Finance Committee on May 17th, 2022

[Norma Kozhaya]

Unfortunately, I can't give an answer to that question specifically.

However, I know that, in general, if we look at experience in other countries that have succeeded at this, like Germany and France, collaboration among researchers, universities and businesses is crucial.

In our jargon, we talk about two types of innovation: push and pull. The term "push" applies when we're talking about tax credits, while the term "pull" is when there is a problem we are trying to find a solution to, through collaboration between universities and the private sector. Experience in other countries shows that this produces good results.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you.

I want to go back to....

[The Chair, Liberal, Peter Fonseca]

You have one minute.

[Heath MacDonald, Liberal, Malpeque, PE]

I'm sorry.

I wanted to go back to the CFIB and ask about the different funding programs that are available to small businesses through the federal government. Which of those funding programs do you feel are not effective going forward?

[Corinne Pohlmann]

That's not an easy question, first of all because I may not be as familiar with some of those programs as others. If you're talking outside of the COVID sphere, I'm not really familiar with all of the programs because many of them are very specific to specific industries, specific types of innovation or whatever the case may be, so it's harder for me to be able to respond.

One that comes quickly to my mind, of course, is the Canada digital adoption program, which is out there right now. Of course, there are a few lending programs, such as the women entrepreneurship strategy and the Black entrepreneurship program, both of which, I think, are still in their early stages, so I'm not sure how well they are going.

Then the Small Business Financing Act is another one. It does loan guarantees through the banks for small businesses. It's going through some changes right now to improve the types of loans and the types of things they can get lending for, which I think will be a positive going forward.

I can't speak specifically, however. I'm still in “COVID head” and I can't remember what was before that. Those are what come to mind.

[The Chair, Liberal, Peter Fonseca]

Thank you. Thank you, MP MacDonald.

Thank you to the witnesses, who have been excellent. I know that you didn't have a lot of time to prepare, but the answers have been great for our committee. Our call gave you very little lead time.

Members, because we don't have enough time to go through a full, regular round, I'm looking at the time. We'll divide that time up by parties, so each party will have four minutes.

We'll start with the Conservatives. I have MP Albas up for the four minutes.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you. I appreciate that.

Mr. Laliberté, thank you for being here and presenting your view on what should happen. I know my colleague Mr. Fast asked you a few questions on it.

There is one thing that I'm wondering about it, though. What makes you think...? Even if we could get members at this committee to agree to separate that section and pull it aside, it doesn't necessarily put any onus on the government to go back to the drawing board and look at some of the conversations that you had with them originally.

If the government is of such a mind that they said, “You know what? We're doing it this way. We're set”, what will giving them a pause by taking this out do? What will that do to change their behaviour? Would they not simply add it to a future bill?

[Pierre Laliberté]

Thank you for the question, but I'm not altogether sure how that would play out. Quite frankly, I think that the intent behind this reform was.... I don't think there was a problem. I think that there was a general agreement on what the problems to solve were and the vision of what should be created instead.

This was in 2019. We're in 2022. A lot has happened between then and now. I think the actual writing down of that vision does not correspond to what it was.

To answer a bit more directly, I feel like this is not a contentious issue. I think it's a matter of tweaking and going back to the original intent. This is what makes me confident that if we had this in committee, I think we would all agree on what needs to be done and avoid voting into law something that might be faulty for the reasons I've evoked.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Ultimately, you'd like this to be taken out of the bill, but then have some sort of process whereby it can be resubmitted directly to committee to thresh it through—

[Pierre Laliberté]

Correct.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

—have hearings and then maybe propose it to the House of Commons.

That is within our ability to do as a committee. Is that what you would like in this case?

[Pierre Laliberté]

I think that it would be the right way to go and have the proper attention dedicated to it.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I appreciate that.

I have limited time, so I am going to go back to the Quebec Council of Employers.

I am concerned, because we've seen production being moved to the United States. An example is Bombardier. I've heard today that this luxury tax being proposed by the Liberals may end up benefiting foreign manufacturers at the expense of Canadian industry.

Can you spell out to the committee and to Canadians exactly what you fear might happen if this bill passes without any amendments?

[Norma Kozhaya]

Yes, it would put the sector at a disadvantage, not just Bombardier, but also the whole value chain and ecosystem that exists around it, like the suppliers and other manufacturers.

Generally, when there is a new tax, the cost goes up, and that reduces demand.

Assuming that we agree that there will be this tax for personal use, and not for business use, we would have to make sure that there are no cash flow problems. As we said at the beginning, a business would not have access to tens of millions of dollars for several months while its competitors didn't have the same problem.

We also have to make sure that the definition of business use is not as narrow. We could also look to the United States, where there was a similar case, and learn from that experience.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

If you could supply that particular model in writing to the committee, a more favourable model in comparison to what's being suggested here, I'd appreciate it. Thank you.

[Norma Kozhaya]

With pleasure.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Albas.

Now we go to the Liberals and MP Chatel for four minutes, please.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you.

I have a question to ask. How much time do I have, Mr. Chair?

I have two minutes, correct?

[The Chair, Liberal, Peter Fonseca]

You have four minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

It's four minutes. Good.

I am going to address the representatives of the Quebec Employers Council again.

Mr. Blackburn and Ms. Kozhaya, I'd like to know what your two or three or four recommendations are for ensuring that big businesses, but also medium-sized and small businesses, very particularly, are able to carve out a place for themselves in the digital economy and the green economy of tomorrow.

[Karl Blackburn]

I can make a start with a general answer, but I'll ask Ms. Kozhaya to complete it.

First, there would inevitably have to be access to more workers. Unfortunately, again, the labour shortage is a drag on investments and is slowing projects down. The owners and employers are the accountants, the people who provide the service, the people who do the delivery and do the buying. So it becomes very complicated to move to the next stage. Without vigorous measures to solve the labour shortage, the risk is that many opportunities will be missed in terms of economic growth.

To answer your question more precisely, I'm going to ask Ms. Kozhaya to talk to you about the measures in more detail.

[Norma Kozhaya]

Yes, the labour issue is a major problem, both for unskilled workers and for highly skilled workers. To ensure the ecological transition, there has to be a workforce that is trained in these fields.

Regarding measures to provide support in the ecological transition, we have to recognize that there are measures in the budget to encourage green investments and investments in low emission or carbon neutral technologies for vehicles. There is also strengthening of value chains around those sectors.

Another initiative we could consider relates to support measures. Often, a company can make an investment, but since operating costs for lower emission technologies are higher, there could be support measures in this connection. For smaller businesses, it's more or less the same thing.

As we said earlier, measures to assist with automation are needed. In Quebec, we have a tax credit for investment and innovation. We had asked for there to be an equivalent tax credit at the federal level too, to help businesses very briefly.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Ms. Kozhaya.

I would now like to address Ms. Pohlmann and Mr. Guénette on the same point.

[Jasmin Guénette]

Can you repeat your question, please?

[Sophie Chatel, Liberal, Pontiac, QC]

If you had four recommendations to make, to ensure that Canadian businesses could carve a place out for themselves in the digital and green economy of tomorrow, what would they be?