Government Operations Committee on Nov. 1st, 2011

[Tom Hayes]

Mr. Wallace has heard presentations on initiatives that we've done at the finance committee over the years.

In addition to direct investment by government, you have a couple of vehicles. You have BDC and EDC. They are active and can do more, particularly on the funding of funds. IRBs offer one creative way. There are these companies like Boeing and Lockheed and now Irving that have billions of dollars of IRB obligations to invest in Canada. Why not provide them with these incentives to get these accelerated credits if they invest in qualified VC funds, funds that will focus on early stages, because that's where the need is?

I'm in the retail venture capital industry. When the program was started the federal government provided a 20% tax credit to investors in retail funds up to a maximum of $5,000. That was in the mid-1980s when the RRSP tax credit was $7,000. Well, we now know the RRSP credits are about $22,000, and the retail venture is still at $5,000, so that's an issue. And the tax credit has been reduced to 15%. If you take it back to the original 20%, we think you'll immediately increase the supply of VC to the entrepreneurs who need it.

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

Thank you.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Hayes.

That's almost a whole separate presentation you've given us, but it's very interesting.

[Tom Hayes]

I didn't know when I could get it worked in.

Thank you.

[The Chair, NDP, Pat Martin]

It's nice working with a real professional.

That's the end of our second round. I have one question, based on one of your earlier comments, Mr. Hayes. In your presentation you made the comment--and it's a little worrisome--that it's sometimes easier to sell to governments of a foreign country than to your own. Do you want to expand on that briefly?

[Tom Hayes]

Sometimes it's easier to sell to foreign customers than to domestic customers because as Canadians we tend to be followers and not leaders. We've had numerous companies present to us where the CEO laments that he has to go stateside or elsewhere to demonstrate that the technology works, and then come home and sell it to domestic customers. That's why it's important that the Canadian government agencies do what they're supposed to do under this program and support domestic companies.

I listened to a presentation by a chap from Quebec who sells some type of technology related to airport security. He said he sells his product in 44 countries around the world but Transport Canada hasn't bought in yet. That was just another example of what we hear from the types of companies that present to us.

[The Chair, NDP, Pat Martin]

That's an interesting point. Thank you very much.

I think that concludes the questioning. We want to thank you very much for three very interesting briefs, from three different points of view, all of which will help us in our study.

We're going to have votes. I believe the bells will ring at 5:15. We're going to adjourn the meeting now, unless there's any other business.

Thank you very much for coming, all of you.

The meeting is adjourned.