Finance Committee on May 14th, 2019

[Clayton Achen]

Sorry—do you mean not related to tax?

[Pierre Poilievre, Conservative, Carleton, ON]

I mean related to any sector of the Canadian economy that is held back by excessive government rules, regulations, paperwork and delays.

[Clayton Achen]

Maybe I see where you're going here. Alberta is suffering tremendously from our inability to get any development going for the energy industry.

That would be a key one that I see. Does that affect middle-class, small business families? Absolutely. A lot of our clients are energy service companies that have had to significantly scale back, lay off and/or close their doors.

[Pierre Poilievre, Conservative, Carleton, ON]

You've covered energy now.

If there were less complexity in the tax and regulatory system, would that make it easier for the small businesses you serve to succeed and grow in Canada?

[Clayton Achen]

I'd argue that any simplification of our tax system would definitely encourage entrepreneurialism. Right now, we have a system that's set up to discourage them. I think to go through tax modernization in Canada would help encourage entrepreneurs to plant seeds in Canada.

[Pierre Poilievre, Conservative, Carleton, ON]

Ms. Coombs, you said that the government brought in this new record-keeping requirement that is of great cost burden to your members. You also say in your background note that the government ignored the one-for-one rule that requires the government to eliminate one regulatory rule for every one it brings in.

How did they get around the law that requires one subtraction for each addition?

[Shannon Coombs]

It's a very good question.

First of all, when it was introduced in the legislation, there was no costing required because it was a legislative amendment, in 2014. When we went through the regulatory process, we were aligning with the U.S. under the regulatory co-operation council, which was very ambitious and effective, because we are harmonized, for almost all intents and purposes, on our safety data sheets with the U.S.

We moved away from the costing because there was already a regulation in place, so they could say that the regulation was neutral, under the one-for-one rule.

[The Chair, Liberal, Wayne Easter]

We'll have to leave it there.

I have a question for Mr. Prouse, on Sevita. In terms of the difficulty getting approval, was it CFIA, Health Canada or a combination of both? We're trying to deal with a couple of similar issues at the moment and the stumbling block seems to be Health Canada.

[Dennis Prouse]

In this particular case, it's CFIA and its rules about seeds with novel traits, because it is the one that ultimately holds the key for approvals. As I say, this is just one example. There are potentially many more coming down the pike in the next few years, which is why it's so critical for their mandate to receive some clarity from government.

[The Chair, Liberal, Wayne Easter]

That's a good message. We need to receive some clarity in these kinds of things.

Ms. Rudd.

[Kim Rudd, Liberal, Northumberland—Peterborough South, ON]

Thank you, Chair. I'm going to give our new member of our committee, Rachel, a chance to ask a question during my time.

I have a couple of quick comments, and then I'm going to turn it over to Rachel.

First of all, Shannon, thank you for coming up and chatting with me before the meeting, and for all of the work that you and your organization are doing to be engaged in the process. I think, as with anything else, we all want the result that's best for industry, business and Canadians, so thank you for that work.

I want to make a comment to Mr. Achen. You've become quite famous so I want to say congratulations. A Conservative witness on Thursday sent me your video. It's also on Rebel Media. There's a lot of singing from the same songbook, but you're becoming quite famous as a celebrity on this subject of the 11% cut to 9% not being good for small business. As a small business owner, I think it's pretty good.

If I could let Rachel—

[Clayton Achen]

Mr. Easter, can I get a chance to respond to that?

[The Chair, Liberal, Wayne Easter]

You will.

[Kim Rudd, Liberal, Northumberland—Peterborough South, ON]

I'll turn it over to Rachel.

[The Chair, Liberal, Wayne Easter]

I'll let Mr. Achen speak, except in fairness, there has to be a quick response. There will be time at the end to get to a round, if you want to go that way.

Mr. Achen.

[Clayton Achen]

Thank you, Mr. Chair.

They're trying to tie me to Rebel Media and the fact that it picked up and posted a video. I don't appreciate that. It seems a bit dirty to me.

Secondly, to insinuate that I think that small businesses should pay more taxes is absolutely incorrect. I think that the small business limit certainly introduces a huge amount of complexity for small business owners in Canada, and maybe it's time for a rethink. That's all I'm saying.

I can't imagine why anybody around this table would argue that modernizing Canada's tax system is a bad idea. The reason I say that is that I haven't heard one good argument against modernizing Canada's tax system.

Thank you very much for the opportunity to respond.

[The Chair, Liberal, Wayne Easter]

We have time for one more question from you. Then we'll go to four minutes for Mr. Poilievre and four minutes for Rachel.

[Kim Rudd, Liberal, Northumberland—Peterborough South, ON]

Thank you.

Michael—Mr. Hatch—thank you for your comments as well. I come from a rural riding in eastern Ontario, Northumberland—Peterborough South, and certainly credit unions, as you mentioned, for farmers and small businesses, are very instrumental in our communities. I want to say they are very generous contributors to our community in terms of donating and supporting a number of causes.

Can you give me the percentage of federally regulated versus provincially regulated credit unions, as what we've been talking about is only for Canadian-regulated credit unions?

[Michael Hatch]

The percentage is quite low—two out of 250, in terms of actual institutions. But it tends to be the larger credit unions that go federal, so in terms of their share of the asset base of our system as a whole, it's much higher than two out of 250, which is less than 1%.

It's the larger credit unions that tend to go federal, because once you outgrow your province of origin as a credit union, the only option if you want to expand beyond your borders is to go federal.

Two more, as I mentioned, are in the process of switching to the federal regulatory regime and we expect that process to continue as more of our members grow and as consolidation continues to take place.

[The Chair, Liberal, Wayne Easter]

Thank you.

Mr. Poilievre, we'll go to a four-minute round. That will give everybody an opportunity.

[Pierre Poilievre, Conservative, Carleton, ON]

I think the reason Mr. Achen has become so famous is that when he walked out the front door of his house and recorded his frustrations with this high-tax government, and posted the resulting video, unedited, on LinkedIn, small businesses across the country could relate. They have been under attack since 2015, when the then-government raised the small business tax rate from 9% to 11%, only to have to reverse itself under immense pressure. They are now paying higher payroll taxes on CPP payroll. They're paying a higher carbon tax for which small businesses get no rebate whatsoever, and of course, the tax changes introduced in 2017 and now coming into effect penalize small businesses for saving within their companies or sharing the work and earnings with family members.

It is no surprise that you became a celebrity when you very succinctly and authentically expressed your personal frustration with the outright attack that this government declared on people like you and the clients you serve. I want to thank you for sharing their frustration and giving voice on behalf of entrepreneurs everywhere.

Out of deference, I'll give you a chance to respond.

[Clayton Achen]

Thanks. I don't have a have a whole bunch more to add to that.

Thank you very much for recognizing that it was a fairly non-partisan video, I would say, about what my clients are actually experiencing on the ground.

[Pierre Poilievre, Conservative, Carleton, ON]

We've seen the government members attack other small business leaders before the panel who have dared to speak out, so don't feel that you are individually targeted. It's all small businesses and all entrepreneurs who are under attack, not just you.

[Clayton Achen]

I can assure you, Mr. Poilievre, should you get into government and make similar mistakes, I'll be all over you as well.

[Pierre Poilievre, Conservative, Carleton, ON]

Excellent, I'm duly warned. I can tell you that we don't plan on making the mistakes that you've seen from the other side.