Evidence of meeting #52 for Finance in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was infrastructure.
A video is available from Parliament.
Vice-President of Research and Chief Economist, Quebec Employers' Council
No. I'm not really familiar with this. Tax credits or any specific measures should be oriented toward fiscal benefits of the measure, specifically what measure would most probably encourage some activities that we think would induce more productive activities, and so more wealth creation overall.
I'm not necessarily familiar with the patent box idea.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Mr. Zizys, I want to ask you a question. You talked about the creativity of employers and being engaged in actually training their workforce. One method we talked about, and we've actually implemented, and employers have been wanting is the job grant.
That is, in essence, for them to identify the people in their workforce and use it as a grant to help them skill up and actually increase their productivity, and get them ready, maybe, for their next jobs in that organization as well.
Do you see that and programs like it as being effective methods to do that?
Metcalf Fellow, Metcalf Foundation
I certainly think it's a step forward.
One point I make is that there's a lot of evidence that shows that training is beneficial to individual businesses. What has been striking to me in my research is why more employers don't train. I think there are a lot of reasons, as I mentioned, a lot of legitimate reasons. Sometimes it's cost, sometimes it's convenience, sometimes it's knowing the training.
The Canada jobs grant is only addressing one aspect of the issue. There are technical barriers like cost, but there are also institutional barriers. For example, it would be good to target something like the Canada jobs grant to specific industries where we want to make a difference.
It's not large enough to have a broad effect on the labour force, so targeting. Encouraging more linkages with educational institutions, so that we're changing the business culture, we're developing partnerships around training, so it's not just the one individual employee who's getting trained, but we're trying to actually make a systemic change.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Ms. Lennox, I'd like to ask you a couple of questions with respect to Startup Canada. You mentioned that this could be self-sustaining and you guys would be on the run after a three-year investment.
I want to know, what are the different types of issues you're seeing at your various sites across Canada that are impacting entrepreneurs? Do you see different regional differences?
As you pointed out in your comments, you talked about information sharing, which is important, but what are some of the regional differences you're seeing in Eastern Canada, Atlantic Canada, and the other areas?
Co-Founder and Chief Executive Officer, Startup Canada
There are absolute regional differences. As members of Parliament, I am sure you see them on the ground, whether it's in Atlantic Canada, in supporting succession of our senior entrepreneurs and getting the next generation of entrepreneurs into their businesses, trained and qualified to actually take hold of their businesses, to opportunities to go down to Silicon Valley with the C100, and how we retain our entrepreneurs to create anchors here at home. So from coast to coast there are certainly different barriers.
There are market barriers for our northern communities. We hear all the time about broadband access and how that disadvantages some of our northern tech entrepreneurs, and the importance of having consistent and reliable transport down to major cities for investment meetings. Our infrastructure impacts the success of our entrepreneurs. The success of Startup Canada is the result of Canada being in such a great position globally, as we are with all the infrastructure we have.
We've just invested $100 million in the CAIP fund in order to support accelerator and incubator programs across Canada. That's going to make a massive difference.
Entrepreneurs—consistently across the board and this is why we're focusing here—continue to have difficulty navigating the ecosystem, so we need to make it easier to plug in.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you very much, Mr. Allen.
We'll go to Mr. Rankin, please, for a five-minute round.
NDP
Murray Rankin NDP Victoria, BC
Thank you.
Thank you to all the presenters.
Mr. Zizys of the Metcalf Foundation, I wanted to plug the excellent report that you did entitled “Better Work: The path to good jobs is through employers”. You gave me a real paradigm shift as you spoke today, and in that report, about focusing on what you call the demand side, the employers, rather than, as we traditionally do, the supply side, the employees and the job seekers.
I was taken in your report—and I see it in my constituency all the time—by the fact that we have the highest proportion of workers with post-secondary education, but we have the highest rates of people with those degrees working in jobs that are way less than what they are qualified for. That is something we really must address head on.
I want to throw an idea at you that I threw at the Chamber of Commerce earlier that comes from work that's going on right now with university presidents meeting with Israeli entrepreneurs here in Ottawa. Their concept is that we ought to give small business owners co-op students or paid interns because they will perhaps bring the innovation ideas to the employers. Those employers don't have an incentive to hire full time. As you point out, they often hire contractors instead. The idea would be to provide a subsidy perhaps, or a tax credit, to those employers to hire people for a few months so they could benefit from that expertise. I would assume that idea fits in with your thinking.
Metcalf Fellow, Metcalf Foundation
Yes. We see a lot about unpaid internships, and that is really a concern for many people because it is suggesting that youth coming out of post-secondary education are having a difficult time finding their way into the labour market. They are seeking experience, which is what a lot of the employers are looking for, and they're willing to offer their services without pay. So anything that supports their ability to gain some income while they're acting as interns and gaining that kind of work experience would be beneficial.
NDP
Murray Rankin NDP Victoria, BC
It gets their foot on the employment ladder and helps get new ideas to small business which otherwise might hesitate. As you point out, all you do is hire contractors because they don't want the commitment that a long-term employment relationship suggests.
As I said, your concept of raising employer ambition and focusing on the employer side as opposed to the worker side is really an excellent approach.
Ms. Lennox of Startup Canada, your specific “ask” as we would put it, is for $15 million over three years. I just want to understand a bit more. You've done such great work with zero federal dollars. I'd like to know specifically how that money would be spent , $5 million a year, I presume. What would you target first?
Co-Founder and Chief Executive Officer, Startup Canada
We would immediately install physical infrastructure in 1,000 points across Canada. These are kiosks. That would be done in year one. Then we would proceed to expand our Startup community network with hubs across Canada. We want 100 Startup communities in the next three years.
The challenge I face is that my counterparts across Canada are government organizations. Startup Chile is a government organization. Startup America is a public-private partnership. They're looking at what we're doing in Canada, and they wish they had what we had because this is all private sector, grassroots-led, but now they're starting to invest $25 million in Startup Mexico, $50 million in Startup Chile. As a grassroots organization, I'm competing with that to consistently deliver our global leadership, so I want to show the world that we can develop the best infrastructure for Canadian entrepreneurs through Startup Canada, and I want to do that in the next three years.
NDP
Murray Rankin NDP Victoria, BC
I have only one minute.
Mr. Clark, thank you very much for your idea about how it would be almost criminal not to borrow and for all the reasons you've articulated, which all strike me as eminent common sense.
Specifically on the infrastructure spending idea, building on what Mr. Brison asked you, the multiplier the committee has heard in the past for spending on infrastructure in the municipal context is about 1.6 for every dollar and zero for tax cuts.
NDP
Murray Rankin NDP Victoria, BC
Is that essentially how you would see that? Is 1.6 in the range of what you would use as a multiplier?
President, C.S. Clark Consulting, As an Individual
Yes, if you look in the Department of Finance budget documents that dealt with stimulus, expenditures on infrastructure had about 1.5. Depending on the type of tax cut, it was less than 1, probably about 0.5.
Conservative
The Chair Conservative James Rajotte
Okay, thank you.
Thank you, Mr. Rankin.
We'll go to Mr. Van Kesteren for five minutes.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you, Mr. Chair.
Thank you all for being here.
Mr. Clark, I want to go to you. Maybe we can get together sometime and just talk. I had the opportunity to speak to somebody else who had worked in Finance for years, and the insights that you get... I want to make a clarification and I'm sure that you meant this as well because there's a little bit of a misconception here. You're not suggesting that lowering taxes doesn't result in a stronger economy? You're talking more of those little perks that governments get. Am I correct in saying that? I don't want to put words in your mouth.
President, C.S. Clark Consulting, As an Individual
No. What I'm talking about is that the current proposals as I read them, the proposal to extend the—
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Let me interrupt because I don't have much time. Let me ask you the question this way. Lowering taxes in an economy for a nation like Canada, or any nation, will result in jobs being created, stronger economies. Do you agree with that?
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
We haven't put together this budget yet, so we don't know what's going to be in it. I wanted to hear that. I certainly would agree with that too. You would also agree that cutting red tape and having free trade agreements and the Building Canada fund, whether or not we agree if it were sufficient, were all good things to do to help.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
In your opening remarks, and I know you didn't mean this, but it did sound like you were saying that these tax cuts...and I know that you as an economist certainly wouldn't want to give that impression to Canadians who are listening.
President, C.S. Clark Consulting, As an Individual
I would say this, though, that no tax is a good tax. You always try to choose the most efficient and fairest tax. I'm just saying that in the past number of years that's not been the case.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
All right, there are some things.... John Locke, the philosopher of the 17th century, said that men joined societies to protect their property and when governments steal their property they declare war on citizens. In essence, whether we want to go that far, we've come a long way from what we say is normal taxation, but when we're taking away wealth from people we are stagnating their ability to go out and be the best they can be. Do you agree?