Finance Committee on Oct. 3rd, 2024

[The Chair, Liberal, Peter Fonseca]

Welcome, everybody. I call this meeting to order.

Welcome to meeting number 156 of the Standing Committee on Finance.

Today's meeting is taking place in a hybrid format. All witnesses have completed the required connection tests in advance of the meeting.

I'd like to remind participants of the following points. Please wait until I recognize you by name before speaking. All comments should be addressed through the chair. Members, please raise your hand if you wish to speak whether participating in person or via Zoom. The clerk and I will manage the speaking order as best we can.

Today we're on the study of the changes to capital gains and corresponding measures announced in budget 2025.

Pursuant to Standing Order 83(1) and the motion adopted by the committee on Thursday, September 26, 2024, the committee is resuming its study on the pre-budget consultations in advance of the 2025 budget.

I'd now like to welcome our witnesses.

From the Association québécoise de l'industrie du disque, du spectacle et de la vidéo, we have the director of public affairs with us, Simon Claus. Also joining Simon Claus is the executive director, Eve Paré. We also have with us, from Basic Income Canada Network, Sidney Frankel, senior scholar and Sheila Regehr, chairperson. From the Confédération des syndicats nationaux, we have François Bélanger, union adviser, and Yvan Duceppe, treasurer. From the Co-operative Housing Federation of Canada, we have Patricia Tessier, who is the acting executive director.

We thank you, Patricia, for joining us. I know it was really last minute, and you were able to make it work. Thank you so much; we appreciate that.

From the Council of Canadian Innovators, Benjamin Bergen, president, is with us as well as Nicholas Schiavo, the director of federal affairs. We also have, from the Raven Indigenous Impact Foundation, Jeffrey Cyr, president and chief executive officer, although we are having some challenges because the headset is not the appropriate one, as you know, members.

What we'd ask is that, for any questions that go to president Jeffrey Cyr from the Raven Indigenous Impact Foundation, you pose those questions, and the responses will be sent to us in writing. We wish that Jeffrey Cyr had the right headset. I know sometimes it's difficult in terms of the logistics of getting these headsets to our witnesses.

On that, we are going to hear from our witnesses for up to five minutes for their opening remarks.

Ms. Regehr, were you saying that you're having some trouble?

[Sheila Regehr, Chairperson, Basic Income Canada Network]

We're not getting sound.

[The Chair, Liberal, Peter Fonseca]

We will check with with sound and interpretation and make sure that it is working.

While we're changing that headset—hopefully it works—we are going to start with opening remarks.

That will be with the Association québécoise de l'industrie du disque, du spectacle et de la vidéo, and I understand that Eve Paré will be starting off those remarks via video conference.

You may start.

[Eve Paré, Executive Director, Association québécoise de l'industrie du disque, du spectacle et de la vidéo]

Thank you, Mr. Chair. I also want to thank committee members for allowing us to testify today.

ADISQ, the Association québécoise de l'industrie du disque, du spectacle et de la vidéo, is an association of some 200 Quebec music and concert entrepreneurs. Their expertise makes it possible for Quebec artists to be heard and to build careers in the long term.

In this increasingly digital world, discoverability of local content on streaming platforms is a constant battle. We are going to be drowning in an ocean of music content. More than 100,000 new titles are uploaded to these platforms every day. In this hyper-competitive universe, there are also algorithms that often promote big international stars who have enormous financial resources at their disposal and who capture a large share of attention, and this makes visibility more complicated for our artists. At the same time, we are seeing fragmentation of listening habits. The result is that reaching the public has never been so complex, and this heightens the challenges for our companies. The effect of this imbalance is a decline in revenue for Canadian producers, while costs keep rising, making it hard to develop careers in the arts in the long term.

In 2018‑19, given this situation, the Government of Canada granted the Canada Music Fund an extension of $10 million over a five‑year period, bringing it to $35 million during that period. This fund supports the Fondation Musicaction and FACTOR, the Foundation Assisting Canadian Talent on Recordings, two key organizations that support the production, distribution and promotion of Canadian music projects. On this point, it is important to note that this support was not related to the pandemic. After this, in the 2021 election campaign, the Liberal Party of Canada committed to increasing the fund to $50 million annually by 2024‑25 to meet industry needs and ensure the predictability of the CMF's funding.

Last year, as the deadline for extending the funding approached, we appeared here to argue the importance of continuing to support the music sector and fulfilling that promise, but our appeal was only partially heard. In its last budget, the government granted funding in the amount of $16 million annually, but only for a two‑year period. Even so, the entire industry breathed a sigh of relief.

We are aware of the present budget constraints and the political context. We are appearing here today to try to persuade you to secure permanent funding for the Canada Music Fund. Predictability of programming is the cornerstone on which companies will be able to invest with confidence in the development of artists' careers.

In addition, the difficulties we have faced for years in our industry also result from the Copyright Act, which has become obsolete. We therefore hope to see two minor changes made that would, most importantly, have no budget impact for the public purse.

The present definition of “sound recording” in the Copyright Act excludes recorded music used in the soundtrack of a television broadcast or a film. The rights holders are therefore not remunerated for the use of their music. We are therefore asking that this definition be amended so that rights holders can receive remuneration when the fruits of their labour are incorporated into an audiovisual work.

Our second request relates to the private copying scheme, which has been a significant source of income for rights holders since it was created in 1997. This is a system of royalties charged on the media and compact disks used for copying music, in order to provide compensation for copies made by individuals for personal use. This scheme has never been revised, even though major changes have taken place in how music is copied. Many countries have revised their scheme to include MP3 readers or smart phones, with no resulting increase in the price of those devices. We are therefore asking that the private copying scheme be revised so that it is technologically neutral and allows royalties to be collected on media such as electronic tablets or smart phones.

We urge the government to act rapidly and incorporate these changes into the Copyright Act in this year's fall economic statement. Providing stable funding for our music and our companies means supporting an industry whose economic benefits help our culture to flourish.

Thank you for your attention.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Now we'll hear from the Basic Income Canada Network. I believe Ms. Regehr will start.

[Sheila Regehr]

Thank you very much for the invitation to appear today.

We bring a sense of urgency that we hope you share. It's undeniable that Canadians are experiencing a polycrisis. This doesn't mean simply that multiple crises are occurring at the same time. They are interacting with each other to produce an effect that's much more serious than the sum of its parts.

These crises include threats to the environment, higher poverty rates as pandemic benefits lapsed, income and asset inequality, food insecurity, decreases in the affordability of shelter and other basic needs items, precarious jobs, crime and violence, and worsening physical and mental health for many of us.

A common thread in this polycrisis is the role that income security plays in producing it and making things worse. Income is certainly not the only determinant, but it is a significant one. Inadequate coverage, poor coordination, insufficient benefits, and inefficiency and ineffectiveness in some of our income programs do not help.

A basic income approach—and this is one that underlies seniors' and children's benefits—has proven itself to be efficient and effective. It's a critical policy lever that government can employ more comprehensively to help solve the polycrisis and lessen its impacts.

Canadians are worried, uncertain and stressed. They don't experience our income support programs as an effective safeguard against the severe risks they face, nor do they find it a support for developing their capacity to help themselves and others. A basic income guarantee does both of those things. It decreases uncertainty and risk, and it increases capacity and options. This is good for individuals, for our communities and for the economy.

What is a basic income guarantee? Very quickly, it's a periodic cash payment with no behavioural conditions for work, education or anything else. It's affordable because it's a better use of resources than paying for a patchwork that's generating more problems than solutions. Conditions in our programs come with costs to bureaucracies, to people who are stigmatized and constrained, to communities facing problems they can't fix, and to governments that lose the trust of citizens.

A basic income guarantee is income tested. This is not a plan where billionaires get money too. It's so that people who need the most help get it when they need it. It's similar to universal health care in that regard. We really hope we're not going to need brain surgery, but we know that it's available to us when we need it.

It does not decrease work. I cannot stress this strongly enough. Decades of research and evidence show that it enables caring for young children, gaining education, searching for a better job and fostering entrepreneurship. It recognizes that some people actually are overworked. It provides the economic basis to start and gain from employment, including—and this happens rapidly—by improving physical and mental health.

[Sidney Frankel, Senior Scholar, Basic Income Canada Network]

We have four recommendations, which are spelled out in the brief.

First of all, as Sheila said, Canada has many partial basic income programs—programs that are unconditional and universal or at least universal for a demographic group.

Given the crisis we're in, we argue that these existing vehicles should be used and their benefits should be increased. For example, we have the goods and services tax credit, the guaranteed income supplement, and a recommendation for a low-income supplement to the Canada child benefit.

Secondly, the Canada disability benefit is a wonderful innovation, but there are two issues. First is its adequacy. It's just not large enough to fulfill the promise of moving most people with disabilities living in poverty out of poverty. Then, the definition in the proposed regulations is much more narrow and conditional than the definition in the act. We hope this changes quickly.

Thirdly, innovation in basic income is occurring in provinces and territories—in British Columbia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories and in the Yukon, which involves significant indigenous populations. These innovations, combined with Ontario's aborted pilot, are important for policy learning. We think the federal government should support them financially and technically, and offer communication and coordination.

Finally, we think that financial and human resources should be allocated to two things, which are developing a national framework for a basic income that will accommodate provincial and territorial interests, and developing a responsibility centre within the federal government for all income support programs and those conditions, like health, that are affected by income.

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Frankel and Ms. Regehr.

Now, members, we'll move to the Confédération des syndicats nationaux for up to five minutes, please.

[Yvan Duceppe, Treasurer, Confédération des syndicats nationaux]

Hello and thank you, Mr. Chair.

I would first like to thank the Standing Committee on Finance for inviting us here.

I would note that the CSN, the Confédération des syndicats nationaux, represents more than 330,000 members in all possible economic sectors, primarily in Quebec but also throughout Canada.

First, we hope that the government will continue with its implementation of a progressive fiscal and budgetary policy. By that, we mean that we are not allergic to running low deficits, as a share of GDP, in order to meet the needs of Canadians and Quebeckers.

Second, everyone is feeling the effects of the housing crisis. One aspect that bothers us relates to monetary policy. The Bank of Canada is said to be independent of the federal government. That said, we believe that rates should keep going down because inflation in general has been checked. The housing sub-index is still rising, however, and it affects primarily low-income people. We therefore hope that the Canadian government will invest in housing, especially in non-market housing, co‑operatives and not-for-profit organizations, which would provide low rents in the long term.

With regard to employment insurance, the reform long promised by the Liberal government has not been brought in. Some of our members, and many people in the general public, are experiencing the problem of the “black hole”, a period during which they find themselves without an income. We believe this issue must be resolved. In addition, it was determined that to qualify for regular employment insurance benefits, a person needed 720 hours of insurable employment in some places, most of the time. To make this fairer, we believe the combination of hours and weeks needs to be rethought.

On the question of pharmacare, we welcome what has been done by the government to date, but it is not enough. All prescription drugs have to be covered, and that is not the case right now. This is a social policy that is important for the public as a whole.

There is much talk about immigration these days. We understand that it is important for the labour market, but not on just any terms, because those terms are often precarious for these people. There must be an end to closed work permits, because, ultimately, we are in the spotlight at the UN, which says that Canada is behaving badly toward immigrants.

The media are of fundamental importance in Quebec. We welcome funding for newsrooms, but it is important that this funding be extended to radio and television studios. Funding for CBC/Radio-Canada must be predictable, sustainable and sufficient, because advertising revenue is in constant decline and because CBC/Radio-Canada is a fundamental component of the culture of Quebec and Canada.

On the subject of the environment, there is talk of public transit to address or reduce greenhouse gas emissions. Unfortunately, most of our transit companies have non-recurring budgets. If we truly want to reduce greenhouse gas in the long term, those companies have to be adequately funded, both by the federal government and by the provincial government. We are telling the provincial government the same thing, have no fear, but we believe that the federal government's contribution is important.

I will close by saying that several tens of millions of dollars, maybe even a hundred million, have been cut from labour market development agreement funding, particularly affecting vocational training. We hope this funding will be restored so that our working women and men receive appropriate training in the labour market.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Duceppe.

Now we'll hear from the Co-operative Housing Federation of Canada.

Again, Ms. Tessier, thank you for coming on such short notice.

[Patricia Tessier, Acting Executive Director, Co-operative Housing Federation of Canada]

Thank you.

I'm very pleased to be here.

As you introduced me, I'm Patricia Tessier. I'm the acting executive director for the Co-operative Housing Federation of Canada, or CHF Canada, for short.

CHF Canada is the national voice of housing co-operatives. As some of you may know, there are more than 2,200 housing co-operatives located across every province and territory in Canada, which are home to a quarter of a million Canadians.

Co-operative housing is a well-documented success story. Co-op housing is affordable because it is operated at cost, meaning that housing charges—we call them housing charges, not rent—are increased only to cover the costs of operating and maintaining the buildings. Co-op housing is secure because there is no outside landlord who might hike up the rent, sell the building or renovate it. Co-op housing is inclusive as almost all operate on a mixed-income model. It brings people of all backgrounds together to make decisions about their housing together and to support each other.

In a world of growing housing insecurity and social isolation, co-op housing offers proven solutions to these financial and social struggles, but we need more and we need to protect what we have.

Here are our budget asks. This upcoming budget is an opportunity to solidify and further scale the existing federal commitment to build more co-op housing. I have four recommendations.

First and foremost, we need to build significantly more co-op homes. Canada must, at minimum, double the proportion of non-market community housing. By this, I mean co-ops and non-profit housing. The recently launched co-operative housing development program—it's wonderful, thank you—is playing a critical role in enabling the development of the next generation of co-op housing. However, the demand is exceeding availability. This existing program and funding will help, but the program should grow in its ambitions with a larger envelope. I can tell you the sector is ready.

Secondly, we also need to protect existing affordable rental homes and the tenants who live there. We can do this through an accelerated and sector-led Canada rental protection fund. We are losing affordable housing more than we are building affordable housing at a rate of 15:1. If you'll permit me to repeat that, we are losing more affordable housing than we are building at a rate of 15:1. This is because a lot of relatively affordable housing in Canada is actually in the private rental market, where affordability is not guaranteed like it is with co-op housing; rather, renters are one rent hike or a renoviction away from losing affordability, which is then lost forever.

It is not lost on me that the previous witnesses have talked of things that are very much impactful and relate to this.

The recently announced Canada rental protection fund is an important first step to enable co-operative and non-profit housing to purchase rental properties that are relatively affordable and are for sale. Tenants, both current and future, would be protected this way because that housing could be converted into a co-op or non-profit, therefore guaranteeing its affordability long term. A co-operative housing model does that. It guarantees affordability long term. Now we need to see the rapid implementation of a sector-led fund.

My third recommendation is that we must also advance indigenous housing rights by fully implementing the urban, rural and northern indigenous housing strategy. Providing culturally appropriate and affordable housing is an important way for Canada to advance reconciliation, so an urban, rural and northern indigenous housing strategy is essential. Implementation of the committed $4.3 billion in federal funding for this strategy, led by indigenous housing providers, is urgently needed. The funding should lead to continued deeper investments aligned with the need.

My fourth and final recommendation is that we invest in long-term rental assistance for low-income households. Through the federal community housing initiative that exists now, low-income households living in co-ops and non-profits receive modest rental assistance. Their housing charge for rent or for co-ops does not cost more than 30% of their incomes. Typically about a third of co-op members receive rental assistance, but this expires in 2028. This is what enables co-ops to be diverse, mixed-income communities.

The federal government should commit to extending this program past 2028. This would support 40,000 households with low incomes who live in co-ops and non-profits across the country. Rental assistance is a cost-effective program for government because housing charges in co-ops are far less than market rents—we have a research paper that demonstrates this. Also, homelessness is much more expensive.

To conclude, a housing system that works for all people in Canada must include more co-op housing. Co-ops are ready to grow to help remedy Canada's housing supply and affordability crisis.

Thank you for your time.

I look forward to any questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Tessier. I'm sure there will be many questions.

We'll now hear from the Council of Canadian Innovators. I believe we're starting with president Benjamin Bergen.

[Benjamin Bergen, President, Council of Canadian Innovators]

Good afternoon, Chair, vice-chair and members of the House of Commons Standing Committee on Finance.

Thank you for the opportunity to present today on behalf of Canadian job and wealth creators from across the country.

My name is Benjamin Bergen. I'm president of the Council of Canadian Innovators, or CCI. I'm pleased to be joined today by my colleague Nick Schiavo, director of federal affairs.

CCI represents over 150 of Canada's fastest-growing technology-intensive companies. All of our members are proudly headquartered in Canada, employing thousands of workers across the country. These companies are leaders in sectors critical to our economic future, like AI, cybersecurity, fintech, health technologies, clean tech and more. They are innovating right here at home while commercializing their solutions globally, selling to governments and consumers across Europe, Asia and, of course, the United States.

As we approach budget 2025, it's important to recognize that Canada is at a crossroads. We are experiencing what many are calling the great Canadian slump, with rising living costs, stagnant productivity and a declining GDP per capita. This reality is making it harder for Canadians to maintain their standard of living. The facts are striking. Real medium wages have barely grown since the 1970s, and Canada's productivity has dropped to less than 1% since the year 2000. Forecasts now suggest Canada could be the worst-performing economy in the OECD in the near future.

These challenges are compounded by structural issues like climate change, global conflicts and pressure on our health care system. However, I'm not here to complain, and our members are not passive bystanders to these challenges. CCI's members have been actively working on policy solutions, and we believe with the right strategic actions Canada can turn the tide.

One of the most important areas for reform is Canada's approach to working with homegrown companies and ensuring Canada remains home to the very organizations that will fuel the country's long-term prosperity. At the heart of our recommendations is that we need a modern industrial strategy, one that places innovation, productivity and the intangible assets at the core of our economic framework.

This must include reforming key programs like the scientific research and experimental development tax credit, or SR and ED. Currently, the program is outdated, and its complexity hinders domestic companies from being able to fully benefit from it. In fact, a significant portion of SR and ED funding goes to foreign firms. We believe this must change to better support Canada's innovators. Our budget submission recommends cost-neutral ways to improve this critical program, and I'd be happy to explore this issue further during our Q and A.

Additionally, reforming government procurement is essential. Government procurement spending represents a significant portion of our GDP, yet our procurement systems are often risk-averse, rigid and lacking the flexibility to adopt new, innovative solutions. This not only stifles Canadian companies, but it also prevents governments from accessing cutting-edge technologies that could improve the public service.

The changes won't happen overnight, but tackling these procurement barriers is vital for unlocking Canada's innovation potential. I'm also happy to expand on this topic if it's of interest to the committee and speak to our recent reports, “Building Winners” and “Buying Ideas”.

We also need to avoid policies that inadequately punish innovators and entrepreneurs. The recent changes to the capital gains tax, for example, are counterproductive at a time when we need to be fostering growth and investment. These policies create an added burden on entrepreneurs, making it harder for Canadian companies to scale and compete globally. When Canada's productivity is in crisis, we cannot afford to hold back our most innovative companies and their leaders.

In closing, I want to address something I heard from Minister Champagne today at the INDU committee, which I saw a reporter from The Logic tweet out. The minister suggested the challenges facing Canada's economy are due to a lack of ambition from our innovators and business leaders. If only innovators would “seize the moment”, we'd be better off, the minister stated. Frankly, this view is troubling, and it ignores the realities that entrepreneurs growing businesses in Canada are living through.

For nearly a decade we've been telling the government that Canadians are as innovative, ambitious and relentless in their businesses as anywhere else in the world. The real issue is that our government isn't providing the modern policy frameworks needed for them to succeed. They're still using old playbooks. Meanwhile, superpowers like the U.S., Europe and Asia are using new strategies to reflect the digital economy their companies are operating in.

I get it. It's easier for government to blame innovators instead of tackling responsibility for the role they should be playing to create the marketplace frameworks for innovative Canadian companies to succeed. However, this is like a hockey coach blaming the players for not skating fast enough when there's no ice on the rink. The problem isn't Canadian ambition. It's our policies, strategies and institutions that aren't harnessing and supporting innovators.

That's why budget 2025 represents a crucial opportunity to enact bold reforms, reforms that will foster innovation, increase productivity and drive long-term economic growth.

I look forward to answering any questions and further discussing how we can build an economy that Canadians deserve, one that is prosperous, innovative and globally competitive for years to come.

Thank you, and I look forward to your questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Bergen.

To members again, we have Raven Indigenous Impact Foundation as a witness. The president and chief executive officer, Jeffrey Cyr, is here. He will be able to hear you. He will be able to note any questions you may have, and the answers will have to come to us in writing because the headset is not to the specifications of our committee.

On that, we are going to go to members' questions. In this first round, each party will have up to six minutes to ask questions.

We are starting with MP Gray.

Welcome, MP Gray, to our finance committee.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you very much. It's good to be here.

Thank you to all of the witnesses today.

My first questions are for the Co-operative Housing Federation of Canada.

I normally sit on the housing committee, and we just completed a housing study where we heard from a variety of witnesses who were talking about the Liberal government policies administered by the government's housing agency, where there was a lot of extra red tape and costs specifically having to do with, for example, building requirements that were above meeting building codes and additional types of costs like quantity surveyors or energy consultants, which might be difficult, especially in rural areas. These all add a lot of costs. We had witnesses say that this could add tens of thousands of dollars to any project. A lot of these are also in addition to normal building and even occupancy permits.

My question for you is this: Is this anything that you've seen and experienced, that some of these extra policies might be adding to costs when you're trying, through those you represent, to build affordable housing? That's my question to you.

Thanks.

[Patricia Tessier]

In terms of red tape, I would maybe come back with more information. I know that, concerning costs on accessibility requirements, some programs with funding have accessibility requirements and energy efficiency requirements that can add but can also save in the long term.

I think that, with accessibility, what we have asked in the past is that the accessibility requirements not be based on a single project but look more portfolio-wide, because at times there is no particular local need for accessibility, so there might be units built but not necessarily used.

Other than that, the administration and reporting back from a funding program can sometimes add to cost, but that's not necessarily to your question about the administrative costs or red tape for constructing or building new housing. I separate those, because I think you might get comments on administration as well on reporting.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you very much.

My next questions are for the Council of Canadian Innovators.

You commissioned a survey of entrepreneurs in July that showed that 90% of respondents believed that the Liberals' capital gains tax hike would have a negative effect on the innovation economy, yet Liberal budget 2024 stated, “Increasing the capital gains inclusion rate is not expected to hurt Canada's business competitiveness.”

Do you believe the Liberal government's assessment on that to be accurate?

[Benjamin Bergen]

No, I do not believe so. I think it's unequivocally false.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you.

Also in this survey that you did, it listed that 67% of tech entrepreneurs who responded to your survey said that access to capital is their top challenge in business.

Do you think these Liberal capital gains tax increases will hurt the ability of Canadian workers and businesses in the tech sector to stay in Canada?

[Benjamin Bergen]

It is not a question of if. It already is impacting it.

A lot of the information that we received initially when it was announced was about uncertainty, obviously, because the measures themselves hadn't been fully baked, and then there was a continued delay of it. What we have heard from not only our member companies but folks in the broader ecosystem is that it's impacting their ability to go and raise capital, because it's less attractive here in Canada when you can do it south of the border. It's making it more difficult to keep highly skilled workers here because their potential stock options are at a higher rate and then, ultimately, the returns are lower. It's a perfect combo where you're seeing it impact founders, employees and investors.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you.

You mentioned in your opening statement the issue of government procurement. I wanted to ask you a question on that.

A report was written in April 2024 by your organization that had to do with “historic innovation underperformance”. We've seen, under this Liberal government, IT procurement policies and management that has led to ArriveCAN-style results favouring well-connected friends, wasting taxpayer dollars and not following government processes.

With that, have you seen how this might damage our innovation economy and the reputation of Canada's tech sector, with the way the government is currently managing its procurement system?

[Benjamin Bergen]

There are a couple pieces in that. It's a great question.

I think ArriveCAN is actually a symptom of a process that's broken. If we actually had a transparent, clear mechanism for domestic firms to be able to procure, we wouldn't have seen something like ArriveCAN happen. It was during the darkest days of COVID, and there were exceptions on those pieces that you can consider.

If we had a straightforward process, we would see firms actually able to access and properly go through it. The complexity of it is definitely part of the issue in terms of why we arrived at ArriveCAN. I don't want anyone in this committee thinking that procuring domestically leads to ArriveCAN. That is not the conclusion that should be reached. That's step one.

Step two is that the procurement system is so complex and challenging. You often don't even get domestic firms applying because they know that, with the way the RFPs are written and the way that certain structures are set up, there's no way for them to actually win contracts. A lot of the member companies that we work with could sell to the Canadian government, but it's so delayed and time-consuming they actually go and try to sell to other governments.

Often, the reality is that you go and become successful elsewhere before our own government will actually purchase your product. That's sort of the headwind that we're facing.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Gray.

Now we'll go to MP Baker, please.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Chair.

Thanks to all the witnesses for being here.

Normally, I like to question several witnesses, but today one of my constituents is here, so I am going to address her.

Ms. Regehr, thank you for being here. It's great to have a constituent here. It's not often that we have constituents from Etobicoke Centre presenting at the finance committee. Thank you for coming and being here.

I listened to your presentation and there are a few things that I'd like to follow up on, if I may.

The first thing you talked about was some of the benefits of a basic income. I want to drill down on that a little bit.

One thing you talked about was decreasing risk. Can you talk about what that means? What do you mean by that?

[Sheila Regehr]

Yes, I think the other witnesses have highlighted this too. It is risky in Canada. There is very little protection against those kinds of new risks that people are facing.

We were just commenting that one of our former board members has achieved great high-tech success in the company. He says it's because he got a basic income from his wife, who was earning when he had nothing, so he could put it into a business.

The risks are the kinds of things that humans face all the time. We can just be unlucky in our genetics. We can face health problems, which are curable by our health care system, but it may take some time to recover, which people don't have the funding for.

Then we have all these risks that are increasing, with technology and artificial intelligence, with a precarious work environment and with just living longer. I have a brother-in-law who came out of high school with very little education and with the expectation that he could walk down the street, get a good job, work his way up and he'd be set for life. That doesn't happen anymore.

People do need to transition throughout their lives, so there needs to be some underpinning—some economic stability—to be able to make those transitions and to plan to do better. Otherwise, people are trapped and that doesn't help any of us.