The Chamber of Commerce of Metropolitan Montreal

Speech – guest speaker:The Honourable David L. Emerson, Minister of IndustryBuilding a 21st century economy

Speaking Points

Honourable David L. Emerson
Minister of Industry

National Speaking Tour

Montréal, Quebec
September 20, 2005


Je suis content d'être parmi vous aujourd'hui à Montréal, une ville que j'aime beaucoup (pause) et je remercie la Chambre de commerce pour son invitation à m'adresser à vous. (I am pleased to be with you today in beautiful Montréal, and I thank the Chamber of Commerce for giving me this opportunity to speak to you.)

I must say how impressed I am by the incredible renaissance this city has experienced.

I remember coming here in the early 1990s and being struck by how Montréal seemed a shadow of its former self. The economy seemed stuck in a permanent recession.

But Montréalers rolled up their sleeves…and they innovated! They embraced the strategy of “industrial clusters”…“la stratégie des grappes industrielles” — promoted by the then Minister of Industry, Commerce and Technology, Gérald Tremblay, who is now your charismatic mayor!

The result has been a profound transformation. You're now a leader in the knowledge economy. You've taken advantage of your skills, your talent, your entrepreneurship and your cohesion as a community.

You support leading international firms: Ubisoft, SAP, Ericsson, AstraZeneca, Novartis, and many others that have established Canadian headquarters here in Montréal. And they join indigenous Canadian multinationals like CAE and Bombardier.

There is no doubt that Montréal has the potential to be a model of commercial success in the emerging global economy.

And Canada 's stellar economic and fiscal performance suggests we are in good shape as a country:

  • Fourteen years of uninterrupted economic growth;
  • Growth in employment and living standards that leads the G‑7; and
  • A debt burden that is the lowest among the G-7 nations, and continues to decline.

We are well positioned but I think we all recognize that yesterday's success is no guarantee of tomorrow's success.

In fact, I have a number of concerns.

I worry that the strong commodity markets, which have contributed to our excellent performance, will weaken — they always do.

I worry about the twin U.S. deficits, and the potential economic fallout for the world economy.

U.S. interest rates are creeping up. And protectionism is growing ever-deeper roots. Think of beef and softwood lumber.

I worry that we are not as prepared as we should be to deal with the opportunities and threats presented by emerging powerhouses such as China and India .

I worry about our aging demographics, and the limited potential for growth in our workforce.

I worry about a lingering 15 percent productivity gap with the U.S. That's an average $14 000 less a year than our American counterparts.

I also worry — we all need to worry — about the effects of climate change. Canada is a northern country and we are already seeing some early symptoms…warming waters, disappearing icebergs and glaciers, declining salmon runs, and unprecedented scourges like the mountain pine beetle in B.C.

Today, these are clouds on the horizon. But Katrina should remind us that today's clouds can be tomorrow's disaster.

We need to be ready. And being ready means being able to withstand the inevitable shocks and pressures coming at us.

Canada is a small trading economy. We are the most trade-dependent country in the G-7. Our standard of living and our quality of life are shaped by our ability to thrive and compete in an increasingly competitive global economy.

If we can't compete, we are vulnerable… vulnerable economically and socially.

Harsh but true: health care, pensions, the environment, education, childcare… all require a powerful economic engine to carry the freight.

And let's be clear, the investment and employment opportunities that future generations of young Canadians are counting on are on the line. Other countries want them and are competing for them with growing intensity.

It's how well we anticipate threats and opportunities. And it's the actions we take today that will determine whether our children will have the opportunities, and the quality of life, that we have enjoyed.

If we falter, those opportunities will go to kids growing up in India , China and the United States .

Alors, comment faire face à cette situation? ( So, where do we go from here?)

Where not to go:

  • Low wages / Poor working conditions — it's not a race to the bottom.
  • Economy at the expense of environmental degradation.

 From my perspective, there is only one way to go. We have to build an environmentally sustainable economic engine with extraordinary power, and that power must be derived from a deeply embedded capacity for innovation and use of technology.

We need to drive science…technology…innovation…deep into every corner of every region and every sector…manufacturing, natural resources, services…both public and private.

That is my obsession as Industry Minister, and I want it to be front and centre in the Government of Canada's agenda.

It isn't going to be easy. It requires focused engagement by millions of Canadians, each adapting in their own way to their own unique circumstances.

From the Government of Canada's point of view, there is no silver bullet.

But that doesn't mean we don't know what needs to be done. We do know.

We know we have to provide people with the necessary tools, with a supportive working and living environment, and with the critical infrastructure of a successful modern economy.

We need to equip people with the knowledge and the skills required to tap into the global knowledge pool.

We need to encourage and equip entrepreneurs and workers with the management skills to enable them to become successful innovators — innovators who consistently find new ways of turning knowledge into wealth in a never-ending process.

We need to continue to grow our critical mass of Canadian research capacity…we need to be among the best at pushing the frontiers of scientific exploration.

And we need the critical infrastructure of a globally connected economy.

Telecommunications and broadband technology are the most transformative technologies of our generation. Canadians without high-speed access to the Internet will be increasingly out of the game…in terms of economic opportunities, education and even health care.

And while Canada does have one of the most educated workforces in the world, and we are making much progress in attracting world-class researchers, we fall short in critical areas.

We do not, for example, produce nearly as many postgraduates in mathematics, the sciences, engineering and business as does the U.S. , and these skills will be essential to our future economic success.

This is a problem, and we need to fix it.

We need to produce and educate more of our own math and science grads. And we need better, more efficient, attraction and integration of trained and skilled immigrants into the economic mainstream of Canada .

Another challenge…in spite of a variety of research and development incentives here in Canada , the R&D performance of private sector companies is mediocre by international standards. There are exceptions, including some of the aerospace and other companies in this room. But by and large, it's a problem.

That's why I appointed a six-member Expert Panel on Commercialization, including Germaine Gibara, from Montréal. I asked them to prepare a roadmap and identify priorities for improving Canada 's innovation and technology commercialization performance.

We have given the Panel broad latitude to knit together a strategic framework of recommendations relating to research, innovation, venture capital and other measures that can contribute to a deeply embedded Canadian capacity to innovate.

This work is pressing and urgent, and I look forward to recommendations this fall.

What else is Industry Canada doing?

First, Industry Canada and the Government's research organizations and granting agencies have invested some $13 billion into research at post-secondary educational institutions.

This includes recruitment of world-class researchers, support for graduate students and provision of research infrastructure.

Our goal has been to make Canada a research leader and, in the area of research in institutions of higher education, we are now a world leader. The challenge is to build on this success.

Another key priority is the Canadian aerospace industry. Montréal is the third largest aerospace centre in the world, and aerospace is Quebec 's leading export industry. The health and competitiveness of this industry is vital for Quebec and vital across Canada .

In the past year we have made major commitments to innovative and forward-looking projects at a number of companies here in Montréal …Bell Helicopter's Modular Affordable Product Line…engine R&D at Pratt & Whitney…and Bombardier's proposed CSeries. Just last week (September 13) we announced a $5.8-million investment in landing gear systems R&D at Héroux-Devtek of Longueuil.

Along with several Montréal-based aerospace executives and the Quebec Minister of Economic Development, we have established the Canadian Aerospace Partnership. This multi-stakeholder group with representation from across Canada is working collaboratively to develop a strategy for the competitiveness of the aerospace industry. Alain Bellemare is one of the co-chairs.

Our strategy will have to combine a number of reinforcing elements:

  • A clear, strong commitment to build on our position as a global leader.
  • A Canadian approach to winning major strategic investments in an increasingly competitive, security-conscious world.
  • Continuing support for technology development.
  • Focused support for education and skills development.
  • Trade policy and trade development, including sales financing.
  • Strong linkage to our security and environmental objectives, including to the space program.
  • Government procurement that supports the evolution of a globally competitive, technology-rich industry here in Canada.

I expect to bring forward a comprehensive Canadian aerospace strategy in the coming weeks. It won't be the last word but it will provide the basic platform from which we can build a robust, evergreen strategy for the future.

We're also restructuring and improving technology commercialization programs at Industry Canada.

Technology Partnerships Canada is a program designed to share technology risk and encourage innovation by Canadian companies.

It's had some great successes, but it's in need of an overhaul.

I am announcing today that I have instructed my officials to wind down the Technology Partnerships Canada program and to complete their assessment of all applications received to date. Details on the new program will be available early in the new year.

Funding for the aerospace and defence sector will continue at the current level.

The overall program budget will remain the same as well, although as we head into the budget cycle, we would expect to be in there fighting for more.

 The new Transformative Technologies Program will emphasize openness in its disclosure of how public funds are spent. It will also be open to a wider array of businesses and projects, as long as they involve leading-edge research and innovation.

The evaluation and selection process for projects will be more open and more competitive — external panels of experts will help decide who gets funding.

The old TPC produced some exciting success stories, but it was too narrowly focused for the technology transformation challenges we face today. There were also some serious administrative compliance problems. For example, recent audits turned up unregistered lobbyists, some of them working on commission.

These are unacceptable breaches of contracts and they will be remedied.

I will be releasing detailed information on these audits in the coming days.

I intend to make the new program more transparent, more accountable, more accessible to businesses here and across the country, and more effective at stimulating research and technology adoption.

Other programs will ramp up as well. Business Development Bank of Canada (BDC) with its head offices here in Montréal has a lot of work to do. In particular, they are exploring how to strengthen the role they play in leveraging provision of venture capital in support of innovation and the adoption of technology.

Their focus will continue to be overwhelmingly on small business. We recently made an additional $250 million available to BDC for this work.

I mentioned the transformational power of information and communications technologies — or ICT. These technologies represent the single largest contributors to productivity and competitive improvement in recent years…accounting for approximately 75 percent of productivity gains.

But evidence shows we're still falling well short of the U.S. in applying these technologies.

Here again we have appointed an expert panel to report by year-end on changes to the way the sector is regulated. André Tremblay from Montréal is on this panel. While the panel is reviewing the regulatory framework, Industry Canada is also in the final stages of developing a strategy for the broader ICT sector.

We shouldn't forget that Canada has shown real leadership in supporting and providing electronic infrastructure.

We've extended broadband to hundreds of Canadian communities and we've supported super broadband connectivity among schools, universities and research organizations in Canada and internationally.

But while we rank high internationally, we've been slipping in the rankings.

It is absolutely essential that broadband access be extended further into remote and isolated communities.

It bears repeating. Without Internet access today, people and communities are simply not able to join the economic mainstream, or even to fully access opportunities for health care and education.

We need to finish the job, here in Quebec and across the country.

Beyond aerospace and ICT, a number of other sector strategies are underway:

the automotive sector, the forest sector, the hydrogen fuel technology cluster, biotechnology, and shipbuilding and repair.

Some sectors — nanotechnology, ICT, environmental technologies — have applications across the economy. Our goal is to ensure that competitive strengths in these areas provide cascading benefits across the economy.

Our general goal is not industry protection. It is to support industry to identify where and how they can be globally competitive, and help clear the path for them to get there over the next five to ten years.

There are many more clusters that are thriving here in Quebec: life sciences, pharmaceuticals, environmental technologies, optical technologies and the list goes on. The Government of Canada is involved directly or indirectly with virtually all of them.

Finally, it is important to ensure the marketplace is competitive and efficient. Competition policy, bankruptcy rules, and patent and copyright laws are the shock absorbers of a vibrant, changing economy. Industry Canada is moving forward legislatively in all these areas.

Let me summarize. This economy has a great and prosperous future.

But complacency is an enemy. We are a small trading economy. We're rich in people and rich in natural resources. We have the potential to be an economy driven by the power of innovation.

But that potential will only be realized if we drive technology deep into all parts of the economy. There is no escape from dramatic new sources and forms of competition. But we can invest in people. We can foster a culture of discovery, of research, of creativity and adaptability.  

Competition won't destroy us, but it will make us stronger. It will force us to create health in new and creative ways.

Now is the time to build a powerful economy driven by a deeply embedded capacity for innovation.

We can do it here in Quebec, and we can do it across Canada.

Let's get focused and get the job done.

Nous n'avons pas de temps à perdre.



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