Government Operations Committee on Oct. 25th, 2011

[Michelle Scarborough]

I think that's a very good direction to move toward. I think BDC is doing a great job of repositioning itself in the marketplace to be the bank for entrepreneurs, so I would suggest that BDC would be the likely candidate to move forward with that agenda and make it happen.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

[Michelle Scarborough]

They are doing the right things; I've been keeping track.

[John McCallum, Liberal, Markham—Unionville, ON]

Ms. Pohlmann, do you have a view on that?

[Corinne Pohlmann]

We were actually given the R and D reviews output last week. We will be going back to our membership to find out a little more about their perceptions of what they're recommending.

We are concerned, because when you start directing money toward specific companies again, you're picking the winners and losers, and we're always a little hesitant about whether that's going to be helpful or not. Then a lot of companies that may be using SR and ED effectively may no longer be able to access those funds.

We're not saying yes or no at this point. We want to go back to those who are currently using SR and ED and try to define better what it is, how they're using it, and whether the changes being suggested would be beneficial to them or not.

[John McCallum, Liberal, Markham—Unionville, ON]

Ms. Scarborough, do you have any views on that, because the only negative I've heard is this business about government picking winners and losers? Is that an issue for you?

[Michelle Scarborough]

I think the government needs be fiscally responsible with how those dollars are spent. If you have the right steward and you've identified the risks and you've been able to mitigate those, then from the perspective of an entrepreneur, and certainly from an investment perspective, we would be onside. I'd want to make sure the risks were mitigated, but otherwise I think it's fine.

[John McCallum, Liberal, Markham—Unionville, ON]

Ms. Pohlmann, you seemed distinctly lukewarm about OSME. I find that an astounding statistic, that only 5% or 6% of your members know about it. Is this the universe of your members, or the ones who are into procurement?

[Corinne Pohlmann]

Those would have been the ones who are actually doing procurement.

[John McCallum, Liberal, Markham—Unionville, ON]

That's amazing, I think. Do you think small business would suffer if OSME disappeared from the face of the planet?

[Corinne Pohlmann]

Probably not. Having said that, we were advocates of an office like OSME, and I don't want to say they shouldn't exist, that they're not doing good work. I think they are trying. The problem is they are not well known. Perhaps they're not structured the right way, or perhaps being internal to Public Works isn't the best approach. However, there is a dire need for some sort of group within the government to help small businesses through this process, because it is so incredibly complex. Right now, OSME is that only option.

[John McCallum, Liberal, Markham—Unionville, ON]

Ms. Scarborough, do you think anything bad would happen if OSME disappeared?

[Michelle Scarborough]

I have to be honest with you. I don't know enough about what OSME is doing at the regional level to be able to make that comment. I have heard from the members of the organization that they are not interfacing with OSME at the regional level very much at all. So my recommendation to you would be to consider if OSME is going to exist, how it can interface directly with people in the communities in which they're residing, such that they can be better advocates for those companies that are in the industry and wanting to do procurement.

[John McCallum, Liberal, Markham—Unionville, ON]

I have one last quick question.

[The Chair, NDP, Pat Martin]

You have about 45 seconds, John.

[John McCallum, Liberal, Markham—Unionville, ON]

If not lodged in Public Works, and if it's not to disappear, where should OSME be?

[Corinne Pohlmann]

One possibility, if you want to be independent, is to look at the procurement ombudsman's office.

[John McCallum, Liberal, Markham—Unionville, ON]

I heard the suggestion from somebody last week, I think, that Industry could be a possibility.

[Corinne Pohlmann]

Honestly, I don't know if it would have that much more exposure through Industry than it would through Public Works.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you very much.

[The Chair, NDP, Pat Martin]

Thank you, John. That's just about right for time.

Now Bernard Trottier for the Conservatives.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Thank you, Mr. Chair, and thank you, witnesses and guests, for coming today and giving us this profile of what's going on, in terms of angel capital on the one hand and then maybe a different profile in terms of the CFIB, if I understand.

Maybe, Ms. Pohlmann, you could describe the range of companies that are members of the CFIB and are I think beyond the angel capital stage. They tend to be more established companies with a mix of equity and debt in terms of their capital structure and so on. Could you give us a quick profile? Then I want to ask some follow-up questions with respect to financing and investments.

[Corinne Pohlmann]

Our membership is pretty much a reflection of the business population in Canada. It's every sector of the economy, every region of the country. They primarily get financing through debt financing, absolutely, and it would be everything from the one-person, self-employed consultant, to the 300- or 400-person manufacturing plant in southern Ontario. So it's everything in between. We do have high tech, we do have brand-new businesses as well that are joining us, so it really is the gamut of industry right across the country.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

What would be the typical maturity profile if you look at the median age of companies within your organization?

[Corinne Pohlmann]

It would be the little, more established companies, because generally, when you're starting out, you're not so focused on being part of a public policy organization, and once you become more established you are. Having said that, I'd say probably in any given year about 5% of our membership is probably less than one year old.