The Hon. John Manley, Minister of Industry
Chairman: Gareth S. Seltzer, President, The Empire Club of Canada
Head Table Guests
Anne Curran, Partner, Lewis Companies Inc. and a Director, The Empire Club of Canada; Jason Leong, Grade 12 Student, Jarvis Collegiate Institute; Rev. Dr. Michael Pountney, Principal of Wycliffe College, University of Toronto; Wayne C. Fox, President, CIBC Wood Gundy Securities Inc.; Dr. J. Stefan Dupre, President and CEO, The Canadian Institute for Advanced Research; Dr. Rony Israel, President and CEO, Pathfinder Learning Systems Corporation; Robert Dechert, Partner, Gowling Strathy & Henderson, Immediate Past President, The British Canadian Chamber of Trade and Commerce and Vice-President, The Empire Club of Canada; Al Flood, Chairman and CEO, CIBC; Colin D. Watson, President and CEO, Spar Aerospace Limited; Gerry Phillips, Deputy Leader, Ontario Liberal Party; Kenneth N. Troy, President, Reuters Information Services (Canada) Limited; and George Cooke, President and CEO, Dominion of Canada General Insurance Company and President-Elect, The Empire Club of Canada.
Introduction by Gareth Seltzer
Today's address by the Minister is well timed. To start, the Empire Club of Canada has just heard from renowned digital guru Don Tapscott on the increasing dominance of the Internet on day-today activity. He noted that there is one home page in Ontario run by a 15-year-old called mydesktop.com that receives, I believe he said, eight million hits a month, more than almost any other site in Canada. Other than the fact that our kids are going to take over the world, I understand that the Minister will address how government is up to the task of acting as a catalyst towards the goal of universal access to the net and net-based data.
At the same time, there was a little matter of the budget earlier this week and I suspect that you have added some comment to your address with respect to the budget. It reminds me of a story of a senator in the U.S. who called his chief aide in a panic saying: "I'm on next, and I can't find the speech I use when I abandon my prepared speech." A balanced budget is a worthy accomplishment and I congratulate you, the Minister of Finance, and all of your colleagues.
Since there has been no shortage of accolades on this historic accomplishment, I am sure that you will not mind that I note that Mintz and partners projected the debt payment amortisation period at around 190 years--and I do look forward to some comment on the debt issue. Lastly, as minister of essentially everything, let me say on behalf of the Club that you are a minister with integrity and of accomplishment.
First elected in 1988, Mr. Manley has been active in the emerging information age--a topic on which he addressed this Club almost two years ago to the day--and we are very pleased that you have accepted our invitation to address the Club today. Ladies and gentleman please give a warm welcome to The Honourable John Manley.
Good afternoon. It's a pleasure to be back at the Empire Club again.
I welcome this opportunity to speak to you about Budget 1998, particularly its impact on programmes within my portfolio.
I think most people would agree that Budget '98 was a "good news" budget. As Canada's Industry Minister, I would characterise it as a "great news" budget.
Budget '98 not only continues our successful campaign against the deficit, but goes straight to the heart of the learning and innovation challenges that Canada faces as we approach the new millennium.
As you know, Budget '98 confirmed that we will reach our target of a balanced budget by the end of this fiscal year--the first balanced budget in almost three decades. In four years, with the commitment and support of all Canadians, we have wrestled a $42-billion deficit to the ground and set Canada on an irrevocable course to reduce the debt.
But the 1998 federal budget is more than a milestone in our battle against deficit and debt. It sets the agenda for building a knowledge-based Canadian economy for the 21st century. The knowledge revolution is changing the basis of success for individuals, businesses, communities and nations. Led by dramatic improvements in computing and communications, it is breaking down the barriers of time and distance. It is redefining old notions of competitive advantage giving greater prominence to the quality of people's skills and the inventiveness of their ideas. It affects all sectors from agriculture, natural resources, manufacturing, retail, education and the voluntary sector to governments.
Developing a learning culture is one of the most important challenges Canada faces today. While the knowledge economy is demanding new skills that need to be constantly upgraded, it is also providing the tools for a new approach to learning, one that makes intensive use of new technologies to develop and use knowledge and ideas.
The knowledge economy also places a premium on continuous improvement and the creation and application of new ideas. To stay ahead, Canada needs to build on its strengths in research and people and focus these resources on building a stronger Canadian innovation system.
The 1998 budget expands and deepens our government's efforts to promote the growth of a learning culture and a more innovative Canadian economy. It launches new initiatives and provides new resources for key programmes that invest in people and technology.
We are increasing funding for university research, and the development of highly qualified people by increasing the budgets of the three university research-granting councils by more than $400 million over the next three years.
We are expanding the successful Industrial Research Assistance Program (IRAP) by an additional $34 million a year to provide greater support for Canadian small business in adopting new technologies and developing new products and processes for commercial markets.
These initiatives will complement others we announced in previous budgets, such as the creation of the Canada Foundation for Innovation and Technology Partnerships Canada, as well as the stabilisation of the Networks of Centres of Excellence Program.
A key part of our strategy for investing in people and technology is my agenda for Connecting Canadians. Last September, at the beginning of our second mandate, our government stated its goal to make Canada the most connected nation in the world by the year 2000. This is a strategy to make Canada the world leader in developing and using an advanced information infrastructure to achieve our social and economic goals in the knowledge economy.
Connecting Canadians is a vision for the entire mandate, which builds on our successes and aims at providing all Canadians with access to the powerful learning tools of the information economy. With this budget, the government is supporting a six-part agenda for national leadership. Budget '98 commits an additional $260 million to help make this vision a reality.
As I said before, in the Speech from the Throne, our government made a commitment to make Canada the most connected nation in the world by the year 2000--to ensure that all Canadians have access to a world-leading information infrastructure and the know-how to use it. Why is it a top government priority?
Connectedness is about our vision of the Canadian society we want in the 21st century: one with a strong, dynamic, competitive economy; one with a strong lifelong learning culture; but also one that uses connectedness to promote social cohesion, cultural expression and to build new linkages between citizens and government.
Essentially, connectedness builds a stronger society and a stronger economy. But in all of these things, the issue is whether Canada will be a leader or a follower; whether we will be defining our own future or importing it; or whether the tool kit for the knowledge economy will be Canadian or American?
How do we rate in our connectedness objectives? How do we compare to our competitors? The answer, in a nutshell, is surprisingly well.
Canada tops the G-7 in home computer, cable and telephone penetration. The World Economic Forum ranks Canada as having the strongest technology potential of the G-7. Canada's phone and Internet charges are among the lowest in the world. And we have the highest level of post-secondary school enrolment in the G-7. In short, Canada starts from a position of strength.
But there are gaps that we have to address to ensure that we reach our full potential as a society and an economy in the new millennium. The less skilled are experiencing increasing difficulty in the knowledge-based economy.
In 1996, the unemployment rate for people with a postsecondary education degree was 5 per cent--about half the national average. For people with a high school diploma or less, it was 15 per cent. People who graduate from universities, community colleges and vocational schools enjoy incomes 45 per cent higher than those with high school or less. We are falling short of our global competitors in on-the-job skills training, ranking 37th compared to our global competitors.
Social and economic cohesion will increasingly be linked to our ability to help Canadians develop skills for the knowledge economy. We need to avoid polarisation between know and know-nots.
I want to show you how connectedness relates to lifelong learning for all Canadians. For youth, the development of computer literacy is essential. To make this happen, all students will require access to tele-learning, computers and the Internet. For adults, tele-learning, computer literacy, and access to government information and services are all key, especially for those seeking employment. The process of lifelong learning should not stop when citizens become seniors. For this group, community-based access and access to government information and services are all crucial. In short, connectedness can help meet the challenge of making lifelong learning a reality for all Canadians.
In implementing an agenda to connect our citizens, we are not alone. Advanced and developing economies alike are developing their own strategies to capture the enormous enabling potential of an advanced information infrastructure. We are in a global race where speed wins, and the countries that lead will dominate the knowledge-based economy.
What will it take to win? It will take partnerships, a national vision, and the capacity to do it quickly. Connecting Canadians is an agenda to build a Canada that can be a global leader in the 21st century knowledge-based economy.
Connecting Canadians is not a one-off programme. It is an agenda for national leadership, an agenda that will brand Canada in the global economy. Making it a reality will take time, commitment and partnership. The agenda we launched in the budget has six action areas: Canada On-Line; Smart Communities; Canadian Content On-Line; Electronic Commerce; Canadian Governments On-Line; and promoting a connected Canada to the world.
The first element is Canada On-Line: getting Canadians connected. Our objective here is to provide all Canadians with opportunity of access to a world-leading information highway infrastructure. It will require partnerships with the provinces and the private sector to make this a reality.
We already have in place a number of world-leading programmes that we can build upon, such as the Community Access Program, SchoolNet, Computers for Schools and CANARIE.
Right now, the Community Access Program is on target to connect 5,000 rural Canadian communities to the Internet by the year 2000. CAP is giving people in Canada's rural and remote areas access to municipal, provincial and federal information services, and helping them learn the skills needed to compete in an information-based economy. It is becoming a focal point for community partnerships in building on-ramps to the information highway. We will expand this programme into urban areas, providing an additional 5,000 sites, making all centres sustainable and upgrading the network. These centres make a difference for Canadians from all walks of life.
The SchoolNet programme has been another one of our success stories. Launched in 1993/94, SchoolNet will see all Canadian public schools and libraries connected to the Internet by the end of 1998. Other countries are now beginning to copy this as a key part of their strategies to connect citizens to new learning opportunities.
SchoolNet has engaged private and public sector partners across the country in an effort to connect all Canadian public schools and libraries to the Internet by the end of this year. Under our watch and the influence of this programme, connectivity is spreading to schools and libraries throughout the country.
Our agenda for Connecting Canadians will extend connectivity from the school into every classroom. If we are to be successful in getting connectivity into all classrooms, this will involve putting computers into classrooms and to do this, we will extend the Computers for Schools Program. To date we've installed some 50,000 computers in Canadian classrooms in partnership with the Telephone Pioneers, the Stentor Group, and provincial governments. We will extend the Computers for Schools Program and challenge private and public-sector partners to provide 250,000 computers for use in classrooms across the country.
To deliver SchoolNet and the Community Access Program, we need to make sure the wiring is there. Students won't stay at a computer terminal if it takes too long to download information and images. The next generation Internet will remove this obstacle. Today, one page of text may be downloaded in about 10 seconds with a 28.8 baud modem. With the next generation learning network 1,000 pages may be retrieved in the same 10 seconds.
The CANARIE programme is a private-sector-led initiative, which involves some 120 member companies, universities and public organisations in building and promoting the development of technologies and applications for Canada's network infrastructure. We will invest an additional $55 million in CANARIE to build the next generation Internet, the world's first all-optical, broadband network. This will make SchoolNet and CAP a unique learning experience for all Canadians.
We will also create the Voluntary Sector Network Program (VolNet) to link voluntary and charitable organisations across Canada to the Internet and to each other. We can enhance the voluntary sector's capacity to engage Canadians by improving their access to, and use of, information technology to help them play a stronger role in Canadian life. Our initial goal is to link at least 10,000 voluntary organisations to the Internet.
The second part of our plan is Smart Communities. Smart communities provide the infrastructure for connectivity at the community level. The goal is to have a number of communities across Canada recognised as world-class Smart Communities.
They will use information technologies to link people and organisations together, sharing ideas and information, so that all sectors and community members work towards developing their community. Smart communities represent a new approach to local economic development for the 21st century.
The third element of our agenda is Canadian Content On-Line. We want to build on Canada's world-class infrastructure by increasing the availability of Canadian content on line--content that reflects Canadian values, achievements and aspirations and makes Canada a leading-edge supplier of on-line content to the world.
Let me give you some examples of the economic and social benefits:
• In tele-learning, College universitaire de Saint Boniface Manitoba was the first college in Canada to offer Internet degree courses.
• In multimedia, we want to encourage more success stories like Softimage which has received worldwide acclaim for its special effects used in movies like Jurassic Park.
• We can put more major cultural collections on line to inform and educate people around the world;
• We can promote social cohesion by facilitating greater knowledge of our heritage.
• We can promote a healthier society by putting health information on line and developing new applications in distance medicine.
The fourth element of our strategy is Electronic Commerce. Electronic commerce will soon revolutionise how Canadians do business. Our goal is to make Canada a location of choice for developing electronic commerce products and services--to capitalise on the phenomenal growth of on-line business. On-line revenues from business and consumer transactions are projected to reach US$2.5 trillion by the year 2000--more than three times the level in 1996.
The most gains from electronic commerce will go to those countries that create the environment for them to flourish ahead of their competitors. But electronic commerce will only succeed if consumers are comfortable with the new technology and what it can do for them.
We are working now to remove impediments to the growth of electronic commerce. For example, Industry Canada and Justice Canada are working together to develop the right legal framework to enable the use of digital signatures.
If we move fast, we can create a global centre of excellence for electronic commerce here in Canada. The move to electronic commerce is inevitable. It's more a question of when, rather than how, and it's interesting to notice how willing Canadians are to use some of the electronic tools.
Our use, for example, of debit cards is equivalent in absolute terms to the use in the United States; in other words, 10 times more per capita than the usage in the U.S. Canadians have shown a remarkable willingness to sample these new technologies. I gather the enthusiasm with which the new President's Choice Bank is being received by some consumers is a further indication of Canadians' willingness to look to electronic means to do some of their standard transactions. We don't need to worry about pushing them. We need to make sure we create the framework from which these things can happen as consumers in Canada want them to happen.
Let me now turn to Canadian Governments On-Line. Putting governments on line connects citizens directly to their governments, and gives them the opportunity to learn more about each other. We have made some impressive beginnings. For example:
The virtual Customs Office. Revenue Canada provides customs information on line, information that you used to have to engage a customs broker to provide you with.
The Green-Lane. Environment Canada provides environmental solutions on line.
My own department's programme, Strategis, which I hasten to mention is the largest source of business information in Canada. We're now at about 220,000 hits per day, which makes it one of the most used web sites in North America and a site on which you can get an amazing quantity of information that can be used in your business. Export Source. Again, Industry Canada, together with the departments of International Trade and Agriculture, have taken the lead in developing this resource, providing information about exporting on line. The Canada Business Service Centres are an example of co-operation and co-ordination among 28 federal departments, all provincial governments and the private sector.
But we are not at critical mass. Citizens are demanding services that are integrated, interactive and client-focused. We have made a good start, but there is much more to do and we are working towards a co-ordinated federal Internet strategy with links to other governments.
The sixth part of our agenda deals with promoting a Connected Canada to the world. Connectedness has enormous capacity to bring a better understanding of Canada to the world and help brand Canada as a leading-edge economy.
Foreign Affairs and International Trade Canada is developing an international strategy, the Canadian International Information Network. Connectedness allows us to promote Canada in new ways. For example, investors around the world could access information on the investment potential in Canada with this new technology. By branding Canada as the most connected nation, we can make Canada more attractive to foreign investors and establish Canada as a global hub of the knowledge economy.
We should never underestimate the power of connectedness to introduce change quickly. In the community of Rankin Inlet we see an inspiring example of what connectedness can mean. The Rankin Inlet story demonstrates how connectedness speaks to:
• The convergence of social and economic aspirations;
• Social cohesion and integration;
• New approaches to regional development;
• Cultural expression;
• New approaches to learning; and,
• Branding Canada.
But I will let the citizens of Rankin Inlet speak for themselves in video. I think that video says a lot more about what this whole agenda means for Canada than any speech could do. This is going to affect people where they live, where they work, where they entertain themselves, wherever in Canada.
Connecting Canadians is a plan to help all Canadians acquire the skills and tools that will enable them to prosper in the global, knowledge-based economy. It is a strategy and a vision for the new century. It is an ambitious, but achievable agenda with a value that is greater than the sum of its parts.
We are challenged to act now and in partnership. Every individual here today, and the organisations you represent, can play a role in turning this vision into reality. I look forward to working with you.
The appreciation of the meeting was expressed by George Cooke, President and CEO, Dominion of Canada General Insurance Company and President-Elect, The Empire Club of Canada.