Evidence of meeting #47 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was innovation.

On the agenda

MPs speaking

Also speaking

Debbie Benczkowski  Chief Operating Officer, Alzheimer Society of Canada
Glenn Harkness  Executive Director, Boys and Girls Clubs of Canada
Alison Thompson  Chair of the Board, Canadian Geothermal Energy Association
Helen Long  President, Canadian Health Food Association
Peter Kendall  Executive Director, Earth Rangers
Neil Cohen  Executive Director, Community Unemployed Help Centre
Philip Upshall  Chief Financial Officer, Asia-Pacific Economic Cooperation Digital Hub
David Paterson  Vice-President, Corporate and Environmental Affairs, General Motors of Canada Limited
Josipa Gordana Petrunic  Executive Director and Chief Executive Officer, Canadian Urban Transit Research and Innovation Consortium
Winnie Ng  Co-chair, EI Working Group, Good Jobs for All Coalition
Gabriel Miller  Vice President, Public Issues, Policy, Cancer Information, Canadian Cancer Society
Lorraine Becker  Executive Director, Canadian Coalition for Green Finance
Michael Conway  President and Chief Executive Officer, Financial Executives International Canada
James Price  President and Chief Executive Officer, Canadian Stem Cell Foundation
Peter Simon  President and Chief Executive Officer, Royal Conservatory of Music
Mark Nantais  President, Canadian Vehicle Manufacturers' Association
Scott Collier  Vice President, Customer and Terminal Services, Greater Toronto Airports Authority
Mark Rodgers  President and Chief Executive Officer, Habitat for Humanity Canada
Sean Speer  Munk Senior Fellow, Macdonald-Laurier Institute
David Watt  Chief Economist, HSBC Bank Canada
Ian Morrison  Spokesperson, Friends of Canadian Broadcasting
Donald Johnson  As an Individual
James Hershaw  As an Individual
David Masters  As an Individual
Peter Venton  As an Individual
Brian Cheung  As an Individual
Abdülkadir Ates  As an Individual
Hailey Froese  As an Individual
Hannah Girdler  As an Individual
Justin Manuel  As an Individual

11:50 a.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Thank you.

Now, on the green investment bank, I think it's a fantastic idea and I am very happy to hear that today. Just to be clear, the number you suggested was an investment of $2 billion by the government, which would attract $10 billion from the private sector for the capital that this bank would need to start.

11:50 a.m.

Executive Director, Canadian Coalition for Green Finance

Lorraine Becker

That's right. The low-carbon economy fund was already included in budget 2016 for deployment in budget 2017; $2 billion was allocated over four years.

We recommend, instead of spending that money on grants and subsidies, investing that money to create assets on the government's balance sheet by using the money to capitalize a green bank, which would attract private dollars at probably one to four. That would create $10 billion of investment in the clean growth economy.

11:50 a.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

So that we are clear and so that the committee knows, help us know how to make that recommendation. When would the return on that investment be seen by the government?

11:50 a.m.

Executive Director, Canadian Coalition for Green Finance

Lorraine Becker

At the end of the first reporting year after funds are deployed there will be a return on the initial investment. Normally it's a five- to seven-year investment cycle, at the end of which investments can be divested and the money reinvested. You thus have a cumulus of leverage of up to 23 times over three cycles.

11:50 a.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

That's fantastic. Let me ask the financial executives, where can we find the recommendation to simplify the tax rules?

11:50 a.m.

President and Chief Executive Officer, Financial Executives International Canada

Michael Conway

We would be very pleased to send you it. We presented some information to several previous FINA panels.

There are various things. At a previous panel I had a little bit of fun, because I came with a document that was about 15 pages long and was called the “temporary act to finance the First World War”. Then I pulled out a document, a book by CCH, that is about 3,800 pages long. It's our current tax act. It has been many, many governments since there has a been a comprehensive review of the Income Tax Act.

11:50 a.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

I agree that we should do that.

11:50 a.m.

President and Chief Executive Officer, Financial Executives International Canada

Michael Conway

We have lots of recommendations, including consolidated tax returns. We're one of the only countries in the world that doesn't do consolidated tax returns.

The interesting thing about that is that large firms effectively do it through employing consultants because they can afford it, and smaller businesses can't afford to do all the machinations that are required to effectively have consolidated tax returns, so they're disadvantaged.

There are many things. I would be very pleased to send the information on to the committee.

11:50 a.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Thank you.

11:50 a.m.

Liberal

The Chair Liberal Wayne Easter

I have to cut you there. You're considerably over time, Pierre.

Mr. MacKinnon will be quite happy to hear that you're asking for an overall review of the Income Tax Act. He talks about it pretty nearly every day.

Before I go to Mr. Sorbara, for the green infrastructure bank you're talking of capital, to begin with, of really $10 billion. How would that work? I think we all understand ordinary banks. How would this work in practice? Does somebody go in with a green plan to get a loan?

Could you expand on that a little bit?

11:55 a.m.

Executive Director, Canadian Coalition for Green Finance

Lorraine Becker

Green banks are not banks that take deposits from individuals. They operate like investment banks, and so they syndicate deals with large investors.

A green investment bank for Canada would operate at the wholesale level. Green banks can be retail level or wholesale level. A green bank for Canada would operate at the wholesale level, syndicating deals with large institutional investors and large-project developers.

As an example, the UK Green Investment Bank markets the offshore wind sector, and our own Enbridge, a company from Calgary, has invested in partnership with the UK Green Investment Bank in the offshore sector in a total deal worth $2 billion, of which Enbridge invested $750 million.

11:55 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you.

Francesco, the floor is yours.

11:55 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Thank you, Mr. Chair.

Thank you, everyone, for your presentations.

I want to start off with the Canadian Stem Cell Foundation with a quick question, if you can provide some colour concerning your comment about our research prowess and—I don't want to say the word failure—the inability to have that research prowess translated into the commercialization of those activities.

I know the ask; my understanding is it's $50 million, for a total of $500 million in federal funds over 10 years. Stepping back from the ask, what's the greatest barrier preventing this research prowess from being turned into commercialization of products and services?

11:55 a.m.

President and Chief Executive Officer, Canadian Stem Cell Foundation

James Price

First of all, I don't want to suggest that we haven't had commercial success. Allen Eaves leads a company called STEMCELL Technologies that 20 years ago came out of research in his lab at the BC Cancer Agency. Over the last 20 years it has been growing to the point where it's approaching $200 million in revenue. It employs 800 people and exports its product, and 95% of its sales come from outside of Canada. So we do have some successes. The point we're making is that we're really at a threshold, and other jurisdictions have realized that, where oftentimes the science was a lot of hope, but in the last decade we've seen more and more therapies move into clinical trials. We've seen countries and jurisdictions rally around trying to attract more clinical trials to their jurisdictions.

I think one of the biggest barriers we've had in Canada has been that we have started almost always with academic research first. We've developed a really strong capability. By any academic measure, Canada is one of the top two or three countries in the world. What we're asking in our initiative is that we need to re-engage the private sector, whether it be private equity, or the industrial sector, or working with the health charities, to support the translation of that into clinical trials. In Canada, we have very few institutional industry-led clinical trials that are happening in this area and there's a lot more that we can do there. So part of our request, and a big portion of our request, is to be supporting some of those early-stage clinical trials.

11:55 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Are there rules in place from, say, Health Canada, or an affiliated agency that makes it harder to conduct these trials versus the other jurisdictions?

11:55 a.m.

President and Chief Executive Officer, Canadian Stem Cell Foundation

James Price

There are. We've had some good progress with Health Canada even as we've started our advocacy efforts around the strategy. Within the strategy, we were looking at streamlining some of the regulatory processes around advanced cell therapies. They were typically regulated much like drugs. We've seen other jurisdictions, such as Japan, that have completely looked at cell therapies as a different category.

In regard to one of the things Health Canada has recently done, when we were talking with industry and developing a strategy, we first approved several cell therapy products here in Canada, but they haven't been commercialized here and the clinical trials haven't happened here. It's because we haven't had clarity around what the requirements are to move from a phase one to a phase two to a phase three trial. Health Canada has now released guidelines that were sitting on the shelf for quite some time. Those guidelines are there and they've now committed to work with us in industry to review those guidelines every six months. That has been one of the impediments to industry doing their trials here. We're working through that. There are more steps that we can take in terms of looking at this as a different class.

Noon

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

I want to make a few more comments.

Mr. Conway, I'm looking at your recommendations. There are a number of them that I agree with as an economist and someone who has worked in finance for about 25 years. We do need to make sure we keep our fiscal capacity in good stead. We need to ensure that. Today we're starting to debate the CPP legislation in the House, so there will be some details there for the next two or three days. Our innovation agenda, which I applaud, and our infrastructure agenda, which we need, will make those key investments to make our economy more productive. I want to assure you on that basis, so it's more of a comment.

Ms. Ng, regarding the EI system, I've read reports and we've seen reports from everywhere, whether it be the Mowat Centre or a number of different institutes. We've made a lot of changes and I think we've improved a lot of things, but we've heard from a number of commentators over the last couple of days that there are still a number of deficiencies.

If you could pick one or two improvements that you would want to implement immediately, I'd like to hear about that. Excuse the term of my words, but sometimes I think we just need to blow the system up and do it from scratch; or let me say, take it apart and do it from scratch.

Can you comment on that, please?

Noon

Co-chair, EI Working Group, Good Jobs for All Coalition

Dr. Winnie Ng

I think part of the piece right now is saying, if we take a look at the GTA area, that we only have one in every five unemployed workers receiving benefits. Something systemically is flawed within the system when the ones who need it more are not accessing it. Lowering the hours is one of the key pieces, but there is also the benefits level. Most of the time, when workers are on the verge of getting laid off, hours are reduced, and the benefit level is 55% based on the reduced income of those last weeks. It's not a living wage, and it aggravates and creates more stress, which leads to cancer and other health situations.

To me, these are part of the systemic pieces. The Liberal government in its election platform talked about the need to provide income security to workers in the changing labour market, and to me these are the key points.

The other piece is that, if we take into recognition that in the GTA, where we have many newcomers, many immigrants who speak English as a second language, accessing services through Service Canada has been most challenging. There's no personal contact, and then people are made to jump through hoops just to access the benefit.

Then, the appeal system has been flawed from the start.

Those are parts of the piece that we think need our urgent review.

Noon

Liberal

The Chair Liberal Wayne Easter

Your time is up.

Mr. Albas.

Noon

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

My time has come, I guess, Mr. Chair.

I can't ask questions of everyone, but I would like to say, Mr. Simon, that I wish you success. I know that music is a remarkable part of many Canadians' lives. I hope that your argument is well heard.

I'd like to go to Mr. Conway quickly.

Mr. Conway, with regard to a review of the tax act, who should be doing that review? Should it be a panel of parliamentarians, or do you believe it should be a group of non-partisan experts who would submit a final report? How would you slice that?

Noon

President and Chief Executive Officer, Financial Executives International Canada

Michael Conway

In previous testimony, I was asked whether it should be a royal commission or a task force, etc., and I said it frankly doesn't matter how it's done as long as it is done.

But to answer your question, I think it should be mainly with representation from across the system of interested parties. We have to make it more efficient for both sides of the table. Businesses are spending all kinds of money, and the government too, administering this mountain of regulations, some of which are at cross-purposes with each other. Businesses like clarity, certainty, and effectiveness. If we boil it down, I think there should be representatives of government, representatives of business, and we're certainly willing to assist.

12:05 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

I appreciate that.

Concerning your comments earlier with Mr. Deltell, I have to say that I agree. Even the IPCC in a recent report has cited that the countries that are the wealthiest are the ones that have the best outcomes in terms of technology, in terms of health, in terms of dealing with climate change.

I'm just going to move down to Ms. Becker.

Ms. Becker, I'm not convinced yet of your proposal, but let's just that if such a bank were to happen, why would we want to build a stand-alone crown corporation that would take five years to establish itself and to put together protocols and then have the problem that there would only be one location and that of course they would need to open up branches across the country? Why wouldn't we use BDC, which has an established clientele and established presence, or Farm Credit Canada, which can tailor its programs to do exactly what you're talking about? Why a stand-alone entity?

12:05 p.m.

Executive Director, Canadian Coalition for Green Finance

Lorraine Becker

There are five things that are required by the low-carbon economy for success in scaling up financing. Those things are focused on domestic projects, on mature technologies, on low-carbon technology specifically, use of varied financial instruments, and—

12:05 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Why wouldn't groups like BDC or Farm Credit Canada, which already are established, be able to offer those things?

12:05 p.m.

Executive Director, Canadian Coalition for Green Finance

Lorraine Becker

Not one of those current institutions offers all of the elements that the low-carbon transition requires, specifically. There is a committee that has been established by finance involving representatives from EDC, BDC, and SDTC to look at optimizing the services in this area, and they are coming up against some barriers in their mandates. Their mandates do not allow them to do this.