Finance Committee on Oct. 28th, 2014

[The Vice-Chair, NDP, Nathan Cullen]

Thank you, Mr. Wilkes.

Mr. Allen, you have six and a half minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair. I appreciate those extra 30 seconds.

Thanks to our witnesses for being here. I appreciate all your kind comments with respect to getting back to business in committee and in the House.

I would like to start with the Canadian Chamber of Commerce. Mr. Brakel, I'd like to pick up on the innovation box a little bit. If I heard you right—I won't put words in your mouth—I think you said “in lieu of” the SR and ED. I guess I just want to push down on that a little bit more.

We heard from our witnesses yesterday that there are different ways that this innovation box has actually been implemented in different countries. It's simply a matter of one way versus another. When I look at a small business, they might do a lot of patent work with respect to a process within their business, and that doesn't lend itself well to a product that they're actually selling. With that in mind, they would never be able to take advantage of this if you took out the SR and ED completely. So I'd be concerned that you'd say “in lieu of”, because that would completely eliminate that away from them.

How have other countries been successful in implementing it? If you're going to pursue this, it seems to me that it would take a little bit of time to figure out how to implement it, and to implement it properly.

[Hendrik Brakel]

That's actually an excellent point because the European Union is doing a review of how these have been looked at. There's a lot of research going on to see how these have been put in place. We think if the definition of an innovation box is sufficiently broad to talk about potentially providing tax shelters for certain types of processes, certain broader innovation.... In other countries they call it a patent box. So it's any revenues derived from a specific patent. Our view is that if it's broadened to certain types of processes, it can be beneficial to small business as well. But you're right that as part of the ultimate design, which we haven't been that specific about, it would be prudent to hold some component of the SR and ED, particularly for...[Inaudible--Editor].

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I guess the point would be that we need to think about this a little bit more before we go down that road.

[Hendrik Brakel]

Absolutely. You're right.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

I'd like to ask you and Ms. Pohlmann about the following issue. With respect to labour market information it seems to me that one of the common complaints I get from small businesses in my riding is about StatsCan. StatsCan drives them absolutely nuts with the surveys that keep coming in. In a lot of cases in these small businesses it's the owner, or someone who responsible for running the business, who's actually has to fill out the forms. Maybe a bigger business has an easier time of doing that. I don't think there's any question that we'd like to see more labour market information and ways to do that, but have there been ways to successfully to collect this information without infringing on the small business owner as the one who has to provide it all the time?

[Corinne Pohlmann]

I would agree that Stats Canada is one of the bigger red tape burdens that small businesses have to face given that they have a requirement to fill out often a 20 to 30 page survey. I think there are a lot of other ways that data can be collected. It can be shared more often between government departments, because sometimes they're being asked the same questions multiple times. I think there can be a better job done at understanding of what's maybe being collected through provinces, through associations, through other means. We as an organization have a huge amount of data that we are also happy to share. So I think there are other ways of getting at some of this information, but I do believe that we need to look a little bit more at what kind of labour information is missing and make some efforts to put that in place.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Brakel, do you have any comments on that?

[Hendrik Brakel]

Absolutely. The one thing we've heard from some of our members is that small business is more dependent on this type of labour and market information than others and big businesses can go out and get their own information, or pay for it. Hotel chains have enormous amounts of data they can get. We actually have resolutions at our annual general meetings where we're small businesses are saying, we really need this data, it's an important source for us. So we absolutely agree with Corinne that it is a burden, but it's actually small business that benefits from some of that free government data from StatsCan.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Ms. Pohlmann, I'd just like to follow up on something. You talk about job vacancies and say there are a lot of job vacancies. Do you have a wage profile for those job vacancies?

[Corinne Pohlmann]

In our last what we call “Help Wanted” report, which we do on a quarterly basis, we did compare the average increase in wages, because it's part of a monthly thing that we do as part of the “Business Barometer”, where we ask about the average wage and price increases they are foreseeing for their companies for the next three months, and we compare those with the companies that said they had job vacancies. What we found was that those with long-term job vacancies actually had higher increases in pay. So they were trying to increase their salaries to attract more people. Again, I don't have exact numbers, but we know that the actual amounts they were trying to increase salaries by for those vacant jobs were quite a bit higher across the board. It didn't matter by sector, it didn't matter by size, and it didn't matter by region. It was generally across the board: if they had longer-term job vacancies, they were much more likely to have higher salary increases than those that did not.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Wilkes, would you concur? With the vacancies in the retail sector would it be the same kind of thing?

[David Wilkes]

We're seeing the vacancies concentrated in geographic “hot spots” as we refer to them—areas that would come as no surprise to the committee—as well as in specific skill areas, a few of which I mentioned earlier. We believe there is an opportunity to look at that and to ensure that as those vacancies are identified, the programs and policies that have been put in place by the government, such as the temporary foreign worker program, allow for those unique needs to be met. From a wage perspective certainly, we do know that it is not necessarily the salaries or wages that are causing the vacancies to remain. It's just the sheer lack of availability of people.

[The Vice-Chair, NDP, Nathan Cullen]

Thank you, Mr. Wilkes.

Thank you, Mr. Allen.

Mr. Rankin, go ahead for six and a half minutes.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

Thank you to all of our witnesses.

First of all I would like to welcome the Green Budget Coalition back. It's nice to see you again, Mr. Van Iterson. I wanted to pursue a few of the themes you were raising. You had three overarching strategic themes and a number of recommendations. Perhaps I'll invite you to elaborate on any you'd like, but you mentioned clean energy and climate change, meeting our biodiversity targets, and ensuring healthy communities. You mentioned specifically something about radon, and I think you said it was the second-leading cause of death by cancer if I'm not mistaken. Is that correct?

[Andrew Van Iterson]

It's the second-leading cause of lung cancer in Canada.

[Murray Rankin, NDP, Victoria, BC]

What specifically were you recommending in that regard then?

[Andrew Van Iterson]

We're recommending that a tax credit of up to $3,000 be available to Canadians who incur costs when a certified agent ascertains that the radon in their homes presents a risk to their health. They would be eligible for a tax credit for those costs of up to $3,000.

[Murray Rankin, NDP, Victoria, BC]

Thank you.

My next question is for Ms. MacEwen from the CLC.

Welcome. First of all I'd like to thank you for your leadership on pension reform and your recognition of the importance of CPP for all of the very powerful reasons you set out in your material. The specific question I have though is with reference to the migrant worker commission concept that you elaborated on in your written report. I don't think you had a chance to speak to it very much here today. You recommended strict enforcement for recruiters and employers and also the notion of a migrant worker commission with enforcement powers. Tell us a little bit about that.

[Angella MacEwen]

In the written report that we sent in for the prebudget consultation, we looked at the example of Manitoba and what Manitoba has been doing in order to both enforce standards for migrant workers and also investigate examples of wage theft or exploitation by these third party agencies that you talked about. That's been very successful in Manitoba, and we think it's an example that other provinces and the federal government should look at to protect migrant workers and make sure that these sometimes very vulnerable people aren't being exploited. We hear in the news all the time about people who have paid thousands of dollars to some third party in order to get a job, and sometimes that job isn't even there when they arrive.

[Murray Rankin, NDP, Victoria, BC]

My next question is for Mr. Brakel of the Chamber of Commerce. I was pleased, just as my colleague Mr. Caron indicated, at just how much we're in agreement with many of the recommendations you've made today regarding investment in infrastructure and the need for better labour information because, as the TD recognizes and you recognize, the Government of Canada just isn't doing the job.

Innovation was the thing that caught my eye, and I want to just ask you about a recommendation that I had heard was coming in your materials but that may not have been as clear. As you may know, there's a conference with university presidents. AUCC is here in Ottawa meeting with Israeli innovators. One of the ideas that have been bandied about, which I'd like your reaction to, is the notion that paid interns and co-op students who are, let's say, at universities go to work in a small business for a period of three months or so and bring any insights that modern research has to contribute to that small business. But there's a gap and sometimes people hesitate to spend the money on bringing these interns in. So the suggestion was made that there be either a subsidy or a tax credit of perhaps $1,000 a month for the three months that a student would be there in order to provide that kind of expertise to the small business, which might otherwise hesitate, as well as provide some jobs for people trying to enter the workforce. Do you have any reaction to that idea?

[Hendrik Brakel]

Absolutely we think these types of programs giving students the experience to make a decision are a great idea. We just put out a report a couple of weeks ago on how hard it is for students to bridge going from university into the workforce and how it's something we have to do a better job of. So absolutely that kind of stuff and that real world experience are great.

[Murray Rankin, NDP, Victoria, BC]

Ms. Pohlmann, do you have any reaction to that recommendation? Would that fit with your membership?

[Corinne Pohlmann]

We would have to test it with our membership, but knowing what we know, they do like co-op programs. They find them very useful. The same is true for internships, and they would love to be able to attract more of them. They often feel though that it's hard for a small business to attract them because they tend to be taken up by the big guys and the governments and so forth.

[Murray Rankin, NDP, Victoria, BC]

So if a subsidy or some kind of tax credit were more available, especially in small towns, that would serve that dual purpose I referenced?