Speaking Points
Honourable David L. Emerson
Minister of Industry
Address to the Regina and Saskatoon Chambers of Commerce
Regina / Saskatoon, Saskatchewan
August 23, 2005
Check Against DeliveryThank you Ralph.
It is great to be back in the Prairies, the big sky always feels like home.
We all recognize that Ralph Goodale and Paul Martin will go down in history for the economic and fiscal performance Canadians have enjoyed for the past decade.
14 years of uninterrupted economic growth;
Growth in employment and living standards that leads the G-7;
8 consecutive balanced/surplus budgets; and
A debt burden that is lowest among the G-7 nations and continues to decline.
Maybe it’s his cautious, fiscally prudent Prairie roots, but Ralph never stops worrying about what’s around the next corner. Are we ready for the risks and challenges that could derail our economic security and prosperity?
Ralph, I have to tell you that as Industry Minister, I worry about that too.
I worry that the strong commodity markets, which have contributed to our excellent macroeconomic performance, will weaken. They always do, and in some areas we’re already well past the peak.
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.
I worry about our ability to deal effectively with both the opportunities and threats posed by the rapid emergence of new economic powerhouses such as China and India.
I worry about the aging demographics of our country, and the limited potential for growth in our workforce in the years ahead.
I worry that despite Canada’s strong macroeconomic performance over the past decade, we see a lingering 15 per cent productivity gap with the US. This means that the average Canadian makes $14,000 less a year than their American counterpart, and it’s a gap that may be getting wider.
At a fundamental level we are a small trading economy. We are the most trade dependent of the G-7. Our standard of living is driven by our ability to thrive and compete in an increasingly, intensely competitive global economy.
The reality is this: our success as a nation depends on our ability to compete and to sustain ongoing advances in our economic performance. Without it, our progressive society wilts on the vine of affordability. Health care, pensions, liveable cities, the environment, education, childcare…without a powerful economic engine to carry the freight, those cherished features of our Canadian society turn into utopian dreams.
That economic engine has to be as good as, preferably better, than those countries with which we daily compete for the investment and employment opportunities emerging generations of young Canadians are counting on.
It’s how well we anticipate, and the actions we take today that will determine whether today’s young people have the opportunities, and the quality of life that we have enjoyed.
Short-term reactive thinking will not cut it. We have to act today for results that will show 5, 10, or 20 years down the road.
So, where do we go from here? The future I see is not one of lower wages, longer hours and just working harder than emerging generations of Americans, Latinos or Asians.
The future I see is one in which Canada is a global leader in converting advances in science, knowledge and technology into rising incomes, employment opportunities and living standards. I see an economic engine with extraordinary power, power derived from a deeply embedded capacity for innovation. That has to become our central mission…to build a globally competitive economy driven by a “deeply embedded capacity for innovation”.
We need to drive science, technology and innovation deep into every corner of every region and sector…manufacturing, natural resources, services, including both public and private. That is my obsession, as Industry Minister and I want it to be an obsession of the Government of Canada.
It won’t be easy. It requires focused engagement by millions of Canadians, each adapting in their own way to their unique circumstances. There is no “silver bullet”…. no single miracle action that government can take. But that doesn’t mean we don’t know what needs to be done. We do know.
Government has to provide people with the tools, with a supportive working and living environment, and with critical infrastructure to support a successful modern economy.
We need to equip people with the knowledge, skills and the education to tap into the global knowledge pool. We need to equip people with the entrepreneurial and management skills to enable them to become the innovators that consistently find new ways of turning knowledge into wealth.
And we need to continue to grow our critical mass of Canadian research capacity….capacity that joins with the world’s best to push the frontiers of scientific exploration; capacity that cultivates a broad-based culture of discovery and innovation.
We also need the critical infrastructure of a globally connected economy.
Telecommunications and broadband technology are the most generally transformative technologies of our generation. They allow people anywhere to use their abilities to the fullest, for their own satisfaction and enrichment, but also to the great benefit of their communities, province and country.
Never forget that more than 95% of the world’s patents and discoveries do not originate in Canada but ready access to the global knowledge reservoir has to be part of the Canadian innovation revolution.
The market and incentive framework must reinforce our strategy. People and capital are today highly mobile, following opportunity and reward.
The opportunities and rewards of investing and working in Canada must enable us to win the daily battles for talent and investment that characterizes the world economy today.
We also know that competition is a powerful motivator, and government has an important role to play in ensuring that markets operate competitively, efficiently and fairly.
Across Government, there is not a single member of Paul Martin’s Cabinet team that isn’t part of a long-term prosperity and competitiveness initiative. At Industry Canada we are 24/7 committed to the mission.
First, Industry Canada and the Government of Canada’s family of research organizations and granting agencies have invested some $13 billion into research at post secondary educational institutions, including 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 a world leader. The challenge is to build on this success and that is the focus of ongoing consultations and discussions with the government, the research community and granting councils.
Unfortunately, although Canada has one of the most educated workforces in the world, and we are making much progress in attracting world-class researchers, we fall short in certain 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 the U.S. is increasingly threatened by the dramatic growth of the math/sciences/engineering talent pool in India and China.
We need to focus on this weakness and we need to fix it. We need to produce and educate more of our own and we need better, more efficient integration of trained and skilled immigrants into the economic mainstream of Canada.
We have another disturbing weakness; 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.
Recognizing this weakness, and recognizing the powerful impact of research and development by private companies, I appointed a six-member Technology Commercialization Task Force earlier this year and asked them to prepare a recommended roadmap and priorities for improving Canada’s innovation and technology commercialization performance. The Government of Canada adopted an innovation agenda in 2002 and set certain long-term goals and we need to build on that framework.
The work of this Task Force is pressing and urgent and I look forward to preliminary recommendations this fall.
We have given the Task Force broad latitude to make recommendations relating to research, innovation, venture capital and other barriers or incentives that need to be modified and improved.
Within Industry Canada, we need to restructure and improve programs designed to stimulate technology adoption by Canadian companies. Technology Partnerships Canada is a program designed to share technology risk and encourage innovation by Canadian companies, but it’s in need of an overhaul. I shall be taking recommendations for reform and improvement to Cabinet in the weeks ahead.
Similarly, Business Development Bank of Canada is exploring how they can strengthen the role they play in leveraging greater provision of venture capital and term loans in support of innovation and the adoption of technology. Their focus will continue to be overwhelmingly on small business.
When it comes to converting science and technology into wealth and quality of life improvements for Canadians, our goal is a quantum improvement in Canada’s performance.
A second critical priority at Industry Canada relates to the telecommunications sector. Information and communications technologies (ICT) represent the single largest contributors to productivity and competitive improvements in recent years. Here in Canada and in other countries, ICT related investments accounted for approximately 75% of productivity improvements. But we<re still falling short of the US.
Here again we have appointed an expert panel to report by year-end on changes to the way the sector is regulated. Our goal is to foster competition; stronger infusion of ICT technology throughout the economy and to ensure that Canada’s telecommunications industry is both a global leader, and a powerful catalyst for technological transformation across this country.
Industry Canada is also in the final stages of the development of a sector strategy for the ICT sector more generally.
Canada has shown real leadership in supporting and providing the electronic infrastructure required to fully participate in the global information economy. 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, the connectivity challenge is not complete. We have hundreds of rural and remote communities, many of them aboriginal, which do not have high speed Internet access. It is absolutely essential that broadband access be extended further into remote and isolated communities. Without Internet access today, a community is 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.
A number of sector strategies will be critical to the assessment and adjustment of the Government’s approach to prosperity and competitiveness.
By zeroing in on specific sectors, we are determined to shape and align a variety of government policies into a cohesive approach for accelerating industrial transformation to a global standard of competitiveness.
Aerospace and defence, the automotive sector, the forestry sector, the hydrogen fuel cells cluster, the biotechnology sector, shipbuilding and repair, are among the sectors where we are zeroing in on the essential ingredients for sustainable competitive success over the next 5 to 10 years.
The goal is not merely to protect. The goal is to support industry to identify where and how they can be globally competitive, and help clear the path for them to get there.
Some sectors, like nanotechnology, ICT, and green energy have application across the economy. Our focus is to ensure the benefits of their competitive success cascade across industries, sectors and regions.
Finally, efficient, healthy markets and the pressure of vigorous competition are vital to encourage innovation and creativity. And competition is critical to protect the interests of consumers and the economy more generally.
Open markets and free trade have to be part of it, but competition policy also has an important role to play. I recently brought amendments to the Competition Act, which are currently before Parliament, and consultations are proceeding with respect to further improvements.
We don’t think about it much, but the bankruptcy and insolvency framework plays an important role in the modern market economy. Business success, failure and rebirth are an essential shock absorber in a healthy, dynamic economy. Industry Canada has proposed significant changes to bankruptcy/insolvency laws to ensure that businesses, workers and creditors have a resilient and equitable legal framework in which to resolve the problems of a troubled business and, in many cases, organize a new start.
In a knowledge-based economy, intellectual property becomes an increasingly important asset. Writers, creators and innovators must enjoy protection of their intellectual property rights or we destroy the incentive to create, to invent or to innovate. Worse still, these agents of innovation and creativity will quickly move to jurisdictions where intellectual property is protected and processes are in place to enforce it.
Canadian Heritage and Industry Canada have significant improvements in copyright legislation before Parliament and we, at Industry Canada, are assessing potential improvements in Canada’s patent laws.
At the same time, we’re going to have to join with our trading partners to develop better frameworks for combating theft of intellectual property.
In conclusion, let me reinforce the reality that we are a small trading economy. We’re rich in people and rich in natural resources. We will never be, nor should we want to be, a low-wage economy competing with the low-wage economies of the world.
As a country of relatively well-educated people, we have the potential to be an economy driven by the power of innovation.
We don’t have to throw out our resource industries, or our traditional industries. But what we must do is drive technology deep into all parts of the economy. Every sector has a brilliant future but it will take ingenuity and creativity to create wealth in new ways.
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, it will make us stronger.
Now is the time to build a powerful economy driven by a deeply embedded capacity for innovation.
Saskatchewan has proven it can be done. People make the difference.
