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37th PARLIAMENT, 3rd SESSION
Standing Committee on Industry, Science and Technology
EVIDENCE
CONTENTS
Wednesday, February 25, 2004
| ¹ | 1535 |
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The Chair (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)) |
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Mr. Michael Nelson (Assistant Deputy Minister, Comptrollership and Administration, Comptrollership and Administration Sector, Department of Industry) |
| ¹ | 1540 |
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The Chair |
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Dr. Michael Raymont (Vice-President, Technology and Industry Support, National Research Council Canada) |
| ¹ | 1545 |
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The Chair |
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Mr. James Rajotte (Edmonton Southwest, CPC) |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
| ¹ | 1550 |
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The Chair |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
| ¹ | 1555 |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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The Chair |
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Hon. Joe Fontana (London North Centre, Lib.) |
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Dr. Michael Raymont |
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Hon. Joe Fontana |
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Dr. Michael Raymont |
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Hon. Joe Fontana |
| º | 1600 |
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Mr. Michael Nelson |
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Hon. Joe Fontana |
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The Chair |
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Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ) |
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Mr. Michael Nelson |
| º | 1605 |
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Mr. Paul Crête |
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Mr. Michael Nelson |
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Mr. Paul Crête |
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Mr. Michael Nelson |
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Mr. Paul Crête |
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Mr. Michael Nelson |
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The Chair |
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Ms. Manon Brassard (Acting Assistant Deputy Minister, Operations, Economic Development Agency of Canada for the Regions of Quebec) |
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Mr. Pierre Bordeleau (Director General, Human Resources, Finance and Administration, Economic Development Agency of Canada for the Regions of Quebec) |
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Mr. Paul Crête |
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Mr. Pierre Bordeleau |
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Mr. Paul Crête |
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Mr. Pierre Bordeleau |
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Mr. Paul Crête |
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Mr. Pierre Bordeleau |
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Mr. Paul Crête |
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Mr. Pierre Bordeleau |
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Mr. Paul Crête |
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Mr. Michael Nelson |
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Mr. Paul Crête |
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The Chair |
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Mr. Gérard Binet (Frontenac—Mégantic, Lib.) |
| º | 1610 |
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Mr. Michael Nelson |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
| º | 1615 |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
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Ms. Manon Brassard |
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Mr. Gérard Binet |
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The Chair |
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Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC) |
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Dr. Michael Raymont |
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Mrs. Cheryl Gallant |
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Dr. Michael Raymont |
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Mrs. Cheryl Gallant |
| º | 1620 |
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Dr. Michael Raymont |
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Mrs. Cheryl Gallant |
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Dr. Michael Raymont |
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Mrs. Cheryl Gallant |
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Mr. Michael Nelson |
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The Chair |
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Mr. Mike Taylor (Director, Government Liaison Office, Canadian Space Agency) |
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Mrs. Cheryl Gallant |
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Mr. Mike Taylor |
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Mrs. Cheryl Gallant |
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The Chair |
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Mr. Mike Taylor |
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The Chair |
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Mr. Andy Savoy (Tobique—Mactaquac, Lib.) |
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Mr. Paul Crête |
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The Chair |
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The Chair |
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Hon. Lyle Vanclief (Prince Edward—Hastings, Lib.) |
| º | 1625 |
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Mr. Michael Nelson |
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Ms. Karin Zabel (Vice-President, Chief Financial Officer, Canadian Tourism Commission) |
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Hon. Lyle Vanclief |
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Ms. Karin Zabel |
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Hon. Lyle Vanclief |
| º | 1630 |
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Mr. Michael Nelson |
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The Chair |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
| º | 1635 |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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Mr. James Rajotte |
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Dr. Michael Raymont |
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The Chair |
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Mr. Andy Savoy |
| º | 1640 |
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Mr. Michael Nelson |
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The Chair |
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Mr. Peter Estey (Vice-President, Finance and Corporate Services, Atlantic Canada Opportunities Agency) |
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Mr. Andy Savoy |
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Mr. Michael Nelson |
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Mr. Andy Savoy |
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Mr. Michael Nelson |
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Mr. Andy Savoy |
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Mr. Michael Nelson |
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Mr. Andy Savoy |
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The Chair |
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Mr. Michael Nelson |
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Mr. Andy Savoy |
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Mr. Michael Nelson |
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Dr. Michael Raymont |
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Mr. Andy Savoy |
| º | 1645 |
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The Chair |
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Mr. Paul Crête |
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Mr. Michael Nelson |
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Mr. Paul Crête |
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Ms. Karin Zabel |
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Mr. Paul Crête |
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Ms. Karin Zabel |
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Mr. Paul Crête |
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Ms. Karin Zabel |
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Mr. Paul Crête |
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Ms. Karin Zabel |
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Mr. Paul Crête |
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Ms. Karin Zabel |
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Mr. Paul Crête |
| º | 1650 |
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Mr. Michael Nelson |
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Ms. Manon Brassard |
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Mr. Paul Crête |
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Mr. Pierre Bordeleau |
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Mr. Paul Crête |
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Mr. Pierre Bordeleau |
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Mr. Paul Crête |
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Mr. Pierre Bordeleau |
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The Chair |
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Hon. Joe Fontana |
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The Chair |
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Mr. Mike Taylor |
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The Chair |
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Mrs. Cheryl Gallant |
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Mr. Michael Nelson |
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Mrs. Cheryl Gallant |
| º | 1655 |
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Mr. Michael Nelson |
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Mrs. Cheryl Gallant |
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Mr. Michael Nelson |
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Mrs. Cheryl Gallant |
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The Chair |
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Mr. Michael Nelson |
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Mr. Peter Estey |
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The Chair |
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The Chair |
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The Chair |
CANADA
Standing Committee on Industry, Science and Technology |
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EVIDENCE
Wednesday, February 25, 2004
[Recorded by Electronic Apparatus]
¹ 
(1535)
[English]
The Chair (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Good afternoon, everyone. I'd like to call this February 25 meeting of the Standing Committee on Industry, Science and Technology to order. Welcome, everyone.
Pursuant to Standing Order 81(5), we're here to have a look at supplementary estimates (B) 2003-2004, votes 1b, 5b, 20b, 30b, 40b, 45b, 50b, 55b, 60b, 65b, 75b, 80b, 85b, 90b, 95b, 100b, 110b, 125b, 130b, and 135b under Industry, referred to the committee on Thursday, February 9, 2004.
We have at the table witnesses from the Department of Industry and the National Research Council Canada. I understand we have 10 minutes for Industry Canada and five minutes for NRC.
We invite you to begin. Thank you for being here.
Mr. Michael Nelson (Assistant Deputy Minister, Comptrollership and Administration, Comptrollership and Administration Sector, Department of Industry): Thank you, Mr. Chairperson. I'm assistant deputy minister of comptrollership and administration for the Department of Industry. I'm also the senior financial officer for the department.
Mr. Chairperson, distinguished members of the standing committee, I'm joined today by Michael Raymont, vice-president of technology and industry support with the National Research Council, as well as Jerry Beausoleil, acting senior assistant deputy minister of Industry Canada's strategic policy sector. Mr. Raymont will share some brief remarks with you a little later.
I thank you, Mr. Chairperson, for the opportunity to call upon representatives from portfolio agencies as well today to provide answers to your specific questions concerning their programs and activities, and we'll be calling them forward as necessary to do that, so I thank you for your indulgence in that matter.
Let me start by saying it's been a busy year for Industry Canada. Our goal is to build a world-leading economy driven by innovation, ideas, and talent to build a more inclusive, knowledge-based society for all Canadians.
These supplementary estimates seek additional spending authorities and provide Parliament with information on changes in estimated expenditures to statutory authorities previously approved by Parliament. They include items already approved by Treasury Board ministers.
I'd like to take the next few minutes to talk about Industry Canada's efforts to build a strong, innovative Canadian economy.
[Translation]
Since 1997, the federal government has invested heavily in innovation, particularly university research, as the key to ensuring that Canadians can create, adapt and adopt advanced technologies. It has supported the creation of new knowledge, particularly in the enabling technologies—biotechnology, health technologies, environmental technology, information and communications technologies and NANO technology—which will have broad applications across many sectors and industries. Take, for example, the government's support for funding of research at universities, research hospitals and other institutions.
The programs managed by the industry portfolio address key needs identified by the research community, as well as by other stakeholders. They encourage continued study and research by Canadian students. They support the research efforts of large and small universities by providing funding for infrastructure, equipment, staff and indirect costs. They also promote the development of information management systems, and technology transfer and commercialization services.
[English]
Stepping out of the public sector, Mr. Chairperson, I'd like to take a look at the business world for a moment. Canada is one of the most entrepreneurial countries in the world, with more than two million business establishments across the country and a growing number of self-employed and women entrepreneurs. In fact, one out of every three new jobs is created by businesses with fewer than 100 employees. This represents 98% of all businesses in Canada.
Mr. Chairperson, these businesses contribute significantly to Canada's GDP and ultimately to our standard of living. In recognition of this, Industry Canada and its portfolio partners play a key role in helping small and medium-sized enterprises grow, diversify, and create jobs. We act to help entrepreneurs grow their businesses by improving their ability to commercialize their access to capital and their capacity for research. This in turn encourages the development of new products for export into more international markets. We also foster new approaches to community economic development in every region of Canada based on community strengths and ambitions.
As I indicated earlier, Mr. Chairperson, a theme of particular interest to Industry Canada is the development of strong, healthy communities, and that includes official language minority communities. Industry Canada is committed to ensuring that minority language communities have the tools they need to participate fully in the development of Canadian society.
On November 21, 2002, the cabinet committee on social union and the cabinet committee on economic union approved the Industry Canada component of the action plan for official languages. Some $33 million was approved for Industry Canada, the three regional agencies, and the federal economic development initiative in northern Ontario.
¹ (1540)
[Translation]
Some four activities were approved—outreach, communication and counselling services; internships for youth; pilot projects involving tele-education and tele-training; and renewal of the Francocommunautés virtuelles program. Industry Canada will deliver the outreach, communication and counselling services as well as the Francocommunautés virtuelles program, while the four regional organizations will deliver the internships for youth and pilot projects.
Our objectives in identifying and implementing these activities are: to maximize the participation of minority communities in existing federal economic development programs; to provide opportunities for youth to stay and prosper in minority communities; to provide access to education and training using leading-edge technologies; and to create and connect networks among minority communities.
[English]
Mr. Chairperson, I've just touched on a few of the many programs that Industry Canada and the industry portfolio have in place to foster a growing and competitive knowledge-based Canadian economy.
Thank you for your time in allowing me these opening remarks, Mr. Chairperson and committee members. I look forward to answering your questions on Industry Canada.
The Chair: Thank you, Mr. Nelson.
Mr. Raymont, you are going to continue on behalf of the research council.
Dr. Michael Raymont (Vice-President, Technology and Industry Support, National Research Council Canada): Thank you, Mr. Chairperson.
Good afternoon, and thank you for inviting me here today.
I am of course pleased to represent the National Research Council and to speak to the major issues of interest to the members of this committee.
The material we can distribute at this meeting--annual reports--describes some of NRC's recent achievements and some of the challenges we are seeking to confront on behalf of Canada. I would be happy to try to respond to any questions on NRC, but I should point out that in my role as vice-president for industry and technology support, my greatest interest relates to Canada's nearly 2 million small and medium-sized enterprises.
As this committee has noted many times in the past, SMEs are the key drivers of jobs and wealth creation in all sectors of the economy and in all regions of Canada. Given their major impact on the economy, SMEs rest high in our minds at NRC as we seek to raise Canada's standing as a world leader in R and D and to improve the economic performance of Canadian industry.
While all of our institute's programs and services benefit Canadian industry directly and indirectly, NRC's primary vehicle for stimulating the innovation capabilities of SMEs is of course the NRC industrial research assistance program, otherwise known as IRAP. NRC IRAP is a Canadian success story. It is regarded worldwide as one of the best programs of its kind, and here at home, NRC IRAP is a cornerstone of Canada's innovation system.
A comprehensive independent program evaluation completed in 2002 showed that the program created thousands of permanent new quality jobs, billions of dollars of economic benefit, and government revenues far in excess of the program costs. There is no doubt that this program works and it works well. It works because it focuses on technology advice, assistance, and services delivered locally to SMEs in communities across Canada. It has supported such companies as Newbridge Networks, Research in Motion, Ballard Technologies, Clearwater Foods, Ocean Nutrition, and many other well-known Canadian companies that have had a major impact on our economy. Through expert technical and business advice, modest financial assistance, and access to business information contacts and national and international networks, the program in fact provides customized solutions to some nearly 12,000 SMEs annually.
Our network of highly skilled and dedicated employees, who include over 260 industrial technology advisers, are keys to the program's success. Again, I would note that they're distributed right the way across Canada, from St. John's, Newfoundland, to Victoria and beyond. They are committed and ready to work with Canadian firms and to build Canada's capacity to innovate, generate wealth, and create jobs. In this respect, I was very pleased to note that the text of the Speech from the Throne spoke specifically of NRC and the need for investments to ensure that Canada's research base is converted into commercial success and economic wealth creation
We are certainly dedicated to this goal of moving more ideas and innovations into the marketplace. More specifically, we need to see more of our innovative small and medium-sized companies accelerating to the next level as global competitors that create enduring and significant national benefits to Canada. NRC is thus now looking forward for ways to build upon its expertise and national reach to help small firms bridge the commercialization gap by providing the research and expertise that small business cannot develop on their own. We're always seeking to improve.
In this regard, I know that some members of this committee are concerned over a special investigation that NRC conducted into the program last year. This has resulted in the dismissal of three NRC IRAP employees last fall and an action to recover contribution overpayments of the order of $500,000. I want to put that in the context of the total program cost, which runs $150 million per year. While we believe that this incident is most unfortunate from many perspectives, there has been no evidence to date of criminal activity, and we are heartened that our system of checks and balances worked and caught the mistakes. In a perverse way, this is a good news story. Our response to this issue has proved to be what outside experts have described as a measured and reasonable process. We're extremely proud of the people who work for IRAP NRC, and we believe the program's success has been a function of their skills and dedication as well as the program's responsiveness and efficiency.
¹ (1545)
As we move forward and learn more lessons from this investigation, we do not want to lose sight of these strengths and facts, because the Canadian innovation system and small firms across Canada will be hurt if we do. We thus welcome the committee's ongoing interest and support as we tackle these challenges and prepare for the future.
Mr. Chairperson, thank you again for inviting me here today.
The Chair: Thank you, Mr. Raymont.
We'll start with Mr. Rajotte and then go to Mr. Fontana.
Mr. James Rajotte (Edmonton Southwest, CPC): Thank you, Mr. Chairman.
Thank you for coming in today.
As you know, we're here discussing the supplementary estimates, and we as a committee are being asked to approve more funding. I believe it's over $27 million more for IRAP.
I think in general the program certainly has some merits, and we don't want to argue with the overall merits of the program, but we have asked some specific questions on this program for over a year and a half. Until today, we have not received any answers. We have basically received statements from ministers saying, “We'll get you the information when it's conducive to us.” So frankly, before this committee approves more than $27 million for IRAP, we want some specific answers to our specific questions.
First, we raised this in the House of Commons in September of 2003. The Minister of Industry confirmed that he had in fact learned about this the previous day, so he learned about this from Dr. Carty in September of 2003.
So my specific question is, when did this investigation begin?
Dr. Michael Raymont: The investigation began back in the earlier part of 2003 as a result of a routine review of files that turned up some irregularities.
Mr. James Rajotte: And Mr. Rock was informed then, in September of 2003?
Dr. Michael Raymont: That's correct.
Mr. James Rajotte: This was followed up in November by Simon Tuck and others in The Globe and Mail, where it was said basically that the National Research Council had fired three employees and had tried to recoup the $500,000 you mentioned.
Can you confirm that three employees were in fact fired by the National Research Council?
Dr. Michael Raymont: Yes, those employees were actually what we call “industry network members” before March of 2003.
I apologize when I have to search my memory or my notes at times, but I joined as vice-president of this organization in June of 2003, so much of this predates me.
Previously, NRC used to contract out with other organizations in many cases to supply its ITAs. So these ITAs were supplied by another regional agency; I can't tell you exactly where they came from, but they were under contract to NRC.
During the early part of 2003, a decision was implemented to bring all ITAs under NRC's direct employment, for a whole variety of reasons. So these employees actually became direct employees of NRC, officially, on April 1, 2003, I believe.
¹ (1550)
The Chair: Can I just ask, what is an ITA?
Dr. Michael Raymont: Industrial technology advisers.
Mr. James Rajotte: Which agency did these ITAs come from?
Dr. Michael Raymont: I'm afraid I'm unable to answer that. It was in Ontario, and I will endeavour to find out where they came from before.
Mr. James Rajotte: Okay. If you could table that with the committee, that would be helpful.
There were rumours that this amount involved up to $25 million. The Globe and Mail reports $500,000 in overpayments.
Can you clarify exactly what is meant by an overpayment? Was this a fact of an ITA giving... Say a company receives a contract and it was just overpaid by an administrative error, or was there in fact any fraud or bribery involved in this at all, as was alleged?
Dr. Michael Raymont: I can't comment on the use of the words “fraud” and “bribery” simply because we do not have the capability to investigate what I would term criminal activities. What we showed was that there were irregularities and sub-satisfactory performance in terms of the due diligence that was carried out by those three ITAs in reference to two companies.
More specifically, there were two companies with very, very similar-looking proposals--in fact virtually identical--that were submitted and funded. One of those companies did not meet the normal criteria that under proper due diligence would have permitted it to move forward to a contribution agreement. Therefore, when that irregularity appeared, i.e. when two essentially identical programs were funded, that's as soon as it was brought to the attention of the reviewing management.
Mr. James Rajotte: Which two companies were these?
Dr. Michael Raymont: They were companies called Sona and... I'm sorry, I don't have the name of the other company with me right now.
Mr. James Rajotte: Okay. Could you table that with the committee as well?
Why were three ITAs fired, if they were?
Dr. Michael Raymont: They were all involved to some extent in the preparation of those submissions for contribution agreements. On review--the investigation that took place over the summer--it was shown that their performance in terms of carrying out the due diligence on the submissions was simply very inadequate. On that basis, there was a determination made that their performance was not appropriate for an ITA and appropriate action was taken.
Mr. James Rajotte: Basically, it's because there were two contracts that were very similar. Could you be more clear as to exactly why the three ITAs were fired?
Dr. Michael Raymont: Two identical programs shouldn't be funded at two different companies at the same time. It turned out that there was movement of some of the management team of one company to another, there was a questionable address used by one of the companies, and it appeared that there was possibly transference of intellectual property from one to another, which wasn't properly done. Maybe there were unregistered addresses for the companies, and so on and so forth. Those are the kinds of irregularities that our management team picked up.
Had the due diligence been done properly those contribution agreement requests would never have come forward. That is why the ITA is involved. It would be deemed to be negligent in a sense, or incompetent, I would say, in their due diligence activities.
Mr. James Rajotte: This is an investigation. The RCMP have been notified and are working with you in this investigation, or are there two investigations?
Dr. Michael Raymont: They are separate investigations. We have notified the RCMP because I understand under the Financial Administration Act, if there's any apparent misappropriation of funds, the RCMP needs to be notified. The RCMP are working on this.
We provide them with information at their request, of course. Because it's potentially a criminal activity that they're looking at, they are unable to share with us any of their findings, and at this point they have not laid any charges.
Mr. James Rajotte: In terms of your own investigation, have you come across any evidence or information that would lead you to believe that these three ITAs, one or all three of them, received any moneys for providing an IRAP loan to one of these companies?
¹ (1555)
Dr. Michael Raymont: No. We have no evidence to that effect. Again, our investigation focused on the incompetence they showed in doing the due diligence carried out.
Mr. James Rajotte: Okay.
I have one last question, Mr. Chairman.
Minister Rock promised he would give us all the information and all the details. Will you table this before this committee, all of the results of the investigation to this date and then when it's finalized, so that we can make a decision based on more funding with the fullest information possible?
Dr. Michael Raymont: We can certainly provide an interim report on the events from the start to this point.
The Chair: Thank you, James.
Mr. Fontana.
Hon. Joe Fontana (London North Centre, Lib.): Thank you, Mr. Chairman.
Thank you to both Industry Canada and the people from NRC for being here.
I think the commitment just made and the fact that they have indicated some of the facts behind the disciplinary action that was taken on behalf of those ITAs...in fact the NRC moved as quickly as it possibly could and has given any information that may be pertinent to any criminal activity to the responsible body.
I want to talk a little bit about some of the good work that the IRAP or NRC is doing. I can tell you that having come from a meeting of the OECD, where a number of countries are very interested in our industrial assistance program, it is in fact one of the best ones in the world that helps small business take a go from research to discovery to the actual building of products and to the market. I want to applaud NRC not only for the development program, but in fact it has created an awful lot of jobs, new businesses, and so on.
In your supplementary estimates you have indicated that you need more money for the program. I know it's a program that is supported by a number of people on both sides of the House. In fact, the demand for assistance to small businesses and communities is ever increasing.
With regard to vote 85b, if I'm not mistaken, the additional funding for IRAP, could you tell the committee specifically what that will create or what that will produce for us?
Dr. Michael Raymont: These were funds that were agreed to be transferred from regional development agencies, specifically Western Diversification, FedNor, DEC, and ACOA. Part of the reason was that they felt we had feet on the ground that could assist them in advancing economic development and assisting SMEs in those regions. We already had a presence there, and we could facilitate things that they alone could not do.
Hon. Joe Fontana: So you'll be acting as agents for the regional development agencies to deliver the programs to the SMEs.
Dr. Michael Raymont: That's correct. Now, each of those amounts of money are clearly tied to the geographic areas in which those regional development agencies operate.
Hon. Joe Fontana: Okay. Thank you.
To Industry Canada, with regard to vote 5b, “grants listed in the Estimates and contributions”, but more specifically liabilities under the Small Business Loans Act, and under the Canada Small Business Financing Act, in fact there are reductions.
From what I hear, from consulting with small business on some of their problems and their trouble with access to capital, which a lot of small businesses have encountered especially when going to some of the major chartered banks, sometimes there was difficulty accessing, I understand, the former SBLA program, and now the new one. We know that the Government of Canada essentially guarantees those loans to the lending institutions, and the banks deliver the programs. But I take it that the reduction of some $12.8 million and also $1.75 million would indicate that either the original estimates, which tended to be higher, are now therefore reflected...or that the programs are not being used as much as possible.
I'm just wondering whether or not you want to comment on some of the problems that I, at least, hear from small business, that it's difficult for them to access those programs for small business, and yet we do all of the guarantees on behalf of the borrowers.
º (1600)
Mr. Michael Nelson: Mr. Chair, I can't comment precisely on the difficulty or not of accessing the programs, but I will point out that Mr. Fontana is absolutely correct in looking at the accuracy of the estimates in forecasting. With the reductions that are there, he's correct that they are quite significant from the estimates.
The program people tell me that the forecasting model they had used for the past number of years was, at least in part, the problem in terms of that number, and that this has been pointed out to them. They've in fact developed a new forecasting model, which is now complete and will be used for future years. So we should expect more accuracy and fewer appearances at the supplementary estimates to make corrections of this nature.
Of course, it is good news to the extent that a reduction in that program means fewer defaulted loans, but as one could appreciate, the difficulty of forecasting exactly what is going to happen in the environment involves a very complex financial model. However, they did understand that it wasn't working as well as it should, which is exactly what you've pointed out. So a better model will be used.
Hon. Joe Fontana: Thank you.
I wonder, Mr. Chair, given the opportunity this committee has, as an industry committee, to look at how we can do more to support small businesses, especially with regard to the small loans financing that the Canadian government provides to small businesses and is delivered by our banks...this indeed might be something we might want to study further.
Let me applaud Industry Canada and the NRC for having some great programs to support small businesses, research and development, universities, and in turn our communities.
Thank you, Mr. Chairman.
The Chair: Thank you. We can certainly include that among the future business items of the committee.
Mr. Crête.
[Translation]
Mr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Thank you, Mr. Chairman.
When I look at the supplementary estimates, particularly vote 1b, I was expecting to see some type of transfer to more traditional sectors. During the past year, many jobs have been lost in certain sectors. In Montmagny, for example, 500 jobs in the electrical appliance manufacturing sector will be disappearing. The apparel industry—jeans and textiles—is also having a great deal of difficulty. People talk about the possible loss of 600 jobs in Drummondville.
With the exception of the additional funding for the Canadian Apparel and Textile Industry Program, I see no changes on the part of the department in order to deal with these matters. Were there not enough reasons for providing extra assistance? Will the estimates requested be used to invest further in the existing program of to cover expenses that have already been incurred?
[English]
Mr. Michael Nelson: The estimates that are in front of us today are for the program known as CATIP,
[Translation]
which was approved by Treasury Board in 2002. The English acronym of the program is CATIP, and its basic objective is to help the apparel and textile industries diversify their markets and increase their competitiveness.
[English]
In this fiscal year--the program is four years in duration--the budget is $2,689,800 in terms of operations and $4,525,000 in terms of grants and contributions for a number of programs to increase productivity in the industry, for a total of $7,214,000.
Much of this, to answer your question, is for that program,
[Translation]
which is already been approved by Treasury Board. So far, close to $14.1 million has been approved for 220 projects under this program. Consequently, the money does go to this program.
º (1605)
Mr. Paul Crête: Do you think the funding is adequate to meet the current needs, or does the assistance requested far exceed the amount the department is asking for?
Mr. Michael Nelson: We are consulting the textile and apparel industries to get their views and we expect the government will announce its response to the recommendations.
Mr. Paul Crête: Could you tell me the difference between the figure for supplementary estimate 1b, for the department generally, and the figures for vote 60, which deals more specifically with the Economic Development Agency of Canada for the regions of Quebec, which actually mentions the program? There are two additional amounts for the apparel and textile industries: one for the department, and one for the Economic Development Agency of Canada for the regions of Quebec. Are these two amounts to be added together, and what are the specific objectives of these two programs?
Mr. Michael Nelson: I cannot speak for the Agency, but I can speak about the objectives of the Department of Industry's programs.
[English]
With respect to Industry Canada, as I've mentioned, Mr. Chair, the fundamental objective is to assist apparel and textile firms to diversify markets and increase competitiveness.
[Translation]
Mr. Paul Crête: Who could speak about the Economic Development Agency of Canada for the regions of Quebec? The vote we are supposed to be studying today relates to that agency. Could someone give us this information before we have to pass this vote?
Mr. Michael Nelson: I would ask, Mr. Chairman, that we hear from the interim Assistant Deputy Minister, Operations, Ms. Manon Brassard, and from Mr. Pierre Bordeleau.
[English]
The Chair: Identify yourselves for the record, please.
Ms. Manon Brassard (Acting Assistant Deputy Minister, Operations, Economic Development Agency of Canada for the Regions of Quebec): I am Manon Brassard, interim assistant deputy minister, operations,
[Translation]
Economic Development Agency of Canada for the regions of Quebec.
[English]
Mr. Pierre Bordeleau (Director General, Human Resources, Finance and Administration, Economic Development Agency of Canada for the Regions of Quebec): I am Pierre Bordeleau, Director General of Finance, Administration and Human Resources.
[Translation]
Mr. Paul Crête: Would you like me to repeat my question?
Mr. Pierre Bordeleau: What appears in vote 60 is the operating budget. From memory, I would say that the contributions budget does not appear in vote 60.
Mr. Paul Crête: In other words, you are asking for an operating budget of $386,000 to pay for salaries and so on. That would mean there would be an additional contribution of $2.6 million for Canada as a whole.
Mr. Pierre Bordeleau: That is correct.
Mr. Paul Crête: How much of the $2,690,000 goes to Quebec, compared to the 300,000-figure for operating costs?
Mr. Pierre Bordeleau: I apologize, but I do not have those figures here today.
Mr. Paul Crête: Could you get them for us?
Mr. Pierre Bordeleau: Of course.
Mr. Paul Crête: I have one final question. I was expecting to see additional amounts for the transition program to deal with the softwood lumber crisis. A specific program was set up for this purpose and it was used a great deal in my riding. I am told that there is no more funding available for this program. I therefore thought that there would be some additional estimates to meet further demands, particularly since budgets must be approved by March 31st, and that includes paying invoices. How do you explain the fact that there is no additional funding for this program?
[English]
Mr. Michael Nelson: The funds that have been allocated for softwood are for this year. We await from the government news of future years.
[Translation]
Mr. Paul Crête: So do we, Sir.
The Chair: Mr. Binet.
Mr. Gérard Binet (Frontenac—Mégantic, Lib.): Thank you, Mr. Chairman. Good afternoon, everyone. I arrived a little late because of some other obligations I had.
As a member of Parliament who represents a region, I can tell you that the Economic Development Agency of Canada for the regions of Quebec is a wonderful organization. We have nothing but congratulations for it. In my region, the main employer was the chrysotile asbestos mine. It used to account for 80% of the jobs; today, it accounts for only 20%. We have diversified our economy with assistance from the Quebec government and the federal government, particularly the Economic Development Agency of Canada for the regions of Quebec, and its Regional Strategic Initiatives Program. At the moment, programs like this one are having a hard time getting additional funding even though people talk about diversifying the economy in areas having difficulty. I am thinking particularly of the garment industry or the problems experienced by smelters because of competition from China. Will there be additional funding for programs such as the Regional Strategic Initiatives Program?
º (1610)
Mr. Michael Nelson: Ms. Brassard will reply.
Ms. Manon Brassard: We develop our strategic intervention programs in cooperation with the community. Our objective is to operate in synergy with the community and to have a leverage effect. We cannot do everything, and we certainly cannot contribute 100 per cent of all costs. It is therefore very important that we have a leverage effect. We are very concerned about the subject you raise. That is one of the issues we are reviewing. In cooperation with the communities of Quebec, we look at how each region is affected, and we try to understand the regional dynamics better. There is competition from China, but also from India, in the service sector. We work with the community to strengthen its technology and to provide economic diversification. Sometimes we must broaden our areas of activity. We also help out communities as regards productivity.
Mr. Gérard Binet: I sometimes see an individual who is involved in the program and who tells me that the budgets are simply not there. This is a program to help people assume responsibility for their situation. There are developers out there, and they do not wait six months. They want things to happen, they want to see progress. Will these matters be settled in the years ahead? We know that China and all the other countries with low-production costs are going to cause us problems. Do you think that Industry Canada will be more sensitive to this? This is a question that has been--
Ms. Manon Brassard: I can only speak for the Economic Development Agency of Canada for the regions of Quebec. Each of our regions had an RSI, and this is often the second or third such program. When projects are submitted to us, we try to process them within a certain period of time, and we try to do our best to speed things up. To the extent that we can intervene and the programs fall within our areas of activity, we do want to provide assistance.
Mr. Gérard Binet: Is there a funding problem, or can you meet all the needs?
Ms. Manon Brassard: I would say that this year, 100 per cent of our budget has been committed. We therefore do not really have a surplus. There's no shortage of good ideas, good business people and good projects, and we can do some leveraging as well.
Mr. Gérard Binet: Companies such as Bombardier are established in the regions. It was not established on Sainte-Catherine Street in Montreal. Our region is not far from the SME level of excellence per inhabitant, but our business people are being told that the money is not available. Everyone knows that the new technologies are the way of the future, and that is what is so wonderful about the Regional Strategic Initiatives Program. However, the regions have to be developed, and the budgets are not there. I find that sad.
Ms. Manon Brassard: Our budgets will be a little lower next year, but we are going to take steps to ensure that our initiatives remain as strategic and profitable as possible. Sometimes that means making choices.
Mr. Gérard Binet: We are talking here about loans, and I do not know what the interest rate is. So that is money that comes back to you.
Ms. Manon Brassard: Yes, that is money that comes back to us.
Mr. Gérard Binet: Are there not some slow periods? When the money comes back to you within a few years, will it be easier for you to provide funding, or will you always have the same problem?
º (1615)
Ms. Manon Brassard: Part of our budget is in the form of repayable contributions, and part in non-repayable contributions. Repayable contributions must generally be paid back two years after the end of the project. This gives the developers time to get going and to get well established so that they can pay us back. However, I would say that there is always a demand for new projects.
Mr. Gérard Binet: But the budget is not always there.
Ms. Manon Brassard: Well I think that--
Mr. Gérard Binet: I am here to put pressure. I spoke to the Minister of Finance in the past. In the regions, people want to get out, but as you know, the banks are not there. They have to deal with automatic tellers, and an automatic teller rarely ever says yes. Therefore, people have to resort to the caisses populaires (cooperative bank); however, the caisses populaires require that there would be partners involved. It is certain when the government involves itself in projects such as those... I can say that in my region, the benefits of the IRS program were exceptional. There are promoters, but if they are stuck because of a lack of financing--
Ms. Manon Brassard: We are very aware of the impact that can have.
Mr. Gérard Binet: Thank you very much.
[English]
The Chair: Thank you, Gérard.
Mrs. Gallant, please.
Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC): Thank you, Mr. Chairman.
My first questions go to the NRC. The Canadian Neutron Facility was reported to have received cabinet approval in the year 2000. Recognizing that there is a dual usage between AECL and your scientists situated at the Chalk River labs, it's my understanding that the NRC is now the lead agency for this project--if my understanding is correct.
At what stage is this project? Is it on the back burner? Is it dead? Do you have to redo their proposal? What do you know about the Canadian Neutron Facility proposal going forward?
Dr. Michael Raymont: I'm afraid, unfortunately, that's not in my portfolio, but I can consult my colleagues and see if I can get you an answer right away.
Mrs. Cheryl Gallant: It is crucial, because it takes roughly seven years from ground zero to have the facility ready. They have been given the money to extend the life of the NRU reactor another seven years, but it's beyond the time limit for which it's supposed to be decommissioned. As I understand it, it's our only source of neutrons for material science. And it is very unique in the way that it looks at materials in a non-intrusive platform and without damaging the samples. So it's key to the generation of new knowledge. I would appreciate it if you were to present your findings on that question to the committee.
Do you know what proportion of the scientists' time in the NRC is actually spent going from ministry to ministry with proposals to get the money for the projects they want, versus the time they're spending actually doing science?
Dr. Michael Raymont: I can only give you a guesstimate on that, but of course the bulk of the money that scientists use for their research and development activities at NRC is allocated to them both through A-base and through revenues that the organization generates and is allowed to reuse for R and D purposes.
NRC researchers do cooperate collaboratively with a number of other researchers in universities and they are thus able to apply for grants cooperatively with those other researchers to funding agencies such as NSRC, CIHR, and so on.
To the extent that those applications take some time to put together, fine, but I would estimate that the time they actually spend searching for funds outside NRC is relatively minimal.
Mrs. Cheryl Gallant: Would there be a model that you would like to suggest to Parliament in terms of having your scientists make a proposal? For example, in the case of the CNF, they had to go to the natural resources department and to the industry department, and then there was a change in ministers and they were volleyed back and forth.
Would it be your recommendation to have a central minister to go to for all science projects?
º (1620)
Dr. Michael Raymont: Can I clarify if you're talking about big science projects here or about more financing for internal NRC institute research work? Are you talking about big science like neutrino science?
Mrs. Cheryl Gallant: Big science.
Dr. Michael Raymont: There was a discussion today in NRC's executive committee and council meeting, and unfortunately I was able to only sit in on part of it because of this event. My understanding is that there is a proposal being developed with both NSERC and some of the other granting agencies and NRC to put forward a big science platform and a big science decision-making framework such that these big science projects can be decided on in a much more logical rather than ad hoc basis. It's my understanding that this document is now ready to be circulated to other interested parties, and it will come forward through the new science adviser, NRC's existing president, and up that route.
Mrs. Cheryl Gallant: Now I'm going to go to the Canadian Space Agency. Has there been an audit, an analysis, of the spending versus the returns on what they've been doing?
Mr. Michael Nelson: For that question, Mr. Chair, I'd like to ask Mike Taylor from the Canadian Space Agency to come to the table, please.
The Chair: For the record we have Mike Taylor, director of CSA.
Mr. Taylor.
Mr. Mike Taylor (Director, Government Liaison Office, Canadian Space Agency): I'm sorry, I missed your question.
Mrs. Cheryl Gallant: The question is in regard to the auditing. Has there been a cost-benefit analysis of the expenditures versus actual outcomes of what they've been doing? What's being done with their money, and what is Canada reaping from it?
Mr. Mike Taylor: I can say for sure that the Auditor General went through the agency last year and did a value-for-money audit, recognizing that we're a relatively new agency and this was their first audit. They made a number of recommendations, which I don't have in my head at this moment.
Cost-benefit analysis is a big word, but on the one hand, there is an assessment of the benefits before we undertake a project. There is a review of the benefits of each project after the project is completed. In terms of a systematic agency-wide process, I would say there isn't such a thing.
Mrs. Cheryl Gallant: Concerns have been raised to me by the space industry indicating that requests for proposals are being put out by the Canadian Space Agency but they're not being followed up on, or in some cases the winner of the contract is predetermined and there's a specific sector of companies that are winning all the contracts. Would you be able to give us some assurances, or what method is used to ensure that there is fair bidding in the process?
The Chair: Thank you, Cheryl.
Mr. Taylor, would you try to answer that?
Mr. Mike Taylor: I'll take a first crack. All I can say is that most of our contracts are competitive. They're done through a request for proposal process that is managed for us by the Department of Public Works and Government Services Canada. Aside from that, I couldn't possibly comment on the specific nature of the analysis that is undertaken in each case.
The Chair: Thank you, Mr. Taylor.
Just before we go to Mr. Vanclief for his question, there is a routine business motion that you have to bring documents forward for Bill C-9 that were tabled for Bill C-56 from the last session. I wonder if I could get one of you to move that motion.
Mr. Andy Savoy (Tobique—Mactaquac, Lib.): I so move.
[Translation]
Mr. Paul Crête: We can finish off and leave it to the end.
[English]
The Chair: Right, to bring them forward to this session, that's all.
(Motion agreed to)
The Chair: Thank you.
Okay, Lyle, back to you.
Hon. Lyle Vanclief (Prince Edward—Hastings, Lib.): Thank you very much, Mr. Chairman, and welcome to the officials here today.
On page 121 of the supplementary estimates are some numbers for the Canadian Tourism Commission--$4 million to assist in mitigating the impact of SARS. I have to admit, after a number of years I still have difficulty reading some of these numbers. Is there a second $4 million there in dark print? It says “Objects of Expenditure: Other Subsidies and Payments”. So have we got an $8 million supplementary estimate here, or is it just $4 million? Also, could you give us a bit of a breakdown on the types of things the moneys were spent for?
º (1625)
Mr. Michael Nelson: Mr. Chair, for that question, I'd ask Karin Zabel, who is vice-president and CFO for the Canadian Tourism Commission, to come to the table, please.
Ms. Karin Zabel (Vice-President, Chief Financial Officer, Canadian Tourism Commission): We've received $4 million of new funding, as is being tabled, I believe, in the supplementary estimates today. The funding was received to react to the impact on the tourism industry in 2003 of a variety of factors, SARS, the Iraq war, and mad cow disease. Of the $4 million $1.4 million was spent in 2003 to purchase the broadcast rights for the Rolling Stones concert that was held in Toronto in July, and the balance of the $4 million, $2.6 million, has been allocated to ongoing marketing expenditures in 2004.
Hon. Lyle Vanclief: I'm showing my inability to read these the way I should probably be able to. The explanation of the requirement has one line there of $4 million, and then the next is “Objects of Expenditure”, another $4 million. What's the difference between those two lines? Are they one and the same thing, or are they two different heavy prints? The first one says “Assistance to mitigate the impact of SARS”, and the second $4 million says “Other Subsidies and Payments”.
Ms. Karin Zabel: They are one. It was $4 million.
Hon. Lyle Vanclief: Okay, they are one and the same.
I believe there's only one part of Canada that doesn't have a regional development agency. There are a number across Canada, but southern Ontario does not have a regional development agency in any way, shape, or form. We do have the Community Future Development Corporations across much of Ontario. I don't think there's anything in the supplementary estimates here to be added to that. Maybe you can correct me if I haven't noticed it. Someone else has raised the question about the cost benefit. I know when I've looked at them over the years, the ones closest to me, the ones I have in my area--and I have involved my riding with two of them--the numbers have shown that they have been a way in which to give a tremendous return on investment to the Canadian taxpayer, with jobs maintained and jobs created, entrepreneurship being encouraged as a catalyst, etc. These CFDCs operate, quite frankly, on a shoestring, and I commend them for what they're doing.
How much work has been done on that return on investment? Do you have that overall, or is it provided to you on a corporation by corporation basis? And do you see a possibility of strengthening this type of development out there as a strategy to encourage more industry and entrepreneurship?
º (1630)
Mr. Michael Nelson: I'd like permission to get back to the committee with an answer, after consultation with the program area, to ensure I get a precise answer for you.
The Chair: Okay. Thank you.
Mr. Vanclief, thank you very much.
Mr. Rajotte, please. Then it will be Mr. Savoy and Mr. Crête.
Mr. James Rajotte: Thank you, Mr. Chairman.
I'd just like to follow up on something my colleague was asking about on the big science projects. Mr. Raymont, you mentioned they're developing something to propose on that, and I'm very heartened by that. We would certainly support something that had an easier system for funding big science projects. I just want to get your reaction.
We in this party have argued for some time to fund something like the synchrotron at the University of Saskatchewan, which I'm sure you're very familiar with. To fund it through NRC and WED--more than one agency--just complicates things for them greatly. They've certainly approached us and asked us to please simplify the way we fund this. They would prefer it be done through NRC, which has an excellent reputation. Is that where we're heading here? Is that what you would recommend?
Dr. Michael Raymont: I'm frankly hesitant to put myself in the position of recommending anything per se, but I can tell you that obviously there would be some sympathy with having a single agency responsible, not so much for the decision but more for the ongoing fluid operation of those things.
Part of the trouble with these large science projects is that the capital estimates are often not that accurate, but above all, operating estimates are not that well considered. So we put in place a $100-million facility with inadequate funds to support it, just through errors in estimating. When you're doing big science you're on the bleeding edge, and it's very difficult to deal with those things.
So the point is that what is being developed is a framework, where a number of different agencies that have experience in big science will work together to make certain that the numbers that are developed are more reliable. That's the aim of putting these agencies together. If a single agency were to take over all responsibility for that, the skills that are present in other agencies that could help might be missed.
Mr. James Rajotte: I appreciate that, but just for our benefit, using the synchrotron example again, is it better to fund through NRC and WED, through one or the other, or does it really make a difference whether you have one, two, or three government departments or agencies involved, in your view?
Dr. Michael Raymont: You clearly get more input the more people you involve. There comes a point of diminishing return for that. TRIUMF is funded entirely through NRC, so there are models of doing that. But on the other hand there are models--you pointed out the synchrotron in Saskatoon--where there are multiple agencies involved, because it draws in a variety of parties and a variety of skills.
Mr. James Rajotte: I want to follow up with a couple of quick questions, just to clarify the previous issue I was talking about with regard to IRAP and the three ITAs who were fired.
According to an article in the Ottawa Sun in November 2003, three employees of IRAP were fired, and the feds were in the process of trying to recover funds paid out to six unqualified recipient firms. It quoted Margo Montgomery. You mentioned two, and this mentioned six.
Secondly, in Simon Tuck's article in November 2003 he talks about how the funds have been recovered from four of the six companies that received the grants. So he mentioned six as well. He could not provide an exact figure on how much had been recouped, but then he said that we expect to have full recovery of debts by 2003.
So perhaps you could just clarify for us why they are saying six in here. Is it in fact six, or is it two? Were the funds, as Dr. Carty said, recovered by the end of 2003? How much of the $500,000 has been recovered?
Dr. Michael Raymont: To answer your last question first, my understanding is that a little less than $200,000 has been recovered at this point, out of a total of nearly $500,000 that was overpaid in the first place. But we're continuing to work on recovering the rest of those funds, and we see no reason why we shouldn't be able to recover them in full, in time.
On the number of companies involved, it's my understanding that there were two. The irregularities that were investigated focused on two companies per se, but in turn there were subsidiaries of those companies involved, and a consultant was involved. So there may be some confusion as to which ones were represented as companies directly applying for the contribution agreements. I would like to clarify that for you at some later date.
º (1635)
Mr. James Rajotte: How many other files were these three ITAs who were fired working on? Have they all been subjected to an audit process, an internal audit, so that you can find out if there are any other regularities?
Dr. Michael Raymont: Yes. This group of ITAs worked on a number of other files, but obviously they were the key focus of attention after the initial irregularities were unearthed. Those files have been gone through very carefully, and the rest of the companies all meet the appropriate criteria for a contribution agreement. Some have been very successful projects.
Mr. James Rajotte: Okay. Could we have the results of that, as well as the other information you promised to table?
Dr. Michael Raymont: Certainly.
Mr. James Rajotte: I do have a question. We've been investigating the ITAs within the IRAP program. We found out that there were three ITAs posted in Thailand because you have a project going on in Thailand. There's one in France, which makes sense, obviously, with Canada's relationship with France. There is one posted in the entire United States. Can you explain why there would be three in Thailand and one in the United States?
Dr. Michael Raymont: There was an agreement between the equivalent agency of NRC, negotiated I think by Dr. Carty at his level, to assist Thailand by teaching them the ITA program. As one of the other honourable members of this committee suggested earlier, the IRAP program is well regarded world-wide. In fact, we have many requests from countries to teach them how the IRAP program works. There was an agreement to provide that assistance to Thailand.
As a result, we actually needed ITAs on the ground there to provide that teaching and mentorship and to bring them up to pace. There are now 30 ITAs. They're called ITAs, but the program is called ITAP in Thailand. It's my understanding that the program comes to an end as of April 30 of this year. That number will be reduced to possibly one, on an ongoing basis, or down to zero.
With respect to your question about the presence of ITAs in the U.S., we take missions frequently, both into the U.S. and to other key countries, such as China, India, and several European countries. It is not usually our practice to domicile an ITA in a country.
With regard to the U.S., we are cooperating both with DFAIT, or its successors, and Industry Canada on the enhanced representation initiative. NRC IRAP is playing a significant role as part of taking missions south of the border.
The Chair: Thank you, Mr. Rajotte.
Mr. Savoy, please.
Mr. Andy Savoy: Thank you very much, Mr. Chair.
Thank you, gentlemen, for coming.
I wanted to initially start out by commending NRC on the IRAP program. I've had the pleasure of being directly involved with it, working with people, with ITAs. As an engineer, I've been involved with small business and product development. The IRAP program is truly one of the most valued programs we have in terms of small business assistance in Canada, if not the most valuable.
I know in terms of technology transfer as well that it has done enormous things for our businesses in New Brunswick to keep them competitive with foreign jurisdictions. I wanted to start by commending Industry Canada in general and NRC specifically for that program. In my mind, it's invaluable to small business in our region.
Looking at the budget for ACOA, we have small banks in the regional development programs. I know with ACOA we have small lending banks; we're small business lending banks, basically.
In our region, it's the New Brunswick Southwest Valley Business Development Bank. I think that's the name of it. In discussions with them, and in discussions with many of my constituents, on trying to access the funds, they describe them as frequently oversubscribed early in the year. I'm talking about six to eight months into their fiscal year.
I notice in your budget that one of your line items on votes, on one of your statutory items, there's $1 million in payment to lenders with respect to claims for loans made under the Canada Small Business Financing Act under ACOA. Am I to assume that we've recognized the oversubscribing situation with those programs and are in fact shoring them up? Is that the situation, or do you have an alternative explanation for that number?
º (1640)
Mr. Michael Nelson: Mr. Chair, Peter Estey, vice-president of corporate services from ACOA, is with us. I'd ask Peter to come to the table.
The Chair: Mr. Estey, did you catch the question from Mr. Savoy?
Mr. Peter Estey (Vice-President, Finance and Corporate Services, Atlantic Canada Opportunities Agency): Yes.
The short answer to the question is no. The SBLA and the Canada Small Business Loans changes that you see reflected in the supplementary estimates are unrelated to funding through the CBDCs, the Community Business Development Corporations, in Atlantic Canada.
But just to reassure you on that point, and perhaps to come back, if I may, to Mr. Vanclief's question, in Atlantic Canada the CBDCs, the Community Business Development Corporations, which are the same as the Community Futures organizations in your neck of the wood, were projected to create 1,200 new jobs and maintain 2,500 jobs in rural areas, through approximately 1,040 loans.
The results that were in fact achieved involve 1,251 loans. We put $39.8 million into business establishments and expansions in Atlantic Canada through the Community Business Development Corporations, and 3,195 jobs have been created.
There's a recognition that some of the CBDCs receive more demand than others; therefore, we've recently created a pool in partnership with the Association of Community Business Development Corporations in Atlantic Canada. The individual business corporations can access that pool. So if a particular business development corporation has excess demand, they can borrow funds from a central pool, make the loans in their region, and then pay back the central pool. The agency has supported that, and the Association of Community Business Development Corporations runs it.
Mr. Andy Savoy: Thank you. That was the only ACOA question I had.
In the Industry Canada budget under vote 75, one of the specific items is the support of greenhouse gas reduction under the climate change action plan. I see that we have a new appropriation for it. I know we're playing an aggressive role at Industry Canada on that climate change action plan, and it's something I support wholeheartedly. Could you explain that number and some of the activities surrounding the number?
Mr. Michael Nelson: Just give me a second.
Mr. Andy Savoy: It's on page 126 of supplementary estimates (B). It would be the third line item under “explanation of requirement”, for activities in support of greenhouse gas reduction under the climate change action plan.
Mr. Michael Nelson: Page 126 is actually for the National Research Council of Canada.
Mr. Andy Savoy: I'm sorry, yes.
Mr. Michael Nelson: It's all in the Industry portfolio, in effect.
Michael, could I ask you to... It's with the National Research Council.
I'm sorry, which line was it?
Mr. Andy Savoy: It's the third explanation under “explanation of requirement“ for NRC, on page 126. It speaks to the activities in support of greenhouse gas reduction and the climate change action plan.
The Chair: It's vote 75.
Mr. Michael Nelson: Excuse me for the confusion. That's vote 75 for the Natural Science and Engineering Research Council. We have someone here from the Natural Science and Engineering Research Council.
Mr. Andy Savoy: It's actually not NSERC, it's NRC, and it's vote 75b, under explanation of requirements. It's the third line item explanation, activities in support of greenhouse gas reduction under climate change action plan.
Mr. Michael Nelson: I think we're very close to having the right person giving the right answer. Excuse us.
Dr. Michael Raymont: On page 126 there is a transfer of money from the climate change plan to the fuel cells research activities at NRC, carried out in Vancouver as part of our fuel cells cluster and Fuel Cells Research Institute there.
Mr. Andy Savoy: Okay, perfect; that's what I was searching for. Thank you.
º (1645)
The Chair: I'll ask you to wind up anyway. Thank you, Mr. Savoy.
Mr. Crête, please.
[Translation]
Mr. Paul Crête: Thank you Mr. Chair.
Ms. Karin Zabel can answer my question with respect to the Canadian Tourism Commission.
I would like to know whether the $4 million in additional funding were used to pay for the marvellous contract landed by Mr. Conan O'Brien, who came here and made fun of Quebec and Canada at the expense of our taxpayers. Were the one million dollars used to pay for Mr. Conan O'Brien's show in Toronto a part of the additional $4 million?
[English]
Mr. Michael Nelson: Mr. Chair, I would ask Karen Zabel to come back to the table.
[Translation]
Mr. Paul Crête: Would you like me to repeat my question?
Ms. Karin Zabel: Yes, please.
Mr. Paul Crête: It was said that of the $4 million, $1.4 million went to the Rolling Stones concert and $2.6 million for other things. Was the one million dollars paid out to Mr. Conan O'Brien for his wonderful show held in Toronto, making fun of Quebeckers and Canadians, drawn from the $2.6 million?
[English]
Ms. Karin Zabel: No, they were not. There was no contribution made by the Tourism Commission towards that initiative.
[Translation]
Mr. Paul Crête: Who paid for the show?
[English]
Ms. Karin Zabel: I'm not sure, to be honest, but I believe it was funded by the Ontario Tourism group through the Ontario government.
[Translation]
Mr. Paul Crête: Did the Canadian Tourism Commission not give Ontario a sum of money that would have allowed it to pay for the show? Within the framework of the “assistance to mitigate the impact of SARS” envelope were there not sums of money that were handed over to provincial tourism commissions including the Ontario one?
[English]
Ms. Karin Zabel: We do not contribute general funds to any tourism organizations; we only partner with tourism organizations for specific events, hence the $1.4 million for the Rolling Stones concert. We would not have given an allocated general amount of money to the Ontario Tourism folks.
[Translation]
Mr. Paul Crête: Very well. Of the additional $4 million, and the total envelope to mitigate the impact of SARS can you give me an idea of the breakdown of sums given to provinces other than Ontario, for example Quebec or the Western provinces? We know that the SARS crisis had an effect everywhere. I saw the impact in the Niagara Peninsula, but also in Quebec City, Montreal and in our regions. Were there sums allocated everywhere? Would it be possible for me to receive a breakdown of this?
[English]
Ms. Karin Zabel: I can come back to the committee with a specific report of funds that were spent, but to give you some general information, we received new funding from the government in 2003 of $21.5 million. Of that there was a specific amount of $7.5 million spent on a marketing campaign in Canada, and that campaign was to encourage Canadians to stay at home. As to whether or not we had specific partnership arrangements with marketing organizations or tourism industry members in the province of Quebec, I don't have that specific information with me, but I can table it with the committee.
[Translation]
Mr. Paul Crête: Does somebody from the Economic Development Agency of Canada for the regions of Quebec have this information here? No? Okay.
I have one last question, on a different subject and that is not for the Canadian Tourism Commission. Thank you, Ms. Zebel.
Among the activities of the Economic Development Agency of Canada for the Quebec regions, there is a program called Entreprises rurales, which is focused, in particular, in the eastern region of Quebec. Unfortunately I do not know if the program was broadened for the rest of Quebec. I would like to know the current state of these estimates. I am surprised to see that there are not any additional estimates, because in my region, I am often told that there are too many applications and not enough money. It is a program that is intended to give people a helping hand in starting up very small and small businesses. It is surprising to see that the Economic Development Agency of Canada for the Quebec regions, did not receive additional sums, as requested. I would like to know what is the current state of the estimates.
º (1650)
[English]
Mr. Michael Nelson: Mr. Chair, Manon Brassard will return to the table.
[Translation]
Ms. Manon Brassard: I do not have the exact figures to give you at the moment. We did not make an additional request. We used the sums that we received for the purposes set out, within the framework of our programs, and for now...
Mr. Paul Crête: Are all the estimates committed?
Mr. Pierre Bordeleau: The estimates for rural development have been committed, and we will be pleased to submit them to the committee. It is not part of our supplementary estimates, but is a part of our main estimates only.
Mr. Paul Crête: But are there enough additional applications to warrant additional estimates?
Mr. Pierre Bordeleau: From a financial point of view, no additional application warrants a request for supplementary estimates, as Ms. Brassard has told you.
Mr. Paul Crête: Did you not receive any application from the regions?
Mr. Pierre Bordeleau: It is the one that was reviewed by the department and warranted a request for supplementary estimates. It is the estimates you are reviewing today.
[English]
The Chair: We have short interventions from Mr. Fontana and Ms. Gallant, and then, if there's agreement, we'll go ahead to the voting part of this meeting.
Mr. Fontana.
Hon. Joe Fontana: Thank you, Mr. Chairman.
I wanted to have a supplementary to Ms. Gallant's question with regard to the Canadian Space Agency. That's another good news story. Perhaps when this committee is reviewing the main estimates it can invite Mr. Garneau to come. Talk about commercialization, talk about making sure the private sector is involved in the research, technology, and commercialization. It's in the Canadian Space Agency, where you'll find there are an awful lot of benefits, not only to Canadian science, but I think to communities and companies that are doing an awful lot of the supply as well as the research.
There is an additional $16 million being transferred to the Canadian Space Agency as it relates to votes 30b and 40b, and that's for Canada's international obligations on satellite and communications. Of course, we all know how important telecommunications are to this country, as well as our involvement in the European space program. I'm wondering whether the Canadian Space Agency can briefly highlight the good news that is associated with this stuff.
The Chair: Mr. Taylor from the Canadian Space Agency.
Mr. Mike Taylor: Thank you.
First, this isn't new money; this is a vote transfer from the capital vote into the contribution vote and the operating vote. One of the projects that involves a contribution agreement is the Cassiope project. It's a demonstration payload for a new concept of satellite communications, essentially a space-based courier service to transmit large amounts of data in near real time. It's transferred from a capital vote to a contribution vote because of a technical thing Treasury Board suggested. Since we had the program fixed, it looked more like a contribution agreement than a contract, and we acquiesced in their request.
Similarly, we are a long-time participant in the European Space Agency. We're the only non-European member of the European Space Agency. We find it beneficial to partner with the larger space agencies in the world. The countries in Europe are among those. We have common interests when it comes to doing research in satellite communications.
The Chair: Thank you, Mr. Taylor.
Ms. Gallant.
Mrs. Cheryl Gallant: Thank you, Mr. Chairman.
I notice that we have ACOA, the regional agencies for Atlantic Canada and Quebec, the Economic Development Agency. I'm wondering where the FedNor report is buried.
Mr. Michael Nelson: FedNor is part of the Industry Canada portfolio.
Mrs. Cheryl Gallant: I just don't see any details on FedNor, and that being part of my responsibility, I was interested in seeing some numbers.
º (1655)
Mr. Michael Nelson: It depends which numbers you're interested in. The supplementary estimates are to ask for specific items that have been approved by Treasury Board, in most cases, during the year, extra money.
Mrs. Cheryl Gallant: So there's no extra money being asked for FedNor?
Mr. Michael Nelson: I think that's the way to read it.
Mrs. Cheryl Gallant: Well, I do see ACOA here. A case has been brought to my attention of an employee who, to his credit, worked his way up, as a disabled person, from the lower ranks of sorting the mail right up to a position where he was authorizing expenditures, almost a comptroller position. He questioned expenses that he was being forced to sign off on, things like silverware for parties, cakes for birthdays, just one thing after another. He refused to sign off on these. Eventually he was given a lateral transfer. Ultimately, to keep him quiet, he was transferred right out of the maritime region and literally paid to sit in a Royal Canadian Legion, to the tune of $50,000 a year, on the condition that he didn't release his boxful of documents itemizing all these expenditures.
So my question on these supplementary estimates is, under operating expenses and personnel, of that figure, what proportion would be going to pay for the silence of other employees who had been forced out of their positions because they refused to sign off on these?
The Chair: I'm sure it's on the borderline, but if there's an interest in trying to answer that....
Mr. Michael Nelson: Mr. Chair, I will ask Peter Estey, who represents ACOA today, if he cares to comment. It will be a difficult one, with respect to the supplementary estimates, to make that kind of determination or to answer that question, but I will ask Peter if he cares to comment.
Mr. Peter Estey: Again, the short answer to your question is zero.
Secondly, I would comment that I have absolutely no idea of the substance of any of what you have suggested is the basis for the question. If you would care to share that us, we'd be pleased to find out what substance there may be to any of that and let you know.
The Chair: Thank you very much.
Maybe as a suggestion, Mrs. Gallant, if you want to put that in a letter to the minister, I'm sure you would get an answer.
With that, I would like to ask if there's unanimous consent to do these votes as a bundle. Is there unanimous consent to do that?
Some hon. members: Agreed.
The Chair: So I call vote 1b under Industry.
INDUSTRY
Department
Vote 1b - Industry - Operating expenditures...........$1
Vote 5b - Industry - The grants listed in the Estimates and contributions..........$1
Atlantic Canada Opportunities Agency
Vote 20b - Atlantic Canada Opportunities Agency - Operating expenditures..........$4,209,471
Canadian Space Agency
Vote 30b - Canadian Space Agency - Operating expenditures..........$1
Vote 40b - Canadian Space Agency - Contributions..........$1
Canadian Tourism Commission
Vote 45b - Canadian Tourism Commission - Program expenditures..........$4,000,000
Competition Tribunal
Vote 50b - Competition Tribunal - Program expenditures..........$238,727
Copyright Board
Vote 55b - Copyright Board - Program expenditures..........$142,600
Economic Development Agency of Canada for the Regions of Quebec
Vote 60b - Economic Development Agency of Canada for the Regions of Quebec - Operating expenditures..........$1
Vote 65b - Economic Development Agency of Canada for the Regions of Quebec - The grants listed in the Estimates and contributions..........$1
National Research Council of Canada
Vote 75b - National Research Council of Canada - Operating expenditures..........$8,294,461
Vote 80b - National Research Council of Canada - Capital expenditures..........$3,650,089
Vote 85b - National Research Council of Canada - Contributions.........$10,403,692
Natural Sciences and Engineering Research Council
Vote 90b - Natural Sciences and Engineering Research Council - Operating expenditures..........$626,338
Vote 95b - Natural Sciences and Engineering Research Council - The grants listed in the Estimates..........$1,050,000
Office of Infrastructure of Canada
Vote 100b - Office of Infrastructure of Canada - Operating Expenditures..........$1
Social Sciences and Humanities Research Council
Vote 110b - Social Sciences and Humanities Research Council - Operating expenditures..........$1
Statistics Canada
Vote 125b - Statistics Canada - Program expenditures..........$15,345,899
Western Economic Diversification
Vote 130b - Western Economic Diversification - Operating expenditures..........$3,901,350
Vote 135b - Western Economic Diversification - The grants listed in the Estimates and contributions........$31,001,445
(Votes agreed to on division)
The Chair: Thank you very much, colleagues. The meeting is adjourned.