Finance Committee on Oct. 28th, 2009

[Sailesh Thaker]

What SDTC does is the pre-commercial demonstrations of technology. So they're in real world conditions with a potential customer. When we talk about young, what we're talking about is newly formed organizations and businesses.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

So it's not an age issue.

[Sailesh Thaker]

It's not an age issue. It's a young organization per se that is starting to build into the market.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Okay, thanks for that clarification.

[The Chair, Conservative, James Rajotte]

That's 30 seconds.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Well, I did have a question for the insurance brokers.

Can you tell us what you think the pregnant capital gain is among small business owners in Canada, that they would able to defer by rolling it over to their children?

[Steve Masnyk]

I'm sorry, Mr. Dechert, I didn't understand the first part of the question.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Do you have any idea what the value of the capital gain would be that exists in these businesses that you're suggesting be allowed to be rolled over and transferred to the owner's children?

[Steve Masnyk]

The global value or the per business value?

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Either one. Can you give us some guidance on that?

[Steve Masnyk]

No, not really. I can tell you that per business it would range anywhere from $600,000 up to several million.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

So it's considerably more than the current small business capital gains exemption.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Martin, please.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Chair.

I too wish I had more time to deal with many of the interesting issues, but I'd like to begin with Volunteer Canada as well. It strikes me that $5 million per year to lever billions of dollars worth of economic activity is a pretty good return on investment. Even an old socialist like me would have to admit that's not a bad return.

Can you tell us how you arrived at that figure of $5 million and what specifically that $5 million would do to encourage the 60% goal of volunteerism you'd like to achieve?

[Ruth MacKenzie]

We arrived at the figure based on our experience of delivering national programs and promoting and strengthening volunteerism over the last 30 years. We want to focus the money on two specific areas. One is social marketing and promoting volunteerism and building on the core value of volunteer involvement as a core component of what it means to be Canadian. Currently, about 46% of Canadians are involved in volunteering through formal voluntary sector organizations—the 161,000.

[Pat Martin, NDP, Winnipeg Centre, MB]

How does that compare to other countries?

[Ruth MacKenzie]

I don't have that data, but Canada has one of the strongest and broadest and most vibrant voluntary sectors in the world. The Canada Survey of Giving, Volunteering and Participating is among the most comprehensive data gathered on giving and volunteering habits that exist in the world as well.

What's interesting, though, is that the survey also tells us that about 90% of Canadians are involved in informal helping out, outside of the infrastructure of the voluntary sector. So we know that core value is there. We want to promote people being involved in the voluntary sector that's delivering vital services. The key aspect of the work we want to focus on is training and building capacity of organizations to engage volunteers, so they can dedicate their dollars to delivering on their missions rather than having to think about and wonder about what the trends are in volunteering and what we need to do to capture the future generation of volunteering. That's our job at Volunteer Canada, to be ahead of the curve, and we want to make sure we are able to share those learnings with our sector organizations, who in many cases are struggling with the here and now around volunteer involvement. We want to make sure they're positioned to meet the needs and interests of volunteers into the future.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's very helpful. Thank you very much.

Heritage Canada, I was interested in your presentation and admired the beautiful booklet you circulated. I was taken by your comment that the greenest building is one that's already built. I think that's a fantastic approach to things, and energy retrofitting, etc., should be encouraged.

What I was going to ask you is this. The City of Toronto tried something called a revolving fund at a period of time, where you could do an energy retrofit without any upfront cost to yourself. The fund would pay for the retrofit and then you would pay it back out of the energy savings until such time as it was paid off and then the energy savings were yours to keep. The result was that they had targeted x number of buildings but ended up doing double that, and the payback was 100% less one or two per cent—like 98% of the money recouped from the revolving fund.

Is that something Heritage Canada has contemplated on a national level at all?

[Natalie Bull]

I think the notion of a revolving fund would be of interest as well. Our recommendations are flexible in that we're talking about tax credits, but also a grant program could work equally well.

[Pat Martin, NDP, Winnipeg Centre, MB]

What I like about the revolving fund is that it's neither a grant nor a tax credit; it's just a pool of money made available that gets repaid as people renovate. Thank you.

This is the last question I have, and perhaps I disagree with John somewhat about this, but the idea of the tax-exempt status for employer-provided transit is something Parliament dealt with. Nelson Riis, my NDP colleague, had a bill to that effect that passed all stages—one of those rare private members' bills that Parliament passed and approved and endorsed. We didn't get that; we got the current tax credit that you get after the fact. There's a current bill in Parliament today—it's exactly Nelson Riis' bill—put forward by my colleague Denise Savoie. It's percolating through Parliament. I hope the other members have a serious look at it and can see the difference between what we're proposing and what Parliament ratified and what the government of the day gave us, which is no comparison really. The rewarding of existing behaviour doesn't do anything to encourage more people to use transit. So as a tax-exempt employer benefit, it's treated the same way other payroll is, I presume. All wages are tax exempt for an employer.

Is that where it would fit into the tax system?

[Michael Roschlau]

Well, I don't think that wages are tax exempt, sir. This act--

[Pat Martin, NDP, Winnipeg Centre, MB]

They're deducted from earnings for the purposes of taxing the company, right?

[Michael Roschlau]

We're talking about what elements of the employment remuneration, either in cash or in kind, are taxable. Right now this type of benefit would be fully taxable, because in a sense an employer would be giving an employee either cash towards their transit fare or a voucher that would be redeemable towards their transit fare--their commute to and from work by transit.

[Pat Martin, NDP, Winnipeg Centre, MB]

Yes, currently it would be treated just as if they gave you a car to use.

[Michael Roschlau]

Exactly.