Canadian Heritage Committee on June 1st, 2010

[The Chair, Conservative, Gary Schellenberger]

I have to interject here just for a minute. We said earlier that our ministry cannot jeopardize itself and we can't talk on specifics--

[Charlie Angus, NDP, Timmins—James Bay, ON]

Certainly, Mr. Chair; however--

[The Chair, Conservative, Gary Schellenberger]

So let's make sure our questioning does not put our people in jeopardy.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Schellenberger, as always, you have the wisdom of Solomon, and you know that I back you 100% on pretty much everything you say--

[The Chair, Conservative, Gary Schellenberger]

Except this.

[Charlie Angus, NDP, Timmins—James Bay, ON]

As I was about to say, I'm not interested in what you're examining with Icahn and Lions Gate behind closed doors. That's different. I'm interested in the question that has been suggested, that this company that has been identified as just a mail-drop has been getting Canadian tax credits.

You guys run a pretty serious operation, as far as I've seen from all our meetings over the years. You'd be pretty much able to verify that the companies that do qualify for tax credits are not just mail-drop boxes and that they actually are companies that are eligible for them. That's the only thing I need to hear from you--yes or no?

[Jean-Pierre Blais]

Yes, and I can't tell you in which circumstance, because the Income Tax Act also has a similar provision. So I can't share that. But I certainly would have access to that.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Certainly. How long.... I don't need to know what you discussed, but these discussions have been going on. Mr. Schaitkin said it was extensive, so you've had a number of meetings. Did this begin in March? Has it been ongoing?

[Jean-Pierre Blais]

I'm not prepared to answer that, unfortunately, but it is an extensive review.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Extensive review. Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Now we go to Mr. Galipeau.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Thank you, Mr. Chair.

I want to continue along the same lines as Mr. Angus, whom I hold in the highest regard, by the way.

Mr. Blais, could you explain the criteria you use in determining what constitutes a Canadian company?

[Jean-Pierre Blais]

I think we would run out of time if I were to answer that, since there are only a few minutes left.

The act sets out a very complex definition, with subsections. We have to determine whether it is a corporation, a trust or a joint venture, and we need to examine the nature of the arrangement. We take into account all those details.

As far as administration of the act goes, sometimes people come to us to ask whether the act applies in their case, whether the company is subject to the act or not. Sometimes we debate the issue. Other times, people assume the act applies and they file an application under it. That is another story.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

How would you evaluate whether a takeover would meet Canadian cultural policy?

[Jean-Pierre Blais]

As I mentioned, there are explicit policies. There's one in the area of film and there's another one in the area of books. In other cases they are implicit. For instance, there is no explicit written policy with respect to newspapers. However, an implicit policy found in section 19 of the Income Tax Act has a certain tax treatment for newspapers and their advertising. So implicitly there's a policy there. So we would look at the cultural ecosystem more broadly, how would it impact actors, scriptwriters, how would it back authors of books. We look very much at the ecosystem as we know it. We are experts in cultural policy.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Thank you very much.

I will not ask you to name the films made by the likes of Jacques Godbout, Pierre Falardeau or Robert Lepage. Instead I will give the floor over to my colleague, Randy Kamp.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you.

I have just a couple of quick questions.

Can you give us a sense of what your track record is on this? I assume there are discussions with companies that never make an application, so they maybe find out they don't have to, or things fall apart, and so on. When they get to the application stage, where does it go from there? Is it a 90% success rate, or less, or more?

[Jean-Pierre Blais]

The success rate is even higher than that, because since we've been administering the act--in 1999--there have only been three refusals.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Out of how many?

[Missy Marston-Shmelzer, Deputy Director, Investments, Department of Canadian Heritage]

We get about a dozen applications a year. We review about a dozen transactions a year.

[Jean-Pierre Blais]

Keep in mind that the application that comes in is not necessarily the one we approve, in the sense that there is a dialogue that occurs that improves the application and its approvability.

[Missy Marston-Shmelzer]

We also receive numerous notifications, small investments and new investments that just need to file a form and aren't reviewed. So they aren't counted in those numbers, but they'd be approvals too.

[Jean-Pierre Blais]

An example of that would be, as I mentioned earlier, production companies in Canada. We have a policy: technically they have to apply, but they're very much fast-tracked.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

One short question, Mr. Bruinooge.