Keynote Address—Canada 3.0 Conference

The Honourable Tony Clement, PC, MP
Minister of Industry

Canada 3.0 Conference
Stratford, Ontario
May 10, 2010

Well, David, thank you very much.

Indeed Member of Parliament Schellenberger, Member of Parliament Braid, my colleague Diane Finley amongst others …

I'm sure there's others out there, I just can't see you with all the bright lights here but I'm sure you're out there anyway.

Thank you for joining us this morning and throughout the day here in Stratford, a very important location, very special place.

I know you're all thinking of Justin Bieber right now. But it's a special place because of the Shakespearean Festival as well and a special place because of Canada 3.0 today.

And I was speaking about that and I was speaking about of course some of the greatest plays in the English language or any language and All the World's a Stage came to mind.

Today the stage includes the online world of cloud computing, social media and e-commerce — a little bit different from several hundred years ago. And that's why it's so great to be part of Canada 3.0 again.

Let me first congratulate the organizers for this first-rate conference. It really feels like we're at the centre of the universe today.

And of course why that's important is because this room and all the people online and onstream are people who are being brought together who are passionate about digital media, online work, who understand the importance of the digital economy not only to Canada but to the future of humanity.

Depuis ma nomination à titre de ministre de l'Industrie, j'aborde régulièrement la question de l'économie numérique parce que je crois en son potentiel — son potentiel de transformer notre économie, de stimuler la productivité et de créer des occasions.

Now with Canada's Speech from the Throne and the last federal budget, my personal priority has become a government commitment.

Specifically, the budget promises that the government will develop the digital economy strategy that will, and I quote, "enable the information and communications technology sector to create new products and services, accelerate the adoption of digital technologies and contribute to improved cyber security."

Ladies and gentlemen, this commitment will be honoured starting today. I'm pleased to announce the launch of a nationwide consultation with the release of a discussion paper — no format here but of course online as well — that will be on the digital economy strategy.

Now all Canadians will have a role to play in helping to shape Canada's digital future.

And that's why we're reaching out, we're consulting broadly. And we're engaging Canadians by giving them the opportunity to make formal submissions and to participate in a variety of forums, including roundtables with targeted stakeholder groups and of course online as I mentioned through an interactive website that encourages discussion on the issues.

The consultations will run until July 9th, 2010, and, once all of the public input has been gathered, we will synthesize it into an action plan for regaining Canada's leadership as a digital economy.

Now this will not be done overnight or on the back of an envelope. Other countries have typically taken between six and 18 months to develop their strategies.

We want to conduct due diligence and ensure the strategy reflects what we've heard and be sure to get this right.

So this consultation is important for a number of reasons. First, because, quite frankly, we don't have consensus on what the priorities should be for such a strategy right now.

Some countries, for example, have focussed on the speed of their next generation networks. Others, on the capacities they offer for innovation.

In my opinion, we need to do both—and more. And that means really challenging ourselves, identifying targets and agreeing on how to meet them.

Second, we need to build a broadly-based coalition.

The private sector, all levels of government and academia will need to be mobilized to ensure that our respective efforts, as well as the existing policies and programs we have in place align with what is needed for a leading digital nation.

Everyone needs to contribute their ideas.

And by everyone we mean individual citizens as well as industry groups and experts.

Canadians are now spending more time online than ever before. We're using social media. We're creating content. We're watching television programs. And we're conducting research and seeking information. We're buying and selling.

And, we're opening up new horizons for business and the economy—all online.

So this strategy, this digital economy strategy will touch our lives. It will touch our homes and our workplaces and it's crucial that everyone become engaged.

And third, these consultations are important because we need to agree on who does what.

Governments—providing leadership and setting direction, setting the right policy frameworks, investing selectively.

The private sector—taking action, building infrastructure, innovating in products, services and processes.

L'élaboration d'une telle stratégie nous permet de bâtir sur des assises solides. Notre gouvernement a tout mis en œuvre au cours des dernières années pour préparer le terrain : il a réduit l'impôt des entreprises, éliminé des obstacles aux investissements de capital et de risque, effectué d'importants investissements dans les sciences et de la technologie, s'est engagé à ouvrir encore plus le pays aux investissements étrangers dans le domaine des télécommunications, y compris l'industrie des satellites, et investi 350 millions de dollars pour créer le programme des Centres d'excellence en commercialisation et en recherche, qui finance, par exemple, le Canadian Digital Media Network.

These efforts build on our suite of programs from the Scientific Research and Experimental Development tax credit, the National Research Council Canada Industrial Research Assistance Program and programs from Export Development Canada and the Business Development Bank of Canada, through our trade promotion and market access efforts abroad.

I also want to recognize the outstanding work undertaken by my colleagues — Minister Moore on digital media and content, and of course Minister Diane Finley on digital skills—that have provided and will be providing critical elements that are preparing Canadians to compete and win.

And of course all levels of government — Your Worship and our provincial colleagues as well—have to be and are working together to improve Canada's digital advantage.

In fact, several provinces are developing ICT strategies. They're supporting research and contributing to connecting rural and remote communities with broadband.

And I want to say that we congratulate and support our provincial, territorial and municipal colleagues for their activities and of course will continue to learn from each other's experiences.

So, ladies and gentlemen, there is a strong foundation in this country but, as Kevin was alluding to, there's a lot of work still to be done.

And what's more, we cannot be standing still, waiting for the consultations to conclude.

We've got to keep proceeding. Even as they proceed, we are continuing to build the momentum toward a digital economy.

As you know, on the legislative side, we will introduce important new copyright and anti-spam legislation, and update our privacy laws for the digital age.

These measures will build confidence amongst consumers, cut costs for businesses and protect the rights of Canadians whose research, development and artistic creativity contribute to Canada's prosperity.

We also know that, as technology evolves and as the number of applications increases, the demand for wireless broadband will grow.

According to Cisco, wireless networks in North America will carry about 740 petabytes of data per month by 2014.

In case you're wondering, that's 740 quadrillion bytes, or 740 thousand terabytes and that figure is more than 40 percent higher than last year.

And so timely and predictable access to additional spectrum is crucial to ensuring that we have the capacity we will need to meet future growth and for next-generation mobile apps and essential public safety services.

Now these are measures that only governments can do — creating the conditions that are there so that the private sector can do what it does best — innovate, create opportunity and turn digital technologies into dynamic businesses.

The reality is that while government can play a key role in providing the legislative and investment framework, it is the private sector that has the talent, the technology and entrepreneurial drive to play the primary role:

to seize this initiative and secure Canada's leadership in the global digital economy.

Let me turn for a moment to the document we are releasing today.

As I say, here's the actual prop and of course there are online versions of this as well.

Of course what we're trying to do is create a made-in-Canada strategy focussed on a number of key areas that will be critical to our success as a country.

Chief amongst these is how best to encourage the greater adoption of digital technologies.

Now I don't need to remind you how important these new tools can be to propelling our economic growth and enhancing our quality of life.

Already, these technologies are transforming the way we communicate, the way we run our businesses, conduct commerce and run government.

They're revolutionizing how medical professionals keep us healthy, how research is done and how students learn.

And they will continue to change our world in ways we can't even imagine.

The amazing progress in genomics, for example, became possible only because of the revolution in computing—the revolution in computing power that could handle the vast amounts of data generated by DNA sequencing.

So the pace of progress is continuing to accelerate, driving down costs and creating new opportunities.

A decade ago, it cost more than $3 billion to sequence the human genome.

Today, a prototype being launched by an American company promises to do the same for less than $100, ushering in a new era of predictive, preventative and personalized medicine and fundamentally altering how we view health as a society.

That's just one example.

So given the transformative power of these technologies, how is Canada doing at integrating them into our economy?

The truth is that, again, as Kevin alluded to, not great.

At the moment, Canada is in the middle of the pack of member countries in the Organisation for Economic Co-operation and Development in terms of how rapidly we adopt digital technologies, the strength of our industry, and the speed and price of our online infrastructure.

And frankly, that's not good enough.

Not when digital technologies are being embedded in leading-edge business processes, products and services in everything from manufacturing cars to mining uranium, from greener energy to performing neurosurgery.

And when other nations are aggressively promoting and adopting these technologies, we have to be cognizant of that as well.

Today, for example, the average ICT investment per worker in Canada—investment per worker—is only 62 percent of that of the United States.

So this lack of investment in digital technologies is contributing to a broader challenge that we have in Canada — lower labour productivity relative to our competitors, something that is increasingly critical given our aging workforce.

So we need to do better and we need your ideas on how best to encourage and promote the adoption of ICTs.

Part of that, of course, means addressing the question of next generation networks.

The fact is that access to these networks is as important to where businesses locate today as the proximity to railroads was to manufacturing companies in the last century.

Bandwidth is now the pre-condition for everything from research to hospitals to smart phones.

And Canadians want that access to data everywhere, anytime and on the device of their choice. And they want it at a competitive price.

Notre gouvernement a consenti à financer l'expansion des services à large bande dans les collectivités mal desservies et non desservies. Cela permettra à un grand nombre de Canadiens de profiter d'importants avantages économiques et sociaux sur le plan, entre autres, de la télésanté, du téléapprentissage et même d'occasions d'affaires. Cela va favoriser le développement économique, stimulera l'innovation et va améliorer la qualité de vie de la population de centaines de collectivités partout au pays.

Yesterday, I was pleased to announce that this broadband initiative has entered a new phase.

And as a first step, we have now approved close to $77 million in funding for 52 new projects of broadband that will bring that broadband to more than 168 thousand households that previously were unable to access high-speed internet service.

Thank you. These projects will open up a world of possibilities for these citizens.

And, in the weeks ahead, we will be announcing even more broadband coverage for communities and households all across the country.

But that's not all that's going on.

For their part, telecom service providers have been investing heavily in communications infrastructure as well.

We now boast in this country three mobile HSPA networks in Canada, covering 93 percent of the population, and offering higher transmission speeds than those available in the United States.

But there are other countries that have also set ambitious targets for next generation network speeds. Is this something Canada needs?

Should Canada set a target for download speeds, for upload speeds?

Or should we focus on providing incentives for the private sector to continue to invest in infrastructure?

What is really the best way forward?

These are questions that need to be answered.

As the global economy becomes increasingly digital, demand for digital products and services will also grow.

And we need to make sure that the Canadian ICT sector grows along with the demand.

That's why we made the ICT sector one of the four priority areas in our science and technology strategy which was announced by Prime Minister Harper back in 2007.

Today, ICT companies account for approximately five percent of Canada's gross domestic product but their products and services drive the competitiveness of the other 95 percent.

Almost 39 percent of all private sector research and development is conducted by the ICT sector.

That's an amazing amount of innovation, concentrated in just one sector.

But in other countries, the ICT industry plays a much bigger part of the economy.

Canada's ICT sector share of business value added falls below the OECD average.

Canada stands 14th out of 23 countries, well behind countries such as Finland, Ireland, South Korea and the United States.

So our challenge is to grow our ICT sector and propel its benefits into every corner of our economy.

Imagine what that could mean to Canada's productivity, to our competitiveness, to our ability to generate the high-paying jobs of tomorrow.

What will it take to grow the ICT industry, to produce the next RIM or Open Text, to produce 10 more firms of that size?

How do we both grow Canadian firms and attract foreign-owned companies to come here?

How can we work together to strengthen Canada's participation in the global supply chains and grow our tech clusters?

What's required in terms of attracting and retaining the talent central to that growth?

As you can see, there's a lot of questions that need to be answered.

And governments also need to become model users of Canadian products and services and so the new Small and Medium-Sized Enterprise Innovation Commercialization Program that was announced in the budget will allow federal departments to demonstrate the value of Canadian products, giving them a presence and credibility in the global marketplace.

Quelles autres initiatives sont nécessaires? Quelles autres mesures les gouvernements pourraient-ils prendre pour éliminer les obstacles à la croissance de ce secteur? Et, plus encore, que doit faire le secteur des TIC pour prendre son essor et devenir un chef de file mondial?

Évidemment, l'un des principaux enjeux, qui est en fait un problème persistant, est l'accès au capital de risque, l'élément vital de l'innovation. Et comment faire du Canada l'endroit par excellence du financement par capital de risque et des investissements destinés à des mandats mondiaux de recherche-développement?

As you know, maybe, in Budget 2010, our government is proposing to narrow the definition of Canadian — of taxable Canadian property, which will eliminate the need for tax reporting under what is called Section 116 of the Income tax Act for many investments.

This may sound like a technical point but one that Terry Matthews has said "Will make Canadian companies more attractive to foreign investors overnight."

And I heard it a lot from tech firms in this country and I heard it a lot from people who wanted to invest in our tech firms in situ in place in Canada that they wanted the ability to do that but were unable to do that because of this impediment that we are now eliminating.

But what other measures are required to make sure that we are well capitalized? What do we need to do better? What do we need to do differently?

And so our consultations will focus on all of these issues that I've just mentioned, all of these questions that I've just posed.

But it will also focus on something most or all of you know something about — digital content.

The Council of Canadian Academies has highlighted new media as having the highest potential for growth in Canada next to the oil sands.

Worldwide, the digital media sector is expected to grow to 2.2 trillion U.S. dollars over the next five years.

So how do we drive digital media, digitization and broadcasting so that Canadians create content for the world and jobs here at home by that same token?

And how do we ensure that Canadians acquire specialized skills and literacy that they'll need to participate and compete in an increasingly complex work environment?

So, these are all important issues for the consultation, critical components that we need to decide before we proceed and building on our actions on copyright, on privacy, and on spectrum and all the other issues that we're driving forward.

And so as I close, let me state something that I hope that you have garnered from own remarks, my own unwavering belief that Canada can and should be a leader in the digital economy — the global digital economy.

Nothing prevents us from being the best place in the world, the best in the world in which to invest, to grow a digital business or create digital content for the world.

And so now is the time for all sectors — private, public, academic—to step up, to contribute our ideas and then, when the digital strategy is in place, implement the game plan.

That is what we intend to do.

And so I encourage all of you to participate.

For those of you here today, we have copies of the consultation document for you to take with you; and for those of you watching via live-stream video online, this information is only a click away at digitaleconomy.gc.ca.

I encourage you to read it and respond to it because we have to get this right. Let's get this right. And let's together regain our leadership in the global digital economy.

Thank you. Merci.