Evidence of meeting #28 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Avrim Lazar  President and Chief Executive Officer, Forest Products Association of Canada
Jayson Myers  President, Canadian Manufacturers & Exporters
Pierre Laliberté  Political Advisor, Manufacturing Sector, Fédération des travailleurs et travailleuses du Québec

5:05 p.m.

President, Canadian Manufacturers & Exporters

Dr. Jayson Myers

No, it's the most important. This is where the money is spent, in the prototype development, the engineering, the scale-up. If you don't do that, you can't do this--

5:10 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

I'm aware of all that, but I'm wondering whether we fund it separately, in a separate fund, or is it a venture capitalist...?

Mr. Laliberté, perhaps you have some suggestions.

5:10 p.m.

Political Advisor, Manufacturing Sector, Fédération des travailleurs et travailleuses du Québec

Pierre Laliberté

I am not a specialist in the matter, but I can say that technology transfer centres are important, especially in the current context; they are clearly crucial for a large number of small and medium-sized companies which do not have the means to hire leading-edge engineers. It gives them access to technological support and to the knowledge that exists in the area. They may also access the intermediate stages of knowledge dissemination. Moreover, institutes which specialize in research on certain sectors of activity serve as a link between universities. There can be some sharing.

5:10 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Would it be preferable for the institution to be private or public? That was really my question. This is what Genome Canada, Biotech and a few others are trying to do. These people work with pharmaceutical companies. At the end of the day, there is not enough money, not enough venture capital and these people are not really ready. In Quebec, the Fonds de solidarité does invest somewhat, but not in a speculative way. This sector is experiencing a crisis.

5:10 p.m.

Political Advisor, Manufacturing Sector, Fédération des travailleurs et travailleuses du Québec

Pierre Laliberté

I would say there are two parts to that. Part of the fixed costs must be borne. In this regard, the government has a part to play. With respect to more random or per-project funding, I think the industry is in a better position to play that part. If only for the upkeep and the establishment of institutions, I think the essential factor is having operating budgets.

5:10 p.m.

President, Canadian Manufacturers & Exporters

Dr. Jayson Myers

But that itself depends on industry continuing to spend on R and D and new technology.

We hear a lot about receptor capacity. If I have a business and talk about receptor capacity, it means I have something my customers don't want. It offers no solution. Maybe that's true of the research in some cases, or maybe there are other people who want it. If we can develop the ability of industry to select and develop the research--in some cases it's incremental solutions and innovation--I think we would be much further ahead in our ability to take new products to market. And colleges have a great role to play too.

5:10 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Quickly, is this a problem just in the small and medium-size companies? Are the big companies taking advantage of what they have in terms of research and bringing it to market? Are they be able to do it?

5:10 p.m.

President, Canadian Manufacturers & Exporters

Dr. Jayson Myers

The bigger companies are certainly more capable of finding out where the research is and working with industry. I think most of the big companies do that very well, but not only from Canada, from around the world.

5:10 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much.

I want to thank you for coming in. Your testimony before the committee is very valuable.

Mr. Del Mastro.

5:10 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

I have one more quick question.

5:10 p.m.

Conservative

The Chair Conservative Rob Merrifield

Okay, I'll allow a very quick question.

5:10 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Lazar, you mentioned that being competitive was one of the three things we needed to do. I want to speak specifically about competitive taxes, because I want to get your position on something.

We have Don Drummond, Dale Orr, Finn Poschmann, and Jack Mintz all on the record about a value-added tax. Do you have a position on value-added taxes for the provinces as opposed to retail sales taxes? They all argue it would boost our productivity and assist with investment in new technology. Do you have a position on that?

5:10 p.m.

President and Chief Executive Officer, Forest Products Association of Canada

Avrim Lazar

We don't have an official position on it. I can tell you that the provinces, for the most part, have been not as quick as the federal government in reforming their tax regimes, and we've been encouraging them strongly. We've also been encouraging what the Department of Finance is now trying to get, which is tax harmonization. That would get us part of the way there.

It's a federation. Everyone has to pull the weight. It's a country. We, as industry, have to do our part. Labour is certainly doing their part; I think they're paying a bigger price than anyone would like. We'd like to see the provinces move harder and faster, just as we'd like to see the federal government move harder and faster.

5:10 p.m.

President, Canadian Manufacturers & Exporters

Dr. Jayson Myers

I think that's right. We've certainly been in support of value-added taxes as the way to go, rather than embedded taxes. In many cases this is a fixed cost that industry has to pay. That's not the way to run an efficient or effective tax system.

Another set of fixed costs—here's the segue into what I wanted to rephrase—is the user fees charged by government departments. Four years ago the User Fees Act was passed unanimously, supported by this committee. It was a very good piece of legislation.

We are still faced with user fees, without any accountability in terms of the standard of regulation that is enforced by government departments. In some cases this is a monopoly position. I would love to go to the competition commissioner and ask her whether government departments should be charging a fee in a monopoly position, except that if I did that, they would charge me $60,000 for the opinion. This is not an efficient way to run public finance.

The Auditor General, as you may know, is reviewing the User Fees Act and compliance with it. I would urge this committee to work on the Auditor General's report when it becomes public to ensure that all user fees in all departments are in compliance with the User Fees Act and that they are publishing internationally competitive regulatory standards and not charging a fee unless they cannot meet those standards.

5:15 p.m.

Conservative

The Chair Conservative Rob Merrifield

Thank you very much. Your testimony is obviously very valuable to this committee or we wouldn't have you keep coming back. We appreciate the way you handle yourself in as non-partisan a way as you possibly can.

With that, we will adjourn this meeting.