Finance Committee on Nov. 7th, 2013

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Can you confirm that Canada's Venture Capital and Private Equity Association is opposed to the elimination of the tax credit?

[Jean Lortie]

Yes.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

Mr. Gupta, you mentioned the insufficient level of venture capital funding, particularly in Ontario, where you work. There used to be a tax credit for workers' funds that invested in venture capital, but it was abolished in 2005.

How much time do I have left, Mr. Chair?

[The Acting Chair, Conservative, Dave Van Kesteren]

You have one minute.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Since 2005, funds available for venture capital in Ontario have been dropping precipitously. They currently represent 36% of Canadian venture capital as a whole. In Quebec, where the GDP is much lower than Ontario's, the percentage is also about 36% of the overall Canadian amount.

You confirmed to the committee the crucial importance of workers' funds that invest in private funds, and the fact that they are essential for organizations and businesses, particularly the ones you represent, who want to have access to this venture capital.

[The Acting Chair, Conservative, Dave Van Kesteren]

You can take about 15 seconds, Mr. Gupta.

[Karna Gupta]

Okay.

I think we agree with that, because we even asked the Ontario government, in our submission, to revisit exactly what's going on in the Quebec market on the venture side.

[The Acting Chair, Conservative, Dave Van Kesteren]

Thank you, sir.

Mr. Adler.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair.

I'd like to begin my questioning with Mr. Aronshtam. You're looking quite lonely in Toronto there.

Could you talk about how successful the angel tax credit in British Columbia has been in creating new businesses?

[Natan Aronshtam]

There are many examples that have been published in B.C. as far as how that's progressed, but there was a recent study done of that credit that showed that for every dollar in tax credits, $2.91 in federal and provincial consumption and income taxes came back. From that point of view it showed that it's quite successful, but there are numerous case studies where young companies were able to evolve and grow through finding the right angels. I don't have any names with me today.

[Mark Adler, Conservative, York Centre, ON]

Okay, but your general assessment is that it's been fairly successful in B.C.

Have any similar experiments been tried in other jurisdictions, to your knowledge, that have met with similar success?

[Natan Aronshtam]

There have not been, to my knowledge, in Canada, no.

[Mark Adler, Conservative, York Centre, ON]

In terms of our personal tax regime, how does that compare to other countries?

[Natan Aronshtam]

It's not really my area of expertise, but in general our personal income tax rates are relatively high compared to many other OECD countries', as I'm sure many of you know.

[Mark Adler, Conservative, York Centre, ON]

Our corporate tax is considered to be very low, which is a strong incentive for attracting investment. Wouldn't you say that?

[Natan Aronshtam]

In my view, there is no correlation between, let's say, a 15% federal tax rate combined with a provincial rate that gets you to about 25%, 26%, as being an investment-attraction vehicle. I don't think there is evidence to support that.

[Mark Adler, Conservative, York Centre, ON]

You're saying there's no evidence to support that a 15% federal corporate tax rate has been successful. Is that what you're saying?

[Natan Aronshtam]

[Inaudible--Editor]

[Mark Adler, Conservative, York Centre, ON]

That's interesting.

I have a couple of questions for Mr. Lortie.

The Conservative Party just had its convention last weekend in Calgary. I didn't see you; I hope you had a good time. You declared that the union's goal is to defeat the Conservative Party in 2015, and you denounced a number of resolutions passed, from defunding the CBC to public pension reforms and the perceived suppression of aboriginal and Quebec cultures.

Could we talk about some of the resolutions that have been passed at CSN conventions, such as supporting the boycott of, divestment from, and sanctions against Israel and about claiming that Israel is committing human rights violations and is an apartheid state? Could you tell me how that further advances the interests of workers as members of the CSN?

[Jean Lortie]

Absolutely, sir. I was in Calgary last weekend with my federal correctional officer and I saw what happened at the convention. There was a union-bashing process there, with more than 15 resolutions voted on and debated on the floor—

[Mark Adler, Conservative, York Centre, ON]

I'm asking about your resolutions.

[Jean Lortie]

I will answer about my resolutions, also.

CSN is a very politically active organization and it has been so since 1921, when it was founded. Even a former Liberal federal member, Jean Marchand, said that unions have the right and the obligation to do political activism for the benefits of its members, but also for the general population, because we're not just working in plants—

[Mark Adler, Conservative, York Centre, ON]

How does criticism of the only democratic state in the Middle East advance the interests of your workers?

[Jean Lortie]

Historically, we have been critical of human rights violations—

[Mark Adler, Conservative, York Centre, ON]

You're not answering my question.