Finance Committee on Oct. 22nd, 2009

[Ian Russell]

—be imposed at that point, anyway. But I think when you look at the cost benefit, I think the benefit to elderly Canadians to have that flexibility in their retirement years justifies doing it.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

On the first point, you list off a bunch of exemptions that would be of organizations that wouldn't qualify because they have a bigger cap and so on. You say that it would affect small companies.

What percentage of the marketplace is that?

[Ian Russell]

Again, it depends on how you measured. If you measured it in terms of the number of companies that would qualify—because what I'm suggesting here is that you target it into common shares of small companies—it would be the vast majority of companies.

Even on the TSX listing, where there are some--

[Mike Wallace, Conservative, Burlington, ON]

It would capture more of that majority.

[Ian Russell]

It would capture a large number of companies. In fact, that would even understate the number that it would capture, because you'd then be encouraging companies that are staying private to list.

So I think it would have a big impact.

[Mike Wallace, Conservative, Burlington, ON]

Okay.

My final question for you is the about facilities that we've provided, the financial facilities. You asked for an extension on them. They haven't even been used up.

[Ian Russell]

No.

[Mike Wallace, Conservative, Burlington, ON]

Why would we extend them if they're not being used?

[Ian Russell]

You're quite right in terms of their not being used, but the fact is that they have been set up. They're there as standby facilities. It gives, I think, confidence to the marketplace.

For example, the insured mortgage program was a very effective vehicle for providing a source of funding for the banks in a crisis environment. I'm just saying, instead of completely unwinding it and disbanding it, leave it in place so there's assurance that if this thing comes back, it's there. It wouldn't cost the government really anything to do it.

[Mike Wallace, Conservative, Burlington, ON]

I appreciate that.

To our direct sellers organization, I appreciate your comments. On the changes that we submitted or put in the budget, then put in the bill, are you saying they're not in Bill C-52 or Bill C-51—whatever the number is—that's coming forward next week? Or is it a regulation change?

I don't get specifically what you're asking for in terms of what regulation change is required. If you could expand on that, I'd appreciate it.

[Jack Millar, Tax Advisor, Millar Kreklewetz LLP, Direct Sellers Association of Canada]

Thank you for the opportunity to do so.

No, it's not in the current bill. We understand there's some form of progress with it, because it's supposed to become effective January 1 of next year. So we obviously have a limited period of time to get something into the House.

The particular provision, the proposal, is to simplify the application of the GST to the remaining part of the industry, covering approximately 400,000 small Canadian businessmen and businesswomen in their businesses. The idea is that it's a good idea to cover them, as well as the 800,000 who are currently covered under the existing mechanism.

The proposal in the bill, Mr. Wallace, is to put in certain thresholds for use. Number one is that 90% or more of the companies' incomes be earned through the direct selling channel. Number two is that 90% or more of the income of the companies be earned from sales to consumers.

The direct selling industry has no problems with those provisions. The problem comes with the third threshold, which is that no more than 10% of the independent men and women in the industry can earn more than $30,000 a year. We have suggested to the department that if that isn't changed, we're going to end up with a dead letter here, because it's counterintuitive to people to put a limit on what the top earners can make. We've suggested there be some slight moderation or attenuation of that restriction, so no more than 20%, say, can earn greater than $30,000, or we've said that no more than 90% can earn $50,000. We've said to them that we know our industry, and that we're in full agreement with them that if they want to put certain restrictions on this, they need to make sure it applies where it's intended. We are all for that, but this one last point is going to have the very unfortunate effect that it's not going to be taken up by the companies, because they're concerned right now that they could be bumping up against the 10%.

My last point is that if they do go into this to benefit the 300,000 to 400,000 small businesses that would benefit, and if they go outside that threshold, there's a penalty tax. That's the last piece of this puzzle as to why we're again before you, and have been for 12 years in a row, on this particular point. We're finally getting it in the budget.

[Mike Wallace, Conservative, Burlington, ON]

Would you put that in writing to us and give it to the parliamentary secretary?

[Jack Millar]

Yes, we will.

[Mike Wallace, Conservative, Burlington, ON]

Dr. Kim, if we were to invest in the research and development of your program, at the end of the day some of the money in it would be taxpayers' money, but who would actually own the technology at the end? Would the hospital own it? Would a third party organization own it? Who would actually own that technology?

[Dr. Peter Kim]

It will be the taxpayers, as the way the institution is structured in Canada, it's owned by institutions. What we have done is that we have already formed a company within the institution to commercialize some aspects of it.

[Mike Wallace, Conservative, Burlington, ON]

Okay. So it's a commercial organization within Sick Kids hospital, solely owned by Sick Kids?

[Dr. Peter Kim]

Yes. But having said that, let's say we have partners from coast to coast, and if they come up with an idea and develop it with the engineers, then the local hosting institution would own that IP.

[Thomas Looi, Program Director, Centre for Image-Guided Innovation and Therapeutic Intervention]

A specific example is our work with the University of Alberta and Capital Health group out in Alberta. This is the whole idea of being able to translate the knowledge: taking the Sick Kids volume of data we have--let's say pediatric heart models, which we have here in size--and comparing it with the data at Capital Health group's radiology group out there. We can easily share the information we have, going back and forth, and translate their patients' specific data as well. It's a matter of our generating these models and having them treat their patients locally, so it's a very specific training model they can use right in the local community.

[Mike Wallace, Conservative, Burlington, ON]

Thank you very much.

I just want to congratulate Sick Kids for the work they do. My mother was a patient there when she was a child.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Wallace.

We go to Mr. Pacetti, please.

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

Thank you, Mr. Chairman.

Thank you to the witnesses for appearing. It's always a challenge for us to make sure that we ask good questions. We have questions for everybody, but it's not possible to ask them all, so I apologize before I even begin.

Dr. Kim, just to continue what Mr. Wallace was asking, shouldn't you be making this request to provincial governments, as this seems to be specifically for health purposes?

[Dr. Peter Kim]

The products that will come about will change the health care system. The care itself, to my understanding, is a provincial jurisdiction. But in terms of the development as such of the technology, you're right that the overall project has both provincial and industry investment and local hospital investment—

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

I don't mean to interrupt you, but my question is have you made applications anywhere on the federal side?

I don't see how the money would be transferred for your cause unless it was through a granting council, and I don't think that is possible. Would it be through CIHR? Would it be through Industry Canada?

I am just wondering where this money would be able to be funnelled through for your purpose. I don't think it would be through Health Canada, either.

[Dr. Peter Kim]

This one straddles across not only health care but also wealth generation in terms of economic development.

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

I am not disagreeing with you, but has there been a request anywhere with the Government of Canada for help?