Thank you.
I would like to thank the members of the committee for the invitation.
At the Conseil du patronat du Québec, or CPQ, we represent 70,000 employers across the province.
In the context of the current trade war, the major transformation in our relationship with our main economic partner and, obviously, geopolitical tensions that are placing increasing pressure on energy prices, the CPQ believes it is more necessary than ever to focus our efforts on what we can actually control here in Quebec and Canada.
We need to be able to strengthen our business environment, stimulate investment, increase our productivity and competitiveness, diversify our markets, of course, and support our capacity for innovation. It is under these conditions that we can make our economy resilient and maintain our standard of living.
The recommendations we are making today are part of that perspective of strengthening our economic and industrial fabric to better deal with the uncertainty we are facing on a daily basis as well as the challenges looming on the horizon.
First, on the regulatory front, project approval processes in Canada are too long, too complex and not well coordinated. That's what we hear on a daily basis from our many members. Multiple players and the lack of alignment among the various bodies are delaying the completion of projects, both public and private, and slowing investment. We recognize the government's desire to make improvements in this area, but it still has a lot of work to do to achieve its goals. The CPQ supports these efforts to simplify and speed up authorization processes, but more needs to be done.
More broadly, our regulatory framework must evolve to foster innovation, investment and competitiveness, while continuing to meet the objectives of health, safety and the protection of the public, of course. Adding new counterproductive constraints should also be avoided, particularly in specific strategic sectors where speed of action and investment ability are key.
Competitive, stable and predictable taxation is an essential instrument to attract investment and support business growth. The CPQ recommends, among other things, reducing the tax on reinvested profits in order to stimulate productive investment, maintaining a competitive advantage over the United States, and retaining effective measures such as super-productivity deductions. We are also thinking of strengthening tax credits for research and development by expanding eligibility for pre-commercialization and commercialization expenses, which are phases that can be described as a valley of death, since they are particularly difficult for many businesses. We also maintain that any tax increase, whether general or sectoral, must be avoided, as it would further weaken business competitiveness. In this context of the trade war, targeted measures are still needed to support the sectors directly affected by the tariffs, including the steel, aluminum, automotive, wood and copper sectors.
Beyond ad hoc support, it's mainly a question of helping businesses to adapt, diversify their markets and better integrate into national and international value chains. This requires, among other things, increased support for exports as well as initiatives that promote trade within the Canadian market itself. Once again, we see the efforts that have been made to promote interprovincial trade, but the results remain to be seen.
The CPQ also urges the government to pay particular attention to strategic sectors such as telecommunications and the life sciences, in particular by modernizing certain regulatory components. At the same time, we need to accelerate the integration of new technologies, particularly artificial intelligence, into Canadian businesses to increase their productivity and competitiveness.
On the energy front, we should focus on a diversity of supply sources as well as principles of energy efficiency and frugality, and using the right energy for the right use at the right cost, while strengthening our energy self-sufficiency.
In terms of government procurement, we believe the government needs to use its purchasing power more strategically. Where appropriate, preference should be given to local suppliers and consideration should be given to the economic benefits of public contracts, particularly in sectors affected by tariffs, while respecting the principles of competition and the sound management of public funds. Such an approach would promote not only innovation, but also greater participation by small and medium-sized businesses in Quebec and in Canada. We believe that Canada's defence industrial strategy must contribute to strengthening Canada's industrial fabric through—