Finance Committee on May 19th, 2022

[The Chair, Liberal, Peter Fonseca]

We're moving to the Bloc and we have MP Ste-Marie for two and a half minutes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

My questions are also for the Council of Canadian Innovators, namely, Mr. Schiavo or Ms. O'Born.

Mr. Schiavo, in your presentation, you said that the programs are difficult, long and tedious. That's also what Ms. O'Born said.

Can you give us some examples and tell us what could be changed?

I only have two and a half minutes, and I would like to ask you another question.

In Bill C-19, where could amendments be proposed to better support innovation?

[Nicholas Schiavo]

In contrast to the other witnesses today, we are not coming with specific amendments. A lot of the elements in budget 2022 we saw as being favourable to innovation, but scarce on details. So we're very much here to advocate for them to be set up in the right way.

In terms of SR and ED, I think the program is too burdensome and too complicated. There is a lot of focus on hiring outside consultants just to navigate it. Practically speaking, if you are a company that is applying for a million dollars and it costs a hundred grand just to navigate that process and there's no guarantee that you will even receive it, there's less incentive to try something new and less incentive to innovate. That's really why our call is to streamline the program to make is simpler and to cover more expenses related to IP.

If you're speaking to the talent side of things, I think the programs we have now just aren't fast enough in terms of immigration. As a designated partner, we of course support the global talent stream, but are there ways to get more talent here faster? One of the ways we do that is by ensuring that the NOC codes that impact that program are updated more regularly and are more in line with the innovation ecosystem and market needs. There are a lot of different strategies, but we need to operate on every level that we can and use a talent lens.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you very much.

My time is almost up.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

Now we go to the NDP and MP Blaikie for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

For our witnesses from JDRF, I know that one of the suggestions you mentioned in your opening remarks was either eliminating or reducing the 14-hour requirement to seven hours. I wonder if you could just expand a little bit more on what a reduction of that requirement from 14 to seven hours would mean for folks who are living with diabetes.

[Dave Prowten]

I think what we're really trying to overcome here is the problem of health care practitioners debating with patients the amount of time they are spending on managing their type 1 diabetes. By eliminating or reducing that, we're trying to make that a lower hurdle for people to clear so that the debate is not within the health care practitioner world.

I think Matt said he could spend a hundred hours a week managing his diabetes, and then you get into debating about the time. For instance, is it five minutes on carbohydrates before a meal or is it three minutes? You end up in these debates. You still have type 1 diabetes and you still have the cost. It's turning into a debate about time, not about if you have the disease or the cost. It's almost like the debate is on the wrong topic for us right now.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Is there a sense that with a seven-hour threshold, most people living with diabetes would easily be able to prove that, as opposed to struggling to get all the way to 14 hours?

[Dave Prowten]

I think so. It would really make the bar much easier, especially because there are a couple new additional activities that are being added in this round of discussion. Between those two, we feel that it will make it much easier for people, and many more people will have access to it.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In the course of your advocacy on this, do you have a sense of whether there are people with other medical conditions who are in the same position as diabetics are in struggling with the time requirements for something that's pretty clear. I mean, you either have type 1 diabetes or you don't. You either need to have ongoing insulin injections or you don't. Are there other conditions that are that obvious in what they require and their additional expenses that would also benefit from a similar change?

[Dave Prowten]

It's a great question. Things like dialysis come to mind, where you must have that treatment, and it takes hours to do. Then it may be the number of times you would need to do it per week, so it would be those sorts of conditions. I think what we end up.... For us, it's about all these little activities that add up to a lot of time, so I don't know if there's another one that's exactly like that. Every time Matt has to eat, he's making a series of calculations; it's a series of minutes that add up to hours.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

We will hear from the Conservatives and MP Lawrence for five minutes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you again, Mr. Chair.

I'm going to go back to Mr. Clayton again. You went through the amendments a little bit with Mr. Blaikie, but we went through them pretty quickly, and I want to make sure the government members fully have the time to get the notes they need to take back to Finance. Could we go through them again? I believe there were three elements of the amendments, Mr. Clayton.

[John Clayton]

Yes, so the first one is to refine the proposed definition of “qualifying disbursement”. This is the mechanism that is the workaround for “own activities”. Remove the reference to disbursement meeting prescribed conditions, which relates to the 800 words, and replace it with a requirement that the charity instead take reasonable steps to ensure that resources are disbursed and used exclusively in the furtherance of charitable purpose. From what I understand, this creates the hook that the CRA can then develop regulatory and accountability frameworks around. That's the first one.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I'll pause you there. Maybe we'll pause after every one.

That's either to eliminate the “own activities” from the current regime or to reduce the prescriptive nature of the new “own activities” as proposed in the BIA. Do I have that correct? Feel free to correct me if I'm wrong.

[John Clayton]

Yes, it's the second option you listed there. It would put a new set of requirements around this new mechanism. Nothing in the amendments gets rid of “own activities”. That still exists in the background.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Okay, thank you.

The second amendment, please.

[John Clayton]

Yes, the second one is to amend language related to “directed giving”. This was problematic. I think it came from amateur sports somewhere, and it was a restriction that would keep Canadian charities from contributing to pooled funds and supporting non-qualified donees. I think this relates to giving to restricted funds or for specific purposes, and then not being able to deliver those funds or to action them for the intended local entity or non-qualified donee.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Right, and that comes from amateur sport. That restriction is in place because it makes sense in that context. If you have a son or daughter who's an athlete and you want to support them, you shouldn't necessarily be able to do that through a charitable gift,. That makes sense. Here—and I believe you have some personal experience through your organization—if someone wants to say, “You know what? I want to give $1 million towards Ukrainian relief,” that could potentially be stopped by this provision in the BIA. Am I correct in that?

[John Clayton]

If the gift were given specifically for a local entity in Ukraine that we're engaged with and is accomplishing something consistent with our objects, yes, that would be difficult for us to do. It would be impossible for us to receive that gift, and it would be very restrictive. A lot of Canadian organizations raise restricted funds for very specific purposes, so this would be very problematic.

Can I go on to the third?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Do we have time?

[The Chair, Liberal, Peter Fonseca]

Yes.

[John Clayton]

The third one is very simple. It's on the regulations that would be embedded into the Income Tax Act. Regulation 3703 needs to be deleted in its entirety. This would allow for regulations to be in the CRA guidance documents rather than exist as codified rules in the Income Tax Act. Having rules in the Income Tax Act and in CRA policy will create a hierarchy and a chilling effect on ever using a mechanism that's in the Income Tax Act. It wouldn't be reasonable. It has to be entirely prescriptive.

One of my friends said yesterday, as I was talking about this, that unless you achieve an A in all of those prescriptive categories, you could face censure from the Income Tax Act and lose your charitable status. The prescriptive nature—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Some of the organizations you partner with are doing fantastic work. I had the pleasure of meeting the founder of Black Moms Connection. The organization is fantastic, but it's not huge. It's very difficult for organizations such as that to abide by incredibly prescriptive and inflexible rules.

Is that correct?