Finance Committee on Dec. 7th, 2007

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

What happened?

[Pierre Thibaudeau]

The schools were connected. It works.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Should the program's funding be increased or should its scope be widened?

[Pierre Thibaudeau]

The program should also include cellphones. We went back to Industry Canada, but it seems that this is not possible.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Fine. Thank you.

Mr. Brenders, I'm sorry I missed your presentation, but I'm familiar with your organization.

Can you quickly take me through how the mechanism works for biotech when it comes to R and D? You don't necessarily get any of the money back. It's all the people you fund or the people whom you partner with. Is that correct?

[Peter Brenders]

It's a mix. When biotech companies get the R and D credits, when they come back, they will come to the company. But the company will either spend it directly within its own staffing or will invest it back into the research institutions, whether it be outsourcing to NRC, to academic labs, or to other partners. Any money that comes back from an R and D refundable credit is 100% spent, again, in terms of research dollars.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

What about the money that's not being returned? There's a whole bunch of money in reserve that is not being refunded because it's non-refundable.

[Peter Brenders]

It just sits there and collects. It's of no immediate use to the companies, because if you look at the bulk of Canada's companies, they all spend 100%. They're not making money yet. They're not profitable. They're looking forward to paying taxes one day.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I don't mean to interrupt you, but our time is limited.

The argument we've been hearing from Finance is on the fact that they're hesitant to refund the money to all these corporations because they're not convinced the corporations will reinvest that money back here in Canada.

[Peter Brenders]

I guess there's a difference. On what we hear from Finance, their assumptions are a little different. They're talking about really large profitable companies.

For refundable credits, we're talking in terms of keeping the same income thresholds. If you're a large profitable company, you're not going to see an additional refund. We're not talking about an historical rollback. We're talking about a go-forward basis. We're focused on the small emerging companies.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Curran, very quickly in terms of the indirect costs, you're asking for 40%. In your brief, and you explained why you want to go from 25% to 40%, but is it really going to make a difference? Where do you presently get the money to cover the indirect costs?

[William Curran]

Each institution has its own percentage of the indirect cost. There is no global percentage that comes directly to the libraries. Is that what you're asking--what comes to the library?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Yes.

[William Curran]

We're aiming for 40% because we believe that 40% is what should take place, given the increasing costs of access to scholarly information, given the amount of scholarly information out there, and given the amount of research that is taking place in the universities and the institutions.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

Mr. Ryan, how are you presently funded?

[Prof. Dominic Ryan]

The operation from the research side is funded jointly by NRC and NSERC. The reactor itself is run by AECL, so they fund it through that crown corporation.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Do you get outside funding from private corporations? Is it 100% from those two? You can't partner? You were talking about uranium, the fact that you don't get any funding from private companies that are uranium producers.

[Prof. Dominic Ryan]

The AECL facility is a commercial facility run as part of the support for the CANDU program. The research reactor is part of that support. As neutron scanners were passed.... We just use the facilities and we get the neutrons for free. And we're funded by NSERC and NRC to provide that access and to support the organization.

The isotope business is funded out of Nordion. It's a diverse multi-user facility that many different groups are built around, but trying to get one organization to come front up with $800 million over eight years to build a replacement has proved very difficult. It touches on so many different departments that no one will take it and champion it and bring it forward.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

I want to thank Ms. Noble and Ms. Dorner and Ms. Laidlaw-Sly. A lot of the comments you made I think we agree with, our party especially. We put some moneys toward the Canada Council for the Arts and I think we had promised them additional moneys, and I think we're a little bit behind. You're asking for $100 million for the council, and I think it's money that's required.

Ms. Noble, my question to you is this. In your brief you talk about tax breaks that are being given to corporations. Can you come up with a specific example? We'd like to see what specific example you have a problem with, what the Government of Canada is giving in terms of tax breaks that corporations shouldn't be receiving.

You can think about that. If you have the answer now, I'll take it. But if not, you can forward it through the clerk.

[Lorette Noble]

I will definitely look into that and forward it to you. It was specifically targeting the Canadian mining industry working abroad and being facilitated to do things through consular services and possibly tax breaks. But we will look into it and get it to you.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Great, thank you.

Thank you, Mr. Chairman.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll now move on to Monsieur St-Cyr.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you, Mr. Chairman. Thank you to everyone who came to Montreal.

Since this is our last day of consultations, I would like to take this opportunity to thank the committee staff, who helped us all week, be it the people sitting at the table, the interpreters or the people responsible for logistics. Our staff has done an excellent job, and thanks to them we were able to travel through Canada and Quebec to meet with the people and to better understand their reality.

The situation Mr. Thibaudeau described was quite striking, interesting and real. In fact, it deeply affected me, because my parents live close to Saint-Donat, in the forest near a tall mountain. When I visit my father, he never fails to mention that he is “sick” of low-speed Internet and that if he wants to speak on his cellphone, he has to stand near the window, on tiptoe while smiling and without moving his head.

To a large extent, people have to deal with real problems. I also liked the parallel you drew when you said that Canadians have to be present everywhere throughout the land. It was as if the idea came to me spontaneously, and I had to smile when you talked about the frigates we are buying to protect our sovereignty in the Arctic, when in fact what we need to do to be present everywhere is to help people live and stay in their communities.

You did not ask for any specific or concrete measures in your brief. But we need your help to make recommendations which will be contained in the report we will present to the House. We hope the minister will read it. What would you like to see in this report? Do you need grants, tax credits or incentives? What would you like us to do?

[Pierre Thibaudeau]

I talked to the phone company. The problem is one of capital. An antenna costs $500,000. The price is supposed to come down as technology progresses. But the company still does not want to invest that much money. Part of the purchase price of the equipment will have to be directly subsidized.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

So you're asking for investment in infrastructure when needed, and not for operational costs to be subsidized. So you're saying that the government should give money to the company so that it can install an antenna.