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.
Through the years we have consistently supported and advocated policies to improve Canada's productivity that in turn would enhance our competitiveness and increase Canadians' standard of living. In our submission we focus, once again, on innovation, or what we call creativity. Why? As stated by the 2008 Competition Policy Review Panel, “Innovation drives productivity and competitiveness in the 21st century”. We also believe that focusing on innovation would aid in achieving a sustained economic recovery and help to create quality, sustainable jobs, two objectives guiding the work of the committee.
CMA Canada is well aware of today's realities, two in particular. First, the global economy is even more fragile than it was when we put together our submission this summer. Second, we believe that Canada's business community must be the primary innovator.
Nevertheless, governments can play an important role as a catalyst of innovation and creativity. To that end, CMA Canada recommends that the committee direct its attention to the following three items: one, commercialization of creative ideas; two, improving Canada's keynote research and development program; and three, investing in basic skills training to help drive greater productivity.
One of the keys to capitalizing on creativity of Canadians is transforming their knowledge into products and services for the global marketplace. The government has introduced initiatives to foster commercialization and business innovation, and it is a partner in the recently launched national commercialization study. These are positive steps, seeing that Canada believes that two initiatives could further enhance and advance the government's objectives for commercializing innovation.
The Government of Australia has recently established Commercialisation Australia. In the current fiscal and economic climate, we do not recommend such a robust program for Canada; however, at least one component of the Australian program merits consideration. We recommend a program of repayable grants to assist innovative small and medium-sized enterprises in developing a new product, process, or service to be taken to market. Applicants for a repayable grant would be required to match the funding on a 50-50 basis.
Moreover, we think there is merit in promoting greater interaction between the business community, governments, and universities and colleges. The University of Waterloo has a unique creator/ownership policy, permitting professors and students to own their creations and encouraging them to commercialize their research. Perhaps the government could examine how the federally funded granting councils might lever their grants to encourage other universities and colleges to do the same.
Our second recommendation is with regard to investing in research and development. A key public policy tool encouraging investment in innovation is a scientific research and experimental development tax credit. We believe the program would be improved by expanding the refundability provision currently available only to smaller businesses to claimants of all sizes.
Most R and D in Canada is performed by large companies. Extending the refundability to them would encourage smaller businesses to grow and recognize the innovation advantage of larger companies.
Finally, Mr. Chairman, as many as 40% of working Canadians lack the basic literacy skills needed to participate in the knowledge economy. Poor basic skills act as a drag on economic growth. CMA Canada was pleased to see that imperative of basic skills training was recognized in Budget 2011, and we encourage more of the same in 2012. We recommend that the government continue to 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 across the country.
In closing, Mr. Chairman, we are well aware of the fragile economic times in which we live, and that governments face particularly difficult decisions among competing interests in the name of the public good. We believe the public good would be well served by increasing Canadians' standard of living through improved productivity. Our suggestions to you are made in that spirit.
We wish you well in your deliberations, and I look forward to your questions.
Thank you.