TPC investments continue despite death of Canada's largest industrial assistance program

The Technology Partnerships Canada (TPC) program officially expired at the end of 2006 after 11 volatile and often controversial years, but not before the government unleashed a flurry of announcements in late December to clear its backlog of previous approved projects. Between December 19 and 27, Industry Canada announced four TPC projects worth a total of $45 million, and followed it up January 19 with an additional investment worth $9 million.

The latest deals closely follow TPC's December 13 announcement of a $350-million investment in Pratt & Whitney Canada , the largest single investment in the history of the organization — a special operating agency of Industry Canada (R$, December 22/06).

The largest of the five recent investments is in Messier-Dowty, Ajax ON, for a $96.3-million R&D project for prototype landing gears. The project involves the incorporation of new composite materials into the landing gear design, including environmentally benign coatings to replace the current practice of using cadmium and chrome plating. TPC is making a $27.8-million repayable investment (see chart below).

future aerospace support remains undetermined

TPC was already headed for the scrap heap under the previous Liberal administration. In 2005, then Industry minister David Emerson announced the creation of the Transformative Technology Program (TTP), an incubator fund geared towards small- and medium-sized businesses from all sectors (R$, September 20/05). It was slated to be operational April 1/06, at which time TPC would cease to exist. The Liberal government was also working on an Aerospace and Defence Technology Development program at the time of its defeat (R$, December 9/05).

"Important Information"

The terms and conditions for the TPC program expired on December 31, 2006. Therefore, no new outlines under this program will be accepted, and no new projects will be contracted. This site will continue to report on the work and benefits phases of all previously contracted projects."

— Notice on TPC website

The Conservative government and its predecessor parties (Reform, Canadian Alliance) have long been vociferous critics of the TPC program, attacking it for its poor repayment record and as an example of corporate welfare. It has also rejected the planned split of TPC into two programs, promising instead a new mechanism to assist the aerospace and defence sector.

TPC benefits report released

The government has also quietly posted a controversial report on the economic benefits of TPC on the program's website (http://tpc.ic.gc.ca/epic/site/tpc-ptc.nsf/en/hb00533e.html). The contents of the 91-page report by Hickling Arthurs Low was leaked to the media last fall. The report, dated September 16/05, shows that TPC stimulated company sales of $517.4 billion and had a net impact on the Canadian economy of $32.3 billion — 8.6 times greater than the government's investment of $2.8 billion. The net impact was determined by calculating the direct sales, spin off sales and diffusion sales of TPC support projects.

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