Evidence of meeting #16 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was services.
A recording is available from Parliament.
12:25 p.m.
Senior Vice-President, Government and International Development Institutions, SNC-Lavalin Group Inc.
I think you would have to admit that the relations between the governments aren't as warm as they have been in the past.
12:25 p.m.
Senior Vice-President, Government and International Development Institutions, SNC-Lavalin Group Inc.
It hasn't affected our business a lot because we haven't been doing a lot of business in China. We've been there for a long time. We would have liked to have done a lot more, but in fact we haven't seen a change in our business there.
12:25 p.m.
Senior Vice-President, Government and International Development Institutions, SNC-Lavalin Group Inc.
I've heard the sorts of stories you have, yes.
12:25 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
In terms of tax structure, you spoke of the need to reform our taxes to be more competitive. Most other industrialized countries have gone through some form of tax reform in the last while. If you look at the three principal forms of taxation, business income taxes and capital on investment taxes, personal income taxes, and consumption taxes, where should we be cutting taxes to be more competitive? Of those three, what would be your top priority to be more competitive and to help your business create more Canadian jobs?
12:25 p.m.
Senior Vice-President, Government and International Development Institutions, SNC-Lavalin Group Inc.
I'm representing a big corporation, so I would have to say the corporate tax. It's something we can see because we're in a competitive market, so we need to be on even ground with our competitors.
12:25 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
As an economist, Mr. Poloz, from a more broad-based perspective as a representative of EDC, where would you like to see the focus if you were looking at the three principal types of taxation? Should we be focusing on reducing and reforming business taxes, personal taxes, or consumption taxes? Where should the focus be to be more competitive?
You're an economist; I mean speaking as an economist.
12:30 p.m.
Senior Vice-President and Chief Economist, Corporate Affairs, Export Development Canada
As an economist, as opposed to the economist from EDC. It's usually not our mandate to comment on government policy--
12:30 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
I'm not talking about a Canadian context. I'm just talking in a general sense.
12:30 p.m.
Conservative
12:30 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
We're interested in the truth, Mr. Chair. We want to know so we can make good public policy. We have an economist here.
12:30 p.m.
Conservative
12:30 p.m.
Voices
Oh, oh!
12:30 p.m.
Conservative
The Chair Conservative James Rajotte
If you are comfortable, answer that, but if you'd rather, speak to EDC's point of view.
12:30 p.m.
Senior Vice-President and Chief Economist, Corporate Affairs, Export Development Canada
I can say something, which is that every economics textbook will tell you that the most efficient way to impose taxation is through consumer taxes. That's the least distortionary, etc., but that's not the only factor that comes into play when you design tax systems.
I agree with Mr. Blackburn that the competitiveness equation is best served by making sure that we have a level playing field. That's important. That's kind of a minimalist approach to things.
There are lots of distortions perhaps in our system and in other systems, but if the level playing field is there, then you can create jobs.
12:30 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
In terms of the evolution toward design, build, and financing of projects, what can we be doing here in Canada in terms of our own infrastructure needs that can help build your competitiveness in terms of the way we design our infrastructure programs, as an example?
12:30 p.m.
Senior Vice-President, Government and International Development Institutions, SNC-Lavalin Group Inc.
It's interesting. Canada has been slow in coming to the public-private infrastructure model. A lot of other countries are far ahead of us. Obviously, it gives us a capability to compete internationally on these projects having some experience at home, because each one is different. There is no cookie-cutter model. So we've been involved in building and operating public-private infrastructure now all around the world. We have a fair number of projects like that in Canada as well, and it's very helpful when you can work in your own country as the base for taking your skills abroad.
12:30 p.m.
Conservative
12:30 p.m.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Good day, gentlemen, and thank you for being here.
Mr. Poloz, you stated that when we sell an airplane, we are also exporting services and expertise at the same time. What I find disturbing about that statement is the realization that increasingly emerging countries will be turning out more university graduates than Canada and that these graduate will have the expertise and will earn lower salaries.
Have you given any thought to what this could me for Canadian university graduates? Do you have an idea of the types of services that will emerge on international markets in the years to come? I would not want us to be facing a problem like the one we have in the manufacturing sector, where we rested on our laurels for too long without investing enough money in R&D, only to see companies ultimately close their doors.
12:30 p.m.
Senior Vice-President and Chief Economist, Corporate Affairs, Export Development Canada
Thank you. Admittedly, emerging countries are turning out more and more graduates who will compete in some respects with our graduates. Obviously, for years, innovation was driven by competition. Competition is not bad for economic growth. In fact, the Canadian economy has always been able to compete and it will also be true in this instance.
Service sector companies such as SNC Lavalin are beginning to recruit, using a global model, to use these resources to promote growth in their global operations. This is not so very different from the manufacturing sector. The Canadian economy has seen major changes in the past 50 years and surely there will be more changes ahead in the next 50 years. Gradual change is positive for our standard of living. Some jobs may be lost here, while new ones may be created elsewhere. The transition is seen as a positive one.
I am not worried about these changes. In fact, change is a sign of development in India and China, and down the road, they will become major buyers of our products, just as Japan is today. The situation was different 30 years ago. Japan was more of a threat to us. Now, it is seen as an important nation.
12:35 p.m.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Am I to understand then that when we export our products, experts will be on site, whether in China or in India. We will not be sending our experts to oversee product development, like SNC Lavalin does. It sends its experts to work with other companies and to oversee development.
12:35 p.m.
Senior Vice-President and Chief Economist, Corporate Affairs, Export Development Canada
That is correct. As I said, this is a form of competition. However, we will always find our niche market that will help sustain our growth. Perhaps this will be achieved through a partnership or through a competitive process, but the focus will always be on having very specialized knowledge. I am sorry, but that is really the only answer that I can give you. That is how is has always been.