Finance Committee on Oct. 3rd, 2006

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you, Mr. Chair, and thank you all for your very interesting and thought-provoking presentations. Thank you for giving us all the opportunity to be here in B.C. today.

I'd like to start by doing a little poll--just a yes or no or abstain from each of you.

The question has to do with the government's reduction of GST. Of course you pay lower GST, but you have to bear in mind that two points in the GST equal $10 billion to $12 billion a year, which crowds out most other things.

I ask you, then--is this move to reduce the GST a good thing? You can answer yes, no, or abstain. I'll start with Mr. Lazar.

[Avrim Lazar]

Unfortunately the rules are that I get to choose my answer, and I'll stick with our original presentation, which is that taxing investment is a bad thing, while reducing taxes in investment would be a very good thing.

[John McCallum, Liberal, Markham—Unionville, ON]

But this is tax on consumption.

Okay.

[Rita Chudnovsky]

Tax cuts don't build child care.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay, so that's a no.

[Avrim Lazar]

That's two disobedient witnesses.

[Michael Goldberg]

No. It's not a part of smart taxation.

[A witness]

No.

[Ken Kramer]

I must say that if we had 7% GST, we might be able to fund wheelchairs across Canada.

[John McCallum, Liberal, Markham—Unionville, ON]

I'll take that as a no.

Mr. Loo, what do you say?

[Michael Loo]

No.

[Blaise Salmon]

No.

[Dr. Alan Winter]

Abstain.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much.

My next question is to Mr. Kramer. I'm an economist. I never thought of wheelchairs as an investment, but when you put it that way, it makes a whole lot of sense from society's point of view, and I really like your idea.

Never having needed one myself, I did not know the cost was as high as the $25,000 you mentioned.

[Ken Kramer]

It's up to $25,000, and perhaps more.

[John McCallum, Liberal, Markham—Unionville, ON]

I really like your proposal. Do you have any idea what the total cost might be, in round numbers?

[Ken Kramer]

That's a very good question, honourable member, and it's a question that we have also tried to work out ourselves. In fact, when I was on the Hill in June announcing the strategy, many of your members asked that same question.

I can tell you that Muscular Dystrophy Canada funds approximately $400,000 from our $8 million annual budget to wheelchairs and other equipment needs. I have no sense of what the national standards are in that area, but I can say there are approximately 155,000 Canadians in this country who rely on a wheelchair.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. Winter, I am a great supporter of Genome Canada and of funding for research and innovation in universities in general. Do I take it that Genome Canada, or Genome B.C., received nothing in the last budget?

[Dr. Alan Winter]

I can speak for Genome B.C., which is an organization independent of Genome Canada. We compete for Genome Canada funds; they would fund 50% of anything we do. In the last provincial round Genome B.C. received money, but in the last federal round Genome Canada did not.

[John McCallum, Liberal, Markham—Unionville, ON]

I think you've made a very solid case for the importance of your entity in particular and of this kind of thing in general, because we're not going to flourish as a country on the basis of low wages competing with Asia; we need to use our brainpower.

If no money is forthcoming in the next budget, does this mean you're basically running out of money, and Genome Canada is also running out of money, so it's an urgent matter to be funded in the next budget?

[Dr. Alan Winter]

Yes, I do believe it is certainly an urgent issue. Part of the reason is that we have national momentum in this area, and it's fuelling to some extent some of the interest in attracting very good people and companies into British Columbia and other parts of Canada, so the answer to that question is yes, if eventually there is no funding from a national source, then to some extent it doesn't become a national priority.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. Lazar, this question might be easier for you than the last one.

[Avrim Lazar]

I'd be grateful.

[John McCallum, Liberal, Markham—Unionville, ON]

I'm a big fan of your proposal for the accelerated capital cost allowance, a two-year write-off for manufacturing in general, I believe, because I look across the country and see that sector struggling under the influence of the high dollar and higher energy costs and see many jobs at risk in many regions of the country.

There are two questions: one, do you know what this would cost per year; and second, would this be your top priority, if you only had one ask?

[Avrim Lazar]

I don't have the dollar costs with us, but they have been calculated and submitted to the Department of Finance. We can provide them to the committee as well.

One of the lovely things about it is that you actually collect the same amount of taxes; it just happens a little slower. We can write off the cost now; it's just that it takes so long that we can't afford to make the investment. But the marginal difference of collecting the taxes slower has been calculated; I believe the Canadian Manufacturers & Exporters did a technical paper that has been presented to the Department of Finance. We'll get you a copy.

If we could choose only one thing, it's getting the taxes on investment down to a straight two-year accelerated capital cost depreciation that would be the first priority, as it is with most manufacturing in Canada.