Finance Committee on Sept. 29th, 2009

[The Chair, Conservative, James Rajotte]

I call this meeting to order. This is the 44th meeting of the Standing Committee on Finance and the second in our pre-budget tour of nine Canadian cities. We did Vancouver yesterday, on the first day, and we're in Yellowknife tomorrow. We want to thank all of you for being with us today.

In this session we have three panels of an hour and a half each. It's very busy, with seven witnesses per panel, so there's a lot to hear and a lot of submissions. We do have members from all over the country here with us today.

We're going to ask each organization to present for up to five minutes maximum and then we will have questions from all members. I think you'll find the exchange with members very worthwhile for all of you.

I'll list the organizations in order of presentation: first, the Alberta Pulse Growers Commission; second, Quadrise Canada Corporation; third, the Alberta Chambers of Commerce; fourth, Almita Manufacturing Ltd.; fifth, Treaty 8 First Nations of Alberta; sixth, Kids First Parents Association of Canada; and finally, the Prospectors and Developers Association of Canada.

Welcome to all of you.

We'll start with the Alberta Pulse Growers Commission.

[Sheri Strydhorst, Executive Director, Alberta Pulse Growers Commission]

Mr. Chairperson, honourable members, and guests, my name is Sheri Strydhorst and I have a farm in northwest Alberta. I'm the executive director of the Alberta Pulse Growers Commission. With me today is Tom Jackson, a farmer who is an adviser to the Alberta Pulse Growers, from east-central Alberta.

The Alberta Pulse Growers represent 4,500 pea, bean, lentil, chickpea, and fava bean growers in the province. While we are here today on behalf of the pulse growers, I've been asked by the other Alberta crop groups to let you know that we are presenting important policy messages relevant to all members of the Alberta crop sector. Today we are going to be touching upon three initiatives that will secure a competitive advantage for our farmers by stimulating innovation with effective policy.

Our first request is increased investment in Agriculture Canada's research branch. For five of Canada's six largest crops, 98% of the research is publicly funded. Over the last 15 years, federal contributions to Agriculture Canada's research branch have been stagnant, with no increases for inflation. In 2009 dollars, this means that funding has dropped from $458 million to $280 million, a cut of nearly 50%.

The number of front-line scientists has dropped by more than 10% in just the last couple of years. The majority of Agriculture Canada's scientists are ready for retirement in less than 10 years. Agriculture Canada is suffering a corporate memory loss. For example, at Alberta's Lethbridge research centre, the plant pathologist there retired in 2006, but since then, a technician, not a trained scientist, has been the only expertise available for the development of disease research.

To address this growing problem, we are asking for a doubling of A-base funding to Agriculture Canada. This would cost $280 million phased in over 10 years, or $28 million a year. These resources would allow for the development of new crop varieties with drought resistance for the southern prairies, cold tolerance for the northern prairies, disease and insect resistance to reduce the use of pesticides, and healthier foods.

There's tremendous potential to make our food healthier for consumers. For example, peas and beans can help reduce diabetes, obesity, and cardiovascular disease, but additional breeding to increase the resistant starch and antioxidants could result in even more health benefits for Canadians.

Recent studies have shown a 12-time return for investments in breeding research for Canadian farmers, and we're not asking the government to do this alone. Investments in Canadian pulse breeding and agronomic research by Alberta and Saskatchewan producers exceeded $3 million last year.

Our second request is a proposal for a reduced production insurance premium for producers who use green agricultural practices. We're at a time in history when there's increasing national and international public demand for food that is grown using environmentally responsible practices. However, from a producer standpoint, environmental compliance is seen as a cost. We need to create a system whereby producers can profit from environmentally aware markets. In order to brand Canadian producers as environmentally responsible, we need to implement incentives for producers to access new technologies.

We're proposing a reduction in production insurance premiums by 20% for producers who use green agricultural practices that also tend to reduce production risks, such as, for example, reduced tillage, diverse rotations that include pulse crops, reduced fuel use, and more efficient irrigation practices.

Our final request is to provide Canadian producers with easier access to credit. The advance payments program is a financial loan guarantee program that gives producers access to credit via cash advances. This means producers have improved cashflow and better opportunities for marketing their agricultural products.

Under the current program, producers can qualify for a maximum of $400,000, with the first $100,000 being interest free. However, these current limits are becoming a constraint to more and more farmers. There have been significant increases in input costs. The prices of feed, fertilizer, and fuel have risen substantially. In adjusting for inflationary costs, we are asking for an increase in the interest-free limit to $150,000 and in the overall limit to $500,000.

In summary, our request is: increased investment in Agriculture Canada's research branch; reduced production insurance premiums for producers who use green agricultural practices; and providing Canadian producers with easier access to credit.

Thank you for this opportunity. We look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to Mr. Murray or Mr. Lennox.

[Dr. James Murray, Senior Advisor, Government Relations, Quadrise Canada Corporation]

Good morning, ladies and gentlemen, Mr. Chairman, honoured guests, and members of the committee. We are pleased to have the opportunity to make a short presentation of some of our ideas.

My role is of senior advisor on government relations to Quadrise Canada, which is a private Calgary oil company. With me is the vice-president of technology, Ross Lennox. He will start the presentation, Mr. Chairman.

[Ross Lennox, Chief Technology Officer, Quadrise Canada Corporation]

Quadrise Canada is a private Canadian corporation based in Calgary. We have 35 employees. We have one of the few R and D labs in Calgary. We have a number of new science graduates who work with us. We have annual revenues of $2.6 million; 2009 is a poorer year. We've raised $42 million in equity over the last three years. We've spent $11 million in R and D spending. Of this, we've received government support for $3.2 million.

What we're attempting to do is provide a wide range of alternative fuels and environmental solutions to oil sands and power generation markets in North America. Our efforts have been very successful in some areas. We've really suffered from lack of clarity on the regulatory front within Canada. We see that continued expenditure in the R and D area is essential to convert a lot of IP that exists and has no venture capital funds to support it in this country any more.

I think our first recommendation is to better utilize the NRC-IRAP network--this is a network that we've been working with for the last five years--and to really develop the NSERC centres of excellence. Across Canada there are 240 IRAP ITAs, and these cover the whole country and all industries. There are more than 1,800 firms that have been funded by IRAP, and more than 500 firms with the youth program in 2008-09. On average, IRAP provides advisory service to well over 7,000 firms each year. A key part of this is that they're dealing with the small and medium enterprises. These are companies with under 50 employees. To our mind, that's really the kick-off point for a lot of our new successful companies in the future, and they provide long-term employment and opportunity for our new graduates and new Canadian businesses.

IRAP has a lot of history with many clients, and it's really the gateway or the clearinghouse for many government departments. That's the first that a lot of government departments see of any of these new technologies. What we think is really important is that this would bring entrepreneurs and the crown R and D into the NSERC centres of excellence.

[Dr. James Murray]

I'd just like to speak about some aspects of the commercialization of research. I've spent 30-some years of my life in academia and then switched in my declining years to the private sector. It's an interesting time these days, obviously.

What we have in Canada is really quite a well-funded research program across the universities, in government, industry, and the private sector. Where we are really very weak and we have been missing the opportunity is in commercializing home run kinds of technologies that come up. I'll give you one quick example. In the mid 1980s, Doctor Harold Copp at UBC discovered a compound called calcitonin for treatment of osteoporosis in post-menopausal women. Doctor Copp wasn't motivated to commercialize that compound, yet it's by far, even today, one of the most effective compounds for treatment of osteoporosis, and it's been sold with sales of billions of dollars per year for many years. Think what would have happened if we had commercialized that. There are very similar discoveries across the country, and the challenge is how we can identify these home runs at an early stage and utilize them for the development of additional Canadian industry.

We have a suggestion on how we might do that, and I'll turn this over to my colleague to discuss this.

[The Chair, Conservative, James Rajotte]

We're running past our time. We'll have to leave that for the question and answer period.

Thank you very much.

We'll move on to the Alberta Chambers of Commerce and Mr. Kobly.

[Ken Kobly, President and Chief Executive Officer, Alberta Chambers of Commerce]

Good morning, Mr. Chair. Thank you for the invitation to speak this morning.

For those of you who are visiting Alberta, welcome to Alberta. To those who are coming home and are from Alberta, welcome home.

By way of introduction, my name is Ken Kobly, and I'm the president and CEO of the Alberta Chambers of Commerce. With me is Don Oszlie, our current chair.

The Alberta Chambers of Commerce is a federation of 124 community chambers in Alberta that represent in excess of 22,000 businesses in the province. That makes us the largest business organization in Alberta. Fully 80% of those members are outside the metro Edmonton and metro Calgary areas, so we have a very diverse membership group. Our policy process is grassroots driven. Our policies are proposed by community chambers and then adopted at our annual general meeting, so they tend to reflect the desires and concerns of our member communities, as well as their members.

We currently have in excess of 60 policies in our policy book, ranging from the obligatory tax policies to very diverse policies on child care and border issues. We also have a policy on reintroducing an accelerated capital cost allowance for the oil sands. It was a little bit tough to pick which policies to present today.

We are aware that a viable and prosperous country depends not just on income taxes and corporate taxes--so again, the reason for our diverse policy base. Our policies are available on the website, should you choose to go and take a peek at them. They're fully public, as are the responses we've received to date from governments.

Our submission is generally about indexing of thresholds. Thresholds have been introduced, and the track record has been that they haven't been amended for quite a number of years to reflect changes in reality, prices, and the economy.

We have four examples that we've chosen to highlight in our submission. One is the GST rebate for new housing purchases, which was introduced in 1991 and hasn't changed since then. When it was introduced, houses below $350,000 were eligible for a GST rebate. The policy was that new homes priced between $350,000 and $450,000 were deemed to be luxury homes, so the rebate would start to reduce and be totally phased out at $450,000.

In a number of parts of our communities in Alberta a new house costing $450,000 would not be considered a luxury home. In particular, in northern communities such as Fort McMurray, that range is even further aggravated. I'll give you an example. Currently in Fort McMurray, $440,000 would not get you a new, single family house. It would get you either a condo or a 40-year-old manufactured home. This is an example of a threshold that was introduced and not amended. The policy that initially brought it forward is completely out of whack with economic realities today.

The second threshold that was introduced and has been amended but needs to be reviewed on an annual basis is the capital gains exemption for small business corporations' sale of shares and for farm property. Most small businesses consider their business assets to be their pension plans or their RRSPs for their eventual retirement. It was most recently updated in 2007, but prior to that the capital gains exemption was not reviewed for 19 years.

The third example is the luxury auto threshold. It currently sits at $30,000. Bear in mind that these vehicles are used for individuals in their business endeavours to earn taxable income. While we agree with the general policy that luxury vehicles should not be available for write-off, certainly we need to ensure that these numbers remain reasonable. The last change to that was nine years ago.

The last one is the small suppliers threshold for GST. It was introduced at $30,000, again when GST was enacted. It's been 18 years since that was amended, and we suggest it be raised to $75,000.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Kobly.

We'll now go to Almita Manufacturing, please.

[Lawrence Kaumeyer, President, Almita Manufacturing Ltd.]

Good morning, Mr. Chairman.

Thank you very much to all of you for having me speak here this morning.

I have French and English in both of my presentations, so please feel free to look at both.

As a snapshot of Almita, it is Canada's leader in the design and fabrication of screw piles. We employ 75 people south of Edmonton in the small town of Ponoka. The key to our foundation is that we basically are competing against both driven piles and concrete piles. We'll grow by 25% this year, and we plan on growing by 25% going forward.

What has assisted our growth? IRAP has assisted our growth, and Ross mentioned this as well. We've received IRAP funding in excess of $164,000 this year for two key initiatives within the company, both of which fuelled our growth substantially. Without that program we would not have been able to be successful, now competing on a world stage at Curl Lake with ExxonMobil and a number of other companies.

It should be noted that the timing of the increased budget amount for IRAP from the economic action plan by the government coincided with one of our key projects. Without that we would not have proceeded and we would not have been successful in being able to launch that, so the timing of it was perfect.

What has assisted our growth also is SR and ED. The tax credits received from SR and ED have totalled $81,000 for our company in the past two years and have provided further support in our key research and development projects throughout the company. Without that, we would not have been successful on the global stage. We continue to use SR and ED for a number of projects within the company, and it's a huge benefit for us.

A number of people have also touched on CCA. Within the small and medium-sized enterprise aspect of the segment of companies and manufacturing industries, capital expenditures are a significant barrier to growth and entry. At Almita Manufacturing we have spent a little over $2.7 million in capital expenditures over the past three years. We appreciate the recently enacted accelerated tax depreciation for certain manufacturing equipment, and particularly the recent acquisition of a major robot in our manufacturing, which has assisted us greatly, and we intend to use that as far as the eligibility is concerned.

What could truly assist SMEs across Canada? Do not cut back on the CCA, please. This was worked on by Jayson Myers at the Canadian Manufacturers & Exporters. It's a vital program for small business.

Consider expanding what is truly eligible under CCA. Unfortunately, currently the definition of what we can actually apply through on an accelerated basis is too narrow for us. We would like to see that expanded to support SMEs across Canada that look at movable equipment, yellow iron, and things we need on a construction basis that would tie in quite nicely with the economic action plan of the government. Specifically allowing any self-propelled industrial equipment such as earthmovers, Cats, hoes, etc., for small to medium-sized enterprise would greatly support our systems.

What could also assist SMEs across Canada would be IRAP. Here again, it would be foolish to cut back this program, and the additional funding that was provided by the government was vital to a number of industries starting up and generating additional cashflow recently. Look for ways to expand this program and look for ways to increase eligibility for it across the country.

Concerning SR and ED, CRA should continue to enhance its administrative service. Preparing a claim for SR and ED is difficult for small and medium-sized enterprises at times. We find it is just very time consuming when you're trying to do it as a small to medium-sized enterprise while you're trying to run the business. So that could be streamlined.

Last, but by no means least, I'd like to mention that we have identified, here in Alberta and I'm sure across the country, that Canada continues to lag behind the U.S. and other OECD countries in its productivity. Support for initiatives across Canada that encourage companies to look at both efficiencies and the increasing value of their products and services would address some of our competitiveness challenges. Alberta has begun this work by establishing Productivity Alberta, a connection point for the industrial sector for all productivity innovation programs, tools, services, and expertise, working in partnership with industry across governments and associations, academia, and related institutions. Perhaps this is the beginning of a model that could be used across the country.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to the Treaty 8 First Nations of Alberta, please.

[Chief Rose Laboucan, Chief, Treaty 8 First Nations of Alberta]

Good morning, everyone, and thank you for having us here.

I represent 23 first nations communities here in Alberta from Treaty 8. We want to look at a different process for first nations people in our area, and we're hoping the presentation to the finance committee will help us look at a different partnership in the way we look at things.

One of the things we look at is not being a tax burden to Canadian society. With this presentation from an economist, I hope we are going to look at it on a more equitable basis.

I'll turn it over to Darcy.

[Darcy Dupas, Representative, Dew Paws Consulting, Treaty 8 First Nations of Alberta]

Good morning.

I want to particularly thank the clerks for their assistance in bringing us here today. They were very diligent in helping me make the submission and coordinate our participation here today.

From 1996 to 1997, direct transfers by the Department of Indian and Northern Affairs to Canadian first nations increased by about 0.59% per capita per year. This figure was well below inflation of about 2.36% per year over that period, below the growth rate of federal government revenues at 4.21%, and below the growth rate of gross domestic product at about 4.81%. Over that 13-year span of 0.59% growth in real per capita transfers, if you subtract inflation, you get a net contraction of government sector spending in first nations economies of 1.26% per year.

The effect of a 1.77% real deficit per year over 13 years is a 26% deficit in the current year. The net social debt from these ongoing deficits is manifested in first nations housing, education, and in general quality of life outcomes.

The funding arrangements are based upon a formula calculated by the department, which allocates according to a trickle-down availability of funds from the main estimates and an internally calculated formula. The effect of the long-term fiscal disparity is an annual recurring deficit.

The current financial transfer arrangements lack transparency, they lack predictability, they lack sustainability, and they in no way reflect an equitable exchange of value compared to the lands described in Treaty No. 8.

A history of the treaties lays it out this way. The British North America Act from 1867 contains specific provisions for the equitable treatment of first nations people. This was an extension of the Royal Proclamation of 1763 by the crown of the British Empire. The guiding principle of equitable exchange with first nations and other aboriginal people around the world was formed by the crown of Britain through more than 200 years of experience in managing the greatest colonial empire in the history of the world. For whatever reason, the crown of Canada has not abided by this time-honoured policy, to Canada's great economic and social detriment.

The equitable principles contained in the Constitution Act, 1982, and the Royal Proclamation are there to assist the long-term well-being of all citizens, not just first nations citizens.

The British Empire understood, through experience, that it did not benefit trade and peaceful commerce to marginalize the aboriginal society.

How are we for time?

[The Chair, Conservative, James Rajotte]

You have one minute.

[Darcy Dupas]

Skipping to our third recommendation, we're looking to negotiate direct treaty-based funding agreements that create a government to government relationship between the crown of Canada and first nations governments, and appropriate arrangements thereto, without getting into the cost estimates.

All first nations in Alberta have a relationship with the crown of Canada through the department, and the current arrangements are consistent with the 142-year-old Indian Act. The very title of the legislation is derogatory to first nations people, and the content is no better. The act enabled a system of enfranchisement, which is a euphemism for cultural genocide. The act was created unilaterally without consulting first nations.

The treaties, by contrast, were enacted through a more consultative and good faith process. Most first nations continue to hold the treaties as a sacred trust between their first nation and the crown; therefore, the treaties are a more legitimate basis for good faith negotiation than the Indian Act.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

[Chief Rose Laboucan]

Could I just make a closing remark?

[The Chair, Conservative, James Rajotte]

Sure.

[Chief Rose Laboucan]

We are the only colonized people in the whole world and we need to stop it.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go now to Kids First Parents Association of Canada.

Ms. Ward, please.

[Helen Ward, President, Kids First Parents Association of Canada]

Hi. My name is Helen Ward. I'm the president of Kids First Parents Association of Canada. I'm also the mother of two. Thank you for having me here today.

Kids First is a grassroots, volunteer-run, national charitable organization concerned with children's optimal care and well-being and with support and recognition for parental child care since 1987. We receive no union, corporate, or government funding.

Some lobby groups will be telling you to spend even more money on non-parental child care, day care centres, or, in its rebranded form, all-day kindergarten for children three to five. Groups like HELP, the Human Early Learning Partnership, will seem to promise that the more you spend, the more you save. They imply that you could save more than $400 billion if you spent on high-quality early learning and child care, that for every $1 spent, you could save anything from $1.58 to $17.

Spending on day care could pay off the debt, apparently.

Now, Kids First supports high-quality child care and early learning, as I'm sure we all do. But what do these terms mean? What is “high quality”, and how is quality measured? Most importantly, what is “child care”? What is “early learning”? The definitions of these words are battlefields. The devil is in the details.

The day care lobbyists frequently cite Nobel Prize-winning economist James Heckman of the University of Chicago as if he supported their agenda, but he does not. In his paper entitled “The Productivity Argument for Investing in Young Children”, he says, “None of this evidence supports universal preschool programs.” He also says, “Advocates and supporters of universal preschool often use existing research for purely political purposes. But the solid evidence for the effectiveness of early interventions is limited to those conducted on disadvantaged populations.”

The reality is that all children need child care, and they need it 24/7, 365.

As for early learning, children begin to learn before birth and continue to do so wherever they are. The institutional care lobby has attempted to co-opt these terms as if they had a monopoly on care and learning. But they do not.

We call on the federal government to end the unjust discrimination against parents who do not prefer full-time institutional care and learning settings for our children and the discrimination against our children.

We ask you to enforce our charter rights to equality before the law, and our children's rights to security of person, by requiring that laws and policies and programs at all levels of government cease to employ exclusive, discriminatory definitions of key terms, including work, child care, and early learning.

We ask that you cease funding the day care lobby--for example, the Human Early Learning Partnership, the Child Care Advocacy Association of Canada, and the Canadian Child Care Federation, etc.

We ask you to redirect funding of child care and early learning and child development to parents so that we can exercise real choice, free choice, in determining our children's care and early education.

The day care lobby is telling us that the UN Convention on the Rights of the Child requires government to fund day care preferentially. It does not. The convention states that the child has the right to be “cared for by his or her parents”. The convention forbids any kind of discrimination.

The UN Declaration of Human Rights says that parents have “a prior right” to determine their children's education.

Stimulating the economy by transferring the production of goods and services away from the family sector and to the family replacement sector in government business and non-profits is not economically, socially, or environmentally sustainable. Increasing children's infections and stress, decreasing breastfeeding, and decreasing parental time spent with children may stimulate economic activity and swell the GDP, but only by parasitically bleeding the family. Funding families directly is fair and sustainable.

Sweden is held up by the OECD as the model for child policy, but after over a generation of this kind of policy there, we find plummeting academic test scores. Canadian teens score higher than Swedes. We find youth suicide and youth violence rising. We find domestic violence against women rising. They say that children in day care centres are 6.7 times more likely to be sick, and that's at a cost of $27,000 per child aged one to five.

We don't want to follow the Swedish model.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to the Prospectors and Developers Association of Canada.

[Philip Bousquet, Senior Program Director, Prospectors and Developers Association of Canada]

Good morning, Mr. Chair and committee members. My name is Philip Bousquet. I work for the Prospectors and Developers Association of Canada. I'm here with Eira Thomas. She is a member of the PDAC board of directors and executive chairman and director of the Stornoway Diamond Corporation.

Thank you for providing us with an opportunity to meet with you today.

The PDAC is a national association whose members are involved in the mineral exploration and development industry, both in Canada and around the world. Our membership includes approximately 1,000 corporate members and 6,000 individual members, comprising mineral exploration and mining companies, service and consulting firms, geologists, geoscientists, students, environmental consultants, and the financial, legal, and investment sectors.

The PDAC organizes an annual convention in Toronto, which is the world's premier mineral industry trade show. In 2009 our convention attracted 18,000 delegates from 120 countries.

As the research and development branch of the mining sector, exploration companies do not have production revenue and therefore must rely on investors who are prepared to support high-risk activities. In the past year, the global financial crisis and a steep drop in commodity prices have had a dramatic and negative effect on the exploration sector. Reduced investment in companies leads to fewer drilling programs and impacts negatively on regional employment and income, particularly in rural, northern, and aboriginal communities.

Working with our members, the PDAC has developed proposals to reduce the impact of the crisis on the mineral industry in Canada.

Number one is a mineral exploration tax credit. As many of you know, this was introduced in 2000 and has consistently provided Canada with one of our competitive advantages. In January the credit was extended for one year to March 31, 2010. The mineral industry is recommending that the current 15% METC become a permanent feature of the federal income tax system. This will provide additional certainty for companies and for investors.

In order to counter the current economic crisis and encourage investment in Canadian projects, we are also recommending a temporary increase of the mineral exploration tax credit from the current 15% rate to 30% for the next two years.

Number two is investing in transportation infrastructure. For instance, all-weather roads, bridges, and upgrades, as well as improvements to seaports and airports in Canada's north and remote regions of the provinces, greatly improve the economics of exploration projects, increasing access and allowing for extended exploration seasons. As well, maintaining a long-term commitment to the geo-mapping for energy and minerals program, or GEM program, will improve our knowledge of Canada's resource potential and encourage new exploration.

In number three, we are looking to improve an exploration company's ability to retain employees by allowing issuance and compliance costs, that is, costs associated with financing legal and accounting expenses, to qualify for renunciation as Canadian exploration expense, or CEE, under flow-through share arrangements.

We believe these recommendations will have an overall positive impact on the economy by encouraging investment in research and resource activities that are critical to Canada's economy. A vibrant mineral sector in Canada creates jobs in all regions of the country, sustains communities, fosters new business opportunities, and raises tax revenues that allow government to meet social needs.

I will now ask Eira Thomas to offer her perspective on issues faced by exploration and development companies.

Thank you.

[The Chair, Conservative, James Rajotte]

You have about a minute and a half.

[Eira Thomas, Member, Board of Directors, Prospectors and Developers Association of Canada]

Thank you very much.

I'm very pleased to be here on behalf of the PDAC and the Canadian exploration sector.

Mining is a globally competitive business. Canadian exploration companies can and do explore for minerals all over the world. In response to the impact of the financial crisis on the minerals industry, we have an opportunity, and I believe an obligation and responsibility, to ensure that Canada remains competitive as a jurisdiction for investment in mineral exploration.

Canada is routinely ranked and assessed as one of the world's most attractive jurisdictions on the basis of its geology. It remains highly under-explored, particularly in the north. However, we also face many challenges. Most of the geology is extremely remote and lacks infrastructure access, making exploration and development extremely expensive. Our northern climate limits the exploration season. And our regulatory regime is expensive, inefficient, and lacks transparency.

Mining is a vital industry in this country and, we think, can play a very important role in our economic future, so we really urge you to consider the recommendations that the PDAC has submitted in order to ensure that the Canadian mineral exploration industry and companies can contribute to Canada's economic recovery.

Thank you very much.