Finance Committee on Oct. 4th, 2016

[The Chair, Liberal, Wayne Easter]

I call this meeting to order. These are our pre-budget consultations in advance of the 2017 budget, under Standing Order 83.1.

Welcome, witnesses, for the first panel this morning.

We'll try to have witnesses stick as close as they can to five minutes, and then we'll go to questions. I think you know from the information we sent that what we're trying to do is beyond regular pre-budget hearings, to emphasize the ways that we can attain better economic growth in Canada on a number of fronts. If you have anything you want to add on specifics in that area, it would be much appreciated as well.

We'll maybe go around and introduce people. It's not Ottawa, where most of the people know the members. Ron is from Alberta.

Ron, do you want to start?

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Good morning, everyone.

My name is Ron Liepert. I'm the MP for Calgary Signal Hill.

My apologies for running in at the last minute. I'll personally say hi to you all when we're done.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I'm Richard Cannings. I'm the MP for South Okanagan—West Kootenay. I live in Penticton, British Columbia.

[Raj Grewal, Liberal, Brampton East, ON]

My name is Raj Grewal. I'm the member for Brampton East.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

I'm Jennifer O'Connell. I'm the member of Parliament for Pickering—Uxbridge, just outside of Toronto, in Ontario.

[Steven MacKinnon, Liberal, Gatineau, QC]

I'm Steve MacKinnon, member of Parliament for Gatineau, just across the river from Ottawa.

[The Chair, Liberal, Wayne Easter]

I'm Wayne Easter, member of Parliament for Malpeque, Prince Edward Island. If you've heard of Malpeque oysters, that's where they come from.

Go ahead, Ron.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Hopefully, we have Ziad Aboultaif, who is the MP for Edmonton Manning.

He's our other representative here this morning, but as Wayne Easter said, he maybe got tied up on the new ring road. We're not sure.

[The Chair, Liberal, Wayne Easter]

Okay, thank you very much all.

With the Shaw Rocket Fund, we'll start with Ms. Augustin.

Welcome. The floor is yours.

[Agnes Augustin, President and Chief Executive Officer, Shaw Rocket Fund]

Mr. Chair, members, it is a pleasure for me to be here today.

I'm Agnes Augustin from the Shaw Rocket Fund. The Shaw Rocket Fund is a not-for-profit, CRTC-regulated private fund that is dedicated to Canadian children's media for independent producers. We support programming in both official languages, indigenous languages, and other minority languages, on all Canadian networks that air children’s and youth programming, with public and private broadcaster support split evenly.

The Shaw Rocket Fund strives to be forward thinking and innovative in its support of Canadian-made media for children, with the audience that represents the future of our country. We believe there is great opportunity to create a positive impression on children's lives, given the appropriate means. Through media, we can positively influence them. With that in mind, we have three recommendations.

First is a youth entrepreneur fund to create online opportunities to develop young Canadian entrepreneurs. Second is to provide tools for discoverability, so that the innovation created by these young people can be found by an audience and monetized. Third, we need research to remain relevant with the habits of the constantly evolving digital world. Our proposal, focused on digital, will touch every part of the country, urban or remote, allowing further generations to contribute to our country's economic growth.

The proposed fund is based on generation Z. After 1995, this generation does not know a world without Internet. They are known as the first global generation having exposure to international ideas and challenges, and the ability to connect beyond all borders, allowing them to better understand our diversity and celebrate who we are as Canadians. We see this generation as becoming the innovators and entrepreneurs we need to contribute to Canada's economic growth.

Given the government's focus on making Canada a country of innovators, investment in online entrepreneurship is key to future prosperity. Our research shows, and the data speaks for itself, that between 2010 and 2014, watching programming on TV decreased by 21%, whereas digital platforms increased by at least 20%. Surveyed in 2014, 60% of kids believe content will become an online experience. That was two years ago. Simply put, we must adapt to these changing demographics and consumption habits.

Our research also shows that 68% of kids aged nine to 18 who were surveyed say they are proud when a show they like is Canadian, and 46% like shows that reflect them as Canadians. Therefore, we recommend that the government invest $10 million over five years to create an online entrepreneur fund for youth, which will help support Canadians 17 and under in all regions of the country to set the stage for successful online entrepreneurs.

A second but critical recommendation is to provide tools for making the content discoverable online. We recommend that 5% of the proposed fund annually goes towards meaningful investments in Canada's young people in urban, rural, and remote communities, to help them tell stories relevant to them, with the emphasis on making the content discoverable online.

Lastly, research needs to be a vital part of this initiative. In 2010, the rocket fund undertook the first-ever media and technology landscape study for young Canadians on their media habits. This initial research gave us the opportunity to truly understand how kids view the constant stream of information that is being communicated to them, and the best ways to engage them. With the digital world changing incredibly fast, we believe it is crucial to expand this type of research to keep it fresh, and to ensure that the media sector and this entrepreneur fund remain relevant to the audience and consumer.

Partnerships have been critical to the success of the rocket fund, and we firmly believe that a private-public partnership could be within our reach should the government choose to make this initial critical investment. We are looking forward to discussing opportunities to make this a reality. We see the government as a catalyst in digital innovation in our sector.

In closing, I want to quickly mention that the rocket fund fully supports the Prime Minister's youth council, as it shares our view that youth engagement is understanding the future economic growth of our country.

I also hope that I will see you all on the evening of November 23 at Rocket Prize, which you've received an invitation for. It celebrates the best in Canadian kids programming and gives an opportunity to engage with stakeholders across Canadian kids programming.

There are four words I would like to leave with you today: innovation, entrepreneurship, economic growth. We see no better role for the government than as that catalyst.

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Agnes.

With the National Cattle Feeders' Association, Mr. Vander Ploeg.

[Casey Vander Ploeg, Manager, Policy and Resarch, National Cattle Feeders' Association]

Thank you, Mr. Chair, and good morning.

I'm Casey Vander Ploeg. I'm the manager of research and policy with the National Cattle Feeders' Association. I'd like to thank the committee for this opportunity to share our perspectives on budget 2017.

In our submission to the committee, NCFA recommends that the 2017 federal budget dedicate significant funds to the rural infrastructure required for the continued growth of Canada's agricultural industry and to expanding international trade. We encourage the federal government to establish a national rural infrastructure fund in partnership with provincial and municipal governments for the maintenance and rehabilitation of rural infrastructure, particularly roads and bridges.

There is a compelling rationale for this recommendation. First, our recommendation addresses the three focus areas identified by the committee. Federal support for rural infrastructure is a necessary precondition for Canadians, Canadian businesses, and rural Canadian communities to grow their contribution to the Canadian economy.

Second, our recommendation addresses a gap in federal infrastructure funding that is, frankly, quite glaring. The primary focus of the current federal infrastructure spend turns around public transit, green infrastructure, and social infrastructure. These priorities might speak strongly to urban Canada, but they do not speak well to rural Canada. A significant stream of funding for basic economic rural infrastructure would fill that gap. Past federal infrastructure funding has often included a rural component. Examples include the prairie grain roads program and the municipal rural infrastructure fund.

Third, our recommendation addresses the single biggest concern for rural municipalities. If you asked any county reeve what their biggest challenge is, they would say roads and bridges. I'd bet the farm that they would give that answer.

A good example of what I'm talking about is unfolding right now in the county of Lethbridge. This county and its surrounding region in southern Alberta is one of Canada's most valuable and productive agriculture regions. Southern Alberta is the fourth largest cattle feeding jurisdiction in North America just behind Texas, Nebraska, and Kansas. Southern Alberta is also home to Canada's two largest federally inspected beef processing facilities.

The county of Lethbridge is finding it very difficult to make the road and bridge investments required to support the needs of agriculture. The county reports a $3.5-million annual shortfall in funding for roads and bridges, and because of this shortfall, the county has resorted to road bans, bridge restrictions, and even closed bridges.

All of that is nothing compared to the radical step taken by the county in April of this year when it passed two new bylaws establishing a special tax on agriculture and a business tax on all livestock producers. This year, the county is levying a $3 head tax on every beef animal in the county. That levy will rise to $4 next year. As you can imagine, this is causing alarm across the beef industry in general and for cattle feeders in particular. The reasons are clear.

Over the past 10 years, the average annual profit for feeding cattle was $18 a head. A $4 head tax basically represents a 20% tax on average long-term net income. The timing couldn't be worse. Today's losses in the cattle feeding sector are unprecedented, even considering BSE 15 years ago. Cattle feeders have seen 14 straight months of negative returns with losses of $500 to $600 per head.

A cattle feeding operation in the county of Lethbridge with a standing capacity of 50,000 head will see an increase in local taxation of $150,000 this year and $200,000 next year. This piles on top of the current losses compounding what is already a dire situation. The tax is making cattle feeding in the county of Lethbridge uncompetitive to other counties, and worse, to U.S. producers. We also believe it sets a very dangerous precedent. Other rural counties across Canada in all provinces are closely following what is happening in Lethbridge.

The situation has the potential to cause serious if not irreparable harm to Canada's beef industry, particularly if cattle start migrating to the U.S. That will restrict the supply of cattle to Canadian beef processors. If Canadian beef processors cannot secure the cattle they need, we run the risk of a plant closure. A plant closure would not be devastating for the Canadian beef industry; it would be catastrophic.

The fourth and final rationale for our recommendation is that the federal government has historically, and must continue to have, an interest in Canada's small rural municipalities and the nation's food supply. Much of the infrastructure required to support agriculture is located in small rural communities with small tax bases that cannot afford, even with matching funds, to make the required investments, yet our rural communities are home to those vitally important roads and bridges that provide a national benefit of moving our agriculture products to national and international markets.

The federal government has a vested interest in ensuring that Canada's agricultural producers can continue moving and exporting their agricultural products. There is a very strong international trade dimension to all of this, and most certainly that is a key federal economic responsibility.

In budget 2017, we believe the federal government must make a funding commitment to Canada's rural communities, with a particular emphasis on basic economic infrastructure to sustain our nation's agricultural production, particularly rural roads and bridges.

In closing, I would simply leave you with this thought. I believe that Canada has all the elements to become an agricultural superpower. A key part of that potential is our beef industry. It is Canada's highest value-added agricultural product. Beef has tremendous potential to increase its contribution to the national economy and create new jobs, especially given new emerging export markets, recent free trade agreements, and growing global demand for high-quality, safe, and trusted sources of dietary protein.

We have all the ingredients for success in Canada. We have a large land base, ample natural grasslands, superior genetics, a good climate, industry experience and know-how, good quality and supply of feed grains, and an internationally recognized food safety system. But these ingredients are no guarantees for success. We also need infrastructure investments to complete the package and fulfill the promise.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Casey.

Turning to the Alberta Urban Municipalities Association, we have Ms. Holmes.

[Lisa Holmes, President, Alberta Urban Municipalities Association]

Thank you for the opportunity to present to your committee.

My name is Lisa Holmes. I am the current mayor of the Town of Morinville, Alberta, and the president of the Alberta Urban Municipalities Association. I'm joined by our CEO, Sue Bohaichuk.

The Alberta Urban Municipalities Association was founded in 1905, the same year as the province. We represent 269 urban municipalities across Alberta, which includes summer villages, villages, towns, cities, specialized municipalities, and also the cities of Edmonton and Calgary.

We coordinate advocacy and policy in regard to the infrastructure, social, environmental, and economic development and needs of municipalities, amongst many other issues.

As such, the Government of Canada's budget is of significant interest to our—

[The Chair, Liberal, Wayne Easter]

Please, I don't want to interrupt, but would you slow down a bit. The translators are having trouble keeping up.

[Lisa Holmes]

That's no problem. I do speak quickly.

The Government of Canada's budget is of significant interest to our organization in terms of the budget's impact at a local level. Canada is facing challenging economic times. Alberta is particularly vulnerable, given our natural resource economy, and we are seeing that in the form of an unemployment rate of roughly 8% and thousands of jobs that have been lost over the past year.

We appreciate the federal government's recent funding commitments for infrastructure and housing, which not only address the tangible infrastructure needs but also result in job creation and support for economic growth. We were pleased the Government of Canada and the province have honoured our call for a 50% federal contribution, a 40% provincial contribution, and a 10% municipal contribution for water-related infrastructure projects. This formula reflects the capacity of each government to raise revenue, and we hope future agreements maintain this cost-sharing formula.

While I know your committee is more focused on funding priorities at a high level, I would be remiss if I didn't highlight the importance of connecting the budget decisions of government with the on-the-ground execution of agreements that can ensure the funding quickly goes where it is required. Future bilateral federal-provincial infrastructure agreements need to be resolved in a timely fashion, so that the funding correlates with our construction season. One of the ways to ensure the efficient pool of funds is to use an allocation model similar to the gas tax fund, so that infrastructure dollars will flow through the province directly to municipalities.

This approach allows the resources to be allocated effectively, and avoids the administrative burden associated with a grant application process. It is beneficial for all levels of government. It also capitalizes on local knowledge, as municipalities are in the best position to prioritize their infrastructure investments based on the needs of their own communities.

We encourage the Government of Canada to establish the cash flows for infrastructure projects in advance of major expenditures. If the cash flows predictably and in accordance with these schedules, then municipalities will not have to pay for the cost of projects up front. This would be helpful to all municipalities, but particularly those that do not have significant reserves.

In order for our communities to prosper, they must feel safe and secure. According to 2014 statistics, Alberta's violent crime rate was 18% higher than the national average, and our property crime rate is 33% higher. Actions are needed to address the high crime rate in Alberta. From a budget perspective, this can be helped by allocating more funds to increase the intake of the RCMP cadet training program. While Alberta receives one of the highest allotments of new RCMP graduates, a shortage of officers has resulted in continued vacancies.

In 2014, there were 112 positions, which is almost 10% of all the positions in the province, that were vacant. As a result, services are reduced, despite RCMP officers working longer hours and taking on more responsibilities. Our RCMP members are at risk of burnout. This affects staff morale and limits its service delivery. The incurring of overtime also adds financial burdens to municipalities.

Another important idea is to improve broadband Internet access throughout the province. Currently, the ability of small and remote communities to contribute to Canada's economic growth is hampered by limited broadband. Reliable, high-speed Internet is the cornerstone of modern life and has the power to transform small communities. It allows for innovation and cost savings in transportation, health care, community services, and business practice, and these benefit the entire nation.

In closing, I'd also like to address disaster funding. As you are well aware, Alberta has had more than its fair share of disasters in recent years. Local disasters have had profound implications for the rest of the country, as the recent fire in Fort McMurray has clearly illustrated. We urge you to recommend the restoration of funding for the federal disaster assistance programs to appropriate levels, as this funding is vital to assist communities in their recovery efforts.

I thank you again for the opportunity to speak. I look forward to your questions.

I just wanted to add that our convention is being held over the next three days in Edmonton. We'll have over 1,000 municipal elected officials from the province at the Shaw Conference Centre. If you are in the area, we would be more than willing to host you at any point so that you can have one-on-one conversations with Alberta's municipalities and know what their issues are.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Lisa and Sue.

With the Canada's Oil Sands Innovation Alliance, Mr. Wicklum.

[Dan Wicklum, Chief Executive, Canada's Oil Sands Innovation Alliance]

Good morning, and thank you very much for the invitation.

I'm the chief executive of an organization called Canada's Oil Sands Innovation Alliance, or COSIA. COSIA was launched about four years ago when the CEOs of the 13 largest oil sands companies in Canada signed a charter. The charter is not a legal document; it's a moral document. What it did was commit those organizations, at the most senior level in this country, the CEOs, to work together or to co-operate on two things: environmental performance improvement and cost-cutting.

This is a world precedent-setting arrangement among some of the largest companies in Canada, where they've decided that it's in their best interest, in the sector's best interest, and frankly in Canada's best interest, if they co-operate and collaborate rather than compete. Collaboration is just a better model to accelerate environmental performance improvement.

What do we do? We align these 13 organizations so that they can articulate their innovation needs and their technology needs in four key areas: water; land; tailings, which is mining waste; and greenhouse gas emissions. We create the framework within which the organizations come up with a single list of technology priorities for the oil sands sector. Then what the companies do is that they launch projects to fill those innovation gaps or develop the technologies that they now all understand they need. So far right now our project portfolio is about 250 projects, with a price tag of about $500 million. But the key difference with COSIA, compared with any other organization that we know of on the planet, is that once these technologies are developed, these large companies, which a short number of years ago were true competitors, for the first time globally that we know of, inside of COSIA, give each other free use rights to their technologies. So far the companies have shared about 820 technologies that cost $1.3 billion to develop.

If you think about it, what this means is that not every company has to develop their own environmental technologies. In the old days, every company would have to develop their own and they would try to license them to each other. Essentially, there was a great amount of effort for a small net amount of outcome. But, inside of COSIA, and the fact that the companies have decided to give each other royalty-free use rights, what it means is that each individual company can develop one technology and share or give use rights to their collaborators. They give one piece of technology away in terms of use rights and they get back 12 pieces of technology. They've leveraged up their investment, their leadership potential, by well over an order of magnitude, and this has the potential to speed up the progress they are making on cost-cutting and environmental performance by well over an order of magnitude.

In our four years, we now have a direct line of sight to prove that this is not just a theoretical concept; this actually works. We have a direct line of sight from setting a priority, developing a technology, sharing it, and implementing it. The proof point is on the company's water consumption. The companies have set a goal inside of COSIA to decrease their freshwater use intensity by 50% by 2022. Between 2012 and 2014, inside of COSIA, they have reduced their freshwater use intensity by 36%, so we have gone from the theoretical and the possible now into the real, and the idea that the concept has been proven.

That's what we do. What do we do into the future? Literally last night we convened a group of the most senior leaders in innovation in the oil sands. We convened presidents and vice-presidents of research of our major universities in Alberta, we convened senior leaders from the provincial government, and we convened over 10 senior leaders of CEOs and vice-presidents from oil sands companies. Now we're taking the COSIA model, where the companies themselves are very organized in terms of aligning on sector-level priorities, and we're raising that level of organization up to all of the innovation providers from academia, from government, and from industry.

We think this model has potential, frankly, to lay out a grand vision for this country in terms of, especially, greenhouse gas reduction technologies, where Canada, through this type of model, can assume a leadership role on the global stage, not just for reducing our own emissions but for developing technological solutions for the globe so that this country can move into the solution space for developing a clear technology path forward to address the global issue of GHG emissions and climate change.

What would be a specific ask?

The current government has signalled an intent to invest into three to five what they are calling “innovation clusters”, through Minister Bains's ministry. We feel that we are uniquely placed to partner with the Government of Canada on one of these superclusters that would, by definition, bring together disparate groups of innovation providers, which now are not fully communicating as much as they could.

We have the core already. We have COSIA. Through our organization, we've signed MOUs, memorandums of understanding, with 40 organizations globally, ranging from the global General Electric to more local universities. We already have the architecture and the culture of setting priorities and linking globally with potential innovation providers. Now we are raising our game to include the most senior leaders in academia and government.

I would like the government, and potentially this committee, to consider the possibility of investing, through its existing announcement of superclusters, into COSIA.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Dan.

We'll turn to Bob Friesen, with Farmers of North America.

[Bob Friesen, Chief Executive Officer, Farmers of North America Strategic Agriculture Institute, and Vice-President, Government Affairs, Farmers of North America]

Thank you very much, Mr. Chair.

As the chair already said, I represent Farmers of North America, or FNA, as we call it.

FNA is a Canadian national farmers' business alliance. Its mission is to develop tools and products for farmers to maximize their profitability. It's considered a private sector solution provider in that respect.

I am not here today to ask the government for any money. I am here simply to ask for a cost-neutral rule change that will remove a disincentive for farmers to use their own money to invest in agriculture. I'll explain that rule change, and I'll try to do it as quickly and as simply as I can.

This request is supported by the Canadian Federation of Agriculture, as well. In fact, if we could accomplish or achieve this rule change, it would free up a potential $900 million of farmers' money for them to invest in their own futures.

You've all heard of the suite of business risk management programs that are funded by both levels of government. You've no doubt heard about agri-stability, agri-risk, and agri-invest. I want to talk about agri-invest.

Agri-invest is the business risk management tier at the top, which is meant to help farmers manage slight reductions in income. That tier is jointly funded by farmers and by both levels of government. Farmers can contribute 1% of their eligible net sales, and that is then matched by the provincial and the federal governments. They together match that 1%, and then that money is put into an account. That money is then meant to be used for farmers to manage slight reductions in income.

The definition of agri-invest is that it's a fund for farmers to manage slight reductions in income and/or invest to reduce future income reductions or to maximize future revenue. It's achieving the first objective really well, and that is to create a small rainy-day fund, as I've said several times, for farmers to manage slight reductions in their incomes. However, it's not doing very well at achieving the second one, which is for farmers to invest to maximize future revenue. I'll tell you why.

When farmers contribute to that fund, their contribution is in after-tax dollars, so that goes into fund one. The government contribution goes into fund two. You have fund one and fund two. When you withdraw from fund two, because that's a government contribution, it's taxable. When farmers withdraw from fund one, it's non-taxable because it's a contribution made after tax.

The rules currently state that a farmer has to withdraw all of fund two, the taxable amount first, before they have access to fund one. That discourages farmers when they are at their best time to invest because they're in a fairly high tax bracket. At that same time, it also discourages them from withdrawing from fund two because fund two is taxable.

What we're proposing is a simple rule change. Of course, most of you are familiar with how farmers can currently do their tax returns. They can still file cash tax returns, so farmers can do.... I know this is on the record, so I'll be careful what I say, but farmers do have some choice as to when they pay taxes and what tax bracket they're in. We know already that farmers will not withdraw from fund two unless they find themselves in a year where they're in a very low tax bracket. Otherwise, they'll keep the money there.

What we're proposing is that when farmers invest in an eligible project—and eligibility criteria could be determined by the department together with the industry—and withdraw money to invest in an eligible project, they can withdraw from fund one without touching fund two. Now you can achieve the twin objectives of the program. You still have fund two as your rainy-day fund to manage slight reductions in income, and farmers have access to fund one and you've removed the disincentive for them to invest in projects to maximize future revenue.

We are confident that it is a cost-neutral rule change.

We need help on this one with finance officials because they, for some reason, are not convinced that it's cost neutral. We're convinced that it's cost neutral because farmers will leave fund two intact if they're in a taxable bracket. We're not suggesting to change the tax rules on fund two. The tax rules will still stay the same. If it's withdrawn, then the farmers pay taxes on it, and because of that, it's cost neutral.

With this rule change there's currently about $900 million in fund one in Canada. What we're simply requesting is a cost-neutral rule change that will remove the disincentive for farmers to have access to $900 million of their own money—this is their money—to invest in projects to maximize future revenue.

Thank you very much, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Thank you, Bob. It's always amazing, the simplicity of farm safety-net programs.

Mr. MacKinnon, go ahead with your first series of questions.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you, Mr. Chair.

Thank you to all of you for being here.

First off, speaking for Liberal members of this committee—and I hope for all members of this committee—we're acutely aware of how low commodity prices have affected this province. As we listen to your presentations this morning and listen to the subsequent groups, let me say we are eager to find solutions and work with all of you to ensure that Alberta remains the vibrant and vigorous part of the Canadian economy that it's always been.

I have questions for all of you, but I'm going to start with Mr. Wicklum.

The oil sands industry is obviously going through a bit of a reinvention. You mentioned the innovation debates or consultations that are going on right now, which will be important. I can't imagine a better candidate for innovation-type work than the oil sands industry. You also mentioned the clusters. Can you give us some tangible examples of what policy instruments could be put in place that would put the oil sands industry on a firmer footing?

[Dan Wicklum]

I'll make one slight clarification. We have a sister organization called the Canadian Association of Petroleum Producers. They have the lead in policy advocacy and communications. We're scientists. We stick to the innovation front and usually make up our asks and our policy prescriptions through CAPP. Let me step outside of my box a bit.

Focusing our existing innovation investments is just as important as focusing potential new innovation investments through the federal innovation agenda. When you take a look at the pledged amount of $800 million for a series of superclusters, which is the major spending vehicle in the government's innovation agenda, it's a small proportion of existing investments when you add up what is invested through NRCan, NRC, NSERC, and SDTC in granting capacity. The list is quite extensive.

We need a deliberate look at where the existing innovation investments are going to make sure they align with current innovation theory such as market pull and that there is sufficient investment to scale up companies and bring them over what, in innovation parlance, is called “the valley of death”. There seems to be lots of support for small companies, but if you're a very big company, then in some regard you've already proven yourself. Scaling up through medium-sized companies seems to be quite different globally, but potentially more difficult in Canada.

Continuing and potentially expanding the SR and ED tax incentive program would be an important thing. Our major ask for the innovation space is to invest in this sector in a supercluster. I think the value proposition we see is that it's not just to reduce the greenhouse gas emissions of Canada but to develop novel solutions for the world. We could play a leadership role in reducing emissions globally and in that find new economic activity and whole new sectors for Canada.

We have one project, which we call the COSIA carbon Xprize. We're offering $20 million to the team that best takes carbon, which right now is a waste and a liability, and changes it into a valuable product. What we're doing is offering $20 million to the team that can reimagine carbon and change it from a liability to a resource. That's the type of thing we're doing in this sector and in COSIA.

Partnering with the Government of Canada in a supercluster that is designed to link more people with novel experiences, different backgrounds, and different perspectives.... The more people you get focusing their unique skills on a clearly defined problem, the more good things will happen. We know that. We've already seen it inside of COSIA. The supercluster concept has potential to catapult Canada onto the global stage of the innovations solution space.

[Steven MacKinnon, Liberal, Gatineau, QC]

Thank you. That's very important.

[The Chair, Liberal, Wayne Easter]

By the way, the first round will be seven minutes today. The second round will be five minutes.

Go ahead.