Evidence of meeting #48 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Nicholas Schiavo  Director, Federal Affairs, Council of Canadian Innovators
Dave Prowten  President and Chief Executive Officer, JDRF Canada
Matt Stimpson  JDRF Canada
Lynne Groulx  Chief Executive Officer, Native Women's Association of Canada
John Clayton  Director of Programs and Projects, Samaritan's Purse Canada
Dana O'Born  Vice-President, Strategy and Advocacy, Council of Canadian Innovators

12:30 p.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Thank you, Mr. Chair.

I'll now turn to the representatives from the Council of Canadian Innovators. My questions will focus on the start‑up ecosystem.

First, how have start‑ups weathered the pandemic and lockdowns? We know that they've had a lot of problems.

Second, how can we better support them? Several of my colleagues have raised the importance of taking them to a higher level. Under the current model, these companies are financed with venture capital and are encouraged to make innovations. When an innovation is made, the start‑up company often sells it to an American company in order to repay the venture capital.

Would it be appropriate to set up a patient capital system to support start‑ups at another level?

12:30 p.m.

Vice-President, Strategy and Advocacy, Council of Canadian Innovators

Dana O'Born

I'll answer the first question in English and then send the second one over to my colleague to answer in French.

For start-ups, scale-ups and technology companies across the board, in the very early days of the panic mode of the pandemic it was a very scary time, obviously.

I will say that the first iteration of the wage subsidy that came out rendered 80% of the innovation economy ineligible. We quickly went back to the drawing board and provided some feedback to the government. Some amendments were made and we saw that the new wage subsidies were then available through different regional development organizations and IRAP, etc. I believe we were able to push the dial in getting some of the pieces in place to support the economy on that front.

For most companies, it was a very difficult, unstable time. All of a sudden there was a very quick turnaround for a number of digital companies who knew that they had to either pivot or get into action supporting the work-from-home operations. Some companies came out very well on the other side, but of course, like many small businesses in Canada, others suffered significantly.

It was not so great at the beginning and then things turned around quite quickly. That was just a matter of fact that we had no idea what was happening or where things were going, and that was something that was being felt globally.

I'll turn the second question to my colleague who will respond in French.

12:30 p.m.

Director, Federal Affairs, Council of Canadian Innovators

Nicholas Schiavo

Thank you, Ms. O'Born.

I'm supposed to speak in French but if you don't mind, I'll answer the question in English.

I've lost track of the question, but I think one thing that's unique about CCI is that we specifically represent the scale-up community in Canada, which are those scale-ups that are headquartered here in Canada.

To your second question, I would just reiterate what we've talked about today, which is ensuring that we have the right marketplace frameworks. The freedom to operate for our scale-ups is critical. Ensuring that they are able to commercialize and get past that start-up phase is something we really struggle with her in Canada.

In addition to having a strong IP regime, the other elements we've discussed—a national data strategy, a review of the Competition Act and open banking frameworks that we're actively engaged in—are all regulations that help our companies grow. Clear rules and responsibilities ultimately create a fair playing field.

12:35 p.m.

Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Thank you.

12:35 p.m.

Liberal

The Chair Liberal Peter Fonseca

Thank you, Mr. Ste‑Marie.

Now we will go to MP Blaikie for two and half minutes.

12:35 p.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Thank you very much, Mr. Chair.

I am just going to continue in a similar vein to Monsieur Ste-Marie, who I think was asking about the capital requirements of scaling up. Often the model in Canada seems to be that companies will develop a product to the point where it's ready for a wider commercialization and then sell to a firm—a U.S. firm or a firm from somewhere else—that then takes that work on.

He was asking if it makes sense to have patient capital—which is a rough translation of the French; maybe that's the term in English as well—and about what could be done to put that in place so that when products are ready for scale up, a better financing infrastructure is already available and in place.

I wonder if you want to speak to that or if you think that's not really the main issue and that it is some of the other factors you were discussing before.

12:35 p.m.

Director, Federal Affairs, Council of Canadian Innovators

Nicholas Schiavo

Thank you for that question.

I might actually turn that over to my colleague.

12:35 p.m.

Vice-President, Strategy and Advocacy, Council of Canadian Innovators

Dana O'Born

Sorry, I was confused whether the question was for us or for another colleague here.

Yes, regarding patient capital, it's funny because people think “patient” refers to people in hospitals. That's not what it is. Patient capital is that long-term investment—that long-term play.

We often see that VCs like to see early double-digits on their return on a three- to four-year investment. With the dips and the highs and lows that we've seen in the economy in the past few years as a result of COVID, and this market dip we're experiencing right now, I absolutely think that patient capital needs to be a big part of the mix.

We also saw that the government made the announcement around the VCCI funding this week. Those types of incentives bring venture capitalists and other investors to the table and create an assurance that there will be an opportunity for a bit longer term.

Any time the government really puts its hand up and says that it wants to be a part of this, there is a bit more of a guarantee that the patient capital can persist. It gives outside private sector investors a bit of assurance that if the government is at the table, they're in it for the long game.

The thing that's really interesting about this concept of patient capital is that it really depends on the sector. We see clean technology companies, which are very capital intensive because they're investing in equipment, manufacturing and a lot of R and D to get—let's keep it simple—a solar panel prepared to go to market versus a software-as-a-service company where everything can be done in the cloud and a bunch of kids sitting are in shorts, working on laptops in co-working spaces or at home. The ability to scale up a company that's all here and operating here versus actually building the material and testing it for market are two very different things.

In the business of clean technology, and also to a certain degree in health technology when we're talking about medical devices, that patient capital is essential in terms of making sure that those products can slowly make their way to market.

The other side of that is with patient capital investments, there are often big regulatory hurdles. Those who are making the investments need to recognize that sometimes, when overcoming requirements related to FDA, Health Canada or standards approvals for particular clean technology pieces, that patient capital piece is a really big part of the equation.

12:40 p.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Thank you very much.

12:40 p.m.

Liberal

The Chair Liberal Peter Fonseca

Thank you, MP Blaikie.

12:40 p.m.

Liberal

The Chair Liberal Peter Fonseca

We will now move to the Conservatives.

MP Stewart, you have five minutes.

12:40 p.m.

Conservative

Jake Stewart Conservative Miramichi—Grand Lake, NB

Thank you, Mr. Chair.

I'll go back to JDRF. Thinking about the disability tax credit, what would be the ideal outcome to make life better for the 300,000-plus Canadians with type 1 diabetes? Would it be to amend the BIA to remove the 14-hour rule by deeming Canadians with type 1 diabetes as automatically qualifying for the life-sustaining therapy criteria in the disability tax credit?

12:40 p.m.

President and Chief Executive Officer, JDRF Canada

Dave Prowten

That would be ideal, for sure. Insulin is a life-sustaining therapy. There are no ifs, ands or buts about it. Once you have type 1 diabetes, you have it for life. That would definitely be the simplest way to make it accessible for everybody.

12:40 p.m.

Conservative

Jake Stewart Conservative Miramichi—Grand Lake, NB

I appreciate that. To me, that seems like the gold standard.

As I was reading some of your opinions and some of the platform for JDRF, I saw that basically there's another idea where you could agree to reduce to it seven hours, or removing the 14 hours for all medical conditions that require life-sustaining therapy may cause unintended consequences regarding administration with the CRA.

Basically, should an amendment be targeted specifically for type 1 diabetes, given the circumstances of the condition? What would that amendment look like to JDRF?

12:40 p.m.

President and Chief Executive Officer, JDRF Canada

Dave Prowten

First of all, we champion for people with type 1 diabetes. I guess if it is possible to make something that would be focused for type 1 diabetics, that would be fantastic. That would be wonderful, because it would probably give clarity to a specific condition that is different from others.

I think if we could make an amendment, we would probably ask to have the hours eliminated or reduced. As I said earlier, we're really debating about the number of minutes spent on a whole series of activities all day long that you have to then debate with your health care practitioner. We're just really trying to find an equitable solution for those with type 1 diabetes—for everybody.

12:40 p.m.

Conservative

Jake Stewart Conservative Miramichi—Grand Lake, NB

Thank you for that. I appreciate your answer.

As I said the other day when you were here, I grew up knowing quite a few people who had type 1 diabetes. I've definitely seen the struggle that parents face and that adults with the condition face as they get older living in this country. I just think it's important for you at JDRF to know that we had a former leader who brought forth something similar to assist in the disability tax credit area. I support removing it entirely for people with type 1 diabetes, and I know I speak for the members of my party as well. As I mentioned earlier, there will be something coming forth from us, but just not today. It's an another aspect of the committee. I think this is long overdue for people with type .

Your colleague mentioned how sleep-deprived his wife becomes. I know people in this situation. Mothers are waking up constantly at three and four in the morning. I know a couple of them, and I know the stress of it.

Those are really all my questions for today. I just think it's important for JDRF to know that I support removing this entirely so that everyone with type 1 diabetes can qualify automatically for the disability tax credit. The members of my party agree with this. Something is coming forward. I'm really hopeful that all the members of this committee in all the parties will support it. We have the power at this committee to make decisions and make changes that can affect Canadians. I just wanted you to know that this will be coming forth.

Those are all my questions. If I have more time, I could give it over.

12:40 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

How much time would I have, Mr. Chair?

12:40 p.m.

Liberal

The Chair Liberal Peter Fonseca

One minute.

12:40 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Great.

To the Council of Canadian Innovators, earlier there was a mention of Huawei and having a decision on that. The government has been promising this since before the 2019 election. Could you please expand upon why having basic certainty on things like 5G is helpful to you, your organization and those you represent?

12:40 p.m.

Vice-President, Strategy and Advocacy, Council of Canadian Innovators

Dana O'Born

Certainly. Thank you for the question.

As I mentioned in my comments previously, I think a number of Canadian companies can offer and deliver the same services. Delaying on a decision around what market entry Huawei has into Canada just signals that Canadian companies are kind of sitting on the sidelines and waiting for an answer on that.

I don't want to get into the diplomacy pieces related to the contract itself, but I think it's going to be really critical that a decision comes, and a decision comes soon, so that innovators are able to recognize and respond.

12:45 p.m.

Liberal

The Chair Liberal Peter Fonseca

Thank you.

Thank you, MP Albas.

Now we're going to the Liberals.

Welcome to our committee, MP Shanahan

12:45 p.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Thank you very much, Chair.

It is a pleasure to be here with my colleagues. We've met in other committees, in other forums, but it's been really interesting listening to the questions to and the answers from the witnesses here today.

I'm sorry. I did miss the opening remarks, so I hope I don't repeat anything. I am very intrigued.

I don't think we've heard from the witness from Samaritan's Purse Canada, and I do have a question for that witness. Who is that witness?

12:45 p.m.

Liberal

The Chair Liberal Peter Fonseca

That is Mr. Clayton.

12:45 p.m.

Liberal

Brenda Shanahan Liberal Châteauguay—Lacolle, QC

Mr. Clayton, first of all, I would like to commend you and your organization for the tremendous humanitarian work that you conduct all over the world. Given that this is—I don't want to mispronounce it—Vyshyvanka Day and we do have interns here from Ukraine, I want to ask you about your work in Ukraine.

Your organization has been doing tremendous work in helping Ukrainian refugees in Poland. I can only imagine how quickly you had to mobilize to get to Poland and Moldova and then here in Canada to do this work.

The federal government has announced over $100 million in spending to implement and operate the new Canada-Ukraine authorization for emergency travel and a special permanent residency stream alongside hundreds of millions for humanitarian and military aid to Ukraine.

Please talk to us about the impact of these investments, but also about the heroic work that you and your staff are performing during this crisis.

12:45 p.m.

Director of Programs and Projects, Samaritan's Purse Canada

John Clayton

Thank you for the opportunity to speak to our work in Ukraine.

It was my privilege on Sunday at 2 p.m. at Pearson International to receive 28 Ukrainians on an aircraft we had coming back from Poland and that landed in Toronto. I got to spend the entire afternoon with them at the airport. They're now in Vegreville, Alberta, the home of the world's largest Easter egg—so they're in familiar territory—and wonderful people. We're anticipating receiving another 21 people tomorrow, on Friday.

We continue to be active. I know that there are many other organizations that are very active across Ukraine and the periphery, so our current activities, using the donor support that we have, are in the 17 projects that we are currently funding in Poland and a number of other European countries in supporting displaced and refugee Ukrainians who have made their way across Europe. We're very active with that.

Our particular interest here today is about direction and control and “own activities” and specific provisions that are in the budget implementation act. I trust that you've made yourself aware of—or we could make them available to you—the specific amendments that we are seeking. I've already spoken with MP Lawrence. We see it as very important for us to keep our charitable sector and the way we can function modernized and to update things. That's something we're seeking.

It's really great to hear you recognizing our work. We have a lot of Canadians—70 Canadians, I think—who have served in Ukraine in our emergency field hospital and in the work we're doing across the country. There's an awful lot going on, and Canada plays a big part across the entire charitable sector in Ukraine.

Thank you.