Finance Committee on Oct. 29th, 2014

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you.

Thank you, Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Saxton.

Mr. Brison for five minutes.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you, Chair.

Thanks to each of you for your words of wisdom today.

Mr. Smillie, just a heads-up, the Department of Finance never likes anything that has what they call a tax expenditure, so that's nothing new, but they also don't have a mandate to consider the positive impact in other areas and that's where we come in. I think what you're proposing has merit in terms of addressing that job skills mismatch and increasing labour market mobility.

I have a question on another area where we have an opportunity and a challenge.

There will be 400,000 young aboriginal and first nations people entering the workforce in the next 10 years. If we've got it right that could be really good for the economy if they had the skills required for jobs today. If we've got it wrong we're in big trouble, and we seem to have it wrong.

Where do the building trades come in in terms of targeting that very vital part of our Canadian population?

[Christopher Smillie]

We're starting to work with the National Association of Friendship Centres; we're trying to get in touch with the folks who have the competencies or want to have the competencies to get involved in construction. The friendship centres are for urban aboriginal folks. We're coming up with an MOU with them and we're hoping to tap into the Canada job grant, those LMDA or LMA funds, in order to facilitate the training for these people so we can give them essential skills upgrading either at the friendship centres or our training centres across Canada and get them up to snuff in terms of what employers are looking for.

One of the key points is partnerships with the employers in those marketplaces, so Janet's members. You had Janet here earlier.... You need to work in conjunction with those companies in those local marketplaces where the projects are in order to hire local aboriginal people. It's upgrading basic skills.

[Scott Brison, Liberal, Kings—Hants, NS]

Ms. Deans, this question is from the same angle concerning the aboriginal or first nations youth opportunity or challenge. The Right Honourable Paul Martin has done a lot of work in this area in building business capacity within a group, including establishing the CAPE Fund.

Are you working with Paul Martin and others who are active in this space?

[Julia Deans]

Yes, we have first nations young entrepreneurs across the country, and some of them are most successful.

Right now we're doing a project in northern B.C. focused on rural and aboriginal youth to figure out how we can best work with those communities to target assistance and what special supports they need. We're going to take those learnings across the country.

We're also providing our stand-alone mentoring on a number of reserves where there are existing business programs. We are starting to develop stronger partnerships with the Canadian Council for Aboriginal Business and others to try to expand those programs.

It's a huge priority for me and for our organization.

[Scott Brison, Liberal, Kings—Hants, NS]

You mentioned two trends.

First is youth unemployment and underemployment. We have 200,000 fewer jobs for young Canadians than in 2008 before the downturn.

Second is the demographic shift and the small business transfer. It's estimated that 50% of the small businesses in Canada will be sold within the next 10 years. There is an opportunity. You see this opportunity of bringing those two together and helping young Canadians become the acquisitors.

Last night we met with Finance officials to talk about the budget implementation act. Future entrepreneurship was discussed as part of that, and the relationship with BDC. We were told by Finance Canada officials that you don't work with or necessarily invest in cooperatives as a corporate structure.

Why is that, when cooperatives could be an incredibly viable business structure to acquire some of these businesses?

[The Chair, Conservative, James Rajotte]

Let's have just a brief response, please.

[Julia Deans]

The big reason is very dilute ownership. The majority of our owners have to be 39 and under, so it's very difficult. But we've reached out to all the major cooperative associations across the country to see how we can help them through mentoring and fix the ownership in such a way that we can work together. So we have that under way.

[The Chair, Conservative, James Rajotte]

You have ten seconds.

[Scott Brison, Liberal, Kings—Hants, NS]

I would assert that the cooperative type of ownership for small businesses and for young people may be a very viable form of business ownership that I would commend to you.

[Julia Deans]

We're reaching out to them actively right now to figure out how to do that. So that's bang on.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brison.

We'll go to Mr. Keddy, please.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chair.

Welcome to our witnesses.

Mr. Smillie, I have a couple of questions on the labour mobility tax credit.

My first question is whether, as I would expect, this would be a non-refundable tax credit; that you couldn't actually accumulate funds, but would get money back from the government at the end of the year.

[Christopher Smillie]

Sure.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

It'd be against.... Tax is always....

[Christopher Smillie]

Sure.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Fair enough.

My other question is—and I just see a part of this that could be problematic.... I like the idea very much of restructuring EI benefits and styling them as some type of travel voucher, but the problem would be the same as with the first part: it would also take away any money that the employer is paying now, I would expect; it would almost have to.

Is that a bit of a disincentive for the employer to get people to travel now?

[Christopher Smillie]

If the employer is currently paying travel or lodging or a per diem, etc., that stuff wouldn't be claimable, obviously. This would be for anyone who's not getting that or for anything that's above and beyond what they're already receiving.

We have collective agreements that set this stuff out. It's not applicable to some people. But the most vulnerable people, whom we want to move around, don't have access to any of these things at all.

It wouldn't replace what the employers are doing; it doesn't take the onus of responsibility off employers to do some. But it spreads it around, and it means some people who currently can't get it would have access to it. You wouldn't be double-dipping, if that's what you're getting at.

I didn't put that—

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

The difficulty I see here is that employers have skin in the game right now, and this actually takes some of that out of the game. They wouldn't have that incentive there.

[Christopher Smillie]

But if you think about it—

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I'm not saying that they can't be overcome and we're not going to solve them right now in a few minutes, but I just see that as problematic. However, it needs further expansion. It's a good idea.

Ms. Julia Deans, the mentoring program that you're talking about, we had a group in here already this week, Startup Canada, which sounds to be similar. I don't want to compare the two, but they do essentially the same thing, mentoring young entrepreneurs and entrepreneurs across Canada.

You're looking for federal dollars. You're a non-profit organization. Your total investment of, I think, $12 million was the original ask?

[Julia Deans]

I'm sorry, what do you mean by original ask?

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

How much money are you expecting the government to put in and what's the return on jobs and individuals who would actually find jobs from that?

[Julia Deans]

Our average entrepreneur creates five jobs. Some have created 350 jobs. There is a return in terms of jobs created. There is also a return in terms of government revenues created and businesses created.