Finance Committee on Feb. 12th, 2026

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you for your concise answer.

In terms of defence, our plan was to announce our defence industrial strategy yesterday, but that was postponed in light of recent events. We're ready, and it's coming soon. It's definitely an important part of our strategy. It will be very important for Canada and for Quebec.

Private investment, of course, is a key aspect of the budget. We want to accelerate investment.

As such, I'll save some time at the end to talk to you a bit about temporary foreign workers as well, because that's important. I want to address another point first.

You briefly alluded to business succession, also known as transfers, and to the fact that Quebec and Canada as a whole will see a very large number of business transfers. I know that's something the federation has been saying for a long time.

Can you tell us, briefly, what you think would be the most effective measure the federal government could implement to facilitate business succession?

[Hubert Rioux]

Good afternoon, Mr. Leitão. My name is Hubert Rioux, and I'm the federation's economic director.

Indeed, as my colleague mentioned, we expect to see 50,000 businesses transferred in Quebec by 2030. We were actually a bit disappointed that the Canadian entrepreneurs' incentive was cancelled, because the net opportunity cost for those transferring their business will be significant despite the increase in the lifetime capital gains exemption. Indeed, the taxes to be paid on capital gains greater than $1.25 million will be higher than they would have been had the incentive been maintained.

At the federal level, there's also what's known as the 50% + 1 rule, which requires family businesses to transfer more than 50% of the voting shares in the first year if they want the capital gains exemption.

What we've been seeking for a long time is the gradual transfer of voting shares to reduce the financial burden of business transfers for family businesses that, as you know, are very important to Quebec's economy.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

That's great, thank you.

I'm sure we'll talk about the small business deduction another time. We've had a lot of conversations about that. It's very important.

I was intrigued by one of your proposals. You talked about a tax incentive that would help double exports to countries other than the United States and enable businesses to make their exports more attractive.

Can you tell us more about that, please?

[Hubert Rioux]

Yes, that's an interesting subject.

The government's goal, as you know, is to double exports to countries other than the United States by 2035. Diversification is an important goal. Other countries, including the United States, have tax incentive models for that. For example, the United States has the Foreign-Derived Intangible Income, or FDII, which allows companies to pay less tax on a portion of their revenue from exports to new markets in the goods sector. We think it would be a good idea for Canada to do something similar.

Another way to do that would be to grant tax credits to cover a portion of the business development expenses that small and medium-sized businesses incur to develop new international markets.

Those are two approaches the government could consider to move in that direction.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you.

I'll take note of that, because it does indeed seem interesting. As you know, there's a budget every year. There will be another one this year as well, so we're taking note of these things.

I think my time is almost up.

Regarding temporary foreign workers, I'm well aware of the issues. It's complex, and it involves both levels of government. Our government is working on temporary solutions. All I can tell you is that there will be announcements soon.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Leitão.

Mr. Garon, you now have the floor for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair. Good morning.

Good morning to my colleagues and all the witnesses who honour us with their presence today.

My questions are for the representatives of the Fédération des chambres de commerce du Québec.

You talked about the importance of the federal government's role in infrastructure transfers, and you applauded the build communities strong fund. However, even though the Minister of Finance announced something like $150 billion for infrastructure investments, the amount of new money invested is between $8 billion and $16 billion, according to the analysis.

The build communities strong fund is $51 billion over 10 years, which is $5 billion a year for all of Canada. That includes $500 million dollars for Quebec for hospital infrastructure. That doesn't even cover Maisonneuve-Rosemont Hospital.

What do you think of the federal government's role in infrastructure transfers?

You applauded what has already been done, because it's better than nothing, but do you think it's enough?

[Mathieu Lavigne]

I don't think amounts like that will ever be enough, because Quebec's infrastructure needs are huge.

A little over a year ago, a study was done on the importance of asset maintenance. It seems as though there's a lot of investment, both by the federal government and by Quebec, in new infrastructure. However, what is most lacking is investment by the federal government and Quebec in maintaining existing infrastructure.

I use the Montreal metro every day, and there are more and more problems. The Saint-Michel station was closed not long ago.

We're seeing the impact of infrastructure in poor condition, so it's important that some investment, be it from the federal government or elsewhere, be devoted specifically to that. Before embarking on all kinds of other projects, it's important to make sure that the ones we already have are working properly.

[Jean-Denis Garon, Bloc, Mirabel, QC]

We're still going to point out that there is fiscal capacity in Ottawa and that almost all infrastructure is provincial or municipal. It always comes back to dysfunctional federalism getting in the way.

I would like to talk more about the accelerated capital cost allowance. As an economist, I know that Great Britain, for example, conducted an analysis called the Mirrlees Review a few years ago. Some countries conduct periodic reviews of their tax system. A common finding is that this should basically be applied across all sectors. For the immediate accelerated capital cost allowance, the government chooses who benefits; it chooses sectors. It takes a position.

Some sectors are completely left out, such as telecommunications, even though we need to strengthen our fibre optic sovereignty. We also know that this may put the smaller players, the small businesses, at a disadvantage.

If you could make a change to immediate and accelerated capital cost allowance, what would you do?

[Hubert Rioux]

Thank you, Mr. Garon.

Yes, I think this incentive should be extended to all sectors, perhaps starting with the mining sector. I'm thinking of critical and strategic minerals, or CSMs, and the defence sector, given the significant investments that will be required in the coming years.

It should also be made permanent. As people have said from the start, Canada has a lot of catching up to do in terms of private investment and productivity, and that will take steadily increasing investment over the years.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I would just like to ask you a follow-up question, Mr. Rioux.

Do you think that's the government's strategy? Did it make this temporary so it can tell businesses to take advantage of it while there's still time?

[Hubert Rioux]

That's the impression I get.

I imagine it's also a matter of budget capacity, obviously. Predictability is important for businesses. The idea isn't to encourage businesses to invest now and then rest on their laurels. Investments need to grow year after year to catch up to where we should be.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Mr. Rioux, you said that regulatory sandboxes are not a bad idea and that they're being used elsewhere. The government still allows a lot of freedom, actually.

What are the main restrictions that should be in place to ensure that the will of Parliament is respected?

[Hubert Rioux]

Yes, we think it's a good idea to move in that direction. As you said, this is being done elsewhere in the world. However, we need objective criteria that are better defined than what is currently in Bill C‑15, which is quite broad. It talks about risk management, the public interest and so on, but that doesn't mean much as things stand.

[Jean-Denis Garon, Bloc, Mirabel, QC]

What you're saying is that it needs to be more specific.

Is that correct?

[Hubert Rioux]

Yes, that's right.

There's an interesting model, France Expérimentation. It has very specific criteria. You can check the website. This model has worked well for a number of years.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you. We'll look into that. It may inform our work on amendments.

I have a question for Ms. Wilding of Chartered Professional Accountants of Ontario.

In the budget, the Minister of Finance separated operating expenditures and capital investments. We're a bit skeptical about what the minister considers investment.

Does Chartered Professional Accountants of Ontario agree that everything the Minister of Finance considers investment is generally interpreted in the same way based on an accounting approach or generally accepted accounting principles?

Are these investments in the accounting sense?

[Carol Wilding]

Thank you for the question.

I'm really here to talk more about the tax policy than about the actual accounting treatment of the federal budget. I think that's something which, down the road, as the budget becomes implemented and, obviously, the—

[Jean-Denis Garon, Bloc, Mirabel, QC]

I understand that the question makes you uncomfortable, so we'll save time.

I'm going to go to the representatives of the Fédération des chambres de commerce du Québec, the FCCQ. We can continue in the next round of questions.

[Carol Wilding]

No, it's not that I'm not comfortable. I just don't think I'm here to opine on the accounting treatment versus the underlying tax policy.

Thank you.

[Jean-Denis Garon, Bloc, Mirabel, QC]

We're here to talk about the budget, and I think accountants are qualified to tell us what an investment is. Thank you very much.

Thank you, Madam Chair.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Garon.

We will now continue with Mr. Kelly for five minutes.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

No. I think....

[The Chair, Liberal, Karina Gould]

I thought you said you were switching.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

In the second hour.