Evidence of meeting #82 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
A video is available from Parliament.
6:20 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
We were talking about green energy. Mr. Phelps, do you feel that the government has done enough in terms of moving more towards a green economy, of moving in that direction in terms of looking into what we can do in the future also?
6:20 p.m.
Executive Director, Canadian Association of Social Workers
Innovation-wise, I think the government can invest more. It's definitely not our area of expertise, but we know that other jurisdictions—the United States—are heavily investing in green technology and green energy. I recognize from this panel that we have high resources in the west that have an appetite for today, but I think planning for the future, and not necessarily just for today, is something the federal government could do more of.
6:20 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
I'll come back to you, Mr. Thurlow, if I have a bit of time.
For the Calgary Chamber of Commerce, regarding net benefit, we have been asking for a long time for the government to actually give a definition or a clarification. In this case, with the deal with Progress and with Nexen, there were some losses in the markets, and some pension funds lost money on that front too. Do you think those moneys might not have been lost if we had a clear definition of what net benefit is?
6:20 p.m.
Director, Policy and Government Affairs and Chief Economist, Calgary Chamber of Commerce
Well, without a doubt, the recent decision on the Progress Energy-Petronas piece did create some skittishness in the markets. As a result, we saw that reaction. That's a confidence reaction. A lack of clarity in the style with which the announcement came forward has really sort of given the market a little bit of jitters in that regard.
I think a little bit more robustness into the process and clarity regarding the decision-making framework could have avoided a lot of that, because the proponent could have come forward with a better understanding of how their proposal would have been evaluated in the context of net benefit and of the parameters under which they would need to check in order to be successful. Without a doubt, I think it's critical.
6:20 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Thank you very much.
Mr. Thurlow, you mentioned that there is a problem right now with product being shipped to the U.S., where value is added there and then it's sold back to us here. I think we're feeling the same thing regarding fossil fuels. We're shipping away our resources somewhere else, they're putting in all the value-added and creating the jobs, and then they're selling it back to us.
Can you tell us why the government hasn't done anything, or what is limiting you to actually move forward to have things done here in Canada?
6:20 p.m.
President, Canadian Renewable Fuels Association
I agree with many of the parts of your question, but there's some of it that I don't agree with. I think the government has done a lot, particularly for the renewable fuels sector.
The program I'm talking about is a very modest change. Applications were made for reasons that are unique to each one of the individual applicants. The build-out did not happen. As a result, we'd like to see that program money made available again so that projects that we know are ready can move forward. It's true that right now canola growers are sending their product into the United States to have it upgraded and sent back. We'd like to see the program reopen to prevent that from happening—so that the logistical costs are cut down for our farmers.
6:20 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
I'll come back to you, Mr. Phelps.
I don't know if you saw the flyer that came out from Kelly Block, the MP for Saskatoon—Rosetown—Biggar, regarding the refugee health cuts. I know the government is really proud, and MPs on the other side are really proud. Can you tell us what your position is regarding those refugee health cuts?
6:20 p.m.
Executive Director, Canadian Association of Social Workers
Social workers have publicly come out against the cuts to the interim health program for refugees. I think there might be some misrepresentation of the cuts, in some regards, and we're thankful that the federal government has put some of the funding back into place.
I think we as social workers look to raise the envelope for all rather than to lower it for others. Recognizing that a person on social assistance in Canada is the same as a human who is a refugee in Canada, and meeting those basic needs....
In the long run, it will be better for the economy if we ensure that people actually have the health care services they need. If they are not to stay in Canada, then it's an investment that is realized on a human scale, not necessarily on a scale that's just ensuring—
6:25 p.m.
Conservative
6:25 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you, Chair.
Thank you, Mr. Phelps, for that answer. I think that was fairly obvious, but I just want to clarify something that I think you made clear as well. The program would see to it that refugees have the same coverage as other Canadians, not more, not less: that's correct.
6:25 p.m.
Executive Director, Canadian Association of Social Workers
The coverage that is extended is really extended to people on social assistance in Canada, and is no more and no less than what other Canadians receive.
6:25 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
And I think that's what we're trying to say. Thank you for that. I appreciate that.
Mr. Sinclair, you talked a little bit about FedDev and the $1 billion. A total of 60% has been used, so there is still some money coming.
Can you give us some examples of successful applicants and how they were able to expand businesses and expand employment in your region?
6:25 p.m.
Vice-President, Greater Kitchener Waterloo Chamber of Commerce
I know there's one firm, called Miovision, that has received a couple of rounds of funding. They do information technology application to municipal traffic planning. Probably in the last three years they've gone from 20 employees up to 50 employees. Again, it's in that IT sector. University of Waterloo graduates came up with an idea in university, and they were able to carry it forward and commercialize it.
It's not just in the business sector, I think. The universities and the community colleges across southern Ontario particularly have benefited as well, not only in terms of funding directly to the institutions but also the partnerships they've developed with private sector partners. Again, a lot of those are in the knowledge economy—high tech, biotechnology, and of course biotech.
Like you, we're from southwestern Ontario, and agriculture is important to us. That's a key area. From our perspective, I think the three areas that we're interested in are IT, agriculture, and manufacturing, probably similar to your riding as well.
But yes, the successes are pretty significant.
6:25 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Yes, you've done a good job, I can tell. I think you should be commended. When I drive through your town every Sunday, and come home every Friday, there seems to be more and more traffic. That has to be an indication.
6:25 p.m.
Vice-President, Greater Kitchener Waterloo Chamber of Commerce
It's because of a good chamber of commerce, obviously. That's what drives everything.
6:25 p.m.
Voices
Oh, oh!
6:25 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
I want to go to Mr. Leach and to the Calgary Chamber of Commerce.
In my riding of Chatham-Kent—Essex, we have seen a significant decline in manufacturing. We all know—we've spoken about this a number of times—the importance of the extraction industry and how that has generated huge revenues. Indirectly, I think, 20% of the GDP can be attributed to what's happening in the extraction industry.
Much of that, of course, is in your neck of the woods. I wonder if you can tell us if there are some programs that are in place to....
We have a vast array of very qualified people in the manufacturing sector. I'm wondering if there is communication, and if the federal government can help maybe improve that, between the cities so that a community like Chatham-Kent will know what's available, what's being called upon by the industries in your area, and can subsequently take advantage of that, and we can all benefit.
6:25 p.m.
Director, Policy and Government Affairs and Chief Economist, Calgary Chamber of Commerce
I guess Gary passed that one over here.
Yes, without a doubt, I think there are a number of initiatives going on. In thinking about this piece, we know there are efforts from Alberta companies, and our City of Calgary as a matter of fact, to reach out to Ontario communities to promote Alberta as a destination and a place of prosperity and job growth. Those do happen. We have Calgary Economic Development. The economic development arm has a specific initiative in that regard.
We are moving forward collaboratively as well, as a group of associations and industry professionals, trying to raise awareness of the labour challenges and the various opportunities out there, from strengthening the immigration piece, tapping into underutilized talent.
The last piece I'll share with you relates to...actually, from a federal government perspective, there are two things. The first is reforming the EI system: remove the distortions in the market, encourage people to migrate from areas of high unemployment to areas of low unemployment. Secondly, it's about conveying the message of the strength of the Canadian economy as a whole and the role the energy sector plays in that. I think it's important. Often perception is reality, and if we can ensure that the message is positive and collaborative across our provinces, I think that would go a long way to helping people with their mindset about moving to areas such as Alberta for employment opportunities.
6:30 p.m.
Executive Director, Small Explorers and Producers Association of Canada
The private sector is doing a lot, too. We have buyer-seller forums in Alberta, where companies from Ontario and Quebec come to look for opportunities to sell products to Alberta-based companies.
6:30 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Van Kesteren.
I want to take a final round. I know we're going a few minutes over our time.
I will start with you, Mr. Leach. In your opening statement, you mentioned the challenges in raising capital. You talked about flow-through shares, and then you made two recommendations. Ms. McLeod wanted you to expand on those two recommendations for the committee. Could you take a minute to do that?
6:30 p.m.
Executive Director, Small Explorers and Producers Association of Canada
Thanks, Mr. Chairman. You know flow-through shares are an issue that we promote as best we can.
We had two specific recommendations on improving the flow-through share regime. One is that the annual Canadian development expense conversion limit to Canadian exploration expense tax treatment be increased to $4 million a year from $1 million per company; and secondly, that the taxable capital test to access that conversion from CDE to CEE tax treatment be increased to $50 million from $15 million. Those are the two that are linked. We think it would make the opportunities a bit more flexible for junior oil and gas companies and take advantage of.... We have to deal with the fact that the costs to invest in oil and gas have been going up and up and up. These limits need to be increased to make the program more viable.
6:30 p.m.
Conservative
The Chair Conservative James Rajotte
For clarification, right now the sector raises about 2.5% by flow-through shares, but you're saying that because of the lack of financing from other areas, you're hoping to increase that percentage, to increase the overall amount, obviously.
6:30 p.m.
Executive Director, Small Explorers and Producers Association of Canada
Yes. These numbers vary considerably. You can see how much the amount of equity collapsed from a year ago—again, a lot of it due to commodity prices and things like that. But 2%, 3%, 4%, probably, is about how much the flow-through share program is of the total amount of equity raised each year. It's particularly important for Canada's home-grown smaller startup oil and gas companies. We think it's a way to get Canadians investing in their own oil and gas development, as it does for Canadians investing in junior mining as well.
We think the program has a lot of merit and deserves a serious look to see if it can be made better.
6:30 p.m.
Conservative
The Chair Conservative James Rajotte
Okay. I appreciate that.
I want to move on to Mr. Sinclair, on the manufacturing issue. You pointed out that Minister Flaherty had it in the 2007 budget, but before that, a couple of us were members of an industry committee that recommended it unanimously—in fact, by all parties. I always believe strongly in committee work, so I think that was some excellent work.
You're absolutely right. It was recommended by the Canadian Manufacturers and Exporters and a whole host of other organizations.
The challenge is—and members of the opposition will point this out—if you have corporate tax reductions, if you have accelerated capital cost allowance...the challenge is for industry and companies to show that they are investing as a result of these initiatives. You've stated it's working. If you can tell your member companies that the more evidence we have as members of Parliament to go to the finance department and to say extend this or make it permanent.... They will raise the argument: what evidence do you have as parliamentarians that companies are actually making investments as a result of these changes, specifically with respect to the accelerated capital cost allowance?
Do you want to address that issue? I know we're going to get challenged on it as MPs if we recommend it, so what would you say in response to that?