Finance Committee on Oct. 26th, 2010

[The Chair, Conservative, James Rajotte]

I call this meeting to order. It's the thirty-ninth meeting of the Standing Committee on Finance, continuing our discussions surrounding pre-budget consultations 2010.

We have two panels here this morning of seven organizations each. In the first panel, we have the Association of Equipment Manufacturers, the Canadian Steel Producers Association, the Canadian Hydrogen and Fuel Cell Association, the Mining Association of Canada, Le Mouvement pour les arts et les lettres, the Certified Management Accountants of Canada, and the Certified General Accountants Association of Canada.

Welcome to all of you. Thank you for joining us here this morning. You each have a five-minute opening statement.

We'll begin with the Association of Equipment Manufacturers.

Mr. Mains.

[Howard Mains, Consultant, Public Policy, Association of Equipment Manufacturers]

Thank you, Mr. Chair, members of the committee, and staff, for providing the Association of Equipment Manufacturers with the opportunity to address you this morning.

Allow me first to say a few words about the Association of Equipment Manufacturers. AEM is a trade association representing manufacturers of agriculture, forestry, construction, and mining equipment. Members include larger multinational equipment makers such as Caterpillar and John Deere, as well as successful Canadian manufacturers such as MacDon Industries in Winnipeg, Manitoba, and Sellick Equipment of Harrow, Ontario, and some 800 other members in Canada and the United States.

AEM member companies develop and manufacture the machines that build roads and extract resources, as well as planting and harvesting equipment.

To set the context for today, I would like to relate a small story. Late last year, we were in discussions with officials at International Trade regarding trade barriers into the Russian market that were affecting the sales of one of our Canadian members, MacDon Industries of Winnipeg. Russia had imposed a tariff on combines and was providing farmers with highly subsidized loans to purchase Russian-made combines.

One day I received an urgent phone call from the official at International Trade because they'd gone through the trade data and determined that Canada did not export combines to Russia. I assured the official that indeed this was the case, but that combines—and I've circulated a picture—are typically shipped with the headers that were specific to the types of crops to be harvested. Importantly, the trade barriers were being applied to the headers that were manufactured here in Canada, exported to Europe to the combine manufacturer, and then shipped to Russia.

So on this piece of equipment that is shown in the photograph I have here, the header, which is the black piece of equipment at the front, is made by MacDon Industries in Winnipeg, and for the combines that were being exported to the United States or Russia, the combine was manufactured in Europe in this case.

The reason I share this story with you is to underscore several points. AEM members such as MacDon Industries compete on a global basis. To compete effectively, Canadian manufacturers must invest significantly in research and development to bring to market equipment that meets the demands of customers in Canada and around the world. The markets AEM members serve must be accessible and free of trade-distorting barriers. The dealers that sell and service the equipment must have access to a skilled workforce. Last, the currency fluctuations and a high-value Canadian dollar introduce more and greater risk.

With these factors in mind, AEM has five recommendations that we would ask the committee to consider in its report to Parliament.

Firstly, extend the two-year write-off for investments in manufacturing and processing technologies to at least the end of 2016 and consider making this accelerated capital cost allowance permanent.

Make Canada's scientific research and experimental development tax credit refundable and, importantly, improve its administration.

Introduce a refundable tax credit for workplace training in order to offset the impact of rising employment insurance premiums

Follow through on the commitments to reduce the corporate income tax rate to 15%. We acknowledge and applaud the government's action on this front to date.

Also, follow through on the recommendations of both the industry committee and the finance committee for the review and modernization of capital cost allowance for equipment. Modernizing CCA rates would have a positive economic effect. Faster replacement of older equipment increases productivity and promotes real environmental savings. Improvements to the CCA rates would also bring Canada in line with its major competitor and customer, the United States.

Importantly, we can all agree that innovation is driven by investment in productive assets: research and development, technology, and workforce skills.

Thank you for undertaking this study and for your consideration of AEM's submission.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mains.

We'll now hear from the Canadian Steel Producers Association.

[Ron Watkins, President, Canadian Steel Producers Association]

Thank you, Mr. Chairman.

Good morning, members of the committee.

My name is Ron Watkins. I'm president of the Canadian Steel Producers Association, representing Canada's primary steel and steel pipe and tube producers. Our industry employs over 25,000 Canadian men and women in highly skilled, well-paid jobs in production facilities in several provinces.

As we like to say, steel makes Canada stronger every day, everywhere, and in multiple ways. Steel has always been and will continue to be a central component of virtually every major industrial cluster. We are, in many ways, a new steel industry with new products, new processes, new ownership structures, and new technologies.

A recent independent study of our industry concludes that from an employment, value-added, knowledge-intensive, and environmental perspective, this is an industry that Canadians should want in their future. Budget 2011 can make an important contribution to that future.

Our industry faces fierce competitive conditions at home and abroad, including well-documented unfair trade from China and other countries. High exchange rates add to the challenge.

The recession had a deep impact, with annual production dropping by over 35% in 2009. Recovery remains slow and uneven.

We compete for investment capital as well as markets. This requires continuous innovation to improve productivity, operational costs, technologies, environmental performance, and workforce skills.

Our recommendations focus on those needs. To be clear at the outset, we are not seeking new spending programs or measures that benefit only our industry. We are seeking measures that would strengthen the competitive conditions for all Canadian manufacturing and resource processing sectors. These are our customers and their economic vitality is important to us. That is why we advocate a pro-manufacturing policy focus by the federal and provincial governments. We ask them to embrace policies that will re-energize Canadian manufacturing, which is essential to the employment and wealth generation on which so many Canadians and public finances depend.

This committee can recommend measures that will strengthen the entire manufacturing base--small and medium enterprises, large companies, and established and emerging industries.

Let me next speak to our specific recommendations.

On investing to improve productivity, we recommend, as did my colleague, an extension of at least five years to the accelerated capital cost allowance for new machinery and equipment. As the Canadian Manufacturers and Exporters and many other industries have pointed out, the ACCA provisions strengthen the business case for individual capital projects by improving project cashflow. This translates directly into improved rates of return on such investment.

The longer-term certainty of tax treatment is fundamentally important, especially for sectors like our own, where major capital investments take several years to plan, evaluate, acquire, receive regulatory approval, and implement commercially. This is all before it starts to return a nickel.

Moreover, it is especially timely to introduce this change now. As economies recover and companies evaluate investment options, Canada must offer strong conditions to attract those next-wave investments here versus other jurisdictions. The ACCA can make a tangible difference.

Second is to develop new technologies. The scientific research and experimental development tax credit--the SR and ED--is an important incentive to market-driven industrial research and development. The SR and ED is valuable, but can be improved by making the tax credits fully refundable. That would assist Canadian industry to sustain R and D efforts even when in a financial loss position. Administrative improvements, to improve the predictability and consistency of claims, would further strengthen industry uptake.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Ron Watkins]

Innovation to improve manufacturing productivity requires more than just equipment and technology. It also rests critically on ensuring that companies have a highly skilled work force to operate in an advanced technological environment of modern steelmaking. To this end, we propose a refundable tax credit for industrial training, creditable against EI premiums.

In my final comments, I would just simply speak briefly to the expenditure side of the budget. We seek the support of this committee to ensure that programs that are important to manufacturers are not subject to excessive cuts as governments seeks to reduce expenditures. Our submission identifies a number of such areas, including the sector councils at HRSDC, infrastructure renewal, enforcement of the trade remedy laws, and technology infrastructure.

I would certainly be pleased to elaborate on those topics, Mr. Chairman, in the subsequent session.

In closing, the proposals we advance will benefit many Canadian sectors, not just steel. We firmly believe that targeted tax measures and the maintenance of essential programs will contribute to strengthening the competitive investment prospects for Canadian manufacturers.

Thank you for your attention.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Canadian Hydrogen and Fuel Cell Association.

[John Tak, President and Chief Executive Officer, Canadian Hydrogen and Fuel Cell Association]

Thank you.

Thank you for your time today. I'm going to share with you information that I am fairly certain you haven't heard before.

Canada produces 3 million tonnes of hydrogen each year. Think about this.The U.S. produces 9 million tonnes each year today--it's not a gas of the future--and Canada produces 3 million tonnes, 30% of what the U.S. produces.

Of our annual production, 2 million tonnes is used in the oil sands in Alberta. That hydrogen is used to clean up and lighten up the heavy oil that's taken out of the tar sands, so the hydrogen and fuel cell sector actually works with the fossil fuel sector. The rest of the hydrogen that Canada produces is used to make gasoline cleaner. That's used today as an energy carrier.

Most of the hydrogen we produce in Canada is, surprisingly, extracted out of natural gas, so natural gas and hydrogen go hand in hand. The more hydrogen you produce, the more hydrogen you will be using in Canada.

As for government funding, from 2003 to 2008, for five years, the Government of Canada invested $170 million in the hydrogen fuel cell sector. The private sector responded, raised capital of a billion dollars, and invested that. Eighty per cent of the capital in this sector comes from private financing, not government funding. Some 80% of the R and D in this sector is done by companies, not government labs, and not universities. I think it's pretty significant to recognize that.

This is a global industry and it's emerging. The hydrogen fuel cell sector in Germany benefits from federal German program funding of $200 million per year, because they see that as critical for the development of their energy efficiency and new clean technologies, along with economic development. Canada, in comparison, invests $30 million a year. Canada's total annual investment in the hydrogen fuel cell sector is $30 million a year, the same as Denmark's. Denmark has 5 million people. We took an early lead, but this is developing globally.

I also want to let you know the good news that the money spent by the government in R and D—$170 million—now is turning into sales. We are selling product in the United States today, where the United States has a tax-based fuel cell purchase incentive. That's what we're asking the Government of Canada to consider. It works. It's stimulating sales.

Earlier this year, the Government of Canada commissioned an economic impact study on the hydrogen and fuel cell sector. The result was that, on a conservative basis, this sector in Canada will create 14,500 jobs by 2020 in a sunrise industry, in the clean energy tech sector, which was developed here in Canada and which we will export elsewhere, as opposed to wind technology, which is great, but which we import into Canada. Please keep this in mind: 80% of the R and D investment is funded by private capital.

I believe you have in front of you our 2011 budget submission. I hope you will take a look at the last page, where we map out exactly what will happen over the next five years if a fuel cell purchase incentive is put in place. It indicates, year by year, what sales we'll have and what impact that will have on government revenues. I'm happy to say that the total impact on tax revenues will be only $60 million over five years, most of that back-end loaded, because you ramp slowly in sales.

We've invested in the R and D and we're here at commercialization. We've proved you can do it. It's happening in the U.S. We hope the committee will look favourably on this recommendation.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Now we'll hear from the Mining Association of Canada, please.

[Paul Stothart, Vice-President, Economic Affairs, Mining Association of Canada]

Thank you very much, Mr. Chair, and thank you as well for the invitation.

I want to use my five minutes to just quickly highlight two figures from the “Facts and Figures 2010” document. You each have a copy en français et en anglais.

Page 9 shows the distribution of the industry clusters across Canada. As you can see from the map, the industry is very strong in all regions of the country: nickel in Newfoundland and Labrador; base metals in Quebec; base metals in Ontario; a lot of gold in Quebec; base metals in Manitoba; uranium and potash in Saskatchewan; oil sands in Alberta; base metals and metallurgical coal in British Columbia; and a lot of diamond activity in the northern territories. It's a very diversified and strong industry across the country.

It employs anywhere from 300,00 to 350,000 Canadians, depending on the state of the economy, and it pays anywhere from $6 billion to $12 billion per year to governments in the form of taxes and royalties, again depending on the state of world mineral prices.

More importantly, perhaps, it provides business for about 3,200 companies that supply goods and services to the industry in Canada. About 3,200 companies supply engineering, environmental services, drilling equipment, and so on. That's important to keep in mind.

The second figure, on page 13, shows the state of proven and probable mineral reserves in Canada, and it shows a fairly troubling picture, which is that the level of Canadian reserves has declined by around one half over the last quarter of a century for copper, nickel, zinc, silver, and so on. That is troubling, because a lot of the other benefits of the industry depend on our having strong levels of mineral reserves in Canada.

We're seeking a couple of things in that regard. One is a continued effort to enhance the investment attractiveness of Canada, and that would include continuing to reduce corporate tax rates to 15% and continuing the super flow-through share provisions of the Income Tax Act. I should add, within the investment attractiveness theme, that we seek the defeat in the coming days of the negative private member's bill, Bill C-300.

We would also seek continued investment in geoscience and geological mapping, especially in northern Canada, where we need to know better what the makeup is in the territories in terms of geological formations. That kind of information is very useful to companies.

On enhanced investment in innovation, there is potential for the government to better support the innovative future of this industry. It's a very technological and innovative industry when you think of some of the processes it goes through to turn rock into 99.99% pure metal.

Finally, I would echo earlier comments about continued support, and in this case, of the Mining Industry Human Resources Council. It's a very effective human resources council and is very useful to our industry in terms of information, research, mentoring, partnerships, and certification. It plays a very useful role and we hope to see enhanced support of that sector council.

I'll wind up there, Mr. Chair.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now move on to the Mouvement pour les arts et les lettres, please.

[Lorraine Hébert, Executive Director, Regroupement québécois de la danse, Mouvement pour les arts et les lettres]

Mr. Chairman, ladies and gentlemen, members of the committee, thank you for giving us the opportunity to express our views during these consultations.

The Mouvement pour les arts et les lettres represents over 10,000 professional artists, artisans, writers and cultural workers. For 10 years, the MAL has been advocating for a substantial increase in public funding for the arts and culture in Quebec and Canada. This call for more funding has become all the more pressing in light of the growing challenges in terms of how Canadian creative content will position itself and how it competes in the new digital world economy.

To meet these challenges, our brief lays out six intervention priorities: intervention in the chain of research, creation, production, promotion and distribution of works by artists from Quebec and Canada; intervention in the sustainable development of arts and culture; intervention to enable better access to basic and applied research in the arts; intervention for international promotion and distribution; restoring cultural diplomacy; and, lastly, intervention in the digital economy.

These six priorities translate into three recommendations. Basically, these recommendations have not changed in years. However, they have become more urgent because our various sectors seem incapable of integrating very talented and successful new artists, they seem incapable of dealing with the increased costs of production, promotion and development of new markets, or with the rising costs of national and international distribution, and, lastly, they seem incapable of helping to improve, even a little, the living and working conditions, or the pay, of artists and those who work in the arts and culture sector.

The recommendations of the Mouvement pour les arts et les lettres are shared by other Canadian coalitions as regards the Canada Council for the Arts and the implementation of new measures to support the promotion and distribution of our arts.

The digital reality is catching up with us very quickly, and if we are to skilfully negotiate these new changes, we will have to count on strong support measures and commensurate funding.

Our first recommendation is that the budget of the Canada Council for the Arts be increased to $300 million to help close the gap between what is needed and what the council can give, because this gap is increasingly affecting the dynamism and vitality of our sectors, including our ability to innovate and to stand out in an extremely competitive environment.

The digital universe is having a huge impact on us and will provide us with many more opportunities to create, promote and distribute our works. We therefore have to occupy this territory with audacious Canadian works, otherwise we risk becoming marginalized.

Our second recommendation is to restore the funding for the promotion and distribution of works by artists from Canada and Quebec. Day in and day out, we see the damage being done because these programs were eliminated. Please understand that artists earn a lot of income from the distribution of their work. Failing that, artists and workers cannot find work.

Soon, that is, by November 1, the International Exchange for the Performing Arts, CINARS, will reveal the impact the cutbacks have had on its ability to find new markets and on its touring productions.

Therefore, my second recommendation is to reinvest $25 million each year in international support and distribution.

My third recommendation deals with the new digital economy and the fact that we should have strategies which are adapted to our sectors, and the financial support to go along with that.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

Next,

we have the Certified Management Accountants of Canada.

[Richard Monk, Past Chair, Certified Management Accountants of Canada]

Mr. Chairman, committee members, fellow witnesses, ladies and gentlemen, I'm very pleased to be with you this morning to represent the Certified Management Accountants of Canada, also known as CMA Canada. Thank you for inviting us.

In our submissions to this committee over the past six years, we have consistently advocated for policies aimed at stimulating the growth of productivity. According to experts, the essential components of productivity are human capital, physical capital, and innovation. We prefer to focus on innovation, or what we call creativity, because it represents the extraction of value from the other two components, namely, physical capital and human capital, through inventiveness.

CMA Canada believes that increasing productivity growth is Canada’s top economic challenge. Why? Because a country’s productivity is linked closely to the standard of living of its citizens.

Unfortunately, CMA Canada’s productivity record over the past decade has been underwhelming. In fact, according to a recent report prepared by TD Bank, throughout 2000 to 2009, productivity growth slowed further, to a depressing 0.7% per year. This most recent decade has bordered on catastrophe.

Steps must be taken to improve productivity. CMA Canada recommends that the committee focus its attention on three areas to drive innovation and creativity: one, post-secondary education; two, basic skills training; and three, investment in research and development.

Very few investments provide the economic benefits that education does. A major part of our future success as a country is linked to developing and maintaining a highly skilled workforce. In particular, boosting innovation will depend on increasing an individual's skills within the so-called STEM disciplines: science, technology, engineering, and math.

Therefore, CMA Canada encourages the federal government, either on its own or in partnership with provincial governments, to make selected investments in post-secondary education designed to boost the creative capacity of students entering the business community. Initiatives could include grants or tax incentives that would encourage more companies to participate in creating co-op and internship opportunities, fellowship programs providing work experience, scholarships to students at the undergraduate, graduate, and post-doctoral levels, with a particular focus on the STEM disciplines, and grants or tax incentives permitting university and college faculty to spend up to one year in an industry position, thereby increasing business-academe collaboration.

Mr. Chairman, as many as 40% of working Canadians lack the basic literacy skills needed to participate in a knowledge economy. Poor basic skills act as a drag on economic growth. Literacy skills, as well as basic and intermediate numeracy skills and problem-solving skills, are essential to expanding creative capacity. Therefore, CMA Canada recommends that the Government of Canada invest, either directly or in partnership with provincial and territorial governments, as well as in collaboration with private sector partners, in literacy, numeracy, and problem-solving skills programs.

Our third and final recommendation is with regard to investing in research and development. On this front, CMA Canada is pleased that the federal government announced two weeks ago the appointment of a panel of experts to consult with Canadians on how the government can cultivate business investment in research and development. A long-standing and serious issue for Canada is the relative lack of investment in R and D by our business sector. CMA Canada intends to participate in this important review.

A key public policy tool encouraging investment in innovation is a scientific research and experimental development tax credit. There is room for a further enhancement of this program that will encourage business participation. We believe the program would be improved by extending the refundability provision of the SR and ED tax credit, currently available only to smaller businesses, to claimants of all sizes. This would encourage smaller businesses to grow and also would recognize the innovation advantage of larger companies. As an alternative, the government could permit larger claimants to apply the tax credit against other federal government levies, such as EI premiums.

In closing, Mr. Chairman, we are well aware that the Government of Canada is running a large deficit and that budget 2010 announced austerity measures for the years ahead. Nevertheless, we urge the committee to take a long-term view of Canada's fiscal condition. As our recommendations to you indicate, CMA Canada believes that the focus should be on long-term outcomes that will benefit Canadians.

Thank you very much. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Finally, we'll hear from the Certified General Accountants Association of Canada, please.

[Denis St-Pierre, Chair of the Tax and Fiscal Policy Advisory Group, Certified General Accountants Association of Canada]

Mr. Chairman and distinguished members of the committee, thank you for giving CGA-Canada the opportunity to take part in the 2010 pre-budget consultations.

We are pleased to appear once more before the committee. The committee is gathering viewpoints on fiscal and program spending priorities in preparation for the upcoming federal budget.

In view of CGA-Canada's deep-rooted concern and interest in small and medium-sized enterprises, we propose one overarching recommendation: that the Government of Canada provide further and meaningful support to SMEs and entrepreneurs. How? By improving the taxation and regulatory environment for Canadian businesses. Given the role SMEs play in Canada's economy, the needs of SMEs should be at the top of the public policy agenda.

I would like to spend the next few minutes outlining strategies to unlock the potential of the SME sector. These strategies emanate from our recent forum on SME issues convened by CGA-Canada and CPA-Australia. These themes also reflect work that was just completed with CPA-Ireland on entrepreneurship.

First, appoint an independent panel of experts to review Canada's tax regime to ensure the system is simple, fair, and efficient. While personal and corporate income tax rates have come down over the years, Canada's tax system has kept on growing. It's unnecessarily complex, cumbersome, labour intensive, costly to administer, full of red tape, and difficult to understand. Being a tax partner in an accounting firm, I believe this is true. We've said it before and we believe now is the time: we must modernize Canada's tax regime.

Second, implement a sunset provision for unlegislated tax proposals. We need an effective process to address the backlog of technical changes to be made to the Income Tax Act. Frequently, too much time elapses between measures being announced and actually being implemented. In the interim, taxpayers, professional accountants, and even the CRA prepare for government policy, which involves maintaining records and forms--sometimes forms that don't even exist for several years--not knowing if the legislation will come forward at all. To correct this, CGA-Canada recommends a sunset provision for unlegislated proposals. In effect, if a tax policy change is announced and not incorporated into legislation within a reasonable amount of time, the measure would lapse. This is in place in Britain and it appears to be working.

Third, introduce a Canadian taxpayer fairness code. In budget 2010, the federal government spoke of the issue of strengthening taxpayer fairness. CGA-Canada supports a Canadian taxpayer fairness code, which includes the guaranteed right of a Canadian business to receive written tax rulings that would clearly define the CRA's expectations of SMEs. The CRA should consider making its policies available to the tax community online, for example. This would strengthen transparency and accountability and also facilitate compliance.

Fourth, take immediate and aggressive action to reduce the overall regulatory burden on SMEs. While there have been initiatives at the federal level, there is more work to do. For instance, the government needs to deliver on its 2010 budget commitment to establish a red tape reduction commission.

Canada's governments need to get much more serious to achieve meaningful results and reduce the overall regulatory burden on SMEs, which continues to cost businesses about $30 billion a year.

Last but not least, all governments must continue working towards revitalizing the Agreement on Internal Trade. Remove the barriers—once and for all—that limit Canada's interprovincial trade and labour mobility, and harm our international reputation as a place to do business.

Mr. Chairman, thank you for your time.

Madame Presseault and I will be pleased to respond to any questions or comments.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll start with members' questions.

Mr. Szabo, for seven minutes, please.

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you, Mr. Chairman.

I want to start with the hydrogen presentation, simply because it's an area we haven't had enough attention on.

You mentioned that $60 million over the five-year period would be roughly what you're looking at. Can you briefly update us on where the technology is and where that $60 million would go?

[John Tak]

Thank you very much.

To be specific, the good news is that the product is selling today and that it's an industrial market. Those early markets are for materials handling, such as forklift trucks, fuel-cell-powered forklift trucks using hydrogen as the fuel, and for telecom backup systems in the United States that need longer run times. After Hurricane Katrina hit, they realized that two hours of battery backup time wasn't working.

[Paul Szabo, Liberal, Mississauga South, ON]

Okay. That's where I was going with the next part. How do we ramp that up to the economies of scale that are going to make it competitive?

[John Tak]

There is an early premium over fuel cell products they're selling today because they're initially in low volumes. Covering part of that premium increase creates an incentive for industrial users to purchase those products. This isn't a supposition. The U.S. has that tax credit now and it's having that exact same effect. That will ramp up volume and help drive down costs to the point where you won't need that initial incentive to stimulate the market.

Just as an example, Walmart is actually building a brand new distribution centre. All of the forklift trucks in that centre will be powered by fuel cells coming from Canada. So this is no longer a supposition. We know now that end users are purchasing these products when the appropriate incentives are in place.

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you.

I'd like to move on to the CMA and Mr. Monk. Your presentation was excellent. I really appreciate the input.

Very few people talk about productivity, because it's really hard to define for a lot of people. How do you get at it--as you put it--with R and D basically being the way we can harvest the benefits of our human resources and others?

I'm kind of interested in the reluctance of both the CMA and the CGA to address the deficit: the timing in dealing with it, and some of the key items, such as the advisability of delaying the corporate tax cut. I wonder if each of the groups could give their views on the economic condition of Canada.

[The Chair, Conservative, James Rajotte]

Mr. Monk.

[Richard Monk]

We realize that Canada is facing a substantial deficit that has to be addressed, but our presentation here is focusing on productivity with a long-term view. Over the long term, studies show that productivity increases the wealth of citizens in the country. Our presentation here is focusing on that, not necessarily on ways of reducing the deficit as it stands right now.

[Paul Szabo, Liberal, Mississauga South, ON]

Thank you. I appreciate it.