New England-Canada Business Council

Speaking Points

The Honourable Tony Clement, PC, MP
Minister of Industry

Boston, Massachusetts
January 20, 2010

Check Against Delivery

Thank you. It's good to be back in Boston.

First of all, let me express my appreciation to the New England–Canada Business Council (NECBC) for organizing today's event. Not only does the NECBC represent an impressive list of leaders from business, government and academia, but since 1981 it has also played an important role in refining Canada's rapport with the New England states.

As Canada's Minister of Industry, I know that these types of forums are extremely useful for our industrial leaders in establishing new contacts, identifying new markets and sharing best practices with our U.S. neighbours.

Whether you are a New Englander wishing to establish contacts or set up a business in Canada, or a Canadian wishing to do business in New England, the NECBC is a good starting point.

The upcoming venture capital forum is a perfect example of this kind of synergy. Along with members of the Venture Capital Forum Canada–France, venture capitalists and business leaders from Canada and the U.S. will tackle the issue of taking technology from the lab to the marketplace. I know that's something my government is focused on—it's a worthwhile topic to be sure.

Ladies and gentlemen, Canada — especially Eastern Canada—has enjoyed a long, fruitful relationship with the New England states. Quebec and the Maritime provinces have played a role in shaping your region's cultural and economic identity.

For instance, immigration from Quebec between the 1840s and the 1930s played a big role in the ethnic diversity of several bilingual French and English towns of northern Vermont, Maine and New Hampshire. And from an economic perspective, we share vital interests in energy, transportation, forest management, tourism, small-scale agriculture and fisheries. Our timber trade dates back to the 18th century!

I know that the Conference of New England Governors and Eastern Canadian Premiers has been an advocate for policy coordination on several of these issues. In fact, just last September, the governors and premiers agreed to promote a number of green economy initiatives and encourage pandemic preparations and open trading policies across their jurisdictions.

On the subject of trade, I will note that Canada is Massachusetts' largest foreign export market, with more than 172,000 Massachusetts jobs supported by Canada–U.S. trade. Two-way trade between us totalled $11.4 billion in 2008, while Canadian exports to Massachusetts stood at $8 billion and imports from Massachusetts totalled $3.3 billion.

I could go on, but I think the bottom line is that New England is a valued and important partner for Canada.

And to that point, I would now like to address the concept of encouraging cross‑border investment for innovation.

Just a little more than 14 months ago, I took on the Industry Portfolio and went to work on tackling the effects of a recession—the same recession the United States and much of the world has been faced with.

I know this is something that Canadian Prime Minister Stephen Harper has worked hard on—first with former president George W. Bush and now with President Obama.

It has not been an easy task.

But we approached it together with a calm and steady hand. We approached it with vision and leadership.

This coordinated response, this leadership, has had the effect of synchronizing the economic boost provided in each nation.

As such, the American Recovery and Reinvestment Act and Canada's Economic Action Plan were launched in early 2009 to provide short-term stimulus during a time of need.

You saw infrastructure as a priority, and so did we. You saw scientific research as a priority, and so did we. And you saw unemployment insurance as a priority, and so did we.

I am happy to say that we are starting to see the results of our actions. In both the U.S. and Canada, financial markets are stabilizing and housing starts are on the rebound.

To build on this international momentum and maximize the benefits for New England, I see two priorities:

• we must continue to capture synergies in industries where we've had success in the past, such as energy, tourism, and construction and building products; and
• we must amplify emerging technologies like biotech and clean tech.

To succeed in advancing these priorities, we must work together to ensure innovation permeates across these sectors.

Working together has been a mutual strength in the past.

In fact, what happens here in Massachusetts and in New England matters a great deal to Canada because of our cross-border links and your consumption of Canadian energy. New England, as a region, represents a valuable export market, a source of venture capital and an outstanding technology partner.

Simply put, our economies are inextricably intertwined.

Let's take energy. New England is a significant importer. Not only is Canada the largest supplier of natural gas, electricity, uranium and gasoline to New England, but there are also a dozen innovative projects in various stages of development in New England and Eastern Canada to meet your projected energy needs. On the flip side, together with adjacent Canadian provinces, New England is becoming a significant hub for renewable energy research and development (R&D). And Canadian academics and businesses will be important partners in furthering this good work.

In terms of tourism, how many of you have taken in the dramatic scenery in St. Andrews by-the-Sea or toured the cobblestone streets of Quebec City? Judging by the statistics, a lot of you have! In fact, cross-border travel from New England to Canada represents 11.8 percent of all U.S. travel to Canada and nearly $700 million in tourism spending. Meanwhile, Canadian travel to New England accounts for 12.5 percent of all travel to the U.S. by Canadians, pumping nearly $1 billion into the region's economy.

We have a long-standing relationship of innovation and investment exchange to build on. And to help ensure that our relationship grows and becomes even stronger, we are going to have to focus on some newer industries—things like biotechnology and clean technologies. These are sectors that New Englanders know well.

Canadian companies are approaching these markets and actively seeking New England–based partners and investment for products and technologies ranging from state-of-the-art LED lighting to smart-grid solutions and advanced building materials. And this is perfectly aligned with your investment community's desire to identify and fund Canadian companies with particular market-ready clean-tech products and technologies.

It's a win-win situation that benefits both the Canadian and New England economies and the environment.

The biotech industry in particular presents opportunities for collaboration between our two countries through technology partnering and financial investment.

Case in point: Variation Biotechnologies, Inc. The company was founded in Ottawa and developed with the help of investments by the Government of Canada, through the National Research Council Canada's Industrial Research Assistance Program, and the Province of Quebec, through its investment ministry. And it attracted a capital infusion from Boston-based Clarus Ventures. Since then, it has expanded its development of vaccines to fight infectious diseases such as pandemic influenza, hepatitis and HIV.

Not only are these research endeavours timely, but the associated investments on both sides of the border also mean new, highly skilled jobs for Canadians and Americans.

I don't have to tell you we need more of this.

To help make further investments possible and to set the conditions for growth to continue, the Canadian government has put in place a number of programs and incentives.

We know that increasing business investment in R&D is crucial to our long-term competitiveness. And we know that R&D talent has been a critical factor in attracting venture investments from Boston and the rest of New England.

So the government is making it easier for businesses to innovate.

Since launching our multi-year science and technology (S&T) agenda in 2007, the Government of Canada has provided billions of dollars—including $5.1 billion as part of Canada's Economic Action Plan—to support S&T and to help stimulate economic activity through large-scale investments in innovative projects.

One of the ways we are doing that is by helping companies partner with universities and colleges—much the same way you have done here in the Boston area with MIT and Harvard. That way, the private sector and academia have common access to research networks, facilities and research talent.

We have launched new programs and boosted the budgets of existing programs to help researchers and entrepreneurs nurture ideas and take them from the lab to the marketplace—generating wealth and well‑being for our society. And we have made improvements to the Scientific Research and Experimental Development Tax Incentive—which is akin to your federal research and experimentation tax credit—to encourage businesses to innovate.

What do all of these initiatives have in common? They encourage those in the private sector to be better. To innovate and aspire to become world leaders in their fields.

At the end of the day, it's not the Canadian or U.S. governments that are going to lead our respective countries out of the recession. It's business leaders, entrepreneurs, researchers—people who are willing to innovate, take chances and dream the big dreams.

Those are the kinds of dreams that are most often rewarded by investments on both sides of our shared border.

Those are the kinds of dreams that will improve our standard of living.

Ladies and gentlemen, I can promise you that Canada intends to continue exploring opportunities to infuse innovation into all of our industrial sectors.

We intend to work with New Englanders to help achieve future prosperity. And as we scale back public-sector stimulus spending, we are going to focus even more on building a knowledge-based economy.

What does that mean?

It means that we will continue to do together what we have done so well in the past—discover, develop and manufacture new products and find cleaner and more sustainable ways to extract resources. We will continue to do all of the things that have made the Canada–New England relationship so valuable to both of our economies. But we are going to do all of those things better and faster—with leaner and more efficient processes—thanks to the adoption of new technologies.

That's the true value of innovation.

Let's get to work!

Thank you.