Mr. Chairman, honourable members, thank you for the opportunity to appear in front of your committee. My name is Anthony Giovinazzo and I am the CEO of a biotech company in Toronto that has a lead program in Parkinson's, applicable to worldwide markets.
I am here today to plead for your support on the proposal presented to you by BIOTECanada to build a better business case for companies like mine to grow and, more importantly, stay in Canada.
For a number of years we've reached out to the government, and you and your colleagues, to your credit, have responded with expansion of the SR and ED credits and with the elimination of the applicability of section 116 of the Canadian and U.S. tax treaty.
The issue is not funding for scientific research or seed capital; it is for what we call the valley of death: the development and commercialization piece of the value chain.
In addition, times have changed. Global competitors to match our early biotechnology leadership have upped their game and further exacerbated the problem. Many countries have begun to outpace us with both research and investment capital. They have also understood the inextricable link between research and commercialization.
In order to simply sustain what we have here in Canada in this industry today, our companies need to attract at least $1 billion a year of capital.
I'm here to tell you that we can build companies that will provide tax returns and real returns on investment to Canadian taxpayers. To do so, we must have access to the full continuum of capital.
Why are we here recommending flow-through shares? The traditional capital markets have changed. Where there was once a strong and competitive VC market, we are down to a couple that are struggling to replenish investment funds. Flow-through shares offer a new marketplace for investment to be drawn into our companies. They reward investors who are able to accept the risk-reward paradigm that our industry can provide. This industry is almost identical to the minerals and resources industry in terms of risk and timelines.
The flow-through shares program is a smart choice because at its core it is market driven as to which companies are funded. For many biotech companies with significant current or near-term commercialization needs, monetizing historical losses is the only asset that can provide capital.
The long-term health of our national economy requires a strategic prioritization of the life sciences-related commercialization funding. There are large amounts of taxpayer money in health care, post-secondary education, and research funding. The availability of commercialization funding through a basic structure like flow-through shares complements that funding and further provides for a measurable return on it.
As a result of the flow-through share provisions, an internationally competitive mining industry has been built and has attracted foreign investment. To this end, the federal budget last year expanded these provisions for certain renewable energy sectors.
I'll now hand you over to Peter Brenders, the president of BIOTECanada.