THE STANDING SENATE COMMITTEE ON BANKING, COMMERCE AND THE ECONOMY
EVIDENCE
OTTAWA, Wednesday, February 7, 2024
The Standing Senate Committee on Banking, Commerce and the Economy met with videoconference this day at 4:14 p.m. [ET] to examine the government response to the eighth report (interim) of the Standing Senate Committee on Banking, Commerce and the Economy, entitled Needed: An Innovation Strategy for the Data-Driven Economy, tabled in the Senate on June 15, 2023.
Senator Pamela Wallin (Chair) in the chair.
[English]
The Chair: Good evening, everyone. Welcome to this meeting of the Standing Senate Committee on Banking, Commerce and the Economy — our first of 2024.
My name is Pamela Wallin, and I serve as the chair of this committee. I would like to introduce members of the committee with us today: Senator Bellemare; Senator Loffreda, our deputy chair; Senator Colin Deacon; Senator Marshall; Senator Martin; Senator Miville-Dechêne; and Senator Yussuff is also with us. I would like to welcome one of our newly minted senators, as of yesterday. Welcome, Senator Mary Robinson from the province of P.E.I.
Today, amongst other issues, we will study the government response to our eighth report, interim, entitled Needed: An Innovation Strategy for the Data-Driven Economy. As a reminder of what that is about — because it was all from last year — traditionally, the collection of data has focused on tangible capital goods, such as machinery or railways or power plants, for the purposes of calculating statistics, like gross domestic product, or GDP, or productivity growth. However, the change in structure of our economy as it moves away from goods production and toward service provision, as well as the increased pace of technological change — that’s all increased the importance of more intangible forms of assets, such as software, data and intellectual property, or IP.
Examining these intangible investments is an important part of providing accurate measures of economic activity. That is the reason why we have the pleasure of welcoming from Statistics Canada, Anil Arora, Chief Statistician of Canada. He is accompanied by André Loranger, Assistant Chief Statistician of Economic Statistics, Statistics Canada. Welcome to you both. Thank you for being here in person with us.
We will begin with some opening remarks from Mr. Arora, please. The floor is yours.
[Translation]
Anil Arora, Chief Statistician of Canada, Statistics Canada: Honourable senators and chair of the committee, it is truly an honour and a pleasure to be with you today.
[English]
Last July, Senator Deacon gave the opening address to some 3,000 world-leading statisticians who had gathered here in Ottawa for the ISI World Statistics Congress. I have to say, his words in that opening keynote still resonate. He said that trustworthy information helps us to be increasingly effective as we act on commitments to address crucially important issues like climate change, fairness and inclusion; that accurate, relevant and trusted facts are more important than ever; and that he was inspired to see that Statistics Canada was increasingly focused on the need to be customer- or user-centric.
It’s with that background that I say I am happy to be with you today.
I have been the Chief Statistician for just over seven years. I have been associated with Statistics Canada since 1988. It’s bittersweet to say that I’m going to retire at the end of March, but it is truly an honour. I’m really proud of the innovation journey that our statistical agency has undertaken over these many years, especially the last seven, to serve Canadians with high-quality and timely data and insights.
Our data stewardship role is setting and disseminating standards and partnering with organizations coast to coast to coast to responsibly share data with government, businesses, Indigenous Canadians, academics and not-for-profit entities. We continue to strengthen our understanding and our statistical system as a result. We continue to work on enhancing numeracy and literacy skills while providing hubs, portals and analytic papers so we can help to better inform decision making.
[Translation]
We are indeed in a data-driven society and economy, and the outputs and expertise of Statistics Canada are an important part of the country’s data ecosystem.
I wanted to leave you with three key messages.
Firstly, developing data sources and standards for innovation in the data-driven economy is essential.
[English]
In 2021, overall gross domestic expenditures on research and development — these are investments in the creation of new knowledge that can result in the production of new products, services and processes — reached nearly $47 billion, up $4 billion from 2020. This increase marked the largest growth in year-over-year R&D expenditures that Canada has seen in two decades.
Innovation is integral to a competitive, productive economy. It is important that we understand the key factors that support and foster a healthy innovation ecosystem.
To better understand the impacts of digitalization on economic activity, we’ve introduced digital supply and use tables, and we’re developing exploratory estimates of intangible capital stock to support productivity analysis. In fact, we were the first in the world to estimate the value of data in this country.
We’re also measuring service exports through the lens of digital trade and have special surveys for innovation, research and development, including intellectual property and advanced technology.
From 2017 to 2019, nearly one in five businesses in Canada owned at least one type of intellectual property, including IP owned outside of Canada. Looking at revenues from IP, in 2021, businesses in Canada performing research and development received $8.9 billion in payments for their IP technology or other technical assistance.
Our surveys also collect information on barriers to innovation or commercialization. From 2017 to 2019, the top reason businesses provided for not protecting their intellectual property was due to the financial cost associated with obtaining IP rights.
As Canada’s national statistical agency, it is our role to measure these changes, so that we are better positioned as the competitive focus of our economy shifts increasingly to knowledge-based and intangible assets.
The second message that I would like to leave with you is that Statistics Canada’s 100‑plus years of experience and world-leading expertise can help in the development of a national data strategy. Whether it’s co-authoring the Federal Public Service data strategy or leading the AI and Data Governance Standardization Collaborative, we play an active role in Canada’s data ecosystem and help shape and influence it.
[Translation]
The Canadian Statistics Advisory Council proposed that Statistics Canada provide national data stewardship support in the development of a national data strategy.
And thirdly, data strategies have become vital to ensure data and information are governed and stewarded ethically, responsibly and effectively. We agree with the committee that we need to develop clear rules for the use, sharing and protection of data to enhance our competitiveness in the intangible sphere.
The work undertaken by the agency has always placed privacy and confidentiality protection at its core, and our frameworks and governance are world-leading.
[English]
In conclusion, data is a cornerstone of this economy and our society and an integral part of public policy. High-quality data and insights will continue to play a leading role as we work together toward improving the frameworks around the digital economy to foster and promote an innovative and data-driven economy.
[Translation]
Thank you again for the opportunity to discuss the importance of data in the digital economy. My colleague and I would be happy to take any questions.
Thank you very much.
[English]
The Chair: Thank you very much, Mr. Arora. That’s wonderful.
We will begin with our deputy chair, Senator Loffreda.
Senator Loffreda: Thank you, gentlemen, for being here. Congratulations on being the first to value data in Canada. As we say, he who owns data owns the future, so thank you for doing that.
I would like you to elaborate on business investment in Canada with respect to foreign business investment. How does Canada rank with respect to other countries? Do the Privacy Act and the Statistics Act, which we currently have in force, hinder you from obtaining what you mentioned — accurate, relevant and trusted facts?
Mr. Arora: In terms of business investment, we have a $3‑plus‑trillion economy. We invest some $54 billion in research and development, and 40% of that is invested by businesses. One third is invested by what we call higher education, so the academic sector.
Let me parse that out a little more. When you look at the businesses themselves, most is invested in the large businesses in this country. Almost 80% of that is invested in businesses that have revenues over $100 million.
Obviously, when we look at Canadian companies that operate on a global scale or multinationals that operate within Canada, they have a higher investment when it comes to research and development and innovation. They play a very crucial role in our intangible space, the digital economy and that innovation ecosystem. We are also trying to compete on the national scale, and multinationals are, of course, trying to compete here within Canada. I would be happy to go into more details about our survey results if there are specific areas that interest you.
Your second question was about the interplay between the Statistics Act and the Privacy Act. Of course, the Statistics Act is grounded in the Constitution. It gives Statistics Canada, as a national statistical agency, the powers to actually compel businesses and citizens to give information, whether it’s in the form of a census or a mandatory survey. But it equally compels Statistics Canada to keep that information protected. If it’s about businesses, their confidentiality must be protected. If it’s about individuals, their privacy must be protected.
We have, for over 100 years, met that promise. For us, it’s not a trade-off. It’s not an “or” but an “and.” It has always been about how to collect that most sensitive information that Canadians care about, that businesses care about, and turn it into high-quality statistics. We have techniques and measures and frameworks. We have world-leading frameworks to anonymize, de-identify and create the insights we all need to make decisions, whether it’s the businessman in the corner store or somebody in Finance Canada using that to make policy that impacts us all.
Senator Loffreda: What about when it comes to foreign countries or foreign multinationals investing into Canada? I’ve heard various rankings. I’ve heard economists say we rank third in the world. I do know, with domestic investment, our businesses, our entrepreneurs, could invest more; we could do a lot better. When it comes to foreign investment, I hear we’re doing well. Is that correct? Could you elaborate on that information and how reliable those facts are? I hear we’re behind Brazil and the U.S. We’re third in the world. Is that correct?
Mr. Arora: The OECD actually creates a little bit of a ranking in terms of how Canada does. The last number I remember was that we were nineteenth out of the 37 countries in the OECD. In fact, we dropped a couple of spots in the last little while.
Domestically, we’re investing about 5% in our intangible economy, et cetera. We’re not investing as much as the United States. In fact, we invest about half of what the United States does.
Senator Loffreda: Do you have that number?
Mr. Arora: The foreign one is a little bit harder to calculate because not all economies are the same, right? We’re an economy that has a lot of branch offices, if you like, for foreign nationals. Our economy, when it comes to intangibles, when it comes to IP, is a very different economy than, let’s say, the United States. Their digital economy is on a different scale than ours.
Comparing the investment of foreign companies into Canada — or any other country for that matter — in some cases becomes a reflection of the tax treatment they might get in a particular country. A foreign national could invest their IP in Canada. For example, we may have an institution, a university or places where they are investing the R&D. However, for them, production might be worthwhile to do in Asia. All of a sudden, you see the returns that they get. These are multinational companies that have different parts of their business everywhere. Calculating on a comparable basis really becomes a difficult thing.
Senator Loffreda: Thank you for that. I heard the Prime Minister say we’re third, behind the U.S. and Brazil, when it comes to foreign investment into Canada. I wanted you to elaborate on that. Thank you very much.
Senator C. Deacon: Thank you so much for being here, Chief Statistician Arora. You’re a great servant to Canadians, and I value your work.
The report that we issued focused on intellectual property, data, and digital services — and how Canada is not, at this point, getting it right. We heard over and over again that 90% of the value of the S&P is in intangible assets. The world is valuing intangible assets, yet we’re not protecting our IP sufficiently. We’re not protecting our data at all right now. Canadians are very much at the wrong end of a data vacuum.
Somehow, there is a gap between what is happening in the rest of the world in terms of core value creation and wealth creation in business and how we are keeping up with our changes in public policy and legislation. How can we align with StatCan more carefully in the future so that we’re starting to track properly? People get a snapshot here and there from StatCan, but we’re not watching the movie. Over time, the movie is worrisome. What help do you see StatCan possibly giving the Banking Committee, for example, as it relates — to be specific — to this report? Can you show us trend lines that are independent from what we saw from witnesses around recommendations and help us have something we can track into the future to see if the policy actions taking place are starting to turn those trend lines in a more positive direction? We do the work, publish the report and then move on, but that’s not working. Over to you, sir.
Mr. Arora: First, thank you very much. That’s music to my ears in this day and age. A complex society like ours absolutely depends on us punching way above our weight. We have half a per cent of the population of the world and we’re amongst the top 10 economies in the world in terms of size.
We have to punch above. If we’re going to grow at the rate that we are, then we need to grow and maintain our standard of living and productivity, not diminish them.
As you said, we’re now seeing more and more service industries and intangible economies playing a greater role. In fact, the return to Canada from our digital and intangible economies are far in excess of some of our more traditional economies. That is not to say that they are not important in terms of their relative size in the economy, but in terms of growth potential, they are growing.
The challenge, senator, is that the amount of investment that we are making is not keeping up with the size. Although we have seen good growth in the amount that we’re investing in R&D, as a percentage it is actually lower than the economy and the overall growth. We have to figure out a way to keep it in tandem with the economy and those sectors of the economy that give us that kind of return.
You’re absolutely right. We need to take snapshots more than once in a while. We need to be on and have the data that allow us to course correct and make those refinements so that we draw the maximum out of this.
In terms of IP in Canada, again, we see about 12.5% of our companies starting to have either copyrights, trademarks or patents. The bulk of them are copyrights and trademarks; patents are low in terms of the amount that we think we should be seeing in the country. We dug into that a bit more. Why is that?
We asked businesses: Why is it that we don’t do more of that protection? Some have said, as you know, that in this country that limits the kind of operating margins. If you don’t have IP protection, then you can’t scale up because others will muscle in on that intellectual property that we have invested in. We have seen that half the businesses feel that it’s too expensive to get that kind of patent protection, or that it takes too long for them, or they don’t see the value because, even if you have the protection, they see the amount of money that they have to spend to protect it legally as being prohibitive in some cases. Those kinds of data illustrate the kind of work we have to do in order to make that system less of an impediment for companies to patent.
Canadian companies also like to patent in the United States, for example, because they see the growth potential there in a bigger market. We also have economies of scale issues. As I said, Canada has branches of other companies that operate here. Canadian companies need to have that kind of ecosystem. Some have said it’s a cultural thing. It might be some of that, but I think it’s beyond that. I think it’s more than just culture. We must have the skill sets and the ability to grow, and we have to remove impediments so that those companies are incentivized to do more in terms of patenting. We must remove the existing obstacles.
Senator C. Deacon: I wanted to focus more on the data that we’re seeing. When we were gathering the research for our report and hearing testimony, we heard that we’re not actually reacting from a public policy standpoint. Simply put, our privacy laws are not keeping up with the reality of how data is being extracted from Canadians and used and monetized elsewhere in the world. We’re still trying to get new privacy legislation through Parliament.
My worry is that a lot of what is known at StatCan is not actually helping to drive changes in policy and legislation. We have done work on a report that we were all very proud of. How do we make sure that we’re actually tracking both the types of indicators that we said are important and Canada’s progress? At this stage, we need policy changes to respond to the realities of the technology and business model changes that have been happening in the world. How do we help each government that comes along keep the pressure on when Canadians are calling for different types of changes but it’s very clear what is needed? We’re getting kind of disparate.
The Chair: Our question here is this: Are you collecting the right kind of data for what people need?
Mr. Arora: As you said, there is a lot of information. We’re serving companies to see what the obstacles are that they see.
To your earlier point about whether we have to stop looking at these things as individual slices, we have to start to look at them as part of that ecosystem. We need to have the protections that Canadians deserve and that companies have to work on.
About 70% of Canadian in the last year or so experienced some sort of a cybersecurity incident. You can’t just look at these things individually. As you said, we need a defensive strategy. We also need a permissive strategy.
In your report, there are a number of recommendations that I know colleagues in other departments are working on. I think Statistics Canada data needs to be even more prominent and present and used because that’s why we provide it. Occasions like this — to make this data known, better used, more frequently available and more integrated — will be part of that ecosystem that we need.
The Chair: We’ll try to move this along because we have a long list of questioners here.
Senator Marshall: How do you decide what statistics and information you’re going to collect? You collect some things routinely, but you’re always adding new things. How do you decide? Do you decide, or do you get requests? How does that happen? Then, how do you make sure that the parties who should get that data actually get it? If it’s something that’s related to government, do you come in and beat them over the head with it?
I’m very interested in the relationship between government and big business, because I’ve seen a lot of articles which indicate there is not a good relationship between government and big business. Do you sense that the businesses that you request data from are somewhat reluctant or very concerned with maintaining the confidentiality of their data?
Mr. Arora: Those are big questions. Thank you, senator.
First, like many other departments, we have a base that we get funded for a set of programs. I would say not exclusively but just to give you a broad sense of it, most of the base that we have covers the essential economic and some of the labour programs. You see the Consumer Price Index, or CPI, the Labour Force, the GDP and the components of the GDP, such as trade, et cetera.
Senator Marshall: All the time.
Mr. Arora: Those are in our base, and there are frequencies that we collect some things on — a monthly, quarterly, annual or, in some cases, five-year basis — to feed our systems and classifications that are internationally accepted.
Because we are putting out data that have to now feed the International Monetary Fund, or IMF, or the Organisation for Economic Co-operation and Development, or OECD — of course, our own policy departments depend on that frequency and the detail that’s there — we are funded to do those kinds of things. That’s the first thing.
We also have a cost recovery program internal to the government. Other departments can say, “We would like a special study on this. Can you spin up a survey?” In some cases, we will use administrative data. We will use tax data. We use other alternate sources of data, even satellite data — imaging of crop yields, for example. We use all sorts of innovative ways, as part of our modernization journey, to try to answer the kinds of questions that businesses and policy-makers in Canada need. So there’s a cost recovery element as well.
Senator Marshall: Could the Chamber of Commerce or one of the research institutes go to Statistics Canada and say, “Can you generate this information?” You could do that, could you?
Mr. Arora: I will say two things: First, under the act, anything that we collect, we make — in aggregate form — available to all Canadians because Canadians have paid for it. If a private company or an organization wants us to collect something, they are generally a little hesitant about making it available at the same time to everybody.
We don’t see a lot of that, but having said that, we have a lot of partnerships. In fact, we have a business data lab that we spun up with the Chambers of Commerce during the pandemic where we said, “What are your needs?” They wanted to make sure that they had information from businesses that would then influence government programs. We had the Canadian Survey on Business Conditions, and we worked with them. They had a hand in the content, and now it’s done on a quarterly basis. That business data lab is now a data collaborative where we take the needs of businesses in one spot, and we bring Statistics Canada’s data into this one spot. We provide the infrastructure. That’s how we’re doing these collaborative types of arrangements. We have many of them.
Your last point as to how we are providing this data, we now have hubs and portals. We do seminars. We do “ask me” sessions. Every single day, you can download our app and get what we are releasing that very day.
We are seeing that just in the last couple of years, utilization of what we’re putting out has grown tremendously. I’m quite encouraged that we are actually quite successful at making sure that Canadians have the kind of data that they need.
Will it be enough? Is it enough? Of course we can always do better and that’s what our efforts are all about.
Senator Marshall: Thank you.
The Chair: I want to follow up on that because I’m looking at actual testimony that we heard here.
People were looking for more granular data. For example, the labour market information is based on surveys. I think the number was 60,000 households. It’s kind of the gold standard, but it’s also limited because it’s just a survey.
The former governor of the bank Stephen Poloz used an example about trying to capture data on productivity. He said that we don’t know how to measure that properly. He cited the example of hospitals, where we measure output by the number of beds, which really has nothing to do with productivity in a very key field and area. How are you responding with respect to these two very specific areas?
Mr. Arora: Thank you, senator. First, we have a labour market information system. Yes, one of the components of that is the monthly Labour Force Survey. About 110,000 individuals across Canada give us their status — whether they are still looking, whether they are working, whether they are off temporarily and so on. That’s what gives us the unemployment and employment figures. That is, if you like, the supply side.
We also have the Survey of Employment, Payrolls and Hours. When businesses are paying, they actually have to make those known to CRA, and we get all the administrative data on the demand side. So that’s the employer.
Now, there are some conceptual differences, and we deal with them. Then we have something called the Job Vacancy and Wage Survey, which gives us the vacancies in the economy.
Those three things together, the Labour Force Survey, which is not an insignificant number of people that we survey every month, and they stay in that survey for six months, so we track their progress, and a sixth of the survey comes in every month; the Survey of Employment, Payrolls and Hours; and the Job Vacancy and Wage Survey complement that labour market system.
As you know, we have been tracking what’s going on in the labour market system very carefully because it has huge implications on what’s going on in this economy. Even the number of vacancies that have dropped from about a million now down to under 700,000 gives us a sense of what that cushion is in this economy as the monetary policies have their effect.
That’s on the labour market system. Arguably, we have one of the most robust labour market systems in the world.
To your point about disaggregation, this government has invested in the Disaggregated Data Action Plan; we now not only have the average and how people in a particular region or industry are doing, but how Black Canadians, Canadians with disabilities, racialized Canadians and recent immigrants are doing.
We now have a richness with respect to what’s happening in the labour market and who’s being differentially impacted at a level that we have never had before. I encourage you to have a look at the outputs that we put out through the hubs and portals.
The Chair: Could I get a quick word, then, on how you measure productivity? That health example is troubling.
Mr. Arora: At the basic level, it is how much you put in and what the output is. It’s the difference between the effort put in — whether it’s labour, capital, training, investment, et cetera — and what the output is that we’re getting.
What we’ve seen in this country in tracking that on a consistent basis, on a definition that’s internationally agreed upon, is that productivity in this country has been steadily going down. We saw after the 2010s, if you like, with the oil price shocks and so on, a constant decline in our productivity, and we are still below the productivity levels we were at prior to the pandemic.
The Chair: I’m going to come back to that later. I want to get others included here.
[Translation]
Senator Bellemare: I would like to talk to you about skill levels. We know that productivity also depends on our human capital, intangible capital. I know you often measure intangible capital based on the level of education.
However, international measurements were developed as part of a study in which you took part during the 2010s, or maybe even before. Skill levels were assessed by rating essential skills on a scale of zero to five. In the context of this study, Canada was just above the average for the Organization for Economic Co-operation and Development, or OECD, which was around two and change.
Following up on this would be worthwhile. I don’t know how you measure investment in human capital, if it is still the number of years of education, but that does not tell us about skill levels, because we’re talking about skill shortages.
Can you tell us a bit more about your intentions in terms of following up on this international study? Could you also tell us if you have plans to measure skill levels without relying only on levels of education? Because that does not tell us anything about digital skill levels, for example.
Mr. Arora: Thank you very much for the question.
You are entirely right. There’s a difference with our level of education; we are in first place when it comes to the number of graduates.
However, there are ways of measuring skills, as you said. Last year, we completed a study with the OECD, and the results will be published this year. We did a test with Canadians in terms of skill level in various fields, mathematics and others. We have a comparative measure with other countries.
When we talk about productivity within businesses, for example, skills have to be measured at a high level. In the case of recent immigrants, the level to measure is different. Are they working in the field in which they did their studies?
Another factor is the way businesses and the economy change their demand for skills. We measured companies’ level of investment in this area. Our studies show that our expenditures represent half of the investments in the United States, for instance. Furthermore, it’s linked to intellectual property. We have a system where we graduate —
Senator Bellemare: I want to come back to international skill level comparisons, as done about 10 years ago.
Some countries are using these indicators to develop productivity strategies and skills upgrade strategies. If Canada does not follow suit, how can we develop our own upskilling strategies? We need key indicators.
You outlined different points, but it would be interesting if Statistics Canada could test essential skills to compare us with others.
Mr. Arora: As I was saying, according to the survey we did last year with the OECD, we are well aligned in that sense. Of course we’re not doing it ourselves, but it’s a matter of getting a comparative measure.
Senator Bellemare: When will it come out?
Mr. Arora: It will come out this year. The OECD will publish the results as well.
André Loranger, Chief Statistician of Canada: Thank you for the question. At Statistics Canada, we do still have a broad research program on human capital. It is indeed based on several components of human capital, including education and so on, but it’s more than that. It’s linked to the way we value human capital and the way we integrate it into other economic measures.
If you are a fan of statistics and understand national accounting, there is a research project on national accounting of standards. The 2012 System of National Accounts is a world standard. The manual is being revised for 2025.
As part of the research program’s framework, we’re thinking about improving measurements. A lot of experimental work in human capital is happening to eventually integrate it into other more direct measurements.
Senator Bellemare: Thank you.
Senator Miville-Dechêne: Thank you, gentlemen.
To start, I just want some clarification. You talked about clients, such as a chamber of commerce asking for statistics. Since Statistics Canada is funded with public money, do clients pay when they ask for specific contracts? In response to a question, you seemed to say there was a mutual exchange. If a chamber of commerce doesn’t pay, how do you make sure clients from different backgrounds have access to you and your data when they want it?
Mr. Arora: Most of our products, including data, databases, publications and more, are available for free; 99% of them.
We hold consultations regularly. If a business or chamber of commerce makes a request, for example, we can respond with our products, the resources we have and what we post to the website. When a specific request comes from a specific entity, it’s not a routine request. So yes, of course, a government policy states that people have to pay for their request.
Senator Miville-Dechêne: I have a question on competitiveness. During this study, which I did not really participate in, Philip Cross came and told us you were no longer measuring competitiveness with concentration ratios.
Do you have other measurements? For example, we talked about the food industry; it’s a topical issue. Do you measure competitiveness indicators for Canada’s different economic areas?
Mr. Loranger: Mr. Cross is right.
When it comes to concentration, we rely heavily on our studies of economic inputs; companies that go bankrupt, for example. We have monthly and annual programs that measure the economy’s composition based on entities entering and exiting the economy.
Thanks to these measurements, we can determine the concentration, but we do not publish a concentration ratio like we did in the past.
Senator Miville-Dechêne: Why?
Mr. Loranger: It’s an analytical product that wasn’t used very much.
Senator Miville-Dechêne: Are there others that are more effective for measuring competitiveness? Because it seems to me that lack of competitiveness is a significant data point in our society.
Mr. Loranger: At Statistics Canada, yes, and we also work a great deal with ISED, the department whose name I’ve forgotten…
Senator Miville-Dechêne: The Department of Innovation, Science and Economic Development (ISED).
Mr. Loranger: Since they produce many competitiveness indicators, we are trying to avoid duplication. They rely significantly on our numbers to produce them, in fact.
[English]
Senator Petten: My question is for Mr. Arora. More and more, we are seeing headlines in the news about AI-generated hoaxes and deepfakes. A report from the Integrated Terrorism Assessment Centre went as far as to say that these kinds of visual trickeries or deepfakes pose a persistent threat to public safety.
What is Statistics Canada’s role in encouraging digital or media literacy, and what is your plan as we deal with new emerging technologies and the rise of AI?
Mr. Arora: Thank you for that question. Yes, when we see these deepfakes, it is concerning, because it could be one of us. It could be a business that’s targeted or misrepresented, or one of our colleagues, employees or family members. That is deeply disturbing. In some cases, these technologies make that kind of misrepresentation easy. You’re absolutely right as well that there’s a lot of misinformation out there.
So what is Statistics Canada doing? First of all, we measure how people consume information in these different formats. For example, regarding people who are going to social media to try to get data or statistics, we find that 54% of them will have a very skeptical view of a data point or something they are seeing and will actually take it upon themselves to corroborate it with another source. You therefore wonder about the other 46%. What are they doing?
So it’s a very real concern. We need to be present on social media. As I was saying earlier, one of our modernization agenda initiatives is to be far more present on social media so that we can provide more information to Canadians through the medium in which they are actually working and then measure how they are consuming.
Now, there are some technologies out there that actually allow you, at an aggregate level, to detect and correct as well. For example, in the census, we were seeing that there was misinformation coming into some of the conversations and the chatter that was there, and that allows us to put something out to correct that kind of information. As there are disturbing types of evolutions, there are also enabling types of evolutions.
The last thing I would say is that under the leadership of the Standards Council, I was chair of the first iteration of the Data Governance Standardization Collaborative. Now, because my retirement is coming up, I just stepped down as the co-chair of the AI and Data Governance Standardization Collaborative. Again, what we are doing is bringing literally hundreds of organizations together to say, “What are the standards that we should have for AI use, whether it’s in the government, industry, Indigenous or other levels of government? What are the compliance mechanisms that should be there? What are the strategies for standardization and compliance?”
Again, we’re playing a very active role because we believe that you can use data and technology responsibly, but you have to have the frameworks, standards and compliance mechanisms to make sure they are done properly.
Senator Yussuff: Mr. Arora, I want to wish you all the best in your retirement. Thank you for your great service on behalf of the country.
The role of StatCan has changed dramatically and will probably evolve even more. We’re dealing with a very complex economy that’s evolving. We’re dealing with an aging population; we didn’t think we would get here, but we are all now grey. It’s a bulge. Equally, we’re dealing with a much larger immigrant population that has come to the country with tremendous talent. The data has been consistent — despite their skills and ability, they are not performing in the areas that can benefit the economy.
Given our report looking at essentially how we can do better, what would Statistics Canada need to do to inform our policy-makers about what we need to do to catch up? The reality is that the country is not waiting. You spoke earlier about how, on the productivity side, regardless of what measurement you’re using, we are not making the gains we should be. There are a number of realities to that, such as investment, technology and development of new products, et cetera.
If you were to look down the road, given you’re going to retire, what does this job look like in 10 years, and what do Canadians need to know from the data you’re collecting that can help us make better policy decisions on how we build a more dynamic economy going forward?
Mr. Arora: Thank you, senator, for that deep, very pertinent and timely question.
First, a few months ago, I was honoured to do what is called a Manion Lecture, which is a lecture that people are asked to do under the rubric of the Canada School of Public Service. It was a lecture where I talked about the country at this crossroads, and it picked up on all the points that you have made. Demography is, in a sense — I didn’t coin this — destiny. We’re seeing the effects of what happened after the Second World War playing themselves out now. The youngest of the Baby Boomers are going to be 60 this year. The oldest ones are in their eighties. They are the largest-growing population in this country. That has huge implications, from health care to the labour markets. As you said, our policy response has been immigration, but we’re still aging. Even with the fastest immigration in the G7, for a couple of decades now, our fertility rate is at 1.33. We need 2.1 to replace.
The environment and the economic nexus are shifting the global geopolitical situation, and the instability is shifting our economy and the kinds of investments that we need and the partners in the world that are there.
You are absolutely right that these factors are playing out not just individually but together to shape our society. We see social cohesion and some other factors. The society, the economy and our environment are intricately tied.
Coming back to what Senator Colin Deacon said earlier, we have to see the movie. We have to see society in all its complexity, not as a function of how we’re structured either jurisdictionally or across departments.
Storytelling and putting information out there to Canadians allows them to consume and see the linkages between these things — quality of life frameworks that are now telling you not only what the quantitative measure is but how people are experiencing that. I think decision makers need to be able to start to look at not just making a decision here and then chasing unintended consequences, but making decisions in full cognizance of what the consequences are and making tough choices.
That’s how I think Statistics Canada is playing — and should and will continue to play — that role. We should be providing the granularity so it’s not just the average. We should be providing who is experiencing what in one part of the country or a subpopulation. What are the gaps? We should be providing the stewardship, standards, and classifications that others who have data can start to share. It should be a truly team sport in a sense. It is a data-driven society and economy. We should be providing the integration between all these aspects. That’s what I see as a future role of Statistics Canada.
Senator Yussuff: Given that for quite some time you have been collecting new data on specific demographics within the labour force — I can’t tell you how valuable that information is to those demographics, because for the longest time in our history, they were irrelevant, knowing where they fit into the overall economy.
Now, of course, it doesn’t paint the best picture despite the data that we are collecting, but has there been enough outreach by Statistics Canada to those communities? If they are empowered with that data, they can advocate for themselves; they don’t need others to do it. Has there been a leap to say, okay, how do we connect this data to these communities, recognizing that they are now a picture of the data that we are providing to the country on a monthly basis when we collect the data and our own labour market statistics?
Mr. Arora: I couldn’t agree with you more about the kind of outreach and partnering we are doing, reaching out, working in partnership, helping them use standards and make better use of the data themselves so they can advocate for what is going on in a Métis or a First Nations or an Inuit community, or whether it’s the Filipino community or the Korean community. We are partnering with them to see how it is that they can be seen in that picture of Canada. They need to see it. We need to make sure that the data doesn’t, either by accident or design, leave anyone behind. The country cannot afford to leave people behind. Our policies need to make sure that they are fully informed with the data that shows the kind of disaggregation which is Canada.
Senator Martin: Thank you both for being here. I also add my congratulations to you on your upcoming retirement.
This is sort of a part two from where Senator Loffreda was looking at how the Privacy Act and the Statistics Act may impede Statistics Canada’s ability to collect and share information in any way.
As you’re talking about this intangible sphere, which is here and now and very important, and you talked about the partnerships that you have — you mentioned the Filipino community, the Korean community, et cetera — are our laws adequate to really address what is happening right now? Are there legislative amendments that you think should be considered by the current and/or future governments?
Mr. Arora: We are statisticians. We are not the policy-makers. I have worked in policy positions in the past, but that’s not my current role.
We are putting out so much information. I sit on the deputy minister committees that are looking at different policy considerations. Statistics Canada is an independent body, but it can’t be isolated — it must respond to the changing policy needs of the country. That’s why the role of the Chief Statistician is so crucial. We need to make sure that those statistics are ventilated, available and inform policy. As part of our role in the number of years when we have been modernizing, we have actually been playing that role to a much larger extent.
What, for example, my colleagues in Women and Gender Equality Canada, or WAGE, might do with what is going on, or Heritage might do with the hate crime situation that we have or the declining trust in institutions — they have to respond to the data that we are putting out there. We are absolutely involved in it. I continue to encourage my colleagues to say that data can’t be after the policy has been made — it must be integral to the start of the policy decision so that we can ask what the outcomes are that we want to define. What are the indicators that will allow us to do that? Then we will be able to measure and, more importantly, course correct if we’re not seeing the outcomes that we want.
I think data are not a passive commodity. They are not an after-the-fact commodity. They must be invested in and a part of the process. I think we have made a lot of improvement in that domain.
Senator Martin: Your answer is quite forward-thinking and positive, but we always seem to be behind many new trends. This is an ever-moving, very fast-paced change that we’re seeing in the world. In terms of conversations you’re having with ministries or departments, do you feel that our laws are adequate at this time?
Mr. Arora: I would allow my colleagues to make that determination. We’re providing the data and the factual basis based on the methodologies and approaches that we have. Their job is to ask: What is the gap our laws are designed to address, and are they sufficient or not? Obviously, then there is a process by which we decide — including you as part of that process — how far we want to go along, and where. I think you as legislators, as decision makers, need to not only be provided a slice of what is going on, but also that integrated nature between our economy, our social fabric as a society and the environment because, as we saw with the pandemic, these things matter.
Having good data and indicators and holding ourselves collectively to account for the outcomes that we designed in the first place, then having that ability, as you said, to see things in motion, is a constant evolution. I’m an optimistic person, but I see positive signs where I think the data are making a fundamental difference in where we go. We can now see the granularity and the differential impacts. It really does ask: What are we going to do about it?
The Chair: Thanks very much.
Senator Ringuette: It’s very nice seeing you again. I must say that with the passion that you are still demonstrating, I don’t know how you’re going to be able to retire. Nevertheless, I do wish you a happy retirement.
I have two questions. One is a follow-up to the productivity question. We have heard for over 15 years that the business community in Canada invests not even half of what the business community in the U.S. does. You just said in capital — you just indicated that it is a similar situation in regard to training of the human capital.
That is the data, but I must admit that, as of yet, we do not have any interpretation of that data with respect to why it is that Canadian businesses are investing less than their counterparts in the U.S., both in terms of capital and human capital. Can you provide an interpretation of these facts and data?
Mr. Arora: First, thank you for your kind words. Even though I may be retiring, I will always be in the service of Canada. I owe everything to this country, so I will continue to stay connected and I will continue to serve.
Your question is a simple one in its construct. It is complicated in its answer because it has multiple dimensions to it. Our economy, when we compare it to those of other industrialized countries like the United States, or Europe, it is so different than many others. We have natural resources; many of the European countries do not. The United States has a very robust digital economy; we’re moving in that direction. We have an ecosystem. We have a population and a consumption base that are different. Teasing out different dimensions to that question through the data that we’re collecting gives us a sense of why we aren’t we doing more in this particular area.
Remember, 98% of the employees in this country work for small- and medium-sized enterprises. In many cases, those companies don’t have the wherewithal and the capital necessary to invest to the extent that they need to. So that raises the question: What should we be doing as a policy response to make it easier? Those that do find it to be a very expensive and an arduous process. What can do to make sure those programs are easily accessible? They find them to be too difficult or too expensive, or in some cases they don’t see the value or the return on the value of that investment.
In many cases, companies are investing because they have to — because we’re requiring them to do it for regulatory or safety reasons, or whatever it is. They also have to see what the economy of scale is where that investment is going to allow them to get the return in this country. Sometimes they see that to be better placed in a country outside Canada, where they see a market is going to allow them to be able to do that. Some will say the return is not there, so their aim is to grow to a certain level and then be bought out by somebody else because that’s the way that they see the biggest payoff.
It isn’t one answer. We have done some work on those companies that are making use of some of the biggest programs in the country that are designed to help with those kinds of investments. It’s largely, as I said, big companies that do make those investments. We’re talking millions of dollars’ worth of investments. I think that those kinds of investments are in the $10-million to $20-million range. You have to have substantial pockets to be able to risk making those investments, and then there is the expectation of a return. What our data also shows, when we do that comparison, is that those companies that have actually made use of those programs do better, employ more people and have greater market share. We have also seen companies that work on the international scale; when they make those types of investments in capital and people, they actually open up new markets.
It isn’t a one-size-fits-all. It is very dependent on the size of the business, the market share that is there and their ability to take risk. Yet what our data are showing is that there are impediments and we need to be removing those impediments so more of our businesses can actually succeed.
Senator Ringuette: Okay. Could you send us those impediments?
Mr. Arora: Yes. We actually put out the results of those studies. I would be more than happy to share them with each of you.
Senator Ringuette: In the last few years at this committee, we have been hearing that there is a financial value to personal data. I believe that more and more people, particularly the younger generation, see that. Do you have any concern with regard to your ability to collect data, the value of the data and individuals and businesses saying, “Well, there is value to this and I want financial compensation for it”?
Do you have any concern there?
The Chair: I’m going to ask you to be concise, because we have gone over.
Mr. Arora: Yes. This is our preoccupation all the time: If citizens or businesses don’t fill out surveys — in addition to that, we are hampered from using administrative and other sources of data — I ask you, what is the alternative that you’re going to use to make decisions? Therefore, it is a preoccupation. We’re absolutely convinced that we have to do right by people, though not by compensating them — because those who get compensated and accept it don’t look and feel like the ones who won’t. It introduces bias, and then all of a sudden the results are reflective of those who accept the financial compensation. So all of a sudden you introduce a whole bunch of noise into the system and wonder whether that was representative or just a reflection of who is willing to pay or be paid for it.
Senator Ringuette: That’s still on the horizon, though.
Mr. Arora: For us, it’s a public good and should be accessible. Yes, we do, in some cases, need laws that compel people — like the census — to fill out forms so we have a representative sample. We’re not closed to the idea. If we’re going to make so many demands on a particular citizen, where we will need them to spend days filling something out, then I think there is perhaps some way to compensate them for those things. We’re not closed to the idea completely. However, as a general principle, no statistical organization in the world is going into paying people to do something. I think it must be a public good, and citizens and businesses must know that when they contribute, citizens or companies benefit. That is part of the quid pro quo.
The Chair: Thank you. We’re just trying to wrap this up now. I think our message to you in part is the question of whether you are getting the granular data. Are you moving fast enough to get the data to answer the questions that have been put before us?
We have a quick final round here.
Senator C. Deacon: We had 10 million fewer Canadians 20 years ago. We also had 100,000 more entrepreneurs. That would suggest to me that conditions for success are diminishing. It’s harder and harder to be an entrepreneur.
You have your Disaggregated Data Action Plan. I was at a really interesting Chamber of Commerce event this morning on Black entrepreneurship and getting conditions for success in place. Are you going to be providing the data that can help us understand what we need to do to help get those conditions for success in place?
Thank you again, sir.
Mr. Arora: The answer is, “Always.” We will always continue to strive for more. This is never going to be a one-and-done. The more information we provide, the more it allows people to ask even better questions, which then spawns yet another line of inquiry to which we then have to look at other sources of data. Therefore, I will say the work of this agency will never be done. Frankly, it should never be done. We should continue to challenge ourselves in asking better, deeper and more integrated questions. We should be working toward a society — as I said — that is not in an “or” proposition of whether we trade confidentiality and privacy for the kind of information we need. In fact, statistical organizations like ours — which are world-leading — have frameworks, methods and ways in which we do both. We provide that granularity, and we provide the privacy, confidentiality and protection. That’s why we need to work on all those fronts. We need to have strong legislation that gives Canadians the trust they need in the agency and how data are used, and we should have ways in which other organizations should not be allowed to violate and misuse that trust and act in ways that are not transparent.
The Chair: Thank you.
Senator C. Deacon: I’m just looking for you to give a concrete report or the start of a movie on that issue.
Mr. Arora: As we have discussed before, senator, on a regular basis, there should be a way in which we can do this. In fact, the last point I will make on this is that the government created the Canadian Statistics Advisory Council, which actually puts out a report every single year on the state of the statistical system. They are actually picking up on all of the themes that you’re talking about. We need to continue to have that drive to push the agency forward so it can be your agency and respond to your needs.
[Translation]
Senator Bellemare: I would also like to wish you a happy, well-deserved retirement. I am sure that with your passion, you will keep busy.
I might be asking you the killer question: will you, or maybe you already do, use artificial intelligence to analyze and collate data?
Mr. Arora: Absolutely. We have about 60 projects in which we use a few elements of artificial intelligence to, for example, classify answers. For instance, someone writes something, and we use technology to make the connection between the answer and relevant classification system.
For example, we calculate the nutritional value of our food. As you said, the country has changed a great deal, and now we use pictures to get a better idea of nutritional values instead of asking what you ate, for instance.
In the agricultural system, we use satellite photos and technology to determine what was sown and harvested, for example.
I could give you other examples, but that gives you an indication of how we use technology.
[English]
The Chair: That makes sense. Senator Loffreda, the last point goes to you.
Senator Loffreda: I’m glad to wrap this up, and thank you once again. Good success in your retirement.
Competition is extremely important for our economy. We have seen that there is a lack of competition in many sectors. We can talk about the grocery sector and how inflation is between 5% and 7% this year. We’re looking for more competition. I think policy has allowed mergers and acquisition in the past in order to compete with the large American multinationals through the free trade that we had. We were concerned, and we allowed many of those mergers and acquisitions to happen.
Does Statistics Canada keep any data on competition? Although competition is very difficult to define, do we have any data on competition?
Not only that — do we have data on the mergers and acquisitions that have been permitted over the past years? We can probably look at that and improve policy going forward with respect to competition. Is there any role you can play or data you can furnish in the future for us to be more concerned and insightful with respect to what is going on and informed with respect to competition and improving that for Canada?
Mr. Arora: That’s a big question. I’ll be able to touch on it a little bit. I’m happy to follow up if you think that will be helpful.
We do put out information on mergers and acquisitions and what the trends and values are over time — obviously at an aggregate level. We also provide it on corporate ownership and how that is shifting over time.
I’ll give you an example on the current situation with regard to food and inflation. We just launched the Food Price Data Hub — you can access it and have a look — where we’re now trying to look at the components of how it is that, ultimately, the consumer pays what he or she does. It’s not directly getting at competition, but it is starting to show the different elements that feature into the prices consumers pay. In some cases, competition may be a very important element. I think Minister Champagne is dealing with that sector. However, I think there are other factors like weather, where we get our food, transportation, our dollar, the price of oil and fertilizers and so on. They all factor into what the consumer ultimately pays, of which competition may, in fact, be very much a factor.
We have done reports on the telecommunications sector, for example, and showing the price of a particular package and how it is shifting over time. Then there are other organizations that can use that information and apply those lenses and look at things like competition indices and so on. I think we provide the raw material for others to be able to look at things in those sectoral elements.
The Chair: That is wonderful. Thank you. I’m glad you were able to join us before you depart this particular position. You can give a heads up to your successor that we’ll be doing this regularly because we have so many questions, as you can see from this.
Our thanks to the Chief Statistician of Canada, Anil Arora, and André Loranger, Assistant Chief Statistician of Canada at Statistics Canada. We appreciate your time and efforts.
That brings our meeting to a close. I ask those who are members of steering to stay for a brief meeting. Thank you.
(The committee adjourned.)