Industry Committee on Dec. 11th, 2007

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Conceptually I assumed it was simply clothing design.

You have a number of people who come up with some fairly innovative design concepts. In my riding we had an individual who came forth with some fur that was woven into a particular material. It was very, very popular. She was from Uxbridge, I believe, which is just north of Mr. Carrie's riding.

I'm wondering what concerns, if any, members of your budding organization have with respect to protecting the ideals, the novelty in the property they're coming forth with? Are there any concerns from your members?

[Samantha S. Sannella]

They have large concerns. It's one of the hottest topics amongst designers, not only product designers but also interior designers and architects who take their sketches to China and have them knock off the buildings.

Emerging product designers are especially reluctant to go to trade shows, because they think other people are going to steal their ideas. The Design Exchange is working on a program with a legal firm for IP, to help train designers in the importance of protecting their products. It's unfortunate, because designers are relatively undervalued and underpaid. They can't normally afford the services of a legal firm to help them protect their products. It's something we're trying to educate them about, but we see a reluctance by a lot of small firms--even large firms--to showcase their work, because they're afraid of the knock-off factor.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

That was very insightful, because I think a lot of us assume for a moment that when it comes to design and other issues out there, these are not issues of great concern to the communities. I think this point by your industry should be made more abundantly before this committee—hopefully anticipating legislation with respect to IP and counterfeiting.

Do you have examples? You mentioned, for instance, the designer who is doing very well in Shanghai, China. Is there still a risk, in your view, for that engineer or designer with respect to being protected? What does the Canadian government do in that part of the world to ensure there is an understanding that as someone produces new designs, they will in fact be properly compensated for them? Is there any such guarantee, or is this something that your membership continues to face with great risks?

[Samantha S. Sannella]

There's no guarantee. It's the biggest risk in an operation.

If, let's say, a product designer has a great product and can't get it produced here in a cost-effective manner and goes to China, it's a huge risk, because what happens.... And there's a great example with Umbra, which makes household products, some great, some not so great. They own several factories in China. Whenever they produce something, the next week they see a knock-off coming out, and there's nothing they can do other than continually produce new products to stay on top of their game.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

And Umbra's headquarters, Mr. Chair, so you and the committee know, is now up for sale in Scarborough. They're shutting down their main warehouse.

[Samantha S. Sannella]

Are they really?

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Yes.

Thank you, Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McTeague.

Members, I just want to indicate that the bells are ringing. There is a vote a 11:15, so we do have 25 minutes. But because of a rule actually spurred by this committee, the chair needs unanimous consent of the members to sit until 11. So I'm asking for unanimous consent to sit until 11, and then we'll go over to the House after that. Do I have consent?

[Some hon. members]

Agreed.

[The Chair, Conservative, James Rajotte]

We'll go to Mr. Stanton, please.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Thank you to our presenters this morning. It was very insightful. Our study of the service sector is helping us better understand the dynamics and the sectors of our economy which, from the services end, strengthen Canada's economy. You've certainly shed some light on that today.

I want to direct my question, if I could, to Ms. Dayus.

In respect to your comments about the GST, our background notes indicate that in the three provinces who currently have HST.... I guess there are four, because Quebec should be in here. Anyway, in these provinces with the HST, there is a refund of the provincial portion of the HST. This is in Nova Scotia, New Brunswick, and Newfoundland.

Do you have any statistics indicating how that refund has changed in any way the incremental sales in those provinces? What has the experience been in terms of that rebate at source?

[Susan Dayus]

As far as statistics are concerned, I don't have them at all. I'm not sure whether Mr. Tabor from the campus side has anything to show.

We know that the booksellers in those provinces fought very hard at the time to ensure that books would not be taxed provincially, because they are a cultural commodity. We just need to make them as affordable as possible. It is something we're dealing with now in the rest of the provinces. As talks on harmonization among provinces across the country are beginning, we want to ensure that books are excluded from any taxes resulting from harmonization.

But as for statistics, I don't have them.

[Bruce Stanton, Conservative, Simcoe North, ON]

Do you know how much of the 8% is actually refunded at source?

[Susan Dayus]

I don't.

[Bruce Stanton, Conservative, Simcoe North, ON]

Okay. I guess what I'm getting at there is that this government has been reducing the GST. You have acknowledged and welcomed that initiative. What I'm trying to get at there is that, as with other retail goods, as we move this added tax on retail goods, it will obviously help sales. If the experiences in these other three provinces has been that it has helped the bookselling industry, I think the reduction in the GST should be having the same effect right across the country.

Mr. Tabor, did you want to add to that?

[Chris Tabor]

I can tell you that where the harmonized taxes existed in the provinces you mentioned, if the provincial portion applying to books was applied for such a short period of time and then removed, it would be very hard to measure. In effect, it's all refunded. There isn't a provincial tax on books in this country that I'm aware of.

[Bruce Stanton, Conservative, Simcoe North, ON]

In other provinces, you mean?

[Chris Tabor]

Yes. I don't think there's a provincial tax in Canada on reading material right now. If there was, it was for a short period of time, so we can't measure the effects of the retraction of it.

As far as the GST goes, I can tell you that on behalf of the students at Queen's University, they thank the government for a savings of approximately $80,000 a year on their textbook costs as a result of the decrease in GST.

[Bruce Stanton, Conservative, Simcoe North, ON]

Is that just for the Queen's bookstore?

[Chris Tabor]

It's $80,000 in one year, so you multiply that across 100 schools and that percentage decrease in the GST becomes a significant savings for students. I don't have those figures on hand. I can only use our own experience.

We think, getting back to my point, you should simply strike down the tariff enjoyed by the foreign distributors of books and you'll see that drop even more dramatically.

[Bruce Stanton, Conservative, Simcoe North, ON]

Actually, that was a good segue--

[The Chair, Conservative, James Rajotte]

Mr. Stanton--

[Bruce Stanton, Conservative, Simcoe North, ON]

Am I done?

[The Chair, Conservative, James Rajotte]

Yes.

[Bruce Stanton, Conservative, Simcoe North, ON]

My gosh, it just disappeared. Time evaporates.