MR. CHAIRMAN: We will begin now. Our witnesses are going to be delayed so we will deal with some other business. Do you want to comment on the report, Darlene?
MRS. DARLENE HENRY (Committee Clerk): From the last meeting we had some other members who needed more time to go over the report and to make any recommendations or changes, so it is just to forward those to me now if there are any. If not, then we can sign off the report and get it to the printer today.
MR. WILLIAM ESTABROOKS: I just want to admit to you, Darlene, that I hadn't read it so now that I looked it over - we are on, are we?
MR. CHAIRMAN: How about the Liberal caucus?
MR. BRIAN BOUDREAU: Yes, we are prepared to sign off.
MR. KERRY MORASH: We already signed it, I think.
MRS. HENRY: We have to do it again, only because we have a new member. Mr. Downe is back on the committee so I have to put him on the new slips and you have to re-sign that.
MR. CHAIRMAN: Darlene, that report, is it to be tabled in the Legislature?
MRS. HENRY: It can be tabled in the Legislature and, hopefully, it will be back from the printer by then. If not, we can table it with the Clerk.
MR. CHAIRMAN: Are there any other comments committee members would like to bring up? I guess Darlene has something else she would like to share with us.
MRS. HENRY: From the last meeting, there were some comments about time limits for questions and whatnot. I did go back to the Public Accounts Committee and took a copy of their time limit for members and for Parties for questioning. which I have here. It is a guideline. It is not really set in stone but if you want to follow their rules for answering questions and putting time lines on questioners, this would be (Interruption)
MR. CHAIRMAN: I am a member of that committee. That is the way we do that. It is up to the committee members.
MRS. HENRY: As I said, it is not set in stone. If you want to change it, it is up to the committee.
MR. CHAIRMAN: I am more concerned with the length of the presentations which is hard to regulate.
MRS. HENRY: It is very hard to regulate. Now, given down there it said that presentation time is 5 minutes to 10 minutes, it still gives 20 minutes or 25 minutes left over for questioning.
MR. CHAIRMAN: Is there any new business any members want to bring up?
MR. BOUDREAU: I was wondering about the agenda. Do we have an agenda for the next few months?
MR. CHAIRMAN: Regarding presenters?
MR. BOUDREAU: Yes.
MR. CHAIRMAN: I know our next meeting is December 5th; MacTara is scheduled to come in, Mr. Alan Rees.
MRS. HENRY: We are working on bringing Mr. Sears in, the South Shore Fishermen's Association, for mid-January. I contacted him yesterday. He hasn't returned my call yet but hopefully I will be able to set something up by week's end.
MR. CHAIRMAN: Do we have a list, Darlene, of all the presenters that we can share with the committee members? As far as potential witnesses or presenters go, if you have any names of people you would like to have on the list, maybe you could just bring it in for the next meeting and we can discuss it and try to bring them in. We want to be flexible in this committee and timely.
[9:08 a.m. The committee recessed.]
[9:11 a.m. The committee reconvened.]
MR. CHAIRMAN: I will call this meeting of the Standing Committee on Economic Development to order. We are running a little bit late. Our guests and presenters this morning, unfortunately, were tied up, I believe, in an accident. What we will do, if we could, we would ask the presenters to perhaps begin by identifying themselves and then we will go around the table and identify the committee members, please.
MR. MARIO DEMELLO: I am the Chairman of ITANS. I became the chairman in June of this year, although I have been on the board of directors for several years.
MR. BRIAN PLEET: I am the 1st Vice-Chairman of ITANS since June as well. Outside of my role with ITANS, I am also president of a technology company in Dartmouth.
MR. PAUL CAMPBELL: I am 2nd Vice-Chairman of ITANS and was appointed in June.
MR. IAN BLANCHARD: I am the Past Chairman of ITANS and I have been with the organization for about eight years.
MR. CHAIRMAN: Thank you, gentlemen. Perhaps we can begin with Annapolis Valley's finest.
[The committee members introduced themselves.]
MR. CHAIRMAN: I guess, Mr. DeMello, you are going to make a presentation to the committee?
MR. DEMELLO: That is right. I was told I had between 5 minutes and 10 minutes for a presentation. So what you have is a very brief overview of ITANS. What I would like to do is to let you know that if you have some specific questions that we can't answer today, if you would like some more information about the organization in any kind of format, we would be pleased to present that to you. As of last week, we did a survey of our industry in preparation for this meeting, asking them all kinds of questions about government's role in the industry. I have the results of the survey here. We just got it back on Friday so I haven't had a chance to absorb it. We will summarize that for you also. However, if you have some specific questions, I can address that, but there are about 40 pages here of details.
I will start off first by thanking you for letting us come here to make a presentation to you. I think it is something that the people had intended to do anyway and your initiative, really, is much appreciated by our association.
I will start off by talking about the mission of ITANS. First of all, ITANS is the IT Industry Association of Nova Scotia. We represent the industry so our mission is to promote the growth and the development of the industry in Nova Scotia and as the mission statement says, through the sharing of experiences, internal and external collaborations - that means organizations within the province, out of the province and internationally - and also by disseminating information and opportunities to our membership. Now when I say membership, even though we have companies that are members of our industry, we represent everybody in the industry, whether they choose to be a member of the association or not. We believe that as our mandate we should be doing that. We encourage companies to join our association. It is not mandatory but obviously, if they want the industry to grow in Nova Scotia, they have to contribute to the growth of our association.
I can't read all these things here, so I will just scan through it quite quickly since you have a copy of that. The objectives, of course, of the association are to represent industry, individuals and companies who provide a wide variety of services, everything from software design to consulting, system integration, telecommunications, multimedia, networks. So there is a whole list, including education. Education is a very important part of this industry. Organizations like ITI, Dal Tech, the community colleges, all play an important role in our industry.
One of the other roles that ITANS plays is advocacy, advocacy with government, with other IT associations and among our membership. A survey that we just completed over the past week is an example of an initiative undertaken by ITANS with its membership, in order to provide government with feedback.
We would like to work more closely with organizations, whether it is individual political Parties or whether it is government. Whenever you have questions about industry, call us. If you give us enough notice, we can always poll our members, get their feedback and give it back to you. What that allows you to do is to be able to then look at the feedback and formulate a policy based on that feedback from the industry.
So our vision, of course, is to be universally recognized as the major contributor to the growth and development of the Nova Scotia IT industry. We hope that all IT organizations will belong to ITANS because of our role as the voice of the IT industry. When I say all IT organizations, you might say, well, how many organizations are there? There are other organizations within Nova Scotia that provide some form of IT services. In some cases they might be non-profit organizations, in some cases they might be groups of people who feel they want to provide some additional services that maybe they feel ITANS is not providing. Our role is to work closely with every organization.
To get a bit of history, ITANS was incorporated in 1989, as the Software Industry Association of Nova Scotia. The name itself, software, does not describe what our industry consists of because it is involved in networking, telecommunications, and hardware. So in
1997 the name was changed to the Information Technology Industry Alliance of Nova Scotia. The organization is run by a Board of Directors, which is elected by the membership, a minimum of 12 members and up to 20. Within the Board of Directors we elect an executive. The executive consists of the Chairman, First Vice-President, Second Vice-President, Secretary-Treasurer and Past President.
We have only one full-time employee, an office administrator. The office administrator is funded by monies provided to us by the Economic Diversification Agreement. That money will expire, the funds and the agreement will expire as of March 31st next year. What we have to do is raise close to $55,000 to $60,000 in order to maintain the office and keep the employee, which right now presents us with a huge challenge, and I will explain why a little later on.
The service provided right now is everything from breakfast and dinner events, in order to educate our members, but also to raise money. We have to do that. We also provide networking opportunities for our members. The idea is to get together in the evening or in the morning, network, do business with each other, exchange ideas. We produce a weekly digest of information. This is sent by e-mail to all our members and to anybody who would like to be on our membership list. This digest would contain anything from business opportunities to articles of interest to profiling members who are in the news.
We also maintain a web site that lists the member directory. It provides members with some services and the general public. There are plans under way to change the web site to make it into a portal. By portal I mean a central depository of information so that not just members but anybody interested in what is happening in IT in Nova Scotia will have to go to that web site. Our wish is that that becomes a central point for IT information in Nova Scotia.
In terms of affiliations, strategic alliances, ITANS is part of a group of affiliates, affiliated organizations across the country and we are all affiliated with ITAC - the Information Technology Association of Canada. ITAC, as a national organization, provides a similar role as ITANS, except at the national level, so they would lobby to the federal government. They would get feedback from the provinces and then disseminate that to their membership, which would be the top IT companies in the country.
There is a huge difference between ITAC and ITANS. For example, membership fees in ITAC would range from about - correct me if I am wrong - from about $10,000 to about $50,000 or $60,000 a year, for a company. Our membership fees range from $150 to $900 and sometimes with that money you get the power or the ability to do things with the employees that they have. Most of the Board of Directors of ITAC are presidents and CEOs of companies. So they are a very powerful organization and it benefits ITANS to be involved as an affiliate organization.
We also have arrangements with the Software Information Industry Association of America, the Software Human Resource Council, it is a Canadian organization. We have signed Memoranda of Understanding with the Australian Information Association, Software Industry Federation of Northern Ireland and with Media Fusion.
Now I will get into our concerns. I hope I am within the 10-minute limit here. We have a lot of concerns but our major concern right now is the fact that this is still a new industry, it is, I believe, one of the fastest growing industries in Nova Scotia. Most of the members of this industry are small to medium-sized businesses. That means that they are either a sole proprietor or may have two employees or maybe as many as 10 employees. We do have some members who have as many as 1,000 employees, companies like xwave or other companies have branch offices here.
So the main concern we have is that we have to raise about $55,000 to keep our full-time employee, the office administrator. We have to do that by March 31 of next year. That doesn't sound like a lot of money but when you have about 250 companies in Nova Scotia and not all of them choose to be members of ITANS - the reasons for that are varied, I can answer that question later on - what we have to do is tax them in order to have the full-time employee. I say tax them, that is the membership fees.
If you have individuals or two young students out of Dal who start a company, they would not even consider paying $200 a year as a membership fee. The normal question is going to be, what do we get in return? The honest answer is, if I talk about advocacy with government, when you are a new entrepreneur you probably don't care. What you probably care about is what can you do for me personally.
Since I took over ITANS in June of this year, what I decided to do was give one day a week of my time to try and help the industry. Now my company consists of seven full-time employees. It is a very small business and I am one of the owners of the business, when I told my business partner I would give one day a week to ITANS, he said that is quite a bit, but okay. In reality, and it is a joke with the board of directors right now, I give more than a day a week, and that is in a volunteer capacity. I know my first vice president's concern is that if he has to do the same thing next year, he probably wouldn't run as chairman.
So what do we do to try to grow this industry? We cannot do it on a volunteer basis. We have to do it by having full-time staff running the association. Without that office administrator I would have resigned by now, I would not run the association. So we have to have a full-time administrator, that office administrator. I believe you have to have at least a part-time executive director or full-time executive director. So the challenge to us is, how do you manage that? That is our primary concern.
The other concern, of course - and there are a lot of other concerns - is, how do we identify all the IT companies in Nova Scotia; through advocacy issues, through our surveys done recently with Industry Canada, we just did a quick survey of the industry and created a CD of IT companies for SoftWorld which was a large IT event held here last month. That, in a nutshell, is a very quick presentation on ITANS. I covered some of the issues, there are a lot of other issues but I think I covered the major ones and I will now open the floor to questions.
[9:25 a.m. Mr. William Estabrooks took the Chair.]
MR. CHAIRMAN: Thank you for your presentation. The 10 minute timeline, we are flexible with it, but we appreciate your attention to it. Perhaps I should point out to you that we have been joined by another committee member. Would you like to introduce yourself, young man?
MR. DONALD DOWNE: My name is Don Downe, I am the MLA for Lunenburg West.
MR. CHAIRMAN: As you can tell, our Chairman had to leave for a few moments, he will return. I can keep you all under control for some questions here. Mr. Chipman.
MR. FRANK CHIPMAN: Mr. Chairman, just a quick, brief question. I will probably ask another one later on. I noticed your funding was eliminated back in 1998-99. The $500 million that Bernie Boudreau has promised, I realize it is a promise at the present time, but is there any chance you might access funds through that?
MR. DEMELLO: The interesting thing is that we would have been consulted if an announcement was made as to how the money is going to be spent. We still haven't been involved in the process. We are trying to talk to the right people to be involved. The answer is, I don't know.
MR. CHIPMAN: So you say you haven't been consulted by them, is that unusual? If you represent the industry here . . .
MR. DEMELLO: Is it unusual? No. I think the relationship between the industry and government has been poor, for many reasons. The point is we are here to try to make sure that happens, to improve the relationship we have. We have had a good meeting with Minister Balser, who has been very cooperative. That is at the provincial level. We have to work with the federal level also, and to do that we plan on working together, with the other universities, provinces, and the ITAC.
MR. CHIPMAN: So it is not unusual for them not to contact you, but if you are the voice of the industry you would assume that you would have been consulted before-hand as to the way, maybe, some of these funds will be administered. You are a membership-driven organization, how many members did you say you had, 250?
MR. DEMELLO: There is over 250 companies in the industry. Our membership, currently, is about 175 companies. Some are in IT, some are providers to IT.
MR. CHIPMAN: For example, would NovaKnowledge, MTT Aliant, would they be members?
MR. DEMELLO: Yes. NovaKnowledge is another association, but they are not really an IT. Their mandate is to provide services to knowledge-based industries. It is kind of fuzzy in terms of what their mandate is, a duplication of services between NovaKnowledge and ITANS. NovaKnowledge is members and individuals. Our members are companies, even though we will accept an individual. To represent the industry, it is industry members which are companies that belong to us.
MR. CHIPMAN: This $500 million I referred to, I read it in the paper. Of course, we are in an election mode now, I guess you question whether these are bits of bait put out or not. What is the actual intention, do you know, the $500 million, where is it to go? Is it to go for the development of the IT sector, to develop that?
MR. DEMELLO: My understanding is that part of that goes to the IT sector, some of it goes to, I think there is an e-commerce centre in New Brunswick, there is a bio-science centre in Halifax. That $500 million is over five years, over four different provinces. That works out to about $15 million a year per province, probably.
MR. CHIPMAN: Some of it has already been committed?
MR. DEMELLO: That is right.
MR. CHIPMAN: Okay. That is all.
MR. CHAIRMAN: Mr. DeMello, if I may, as the Chairman, just ask a question I was going to ask. You mentioned membership, could you tell us regionally, across the province, where your membership is? Is it mostly in metro?
MR. DEMELLO: It is mostly in metro. I think we have one member in Yarmouth, maybe a couple in the Valley, and maybe a couple in Cape Breton.
MR. CHAIRMAN: If I may, committee members. You mentioned during your presentation that not all companies are interested in being members for one reason or another. How many potential members are out there that you would like to have as part of your group?
[9:30 a.m.]
MR. DEMELLO: About 300. First of all, it is very hard to find out how many IT companies there are in Nova Scotia, because every week I come across a new company that was just formed. Brian's company just got started in October.
MR. CHAIRMAN: If I may, again, perhaps Brian, could you tell me why your new, young company joined the association?
MR. PLEET: It was helped greatly by the fact that I am 1st vice-president of the association, so I signed up quite willingly. I think to Mario's point, the IT industry changes dramatically. There are many companies forming on a daily, if not weekly, basis and it is very difficult to communicate with the community to ensure that everyone is aware of ITANS. Furthermore, ITANS has a long history and some people have decided they didn't find value in the organization previously and therefore they are somewhat hesitant to join the organization now, but that is changing as we make changes to what the organization delivers.
MR. DEMELLO: It is a good point Brian makes when he talks about the history of ITANS. We have been around for over 10 years and I have been involved on the board for three years. Even in those three years I have seen some things I wasn't happy with, which is why I chose to become the chair this year. I made a personal commitment to a lot of people that they would see changes and that is why I am giving a day per week of my time to the industry. I believe people appreciate the effort and some of them are joining; in fact there have been some past members who have joined again.
The chairman of our advocacy committee is in fact from a company that has been in Nova Scotia for over 20 years and they backed out - I think it was last year or the year before that - and they are back in now. So it is a question of people asking what is in it for me when they join an organization, and sometimes that is a hard question to answer because as you might appreciate too, when you go through an election, the public asks what's in it for me. Well, you can't please every single individual; but what you have to do is try to do what is best for everybody.
When you are a large organization, say like an Aliant or xwave where you have one thousand employees, do they really need the industry association? Probably not but the only value they can see is the association lobbying government, then maybe the larger organizations see a benefit. The benefit the smaller ones might see could be looking after getting some capital for them, could we provide some education for them? The answer is yes, but when you have volunteers it is not as easy as it seems.
MR. DOWNE: It is interesting, the information technology, IT telecommunications, a $3 billion industry in Nova Scotia, 30,000 employed. We have had a number of trade missions over the last two or three years in which companies in Nova Scotia were supported by the provincial government to carry forward on those trade missions, which I led one of them to Boston. We had them in Washington and were extremely successful, partnering with the Pentagon and a number of other major corporations, partnering up only because of angel investors and private sector investors; they have a stable of that.
The IT companies represent 75 per cent, here in Halifax, of the activity in the Province of Nova Scotia and almost 18 per cent in Cape Breton. So there are two very central, focused areas and there are a number of organizations that are heavily involved in them. Your organization is one of many, there are other organizations out there who are very vocal and I know that they say that they speak for all 30,000 employees of all these organizations. Sometimes there is confusion from government as to who is the voice and then there are sectorial voices because one is a broader perspective than very specific initiatives.
The Progressive Conservative Government has come out with documents saying that there shouldn't be any subsidy to the private sector, or very little, or very focused. The Chamber of Commerce and NovaKnowledge, with whom you are affiliated, have said no to subsidies and grants. You are asking for a grant for your organization to pay for staff, to keep things going forward. How does that work? How does a politician who is listening to all these really right-wing mentors in the system saying that we should not be doing anything other than creating a better environment? That better environment to me could be taxation issues which I think is where the opportunities will be for the industry - better tax provisions federally and provincially, so that there is more opportunity for investors in smaller businesses. The one question is about the different signals we get as politicians: one saying leave us alone, we are quite able to do it on our own and stay away from us - we are independent - and you could be the three people that are sitting at the Chamber of Commerce going like this while we are getting beaten up for anything we ever do to get money to pay the business, so that is one.
Number two, I understood the federal government's money was geared specifically to be more of a macro help to the IT sector, telecommunications sector; more in research and development, more in helping, like what the Americans do. The Americans infuse dollars into the hard research or the capability so that businesses can spring off that. If you think of Xerox, that developed - and it wasn't Gore, it was Xerox - the Internet for the military, well, that was an infusion of American dollars into that technology via Xerox for which all sorts of things have happened and that is the American way of doing it.
Canadians are seeming to look at shares of research and shares of facilities within university structures to help with the development of some of these programs, so there is a question about that, whether or not that is the right way to go or should it go to a specific organization or not.
The last one is, I belong to a number of organizations and most of the ones I belong to are farm organizations and they are small, mom and dad operations, a couple of employees and we all pay in to provide for a secretary, general manager, or whatever, to help be the umbrella. In a little farm operation, I pay a few thousand dollars a year into that - probably tens of thousands of dollars a year, come to think of it - into those organizations, simply because you need to have an umbrella body that has a voice; otherwise you have 30,000 separate voices floating around out there. But there are so many of the different groups that are there, sir, is there any way that your sector could collocate them together and bridge one umbrella body that focuses on different aspects of the new emerging industry which I happen to feel has, without question, the most exciting potential for Nova Scotia that exists? The resource sectors are important, but you are the new frontier. The offshore is a new frontier and a few other areas are the new frontiers and we need to do whatever we can through creating a better environment for you to expand and grow and keep that intellectual property right here and so those are the three areas that are questioning to me.
MR. DEMELLO: I will see if I can answer your questions. On the second page under Survival, Item 5 says that, ". . . other institutions that appear to provide similar services to the IT Industry.", and I was going to address that.
First of all, I will talk about Cape Breton. There is MEDIAfusion in Cape Breton. MEDIAfusion represents what they call the new-media industry. However, when you talk to some of the companies and you ask them are you IT or new media, it falls within IT even though they work with videos and what they call new media. MEDIAfusion right now provides services to those companies in Cape Breton. We felt that through MEDIAfusion we could provide services to those members which is why MEDIAfusion has a representative on our board of directors and we have one on their board of directors.
So that is one organization. Then you have other organizations locally. I am just going to talk about NovaKnowledge and the perception that NovaKnowledge is an IT organization. When I look at their mandate, it is not IT. However, when I look at the events that are held by NovaKnowledge in terms of, say a luncheon series, most of the speakers are from IT.
Then there is Tech Table which is run by the Halifax Club, run by about three or four individuals and they have the occasional breakfast or luncheon event. Let's see, what others are there? (Interruptions) Tara is more of a funding agency though. The Chamber of Commerce has an IT committee. When they formed an IT committee, I contacted them and asked them why they wanted an IT committee, why wouldn't they just be on one of our subcommittees but, no, they felt they had to have a subcommittee to represent their membership.
There are three women's organizations over the past six months that opened up in Halifax or Nova Scotia. One is called Women in Trade and Technology, one is called Web Girls and the other one just started a few days ago - anyway, there is a third one here. I
contacted them and said why do you have three organizations? Why don't you work together? If there are women's issues in IT, why don't you work together and one of them said, well, we are in trades and technologies, not just IT. The second one said, well, Web Girls is about the Internet and the third one seems to be a duplication of what the Web Girls organization does. That is the challenge faced by us.
I am not sure what the answer is. I spoke with Mr. Shoebridge of Tara and we are planning on getting a group of these people together and to say, okay, there are 15 of us, divided we would only provide a good service to the industry in Nova Scotia, what do we do about it? I hope that answers it, but that is going to happen.
MR. DOWNE: So, for government - and I am not in government now, I am in Opposition, but for this government here - we worked closely together for years on a number of different organizations, but it is hard to know if they are saying we should give one organization money, then they all want money. Yet half of the groups say don't give us money, don't give us grants. We will do it on our own. So it really is a complex message that the media are sitting back one minute and somebody is saying don't do this and the next minute the other group is saying, well, I need it to survive.
MR. DEMELLO: I will address that question next. The first one is the different organizations. We are going to get together with lots of organizations in the room and say, look, why are you doing this? Do you want us to do it for you? Why don't you work with us? Why have separate organizations with separate mailing lists? It just does not help the industry.
The second issue, of course, is the Chamber of Commerce, when Ian at dinner says government should stay the hell out of business and at every chamber event, that is exactly what he says. I can understand why he would say that. We did a survey of our membership and we asked that question - let me see if I can find it - ACOA loans or grants are counter-productive to industry development. The next question was, ACOA loans and grants are essential to industry development.
I will tell you what the industry said; 41.7 per cent in the IT industry disagreed that ACOA loans are counter-productive. I know I have some members from companies who feel very strongly the other way, that say government should stay the hell out of business, the government should not provide money. I have other members who say no, there is a role for government to play. The very next question, the same thing, it says ACOA loans and grants are essential to industry development and we broke the survey down by IT production services, the companies that provide those; academic, and IT production services; 13 per cent strongly disagreed, and I can make these figures available to you once we summarize that.
I am looking at it from an industry association's point of view. My company, which is DDA Computer Consultants, does it need government funding? No, we do not need government funding. If you asked me, as a company what I would like, I look around and say there are all kinds of graduates coming out of university and it is an expensive process for me to hire them because I have to train them again. Just because they come out of university or ITI, it does not mean they can be productive from day one. So I have to take them and train them - and I have done that - but when we talk about a brain drain here and we talk about why people are leaving Nova Scotia, it is because companies will not take these people and will not hire these new graduates and train them. They have to do that. In the States they will do that. They will take the students and train them and make them sign an agreement that if they leave within a certain period, they have to refund the money.
What I am saying is, the role for government would be, like you mentioned earlier on, to provide tax breaks for hiring students and new graduates. So, yes, give us the right tax environment. That comes across very strongly in the survey. We need the right tax environment to encourage more businesses to move to Nova Scotia. ITANS believes that it is important for larger organizations to move into the province. Yes, they might absorb some smaller companies, some smaller companies might fold, but from a long-term point of view, it is good for the industry. When the chamber says government should stay the hell out of business, I am not sure what the answer is. I think if you talk to some of the members, the smaller ones are going to say, we could use some help. Some of them are going to say, no, I don't want government money.
There is another issue here. In our industry we have venture capitalists who obviously look for smaller companies to invest money in. In the earlier stages, they won't touch your business. Is it easy to get money in Nova Scotia? Not necessarily. There was a conference about a week and a half ago, where there were representatives from Tara, BDC, the Royal Bank and one other organization. I asked them the question, if a small IT company took money from ACOA, would the venture capitalists not touch them, saying you have taken government money? The answer was varied. Some of them said, no, in the earlier stages it wouldn't be a problem, take the money wherever you can. There was one venture capital company that said, well, one of our concerns is that if it is easy money, how hard do they have to work to get it?
I am not sure if there is a right answer. The venture capitalists will say, no, we won't even know them. If they have a good product and good service, we will invest in them. Typically, venture capitalists only invest in the companies after they have already proven themselves and have a viable product. But how do they get to that point? They can get to that point on their own, maybe. I think some SEED capital might help. I think there is a misconception in the industry right now in the public and the public seems to think that government gives money to businesses as opposed to loaning money to businesses. What happens, too, is this venture capitalist said that 2 out of 10 companies that they invest in, in our industry, survive and do well.
When I look at ACOA's record, what I hear about in the press is the bad news. I am not saying that ACOA is successful, I don't know. What I would like to do is hear the good news. I wonder why organizations like that do not blow their horn and say, yes, you hear the bad news, here is the good news. I don't know if government funding for an individual business is right. I do know that as an industry organization, to provide the services to our members, I cannot do it with membership fees. I certainly won't do it with my personal time again, not for the next year. One day a week, if I calculate how much time I spent with ITANS, one day a week for 52 weeks at my billable rate is a lot of time and money. This is a business, it is not a non-profit organization, we are running a business here.
You had a third point, I am trying to remember what that was. Was it trade missions?
MR. DOWNE: The investment that government, in the dollars you are talking about for the investment, in creating that better environment, are they better off going into universities or other areas to help infuse dollars and to give the basis for some of the R and D that needs to be done? For 20 years, Nova Scotia's private sector has been reluctant to invest in R and D, simply because they have never had the money to be able to do it and it is a cultural difference. Where is the role government should be playing? I understand there is money that Ottawa - and Bernie Boudreau's name gets attached to it, so I will give him the credit for bringing it here - those dollars going into R and D seem to be, from what I have heard, a very good, positive move for a lot of sectors. I am just interested in knowing whether or not research and development in your industry is one that you would embellish, vis-à-vis money in another direction.
MR. DEMELLO: I think the position about the money is very important. I am glad to see that part of it is going to universities, like Dal. I think it is critical. If you look at the success of our industry in the States, most of the new business has come out of Stanford and Berkeley because of the research that is taking place in those universities. I am hoping . . .
MR. PAUL CAMPBELL: I think you are quite key when you talk about the $500 million, as well as other dollars in funding that are available today. Academic institutions looking at the giga-pop that is put in at Dal is a primary contact for us to have a link to the overseas market, and this is vital to the Nova Scotia economy. You talk about economic development, you talk about impediments in doing business in Nova Scotia, these are the key issues that ITANS' memberships have. You talk about the provincial government doing things; you talk about the federal government doing things; and you talk about municipalities doing things. The challenge today is that they are all working in different directions, and if we are going to do things in a concerted effort, what we need to do is build up on the infrastructure.
Mary, you talked a little bit about the Chamber of Commerce forming an IT committee. Well, what the chamber did, what Ian Thompson decided was, yes, we need to have an IT committee, but let's not exclude those organizations that are also being a voice
of the industry. So they asked for a representative of ITANS to sit on that IT committee and I think it has been very productive to do so because when you talk advocacy, you talk issues, you need to have that stronger voice and there is not one organization that represents this industry, clearly there is not.
You ask what can we all do in providing infrastructure and how can government funds, if they are available, better be used - funding an association member or could they be used to build that infrastructure? If you look at Sweden as a model and you look at how they tied all their industry and municipalities together using dark fibre, Quebec has done the same thing in Canada with the school system, but where is Nova Scotia on that mark? We talk about our membership all residing pretty much in Halifax or in Sydney, maybe a couple members in Yarmouth, but what about all the municipalities in rural destinations in between? They all want to do business in this province and they all see the web as being a viable business mode, but the challenge here is that there is not the infrastructure throughout the province to give everyone ubiquitous access which we have all been toting for many years.
Until we overcome these challenges, let's look at Ireland as a model and how government has played a vital role in upgrading the infrastructure there. There were many trade missions over the last number of years to locations like Ireland, or Boston, to look at how the technology can be used. Boston is a clear-cut example as well. They have a report card in Boston identifying the infrastructure that is there to attract businesses and companies, but where is ours in Nova Scotia? These are things that we need to work on.
I know there is a new economic development strategy for the province being developed and we have been consulted over the past summer to talk about IT issues in the province. This has been really the first time in a long time that IT has become a vital player in the Nova Scotia economy, to a point where if we do not have the infrastructure to attract the companies we are all going to lose out in this province. We have seen a migration in health, we have seen a migration in a number of other industries as well, going where it is more attractive.
MR. BRIAN PLEET: I would like to address the three questions, and I was taking notes. First, the question was around who is the voice of the industry. Let me see if I can provide some clarity. There are three major organizations that I think have a voice and should have a voice, and they all have different mandates although not clearly expressed. First, NovaKnowledge. NovaKnowledge spends a lot of time encouraging individuals to join their organization because they want to represent individual members and give them a voice in the new economy that is coming. That is a very valuable thing and their membership is made up largely of individuals.
The second organization is the Chamber of Commerce. We participated as ITANS in the foundation of that new group, and their mandate is to look at the application of technology within the business community. They want to ensure that Halifax, in particular,
as it is the Halifax Chamber of Commerce, can utilize application to its best advantage and that is their mandate. It is the application, not the creation of technology.
The third group is ITANS. ITANS is a group for industry members, companies and organizations. That is our only mandate. We do not have individual members. We have members who are in the business of making information technology and producing those services. So there are three different groups and three have very distinct roles, I believe.
The second question was around subsidy. In my personal view, and I think I can speak for the association as well, subsidy of individual organizations and companies that are for profit by government is one which is not well regarded. That has been a discussion which will ensue in the political world and it is well beyond this association, but our members are telling us that if you provide a subsidy for a profit organization, that creates issues and conflicts because the question always is why them and not me.
So our position would be that providing funding to individual for-profit organizations is not something that we are looking for, but I want to distinguish that from what you referred to as a subsidy. Our asking for support of the association is not to provide any funding whatsoever to individual companies. It is to provide an organization so that the companies in Nova Scotia that are in IT can come together and have a strong voice. That is quite a distinct issue from subsidies. I think subsidies itself, as a word, has taken on a negative tone.
The third issue which I think you have raised is what is it you would want the money for as an association. Many different surveys of communities that have invested in information technology say there are four or five things that must be present for IT to develop. One of them is research and development funding. There must be a source of funding for R and D. You had mentioned Xerox. Coincidentally, I used to work for Xerox for six years. It is a very strong organization and they did, in fact, get funding from the U.S. Government to do many interesting things. The Internet is one of the outcomes of that investment. So R and D funding is required.
The second requirement in a community to have a strong IT industry is that of an anchor tenant. An anchor tenant would be an organization that is in the business of producing IT and we have some candidates in the province but, frankly, not enough. One of those organizations that is a candidate to be our anchor is Aliant and it is also coincidental that I was the director of marketing for MTT before the merger. So I am quite familiar with Aliant and I think there is an opportunity there for Aliant to play a lead role in the development of the IT community.
The third thing that we need in a community to be successful is legislation that is favourable to technology companies. The province has a reasonably good record. There was the tax credit for Nova Scotia small business. That has proven itself to be quite positive for the industry and I know there was a strong response in our survey to say that our members
believe that that should continue. So for the point of making that, the ability of our tax system and the legislation to provide support for small technology companies is important.
The last point that I would make about what we do need is a strong educational community because without the skills in the people who power these companies, we are not going to be successful and to that end we need a very strong educational community in the province. I think we have a good one working here. Certainly we advertise very strongly the fact that we have more degree-granting institutions per capita than anywhere else in Canada and I think that is something that we should be proud of. We just have to make sure that those educational institutions are delivering the kind of skills that small IT companies require to get started.
MR. CHAIRMAN: Mr. Corbett.
MR. FRANK CORBETT: Mr. Chairman, again this could probably be a question answered by anybody on the committee or all of you. When you brought up the idea of access, I guess, to information - and I do not know if we necessarily want to perceive Halifax as being the hub - that access, I do not think, is spread evenly across this province. If you want to look at it and use the term service and underserviced areas, or dead spots, whatever you want to do, and I was interested because of Mr. Pleet's background with MTT, so what is the way around it? How can you give somebody in Judique the same access to high-speed information as you would somebody on Granville Street here in Halifax?
MR. DEMELLO: I might mention that one of our initiatives is going to be to build a portal ITANS. It is just the centre depositary of information. Basically, that is it. It is a central source of information so if a small company in some small little town in any part of Nova Scotia has Internet access, that is how they can get the information.
When I say information, I mean anything from documents to notification about events. One of the initiatives we are thinking about right now is either webcasting it, you know, in other words, if you have an event in Halifax, for example, and it is a for-a-fee event, there is no reason why we cannot webcast it to other parts of the province for free. So if they are interested, they register, we give them a user ID and password, they go on the Internet and they can attend the event. We have to use the technology. We thought about having an event in Cape Breton, say let's have a couple of events at Silicon Island, and in our discussions with the individuals at MEDIAfusion, they said if you are having it here and you are trying to talk to some of the businesses about maybe joining ITANS, it might be a bad move because there is still this concern about the mainlanders coming down here and trying to tell us what to do. I think using the technology by having webcasting so that if you are in any part of Nova Scotia where you have Internet access, you can virtually attend an event. The other one is for them to be able to go into our website and download information. The website is not where we want it to be right now, but it will be.
[10:00 a.m.]
MR. CORBETT: That answers part of the question, but what I am thinking of are businesses that want to start somewhere in the IT sector and they do not have high speed Internet access right now. Do you see your group as being a player there? What, in reality can you do? I will just throw out an unrelated question and you can hopefully answer both of them and then I will go around to somebody else. You talk about Silicon Island, there is a technology advisory group in Cape Breton, are they part of your group or are they kind of a subset? Or is there no melding together at all there?
MR. DEMELLO: They are not even a part of MEDIAfusion. It is a group of individuals who get together and they meet on a regular basis - the third Thursday of the month - and that is webcast and what we are going to do right now, we have asked them for a user ID and passwords so that we can participate over the Internet.
Another thing we are going to do is go down to Cape Breton and attend one of the TAG events. It is a pretty informal event, it is a very vibrant organization. So it is stepping slowly and trying to say, we are here, how can we help you? But, it is like I said, we are working closely with MEDIAfusion to try to make headway and we were told to step carefully.
MR. CAMPBELL: In the first part of your question you spoke about how businesses can take advantage of IT in Nova Scotia, especially in rural communities and so on. One of the aspects is that it is almost like a chicken and the egg scenario where businesses want to subscribe to the Internet to do business, but there is not the advantage of the commercial entity so that the Internet service providers will provide the infrastructure there, the higher band width, so businesses can take advantage of it. So, until consumers take advantage of doing business and feeling comfortable with using the web to do business, the infrastructure is not going to be developed.
One of the things that we need to do is promote the Internet in Nova Scotia as being used by businesses and individuals. Less than 25 per cent of businesses in Nova Scotia have access to the Internet or even a web page to date and we need to really build awareness that there is another opportunity for them to do business on the web as well as the home shoppers and so on to take advantage of that infrastructure. As soon as that grows, commercialization will take over in the sense of the development of web pages and the commercial icons and so on so that they can get some media coverage and some exposure. Those are the optics that companies and individuals are looking for and until that happens, it is not profitable to put that infrastructure in place.
MR. DEMELLO: Last week, or the week before that, Microsoft had an event in Truro and I think that is about as far as Microsoft might go in terms of having events outside metro. They may have had one in New Glasgow. So, we can have an event in those areas. What we
are faced with right now is if you have an event in Halifax, we get the core numbers we need to at least break even. If we have an event in another area, we are going to lose money and we are in a position right now of making money, we have to. So, we have to provide services to the outlying areas - we are a provincial organization - so we look at it and say, what is the most efficient way for a person to provide services? The most efficient way for us to provide services is technology.
If they do not have the Internet access, then as an IT company, they are not going to survive in that area anyway. So, maybe when we speak about infrastructure, that is one of the things that we need to push and say, why don't they have access in those areas? Mind you, I think Nova Scotia in terms of high speed access is way ahead in terms of Canada or even North America.
MR. CHIPMAN: You made a statement that the different levels of government - federal, provincial and municipal - all seem to be going in the opposite direction, and I am not suggesting this, but it is possible that maybe they are all looking for the credit instead of working together; they are promoting their own agenda.
You mentioned earlier that you had one member in Yarmouth, two in the Valley, a couple in Cape Breton and most of them are in Halifax. That is a concern. What I see is all the concentration in urban Nova Scotia and very little in rural Nova Scotia. Being from rural Nova Scotia, we have to develop rural Nova Scotia to make the whole province prosperous.
I notice in the pamphlet I have here that your funding was reduced in 1998-99 to 25 per cent from 50 per cent. You just made a statement that you don't really require government funding anymore. How have you been able to operate on your own? I assume this comes from contributions from your membership. Do you see a growth pattern, do you see growth in the industry, an increase in membership?
MR. DEMELLO: No. As soon as that funding dropped, in June of last year, we let the executive director go, and we had just the office administrator, we saw a drop in membership, because we also had a drop in services provided to the members. Since then, it is beginning to go up again. Again, I am acting as a part-time administrator. That can't continue, that won't continue.
MR. CHIPMAN: Somebody made a statement that we seem to be lagging behind. We had a meeting with MTT recently, and I was under the impression that Nova Scotia is on the leading edge in all of North America for Internet technology, digital, et cetera. One other question I wanted to ask, basically two. I noticed the Information Technology Institute in Nova Scotia, it costs $30,000 for tuition for nine months. Are we losing a lot of these graduates to other provinces and other countries, the United States in particular?
MR. DEMELLO: Yes, the answer to that question is yes. Let me take one step back though. I did agree with you that we do have, in terms of the high-speed access, one of the best in North America. I agree with you there. But what I am saying is there is an outlying area where there is a company being formed and they are looking for services, if somebody makes the decision that they don't have the high-speed access there, then it is difficult for us to service them using technology.
In terms of the graduates, yes, that is the point I made earlier on. In my company, I have a graduate from the community college, two from ITI and one from Dal. They all came straight out of school and I hired them because the price was right, but I spent a lot of time training them. Of course, I had to keep bumping the salary up or I would lose them, which is a fact of life. We do IT placement by the way, our company. A lot of employers will call us up and say, do you have somebody who has two years of regional, basic experience, and the answer is, yes, I can probably find somebody, but maybe not locally. If I can find somebody locally it means I am taking from Peter to feed Paul.
There are a lot of students. They do not want me to provide them with a resume of a new graduate because they say, I can get that anyway, but they don't hire them. What happens is, ITI has made money out of training the students and marketing them to companies in the States. Keane Canada is one of the few companies that took a lot of ITI grads, but what happened was Keane went to ITI and said, here is what we need for the year 2000, we want you to train them in these technologies because we have clients in the States who could use these skills. ITI trained the students, and Keane took them. I know of people who have moved to the States, are working for companies down there, signed agreements for the training, signed agreements that when the training is over they would stay with those companies. Some of them want to move back here.
MR. CHIPMAN: I would like to make a guarantee that they would stay here and work for a number of years after they get their training. In Nova Scotia, that has been our biggest export over the years. We use taxpayers to educate our children, and we don't have opportunities here to offer them and they leave. You said 75 per cent to 80 per cent are central in Nova Scotia, in the Halifax-Dartmouth area, but really with Internet technology, you can run a business out of any place in Nova Scotia. I know a friend of mine who runs a business out of New Jersey in my community through the summer months, and why it is all concentrated in the urban areas, I have no idea. Maybe it has to do with social things, social functions.
MR. DEMELLO: You will find it is changing. There is a company in the Valley that exports genealogy software, in Wolfville. So that will change, but they have the access there. They have Internet access. They don't come to Halifax for meetings. When they were looking to hire some people, I got an e-mail from him and I did all my correspondence with him by e-mail. That is the way it has to be if you are going to be in that industry, you have to have access to the technology and you do your business over the Internet.
So, the answer is if you want to keep talent here I think you have to have a tax environment that encourages businesses to take the students and train them. Just because they come out of ITI or Dal, it doesn't mean they are ready to do business the way I want them to do business for my company. I still have to train them, I have to invest my money in them. If I am investing my time and my money in them, then it costs me a lot. Given a choice of taking an experienced person or a student right now, I am going to take an experienced person because I get productivity immediately. If I am going to take a student, I am investing a lot of time and money in that person and they could leave. What is in it for me, strictly as a business person, right?
MR. CHAIRMAN: Thank you, Mr. Chipman.
Mr. Boudreau.
MR. BRIAN BOUDREAU: Mr. Chairman, I always regard this as a very exciting industry. Unfortunately, I don't believe this government recognized the importance of this. A little bit of development could be a very interesting industry for Nova Scotia, particularly when we are dealing with rural Nova Scotia. Could you indicate approximately, how many people are employed in this industry today?
MR. DEMELLO: About 30,000. One of the next surveys we are going to do, actually, is going to address those issues. It is going to talk about numbers, it is going to talk about revenues of the businesses and salaries. We will be doing the survey early in the first quarter of next year.
MR. BOUDREAU: The projected job growth over the next four to five years could be, what 4,000 to 5,000, if the industry is developed in the proper manner? Is that fair?
MR. DEMELLO: It is hard to predict. The rapid growth, like I said, is one of the challenges I have. I attend a lot of events just to meet companies that have been formed. Every week I find that a new company has been formed and I say, oh, I didn't know about them. They are automatically in my Palm Pilot and they are automatically on the ITANS mailing list.
MR. BOUDREAU: I agree. I have been watching this industry a little bit because I guess in my role in Cape Breton, it is the leading industry in that particular area and it has created much-needed jobs. I think that could be the cornerstone or an example right across the province that we have the ability in this industry to develop it into a world-leading industry. I know the previous government initiated a 15 per cent tax credit, which was defeated. I guess I would just like to get an understanding of how you would feel with this kind of initiative for the industry.
MR. DEMELLO: Definitely in favour. Any type of tax incentives, I would be in favour of; speaking as an entrepreneur, I would be in favour of it and I know the industry would be in favour of it.
This survey we did - and I will read some questions here - on a scale of 1 to 5, 1 being strongly disagree, 5 being strongly agree. Does the role of a government facilitate capital investment for outside markets; that was 3.5, so it is leaning towards the agree part. The IT industry has reached a critical mass in Nova Scotia, that is on the lower end, in other words there was a strong disagreement; 2.3 on the scale of 0 to 5. We talk about taxes, I am sure there is a question here on taxes, too. Here is one, it says the provincial government understands the value and importance of the IT industry; that is 2.4 out of 5. Anyway, we will summarize the survey and we will make it available. Here is one, the Nova Scotia tax credit expires on December 31, 2000, should it be renewed? Out of a scale of 0 to 5, 4.1 on the scale. The industry strongly feels it should be renewed.
Community Economic Development Investment Funds - CEDIFs - are inefficient and poorly monitored. The industry feels that on a scale of 0 to 5, 3.5 that yes, they are poorly monitored.
MR. BOUDREAU: Now when you indicate that when you hire a new graduate from a university or a college in Nova Scotia, you have to retrain immediately upon hiring them. Is that correct? Is that what you indicated?
MR. DEMELLO: I am not sure I would say retrain, I would say additional training.
MR. BOUDREAU: Additional training. So . . .
MR. DEMELLO: Because they have the foundation and some basics. But you know, some institutions churn them out. They churn them out, they have some basic skills. When they come to my organization, I still have to teach them good testing techniques. Also, they have to understand how my business operates. You take the same individual and put them in my business, the training they receive from me may be different from the training they receive from Brian because Brian has different needs and different standards.
MR. BOUDREAU: But do you feel that the educational format could be standardized?
MR. DEMELLO: Within the community colleges it could be. I also was on one of the community college committees for curriculum and the curriculum in Halifax is different from the one in Yarmouth and the one in Truro, so it is not exactly the same. They are working towards that though, they are trying to standardize, no matter which community college you are in, you get the same program.
But if you are saying, could we standardize it between the private institutions like ITI, it is not going to happen because they are a business. They just changed a program from teaching Oracle to teaching DB2 and I think that is based because they put out tenders to the companies and Oracle lost and IBM won. It is strictly based on business and maybe an organization like ITI will train their students based on their market which is not here, but in the United States. Whereas community college, I have a community college graduate working for me and he is excellent, he is great. Now, where he is great in technical skills, he might lack some other skills and I have to work in improving the skills.
So, it is an investment that businesses make in their employees. Our assets are our people and we should be investing in the people, but why would the businesses invest in a new person as opposed to an experienced person?
MR. BOUDREAU: Is it not true that today for qualified workers, there is a shortage across the province?
MR. DEMELLO: I have to qualify that. When a company calls us up and says, can you provide us with an individual with two years' experience, it depends on the type of skills they are looking for. I can find them in the province. A person coming out of school is qualified. Are they experienced? No, they are not. So, it depends on how you define qualified. If you are saying somebody out of school, are they qualified? I say, yes they are. Are they experienced? No, they are not. But what companies are looking for are experienced people. So, yes, there is a shortage of experienced people and companies have to realize that and hire inexperienced people and train them; give them the experience.
MR. BOUDREAU: But in terms of job development, is it not true that if we train people immediately, that there are job opportunities out there that could create job development?
MR. DEMELLO: Yes.
MR. BOUDREAU: I don't want to sound like I am scolding the government, but in the last 16 months I have been disappointed with this particular government because I see this as an industry that can be developed into a leading industry in this province and a very responsible way to find employment opportunities, particularly in rural Nova Scotia.
I would, I guess, just want to make a comment, if I may, to encourage the committee to recognize this industry and perhaps even write a letter to both the Minister of Education and the Minister of Economic Development requesting that they provide whatever support that could be provided to ensure that this industry is developed in a manner that it could and should be for individual Nova Scotians.
MR. DEMELLO: Actually, in the three or four years that I have been on the board of directors, this is the first time that I found the province was actually working closely with us, so it is encouraging. I had a very good meeting with the minister. The minister and the deputy minister were there, and actually I came out of the meeting feeling good. I felt that our industry would benefit and that the government was listening, which is refreshing. I cannot speak to the past when the other Party was in power, but I can speak about the existing government and I know they are listening. The next issue, of course, is to act. So it is up to us to push and we will be pushing to say this is what we need, what are you going to do about it?
MR. CHAIRMAN: Thank you. I just had a couple of quick questions. Mr. DeMello. You were referencing some questions on a scale of zero to five.
MR. DEMELLO: Yes.
MR. CHAIRMAN: Who was the author? Did ITANS or did you generate the questions?
MR. DEMELLO: This was generated by our advocacy committee two weeks ago and circulated to everybody on our mailing list who was in the IT industry except for, in fact, on our mailing list we also have people in government and they were excluded from that mailing.
MR. CHAIRMAN: I would like to see a question posed - and perhaps it's there and I apologize if it is - relative to tax breaks versus subsidies and just what your members feel along those lines. There is a lot of talk today, not just here in the confines of this room, there is a lot of talk right across the country about tax breaks and subsidies and which is more effective. I think it would be very interesting as to what type of results we might receive, or ITANS might receive?
MR. DEMELLO: I know in just speaking to a lot of companies, a lot of them would rather have the tax break than subsidies . . .
MR. CHAIRMAN: Yes.
MR. DEMELLO: . . . these are companies that are already established. It would be interesting to talk to some new start-ups and ask them how they feel about it.
MR. CHAIRMAN: Yes.
MR. DEMELLO: As an industry association, we would take a certain position and say, this is it, saying, no subsidies, but that does not mean that every member in our industry is going to agree with us.
MR. CHAIRMAN: I want to thank the witnesses for coming in this morning. If Mr. DeMello or one of his colleagues would like to make some summary comments, you would certainly be more than welcome.
MR. DEMELLO: I will say a few things, and feel free to pitch in. The first thing I want to say is that we will make sure that a summary of this survey will be available to anybody who requests it. I think there is useful information in here, and along with the survey some of the respondents actually added some personal comments. I will have to check with the advocacy committees to make sure that we can publish those comments first, but I am quite willing to let you see those. They would be interesting; it was interesting reading. Secondly, of course, if any of you is looking for more information about industry or how you can help industry, let me know. I will give you my e-mail address and my phone number.
Basically, the bottom line is that March 31st next year for us is a critical date. If we do not raise the money, what I can say is I have given a day a week of my time, which is a big commitment for a small business. Actually my company has actually seen a drop in revenue because of my efforts in this industry, and my business partner is on my back all the time and that won't continue. When my term is up, it is up; I will remain as past chairman. So our goal, of course, is to grow as much as we can between now and the end of March. My term is up in June, but by the end of March, that is a critical date. I am not sure what is going to happen. I guess I am putting our members on notice, and then I am letting you know that that for us is a critical date.
MR. CHAIRMAN: Thank you, Mr. DeMello.
MR. PLEET: If I may, just a point, for some clarification to this group. There is much discussion in every newspaper and every radio broadcast and every report about the IT industry; I think that some clarity would be useful and I would just leave you with this thought. There are three levels to the IT industry, as we refer to it. One is the individual who is a taxpayer, who is an employee of a company, and for them to participate in this IT economy, they need a strong education and they need good skills. I think the government will play a part in doing that, and does today.
The second group is the companies that use technology, and we have talked a little bit about that today. Those companies apply technology for growth, and for those of you who have been watching the U.S., Edward Greenspan had recently reported that the drag - along effect of companies using information technology in the U.S. can now be quantified and the ITAC association is about to do the same study in Canada to look at what effect it has when companies use information technology. So that is the middle layer.
The third layer is companies like mine and like Mario's and others represented by ITANS who actually create technology. We are the organizations looking to the Standing Committee on Economic Development for your support. We are actually a very small group, compared to the users of technology and individuals who are taxpayers. We ask you for your support to create that foundation so other companies can use our technology and other individuals will join our industry.
MR. CHAIRMAN: Thank you, Mr. Pleet.
Mr. Campbell.
MR. CAMPBELL: I would like to thank the committee, first, for recognizing that IT is a major economic force in Nova Scotia. Over the next few years the IT industry is clearly going to escalate. The emerging technologies that Nova Scotian companies develop through our R & D relationships with the academic institutions, as well as new businesses, are going to be vital and the increased partnerships that we have in the province will again clearly define a stronger IT sector. So I look forward to continuing to work with the Nova Scotia Government, as well as other levels of government and businesses in the province, to build the presence of IT and, again, the voice of IT in the province. Thank you.
MR. CHAIRMAN: Thank you very much. Mr. Blanchard, did you want to sit at a microphone or stand up? Whatever is easier for you there.
MR. BLANCHARD: I just wanted to thank the committee for the interest shown in this. I have been with ITANS many years and I know that this is probably the first time you have had this degree of interest in ITANS and what it is doing.
The only thing I wanted to comment on was the small companies. There are many small companies in Nova Scotia which are building technology. They are all underfunded, they are seeking venture capital, they have no money. Also, by their size, they don't have a voice in Nova Scotia. They are just two- and three-people companies. ITANS is an organization which can speak for that group. There could be 50 or 60 companies out there or more, outside of Halifax, if we can coordinate their thoughts, we can speak for them and move forward.
I think the key thing this committee wants to consider is that they are the engine for growth. If you look at Silicon Valley and other places around the world, these small companies are the ones that really drive the growth, because if you bring 200 jobs into Halifax, you bring 200 jobs, but these companies, if they each just add two or three people, you have a huge increase in jobs and in the peripheral technologies that go on from there. So we really support these small companies and I think that is where the future lies. Thank you very much.
MR. DEMELLO: I have one final statement. This might address what Mr. Downe was talking about. If there is any other organization in Nova Scotia that claims to represent the IT industry association, I will take them on, one-on-one, in a debate to talk about it. I believe that no other organization here represents the IT industry. If they believe they do, then I would like to talk to them about it.
MR. CHAIRMAN: Thank you, Mr. DeMello. I think that is a challenge that probably they would be a little reluctant to take on right now, but that will remain to be seen.
Thank you very much, members of the IT alliance for coming in this morning. We certainly do appreciate your coming to our committee hearing, and down the road, in the future, we would be pleased to welcome you back.
Thank you very much and thank you committee members. Our next meeting is December 5th, MacTara Sawmill Limited will be the presenters and witnesses; December 5th, 9:00 a.m. to 11:00 a.m. Thank you for filling in so aptly, Mr. Estabrooks.
[The committee adjourned at 10:29 a.m.]