Thank you.
I'd like to return to what I was talking about earlier but with perhaps a bit more clarity in the question. I think this report that came out yesterday did a number of things, but I'll just focus on three, and I'd ask each of you if you agree with it or not.
The government currently spends about $7 billion a year in these areas and they had to keep that level constant, so it was a question of reallocation. Given our challenges, you could argue that we should spend more, but in today's fiscal climate one might be lucky just to keep what we have.
Point number one is the SR&EDs now account for about a half, $3.5 billion out of $7 billion, and this makes Canada an outlier in terms of a very heavy dependence on indirect tax incentives versus direct spending. They propose to reduce over time the refundability of SR&ED, which would produce savings that they would then shift over to BDC for direct grants or expenditures or investments on late-stage risk capital financing and start-up funding. I think if you're a pure market person, you might not like that, because in a way it might involve some public agency choosing winners and losers, as opposed to the tax system, which is neutral. But the tax system, on the other hand, could be arguably not terribly effective and a shotgun approach.
Finally, I think everyone here would agree that they propose that CICP be made permanent and larger. Given what we've been saying, I think you would all agree with that.
My question, then, is do you agree, philosophically or in terms of your experience, with the proposal to reduce somewhat the money spent on SR&ED and to use those savings to do more through BDC on late-stage and start-up funding?
Mr. Gupta.