House of Commons Hansard #140 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was c-38.

Topics

Government Operations and Estimates
Committees of the House
Routine Proceedings

June 13th, 2012 / 3:20 p.m.

Liberal

John McCallum Markham—Unionville, ON

Mr. Speaker, I move that the third report of the Standing Committee on Government Operations and Estimates, presented on November 23, 2011, be concurred in.

I would like to advise you that I will be sharing my time with the hon. member for Winnipeg North.

This refers to the third report of the Standing Committee on Government Operations and Estimates, and it involves government support for small and medium-sized enterprises.

I think we all know that small and medium-sized enterprises play a crucial role in our economy. They account for something like 98% of all firms, 60% of all jobs, and 70% of all net new jobs, so anything government can do to support small and medium-sized enterprises is very positive and helpful.

We decided to examine two cases and we questioned witnesses to determine whether these programs were good or bad, whether they should be renewed and whether they should be changed in any way.

One of these items that we examined was the Canadian innovation commercialization program. This was a program designed for small and medium-sized enterprises, whereby they could put bids in for government support to help fund their innovation, and then their innovation would be examined and commented on by government departments.

We had a number of witnesses both from within the government and outside the government, and the general consensus was that this program was a success. It was helping Canadian small companies to innovate, be successful and improve productivity.

The program was to run for two years. In our committee report, we recommended that this program be made permanent. The government, in its answer, gave a somewhat ambiguous reply, but we then learned in the budget that the government had indeed cancelled the program.

It is ironic that the government should have cancelled the program, because just today a new OECD report came out on the Canadian economy, and the primary recommendation was that Canada had to do something and get its act together to deal with our very lacklustre performance in the areas of productivity and innovation.

This program that the government killed was precisely designed to help small businesses be more productive and innovative. All of the witnesses said that this program was having success, and yet the government chose to kill it.

As I have said before, often there have to be some reductions in government expenditures. We on the Liberal side do not object to that, but when the Conservatives focus their cuts on science, on Statistics Canada, on knowledge-generating, innovation-generating activities of government, then we certainly take exception to that.

Canada's productivity has lagged since 2002, I believe, which is a long period of time. It is actually lower today than it was 10 years ago.

All kinds of new programs and new activities should be considered to improve Canada's very dismal productivity and innovation performance. The fact that the government chose to eliminate one of the more successful programs in this area is certainly not good news for Canadian innovators and Canadian small businesses in general.

The second case that we examined was the Office of Small and Medium Enterprises.

Government can be very difficult to understand for a small company without massive numbers of employees, particularly in the area of procurement. The idea of this agency is that it could help small and medium-sized businesses have access to government procurement. Government procurement, as we have heard in recent weeks, has been a total flop in certain areas, as in the case of the F-35s, but it involves billions of dollars.

It is important that small and medium-sized businesses have access to these programs since it is difficult for them to obtain all the required information. It is important that a government program help these businesses find the information and participate in government procurement.

I know from my time in government that often these procurements are very large. An effort is made to bundle the smaller components to make them into a bigger contract.

Again we heard from stakeholders that this program was a success. We heard that there were certain things that could be done to improve it, but that over time the agency had been increasing the number of companies benefiting from its activities and increasing the amount of procurement going to the smaller companies.

The committee report was unanimously concurred in. All political parties agreed. We are disappointed that the government cancelled the first program that I talked about because, in this day and age, Canada needs more innovation and productivity, as the OECD said today.

By cancelling this program, the government is negatively affecting the productivity and innovation of small and medium-sized businesses in Canada.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:25 p.m.

Conservative

Bernard Trottier Etobicoke—Lakeshore, ON

Mr. Speaker, I am somewhat aghast at what the hon. member for Markham—Unionville just said about the Canadian innovation and commercialization program being abolished.

I will read from the budget itself: “Economic Action Plan 2012 proposes...[an additional] $95 million over three years, starting in 2013–14, and $40 million per year thereafter to make the Canadian Innovation Commercialization Program permanent and to add a military procurement component.”

Perhaps the member for Markham—Unionville did not read the budget. It states right there that it is to be made permanent. I was part of that committee and was delighted to work with that member to make that recommendation.

Did the member read the budget, and does he have any comments to make to correct his statement that the program has been abolished?

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:25 p.m.

Liberal

John McCallum Markham—Unionville, ON

Mr. Speaker, I do remember doing the report, and I also enjoyed working with the hon. member on that report.

I would have to go back and consult with my colleagues. It seems I may have been misinformed on this issue, but I will check.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:25 p.m.

Liberal

Joyce Murray Vancouver Quadra, BC

Mr. Speaker, there have been a litany of actions on the part of the government that have been difficult for small and medium-sized businesses and very few to benefit small and medium-sized businesses.

One of the recent initiatives that retailers tell us is harmful is that the doubling of duty-free shopping has not been accompanied by the removal of duty on those goods when they are purchased by retailers in Canada. As a result, they are now at a huge disadvantage, as a lot more people will be going across and spending their dollars in the United States instead of through retailers in Canada.

Can the member tell us if there is anything in this budget that is positive for small businesses?

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:25 p.m.

Liberal

John McCallum Markham—Unionville, ON

Mr. Speaker, my colleague from Vancouver Quadra does a lot of work involving small business. She is our critic in that area. She raises a very good example in relation to this new measure that allows Canadians to buy more south of the border.

I know that many retailers, particularly those with operations relatively close to the border, are suffering immensely from this move and have the potential to suffer more, so I certainly would agree with her that this measure is not good for small business.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:30 p.m.

Liberal

Massimo Pacetti Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I know the hon. member is an economist and knows a bit about finance. He sits on the finance committee and is the former finance critic.

The government always boasts about being able to introduce certain tax reductions. All it has done to boost productivity, as the member's speech was focused on productivity, was to extend the accelerated capital cost allowance. However, companies have been asking for it to be extended it for longer periods of time, because the purchase of large machinery and equipment requires a four- or five-year commitment down the line. I wonder if the member is in agreement with this.

As well, the government is boastful about reducing taxes, but what we have actually seen is an increase in unemployment premiums, an increase in income tax rates in the first years of this government and increases in all kinds of other hidden taxes. I am wondering if that adds anything to productivity.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:30 p.m.

Liberal

John McCallum Markham—Unionville, ON

Mr. Speaker, I certainly agree with my colleague that the government keeps talking about cutting taxes and has cut a few, but it never tells us when it raises taxes.

I remember that the government raised the income tax rate back in 2006, but claimed that it had actually cut it. The income tax form that every Canadian filled out made it abundantly clear that the rate had gone up, not down. The government did not seem to know the difference between up and down.

I think the EI premium hike that started at the beginning of the year was $600 million, if I remember the figure correctly, and EI premiums, as we all know, are a tax on jobs. The government chose to increase the tax on jobs to the tune of $600 million. All of the experts agreed that premiums should be raised far more gradually, over a longer period of time, and not increased at this time of what the Prime Minister calls a “fragile economy”.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:30 p.m.

Liberal

Kevin Lamoureux Winnipeg North, MB

Mr. Speaker, it is a pleasure to rise on this particular issue.

For the most part, the government has been fairly negligent in dealing with an industry that is critically important to all Canadians. When I talk about industry, I am referring to small and medium-sized businesses, the entrepreneurs who, ultimately, many would argue, are the backbone of our economy. The amount of contributions to future potential job growth that is within those small and medium-sized businesses is phenomenal. When the government does not take this industry responsibly as an issue, we lose opportunities.

I want to focus on that because we had a report that the Standing Committee on Government Operations and Estimates brought forward. The hon. member for Markham—Unionville is quite familiar with that report as he is one of the co-chairs of the committee. The report details the importance of procurement. The Government of Canada spends billions of dollars every year on procurement and on a number of contracts. There is a very vital and important role for small and medium-sized businesses and entrepreneurs to be engaged in those procurement contracts.

We want to emphasize just how important that is to the government. We, in the Liberal Party, have acknowledged it. Years ago, we set up frameworks to ensure that small businesses would have the opportunity to get engaged in those procurement contracts. We look forward to seeing a more progressive government that will ultimately see small and medium-sized businesses more engaged.

I will cite a couple of specific examples. I could talk about the F-35 and military procurement and the manner in which the government has made a mess of the whole procurement process. For example, why was there no tendering process for the F-35? To what degree could we have ensured there would have been bundled small contracts incorporated into these larger contracts when government issues billions of taxpayers' dollars on one procurement?

Those are the types of things we need to look at and give good and detailed diligence to. There is a great deal of merit to breaking up these larger contracts that are bundled into one.

There are industries across Canada. I have had the opportunity to tour a couple of facilities in Winnipeg where mobile military tracks built are built. These are very small components. Those are bundled into a larger contract. These are good quality jobs. Those are the types of things that we need to be very much cognizant of.

That is why even in government expenditures, the amount of dollars we spend every year on these procurements, there is a vital and important role these small and medium-sized businesses play. We in the Liberal Party have acknowledged that role. We want to encourage the government to review the budget process it has been entering into over the last number of years, which has denied many of these small and medium-sized businesses the opportunity to legitimately participate, thereby losing millions of dollars or potential contracts, which prevents jobs from being created. The government needs to approach it in a much more open-minded way.

I think of Winnipeg's garment industry. I had a wonderful tour of Peerless Garments Limited. Peerless has been one of many different businesses in Winnipeg that has used government procurement contracts to sustain good quality jobs in the city of Winnipeg. It has done that and it has been very effective.

I could talk about Peerless, StandardAero or the aerospace industry as a whole. We can see that in the relatively smaller communities like Winnipeg, compared to Toronto, Mississauga, Montreal, Vancouver or Calgary, and then we have many of the medium-sized cities such as Edmonton, Halifax and St. John's, but all of these communities should have the ability to compete for some of those government contracts.

There has been some progress. For years the Martin and Chrétien government talked about how important the Internet was. I can recall having discussions with the former president of the Treasury Board, Reg Alcock, on how important he thought it was for procurement contracts to be done on the Internet because that technology would be better able to provide opportunities for all small and medium-sized businesses to participate in government contracts.

At the end of the day, the more aggressive and committed the Government of Canada is at widening the field and ensuring that these small and medium-sized businesses are in a position to compete for those tendered contracts, the better for the taxpayer and the better for the economy itself.

We need to look at the technology that is there. It is very real today and the opportunity is greater today than it ever has been because of that technology. However, we need to go beyond that. There are many different minority groups, whether they be professional women running businesses or the many different ethnic minority groups that may not be as familiar with the government contract process. What can we do to enhance and encourage their involvement in the process?

One of the things I would suggest is to have seminars. We see some of that happening today through the Office of Small and Medium Enterprises, and that is a great thing to see, but we can never see enough of that because, at the end of the day, if we can get more people interested in participating in the process and get more businesses interested and aware of the number of contracts that are on the Internet the better we will be.

A great Internet site is buyandsell.ca. When I click into that site I can see how many hundreds of millions if not billions of dollars of potential contracts are there. We need to ensure t there is a very strong educational component that engages small and medium-sized businesses. We need to challenge our chambers of commerce from coast to coast to coast to come up with ideas to ensure those community businesses are aware of the types of contracts that the Government of Canada is engaged in and encourage their participation.

If we do that, then I believe at the end of the day there will be more jobs created for Canada, more opportunities and better quality products. We believe that the government needs to work with the stakeholders to engage both small and medium-sized businesses. I think that is critically important to our economy and all of us would do well to give more attention to that issue.

Having said that, I move:

That the House do now adjourn.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:40 p.m.

Conservative

The Acting Speaker Barry Devolin

Is it the pleasure of the House to adopt the motion?

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:40 p.m.

Some hon. members

Agreed.

No.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:40 p.m.

Conservative

The Acting Speaker Barry Devolin

All those in favour of the motion will please say yea.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:40 p.m.

Some hon. members

Yea.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:40 p.m.

Conservative

The Acting Speaker Barry Devolin

All those opposed will please say nay.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:40 p.m.

Some hon. members

Nay.

Government Operations and Estimates
Committees of the House
Routine Proceedings

3:40 p.m.

Conservative

The Acting Speaker Barry Devolin

In my opinion the nays have it.

And five or more members having risen:

Call in the members.