Evidence of meeting #44 for Finance in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
10:05 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you for your presentation. We'll now go to questions from members.
We're going to start with Mr. McCallum, for seven minutes.
10:05 a.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Thank you, Mr. Chair, and thank you all for being here.
It's a pleasure for me to be in Edmonton. I went for a little walk this morning and was accosted on the road by an enthusiastic Liberal--in Alberta. So that was a great pleasure. It made my day.
10:05 a.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Well, I'll move on.
Four of you focused on either the importance of government contribution to research or active government measures to help companies out, whether it's IRAP, the mineral exploration tax credit, or SR and ED. All of that is music to my ears, because we believe very strongly that a lot of the jobs lost in the current recession won't come back, and we must have active government policy to create the jobs tomorrow. That involves research and commercialization, which implies an active role for government.
Even though I'm in Alberta, I'll say that this is in contrast to the government's position, which has actually cut back on funding for research and science. I agree with the thrust of those who have argued for this more active approach.
My first question will be for Mr. Murray. While I agree with what you have said about finding the winners or home runs early, there is also the view that governments aren't always very good at choosing winners. For governments to find the home runs early kind of sounds like choosing winners, and we may not choose them well. I'd like you to speak briefly about your plan for allowing governments to identify these home runs--not necessarily governments, but government funding.
10:05 a.m.
Senior Advisor, Government Relations, Quadrise Canada Corporation
Basically we need a more integrated approach to utilize the expertise--not just in government, academia, or the private sector--and form teams that can evaluate these discoveries at an early date. To date we've basically looked at government, academia, and industry to identify them. That approach hasn't worked. We have all the elements in those three planks, but we have to use them together.
10:05 a.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
Thank you. That's very interesting. I'll study it further, because I think it is a key issue. If we could identify home runs, we'd do really well, but it's always a challenge to know in advance which one will be good and which one won't.
On agriculture, your presentation was really clear. In a minority situation one has to be ready for an election at any time, so I will pass it on to Wayne Easter, our agriculture critic. That's not really my area of expertise.
If I may ask Mr. Bousquet a question, I was NRCan minister for a brief time in the dying days of the Martin government. On the mineral exploration tax credit, it strikes me that to make it permanent would make sense. Governments seem to extend it each and every year, but there's always that uncertainty. Would it help your industry quite a bit in terms of certainty if it were officially made permanent?
September 29th, 2009 / 10:05 a.m.
Senior Program Director, Prospectors and Developers Association of Canada
It would. The investors and companies are looking for some measure of certainty on tax policy, tax credits, and regulatory regimes. That's why we've asked for this to be made permanent. It would allow companies to plan on a longer timeframe.
Eira, do you have any comments?
10:05 a.m.
Member, Board of Directors, Prospectors and Developers Association of Canada
I'll just comment that exploration takes a long time. For diamonds in particular, it could be seven to 10 years before you know whether you have an economic project. So for us to have the assurance that we could go back to the market year after year and raise funds on the basis of that tax credit would be very helpful.
10:10 a.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
It wouldn't cost the government anything. Whichever party is the government has tended to renew it every year. That has been the pattern for quite a number of years--correct? Yes.
On aboriginal matters, in the past we brought in the Kelowna accord, and we're committed to having something not necessarily identical but similar come the next election. Under the Kelowna accord the last time there was approximately $1 billion a year for five years. However, if I look at this complicated formula in your presentation and read it correctly, are you saying that aboriginal people in Alberta alone are underfunded by approximately $1 billion per year? It shows $999 million on page 3, which is pretty close to $1 billion.
10:10 a.m.
Representative, Dew Paws Consulting, Treaty 8 First Nations of Alberta
The calculation was based upon all levels of revenue collected. Alberta is a special case because we have to compete with the provincial jurisdiction when it comes to education. It makes it very challenging to retain teachers and so on. To be accurate, that formula doesn't include the health transfer or the HRSDC transfer. So you'll have to subtract those out as well.
In about 2003 or 2004, the acting regional director general of the Alberta region sat before the chiefs of Alberta and assembly and made a carte blanche admission that there was a $110 million deficit for K through 12 education alone. That's just in terms of fiscal parity, and it has nothing to do with outcomes.
10:10 a.m.
Liberal
John McCallum Liberal Markham—Unionville, ON
A few of you mentioned IRAP, but maybe I'll ask Mr. Kaumeyer. My impression is that it is a pretty good program. Do you agree?
10:10 a.m.
President, Almita Manufacturing Ltd.
It is a good program. It's just that the direct funding that was provided through the economic action plan is temporary. We would want to make sure that it becomes permanent, because it has supported a great deal of additional investment recently that has helped stimulate growth—which will show up and is showing up.
10:10 a.m.
Liberal
10:10 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. McCallum.
We're going to go to Monsieur Laforest.
10:10 a.m.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Good morning everyone. I am extremely pleased to be here with you, in Edmonton.
My first question is for Mr. Kobly from the Alberta Chambers of Commerce.
You made recommendations on threshold limits that have practically never been reviewed. You are recommending setting the “small supplier threshold” at $75,000. It was introduced at $30,000 in 1991 and has not changed since.
What is the figure based on? Is it an arbitrary number? Are there studies proving that a $75,000 threshold is preferable? Why not $100,000?
10:10 a.m.
President and Chief Executive Officer, Alberta Chambers of Commerce
Well, there aren't studies currently available to determine or support the $75,000 number we picked. We took a look at the intent of that threshold when it was originally introduced at $30,000 in order to eliminate and/or save on compliance issues, as well as the compliance costs of reporting GST—or taking it off to their accountant to figure it out.
We've seen a great proliferation in the last number of years of individuals who are working on a subcontract basis. They may be working for one contractor or two contractors. So these are truly the smallest of small enterprises. As for the number of $75,000, if you look at what was considered low income in 1991 and then carried that forward with the effects of inflation, I think it would bring you pretty darn close to the $75,000 range.
If you take a look at what would be the overall impact on government, it would be very minimal, in our opinion, in that individuals who work for GST-registered companies or who provide services to GST-registered companies get that GST back on the items they pay.... So as far as the impact on the Government of Canada is concerned, it would be minimal. The true benefit of this would be for small enterprises, by reducing the burden on them.
10:15 a.m.
Bloc
10:15 a.m.
President and Chief Executive Officer, Alberta Chambers of Commerce
Definitely, if they are working as a subcontractor or as a self-employed individual.
10:15 a.m.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Perfect, thank you.
I now have a question for Ms. Strydhorst.
On the issue of agricultural insurance, your group proposes to reduce production insurance premiums by 20% for producers who use “green” agricultural practices.
What is the rationale behind that? We rarely ever hear from groups that advocate reducing payments.
10:15 a.m.
Tom Jackson Advisor, Zone 3, Alberta Pulse Growers Commission
Thank you very much for the question.
I think it's clear, in this day of energy conservation and the green movement, that growing crops like pulses that fix their own nitrogen, reduce chemical inputs, and all of those things that conserve the environment should be encouraged by our government. There's the production of forage and a whole number of things. Crop insurance has really emphasized traditional crops, monoculture. This would be very good for our environment, for encouraging value-added processing, and there are a number of ways that our crops that are environmentally friendly have always been discriminated against in crop insurance. We're asking for a level playing field. Particularly, risk management is a problem for our industry. If we could have that help, it would put our crops on an even footing with many of the major crops like wheat.
10:15 a.m.
Executive Director, Alberta Pulse Growers Commission
To add to that, there was the national farm stewardship program that was essentially achieving the same results, but funds in that program did run out in August 2008. This is seen as another way to implement a similar type of approach where there is more producer buy-in to it by its being a reduction in crop insurance premiums that they pay.
10:15 a.m.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
In your opinion, will producers of green products, or those who use “green” agricultural practices react strongly to the recommendation you are making? You argue that their costs vary slightly and are lower than yours. When the proposal is made to reduce insurance payments to a different group than one's own... I can imagine that there will be a strong reaction. I am just seeing things from their perspective.
10:15 a.m.
Advisor, Zone 3, Alberta Pulse Growers Commission
From a producer's point of view, because we are a non-traditional crop, there aren't good records. We are generally discriminated against on cost of risk management because of those issues. We need to look at this issue of green production and the true cost, both to us individually as farmers and to society. We hope this committee will look into that.