Speaking Points

The Honourable Tony Clement, PC, MP
Minister of Industry

Canadian Club of Ottawa

Ottawa, Ontario
December 8, 2009

Check Against Delivery

Thank you.

And thank you to the Canadian Club of Ottawa for inviting me to join you today. For over 106 years, the great issues of the day have been discussed and debated here, so it is a privilege to be with you today.

I don’t think I need to remind anyone in this room that, for the past 15 months, we have been witness to history — an unprecedented worldwide recession. While this recession started outside of Canada, it certainly has had a real effect on Canadians and Canadian business.

Countries around the globe were forced to take decisive action and, even though a great many of them are now exiting the recession, they will continue to deal with the effects of it for some time to come.

Our American neighbours are battling unemployment that has reached a 26-year high. The Japanese government just conceded its economy has fallen into deflation for the first time in almost four years. And the UK has yet to exit recession.

In Canada, we saw companies and, in some cases, entire industries buckling under extreme financial pressure. Jobs were lost, we slipped into recession, and the budget balance moved into a temporary deficit.

In my own portfolio, I faced critical decisions with respect to the manufacturing sector — especially the auto industry — as well as the information and communications technology sector and high-profile decisions under the Investment Canada Act, just to name a few.

Across our government, I know that other ministers faced similar challenges.

These were tough times that demanded tough choices, strong leadership and a steady hand. And I am proud to say that our country has met those challenges and continues to work through the recession.

In the years before this global economic downturn, our government had taken steps to strengthen Canada’s fiscal position. We paid down debt — almost $38 billion in the first 3 years of our mandate. As a result, we were in much better shape to react than others when the crisis hit.

Now this is not just my view. The World Economic Forum said that Canada will emerge from this slowdown as one of only two industrialized countries in a more competitive position than when we entered it.

The Organisation for Economic Co-operation and Development expects Canada to be among the strongest performers in the G7 in 2010, thanks in large part to our fiscal and monetary policies.

To quote the International Monetary Fund:

“Canada’s resilience bears testimony to its strong and credible policy frameworks that responded proactively to the global crisis. While the outlook is not without risks, maintaining supportive policies as the economy recovers can promote a timely return to sustainable growth.”

While the recognition is appreciated, it is not time for complacency. The world may have pulled back from the brink, but the global economy is still fragile. Canada must continue to work the sound financial management plan that has guided us thus far.

Today, I would like to talk about where we stand, what’s ahead and why it matters.

For 10 months, we have responded to the global recession by implementing Canada’s Economic Action Plan.

The Economic Action Plan has many elements but one single goal: to counter the effects of the global recession at home.

Recessions are measured and reported in stark numbers. But what is not so easily measured is how recessions affect the lives of Canadians. Behind the numbers are people just like you and me — Canadians from coast to coast who have had to make hard choices this past year. People who need a job to pay the bills or whose dream of being their own boss was pushed back. People who worry about how they will afford to send their kids to university and who want to know if they will be able to retire comfortably.

We all can relate to these concerns, and that’s why our efforts have been aimed at helping Canadians through practical, concrete and immediate action.

Since we implemented the Economic Action Plan, we have taken extraordinary action to stimulate the economy to push back the global recession. I am happy to report that 97 percent of the 2009–10 stimulus funding has now been committed, with work started on over 8000 projects across the country.

Immediate stimulus was critical — to re-energize the economy, to restore confidence and to enhance Canada’s position in the world.

I would be remiss if I did not mention some very encouraging news from Statistics Canada, which recently reported that our economy created an impressive 79 000 jobs last month. This shows the incredible resiliency of our country and that our plan is working.

It’s why we’re investing in infrastructure programs that create jobs for people across the country while also improving the roads and highways, bridges, buildings and waterways of the communities in which they live.

It’s also why we assisted GM and Chrysler through their restructuring efforts, so that members of the auto supply chain — from British Columbia to southern Ontario to Nova Scotia — could keep their jobs and not have to put their futures on hold.

Our investments in aerospace mean that companies like Héroux-Devtek in Longueuil, Quebec, can continue to be a first-class supplier of landing gears and aircraft structural components to their customers around the world. And that our young aeronautical engineers can continue to fill jobs here at home.

It’s why we made important and long overdue changes to the Investment Canada Act, making Canada an inviting destination for international investment. Investment that brings jobs and opportunities to Canadians, while at the same time ensuring that we can preserve our national security and sovereignty if and when necessary.

In the midst of the worst economic crisis in decades, we made the single largest investment in science and technology of any federal budget, ever — of more than $5.1 billion.

In the future, our world will be driven by ideas, and successful countries will be those that nurture and create knowledge. Our way forward as a nation depends on the discovery, innovation and commercialization of new products. Those new products can enhance our traditional industries as well as build new opportunities, but to get there we have to ensure our research gets to that late stage.

So today I would like to announce that our government is providing the Business Development Bank of Canada (BDC) with $75 million in support of a new $300-million growth capital fund.

Known as the Tandem Expansion Fund, this investment instrument will support the growth and expansion of tech companies by helping them penetrate new markets, expand production capacity and provide additional working capital.

About 20 to 40 Canadian firms will benefit from this first closing, which includes the participation of the BDC and private equity manager Tandem Expansion, as well as Export Development Canada, Teralys Capital, the Caisse de dépôt et placement du Québec and the B.C. Renaissance Capital Fund.

This funding for late-stage research and development is a strong complement not only to our 2007 Science and Technology Strategy but also to our investments in science and technology this year to help weather the recession and return us to economic growth.

My message today is that, from our moment of crisis, we will find and embrace emerging opportunities.

Since I was appointed Minister of Industry, I’ve had the privilege of travelling on behalf of Canada. To India, the U.S., Italy, Afghanistan and, most recently, Israel. And I have seen Canada’s reputation and strengths through others’ eyes.

What has struck me is how fortunate we are.

With the assets we have, the ingenuity of our people and our abundant resources — nothing can stop Canadians when we are determined to succeed.

At a time when investment is looking for a safe harbour, Canada is a beacon. We have the potential, the resources, the workforce and the drive to become an economic world leader. But our success is not preordained, nor should it be taken for granted. We have to work hard to ensure it and to expand on it.

How? First, we must manage our economy, do the big things right — things like lower taxes, sound policy and smart regulation. We are creating an investment destination for global business and investment through supportive economic policies that make Canadian companies more competitive and our country more attractive to international investors.

We attract investment with a low tax regime. Our corporate tax rate is on pace to be 15 percent by 2012 — the lowest corporate rate in the G7.

And we attract investment with solid economic policy — for instance, at Industry Canada over the past year, we have made policy amendments to the Investment Canada Act.

We have also recently modernized the Industrial and Regional Benefits Policy to bring it in line with current business realities and provide help for firms to engage Canadian partners on major platforms beyond what their current obligations may require. For shipbuilders, we recently concluded consultations and are developing options for a long-term, sustainable Canadian shipbuilding strategy. And we are working alongside the Science, Technology and Innovation Council to examine ways to improve clinical trials for new pharmaceutical drugs.

So you can see we are taking policy and our future market frameworks very seriously because it will mean a loss of jobs and prosperity if we don’t.

Second, Canadians need to understand that globalization isn’t something that happens “out there.” Globalization needs to be embraced as part of our business plans if we want to succeed in the 21st century. It also needs be part of how we are educated because the competition is no longer across the street, it is around the world.

So we need to equip Canadians with the tools they need to compete with the best worldwide. That is why, two years ago, our government set an ambitious goal: to have the best-educated, most-skilled workforce in the world.

Getting our economic fundamentals right through taxes and policy, promoting growth through science and technology, being more global in our outlook and developing the best-educated workforce in the world are critical to Canada’s place in the global marketplace.

This matters because governments can only take us so far. Only market forces have the power to drive and sustain creativity, innovation and prosperity in the long term. As the recession recedes and we scale back public sector stimulus spending, I see the legacy of Canada’s Economic Action Plan. I see it as the platform for a re-invigorated Canadian economy, prepared to compete and succeed … and poised to seize the extraordinary opportunities of the 21st century.

As I close, I am reminded of the quote, “well begun is half done.”

I think that rings especially true for Canada right now. Economic conditions have improved, and the Economic Action Plan has had a lot to do with that. But the recovery is fragile. Employment remains too low, and output, while improving, is still modest. We have work left to do.

We must see the Economic Action Plan through to ensure that a recovery takes hold.

It is right for Canadians and it is right for our economy — today and in the future.

Let’s not waver from our course. Let’s not lose sight of the opportunities ahead. And let’s continue to prepare for the incredible future we can build together.

I thank you.