MICHAEL CAMPBELL (Host): Let's turn to something a lot more positive. You know, we talk about the Canadian economy; well, there's one aspect, and that's a darn good aspect to be competitive on, and that's how we're doing with technology, and especially when it relates to the Internet. I've got the Minister of Industry for the federal government, John Manley, on the line. Mr. Manley, first of all, thanks for taking the time, I know you're between all sorts of events. But I wanted to talk about an announcement that you've just made talking about, you know, it's a pilot program called Community Storefronts. Can you give us an update on what that is?

JOHN MANLEY (Federal Minister of Industry): Well, thank you, Michael. It's a pilot program that's going to introduce some real-time electronic commerce for smaller communities as a way of really demonstrating what can be done, hooking up some small businesses, using community access to the Internet as a means of doing it, and really being able to create the entire transaction framework in a smaller community.

We've got four pilots across the country, one here in British Columbia in the Northern Okanagan, one in Ontario and Quebec and Nova Scotia.

CAMPBELL: Well, I like the idea of being able to do a one-stop shop for people in small and midsized business. I mean, this is obviously a huge part of the future. I mean, when a guy like Bill Gates, who kind of knows something about it, shifts his entire company focus to the Internet. We just had Compaq computers announce a new line of computers for themselves which has a direct Internet link: in other words, you just press a button - and that's one of the main features of it - you're onto the Internet.

I mean, this is just going to be a huge area where business can be done, and it's kind of interesting that you've chosen to go into some of the smaller communities.

MANLEY: Well, you know, what happens of course as in so many other things is that large businesses have the resources to try to figure out how they're going to exploit a new opportunity, whereas small businesses, because, you know, the owner-manager is preoccupied with simply paying his bills on a monthly businesses and sometimes is slow to exploit new opportunities.

So we've really put an entire package together here for these businesses in the four communities., so we'll have at the outset about 250 businesses. Also, some charities and not-for-profit organizations will be hooked in. The technology will offer a secure system, the purchases will be made via credit card. Credit card numbers never even go to the merchants. We've patched it directly into the Royal Bank so that they will take the Visa number directly.

And the whole package is nicely put together. Merchants put their products on-line, sell directly, paid through the bank, and they deliver.

CAMPBELL: You know, one of the interesting things you've just alluded to is that I was reading a survey from Intelliquest out of the States that said that still a huge proportion of Internet users are worried about security transactions on the Internet, they're worried about giving their credit card number. It's funny that we don't care when we give it to a stranger over the phone, which to me is much more risky, as any bank will tell us. But DoP@y, I guess, is the partner in this with the Royal Bank, and they've got this system where there is full security on it.

MANLEY: That's right. The system is entirely secure. As I say, the card number is disclosed directly to the bank; it doesn't even go through the merchants' hands. But as you say, it's a phenomenon that consumers are a little nervous about giving their Internet number...or their credit card number over the Internet, but in fact, when you use your credit card, whether by telephone or, frankly, if you use it in a restaurant that you're not familiar with or a place of business, your number is there, a copy of it is made, and it could be misused no matter where you happen to be. So there's no reason to think the Internet is less secure.

But just to put it in context, Michael, I believe that there's an enormous opportunity for Canada here. I'm intent on making us a world leader in electronic commerce. If that's going to happen, consumers have to have confidence. We have to encourage them to feel comfortable using it. So if we can put the package together, allow it to really be actively demonstrated, people will see why it's beneficial to them, that will position Canada and Canadian businesses to secure a leadership position.

CAMPBELL: Well, I couldn't agree more. I mean, I've been accused of being a cheerleader for the Internet for the last five years, and I'm glad about that. I don't think it was meant as a compliment when it first started, but I'm glad about it at this case. I want to ask you about another initiative you're doing, and that's trying to get every school and every public library hooked up to the Internet, you know, within the next year or two. Where are you at with that?

MANLEY: We're making very rapid progress on that project. We started back in 1994 essentially with a little pilot project linking a couple of schools. It's gradually mounted up 'til by the end of 1997, we had about 12,000 schools connected across Canada. By the end of this year, I'm confident that we will have completed the project: that'll be 16,500 schools across Canada, 3,400 public libraries, 350 schools on aboriginal reserves, all connected to the Internet. The first country in the G-7 to have done so, two years ahead of President Clinton's target for the U.S.

CAMPBELL: So that every public school basically is going to be Internet...and plus library access, too.

MANLEY: At least one connection to every school. And the next project is going to be to see to it that every class in every school has a computer that's on-line.

CAMPBELL: Well, I'll tell you, I fully support that and would encourage to move as fast as possible. I think the implications for commerce, as we just alluded to, but education are all so dramatic. I mean, I was just watching last week where 10,000 people signed on down in Florida to watch a woman in live time give birth.

But I'm saying the potential for that, for classrooms...I mean, for example, we can bring in world-class speakers and literally hook them up to the entire educational system. They can download a real-time video or a video after the fact. All of that's going to be reality soon, and :I think the implications for increasing quality of education is going to be tremendous.

MANLEY: Well, quality of education, as you say, access to informed people. But also we've got in St. Boniface, Manitoba, we have the first Canadian school that offers a degree or diploma entirely over the Internet. So distance education opportunities arrive. In medicine, it's not strictly for learning, but do you realize that in Canada, we spend a fortune every year simply transporting people from remote communities, usually in the North, to southern cities for medical treatment?

The opportunities that arise with distance medicine not only give us a chance to save some money because you can actually deliver some medical services that would otherwise have required you to transport people, but allow people to stay in their own community, where they have family to take care of them, while they're receiving treatment.

So many, many opportunities here. But I believe that the advantages, the commercial, the economic advantages are going to go to the countries that do it fast.

CAMPBELL: I couldn't agree more. I mean, it's like competing in anything. If you get your place in there quickly, you know, that's where your competitive edge comes.

MANLEY: And our objective - and I've been talking about this all over the country - is to ensure that Canada is recognized as the most connected country. And you know, we're already not doing badly, but if we can be essentially branded around the world that's the country that's really made being connected something that's important...and you know, if you're in the Deutschebank and you're developing a new application for electronic commerce, I want you to think we should check and see if they've done that in Canada, because chances are they've done it there.

CAMPBELL: Well, as I say, I was looking at some of the numbers for this, 100 million users on the Internet...here's an amazing stat that just...according to Jupiter Communications out in New York, there were 130 websites in 1993; today there are 650,000. I mean, the growth of the medium...I think anybody who's still got there head in the sand about this one and not seeing that this is an amazing opportunity, you know, it really has to give their head a shake.

I'll tell you another figure I've heard, Mr. Manley, that I'm sure you'll like to here, is that when Compaq announced its latest computer, they said penetration in Canada is as much as 50 per cent in the home for personal computers, with 17 per cent having more than one computer in the home.

MANLEY: We lead the G-7 in home computers per household. We lead the G-7 in Internet accounts per 100,000 in population. We have the lowest Internet charges in the G-7. We will, as I say, lead in hooking our schools. There are many reasons...I mean, Canada has a lot of things going for it. But I mean, if you turn around and rest, by tomorrow we won't be first anymore, we'll be second or third, so we have to just keep pressing ahead.

And not only for the commercial advantages, the educational advantages, the health care advantages, but the reality is whether it's good or bad, it's neutral, the world economy is shifting from one in which prosperity was based on having and exploiting natural resources increasingly to one where prosperity is generated through knowledge and the ability to acquire and use information. And that's what really these technologies are all about, the ability to acquire information, to exchange information, and to create value from it.

CAMPBELL: I agree completely. Minister Manley, thanks so much for taking the time, I know you're off to another meeting.

MANLEY: Thank you, Michael.

CAMPBELL: John Manley, Minister of Industry.