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Proceedings of the Standing Senate Committee on
National Finance

Issue 36 - Evidence - April 17, 2013


OTTAWA, Wednesday, April 17, 2013

The Standing Senate Committee on National Finance met this day at 6:46 p.m. to study the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2014.

Senator Joseph A. Day (Chair) in the chair.

[Translation]

The Chair: Honourable senators, tonight we are resuming our study of the 2013-14 Main Estimates for the fiscal year ending March 31, 2014.

[English]

From Canadian Heritage, we welcome Ms. Nada Semaan, Associate Deputy Minister. She is accompanied by Mr. Robert Hertzog, Director General, Financial Management Branch, Strategic Policy, Planning and Corporate Affairs. Thank you for being here.

From the Canadian Space Agency, we welcome Ms. Marie-Claude Guérard, Chief Financial Officer. From the National Research Council of Canada, we welcome Mr. Michel Piché, Vice President, Corporate Management and Chief Financial Officer; Ms. Gail McLellan, Director General, Finance Branch; and Mr. Bogdan Ciobanu, Vice President, Industrial Research Assistance Program.

I understand that each of you has brief introductory remarks to set the stage for a dialogue with honourable senators. I propose that we begin with Mr. Piché, followed by Ms. McLellan, Ms. Guérard and Ms. Semaan.

Michel A. Piché, Vice President, Corporate Management & Chief Financial Officer, National Research Council Canada: Thank you for the opportunity to appear before you today with respect to the National Research Council Canada 2013-14 Main Estimates. I would like to begin by taking a few minutes to provide some overall context on the NRC and its role within the Canadian economy.

The National Research Council of Canada bridges the innovation gap between early-stage research and development and commercialization, focusing on socio-economic benefits for Canada and increasing national performance of business-led R & D and innovation. As a federal leader in technology development, the NRC supports Canadian industry by enhancing their innovation capabilities so that they can successfully deliver innovative products, processes and services. The NRC works in collaboration with industry, governments and academia to maximize Canada's overall R & D investment. The NRC's investments in technology innovation are focused in areas of strategic importance to Canada, such as, for example, aerospace, automotive, construction, marine technologies, energy and the environment.

The NRC's mandate supports the development and growth of a strong technology-based private sector through the sharing of research knowledge and collaborative development of commercially viable products and solutions. Our support to Canadian industry does not stop there. We work with companies of all sizes and provide them with advice, education and training, and access to facilities and equipment to help enhance their innovative capabilities.

An example of recent successes in which the NRC played a pivotal role include the world's first-ever flight of a civil jet powered by 100 per cent biofuel and the development of ultra-high-performing concrete for highway bridges. The NRC also collaborates with and provides technical services to high-impact Canadian-based companies in such important areas as vaccines, biopharmaceuticals, medical devices and natural health products.

The NRC offers its clients access to unique research infrastructure as well as operating technical expertise. This includes facilities in aerospace engineering and manufacturing, astronomy, high-throughput DNA sequencing, photonics, biotechnology and nanotechnology, to name just a few. Access to these facilities allows innovative businesses to pursue blue sky research and development opportunities here in Canada, while lowering the risks associated with research and development and accelerating product development.

I would also like to mention NRC's Industrial Research Assistance Program, known as IRAP, which has long been recognized for its effective support to Canadian small and medium-sized firms. The industrial technical advisers of IRAP work closely with small fledgling Canadian companies to provide advisory services, financial support and opportunities for networking, which help technology-based companies grow in Canada. As a result of the increasing importance of IRAP funding within NRC's Main Estimates, I have asked my colleague Mr. Bogdan Ciobanu to join me today to answer questions relating to IRAP's programs.

During the 2013-14 fiscal year, NRC will continue its efforts to become a unified industry-driven research technology organization to more effectively address the Government of Canada's innovation priorities. NRC will have the greatest impact by aligning its business activities and processes with market demand and industry need, opening up international markets for Canadian firms and making strategic investments. NRC will also continue to streamline its corporate services so that these, too, align with best practices in an effort to realize greater operating efficiencies.

In its 2013-14 Main Estimates, NRC is seeking federal authorities of $820 million, a net increase of $119.5 million from the 2012-13 Main Estimates. From this $820 million, voted authorities represent $637.8 million, while statutory authorities represent $182.2 million.

The significant changes from the 2012-13 Main Estimates are an increase of $110 million for the Industrial Research Assistance Program from Budget 2012; an increase of $10.2 million from the reprofiling of funds from the 2011-12 Main Estimates for the Digital Technologies Adoption Pilot Program and the Canadian HIV Technology Development Initiative; an increase of $10 million in statutory revenue due to the alignment of NRC's business activities and processes with industry needs; and a decrease of $15.2 million per year for planned reductions from Budget 2012.

The 2012-13 estimates to date are $879.2 million, which consist of an increase of $178.7 million in addition to the Main Estimates of $700.5 million.

The authorities for the additional spending of $178.2 million came from supplementary estimates, TBS central votes and approved voted budget carry-forwards. The higher estimates to date came primarily from the Supplementary Estimates (B) and reflecting Budget 2012, where NRC received $91.4 million for IRAP; $61.1 million to support NRC's transition to demand-driven research; less $1.3 million from planned reductions as a result of Budget 2012, and other transfers totalling $200,000.

In Supplementary Estimates (C), NRC received net funding totalling $400,000. In addition to the supplementary estimates, NRC received operating and capital budget carry-forward approvals totalling $8.1 million, Treasury Board funded liabilities of $6.6 million and $12.3 million to cover the cost of collective agreements.

Federal Budget 2013 will also have an impact on the 2013-14 Main Estimates. NRC expects to receive $121 million of federal funding over the next two years to support its ongoing alignment of research activities and processes with market demands and industry needs. As well, the Economic Action Plan 2013 proposes to provide $20 million over three years for a new pilot program to help SMEs access research and business development services. This program will be delivered through IRAP.

My colleagues and I will be pleased to answer your questions.

The Chair: Thank you, Mr. Piché. We appreciate your comments.

[Translation]

Marie-Claude Guérard, Chief Financial Officer, Canadian Space Agency: Honourable senators, I would like to thank you for your invitation to appear before the committee. As the chief financial officer, I am here today to discuss the 2013-14 Main Estimates for the Canadian Space Agency.

[English]

The mandate of the Canadian Space Agency is to promote the peaceful use and development of space, to advance the knowledge of space through science and to ensure that space science and technology provide social and economic benefits for Canadians.

[Translation]

The Canadian Space Agency meets this mandate in collaboration with the private sector, universities, Government of Canada organizations and other space agencies and international organizations.

And now, I would like to focus on the Main Estimates and draw your attention to a few key points.

On page II-95 — et à la page II-65 dans la version française — you will note that the 2013-14 Main Estimates for the Canadian Space Agency indicate departmental expenses at $488.7 million, divided as follows: $288.7 million to increase the use of space data, applications and information by government departments and agencies, which include among others, the implementation of the three-satellites RADARSAT Constellation mission, which will maintain Canada's position as world leaders in the development and utilization of radar satellites; $95.4 million to generate advances in space exploration, which include Canada's continued participation in the International Space Station program and the command of Expedition 35 that is currently led by Canadian astronaut Chris Hadfield; $58.5 million to maintain a critical mass of academic, industrial and commercial expertise needed to address future national needs and priorities in space; and $46 million for internal services.

The 2013-14 Main Estimates present a net increase in expected expenditures of $125.4 million, or a 35 per cent increase over the previous year's Main Estimates.

This increase is mainly attributed to the RADARSAT Constellation mission, which itself represents an increase of $112.5 million. I would like to highlight at this point that the RADARSAT Constellation mission is managed by the Canadian Space Agency and is supported by the main government users, who also contribute financially to its development. An increase of $34 million is linked to predicted needs in relation to cash flow of various projects and initiatives related to the carryover of funds from 2012-13 to 2013-14. An increase of $3.9 million is linked to the ratification of collective bargaining agreements. A decrease of $24.7 million corresponds to our target for the second year of the deficit reduction action plan announced in Budget 2012.

This concludes my preliminary remarks. Honourable senators, I would like to thank you for your attention. I would be pleased to respond to your questions.

Nada Semaan, Associate Deputy Minister, Canadian Heritage: Good evening, honourable senators. Like my colleagues, I am very pleased to meet with members of the Standing Senate Committee on National Finance.

Today, my remarks will address the 2013-14 Main Estimates and the 2013-14 Report on Plans and Priorities for the Department of Canadian Heritage.

[English]

The 2013-14 Main Estimates for Canadian Heritage and its portfolio organizations illustrate the government's ongoing efforts to exercise sound financial management while continuing to provide strong support for arts and culture. In 2013-14, the total resources for Canadian Heritage are $1.32 billion, including $184.8 million in operating expenditures and $1,132.4 million in grants and contributions.

The Chair: You have probably written this, and now you are reading it rather quickly. We are trying to do simultaneous translation.

Ms. Semaan: I will go slower.

The Chair: Thank you.

Ms. Semaan: While this represents a net increase of $36.7 million from the 2012-13 Main Estimates, it should be noted that there is a decrease of $18 million in operating expenditures and an increase of $54.6 million in grants and contributions. The increase in grants and contributions is largely due to $122.3 million in funding for the upcoming 2015 Pan American and Parapanamerican Games. This is also offset by reductions reflecting a change whereby some components of the Aboriginal Peoples' Program were transferred to Aboriginal Affairs and Northern Development Canada, and that represents $31.7 million, and Budget 2012 decisions, which represents $39.1 million.

[Translation]

Major changes to the 2013-14 Main Estimates for portfolio organizations reflect spending review decisions included in Budget 2012, as well as the anticipated sunsetting of funds.

Regarding the Canadian Museum for Human Rights, the Main Estimates are $31.7 million, an increase of $21.7 million compared to last year. Some $10 million of the total estimates this year are for the museum's construction project and are sourced from an advance on future appropriations. The remaining $21.7 million is for operations.

For the Canadian Museum of Immigration at Pier 21, the Main Estimates are $18.5 million, which represents an increase of 85 per cent. This increase is due to a change in the funding profile for the consolidation and renovation of museum facilities. The Report on Plans and Priorities for 2013-14 reflects amounts from the 2013-14 Main Estimates and future years.

This year's RPP emphasizes a number of key initiatives that support Canadian Heritage's mandate. Let me provide you with some details.

[English]

As we draw closer to Canada's one hundred and fiftieth anniversary in 2017, a key priority will be the celebration of Canada's history and heritage. To that end, in 2013-14 the department will mark several key milestones of Canadian history, such as the one hundred and fiftieth anniversary of the Charlottetown and Quebec conferences.

Museums also play a vital role in telling the stories of Canadians, and they will be part of the planned celebrations. As such, the creation of the new Canadian Museum of History will be a significant legacy project leading up to the celebrations of Canada's one hundred and fiftieth anniversary in 2017. The amendments to the Museums Act, required to change the name and mandate of the Canadian Museum of Civilization to the Canadian Museum of History, will continue to make their way through Parliament.

We will continue to promote Canada's two official languages, as well as the vitality of official language minority communities, by implementing the new Roadmap for Canada's Official Languages that was announced by Minister Moore on March 28, 2013. We offer ongoing support to promote, celebrate and strengthen linguistic duality in Canada.

We will prepare and oversee Team Canada's artistic and athletic participation in the seventh edition of the Jeux de la Francophonie in September 2013 in Nice, France. We will continue to foster sport participation and athletic excellence by supporting the 2013 Canada Games in Sherbrooke and the 2015 Pan American and Parapanamerican Games in Toronto.

[Translation]

We will deliver on these and other activities over the course of the year. As well, we continue to modernize how we deliver our programs and services by simplifying and streamlining processes and taking advantage of the new tools and technology that are now available.

Honourable senators, Canadian Heritage supports the need for ongoing operational and productivity improvements and efficiencies across the Government of Canada, and we are doing our part to achieve the goals that have been established.

We would be pleased to respond to any questions you may have.

The Chair: Thank you.

[English]

I had not heard the term "Parapan American Games." That will be held in Toronto. I had not heard that term before.

Ms. Semaan: Actually, the Parapan American Games will be for the first time held in Canada. It is basically like a version of the Paralympics, but it is the Parapan Am.

The Chair: It falls under the Pan American umbrella.

Ms. Semaan: Absolutely.

The Chair: We will look forward to that coming up in Toronto.

Thank you each very much. That gives us a nice overview. We have had a chance to look at your Main Estimates. We have also looked at the Report on Plans and Priorities that is out for each of your departments, so we have a bit of a background from reading those documents.

I will go to senators who have asked to engage in a discussion with you.

Senator Black: Initially, I have a question about how you would like to proceed. We have heard from three branches. Do you want questions directed, for example, to the Canada Space Agency, pause, and then Canadian Heritage, or would I ask my questions all at once?

The Chair: No, I think you should ask a question and then have a response from whichever person you wish to direct the question to. Then go on until I cut you off.

Senator Black: As you see, Mr. Chair, I have some experience with that, but there is a big clock there. I will keep my eye on that.

We will start first on the National Research Council Canada. You are to be commended on the brilliant and important work you do for Canada. I would, however, ask for your comments on the press and the statistics that we read from time to time on the fact that Canada has lost or is losing its innovation advantage, that our percentage of moving innovation to commercialization is not as high as many other Western countries, and that such are going directly to a diminution in our ranking as a nation that is seen as an innovator and a leader in R & D. Why is that, given the tremendous work that you are doing?

Mr. Piché: I can give you part of the answer from an accountant's perspective, which may not be exactly what you are looking for.

Senator Black: I am more interested in a policy view. My sense is that something is not working. It may not be the government but rather the private sector. I do not know the answer. Do you agree with my proposition that we are losing our innovation edge?

Mr. Piché: I will answer part of the question and also refer to my colleague, who is more directly involved in these kinds of issues throughout the country. First, let me say that I agree with you that the statistics are clear that our standing in innovation development and so on has not been as good as we would have expected in light of all the investments we have made.

In a way, that is the reason the NRC is changing considerably in every part of its activities and in the way it manages itself, its clients and relations with its collaborators. It is a considerable transformation that is essentially being done to help improve Canadian innovation, bring new products and services to markets and to help small and medium-sized companies stay and do research and development in Canada.

Without going on for too long, I would like my colleague, Mr. Ciobanu, to add comments on that issue.

Bogdan Ciobanu, Vice President, Industrial Research Assistance Program, National Research Council Canada: You are perfectly right, senator. Let me express my point of view through my involvement with IRAP, the Industrial Research Assistance Program.

The government has invested increased resources in the last few years towards commercialization, supporting small and medium-sized businesses in Canada and commercializing innovative products, technologies and services. This is illustrated by an increase of $110 million in Budget 2012, an increase in IRAP's resources to double the contributions and to increase its field staff. IRAP has in excess of 209 industrial technology advisers across Canada in more than 100 communities who work directly with companies to do exactly this.

Not only do we work with companies to help them develop and commercialize technologies, but we also link them to providers of intellectual property with universities, colleges and other federal and provincial research labs.

Another illustration of the government's determination to do this is an increase of $20 million for the next three years in IRAP's budget to facilitate linkages between universities, colleges and other private research facilities with small and medium-sized businesses and to help commercialize those technologies because technologies are commercialized by companies, not by other entities.

Senator Black: How will we know when we sit here next year or the year after that we have been successful? What measures have you put in place to assess whether or not we are addressing this issue effectively?

Mr. Ciobanu: There are different measures, different key performance indicators. What I would like to focus on now is what is important for Canadian businesses and what is reflected in the Canadian economy. What is important for them is increased revenue and increased profits. For Canada, in general, it is important that these companies become global, increase high-quality jobs in Canada and grow to become medium-sized and large companies.

The most recent evaluation of IRAP, which looks five years back, from 2007 to 2012, indicates that for every dollar IRAP invested in small businesses in Canada, those businesses generated $10 in sales. This is very significant. Moreover, the economic impact of the $1 that IRAP invested translates into $12 of economic influx. These are just two numbers that reflect the economic impact.

Senator Black: Thank you for your frankness. I will defer to my colleagues, but I do have questions for Canadian Heritage eventually.

Senator Buth: Thank you very much for being here this evening. My first questions are for NRC.

First I have a comment on IRAP. I hear nothing but good-news stories and positive feedback from constituents on IRAP, so it is good to see the additional funding going into IRAP as well.

Part of the government's focus on innovation and focus on commercialization has come from the Jenkins report. The expectation is that you will refocus on business-led industry research, and you comment on ongoing alignment of research activities and processes with market demand and industry need. Can you tell me how you will refocus the program?

Mr. Piché: Yes. Without getting into too much detail about the mechanics of how we are doing so internally, the transformation we are going through in order to realign our research and development program from the historical institute to a more industry-based, client-focused approach is made up of first identifying the key strategic sectors that we need to operate in. Those have been identified in various documents, such as the Main Estimates, RPPs and so on. Also, internally we have put together a rigorous program approval process that requires the program manager to demonstrate through their proposed program the value they will create by investments in their research activities, and probably more important than other factors, to demonstrate that there is actually a client demand out there or problems to be resolved.

If we do not see that there is industry interest in the research project that we want to undertake — and by "interest" I mean in terms of the willingness to invest in those programs — it is very difficult for these programs to go forward. This whole collaborative, industry-focused approach is actually being translated into practical program review and approval of investment that will go into these various initiatives that can go on for five to seven years.

Senator Buth: I now have a more specific question on that. Can you tell me what you are doing with respect to agricultural research? Where would I find that in the estimates?

Mr. Piché: In terms of agricultural research, it would be a specific area of activity that would come under the Report on Plans and Priorities. Please bear with me for a second.

Senator Buth: Maybe I can ask my next question in terms of the agricultural components. How do you cooperate and then relate to what Agriculture Canada is doing in agricultural research?

Mr. Piché: I will answer that while my colleague searches.

Mr. Ciobanu: In the meantime, senator, if I may intervene, IRAP invested $11 million in agriculture and agri-food businesses in Canada this past fiscal year.

Mr. Piché: If we cannot find the numbers, we will get them to you.

Senator Buth: All right. Thank you.

Mr. Piché: To answer your question generally, a good part of what we do in terms of collaborative research is with other government departments. Agriculture Canada is a department we are closely involved with in developing some major initiatives that will be based in Saskatchewan, which I cannot really talk about right now because it has not been formalized yet. It will be a significant, multi-year program that will involve various parties, including Agriculture Canada, specifically dealing with agricultural issues.

Senator Buth: Actually, if you could tell the clerk where I can find the information for your plans and priorities on agriculture, that would be great.

My next question is for Canadian Heritage, and I think I gave you a heads-up. I am interested in the Canadian Museum for Human Rights because I am from Winnipeg, and it is an absolutely incredible investment.

I do not know whether you have had the opportunity to see it recently, but it is going to be incredible. We are very proud of that and very pleased to be able to house a national museum.

I am looking in your presentation at the estimates for the Canadian Museum for Human Rights at $31.7 million.

Senator Hervieux-Payette: What page is that, please?

Senator Buth: I am in the notes from Canadian Heritage that were provided, but if we can find it in the estimates, that would be great.

The Chair: That is where we would like to find it. Canadian Heritage is at II-53.

Senator Buth: Yes, 53, 54, 55.

Ms. Semaan: The Canadian Museum for Human Rights I have as II-75, 76.

Senator Buth: So you have the estimates at $31.7 million, up approximately $10 million from $21.7 million. I think you said in your presentation that the $10 million is an advance on future appropriations.

Ms. Semaan: Yes.

Senator Buth: Can you explain that?

Ms. Semaan: Absolutely. In terms of appropriations, it was planned that the Friends of the Museum would have money for the construction up front. They were not getting as much as they had hoped, so we brought some of the appropriations over into this year so that the construction can continue on time. However, in future years that would be paid back by the friends. This way, the government investment remains the same but it allows for the museum to open on time and to continue to progress.

Senator Buth: What is the total federal contribution to the museum?

Ms. Semaan: The total federal contribution is $100 million. The total cost is $351 million, but the federal contribution is $100 million.

Senator Buth: The rest of the money is coming from the province and from donors?

Ms. Semaan: Yes.

Senator Buth: How would that be reduced in future years?

Ms. Semaan: The operating budget is $21.7 million going forward, so it would be reduced a bit every year for 10 years, if I remember correctly, when it would be paid back. It is a yearly removal of it and it is paid back as it is brought in.

Senator Buth: Thank you.

Senator Callbeck: Thank you all for coming and for your presentations.

I would like to deal with Canadian Heritage first. I was delighted to hear you say in your comments that in 2013-14 the department marked several milestones in Canadian history such as the one hundred and fiftieth anniversary of the Charlottetown and Quebec conferences. Obviously there is money in the estimates for both of those events. Where would I find those amounts?

Ms. Semaan: There are a lot of programs. For example, for the Charlottetown Conference that you mentioned, there was recently an announcement of $6.1 million. That is both ACOA and Canadian Heritage. That announcement encompasses quite a number of programs. It encompasses money from the Commemorate Canada component, the Celebration and Commemoration Program, and from the Canada Cultural Spaces Fund. Those are the three areas, but it would be pieces of that.

The Chair: Can you show us that in the estimates?

Senator Callbeck: It is page 54.

Ms. Semaan: I am looking for the specific programs I just mentioned.

For example, on page 55, Cultural Spaces is eighth from the bottom. Some of the money that was announced will come from that component. I will find the others as well.

Senator Callbeck: That is $6.2 million. Is other money allocated in here for those events?

Ms. Semaan: There are a number of programs to which people can apply for celebrations. There was not a specific line item in the budget for that, but we use our programs to fund all of these celebrations. There are a variety of programs depending on what it is.

For example, the recent announcement was the Confederation Centre. For that one, the enhancements to the centre would come from the Cultural Spaces fund. For celebrations, funds come from Commemorate Canada or the Celebration and Commemoration Program.

Senator Callbeck: Where is that?

Ms. Semaan: The Celebration and Commemoration Program is at the bottom of page 56 — "Contributions in support of the Celebration and Commemoration Program." It is the third from the bottom on page 56.

Senator Callbeck: That has certainly decreased a lot.

Ms. Semaan: From $13 million to $7 million, and that represents the finishing of money for the War of 1812 that was brought forward.

Senator Callbeck: That is two programs. Are there any others where money might come from?

Ms. Semaan: There are Commemorate Canada, the Celebration and Commemoration Program and the Cultural Spaces Fund. As I mentioned, the Atlantic Canada Opportunities Agency will also be funding that. We have a number of other programs. It depends on the items that are brought forward to us. We look at the programs and the funding to see what is possible as applications come in.

Senator Callbeck: There are a number of programs here from which money could come for both of those events?

Ms. Semaan: Yes.

Senator Callbeck: On page II-54, Engagement and community participation was $88 million last year and now it is $46 million. It has taken quite a hit. Why is that? First, what is included in that program, and second, why was it cut? That is about halfway down page 54.

Robert Hertzog, Director General, Financial Management Branch, Strategic Policy, Planning and Corporate Affairs, Canadian Heritage: Senator Callbeck, there are a number of programs included in Engagement and community participation. The major ones are Building Communities through Arts and Heritage, and the funding for that program has remained the same. There was a major change in the Aboriginal Peoples' Program. Some major components of that program were transferred to AANDC effective 2013. It was actually in the Main Estimates in 2012-13. Subsequently, those programs were transferred so it has come out of our Main Estimates in 2013-14.

Senator Callbeck: Does that make up the $42 million?

Mr. Hertzog: Yes; it was $39 million.

The Chair: The government acronym AANDC, Aboriginal Affairs and Northern Development Canada, is the name that someday will be the name of that department, but it has not gotten there yet.

Mr. Hertzog: That is correct.

Senator Callbeck: I would like to go to the National Research Council, which I believe is on pages II-233 and II-234. My province is home to the NRC Institute for Nutrisciences and Health. Is that affected in any way? Does this budget affect that institute? Where would I find the money? What is it under on page II-234?

Mr. Piché: If I refer you to the Report on Plans and Priorities, it is on page 22.

Senator Callbeck: I have not got that. Sorry, page 22? Thank you.

Mr. Piché: That particular operation would be part of the budget for Program 1.4, Health and Life Science Technologies. The resources, the planned spending, would be part of that detailed budget. I believe we are talking there about biologics and natural products.

To answer the question from the previous senator on agricultural research, it is also on page 24, under that same program. If you look on page 24, the second paragraph, it will also talk about the potential investment. That, unfortunately, is not broken down specifically for that operation, but it is part of that envelope.

Senator Callbeck: Could you get that information and provide it to the committee at later date, about the institute in Charlottetown, as to what the budget was last year and what it will be this year?

Mr. Piché: Yes; we can do that.

Senator Callbeck: That will be fine; thank you.

With National Research, could you explain the Youth Employment Strategy, please? That is on page II-234, too. The spending is around $5 million.

Mr. Ciobanu: I will explain what the Youth Employment Strategy is. It is a program delivered by IRAP across Canada for the benefit of HRSDC, Human Resources and Skills Development Canada. It is a relatively small program; it is $5 million per year transferred from HRSDC to IRAP. The purpose of this program is to help small businesses hire highly qualified personnel, young graduates from colleges and universities in Canada. IRAP is supporting small businesses by helping them with the first year's salary up to $30,000 per graduate that they hire.

Senator Callbeck: Roughly how many students is that?

Mr. Ciobanu: It is not students; it is graduates, so people who are already in the market for a job, graduates from universities and colleges. Being a $5-million program, it is up to $30,000. On average, it is a little bit less than a $30,000 contribution, so it is about 200 a year. My colleague has the exact number here. It is 172. I will check in a second and I will give you the exact number of graduates.

The Chair: We know what the fraction is anyway.

Senator Callbeck: They get that for one year?

Mr. Ciobanu: It is during the first year, yes. It is support up to $30,000. The benefit is that this program is delivered through the needs of the company. Our ITAs work with companies on a regular basis, and when they see a need for some expertise in science, technology, or even business and marketing, they link them with either a university or a college or by other means with graduates and they help them hire the most appropriate resource. The rate of retention is extremely high because it is not just a four-month or eight-month or 12-month internship. It is really a job that the company needs for a longer term. The retention rate after the end of this support to the firm reaches 77 per cent, so almost four in five stay with the company.

Senator Callbeck: That is good. I have other questions but will go on the next round.

The Chair: Before I go to the next questioner, Ms. Semaan, with those programs you have where the money goes to various projects during the year — and that is the department managing the funds that we make available to you — where could we find out where that money has gone? Do we wait for public accounts or can we look to your website to find out where the money has been disbursed?

Ms. Semaan: Absolutely; on the websites. Every contribution and grant is posted there.

The Chair: Good. That would be helpful for us to know and I appreciate your letting us know that.

[Translation]

Senator Bellemare: My first question is for Ms. Guérard from the Canadian Space Agency. I was looking at the Main Estimates, and I see that capital expenditures for 2013-14 are going to increase significantly. I wanted to know what your capital expenditures were, roughly, and what the process is for invitations to tender. Is there any Quebec content in those expenditures that you are investing in?

Ms. Guérard: Thank you for your question. First, for the 2013-14 budget, as I mentioned in my presentation, the major element that is increasing in the capital budget is related to the RADARSAT Constellation mission, which is an increase of $112.5 million. Briefly, in the context of this mission, a launch is expected in 2018, and some main departmental users are working with us.

In terms of the budget, of the entire capital, these are mainly special assets that the space agency is developing in partnership with the Canadian industry at the international level.

You had a question about markets. In terms of regional distribution, we follow the for-use rules for contracts, and there is regional distribution that we must follow within contracts.

Senator Bellemare: Regional distribution among the provinces?

Ms. Guérard: Yes, among the provinces.

Senator Bellemare: Is that per capita?

Ms. Guérard: I do not have that information with me, but it is something I could provide to the committee.

Senator Bellemare: Yes, I think that might be interesting. My next question is for Ms. Semaan from Canadian Heritage and has to do with the development of cultural industries.

For example, if we go back to your report on plans and priorities, on page 5.

With respect to the developments of cultural industry, the report states that among the means used, there are tax credits for film production. We are looking at the Main Estimates, but we have tax expenditures for the development of cultural industries. I would like an approximate idea of the financial impact of this measure. Do you know that offhand?

Mr. Hertzog: It is approximately between $300 and $400 million.

Senator Bellemare: That is quite significant. That is even more than IRAP. That is why it is sometimes interesting to compare.

Do you have an idea of how tax expenditures are distributed across Canada?

Mr. Hertzog: I do not have that information with me, but I could send it to you later, if you would like.

Senator Bellemare: Yes, I would be interested in that.

I have a comment for the National Research Council of Canada regarding IRAP. I was looking at the vision you are proposing in your strategic plan. It sort of follows on what Senator Black was asking. It is on page 6: The National Research Council of Canada's vision is to be the most effective research and technology organization in the world, stimulating sustainable domestic prosperity.

I was a little surprised in the sense that I find it worthwhile to have ambitions and great objectives, but I cannot stop thinking about the people who will have to attain those goals; the objectives are perhaps ambitious and not at all realistic in the short term. It might be good to send a message that are a little more realistic when it comes to the means we can use, without diminishing the value of what you do.

Mr. Ciobanu: You are absolutely right, senator. It is ambitious, but I would say it is also realistic. The vision of the National Research Council of Canada — and it is much more than IRAP, by the way — includes three main research divisions and the IRAP division, but your question has to do with the National Research Council as a whole.

Our vision is to become the most effective, but that means having very specific performance indicators. We compare ourselves with similar organizations around the world, organizations we call RTOs, or research and technology organizations. Their goals are to transfer intellectual property so that it is marketed by companies, to increase the productivity of companies in their respective countries and, in general, to contribute to increasing the quality of life and the gross domestic product.

We compare ourselves on a number of factors, mainly on the economic impact. As Mr. Piché said, all the National Research Council of Canada's research programs are focused mainly on Canada's economic priorities and are carried out with the participation of companies. So, before the National Research Council of Canada gives the green light to a research program, it must have the interest of private industry, and small, medium and large enterprises.

Senator Bellemare: It needs to be shared.

Mr. Ciobanu: Shared, yes, with respect to cost, but more importantly, with respect to marketing, because those people will make money. Investment is one thing in development, but what is important is that it pays off, and the people who can do that are private companies that are profit seeking, that have clients and distribution networks.

We ensure that all our projects are carried out with them so that they increase their market share and become more competitive. It is one of the fundamental elements. We will compare ourselves. Our time frame is five years. We are starting to create our foundation.

Senator Bellemare: The results indicators, perhaps I missed that, but I was looking for more specific results indicators or targets.

Mr. Piché: I would like to add to my colleague's comments. There are results performance indicators in research and development and also internal performance indicators. When we talk about effectiveness, we are also talking about efficiency, being able to deliver results in terms of Canada's current economic indicators. Internally, we also have efficiency performance indicators concerning our ability to maximize support investments for corporate services to be able to focus on research. We are currently in contact with other similar international research and technology organizations in countries like Finland, Germany and Australia, and we are developing indicators with them to have a baseline for comparison to determine whether we are achieving results.

Senator Hervieux-Payette: I have a question for everyone, but the one for Canadian Heritage is fairly quick.

Since our committee is televised, could you explain for the average citizen the difference between a grant and a contribution? For people or agencies that might be interested in the programs we are discussing, it would be good to know which of the two they can apply for when they are in contact the government.

Ms. Semaan: There is not much difference. It is really a difference between how it is reported and what we want it to do. With a contribution, it is very clear that the stages on what we want it to do are presented and, afterwards, we do a review to determine if it did what they wanted it to do.

With a grant, it is important to do what they want to do, but there is a little less reporting. At the same time, it is important to comply with the program's terms and conditions.

Senator Hervieux-Payette: In either case, does the involvement of provincial governments come into play? If the project is in Quebec, for example, does having assistance from the provincial government exclude it from a federal program?

Mr. Hertzog: Yes, other governments are often involved. It is often the case, depending on the nature of the program and the activity in question.

We have a lot of projects in which various levels of government, sometimes NGOs and the private sector take part.

Senator Hervieux-Payette: It is important to know. That is money that comes from Canadians' pockets. At the space agency, there is a lot of talk about the RADARSAT Constellation project. Is potential revenue expected once that radar has been developed? We are paying out now, but will there eventually be revenue from that project?

Ms. Guérard: I do not have an answer for you today. If I refer to RADARSAT-1, we had royalties. I will have to validate the information for the RCM.

Senator Hervieux-Payette: So you do not know whether RADARSAT Constellation will have any users other than the federal government?

Ms. Guérard: Other than the federal government?

Senator Hervieux-Payette: Yes.

Ms. Guérard: I will have to check.

Senator Hervieux-Payette: We are undertaking a project, but without knowing who will use our radar. This project costs hundreds of millions of dollars.

Ms. Guérard: That is true, but I am sorry, I do not have that information. I will get back to you.

Senator Hervieux-Payette: Mr. Chair, I would like us to make sure of that. I have always had the impression that, when similar programs were launched, a commercial aspect was always involved. Investments were made, but eventually, those who use the programs commercially would receive royalties. I do not see why we would spend half a billion dollars, and perhaps more, on something that will have only one use. After all, we are talking about the cutting edge of technology.

Ms. Guérard: Yes.

Senator Hervieux-Payette: In any case, we will know more about that later. Let us now move on to the National Research Council Canada and the Natural Sciences and Engineering Research Council. I have always had fundamental problems with the subject of my next question. When someone has proved a concept, carried out a demonstration project and reached the commercial stage, where do they turn for projects such as new environmental technologies, new solar panels? They do have to start with an idea — even put it on paper — and then continue going through the various steps. I am talking about the National Research Council Canada and the Natural Sciences and Engineering Research Council. To my knowledge, engineering is often involved in environmental issues. I would like to determine who takes care of what, and at what stage of a project's development.

Mr. Piché: We have a new approach at the National Research Council Canada when it comes to project creation and approval. We try to begin by putting those elements on paper — before an investment in a project is approved — in order to get an idea of not only what we want to accomplish through that project, but also how we can carry it out. How will we be able to divest ourselves of our connection to the project? Normally, there are two ways to do that. A more positive way is to have a marketable product or service that the private sector would take charge of and be able to market — be it as intellectual property or something else.

The other option is perhaps less positive. At a given stage, we would realize that the project cannot be carried out. That is where a review system comes in. We would need to be sufficiently disciplined to make the decision to abandon a project that would fail to achieve the set objectives. That is something of an issue when it comes to research. In many cases, we cannot ensure that the desired results will be achieved, especially since the National Research Council Canada is involved in an environment into which the private sector may not yet be ready to invest because of all the uncertainty. But we want to make sure that we have guidelines that will help us decide whether to keep going or stop at any stage of project development.

Senator Hervieux-Payette: Could you be more specific? At what point do people contact you? When they have an idea? After they carry out their pilot project? Once they have completed a demonstration project that is close to commercial success and they need one final push from you to help them enter the market? Do you get involved at the outset and follow them once the pilot and demonstration have been successful and you see that a product can make it to domestic and international markets?

Mr. Piché: I would like to add a few words to my previous comment. To answer your question, on the one hand, we have our research and technological development projects, where we start from the beginning. We enter into discussions with potential partners at the beginning of conceptualization. Nothing exists at that point. On the other hand, an important aspect of our activities consists of what see as technical services we provide to clients who make short-term use of our facilities, equipment and expertise. That aspect depends on clients who come to us for specific tasks. They pay market prices for our services, and we ensure that the National Research Council Canada maintains its cost and profit margins. Those are two somewhat different aspects of our activities, but they cover our ability to support the industrial sector.

Mr. Ciobanu: Business owners who have identified a business opportunity on the market and want to build on it by developing a product, service or technology have to knock on a single door. I am talking about the Industrial Research Assistance Program, or IRAP. IRAP advisors are everywhere. Every company has an IRAP advisor nearby to whom they present their project. The company may be in a preliminary stage of a project, with only a glimpse of a market opportunity. It may also be in a subsequent stage of the innovation cycle. It may have proof of concept or be in the demonstration stage. It may have a product, but still need to develop and pre-produce it, and create a distribution network.

At any stage of the innovation cycle, the industry technology advisor — the ITA — can help with a number of elements. Advisors are all part of the business community and have 20 or 25 years of experience in business management. They have a good network of contacts. They can provide the company with advice on product development. They can link them to resources to help strengthen the management, R & D or marketing team. Companies are provided with information on market intelligence, existing concepts, potential competitors and markets, and existing technologies. Instead of developing and taking a major risk, business owners can import existing technology, negotiate with technology providers from around the world and use that technology in Canada. There are all sorts of options available in terms of market opportunities. The advisor can put the business owner in touch with potential investors from the private sector, angel-investors, venture capital firms, the Business Development Bank of Canada or other Canadian financial system players. Of course, IRAP contributes.

The Chair: Thank you, Mr. Ciobanu. We have to move on. Several senators would like to ask questions. We will continue with the deputy chair of this committee, Senator L. Smith.

Senator L. Smith: Ms. Guérard, what exactly does the $24.7-million cut consist of? What are you going to do? I know that you will have an increase of 35 per cent, but that is made up of $112 million, plus $34 million, plus $3.9 million, minus $24 million. But what are you doing in terms of your deficit reduction action plan?

Ms. Guérard: Senator, we are in the second year of the economic action plan's implementation. Just like other departments and agencies, we have contributed to the deficit reduction effort. We did that by trying to improve efficiency — mainly through internal measures — in terms of operations.

Senator L. Smith: Like what, for instance? Are we just talking about downsizing?

Ms. Guérard: We carried out a review, the main consequence of which was downsizing — 49 positions over 3 years have been announced. We have reviewed all of our priorities in order to reach the government target that was announced in Budget 2012. So we are mostly focused on improving efficiency.

Senator L. Smith: So your actions mostly revolve around downsizing.

Ms. Guérard: Yes.

[English]

Senator L. Smith: The minister's message says:

The world-class RADARSAT Constellation Mission will keep Canada at the forefront of the design and operation of radar satellites. Canada's continued participation in the International Space Station (ISS) will be capped by an historic milestone for our nation when astronaut Chris Hadfield completes a long-duration mission as the first Canadian commander of the ISS.

[Translation]

To follow up on Senator Hervieux-Payette's question, how much money will we invest in that program? What are we going to do with it?

Ms. Guérard: Are you talking about the space station?

Senator L. Smith: Yes.

Ms. Guérard: Since it committed to being an international partner in the space station, Canada has invested $1.9 billion. If I break that amount down, $1.2 billion was used for the development and construction of major stage projects — including the Canadian arm. To date, $676 million has been set aside to keep the space station running.

Senator L. Smith: So the total spending is $1.9 billion, which includes the $676 million for operations?

Ms. Guérard: Exactly. As announced in Budget 2012, the government has confirmed that its participation in the space station will be extended until 2020. The agency is currently in discussions with NASA to define the nature of our contribution. So we are currently negotiating that aspect with NASA.

Senator L. Smith: I think that Senator Hervieux-Payette asked her question to obtain some fairly important information for us. We need to know what is planned going forward, as you have spent a lot of money. What are the future plans?

Ms. Guérard: We are now talking about the space station, but the senator's question was about the RADARSAT Constellation Mission satellite, which will be launched in 2018.

As for the space station, as I mentioned, we are currently committed to participate until 2020. We are now determining the cost of continuing our partnership. We could provide the committee with information on the estimated cost of Canada's participation in the space station.

[English]

Senator L. Smith: I have a question for Ms. Semaan.

Part of your strategy is to develop the historical programs, such as the War of 1812. The one hundredth anniversary of the First World War will come up, and then the one hundred and fiftieth anniversary of Confederation. How do you measure the effectiveness of the investments you are making in these programs? What outcomes are you looking to achieve? You read the report, the RPP. Specifically, what are you trying to achieve?

Ms. Semaan: Actually, if we were to look at the RPP, it is basically having, for example, Canadians share, express and appreciate their Canadian identity.

Senator L. Smith: How will you measure that?

Ms. Semaan: In a number of ways. We break it out, depending on different programs, but there is always the overarching. For example, one of the outcomes for the Building Communities through Arts and Heritage program is that communities celebrate important events, and that celebration uses a variety of volunteers and artists. Every time we fund that, we ask them how many people participated, what the key themes were and how many volunteers came. We collect all of that information to see what happened.

Another example is that there was a lot of media coverage on the War of 1812. There was a review by a survey asking Canadians: Did this media campaign actually teach you anything about the War of 1812? How was it effective? It was identified as one of the most effective public campaigns, so people did recognize and understand it.

Senator L. Smith: Will you be giving the public feedback from these types of events, with measured results on four or five key priority areas?

Ms. Semaan: Absolutely. The public opinion research, which I just mentioned, is posted on the Web for all Canadians to see the impact of the funding and what was received out of it.

We do have measurements. As you saw in the RPP, we actually identify what we measure. In the RPP, we say what we are going to do in the year, and in the DPR we say how we did it, based on the measurement we have identified per program.

Senator L. Smith: Is there is a summary report you could give us? It is fairly detailed. Some of us who come from industry are used to one or two pages of bullet summaries. That would be neat to have so that when you come and talk about what you are going to spend, then you could have a one- or two-page summary that could be distributed to the senators. I think it would be beneficial to see how everything is connected.

Ms. Semaan: Absolutely. I could leave you with one of the pamphlets we created, which outlines impacts on our program.

The Chair: Thank you, Senator Smith. If anyone would like to produce documentation and give it to our clerk, it will be circulated to all the senators.

[Translation]

Senator Chaput: My first questions are for Canadian Heritage. You talked about the roadmap, which the government just renewed for a five-year period. I was wondering what portion of the Canadian Heritage budget is set aside for roadmap initiatives, as we know very well that a number of departments contribute. So what percentage of the Canadian Heritage budget is set aside for roadmap initiatives? Where could we find that document? I have looked everywhere, but was unable to find anything.

Ms. Semaan: I can give you that information.

Senator Chaput: Are you talking about the report on plans and priorities?

Mr. Hertzog: In our RPP — I have the English version, but I do not have the French version with me — in the English version, that information is in table 2, under strategic outcome 2. If you look under "official languages," you will see that, in 2013-14, we plan to spend $348.4 million. About a third of that amount comes from the roadmap.

Senator Chaput: So a third of the amount will go to the roadmap.

Mr. Hertzog: Approximately.

Senator Chaput: Do you have an idea of how many departments will contribute to the roadmap and what their contribution will be in terms of percentage? If not, could you provide us with that information? It would be interesting to know.

Mr. Hertzog: Yes.

Senator Chaput: On page 5 of the French version of the report on plans and priorities, the first table contains an overview of Canadian Heritage. If I compare the various columns with the budget in terms of figures, I see that there is a $5-million cut in the arts, a $16-million cut in cultural industries, a $4-million increase at Heritage Canada, a $21- million cut in attachment to Canada, a $42-million cut in engagement and community participation — but you explained that and said it had to do with aboriginal programs.

Mr. Hertzog: Exactly.

Senator Chaput: A $5-million cut will be made in the area of official languages, but a $130-million increase will be made in sports.

Does that mean that, over the next few years, many initiatives supported by Canadian Heritage will focus much more on sports than on cultural industries, the arts and official languages?

Ms. Semaan: As I already told you, the increase in funding for sports is owing to the Parapanamerican Games.

Senator Chaput: I understand that the costs involved are very high. But given the cuts — such as $5 million less for the arts, $16 million less for cultural industries and $21 million less for attachment to Canada — some programs will surely suffer. Right?

Ms. Semaan: Yes.

Mr. Hertzog: This is a combination of two factors. A decision was made as part of Budget 2012 to cut certain programs. However, some programs are funded over a fixed period and have to be renewed. So they will not be reflected in the figures until their renewal. There is a reduction, but those programs could potentially be renewed.

Senator Chaput: And the spending would then appear in the next document we receive?

Mr. Hertzog: Yes.

Senator Chaput: Very well.

Ms. Semaan: In supplementary estimates, yes.

Senator Chaput: My last question is for the National Research Council Canada, and it is brief.

Pages 23 and 24 of the French version of your plan — pages 20 and 21 in English — contain information on the Industrial Research Assistance Program, which supports small and medium-sized enterprise — SME — growth.

On page 24 — page 21 in English — we see that, despite the fact that small and medium-sized enterprises account for 99.8 per cent of all businesses in Canada — so almost 100 per cent — your budgetary expenditures are reduced by about $39 million.

I would like you to break down this reduction in support for SMEs. I may not be reading the figures correctly.

Mr. Piché: Are you on page 24?

Senator Chaput: Page 24 in the French version.

The Chair: Page 20 in the English version.

Mr. Piché: Page 24 in French, program 1.3. Are you looking at the table?

Senator Chaput: Yes, at the top of page 24 — bottom of page 20 in English — in your budgetary expenditures, under planned spending, there is a reduction for 2014-15.

Mr. Piché: Sorry, I do not have Ð

Senator Chaput: From $279 million to $240 million.

Mr. Piché: My apologies. I have the wrong report.

Senator Chaput: I think this seems to concern the needs of small and medium-sized enterprises. I would like to understand what is happening with these companies that are so important to our country.

Mr. Piché: Okay, I have the figures here. I would like to ask my colleague to answer your question because this may be an example of budgetary processes that can sometimes have various interpretations.

Mr. Ciobanu: Senator, this is not actually a reduction. Budget2013-14 includes a transfer of funds that were not spent in 2011-12. So that budget is specifically for 2013-14. Therefore, it is not included in 2014-15.

Senator Chaput: So any transfers made are part of Budget 2013-14. They will all be spent, and no transfers will be part of budget 2014-15. Is that correct?

Mr. Ciobanu: Exactly.

Senator Chaput: Interesting.

The Chair: We will see.

[English]

Senator McInnis: I have a few quick questions. First to the NRC, you do great work, and you do a lot of work to help with R & D in the private sector. Is there any revenue stream from the private sector? Obviously, many of these companies go off and are very successful. Is there ever any thought of any charge? Are there charges? I could not find any.

Mr. Piché: The information you are looking for you will find under "Total Statutory." Again, forgetting the budgeting process, in the public reports, it is shown as statutory expenditures. If you go to the Main Estimates, you will see, on page II-231, $182 million.

Senator McInnis: Is that net?

Mr. Piché: This is, for the most part, external revenue that is spent against NRC operations. The actual revenue part is $142 million that we receive from clients and collaborators in pursuing research and development projects or providing technical services.

Senator McInnis: For example, the wind tunnel?

Mr. Piché: That is correct.

Senator McInnis: That would be a charge?

Mr. Piché: That is correct.

Senator McInnis: Okay. I wondered. Thank you.

The next question is for Canadian Heritage. I am envious now that I am here in the Senate and am unable to converse in French. One of the reasons, of course, is that French immersion is not readily available in rural Nova Scotia and, I suspect, in the rest of rural Canada. Yet, I see, under Grants, that there are 1, 2 and then, under Contributions, another couple of huge sums of money. My question is: What transfers go to the provinces for French immersion? I presume that each province gets a lump sum of money predicated, probably, on the population?

Ms. Semaan: Education is, obviously, a provincial jurisdiction. However, in order to incent official language minority community education, there are transfers as part of the official languages program. I do not have the breakdown with me right now, but I can give you the breakdown by province that we give without a problem. I could send that to you. It is for education and for second language learning.

Senator McInnis: I see it in the estimates at page 55: "Grants to organizations, associations and institutions to promote the vitality and long-term development of official-language minority communities through the Development of Official-Language Communities Program." The amount is $33 million. For "Grants to organizations, associations and institutions to promote the full recognition and use of the official languages in Canadian society through the Enhancement of Official Languages Program" the amount is $5.5 million. It continues under Contributions.

Are those separate? Is there another figure that I am missing?

Ms. Semaan: Yes, those would be going to non-governmental organizations. There are also contributions on the other page.

Senator McInnis: Yes, I saw those. There are two amounts: $105 million and $188 million.

Ms. Semaan: One of these is for the provinces. I would have to get back to you with the details.

Senator McInnis: Okay. If a community or an organization wanted to take advantage of this, would they make application?

Ms. Semaan: Yes. There are a number of programs that organizations can apply to through us or any of the other organizations, whether HRSDC, Health Canada, which provides funding for health care service in minority languages, or Justice Canada, which has programs to provide justice services in minority languages. The official languages roadmap is about 15 different departments that have programs. They can all apply to them. In addition to that, we transfer money to the provinces to encourage second-language minority education. That is the one I can get the list of what we give to each province.

Senator McInnis: Who polices this? How do we know? Are there follow-ups? I understand that the jurisdiction for education is with the province.

Ms. Semaan: Reporting is required, whether a contribution agreement or a transfer payment, in terms of what was accomplished with the funding. A secretariat not only looks at our programs but also at all the programs to identify the impacts, to see what we are getting for it and to see if any adjustments are required.

Senator McInnis: What you are getting for it, in my opinion, is French immersion in urban areas. I started this conversation by saying that in rural Canada they are not getting it. Whether that is because of the lack of teachers or lack of governments trying to spread it to rural areas, I do not know. As I said the other day at the Standing Senate Committee on Official Languages, it is a real hindrance and a disadvantage for rural Canadians not to have the opportunity to have French immersion because they lose out on the opportunity of employment. It is troublesome.

I would like to know — not tonight but perhaps we can converse later on — why the money continues to flow in — you have sums of money, incidentally — and who is checking on this because if you are in Halifax, Dartmouth or Saint John, you will get it; but you will not get it in the rural communities.

There are several different components of this to grants and contributions and probably others that I have missed. It is a bit of a sore problem. I would like to have some discussion with you on that.

Ms. Semaan: Absolutely.

Senator McInnis: I have a quick question with respect to the Canadian Space Agency. I have been told that we can drill down because we have the Report on Planning and Priorities. Future Canadian space capacity pretty much consistently runs from $69 million to $58 million this year. What is that? Is that to maintain their presence? Is that to keep us in idle form? Is that to keep the university academics and all that type of thing current? Is that what it is?

[Translation]

Ms. Guérard: This program has two main elements. The first priority consists in creating winning conditions so as to ensure the development of highly qualified staff in the space sector. That is the first objective. The second objective is to ensure the presence of conditions that support space technology development in order to address the country's priorities and needs in terms of Canadian industry and universities. Those are this program's two main objectives.

[English]

Senator McInnis: I think you have answered it.

[Translation]

Ms. Guérard: It is a matter of having highly qualified staff in Canadian industry and universities in order to maintain a critical mass needed to develop technologies that meet Canada's needs.

[English]

Senator McInnis: Are they currently doing it or are they just on hold?

Ms. Guérard: We are doing that right now.

Senator McInnis: Are they doing projects now that will help us in the future?

Ms. Guérard: Yes.

Senator McInnis: That is fine.

The Chair: Ms. Semaan, you undertook to provide us with a breakdown of how much money was transferred for educational purposes. That is under Contributions as I understand. You answered earlier that contributions require more reporting. Could you provide us with the reporting you get back from the provinces regarding how they use that money?

Ms. Semaan: Absolutely.

The Chair: That will be useful to the committee; and we will circulate that, of course.

Ms. Semaan: Yes.

[Translation]

Senator De Bané: I would like to read my questions, which is fairly long. I ask that the National Research Council Canada's representatives answer it in writing. My question is somewhat long and refers to a study published by Professor Richard Florida.

[English]

He is Director of the Martin Prosperity Institute at the University of Toronto Rotman School of Management and Global Research Professor at New York University.

The professor has tried to understand to what extent scientific, technological innovation represents a share of the economic output of a country. He has published in his study four charts. The first chart is the percentage of economic output that countries devote to R & D investment. The ranking is as follows: First is Israel, then Sweden, Finland, Japan, Switzerland, South Korea, Germany, Denmark and France round out the top 10.

The second chart maps the scientific and engineering researchers per capita. First is Finland, then Sweden, Japan, Singapore, Denmark, Norway, the U.S., Australia, Canada and New Zealand.

The third chart is plots innovations, measured as patents per capita. There, Canada is No. 8 after countries like Switzerland, Finland, Israel, Sweden and Germany.

With all those three tables, he makes a comprehensive one of them all. I will finish with that. The last one is called "Global Technology Index," which is a broad assessment of the technological and innovative capabilities of the world's leading nations. No. 1 is Finland. Again, this is the comprehensive of the first three. Finland is first; second is Japan; third is the United States; fourth is Israel, which has the highest concentration of engineers in the world and has pursued relentlessly an economic development strategy based on launching innovative firms; fifth is Sweden; sixth is Switzerland; seventh is Denmark; eighth is Korea; ninth is Germany; and tenth is Singapore. Canada is not in the top 10.

I would like to give you the reference of the study done by several people, but the main one is Richard Florida. Maybe you would like to send us written comments on those four charts that were published in April 2013. Send them to us through the clerk.

[Translation]

The Chair: Is your question for Mr. Piché?

[English]

Senator De Bané: It is for the National Research Council Canada. I think they have a very good evaluation of what we have in Canada — our strengths, our weaknesses, et cetera — and maybe they could comment on that study by Richard Florida.

Mr. Piché: If I could confirm with you the context of our response, would that be NRC's view on why Canada fares the way it does under that study, or would you like to know more particularly how NRC intends to address some of these deficiencies?

Senator De Bané: I think both questions that you have pinpointed are really interesting. We have around the table several financial wizards. I am not one of them, but Senator Gerstein and all the others are financial wizards. I would like to look at the whole picture. I see that Canada should be before Singapore and some of those small countries. We should be in the top 10.

Mr. Piché: I will be happy to provide you a written response.

Senator De Bané: Thank you. I put it in English because the study is in English. I know my English is not very good, but the study was published in English.

The Chair: Thank you very much. We appreciate that. I will now go to the final senator of round one.

Senator Duffy: Thank you, witnesses, for coming here. My colleague has mentioned the financial wizards who are here, and he and I are together because neither of us is in the financial wizard category.

However, my colleague from Prince Edward Island raised earlier the whole question of 2014, which will be the anniversary of the 1864 conference where the birth of Canada began and was followed up later on. I think I speak on behalf of my colleague that we were all thrilled to see Minister Moore last week in Charlottetown, announcing significant funding from the federal government for both the Confederation Centre of the Arts, which we all know is the national memorial to the Fathers of Confederation, and for the 2014 celebrations.

In this last year, Canadian Heritage has also been given responsibility for the noon show on July 1 on Parliament Hill. All of those who are watching us tonight will have seen that broadcast. Can you give us any idea of the kind of energy and freshness, and about the move of that program from the National Capital Commission, which most of us think of as tending the tulips, to Canadian Heritage? What was the philosophy there, and did you get additional funds in order to make this the kind of celebration we all want and expect?

Ms. Semaan: First, to clarify, the noon show has always been done by Canadian Heritage. The evening show has always been done by the National Capital Commission.

The item identified in Budget 2013 in terms of the machinery change for the NCC was to recognize synergies. We do a number of things together; for example, we do the day show and they do the night show. We do work already together. The question was how we can work even more closely together to get those synergies, especially as we move toward the one hundred and fiftieth anniversary of Canada.

Also, as we start celebrating in the National Capital Region, the whole point of the National Capital Region is not Ottawa but the capital of the nation. Therefore, how can we ensure that all the celebrations here in the national capital have a pan-Canadian perspective, and how do we ensure it is out everywhere and we celebrate together?

Those are the synergies we hope to accomplish with that part of the NCC joining Canadian Heritage.

Senator Duffy: Those of us in P.E.I. are especially excited about one thing that will happen in 2014, which is that Duncan McIntosh and his theatre group will go coast to coast, much like we had the torch relay for the Vancouver Olympics. That is one of the things that we gather your department has signed off on. We will be bringing a little bit of P.E.I. to every corner of the country, and that is putting meat on the bones, as it were. We see the numbers here, but that will all mean that people will have coming to their communities this reminder of how Canada has been built over the last 150 years. Thank you for that, and we look forward to a very exciting time in 2014-15, right through until the big one hundred and fiftieth national celebration.

Finally, on IRAP, as colleagues have said, I constantly hear positive things about the IRAP program. Sometimes we read the media and hear that all the scientists are all upset and so on. Usually retired scientists are the ones being quoted.

One thing I have noticed over the years is that change is always difficult. The NRC and your facility here with your people across the country and having IRAP in every place where there is manufacturing — it really has been a dramatic cultural change for your organization. I think it is important that your people recognize that your staff and people have caught the wave and, even though it has been difficult, have joined in to make the work you do have a direct impact on the economy, which means jobs and the well-being and welfare of Canadian citizens.

It is important that all of your staff realize that some of us appreciate that making that transition has not been easy, but when you see the results in the public positive comments about the programs that you have undertaken, it is really quite remarkable. In terms of the list of research, in our province of P.E.I., there are over 300 different projects. It is quite remarkable, including the sex lives of lobsters.

Mr. Piché: Thank you very much, senator. I was not aware of that particular project. Now that you mention it, maybe I need to look at it.

The Chair: We are rated for family here, and I think that was a comment that does not need an answer, frankly.

Senator Black: Perhaps in the interests of time you could provide the responses to the committee.

This is a question to Canadian Heritage. I am advised, and you can correct me if I am wrong, that the first overview of Canadian cultural policy was done in 1951 by Massey. I am told that in 1980 Applebaum did a refresher, and I am told there has been no comprehensive overview of Canadian cultural policy since that time. Can you comment on that?

Ms. Semaan: I am not familiar with those two particular overviews. That is why I am hesitating. We do refreshers of our policy often. For example, we are currently working on a number of different policies. We did recently the copyright digital policy. In terms of overall culture, I cannot say I have seen it recently.

Senator Black: Do you think it would have value?

Ms. Semaan: Absolutely. I will go back and find out when the last was done, and I will bring it back to the committee. I am sure one has been done. I just do not know off the top of my head.

Senator Black: I do not think it has, but I would like to know if it has.

Ms. Semaan: Absolutely, we will do that.

Senator Black: It would be from the higher level to a very granular level. I am from Alberta. It is a sore point in Alberta. There is a feeling among the cultural industries and the cultural community in Alberta that we just do not get our share. I have never really paid attention to that. I thought it was anecdotes and people are people, but I have seen some statistics yesterday and today that tell me that maybe there is something to it. Again, I will just present what I have been told is the case and you can respond to it.

I am told that the Canada Council for the Arts grants by province and territory in 2011-12 had Alberta last in Canada. Alberta, of course, has the fourth largest population of the provinces and is growing at the fastest level.

I am also told, for example, that with Telefilm Canada, similarly the Prairies, British Columbia and the territories are again last in terms of Canadian contribution to that industry in the West. Perhaps there are good reasons for that, but for my own constituencies I would very much like to understand why that is the case. We will leave it at that.

Ms. Semaan: We will be happy to look at those numbers and get back with a written response for you.

[Translation]

Senator Bellemare: My question is for the National Research Council Canada regarding the IRAP program. I would like to know how the allocated funds are broken down by province. Is the allocation based on per capita or on project merit?

Mr. Ciobanu: Are you referring to Quebec in particular?

Senator Bellemare: I am referring to Quebec, as that is the province I represent.

Mr. Ciobanu: In Quebec's case, 20 per cent of the IRAP contribution budget is allocated to that province's companies.

Senator Bellemare: But what about distribution criteria?

Mr. Ciobanu: That is more complex. Quebec's gross domestic product accounts for 19.4 per cent to 19.6 per cent.

Senator Bellemare: That is based on value added.

Mr. Ciobanu: That 20 per cent is related to the gross domestic product. The number of companies, universities and innovative businesses is also taken into account. We try to take a number of criteria into consideration.

Senator Bellemare: Thank you very much.

Senator Chaput: I want to make sure that the committee will receive the following information in writing from the witnesses. First, we need information about the roadmap, the number of departments and contributions.

Second, we need information about the overview table for Canadian Heritage. There are seven tables, so what is behind the difference? Earlier, I was talking about funding for the arts, where $5 million has been cut. Why? Has a program ended? Are we talking about a program that has been cancelled or renewed and will eventually be included in another budget? I would like to have that information broken down by table.

Third, in your plans and priorities, you talk a lot about technological benefits. You also talk about the advantages of digital environment adaptation and implementation. Access to technology is a commendable and very important goal, but here is my question: Have you ever looked at how much access to technology Canadians have?

I hail from rural Manitoba, where the most remote communities still do not have access to technology. There is no cable or high-speed Internet. So what are we going to about those people now that all information is increasingly dependent on technology and there are still Canadians who cannot have access to it at home? I would like you to give that some thought.

[English]

The Chair: If you are able to provide us with that information as expeditiously as possible, it would be very much appreciated.

Honourable senators, we have gone through a lot of material this evening, but I think the discussion was very helpful.

On behalf of the Standing Senate Committee on National Finance, we would like to thank the Canadian Space Agency, the National Research Council and Heritage Canada for being here.

(The committee adjourned.).