid; they certainly are. It's when it's broken down company by company that's the issue, and I think there may be competitive concerns there.

    On the question asked by my colleague from Windsor, Mr. Chairman, there has been consultation with interested parties and there will continue to be consultation, but let's be clear. Resolving the issue of the Windsor-Detroit gateway is an issue that bears upon the national economy. It's a national question. We have to address it. We have to solve it.

    At the same time, we have to accommodate the concerns of the communities in and around Windsor. It's for that reason I've met more than once with the mayors of those communities. We have consulted and we'll continue to consult as we always do.

    The Chair: Thank you very much. Thank you, Minister, for being with us today and answering our questions.

    As you know, we're a very busy committee, and we have many more questions. We'll wait for the secretaries of state to come forward to explain some of the details that were kind of overlapped here today.

    Thank you very much, ladies and gentlemen. This meeting is adjourned.

    Mr. Allan Rock: Thank you, Mr. Chairman.