Finance Committee on Oct. 27th, 2011

[The Chair, Conservative, James Rajotte]

Dr. Chad, can I ask you to wrap up, please?

[Dr. Karen Chad]

Sure.

I thought you'd be interested in hearing probably one of the most fascinating stories. Anand Agarawala sold his technology start-up company to Google for $30 million, and if you ask this gentleman what was the key to his success, he will tell you that it was a $20,000 university fellowship.

In conclusion, I'd like to thank the expert panel for their work and let you know that the University of Saskatchewan is eager to continue its collaboration with others on the needed next steps.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll begin our questions from members with Mr. Mai, for five minutes, please.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you to all the witnesses for their presentations.

I want to take a few moments, as this is our last travel time with the panel, to thank the clerk, the analysts, the interpreters, and also the proceedings and verification officers for their help. This is my first time travelling with the finance committee. I find it really interesting. It's my first time here also, in Saskatchewan, so I find it very interesting.

My first question is with regard to the Saskatchewan association of municipalities. We've been pushing and asking the government to have a plan, a strategic plan, for infrastructure with basically sustainable funding. We've been asking to have the transfer for the gas tax indexed, and also to have an additional amount of one cent.

What's your view regarding having a strategic plan for infrastructure?

[David Marit]

Well, we look at what we're in the process of right now. We know the Building Canada fund is going on until 2014. That's why we're here now, to open the discussion on where we go forward from 2014.

What we'd like see, and what I think every municipality across this country would like to see, is some form of long-term infrastructure funding. I think that's why we made the point that it's important that municipal organizations, along with FCM, be at that table in designing that program.

As to what the dollar amount is and how that's going to be, I think that has to be determined by the government of the day. I think all we can do as organizations is lay the groundwork in terms of what we'd like to see designed into that program.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

Turning to SIAST, you just started talking about the plan in terms of what you've done for aboriginal people. Could you perhaps expand more on that?

[Dr. Robert McCulloch]

Yes, thank you, Mr. Mai.

Our system, for years, has always been to have aboriginal support at each of our campuses, but we're finding that we must be more strategic. This plan is a longer-term plan. It involves making sure that we handle the transition for aboriginal students into post-secondary, and then the success in the program, but also the transition out of the learning environment into the work environment.

The point is that we're trying to cover the whole continuum. The new part that I like about this plan--I have a couple of copies that I'll leave here--is that we have a commitment from our provincial government for it. I think it's just a broader-based approach.

The point is that we are getting more and more aboriginal students into programs, but we must ensure that they continue with the same success rate as, or even better than, all other students. Right now there is a gap in some programs. In some technology areas the gap is as much as 15%.

So that's what we're trying to target: transition in, success, and then transition and success into the workplace.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you very much.

To the University of Saskatchewan, on the same issue, what can the government do more of in terms of helping aboriginal students? We've heard a lot about it, but can you give us more examples of what we can do?

[Dr. Karen Chad]

I guess in terms of following on from my dear colleague Bob, it really is that: pre, during, and post.

In the “pre”, I think what we need to do is look at what types of support programs, bursaries, and relevant base curriculum we are providing. We also have to look at, in terms of the curriculum, what kind of experiential learning we are doing. The transition then into the job force becomes an easy transition. It all of a sudden starts to hook up in terms of both cultural and also relevant market opportunities.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Great.

To the Investment Industry Association of Canada, it's not necessarily a recommendation that you've proposed, but we've seen so far a lot of recommendations regarding tax simplification.

Do you think having a commission that would actually study the impact of simplifying tax would be beneficial for the members you represent?

[Ian Russell]

Yes, it probably makes sense to stand back and take a look at the system as a whole. A particular area that might merit from further examination is the sales tax side, especially in the context of the harmonization of sales taxes that is taking place across the country.

A lot of issues come up in terms of the treatment of different types of commodities and services within a sales tax. There is probably merit in having a study that looks at the efficiencies of a sales tax. It's an important tax, and it's obviously one used around the world. There are some good examples we can take a look at. In that area, we haven't done anything on that tax since 1989.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Mai.

We will go to Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

I too would like thank the clerks and everybody involved in the travel. That was very honourable of you to do that. We sometimes forget what goes on in the background for these meetings. These folks do an excellent job, and we sure appreciate them basically having our backs as we do these types of discussions.

I also want to thank you, colleagues, for coming. I can't think of a better group of representatives from Saskatchewan and from outside Saskatchewan to talk about some of the issues we are facing here in this province. Of course, they are different issues than we faced four or five years ago. Now they're issues of growth instead of issues of decline. It's always good to see that.

I wish I had about 35 minutes to ask questions. I will see if I can get the chair to stop this clock for a while, but he's a little strict.

The first place I want to go is the investment dealers. We talked about the tech sector and we talked about the research sector. We're hearing about the inability to commercialize and the inability to get the capital into those sectors. In some ways, I wish you and Karen were sitting next to each other. Somehow there is a perceived wall between the two of you. What policies do we have to have as a government to get rid of that wall so that they don't have to go to San Francisco, Boston, or the eastern States to get their funding% They can go to Toronto, Vancouver, Montreal, or Saskatoon to get that funding. What do we need to do to make that happen?

[Ian Russell]

The problem, as I see it, is that the current environment is probably exacerbating the difficulty of raising capital for small and mid-sized companies, although we've argued that there has been relative difficulty over the last few years. In this current climate, it has been very difficult. The difficulty can really be traced to sources of risk capital and getting individuals or funds to invest in good Canadian enterprises.

The flip side of that is that we have a pretty good mechanism for finding the investment opportunities. It's really about bringing them together with the sources of capital. For example, the angel marketplace has worked fairly well. It could be better. There is a great clustering here in Saskatoon. There's Waterloo, Montreal, and Vancouver. That helps for the start-ups.

On venture capital, there's been a lot of talk around this committee about trying to encourage more venture capital in the small business sector. The government should be commended for the tax changes it made to allow in offshore venture capital funds. Again, it's a small part of the puzzle. It'll take some time.

[Randy Hoback, Conservative, Prince Albert, SK]

I don't want to eat up the whole finance committee. Unfortunately, I only get five minutes, and I have a lot of questions. What I would like to do is think of whether there is a way to get both of these sectors together to come to us with a policy or a plan that would see those funds start to transition in a natural way.

I'm going to move on to my next question. Sorry. As I said, I wish I had 30 minutes. I don't want to discount what you are saying. It's very important.

It kind of ties in to my questions for the members of CropLife. We talk about research and we are doing a lot of research in Canada. It's great. We're providing that. What do we have to do to get your CEOs to locate here in Canada and to get your head offices moving into Canada? It's one thing to have the research park here in Saskatoon, but I want the CEOs here. I want the decision-makers here. What do we have to do to make that happen?

[Dennis Prouse]

I'm not sure there's any magic wand that's going to make that happen. That's just a continuation of good tax policy. We've talked in our submission about regulation and the ability to make approvals faster. If you want Canada to be a centre for research excellence, there have to be clear and somewhat easier paths to approvals. There are clear, easy measures that can be taken in the approvals process to move that along. If that happens, you're going to see Canada become more of a cluster for research. That will attract people to locate here.

[Randy Hoback, Conservative, Prince Albert, SK]

Ms. Chad, we've heard about the brain drain leaving Saskatchewan or leaving Canada. Six or seven years ago, that was the issue: the brain drain—everybody is leaving. Now I think we have a good gain back. But are we doing enough to attract the top-quality MBA students, the top-quality doctoral students?

[The Chair, Conservative, James Rajotte]

Give just a brief response, please.

[Dr. Karen Chad]

I think the federal government has done a really great job of its programs, starting with the Canada research chairs program and then most recently the Canada excellence research chairs initiative. If you bring in those top world leaders here, faculty will come here and your students will come. I think you are going absolutely in the right direction, and I would encourage you to sustain those and even build upon them more. That was the success of bringing 19 world leaders here to Canada.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

We'll go to Ms. Block, please.

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

Thank you very much, Mr. Chair.

I echo the comments of my colleague in welcoming you and thank you for taking the time to be here.

I know some of you. I'm a member of Parliament representing Saskatoon—Rosetown—Biggar, right here in Saskatchewan, and I am very proud to do so. We all represent rural constituencies.

My questions will be directed to Mr. Marit and Mr. Orb.

We've heard long and hard about the Navigable Waters Protection Act and the implications that act is having on our rural municipalities. Could you give us some real, tangible examples of how that act impedes the work of our rural municipalities in moving forward?

[David Marit]

Through you, Mr. Chair.

Thank you very much for the question.

There are some strong, tangible examples in this province,where bridges built in the fifties and sixties, and prior to that, are becoming outdated. Our transportation system and our needs are changing. For example, we just had a case come to our office a few weeks ago of a bridge that has been more or less condemned on a lower class of road. The municipality wants to put a low-level crossing in and the Navigable Waters Protection Act says it has to be maintained as a bridge. Virtually nobody uses this road; it's a one-landowner road. That's how old and archaic the act is.

Those are things we have to change. It's costing not only us but all levels of government a lot of money.

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

Thank you.

My second question for you would be this. Do you have any other regulatory changes to recommend that would have a positive impact on rural Saskatchewan?

[David Marit]

I do, through you, Mr. Chair.

One recommendation, which we couldn't put in and which was a problem that we saw this year specifically in Saskatchewan with disasters, with the flooding—we think this would be an opportunity to probably save the federal government tens if not hundreds of millions of dollars—is to review the federal disaster assistance program.

Right now, municipalities cannot be compensated or are not compensated for doing their own work. We have to out-source all of it. In rural Saskatchewan, and probably in many parts of rural Canada, we don't have the contractors to do it. In the southeast corner of our province, we are so heavily industrialized in the oil and gas sector that the private contractors will not leave those companies. And you can't blame them. They have contracts with them; they won't leave them.

We think something that could save the federal government a lot of money is to look at their national road builders guide, use it as a guide, take the profit out, even, and say that they would pay the municipalities for their equipment to do work on disasters that is over and above their normal maintenance work.

Thank you.

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

I would like to ask you to comment on the Growing Forward 2 program and what our government is doing in seeking input from the agricultural sector to develop policy options for that framework. Could you comment on what your priorities for this framework are?