Finance Committee on Oct. 22nd, 2009

[Ian Russell]

Thank you for the question, Mr. McCallum.

I guess the way I'd start my answer is to say that looking at RRSP usage, it seems to me that when we look at the aggregate numbers, you're right, a lot of Canadians are not using RRSPs the way one would anticipate. But if you look at it across different income strata, particularly for middle income Canadians, you find that those Canadians are hamstrung. They don't have enough room under the tax-assisted plan to save adequate savings to fund the lifestyle they're now enjoying and would want in their retirement years.

I think the problem here has been that those Canadians have accumulated significant savings under those ceilings. The lifetime target might not necessarily alleviate.... In other words, it would be nice to say that we would raise that ceiling to the levels it's been in the U.K., for example, where it's at a significantly higher level than we have in Canada. But in addition to the size, what it would do is give flexibility to Canadians, I think, in circumstances where they've lost money.

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

I don't want to rush you, but I'm running out of time. Thank you.

Mr. Wilkes, on the subject of angels, I certainly fully agree that this is a crucial area and that the jobs of the future are going to come through new ideas and their commercialization. But I think you're suggesting that in order to get a research grant, there might be a requirement for commercialization.

As a former academic, that sort of rubs me the wrong way. A good part of research is not necessarily for commercialization, even though, where it's appropriate, I agree that it's a good thing.

Is that what you...?

[Andrew Wilkes]

No, I'm not suggesting that at all. I guess what we're looking at....

While we had some testimony that there is intellectual property being spun out of universities and hospitals, it's not enough. Our recommendation would be that we look at some of that funding and try to incent appropriately the researchers as part of the milestone that it could be spun out of.

This is not something that I have the answers for. It's an observation.

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

Okay. Thank you.

I have a quick question for Councillor Carroll. You have a long list of things you think the federal government should do, most of which I agree with. But since we have only 30 seconds, if you had to say one thing that you thought was the most important thing for the federal government to do, what would it be?

[Shelley Carroll]

My final note, for all cities, would be to look at the policy piece, because it is a policy undertaking to embark on what has happened all over the world. Cities become sustainable and off your backs when you give them revenues that grow with the economy so that in renewal times, they can renew.

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

So your single point would be a revenue stream that is sustainable.

Okay, thank you.

[A voice]

Like the gas tax.

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

Like the gas tax.

Thank you.

[Shelley Carroll]

Thank you for the gas tax--but it was a start.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McCallum.

We'll now go to Monsieur Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

Good morning to all the witnesses. I was particularly impressed by Peter Kim's testimony on the intervention centre. We're always surprised to see where science can lead us, particularly in the area of micro-surgery. That's what you do, if I understand correctly.

Can you give us more details on the procedures you do? You talked about procedures during pregnancy, on children before they are born. Can the procedures you conduct also be done after birth, or are they strictly limited to pregnancy? Is the purpose of these procedures to correct strictly esthetic problems, or do you go further in treating problems such as spina bifida or cerebral palsy? Can it go that far?

[Dr. Peter Kim]

The type of problems we wanted to address with the new technology development has to do with those that are potentially life-threatening for both baby and sometimes complications for the mothers as well.

The real challenge is that it's a fairly substantial number. Canada has 33 million people and 350,000 pregnancies per year. If you look at Ontario, for instance, we have 140,000, and in Quebec there would be about 70,000 or 80,000 new births per year. About 1% to 3% of them would have a birth defect associated with them. It affects the entire system, from brain to heart to lungs to the abdominal organs.

The type of technology we want to develop is essentially to make the system smart. Currently we use very dumb instruments, 1990s technologies that we pay a huge amount of money to buy and use.

The second thing is to not only make those instruments smart but make them small, so that it's applicable right across, in all children of all ages, from even before they are born, and it's a type of technology that's scalable for adults as well.

The other fundamental change for us is that this is an opportunity for not only clinicians such as myself, but it allows interaction with engineers. It's a new paradigm, in a sense. It's an open canvas where scientists, engineers, and clinicians can interact.

Canada has always been a leader in using the technology, and I think this is really the beginning of an opportunity to be able to put things together and make a difference.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

That's not done elsewhere?

[Dr. Peter Kim]

No. On the conceptual aspect, we're about three to five years ahead. As it sits now, the current paradigm of this group is leapfrogging, at the cutting edge of it. With further investment, it would really put us on the map and make a difference in care.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you very much.

I have a second question for Ms. Diamond from the Ontario College of Art and Design, which is growing.

Can you give us an idea of the number of registered students? In more concrete terms, what kind of graduates leave the school and what kind of work do they do?

[Dr. Sara Diamond]

I'm very pleased to do that.

We have incredible demand in the Ontario system. In fact, we had a 31% increase in the number of first-year applicants. We were the most popular school in terms of first choice.

Now, that makes up about 3,600 or 3,700 individual undergraduate students, with a full-time equivalent of 3,200 and a growing corps of graduate students. But that's small. That's a very important growth piece for us.

We cover all disciplines in design, so everything from industrial design to environmental design—in the discussion on sustainability, we're partners in the mayor's initiative, for example—right through to material art and design. We have a very strong digital futures initiative across all disciplines, and an equal number of students in art.

The professions that we graduate students into include everything from the feature film industry to animation to working with hospitals. In fact, some of our colleagues are precisely involved in design in medical engineering. We have a pretty significant research portfolio of some of the supports from the granting agencies that my colleague mentioned, but also a great deal of collaboration with industry--but not on the college model, because industry tells us that they need students who have the intellectual and critical skills to lead businesses as well as the technical and creative skills.

We have a very holistic way of educating, but we're very engaged also with commercialization of research results.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

I have a final question for Mr. Russell.

You propose to eliminate minimum annual withdrawals from RRIFs. If the government put that measure in place, what would be the difference between an RRIF and an RRSP?

[Ian Russell]

Well, the minimum withdrawal is once the RRSP has been converted into an annuity, into an RRIF, and the problem right now is that there's a formula that stipulates a maximum withdrawal each year. If that's removed, it gives a lot more flexibility on simply withdrawing the funds from that RRIF over a period of time. You're not caught by that minimum withdrawal threshold. You can take out more if you want, or you could take out less.

So it provides flexibility for a Canadian who's already retired, whereas the RRSP, the way that's structured right now, that limits the contributions that can flow into the fund. What we were suggesting there was perhaps replacing that annual constraint on contributions with some kind of a lifetime constraint that just provides a lot more flexibility for Canadians to contribute more in one year and less in another.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

All right, thank you.

[The Chair, Conservative, James Rajotte]

Merci, Monsieur Laforest.

We'll go to Mike Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

Thanks to our guests for joining us this morning.

I'll start with Mr. Russell. I only have seven minutes, so I'll go fairly quickly. I'm going to ask you about all three items, but I'll start with the last one.

The RRSP contributions that people make are really a tax deferral program that we have. They don't pay tax on it when they put it into the system, and hopefully, when they take it out, they will be at a lower tax rate and be able to take advantage of that.

I'm not saying I disagree with you, but with the elimination of the required withdrawal rate at 71, or flexibility in it, the government of the day—whoever it happens to be—still needs its tax revenue, I can tell you that.

In your proposal, when would you propose that the government actually gets the taxes that have been deferred for years and years by doing RRSP contributions?

[Ian Russell]

I think if you provided the flexibility, the likelihood is that the tax take would be stretched out over a longer period of time, for sure.

[Mike Wallace, Conservative, Burlington, ON]

So you would still have an end date where it had to be emptied out by?

[Ian Russell]

I'm not sure. If it didn't and the individual died, then the tax would—

[Mike Wallace, Conservative, Burlington, ON]

At that time.