Finance Committee on Nov. 7th, 2024

[Dr. Terry Rock]

It will be years.

Their goal is to get to the point where they will have a capital gain at some point, maybe. We think there is about an 85% to 90% failure rate when you're starting a company, and that's why we need so many people to get behind them and get behind the company. We're trying to change that rate, but there is definitely a headwind for folks who are trying to get started.

Many more people than 0.13% are impacted by this.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP McLean. That's the time.

We're going to our final questioner, and that is MP Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

Welcome to all the witnesses.

David, from the TMX Group, thank you for providing the answers that you could provide.

We invite witnesses—and I've been on this committee for many years—to provide insight on how we can continue to grow the Canadian economy, create good jobs for middle-class Canadians and do what's right. One thing I'd like to put on the record, Chair, is Canada's economic growth story.

Today Statistics Canada provided the revised estimates for economic growth in Canada. I would like to say that the cumulative total of the revised growth rate here in Canada for the last three years is a positive 1.3%. In fact, if I can go through the three years, Chair, for 2021, the reported number of 5.3% for economic growth goes to 6%. In 2022, the economic growth rate for Canada goes from 3.8% to 4.2%. For 2023, the economic growth rate goes from 1.2% to 1.5%.

Obviously, Chair, this makes the per capita GDP story very different from what is being reported, and that is good news for Canadians. It may not change the price of groceries at the grocery store and so forth, which we know have been impacted by global inflation. We know how people are feeling, but Canadians can rest assured that at home, this government, coming out of the COVID-19 pandemic, put in the necessary resources and supports for businesses and workers. We didn't allow scarring to happen in the economy. We allowed our economy to exit in full throttle to recapture the GDP that was lost. I am so proud to be part of the government that allowed that to happen.

Mr. Clarke, you're from the TMX Group. What is the TMX trading at these days? Where are we right now?

[David Clarke]

Do you mean our company stock or the S&P/TSX?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I mean the S&P/TSX. Are we at a record high right now?

[David Clarke]

I haven't checked it today, but I think things are okay.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Yes, things are going really well. We were at a record high a month ago, and we're actually doing quite well on the S&P/TSX. The energy sector makes up a big portion of that, I think.

[David Clarke]

Yes. The energy sector, by market cap, is 10% to 15% of the companies listed on the TSX and TSXV. That's right.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

For full disclosure, I have a wealth adviser. I don't know what I own or don't own in any of those companies. In my prior lifetime, I knew I had shares in oil companies, natural gas companies and so forth. Today, I don't know, so I just want to put that on the record to be up front.

However, the S&P/TSX and the subsectors are performing exceptionally well. We know that. We also know that the IMF came out with its economic growth forecast and said Canada would grow the fastest in 2025, at 2.4%, which is even faster than the United States.

Chair, as I indicated previously, we run a deficit of about 1% of GDP, while the United States is going to be running a deficit of 6.5%, and it may even get larger. In my view, that is unsustainable, and there will be a reckoning.

Mr. Clarke, you have commented that not all capital gains are equal. What did you mean by that?

[David Clarke]

What I was referring to there, again, is a difference between capital gains that are the result of what I would call productive investments or productivity-creating investments and other types of investment.

What we're here asking for today is a reconsideration of raising the rates on Canadians investing in those productive Canadian investments—Canadian companies, as an example. We think it would be beneficial to reconsider that raise and not raise the rate on gains that are accrued from Canadians investing in Canadian companies. You could even potentially look at reducing them, if we want to address the issues of flagging productivity and slow economic growth.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

To any of the concerns out there with regard to the oil and gas sector globally, look at a country like China. China has one of the largest electric vehicle companies, called BYD. I think that's the name or the acronym.

The Chinese have built this huge electric vehicle company. We know the United States has placed tariffs. We have placed tariffs on steel, aluminum and electric vehicles to protect Canadian workers. The Europeans have placed tariffs as well.

The transition away from the way we look at traditional oil consumption has started. It has not only started, but it started with countries like China, where I believe the EV market share is now over 20% of EV sales in the world. It's started.

Now, a country can be what I would call a dinosaur or a laggard—I remember there was a Reform Party leader and some dinosaur thing from many years ago—or it can be a first mover. We can be the leaders of the world and go, as we would say in the hockey analogy, where the puck is going. We can take the puck and actually score the goals and create the jobs.

That's the way I look at it. I think the countries and the companies that are doing that will be the leaders of the world tomorrow, although I agree that we have to get applications and developments done faster in mining and resources.

I think the chair's saying, “That's enough, Francesco”, so I will stop there. That's my time.

Mr. Clarke, I thank you and all the witnesses here for your testimony. I am the last individual speaking. It's always great to hear from a wide variety of diverse voices in our economy and in our country.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Sorbara.

As he said, we want to thank all the witnesses for their testimony on our pre-budget consultation in advance of budget 2025.

I am going to remind all members, because these are our final witnesses and we've had many witnesses and many submissions, to prioritize the recommendations that you want to get to our analysts so that they can do their job. We've asked for them by the end of week on Friday if they require translation. If they don't require translation, then it's the Monday thereafter.

If we can all do that, it would be great.

We wish our witnesses the best with the rest of their evening. Thank you very much for coming before our finance committee.

The meeting is adjourned.