Finance Committee on Oct. 25th, 2010

[Avrim Lazar]

I want to be very clear that if you're sitting in the kitchen of an average Canadian family, their worry is not about the deficit and it's not about the stimulus but about whether we can compete. Government will not allow us to compete.

It's going to be business investment. If we care about people having jobs in this country, we want to invite business investment in; we want to invest in Canadian facilities. The simplest, most leveraged, most powerful way to get people to invest in Canadian factories and Canadian industrial infrastructure is to give them a fast return on their investment by not taxing it quickly and by allowing the depreciation to go quickly.

Capital is mostly travelling internationally. If you have a pool of capital, and I face this all the time with my companies—they're multinationals and they have a small pool of capital—should I put it into my mill in Georgia, should I put it into my mill in France, should I put it into my mill in Brazil? What they do is add up the speed of return. Nobody can afford to wait.

If we had an accelerated capital depreciation, the numbers shift; they invest in Canadian facilities, and then we have jobs over the long term. If people don't invest in Canadian facilities, there's nothing government can do to make us competitive.

I'd be happy to work with you, Mr. Chairman, on the details and the technical aspects concerning whether this is a subsidy or just reducing a tax grab by government, but the more important question is how you keep jobs in the country if you don't bring investment money in.

I think it's a no-brainer: we need private industry investment to replace the stimulus if we're going to keep growing our economy. Extending it year by year, frankly, is just not good enough. We should see a five-year permanent extension so that people have confidence in investing in this country.

[The Chair, Conservative, James Rajotte]

I appreciate that, and we would certainly appreciate any information you have on investments that have been made in the sector since that policy change was made, in order to bolster the argument to continue the policy.

I want to finish. Mr. Pacetti, please, you'll have five minutes.

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

Thank you, Mr. Chair. I guess you saved the best for last.

[Voices]

Oh, oh!

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

I want to first thank all the witnesses for appearing. It's always a challenge for us.

I'm going to do just a little bit of clean-up. I'm going to ask my questions to the Polytechnics people, to Ms. Robinson.

I have two questions. First, explain to me the difference between, for example, you and the Canada Foundation for Innovation and the members you're dealing with, and why your institutions are needed to avoid duplication of the moneys being distributed to your founding members. I see that you're getting money from the social sciences...and I think you're also getting it from the Canada Foundation, I believe?

[Nobina Robinson]

Thank you for your question.

Polytechnics Canada doesn't get a cent from any of these councils. We represent colleges that can compete and then on a competitive basis obtain funding from a variety of sources.

There is a difference between the three federal research granting councils in Canada—those would be the natural sciences council, the social sciences council, and the Canadian Institutes of Health Research, which fund the research activity—and the Canada Foundation for Innovation, whose president is here, which funds the research equipment, infrastructure, and facility.

Polytechnics Canada does not get any of that funding to—

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

But all your members will request money from the three funding organizations?

[Nobina Robinson]

In different kinds of competitive projects, partnered with industry often, as CFI has explained, and leveraged with other sources of funding, institutional or private sector, for different kinds of purposes. If you have a project that's trying to do an IT technology, you go to NSERC, but if you're trying to study the impact of better business practices in a certain sector, you'd go to the social sciences council. They're different tools.

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

Are your members happy with the way the system works presently?

[Nobina Robinson]

Well, we are happier than we would have been a decade ago, when college research was not funded at all by any federal department or granting council. We are new players, new entrants, and we are very glad for the little recognition there is. But the balance is something that over time needs to be rectified.

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

Then the magic question is going to be, with all this money that's going into research—I think Mr. Lazar was speaking about it a little bit, and it's one of the criticisms this committee has had—how do we determine whether we're getting a return on the money? I'm speaking for Canadian taxpayers.

Secondly, how do we increase productivity in this country? We are putting money into research, so why is it not showing up in our stats? What's the next step? I know there's a need to improve on commercialization—that's been one aspect—but I'd like to hear your comments on those two aspects.

[Nobina Robinson]

The chair will tell me how many seconds I have left to answer. I have two minutes?

[The Chair, Conservative, James Rajotte]

You have two minutes.

[Nobina Robinson]

Okay.

You've asked many very fundamental questions.

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

Basically, what's the return? How do we evaluate that, and how can we improve productivity from a Canadian standpoint? That's been one of the criticisms we've had.

[Nobina Robinson]

I think the federal government is beginning to consider that, yes, the ROI—the return on investment—needs to be looked at, which is why it has recently created an expert panel on business innovation.

I can only speak about the inputs and the outputs of my members.

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

That's what I want you to speak about.

[Nobina Robinson]

That's what we have been tracking year on year now for two or three years, where I believe we are seeing, first of all, the private sector investment in our colleges growing. Our data show that it had grown by about 120% last year, from year to year. We've gone from $3 million to over $7.5 million of private sector small companies coming to our colleges to invest in what we are doing. So we do have to move from a mentality that keeps demanding input dollars without showing the outputs, I agree.

There are six outputs that we think are important to measure the work we do: how many students are involved; how many faculty are involved; how many prototypes have been created—not patents, because scientific research is measured by patents and trademarks, and we are in the business of late-stage commercialization--how many prototypes; how many processes have we improved; how many studies have we done to do cost avoidance so that companies can avoid market failure. We're into that valley of death. So we measure six of our outputs: how many collaborations we have with universities, as well as with the private sector, and how many clients we have served.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Pacetti.

Thank you, Ms. Robinson.

I want to thank all the witnesses for being here today. I did have a request from a member.

Ms. Hughes Anthony, I believe you referenced a report regarding personal income tax proposals. If you could submit that to the clerk, I'll ensure all members of the committee get a copy.

I want to thank you for coming in.

Thank you very much for your presentations and your responses.

Thank you.

The meeting is adjourned.