Finance Committee on Oct. 18th, 2010

[Dr. Judith Shamian]

That is the hardship that over three million Canadians experience who want to do their very best. It's very difficult to do so.

The supports caregivers need are around technology, health human resources, education, and tax support. Then there is the whole component of volunteers and how we support volunteers. That's for another day.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Szabo.

Monsieur Paillé, s'il vous plaît.

[Daniel Paillé, Bloc, Hochelaga, QC]

I would like to come back to the brief submitted by the Canadian Caregiver Coalition. In your brief, you stated that the tax credit should be refundable, as it is in Quebec and Manitoba. That should be a key recommendation in the committee's report.

A bit earlier, Mr. Szabo asked the same question. I would like you to specify, either today or at a later date, the number of people affected. We know that the problem is growing, but you give several figures on page 2 of your report. We do not know whether it is 10% or 1.5% of people, and you also mention 5 million people. That is a lot.

I am not sure whether you have a Quebec branch of caregivers in your area, but I encourage you to pay close attention to areas of jurisdiction. Would it not be possible for the federal government to hand over this domain and give the provinces a certain number of tax credits so that provincial health ministries could administer them?

Furthermore, have you given any thought to the volunteer compensation project that was submitted to the Quebec government? A caregiver always needs volunteers, especially when the patient requires an increasing amount of care. There was a project on that, and I want to know whether you have anything in your files about that. I would ask that you please keep your answer brief.

[Dr. Judith Shamian]

I'm definitely not getting into the FPT agenda on federal or provincial jurisdiction. I'm going to stay out of that.

As it relates to volunteers, absolutely--

[Daniel Paillé, Bloc, Hochelaga, QC]

You are wise.

[Dr. Judith Shamian]

I used to work for the federal government, so I know my place.

As it relates to volunteers, you're absolutely correct. There are a lot of interesting initiatives in different countries. For example, there are initiatives where volunteers can bank the hours they volunteer, and when they need it they get those benefits.

As it relates to tax benefits, they absolutely need to get some recognition. As we move into the baby boomers, we need to look at volunteers not just as a service we need. Research clearly shows that when you volunteer and have meaning, you stay healthy longer. So we're looking at the economic return on that investment and some form of recognition.

In my organization we have 10,000 volunteers. We pay their mileage and give some other awards recognizing them, because without them lots of people would have no meals or exercise programs, and so on.

[Daniel Paillé, Bloc, Hochelaga, QC]

Thank you very much, Ms. Shamian.

My second set of questions is for the representatives from the Canadian Festivals Coalition. I would encourage you to be careful and to make sure that your festival names are in French. On page 18 of the French version, for instance, it reads “Quebec Winter Carnival”. I do not think Bonhomme Carnaval would be too pleased to see the name of his festival in English in the French document.

Nevertheless, I do not see any mention of last year's federal cutbacks, which were drastic, severe and even savage. I would like to know whether that had a significant impact on your end.

[David Heurtel]

Indeed, some of our members had to deal with some harsh cutbacks. The past two years have been very tough, and our members have had to respond quickly. It was talked about rather extensively in the media, for that matter.

We hope that, in the future, the government will adopt slightly more permanent measures based on more objective criteria, which would provide Canada's major festivals and events with a stable and increased source of funding, in turn allowing them to grow and develop.

[Daniel Paillé, Bloc, Hochelaga, QC]

Thank you.

I have just 30 seconds left. I have a question for the BIOTECanada representatives. You want the government to start a flow-through shares program. Why not simply create limited partnerships, a system that exists already?

[Anthony Giovinazzo]

Chairman, through you to the honourable member, the amount of capital required is significant. And having it based on market trends and having the market making the decision, we believe, is a more appropriate way to allocate funds. Of course, there are a number of organizations that provide funding, such as the Alzheimer's organization and the Parkinson's organization, and there are also venture capital funds, as you probably appreciate. But that sector has been decimated over the last several years and does not have the breadth and depth of capital it had several years ago.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Ms. Block, your turn.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

Welcome to all of you. I've certainly appreciated your presentations here today.

My first questions are going to be for the Alberta Pulse Growers Commission.

I appreciated reading through your brief. I just want to focus on your third recommendation on ensuring flexibility for research scientists, and I'm wondering if you could clarify for me a statement you made. In your brief it says, “One of the program funding conditions prevents using the funds to hire full time staff.” Then you talked a little bit about labour shortages.

Can you explain that a little bit more for me?

[Sheri Strydhorst]

Certainly. Maybe it's easiest to give you an example.

In the bean breeding program we have at Lethbridge, there's investment from the private sector and from government. The private sector wanted to scale up the work going on there, but they could not hire technical staff to carry that out using science cluster dollars because they are not allowed to use it for staffing funding. That is what prevented private industry from investing. That's where the labour shortage is. They were able to hire summer students, but that's only good for four months of the year, and of course work needs to be done outside of that. And post-docs certainly have projects to complete and other things to do. So it's that technical shortage we suffer.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

I have another question. I represent a very large rural riding that I think is known for its pulse crops. I'm very glad to have you here. I'm just wondering if you can explain to me what A-based research is. I'm not familiar with that term.

[Sheri Strydhorst]

Actually, I'll maybe pass that over to Richard. He's a little more versed in some of that.

[Richard Phillips, Representative, Alberta Pulse Growers Commission]

The A-based fund is just the core agronomic dollars that fund the Ag Canada research stations and the actual Ag Canada scientists. That's kind of what we call the core agronomic research that goes on in Canada.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

I would like to move on to the folks representing Canada's research-based pharmaceutical companies and just ask a couple of questions.

In your first recommendation you state that Canada's intellectual property regime needs to be improved. You talk about the “effective right of appeal” and “an existing legal imbalance”.

Can you explain that for us?

[Wendy Zatylny]

Absolutely, and thank you for the question.

The current regulations provide a system that encourages the resolution of patent infringement issues before a generic drug actually enters the market. Often this is done through litigation. Under the current system, if a judgment goes against a generic company, that generic company has a de facto right of appeal. It can go back and ask the courts to reconsider the decision. Should the decision go against an innovator, most often we do not have that right of appeal, so we cannot go back and ask the courts to reconsider the decision. We consider this a fundamental inequity in the system, and it destabilizes the IP system here in Canada.

For that reason, we believe that the regulatory amendments to create a time limited but effective innovator appeal mechanism are really needed to restore that balance in the operation of the regulations in a way that would also allow us to create jobs and bring investment into the country.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Okay.

In your third recommendation you talk about “[i]mprovements to the efficiency of Health Canada’s regulatory review processes”, and you state that they need to be improved so that they do “not negatively impact core operations budgets”.

Is that happening right now? Are those budgets being negatively impacted?

[Rob Livingston, Director, Federal Government Relations, Merck Frosst Canada Ltd., Canada's Research-Based Pharmaceutical Companies (Rx & D)]

Yes. Our concern is that the workload for the drug approval process has been increasing as the complexity of the reviews increases and as the A-based funding--as was explained with respect to Ag Canada--is being eroded. They are recommending a cost-recovery program, which they're going to bring forward this fall, which we've supported on the grounds that it's tied to efficiency. But our concern has been that the A-based funding mechanism hasn't kept up with the workload.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Okay.

My last question is for the folks from BIOTECanada. In your submission you talk about the need to maintain a sustainable community of biotechnology companies. Can you explain what that would involve? How many companies would ensure that you had a sustainable community?

[Anthony Giovinazzo]

Honourable member, I don't have a specific number for you, but I can tell you that there are approximately 175 biotechnology companies in Canada that are focused on therapeutic development. Then there are others that are related to a variety of research in related fields, such as diagnostics and medical devices. Canada is a rich developer of science and technology. We invest heavily in that academic and research-based area of investigation, but we need to further support that investment with commercialization and the availability of a continuum of capital to allow us to do that.

On the opposite side of the coin, I've been instructed not to say anything negative here, but I think it's important to share with you that we've had a number of companies leave this country and bring with them technologies and individuals who have been paid for and trained in this country, the most famous of which was announced a few days ago. Geron, in the United States, is becoming the leader in stem cell therapy by being one of the first in North America to be allowed to run clinical trials. They're in California; they were in Hamilton. The science that developed that technology was from Canada and was funded here in Canada, but it couldn't find the commercialization capital it needed. In fact, it couldn't find the venture capital it needed several years ago and it ended up moving.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Ms. Block.

Monsieur Mulcair, s'il vous plaît.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you very much, Mr. Chair.

I will start with the people from ACTRA, an alliance better known by its English acronym.

Mr. Waddell and Mr. Benskin, welcome. I want to thank you once again for your contribution, which is one of the most important in these deliberations. I recall that, last year, you made a plea for an income averaging system for tax purposes to benefit artists. They must have to deal with huge fluctuations in income at times. This kind of income averaging was already allowed in Quebec, and you asked that it be implemented elsewhere as well. Today, you again provided the committee with one of the most interesting reports. You reminded us that when it comes to creating jobs and wealth, culture is one of Canada's most valuable sectors.

I am going to try to understand one part of your analysis. I want to be sure that I have understood it properly. You call for incentives for the private sector. Right now, the most profitable companies enjoy the highest tax cuts. That is obvious. Are you telling us that the richest companies are the ones that need it most and should receive huge indiscriminate tax cuts while companies that are not profitable get nothing?

Are you making a case for these types of investment incentives for private companies in order to create more jobs, which would be the most productive approach? That would be similar to what was done in Montreal in the cases of the companies you mentioned, in video gaming, for instance. Those are precursors in North America. Is that the idea behind your recommendation for further incentive measures benefiting the private sector?

[Stephen Waddell]

Thank you for the question, Mr. Mulcair.

There are a variety of means by which we would like to see investment in the industry increase. We already have a tax credit system that is quite efficient. However, it could be expanded, and as we suggest, we would like to see and we urge the government to consider expanding the tax credit system to include all costs associated with a production. Right now those costs are limited to the labour costs.

A couple of provinces—Quebec followed by Ontario—have adopted what's known as the “all-spend” formula, which has generated a significant increase in production in Ontario and Quebec specifically. We would hope this government might consider adopting such an all-spend formula for the federal tax credits.

Similarly, like our colleagues from the biotech sector, the idea of flow-through shares from the mining sector could apply very well in our sector as well. As we have also suggested, an innovative approach to establishing a place for Canadian content in the digital environment would be to take the model that has already been established in the broadcasting jurisdiction and amend and expand section 19.1 of the Income Tax Act to include digital media productions; that is to say, if you created a website in Canada, you would have the opportunity to deduct the advertising expenses as a taxable expense, thereby encouraging advertising on Canadian websites.

Thank you.