INST Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Industry, Science and Technology

EVIDENCE

CONTENTS

Wednesday, May 14, 2003

¹

1530

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

Hon. Stephen Owen (Secretary of State, Western Economic Diversification)

¹

1535

¹

1540

¹

1545

The Chair

Hon. Stephen Owen

The Chair

Mr. James Rajotte (Edmonton Southwest, Canadian Alliance)

The Chair

Mr. Stephen Owen

¹

1550

Mr. James Rajotte

¹

1555

Mr. Stephen Owen

The Chair

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

Mr. Stephen Owen

Mr. Brent St. Denis

Mr. Stephen Owen

º

1600

Mr. Brent St. Denis

Mr. Stephen Owen

º

1605

The Chair

Mr. Brian Fitzpatrick (Prince Albert, Canadian Alliance)

Mr. Stephen Owen

Mr. Brian Fitzpatrick

º

1610

Mr. Stephen Owen

Mr. Brian Fitzpatrick

Mr. Stephen Owen

Mr. Brian Fitzpatrick

º

1615

Mr. Stephen Owen

The Chair

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

º

1620

Mr. Stephen Owen

The Chair

Mr. Serge Marcil

Mr. Stephen Owen

The Chair

Mr. James Rajotte

º

1625

Mr. Serge Marcil

Mr. James Rajotte

Mr. Stephen Owen

Mr. James Rajotte

Mr. Stephen Owen

Mr. James Rajotte

º

1630

Mr. Stephen Owen

º

1635

The Chair

Mr. Brent St. Denis

Mr. Stephen Owen

º

1640

Mr. Brent St. Denis

Mr. Stephen Owen

Mr. Brent St. Denis

The Chair

Mr. Brian Fitzpatrick

º

1645

Mr. Stephen Owen

Mr. Brian Fitzpatrick

Mr. Stephen Owen

Mr. Brian Fitzpatrick

Mr. Stephen Owen

Mr. Brian Fitzpatrick

Mr. Stephen Owen

Mr. Brian Fitzpatrick

Mr. Stephen Owen

º

1650

Mr. Brian Fitzpatrick

Mr. Stephen Owen

Mr. Brian Fitzpatrick

Mr. Stephen Owen

Mr. Brian Fitzpatrick

Mr. Stephen Owen

Mr. Brian Fitzpatrick

The Chair

Mr. Brent St. Denis

Mr. Stephen Owen

º

1655

The Chair

Mr. Stephen Owen

The Chair

Mr. Stephen Owen

The Chair

Mr. Stephen Owen

»

1700

The Chair

Mr. Stephen Owen

The Chair

The Chair

Mr. Serge Marcil

»

1705

The Chair

Mr. James Rajotte

The Chair

Mr. Serge Marcil

The Chair

Mr. Serge Marcil

The Chair

Mr. James Rajotte

The Chair

Mr. James Rajotte

The Chair

Mr. Brian Fitzpatrick

Mr. James Rajotte

The Chair

Mr. Brian Fitzpatrick

The Chair

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CANADA

Standing Committee on Industry, Science and Technology

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NUMBER 045

l

2nd SESSION

l

37th PARLIAMENT

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EVIDENCE

Wednesday, May 14, 2003

[Recorded by Electronic Apparatus]

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[English]

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

    Pursuant to the order of reference of the House dated February 26, 2003, today we are considering the main estimates for the fiscal year ending March 31, 2004, votes 130 and 135 under Industry.

    Today we have with us the Hon. Stephen Owen, Secretary of State, Western Economic Diversification. It's also a pleasure to have with us Oryssia Lennie, Deputy Minister, Western Economic Diversification.

    I must say, Minister, that I'm glad to see you here without your neck brace and that you're in full physical fitness to answer the tough questions of the day.

    We ask you to lead off for 10 minutes, and then I will take it from there.

    Mr. Owen.

    Hon. Stephen Owen (Secretary of State, Western Economic Diversification): Thank you, Mr. Chair.

    I welcome the opportunity to update this committee on the achievements of Western Economic Diversification Canada over the past 12 months and to describe how the department plans to address the emerging challenges and opportunities across the west in the year ahead.

    For the past 16 years Western Economic Diversification, or WD, has worked to promote the development and diversification of the western Canadian economy, to coordinate federal economic activities in the west, and to reflect western Canadian interests in the national decision-making.

    However, the fact that our mandate has remained the same does not mean that our program objectives, priorities, or delivery structures have remained static. For instance, Mr. Chair and honourable members, since approximately 1995 the department has not been involved in providing direct grants to individual corporations. Sometimes this is mistakenly thought to be a primary function of Western Economic Diversification. In fact, we do not make grants to individual companies. There are some student programs where we share in funding salaries with corporations for first jobs in science and technology and likewise, but we do not make grants as such to the corporations.

    WD has experienced continuous and constant evolution, and 2002-03 was no exception. The softwood lumber dispute and the Kyoto agreement are just two examples of changing conditions in western Canada. WD is leading the community adjustment effort in communities affected by the softwood dispute and will play an integral role in the implementation of Canada's climate change strategy, allowing western Canadians to fully realize the economic potential that exists in the ever growing business of clean technologies.

    Let me just say, Mr. Chairman and colleagues, that the opportunities on the economic side of the climate change agenda are extraordinary. Simply reducing energy costs for corporations is a major benefit to our economy. The new environmental technologies, which are being developed and supported by WD in many areas of the west, will allow us further export industries, rather than importing environmental technologies from other countries to meet the ever rising standards worldwide. There are also the health cost savings to the Canadian economy and the Canadian people by reducing pollution levels from greenhouse gases and other emissions.

    The department's operations have been realigned under three central organizing principles, and this is over the last year--innovation, entrepreneurship, and sustainable communities--directions that are consistent with the government's overall objectives for economic development and growth. Although the three strategic directions can be described individually, as I will do in a moment, in reality they are closely linked. Innovation is often the result of entrepreneurial activities that drive the emergence of new sources of long-term employment and wealth. That in turn enhances the sustainability of local communities and the quality of life for the residents. Many of WD's initiatives are designed to address several priorities at once.

    In the new economy knowledge is as important as natural resources, physical capital, and financial capital as a source of economic growth. Knowledge and innovation give economies their competitive edge in the global marketplace. As a result, innovation is the first of WD's three organizing principles. Within the area of innovation, WD works to enhance the rate of technology development, commercialization, and adaptation; improve the western knowledge infrastructure and capacity; and increase growth and job creation in knowledge-based sectors. We are the key to implementing Canada's Innovation Strategy in the west.

    Mr. Chairman and members, this is not simply a matter of the new high tech economy. Biotechnology, new information and communications technology, and genetics are serving to high tech the traditional resourced-based economies of the west, and this is extremely important, whether it's increasing yields or stopping pests in agriculture, promoting fish stock protection and enhancement, or increasing the rate of growth and return of our forests.

    WD has supported pivotal projects that are putting western Canadians at the forefront of technologies and applications, which will substantially improve the region's position as an international leader in several leading-edge industries. These new technologies hold the potential to substantially broaden the economic landscape of western Canada and to create better, more highly paid jobs for western Canadians. We have invested in a wide range of emerging technologies, including nanotechnology, wireless, virtual reality, genomics, and biotechnology.

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    By being there on the ground from the beginning, we are creating more than just economic benefits. Innovation is also a key driver of federal priorities, such as learning, health, and climate change. For example, we have supported the development of British Columbia's fuel cell industry from the earliest stages. Under the Canada-BC Western Economic Partnership Agreement, we provided substantial funding for initiatives related to fuel cell development, including the creation of Fuel Cells Canada and demonstration projects to test the next generation of fuel cell bus engines. As the world searches for cleaner power sources, the potential world market for fuel cell technology is enormous, an estimated $46 billion by 2011. With 15,000 jobs created for every billion in demand, the potential economic benefits are even more significant. We intend to do all we can to help ensure that Canada will be a leader in fuel cell development. At the same time we will be contributing to Canada's ability to meet our commitments under the Kyoto agreement and to a healthier environment for future generations of Canadians.

    WD is also working with leading members of the western Canadian health research community to increase the economic benefits resulting from western Canada's growing capacity in health research and health technologies. Mr. Chair, this is particularly important given that health services are the number one issue for Canadians and that our geographic challenges in this country create perhaps the greatest challenges for a health care system in the world. We have helped develop through innovation, expenditures, and investments, for instance, wearable wireless physiological monitors, where people can be constantly monitored at a distance for their life signs. Through Telehealth we have diagnostics over a distance. Even surgery is now being performed and enhanced through robotics and ICT wireless adaptations in western Canada.

    We support genomic research at the BC Cancer Agency Genome Sciences Centre in Vancouver, for example, to help advance Canadian scientific expertise in the creation of new cancer treatments made possible by breakthroughs in genome mapping and genetic sequencing. The recent success by Dr. Marco Marra and his team in the genome mapping of the SARS virus is not only a dramatic scientific and humanitarian milestone, it is a metaphor for the value of what we can do as a department. In addition to that, Mr. Chair, we are looking at opportunities with the CDC in Vancouver to perhaps develop both tests and vaccines for the SARS virus, which will be extremely important to other parts of the world, such as China, with huge populations, distances, and challenges. This is a potential commercial follow-through from a great innovative breakthrough in mapping the SARS virus.

    Exploring the new frontiers of science and technology requires contributions from a variety of committed partners. WD's understanding of the issues and our presence on the front lines are major factors in bringing together the players that can make a difference. By being first through the door with catalyst funding, we can help other investors up the risk curve. This funding, which is provided through community futures development corporations, 90 of them across western Canada at the local level, with regard to loan support and due diligence analysis for small and medium-sized enterprises, allows others to have confidence. Because they have confidence in the work that's done through the CFDCs on the ground, it allows other equity and finance investors to feel confident in going in. That catalytic role is borne out by the numbers. In 2001-02 the $63.5 million approved by WD in loan funding for projects supporting innovation in the west leveraged an additional $122.3 million. That's three times the money, Mr. Chair.

    WD's activities relating to our second organizing principle, entrepreneurship, are designed to improve access to capital, services, and information; promote increased trade and export opportunities; and improve the skills and capacity of western Canadians and western Canadian businesses. These services are delivered through the Western Canada Business Service Network, which provides over 100 points of service across the west. Comprised of several integrated organizations, the network ensures urban and rural entrepreneurs have access to what they need to establish a business and make it grow. For example, the 90 community futures development corporations, which are a vital part of the network and are volunteer-led, non-profit organizations of community and business leaders at the local level, provide support such as strategic economic planning, technical and advisory services, loans to small and medium-sized enterprises, and self-employment programs aimed at youth and entrepreneurs with disabilities.

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    These investments are making a difference. According to a study conducted by Ference Weicker & Company, the average CFDC loan client generates revenues of $1.2 million in the first five years after receiving financial assistance. The average loan size is $25,800. In the same five-year timeframe, companies that received CFDC assistance collectively created or maintained about 32,000 jobs. From 1995 to December 31, 2002, CFDCs loaned over $400 million to small businesses, which leveraged over $550 million in additional financing. This means that every $1 WD invested leveraged $1.6 from other sources.

    WD is proud of the success of the partners in the WCBSN. The network we built has grown and matured to the point where it can now provide many of the business advisory services needed by western entrepreneurs.

    Let me turn now to another WD priority, Mr. Chair, which is inclusion. We have tailored many of our activities to help specific segments of the population--aboriginal people, youth, women, francophones, and residents of northern communities--overcome persistent barriers to full economic participation. Our support for such targeted approaches is consistent with the federal government's commitment to ensuring equal access to resources and opportunities for all Canadians. But it is much more than that. It is also common sense.

    The growing aboriginal population represents a particular opportunity. It is estimated that over 200,000 jobs will be needed across the west within the next 15 years to meet the demand. This is an unprecedented opportunity to improve opportunities for aboriginal people and to increase productivity across the region. Mr. Chair and members, this is a human resource treasure of this country. With the proper education and economic opportunities, the aboriginal youth who are coming through our system, whose average age is dropping, will help us renew the workforce across the whole spectrum of needs of our country.

    We continue to work with our partners in economic development organizations to help increase the participation of aboriginal peoples. On behalf of the federal government we work with all federal, provincial, and municipal governments and agencies to help coordinate support for aboriginal entrepreneurs through such initiatives as the Canada-Saskatchewan Northern Development Agreement. Members, this brings together $10 million from the Saskatchewan government with $10 million from the federal government through WD to work in northern Saskatchewan on economic development issues involving partnerships with local municipalities, first nations, and the Métis. That's just getting underway, but we expect that will perhaps be a model for northern development across the country.

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    The Chair: I apologize, Mr. Owen, but we're slowly going way over our time limit. So I'm going to ask you to conclude, and then we're going to go to questions.

     Hon. Stephen Owen: Thank you, Mr. Chair.

    I know that the committee has had access to material about WD. I look forward to your questions. I will try to relate any further remarks I would have made in the introduction to those questions.

    The Chair: Thank you very much.

    We'll start off and rotate for eight minutes.

    Mr. Rajotte.

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

    Thank you, Minister and Ms. Lennie, for coming in today.

    I know time is short, so I'll try to be very specific in the questions I pose.

    I'd like to touch on three areas. Under innovation on page 4 of your presentation you talk about the amount that has been invested in these projects. Under entrepreneurship you talk about the community futures development corporations and the revenues that have gone out and the average loan size. You say “...companies that receive CFDC assistance collectively created or maintained about 32,000 jobs.” The third thing I want to reference is the western economic partnership agreements. You talk about 1,300 full-time jobs created, 120 new businesses, and private sector investment of $458 million. I must admit I'm skeptical. I hear these figures all the time from the Minister of Industry. To date I have not received any facts or figures that support any of the supposed facts he presents to me on the number of jobs created; the number of businesses spun off; the private sector investment; and, lastly, the amount that is being repaid.

    I'm assuming that you don't have this information with you. It's a very detailed question. For the three I've referenced here--innovation, community futures development corporations, and the western economic partnership agreements--I would like a list of the number of jobs that have been created, by which companies, and during which time period. I would like to know how many businesses have been spun off and which businesses. I'd like a list of their names. I'd like to know the amount of private sector investment and by which companies or individuals and a list of repayments.

    My experience with programs such as Technology Partnerships Canada under the industry department is that they do not allow parliamentarians and Canadian taxpayers to actually see which companies are repaying the so-called investments or loans. It's my understanding that under your department it's the same. They may show an overall gross figure, but they don't show actual individual repayment.

    I don't know if you can answer all those questions offhand. If not, I'd like you to provide them to the chair.

    But perhaps you could just answer the last question. Why is it that within the industry department and Western Economic Diversification, we as parliamentarians and taxpayers cannot see a detailed list of who repays and how much? It seems to me to be a fundamental principle of accountability for taxpayers.

    The Chair: Perhaps you could go to the parcel that everybody received and pick out one of the provinces in order to be able to get at your question, Mr. Rajotte.

    Mr. Stephen Owen: The leaflets show some examples for the different provinces related to the innovation investments.

    Mr. Rajotte raises an excellent question of how we measure success. It always feels better to have a quantitative result that can be measured. The qualitative ones are much more difficult. The qualitative are particularly typical where we fund partnerships, where we're not funding individual corporations. For instance, we fund Fuel Cells Canada, which is a consortium of a research institute plus large and small companies that might be involved in promoting that research, and through mentoring or other development we attempt to assist start-up companies in that field.

    In the various programs you mentioned, independent evaluations are done. The audits and evaluations for the programs you mentioned are available, I suppose, on our website. They're certainly available as public documents to parliamentarians. For instance, the western diversification program audit and evaluation was done in February 2003, the western economic partnership agreement evaluation was done in May 2002, and the evaluation of the loan program through CFDCs was done in December 2002. We will certainly provide as much exact detail as we can in answer to your questions. I think those independent evaluations will also be of assistance to you.

    One of the things on the qualitative side, Mr. Chair, that helps, I think, all of us to feel some confidence in these programs is the issue of partnerships, which is a key to all of our programs. We don't administer Technology Partnerships Canada. That's done through Industry Canada itself, and I won't attempt to speak for the Minister of Industry. I know he answers some of these questions in question period from time to time. I'm sure that his department can provide much more detailed results.

    With regard to the western economic partnership agreements, one of your questions, the first of the four-year WEPA partnerships with each of the four provinces expired a year ago on March 31, 2002. Because of this year's budget, which has given us now four years of stable funding, I am feeling confident to enter into new WEPAs with each of the four provinces. Since the last ones expired, they have all expressed a real interest in doing that. The relevance to evaluation and outcome is that this requires each of the provinces to put up equal money with us to jointly fund a whole range of initiatives that are seen as important for them.

    I think one of the acid tests of effectiveness is the willingness of other partners to put up money. It may be through CFDCs, these revolving loans; other private equity; equity from the proponent; or other financial institution debt financing. In the sense of CFDC's management--they're administered by volunteer local business and community leaders--the confidence we get from that partnership is that it's on the ground. It's not those of us in Ottawa or Edmonton, where WD has its headquarters, making those decisions. We're taking the advice from local people who know the conditions, who do the due diligence, and who have confidence in the outcome and therefore can attract other investors to help them up the risk curve.

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    Mr. James Rajotte: That's abstract. We're here to discuss the plans and priorities and the estimates, and we have a duty as parliamentarians to ensure that the taxpayer dollar is being well spent. If one of us had gone through university and handed in an economics paper in which we said, this project has created 1,300 full-time jobs and 120 new businesses, the first thing the professor would ask is, what's your source for this? You state facts and figures in here, so what is your source? When I asked the industry minister about the TPC I said, you've said that it has created 38,000 jobs. Where are these jobs from? He said, in fact, we've created 45,000 jobs. But he didn't give me any information to base this on.

    I'll just reiterate the question and say that for the innovation on page 4, for the CFDCs, for the western economic partnership agreements, for the facts and figures you actually state, Mr. Minister, I'd like to get the jobs created, which companies, and when; the businesses spun off, which companies, and a date would be very helpful; the private sector investment; and the repayments, if any. If you can't list the repayments, perhaps you could just explain to me why that is so. I think that would be very helpful for all members of the committee. I think it's a very legitimate request.

    I know that time is short, so I'm going to jump to my second issue. As I go through the list of items that are funded through Western Economic Diversification, including the synchrotron and genomics, it just strikes me--and I raised this issue with you last year--that we fund the synchrotron through NRC and genomics through Genome Canada and we fund through so many different agencies. I met with the synchrotron people this year. They're very appreciative of the funding through all the different agencies, but they ask us over and over again, could we please have a single window where we could come as a project and get funded instead of having to go to a multiplicity of agencies? Why does the federal government insist on funding one project through so many different agencies? It seems to be just having layer after layer of bureaucracy. What is the reasoning behind funding something like the synchrotron through the NRC and WD? It seems to be much simpler to just fund it through the NRC, rather than through two agencies.

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    Mr. Stephen Owen: I think the question is very pertinent to the synchrotron. It's also very pertinent more generally. I think the strength of multiple sources is that you're looking at the same thing through a prism of different mandates. I think you're building a stronger collaboration. I think what we don't want is a centralized, single funding force from one department with officials based in Ottawa. We want to be out on the ground. Synchrotron is funded partly through WD and partly through other research funds in Canada, but it's also very largely funded by the provincial government and private industry. Private industry lining up to get access to those light sources for a whole range of commercial applications provides the rationale for that type of investment.

    I share your frustration with not having simple aggregated numbers that we can measure. We will pull together as much as we can. I think we can answer your question quite specifically, with one exception. I mentioned the independent evaluations and audits that have been done, and we will put together information from those independent audits to answer your question. But there's one area where there is difficulty when we are dealing with private business. There are privacy concerns under legislation and under the loan agreements that are made through the CFDCs. So a certain amount of aggregation is necessary, rather than naming individual companies and employees. But we can certainly give you the gross data.

    The Chair: Thank you, Mr. Rajotte. We'll come back to you.

    Mr. St. Denis.

    Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chair.

    Thank you, Minister, for being here.

    My own riding is in northern Ontario, and we have had a really good experience with the northern Ontario counterpart of the western diversification program, that being FedNor. By way of understanding better whether approaches in the west are different from or the same as those in northern Ontario, I want to get your comments on the community futures development corporations. I'm not sure if they have them in your community in Vancouver. I'm not sure if there are urban equivalents.

    Mr. Stephen Owen: There's something similar.

    Mr. Brent St. Denis: Our experience has been that when you have a small geographic region within which you provide some assistance to incorporate a group of people who are local volunteers and assist them with a small staff, they are able to work much better with their own municipal and first nation leadership and their own local businesses than somebody in Ottawa, Toronto, or some city far away. I'm sure that in your travels you've met with some of the CFDCs. I'm wondering if you could share with us whether you feel that it's working as well out west as we're finding it's working in northern Ontario, where the local communities through local volunteers are being engaged to assist local business through a loan program or communities with very small grants. I'm just wondering if you have any comments on that.

    Mr. Stephen Owen: Certainly, my experience in the western provinces for the last year has substantiated that. What gives me confidence is that these are local people, business leaders, who are volunteering their time in their communities, and we provide support staff and a budget for them and access through partnerships with financial institutions to a loan loss reserve. When proposals come before them, we support them with the due diligence that needs to be done for the expenditure of any public funds, and they provide local knowledge of what the needs are and what's realistic. Also, as a community they represent a commitment to the implementation of whatever the enterprise might be. It's on the ground and it's real. That gives me great confidence in not making decisions from Ottawa, Edmonton, or any of the other large cities, but rather asking the support of the community and business leaders.

    I think the model is right in terms of the whole concept of localization, which is a scale of decision-making that's really part of the global discussion now on what decisions should most appropriately be made at a local level. Small and medium-sized enterprises have to take into account the reality of their community. If it's not the community and business leaders, I don't know who is better able to make these decisions. In fact, the data show--and we will get as much detail as we can for Mr. Rajotte--that these are highly successful. They create jobs. They create, as I mentioned in my remarks, a large amount of revenue over their first five years. So I think it is a good model. If I had to put my faith in anything in terms of the development of a small business opportunity, it would be the local business leaders in the community where it's going to be proposed and implemented.

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    Mr. Brent St. Denis: Thank you.

    Before coming to my next question, I'll just add the comment that in the case of the CFDCs that serve my riding--that includes parts of five, actually, because my riding is quite large--without exception they have been successful in turning over their funds in loans and repayments. Yes, they have a higher loan loss rate than the banks do, but not that much higher. But they're sustainable, and they're doing a very good job. So I thank you for your comments.

    Much of the emphasis in the notes you provided us and in your comments has been on science and technology, and I've been very impressed with the way the west has done so much in the area of science and technology. Perhaps you could qualitatively describe how big science and technology supports are through Western Economic Diversification. I don't need numbers, just how important it is to the big scheme of things in relation to other kinds of investments. I don't need exact numbers. It seems to me that your descriptions indicate a very vigorous interest in science and technology in western Canada, which your organization is responding to.

    Mr. Stephen Owen: It's true that innovation is a major preoccupation of our initiatives. About 60% of our funding last year, and projected for the next year, was directed toward innovation. As I mentioned briefly in my remarks, it's really important for us in western Canada, as we go through a transformation from a resource-based economy to a technology-based economy, to understand that does not mean we're displacing our traditional resource-based industries. It means that they also are becoming high tech, knowledge based, and value added. In my mind the most vulnerable part of our western economy is being based on resource industries that don't add value but produce commodity products. That's what causes the boom and bust and leaves us to the vagaries of fluctuations in international commodity prices, which caused the boom and bust in our history. The way we guard against that is through innovation to add value to the products and make the profit margins wider so that we withstand those international commodity price fluctuations and get away from the boom and bust.

    So I see technology and innovation as not displacing our traditional resource industries with the new economy industries of ICT and such, but rather blending them together to restore them to health and sustain them into the future. That's where it goes into our sustainable communities emphasis, our other strategic emphasis. I can tell you that in my province, where I've had experience throughout it with resource-based towns, often one-industry towns, that's where the vulnerability is.

    It also, Mr. Chair, deals with one of the problems we have in our society across Canada. We talk about regional alienation, whether it's western, east coast, northern, or whatever. Part of the alienation that exists in our country isn't between different regions of the country but rather between rural and urban economies in each region of our country. It seems to me that in the emphasis of our investments that are directed toward this, if we can assist through innovation and technology in adding value and knowledge to the traditional rural resource-based economies, we can create one economy out of what is often two and what often causes dislocation and conflict in our society. I think that one economy in Canada that is brought together through innovation, technology, and knowledge is a very healthy thing for our country.

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    The Chair: Thank you, Mr. St. Denis. We'll come back to you.

    Mr. Fitzpatrick.

    Mr. Brian Fitzpatrick (Prince Albert, Canadian Alliance): You mentioned the difference between urban and rural, and this brings to mind a subject that maybe you can shed some light on. I look at the city of Vancouver, and I see a city that's built on exporting raw materials and importing finished goods from elsewhere. That's the primary economic activity of that area. If I drive a couple of hundred miles south, I find another city, Seattle, in which you have an aerospace industry in Boeing; the biggest software industry in the world in the computer sector; and the head offices of a whole host of companies, ranging from Starbucks to Eddie Bauer and Costco, which grew out of that environment down there. It doesn't occur to me that they ever had a northeast United States economic development authority at the federal level to create this sort of thing. Silicon Valley is another example where we have a cluster. I heard the president of Intel say that there was no state central planning that brought this about. It just happened, and it's a big mistake for governments to think they can start planning these sorts of things. How do you explain this phenomenon, that what happened in Seattle hasn't happened in Vancouver?

    Mr. Stephen Owen: Thank you for the question. I think it is happening in Vancouver, from fuel cell companies to information and communications technology companies, new media companies, and biotechnology companies. These are all growing fields, and they all help support the hinterland of our province. I think this is similar in all provinces as to the cities.

    You mentioned Seattle. Let me mention Calgary and Edmonton. These are cities that enjoy one of the most sophisticated research and development infrastructures in North America, and that's booming. That infrastructure is being created through partnerships with the federal government, the provincial government, and business. This is true across the west. The innovation centres in all of our major universities in the west, whether it's SMARTpark in Winnipeg, Innovation Place in Saskatoon, or Inno-centre at the University of Calgary, are organizations and facilities, which we're helping to support, that bring business together, large business with new start-ups, with venture capital, and with new innovation.

    Mr. Brian Fitzpatrick: I have another question. You mentioned that the money you've been spending leverages. It creates all these spinoffs and more jobs, more benefits, and so on. Quite frankly, Mr. Owen, any kind of spending will do that. If you gave every Canadian $1,000 and told them that within a week they had to spend the money, it would create economic activity. People would go out and spend money. You talked about the benefits that came out of that. But has your department ever looked at the cost to the Canadian economy to take your money out of the economy and the effect it has on the private sector and the overall economy to squeeze this money out of the private sector, businesses, people's pockets, and so on and work it through your bureaucracy and then spread it around in your wisdom? Have you ever done a study like that?

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    Mr. Stephen Owen: I think we had this discussion last year, and I welcome it because it's a good issue. What we're looking at is spending $1 and leveraging, as I mentioned in my opening remarks, double that amount, so tripling the money through private and other investment. In every one of our programs we're dealing with partners, whether it's the Government of Alberta or the Government of British Columbia, both of which, as you're well aware, are very hard-nosed about the expenditures of public money. These are partnerships that are creating wealth. I can't answer your question generally because we have a whole list of programs, which I've mentioned. Whether they're corporate, provincial, or municipal, they're all partnerships.

    Let me just say this in terms of Seattle and Vancouver. In fact, Vancouver doesn't create its wealth just through exporting commodities. Increasingly, it's value added through a whole range of knowledge-based industries. But it's also lowering cost bases.

    I'm sure you're aware of--and I'm sure it has been discussed here previously--the KPMG study of about a year ago, which looked at business costs for all the European Union countries, the United States, Mexico, and Japan. It found Canada and our western cities to have the lowest cost bases than any of those countries, which includes considerations of salaries, taxes, property costs, payroll taxes, and regulatory costs. So we're very well placed. I don't think it's such a mystery when we think of something like a low-cost base to understand why Canada has the strongest economy of the G-7 countries.

    Mr. Brian Fitzpatrick: I want to talk about this privacy concern, sir. With all due respect, let's say that I'm in the private sector and I'm talking to government about getting public assistance for my enterprise. It may be a conditionally repayable loan, which, from what I can gather looking at the statistics, means a very low repayment schedule that is way out of whack with the private sector, or it may be a non-repayable contribution. George Orwell would probably say that in simple English that means a grant or a giveaway. I have the greatest difficulty trying to understand the privacy issue here. The privacy issue that's being violated here is that the Canadian people are being forced through the tax system to give you money so that you can turn it over to people, and then we can't find out what has happened to that money. It's behind this curtain of privacy. But it seems to me that a private company that's receiving money from government should not be able to cry privacy arguments. The public should have a right to know what's happening to their money and whether's it's being repaid and whether they're getting value for it. I think they should be prepared to sign a waiver when they're getting that money to the effect that's going to be available to the public.

    Mr. Stephen Owen: You're quite right that all sorts of information connected to the expenditure of any public funds must be made public. There are some exceptions in the privacy and information legislation in this country, provincial and federal, over corporate secrets. They may be trade secrets or whatever. So there are some restrictions on it.

    Short of those restrictions in law, you're absolutely right, and that information is generally available. But remember that it's available to a committee of local entrepreneurs, business people, and community leaders, who are helping vet these applications. They're applications for repayable--

    Mr. Brian Fitzpatrick: With regard to the contracts on those things, I went through the access to information process, and they're all blotted out. You can't get any details on it. Then if you try to find out what the specific repayment is with this transaction, you get the privacy argument. So, sir, with all due respect, I'd say that the privacy thing is almost like a completely closed door to people trying to find out what's happening with their tax dollars.

º  (1615)  

    Mr. Stephen Owen: I don't want to overstate the extent to which confidentiality shrouds this, because it doesn't very much. There may be situations where people are. But if you're asking about getting information about who is getting loans, how much they're being repaid, and how successful their company may be, it may be that you can't go right inside their books, but you can certainly get the information about who they are, what they get, and how much it's repaid. I'm not taking issue with you.

    The Chair: Thank you, Mr. Fitzpatrick. We'll be back.

    Mr. Marcil, do you have a question?

[Translation]

    Mr. Serge Marcil (Beauharnois—Salaberry, Lib.): Thank you, Mr. Chairman. Mr. Minister, as a Canadian, my greatest concern is that we have such a large country and we have to subdivide it into regions in order to make it more manageable. Obviously, at Industry Canada, there's an agency for every region so that government is closer to the people and has a better grasp of regional needs, since the West, Central Canada and the East have different aspirations. However, we still live in the same country.

    So we have four agencies serving Canada, one in the West, one in Northern Ontario and the rural sector, one in Quebec, which is the Economic Development Agency of Canada for the Regions of Quebec, as well as the ACOA in Eastern Canada. My concern is that development programs within each of these agencies may at times clash with those of other agencies. We had a case in Quebec where a business in my area employing 150 workers applied for support to the Economic Development Agency of Canada for the Regions of Quebec, which apparently did not have a program to deal with this need. However, the ACOA in the East had such a program, so that a business from New Brunswick got help from the government. This created a competition situation that ended with the Quebec business closing down its operation. That left 150 workers jobless.

    What I want know, Mr. Minister, is whether the Department is aware of these things. Are there any consultations between the four Canadian agencies and Industry Canada so that WD does not encourage businesses to move from Central Canada to Vancouver or Alberta, and vice versa? Do you take these things into consideration? Each time there's an application or a new program in one of the agencies, are there consultations between the four agencies in order to avoid making businesses in one region more competitive than businesses in another region?

º  (1620)  

[English]

    Mr. Stephen Owen: I think that's an extremely important point. I think we can probably do it better. I think the suggestion you're making is a good one.

    In terms of dealing with agencies that have the ability to differentiate between different needs in different parts of the country, we're looking at reacting to different circumstances, and we need the flexibility that different regional agencies can provide. For example, some parts of the country are more heavily urbanized than others, and they confront different problems.There are economic problems and often catastrophes, such as the floods in Saguenay and Manitoba, the ice storms in Quebec and Ontario, the collapse of the east coast cod fishery and the west coast salmon fishery, and the impact of the softwood lumber situation.

    At the same time we do have national programs that each of us administer in our own regions. The infrastructure Canada programs are, I suppose, the most obvious ones, where we have national standards in terms of funding that is available, with general terms and conditions set forth in those programs that must be met across the country, and with the amounts of money based on a set formula, which is unemployment combined with the per capita amount. So you get equal distribution across the provinces on that basis.

    We have a different issue with regard to the territories, where per capita doesn't work because of the large distances and low populations. Some of the northern areas of our provinces are similar, which is why we have FedNor in northern Ontario. But there isn't a specific agency for southern Ontario. The Canada-Saskatchewan Northern Development Agreement, which I mentioned in my opening remarks, is another example of looking specifically at the sub-regional needs of one of our western provinces.

    The secretaries of state for the regional agencies meet with the Minister of Industry on a regular basis to compare their approaches and what might be differing or similar needs.

    What was announced in the Speech from the Throne last September and reiterated in the budget last February was a review of regional agencies, their effectiveness and the different levels of support across the country to meet different needs. I think that's an important periodic analysis that needs to be done to ensure there is equity across the country, but also sufficient flexibility to meet specific regional needs.

    The Chair: You have time for one more.

[Translation]

    Mr. Serge Marcil: I have another question which is fairly technical, just as Mr. Rajotte's earlier question was. How do Industry Canada's economists assess the economic fallout of such a project? In fact, I'm asking the question for those who are listening or those who will read the record of this meeting. How does your agency measure the economic fallout of a project being proposed or that you decide to approve, to invest in or to help implement? What criteria do you use for measurement purposes? What factors do you consider when comparing the economic fallout of project X to that of project Y?

[English]

    Mr. Stephen Owen: To take the example of a loan that may be approved by a community futures development corporation in a rural municipality--and it relates to a question by Mr. Fitzpatrick as well--part of the due diligence that goes into the analysis of that loan application is to ensure that it does not provide a competitive advantage over other similar-sized businesses in the area. So that's taken into account. The measurement for those loans is, are the loans repaid? Related to that is their ability to repay, and related to that is whether they're a successful business. There have been very good results from CFDCs. I think they're widely recognized across the country as providing a good analysis of a realistic business proposal that is trusted.

    One of the great measures of trust is the extent to which other money is invested, either through loans through other financial institutions or private equity investment, along with the investment put up by the proponent. So you have a built-in test coming in as to whether other people are willing to invest, and you have the test coming out as to whether the loan is repaid and the business becomes successful. We do keep those statistics. Those are part of the body of information we're going to make available to this committee in more detail.

    The Chair: Thank you.

    Mr. Rajotte.

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

    Usually, we don't get to ask this many questions. It's interesting that there are no Tory, NDP, or Bloc members here. I thought they would be here for sure.

º  (1625)  

    Mr. Serge Marcil: They're celebrating.

    Some hon. members: Oh, oh!

    Mr. James Rajotte: I want to follow up on what my colleague Mr. Marcil was touching on, which is how you make decisions on funding different projects, in particular the big science projects, such as the Canadian Light Source. You have it listed here at about $173 million. WD invested $1.83 million in developmental funding. How do you decide, whether it's in cabinet or within your own department, on how much funding the synchrotron should receive? Do you work with the NRC and the industry minister? Do you have a joint meeting? How exactly is it decided that the synchrotron will deserve this much funding?

    Mr. Stephen Owen: That particular project is a good example. It's a large amount of money from Western Economic Diversification, over $20 million. All of the things you mentioned would be part of the due diligence. It's a collaborative effort. We want to look at both the value as a public good that comes out of that type of investment in basic research and the potential commercialization and support, therefore, from the business community, who are becoming partners in it to make use of the technology.

    As far as the approval process for WD goes, there are certain limits under which I can approve a project going through our own analysis. Over other limits the Minister of Industry must approve, and over $10 million it must go to Treasury Board. All of that still has to be within our statute, our terms and conditions, and Treasury Board guidelines at every level.

    For something like the synchrotron, it's the highest level of scrutiny with the greatest consideration of due diligence. I would say, just in a qualitative way, that we would want some assurance demonstrated by investment by other partners, both business and public. That's true of the synchrotron.

    Mr. James Rajotte: Because the synchrotron is above that level, I would assume that you would get a request for funding and you would then sit down with the Minister of Industry. Would you sit down with the Secretary of State for Science, Research and Development? Would the entire cabinet make this decision?

    Mr. Stephen Owen: No, it would be a committee of cabinet, which is Treasury Board, that makes the final decision on it. So in effect it's a cabinet-level decision.

    I wasn't present at the creation of the idea of synchrotron, but I have been since in other projects, and these involve building collaboration. In my experience and from what I hear from provinces, municipalities, and businesses across the west, that is one of the key features of WD, its ability to facilitate collaboration across federal government departments or agencies as well as among levels of government and out into the community and the business community. To me that's one of our key roles.

    One of the examples of that is the urban development agreements we have. We have a MOU with Winnipeg. We're looking at other western cities. We have the Vancouver agreement, which I think will be seen more and more as the process agreement for the country and as the way the federal government can become involved in a partnership way in economic development in cities. In all of those situations WD is playing the catalyst role, the facilitating role, putting up a small amount proportionately of the funding, because we're there as a partner, but really being the facilitating agency. The Assistant Deputy Minister in each of the four western provinces chairs the committee of senior federal officials in that province. That's just another example of the role we play in helping the federal government integrate, but then also, in something like the Vancouver agreement, in coordinating with the province and the city.

    Mr. James Rajotte: I'd like to talk about some of the coordination between the federal government through WD and the provincial governments.

    In the documents you've handed out, under the WD mandate it says “Since its establishment in 1987, WD's mandate has been to promote the development and diversification of the economy of Western Canada and to advance the interests of the West in national economic policy.”

    You mentioned in your opening statement “The softwood lumber dispute and the Kyoto Agreement are just two examples of changing conditions in Western Canada.” I think that's a very soft way of talking about those two issues. You're certainly very aware of the repercussions of the softwood lumber dispute, and I'm certainly very aware of the repercussions of the whole process. We at this committee have been doing a study of the Kyoto accord and have found the whole implementation plan incredibly lacking. It's a process that alienated three western provinces, in particular Alberta. It alienated a lot of the industries, such as the chemical producers and the oil and gas industry. Under your mandate you are certainly a spokesperson for western Canada in cabinet. In your position as the Secretary of State for Western Economic Diversification, were you satisfied with the government's process with regard to Kyoto, and are you satisfied with the Kyoto implementation plan to date? Are you satisfied with the government's actions on the softwood lumber dispute, which is certainly harming your province to a great extent?

º  (1630)  

    Mr. Stephen Owen: Yes, it certainly is.

    With regard to Kyoto, I took as full a part as I possibly could in cabinet committees and general cabinet in moving toward implementing the decision to ratify Kyoto.

    Just as an aside, I think it's very interesting and instructive to us to note that Suncor, one of the largest companies involved in the oil sands, within a week of our ratification came on board to say that they could live with this. This could be a good thing. Shell Canada reduced its greenhouse emissions by 2000, setting out in 1997 to reduce them to 1990 levels, and they now have targeted meeting their full Kyoto target of 6% below 1990 levels by 2005, and they'll probably beat that target. So there is a great advantage to Kyoto.

    I also note that the public in all western provinces is in favour of Kyoto ratification once people become aware of it. So I'm very supportive of it. This is an industry committee, and on economic grounds, the cost reduction by using either alternatives or less greenhouse-causing energy is a good thing.

    Mr. Chair, because this is the industry committee, let me just refer to the competitive analysis study that was done in 1990, which was commissioned by the former Mulroney government, by Michael Porter, renowned as the international expert on competitiveness of countries. His report was called Canada at the Crossroads, which identified two main weaknesses of competitiveness in Canada: one was the low pricing of natural resources, which discouraged the moving to value added and higher profit margins in favour of commodity production; and the second was the low level of environmental regulation. Through looking at the international spectrum, he identified that the countries that have the highest environmental standards have companies that are the most innovative; avoid boycotts for environmental reasons; are more innovative and flexible; invest more in R and D themselves; and also produce spinoff environmental technologies, which they sell to other parts of the world.

    For instance, you mentioned the softwood lumber issue, and there's the lumber and paper business generally. British Columbia companies spent billions of dollars to meet pulp mill emission standards in the late 1980s, and they paid all of those billions to Scandinavian countries to buy their technology. Without getting into the moral leadership and the health and insurance costs, simply the benefit of creating companies that are becoming more innovative and therefore more internationally competitive is to me an underpinning of Kyoto.

    With regard to the implementation plan, I would equate Kyoto to the Charter of Rights and Freedoms in terms of a major public policy decision of this country. With the charter we didn't know exactly how that was going to be interpreted, but it was a framework of principles that the country believed in. It has played out as perhaps one of the most important decisions we've made. I think Kyoto has the potential to be on that standard, because the world is going to change from hydrocarbon-based economies to a post-hydrocarbon era, perhaps in 100 years or maybe 50 years. Our natural gas and other technologies in the oil and gas industry are wonderful transition opportunities and a basic part of our economy, but sooner or later we're going to be shifting to other energy uses. The oil and gas companies are repositioning themselves as energy companies, not oil and gas companies, because they know this. I'd rather see Canada at the forefront of that than buying the technology from elsewhere.

º  (1635)  

    The Chair: Mr. Rajotte, maybe you can confer with Mr. Fitzpatrick. We'll be back to Mr. Fitzpatrick in a minute.

    We'll now go to Mr. St. Denis.

    Mr. Brent St. Denis: Thank you, Mr. Chair.

    I appreciate the chance to ask a few more questions.

    In your remarks at the outset, Mr. Minister, you mentioned, if I remember correctly, possible future job shortages and the potential to engage maybe in a better way our aboriginal communities in filling those needs. I suppose also, in another sense, through increased immigration. I've heard that a million jobs will be found wanting in 10 years. That's a figure I recall reading in the media. I'm just wondering if there's any sense of how great the shortage will be in western Canada. Sometimes one of the downsides of a strong economy is the lack of skilled labour. So I'm wondering if you could talk a bit about that.

    Mr. Stephen Owen: It raises a couple of points. One is just to reflect on the fact as Canadians that our economy created 560,000 jobs last year, which leads any industrialized country in the world. Clearly, our economy is growing. We're creating jobs, and we have to have people to fill them. In our immigration policies and our discussions with the provinces and professional organizations, we are looking at ways to certify new immigrants who have skills so that they can practise them here and put them to use in the Canadian economy.

    The aboriginal potential in this country is extraordinary, but we have to increase the educational outcomes. The post-secondary opportunities are there.There are apprenticeship programs in western Canada, which we're involved in with businesses, to go into the high schools--not grade 12 but grades 7 and 8--to encourage kids to stay in school and to learn, for instance, about the apprenticeship opportunities that are available.

    There are two other aspects of our economy that are critically important in the west: one is developing exports, and we've talked a bit about value-added exports, and another is attracting investment from abroad. Let me make just a brief comment about each of those, specifically with regard to WD. We have a project in British Columbia, which we started about a year ago, called Gateway to Asia. We do that in partnership with the large immigrant services society, SUCCESS, in Vancouver. We connect new immigrant Asian entrepreneurs with local service and manufacturing businesses so that together they can identify opportunities and networks in Asian countries and also help adapt Canadian-built products and services by adding value, which is the knowledge of adaptation to a foreign market. This has been immensely successful. In the first three months of that program it attracted a $46 million investment to build 240 new homes in a neighbourhood of Shanghai using Canadian softwood lumber and with a Canadian architect and a Canadian home-building company. This helps diversify our markets away from the United States, which is one of the greatest vulnerabilities we've had through the softwood lumber disagreements.

    I'm sorry, Mr. Rajotte, that I didn't get to that part of your earlier question, but I'd like to return to it, if I can.

    The other one in terms of attracting investment is something called Project Germany, which WD has partnered with the capital region of Edmonton. Because of the large German-Canadian community in the Edmonton area, we have partnered with them to promote opportunities for investment in Switzerland, Austria, and Germany. The last I heard was that it attracted more than $50 million of investment that wouldn't otherwise have been there.

    What these initiatives demonstrate, both in terms of export potential and investment attraction, is the incredible competitive advantage Canada has because of our multicultural makeup and our immigrant populations. So this is something we're testing. In terms of a regional development agency working creatively to promote business and investment opportunities, really drawing on the competitive advantage of the cultural makeup of our country is highly innovative just in terms of partnership. So I think we should be looking for a lot more of those types of opportunities.

º  (1640)  

    Mr. Brent St. Denis: It seems like a reverse ambassador program, where we're using the immigrant and the multicultural community in Canada to do the outreach as opposed to sending people abroad. It's opening a different kind of pipeline.

    I'd like to turn to another question, Mr. Chair, again going back to the fact that my riding is in Ontario. We see a great divide between the economy of southern Ontario and the rather sparsely populated northern Ontario. From my knowledge of western Canada, you have a less extreme difference, but nonetheless a difference, between southern Manitoba and the far north and the southern and northern parts of Saskatchewan, Alberta, and your own province of British Columbia. Within Western Economic Diversification, is there a recognition of the north-south differences, and are there programs to deal with the different needs of the north of the provinces versus the south of the provinces?

    Mr. Stephen Owen: Yes, there are. I think the value of not only regionally based agencies but locally based development proposals and the implementation of them within any province in the west speaks specifically to that, but also linking the urban and rural opportunities. For better or worse the reality is that in Canada our major research and teaching universities are in large cities. But this is where a lot of the innovation is being created, such as biotechnology. That can help, for instance, in dealing with the Mountain Pine Beetle, which has been a scourge in many forests in northwestern and northern British Columbia and into the Yukon and Alberta. That type of investment in basic biotechnology and genetics, which can help deal with a pest such as that, is linking the two economies in a very cohesive and important way for Canada.

    Similarly, one of the greatest concerns we have because of our geographic challenge in Canada is how to deliver services to remote and rural communities. The innovations in information and communications technology allow us increasingly to do the most exotic diagnostic medical work at a distance. A highly trained specialist, such as a radiologist sitting in Winnipeg, through wireless distance technology can receive information immediately and interpret it and have the diagnostics for a MRI or a CAT scan. We can provide the service without having to have that level of specialist in every small rural and remote community. We're even doing counselling and psychotherapy at a distance through video technology.

    This is why Canada, with our great transportation, communications, and geographic challenges, has created the opportunity, which is imperative for us, to innovate in these ways. All of that innovation is immensely necessary for the underdeveloped parts of the world, which are going to take advantage of it. So what we produce, perhaps in partnership with businesses, for the public good in Canada becomes a commercialized product when it goes abroad to whatever other country.

    Mr. Brent St. Denis: Thank you.

    Do I have time for a short question?

    The Chair: No, you don't.

    Thank you very much. I appreciate it.

    Mr. Fitzpatrick.

    Mr. Brian Fitzpatrick: Some eminent Canadians are talking about the urban agenda and the federal government getting more directly involved with the urban problems of our society, especially infrastructure matters. In fact, for all I know, maybe they'll be Prime Minister of Canada someday if they're successful. I'm looking through some of the spending under WD. Am I correct in saying that a lot of the spending is on infrastructure at the municipal level in western Canada?

º  (1645)  

    Mr. Stephen Owen: It is in terms of the non-core parts of our budget. We administer the infrastructure Canada programs in western Canada. Those aren't in our core budget. They come through Industry Canada, but we're the administrative agency for them.

    Mr. Brian Fitzpatrick: So the federal government has already crept into that jurisdiction, looking at the spending that's going on in these different departments.

    Mr. Stephen Owen: Mr. Fitzpatrick, we haven't crept in. We've been invited in through the front door by provinces, municipalities, and local community groups.

    Mr. Brian Fitzpatrick: Is that under section 91 or section 92 of the Constitution?

    Mr. Stephen Owen: It's under cooperative federalism.

    Mr. Brian Fitzpatrick: I want to pursue a matter that Serge raised about all these different regional development authorities with different mandates doing different things and how you coordinate it.

    Last year, I believe, the secretary of state for northern Ontario was talking about an industrial park that was built in Kenora, Ontario, and all the benefits it brought to Kenora. I think it was Kenora. Maybe it was some other northern Ontario community. The thing that crossed my mind, living in Saskatchewan, is that I can think of 15 communities the size of Kenora that would all like industrial parks, and I could tell you all about the benefits of industrial parks and so on.

    Furthermore, I talked to some people involved in the paper industry out west, and they indicated to me that the market wasn't that great. They were downsizing their operations to try to fit the supply and so on. Then I see the Quebec regional authority putting $80 million into a plant that Abitibi had closed down, because it just wasn't a sustainable or viable business anymore. But here the government puts in $80 million to get somebody else to restart the plant, when the rest of the industry, especially out west, is trying to deal with a supply problem, a pricing problem, and a margin problem.

    I think we have a problem with all these different regional development authorities, and I think we have them operating at cross purposes in some areas.

    If Kenora can get an industrial park as part of an infrastructure program, why can't every community across the country the same size as Kenora expect the same sort of thing from the federal government? Or are you just picking winners and losers?

    Mr. Stephen Owen: I'm pleased to hear your endorsement of the idea of Western Economic Diversification and our ability to provide infrastructure and investment in partnership in western Canadian communities.

    I must say, Mr. Fitzpatrick, that one of my most pleasant activities since I became Secretary of State for Western Economic Diversification occurred in La Ronge in northern Saskatchewan, probably last October, when we signed the Canada-Saskatchewan Northern Development Agreement with municipal mayors, first nations, Métis interests, and the provincial government, which is a $20 million fund, half federal and half provincial, to do that very thing, to make those opportunities available, whether it be through tourism, non-timber forest products, or other sorts of small and medium business opportunities in northern Saskatchewan. There are many opportunities and a great need, and this sort of partnership can start filling that need.

    Mr. Brian Fitzpatrick: You say that your major role is to be a facilitator. It seems to me that what you're really saying, Mr. Owen, is that government has become so diverse and complex and there are so many different government bureaucracies and programs that the government has to invent somebody who can be a coordinator or a facilitator so that something can be accomplished or they might all go at cross purposes. Is that what we've come to, that we have to invent a government agency or department to try to coordinate the huge variety of programs we have going with this federal government?

    Mr. Stephen Owen: That's a good point. You asked earlier whether we were operating under section 91 or section 92. In this country of modern governance the reality is that no matter what the Constitution, provincial legislation, or whatever says it can do or what its statutory mandate is, no government can act alone. Whether it's the environment, economic development, transportation, research and development, or post-secondary education, it has to be done in partnerships.

    You're right, we do need facilitators. Let me--

º  (1650)  

    Mr. Brian Fitzpatrick: On that point, if a research facility is being built in southern Ontario, such as the synchrotron--and I think the University of Toronto has a big project going on right now--they don't have a western economic development outfit to do their facilitating. I heard your response to Mr. Rajotte's question. How do they operate in southern Ontario to get their projects built? It seems to me that it couldn't possibly happen without this facilitator. So how do they do it?

    Mr. Stephen Owen: They do it directly through Industry Canada, whose major office is located in Ottawa in southern Ontario. Many of the same things are accomplished.

    But I'm sure that if you were living in northern Saskatchewan, you wouldn't be happy with all of the decisions being made from Ottawa. This gives you an opportunity through the northern Saskatchewan accord to make those economic development partnerships in the area where they're going to be implemented.

    Mr. Brian Fitzpatrick: Are they going to transfer the firearms registration for western Canada over to Western Economic Diversification so that we feel better, or Revenue Canada?

    Mr. Stephen Owen: It hasn't been suggested by anybody else.

    Mr. Brian Fitzpatrick: Or 150 other government programs that are administered out of Ottawa?

    Mr. Stephen Owen: That's the first time I've heard that suggestion, and I'm not keen on it.

    But, seriously, to take your question one step further, different levels of government have difficulty because they do have a lot of responsibilities in different departments. The Vancouver agreement, which WD helps facilitate in Vancouver, integrates the work of twelve federal departments, seven city departments, and fourteen provincial departments into something that actually works. So if you're asking whether the facilitator is needed, sure it is.

    Mr. Brian Fitzpatrick: That's reassuring.

    The Chair: Mr. Fitzpatrick, I thank you for your comments.

    We will get a short question from Mr. St. Denis, and then the chairman is using his prerogative today.

    Mr. Brent St. Denis: Thank you, Mr. Chair.

    I have just a short question as a follow-up to my first question in my last round, which has to do with the 60% emphasis on science and technology and innovation in western Canada. In view of your additional position as Secretary of State for Indian Affairs and Northern Development, I want to ask if you have any thoughts about increasing the attractiveness of science, maths, and so on for aboriginal youth when it comes to education. I ask this because just yesterday I had a meeting with the chief of one of the first nations in my riding. He's a young man who was recently elected. He has an engineering degree, which is very satisfying to me. But I think there is generally a lack of emphasis in the aboriginal population on the sciences as an option. When it comes to the future of innovation in western Canada, to make sure that we have aboriginal youth looking to fill those future needs, is there a strategy or do you have any thoughts on how we might engage aboriginal youth in the sciences as they're going forward?

    Mr. Stephen Owen: That's an important aspect of education, and it can be said more broadly as well. The outcomes for aboriginal school children in our country are very much poorer than for the general population. We do have a national education initiative at the moment through the Department of Indian Affairs and Northern Development, which is partly my responsibility. Along with 15 aboriginal educators from across the country, who have been in a working group for the last year, we have just put together a pretty detailed framework for how we can work with first nations to improve those outcomes. Part of that is ensuring, first of all, that there is the opportunity for them to use the education that they have positive outcomes in and that they're told about it so that they're aware of it.

    Mr. Chair, if I can use one example of how this can proceed across federal departments as well as provincial ministries, we are negotiating at the moment with Manitoba Hydro, four first nations in northern Manitoba, the Manitoba government, and the federal government--HRDC, Indian Affairs and Northern Development, and WD--to create two new hydro generating stations in northern Manitoba. The first nations will be equity partners in it. We will create a training centre for technical training. The kids going through school will be required to have science and math facility and success to get into these training programs, which will then provide the labour for the aboriginal and other companies involved in this development. So that's a very concrete example of being able to go into a high school in The Pas or Norway House and say, here's a real opportunity. It's coming over the next 10 years. It's going to be a major development, private and public. Your first nations are going to be partners in it. So stay in school, take science and math, and then go into these technical training programs, and here's your successful future.

º  (1655)  

    The Chair: Thank you, Mr. St. Denis. Thank you for taking up all my time with a short question.

    Mr. Minister, on page 42 of the main estimates it shows $5 million in grants for the western diversification program. Could you enlighten us on what examples those are and when the evaluation program is going to be available.

    Mr. Stephen Owen: I'll just get some advice here, Mr. Chair, on exactly what programs may be contemplated. This is planned spending, so those decisions may not have been made yet. The western diversification program is in our general grants and contributions section.

    The Chair: This is new money. This is not money you've had in the past to do this. This is a new program for this year. Could you be more specific on what they are and when the evaluation program will be available? Maybe you could send us a note on that.

    Mr. Stephen Owen: Let me give you an example of where that type of budget line item might be expended. We have been involved in the last few months with the Government of Manitoba and OmniTRAX to help deal with the threatened shutdown of the port of Churchill, because of the drought on the Prairies and the reduction in the transportation of wheat from Saskatchewan, which Mr. Fitzpatrick will be very aware of. We have come in with a bridging package to help address some of the infrastructure needs there and to increase the capacity of the port to stay viable. The railway and port are an essential part of the transportation infrastructure of northern Saskatchewan and Manitoba. Through an expenditure out of a program from that line, we were able to assist the provincial government and OmniTRAX in ensuring that the port is kept open, along with those rail lines. Looking ahead, that is not designated funding at the moment, but it's a fund from which that type of project can be....

    The Chair: Going back to Mr. Marcil's comment, it was my understanding that the infrastructure program for the port of Churchill was all in place and it was not to compete with Thunder Bay. Are we now exactly where Mr. Marcil is, where we're going to provide money to a consortium and weigh one area against the other?

    Mr. Stephen Owen: No, but what we're doing is ensuring that an essential piece of Canadian transportation infrastructure is not lost to Canadian society. I have travelled throughout northern Saskatchewan and northern Manitoba. The transportation needs are great, and the economy is dependent on them. So this is certainly one example where government has to be ready in unforeseen circumstances to ensure that public facilities are available.

»  (1700)  

    The Chair: Thank you very much. I'm sure that if there are any further questions, we'll be asking you to come back, or we'll see you during the next 12 months. Thank you very much for being here today.

    Mr. Stephen Owen: I appreciate the discussion. Thank you all.

    The Chair: We'll suspend for 30 seconds, and then I'll go on to the second item of the agenda.

»  (1700)  

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»  (1702)  

    The Chair: We'll get back to order here.

    The next item is pursuant to Standing Order 39(5), the failure of the ministry to respond to the following question. It was deemed referred to the Standing Committee on Industry, Science and Technology. It's question 179 by Mr. Ritz from Battlefords--Lloydminster. The question is:

For the past five years, can the government provide a breakdown of federal research funding, including research projects and infrastructure, by university, including the name of the recipient, a brief description, the type of funding and the amount?

    We tried to get hold of Mr. Ritz to be able to explain it better, but I take it this means the funding and research projects by university. I take it that is the question.

    This is the first time I've had to deal with one of these. It has been referred to the committee. I gave notice to you yesterday.

    I think, Mr. Marcil, you have some explanations. Then as a committee we'll ask questions on that.

    Mr. Marcil.

[Translation]

    Mr. Serge Marcil: Mr. Chairman, about the question Mr. Ritz put on the Order paper in the House, I wish to say that the delay in responding to question No. 179 is not due in any way to a lack of goodwill on the part of the department or the Industry Portfolio. The situation is rather exceptional since, to the best of my knowledge, this is the first time that we have to give an explanation in committee in order to justify a delay over 45 days, as prescribed under Standing Order 39(5)(b), to respond to a written question from a member. We regret the delay.

    Question No. 179 was put on the Order paper in the House on March 26, 2003. The answer should have been tabled in the House last Monday, May 12. What happened, Mr. Chairman?

    The question involved many agencies, including Industry Canada, the Copyright Board, the Natural Sciences and Engineering Research Council, the Social Sciences and Humanities Research Council, the Competition Tribunal, the National Research Council of Canada and others. So the task of collecting information from such a number of members of the Industry Portfolio in order to give a clear, accurate and compete response to the question was longer and more difficult than anticipated, causing a slight delay in the administrative process.

    Mr. Chairman, it was obviously not the intention of the department or the portfolio to delay the response to the House. It was simply a matter of collecting a very large volume of information in a short period. I wish to inform the committee that the response to question No. 179 is now ready and was approved by the minister. It was sent to the Privy Council earlier today, hopefully to be tabled in the House before Friday.

    We regret the delay and we can assure you that we will keep on working relentlessly to avoid such delays as much as possible in the future. That was the explanation I wanted to give today, Mr. Chairman.

»  (1705)  

[English]

    The Chair: Are there any questions?

    Mr. Rajotte.

    Mr. James Rajotte: I have just a short response. I want to thank my colleague Mr. Marcil for that response. I'm sure he was one of the ones who encouraged the minister to work long and answer this. I appreciate the fact that it has been answered this week. That's a slight delay, as he said. But I think perhaps we in the committee can send a message back to the minister on answering these questions within the 45-day period. I don't know if other members have experienced this, but for some of the questions I've been sending the minister by normal correspondence, it has taken eight to nine months to get a response. That is why we in this party have gone through this process, so that we can get it within a month and a half, hopefully. It is a fairly big question, but the department certainly would have these figures at their fingertips and would be able to produce them. So I appreciate the response. But if the chair would be willing to express that, I would appreciate it.

    The Chair: If that's the wish of the members, I'll be glad to notify the minister along that line, and I'm sure Mr. Marcil will take that back to the minister.

    I, too, found this a little bit odd because this is our new procedure.

    The one question I want to add is, was Mr. Ritz notified that it was going to take a little bit longer? Stuff like this sometimes requires a lot of coordination. It goes from department to department, and then it has to be put into one. Do you know if Mr. Ritz was notified that it would take a little longer, out of courtesy? Do you know if that was done?

[Translation]

    Mr. Serge Marcil: I cannot answer this question, Mr. Chairman. I just don't know.

[English]

    The Chair: Do you know if he was?

    Mr. Serge Marcil: I can't give you an answer.

    The Chair: Mr. Rajotte, do you know?

    Mr. James Rajotte: I'm not certain. I've been given notice by the Journals Branch that a question I have will likely not be answered in time, as a courtesy. Again, that's why I'm asking you to raise that point.

    The Chair: Okay.

    Are there any other questions?

    Since there are none, we'll take it that has been taken care of.

    For those who are taking an extra long weekend, all the best during the recess break.

    Mr. Rajotte.

    Mr. James Rajotte: The Secretary of State for Western Economic Diversification left here with a fair number of bureaucrats from Ottawa. They're all looking after the interests of western Canadians from their perch here in Ottawa. Is that the case?

    The Chair: I don't know who was here. That might be a question to ask--

    Mr. Brian Fitzpatrick: I hope the west survived while they were all in Ottawa.

    Mr. James Rajotte: That can be a rhetorical question. Mr. Fitzpatrick and I feel very happy that we have....

    The Chair: I think that the headquarters for Western Economic Diversification is in Edmonton.

    Mr. Brian Fitzpatrick: They have 105 contact points in western Canada, plus 100 community futures development corporations. So they have lots of--

    The Chair: I'm sure that if you visited it, you'd get to understand how it operates. I do that during the summertime to become familiar with things. The western decisions are made at the western headquarters most of the time.

    Thank you very much.

    The meeting is adjourned.