Industry Committee on April 30th, 2013

[Dan Harris, NDP, Scarborough Southwest, ON]

Is this something you could see government playing a role in to help bring it about, to help municipalities put those kinds of systems in place so as to make themselves more attractive for business?

[Corinne Pohlmann]

It's all about priorities, isn't it? It's about what the priorities are at the municipal level and whether this is the priority, when you ask a small business owner what a municipality should be investing in.

It's a great idea, but whether it's at the top of the list....

[Dan Harris, NDP, Scarborough Southwest, ON]

You need to get roads and sewers and electricity and everything else first.

[Corinne Pohlmann]

We would probably argue that they need more help in some of those other areas before this one.

[Dan Harris, NDP, Scarborough Southwest, ON]

Infrastructure is absolutely, I think, the biggest one. Digital infrastructure is going to take on a greater importance, certainly, in the years to come.

Mr. Smith, did you have anything to add—quickly, because I want to share my time with Mr. Lapointe?

[Scott Smith]

I will just add to your point about digital infrastructure. Municipalities can play a large role in helping bring the digital economy along by automating most of their infrastructure systems.

[Dan Harris, NDP, Scarborough Southwest, ON]

Great. Thank you.

I would like to pass my remaining time to Mr. Lapointe.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

A number of merchants have told me of their concerns. It goes right to this issue. Online businesses are inviting consumers to go to real stores, not virtual ones, scan the labels, and the online supplier promises to sell the item 5% cheaper. You can understand what competition like that can do to people who take risks, buy inventory and pay municipal taxes. They cannot compete with it.

Last week, the American government floated the idea of taxing online trading of goods in order to help real merchants, whose costs are higher, to be competitive. I have not yet finished deciding how I feel about that, but I would like to know what our stand on it should be.

[Corinne Pohlmann]

We would be strongly opposed to any kind of additional tax being imposed on.... Even as an online merchant in Canada, you're subject to taxation laws in the place of supply, wherever you're located as a business, regardless of where your customers are. In the Canadian context, I think this is somewhat addressed. Maybe it is not in the American context, and perhaps that's why they're doing this.

I can tell you right now that we'd be strongly opposed to any sort of additional tax on online merchandising just to balance it out.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

How can we help real-life merchants who buy inventory, pay municipal taxes and have to face aggressive competitors offering to sell me a product for 5% less than the price on the label, if I scan it? You can understand the concern of the merchant who is not in a position to do that. How do we help him? You say no to a tax, but what can we do?

[The Chair, Conservative, David Sweet]

Be very brief.

[Scott Smith]

I can do this briefly. I would agree that the idea of taxing for online sales is probably not the way to go. Most businesses now do brick and mortar and online to serve their customers.

One thing that is missed is that most people do their research online first, so they're going to find the best price and then go to a brick-and-mortar shop to purchase. The idea of taxing Internet.... I haven't heard from any of our members of this being a problem.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Lapointe.

Now we go on to Mr. Regan for five minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chair. Thank you very much.

There's been a lot of discussion here and elsewhere, Mr. Chair, about promoting digital literacy and about the need for it across Canada. I think it's connected very much to the topic we're discussing today. Many of us address the role of the federal government in relation to the promotion of digital literacy.

What comes to your minds—I guess I'll ask both organizations about this—when you think about adoption of digital technology, and what is the role in your view of the Government of Canada? What linkages do you see?

[Scott Smith]

From the chamber's perspective, one role of the federal government should be.... There are many programs out there for digital literacy. People will learn.

The challenge is in finding and accessing them. There's a role for government to play in providing a portal, providing a one-stop, central location for everybody to come to and find what they need.

[Corinne Pohlmann]

I would definitely agree. There are lots of tools out there for people to learn how to use the digital world. Groups such as us and I'm sure the chamber are doing our part to make sure that our business owners understand.

I have to say that I'm not sure there's a role for the government in digital literacy beyond, I suppose, that of the provincial governments and the school systems. Given that it's such a vast and quickly changing environment....

I don't mean to be disrespectful, but governments aren't necessarily known for their quickness and their ability to quickly react to situations. I would probably argue that governments are perhaps not the necessarily best source to provide digital literacy and that we should leave that to the many other groups out there that are doing this kind of work already.

[Geoff Regan, Liberal, Halifax West, NS]

The government's budget has a new program for training, $15,000, whereby $5,000 will be from the federal government and $5,000 from provincial governments, where the provinces can afford it—and in fact the four Atlantic premiers just asked why the government hadn't consulted them on these things when it put them forward—and of course $5,000 from small business. When we're talking about the need for small businesses to enhance their knowledge in this area, how many of your 109,000 members could afford to take part in that kind of program?

[Corinne Pohlmann]

My understanding is that it's up to $5,000. It's difficult to say. We believe it's important to have training at the workplace level or at the business level, so we like the concept of what they're trying to do with this particular program. We're still waiting for more details as well. We are concerned about the red tape and the ability of businesses to be able to raise that sort of money, but at the same time, we also know small businesses already invest thousands of dollars per year in training. So we want to make sure that the Canada job grant, which is what I think you're talking about, is accessible to smaller firms and that it recognizes things like informal training, which is leading way in which small firms do train people.

We're waiting to get more information to understand it better as well before we decide whether or not it's the best approach for small firms.

[Geoff Regan, Liberal, Halifax West, NS]

If some provinces feel they can't afford to opt in, what impact does that have on your members in those provinces?

[Corinne Pohlmann]

It's hard to say. Again, it's early days to understand how that's going to ultimately impact the entire training process, but we do need more skills. We need to figure out how to get Canadians more skilled in different areas, so finding ways to make sure that the training is happening at the workplace itself, to us and I think to other organizations, is probably the most effective way of getting people trained into certain positions.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Regan.

We normally don't have this luxury, but I'm delighted that I can capitalize on it. If you'd like to have some closing remarks, maybe two minutes from each organization, to maybe sum up or fill in where you had a question and the time ran out.

Why don't you begin, Mr. Smith, and then I'll go to Madam Pohlmann. It looks as if you're ready.

[Scott Smith]

Thank you very much, Mr. Sweet.

One thing I would like to raise is this. We've spent a lot of time talking about the barrier to ICT adoption being the cost, particularly the cost related to payment transfers. One of the things I hope doesn't get lost in this study is that ICT adoption can do more than just payment transfer or the transfer of money. There are advantages and efficiencies for all businesses to adopt technology for tracking their shipments, for procurement, for other types of online transactions, even to communications. The efficiency of being able to meet with your counterparts and colleagues and competitors in an online environment, the fact that the technology exists for now, does amazing things for efficiency. I hope that doesn't get lost in this discussion.

[The Chair, Conservative, David Sweet]

I know one particular area is training, where it's really revolutionized the ability of people to perform.

Madam Pohlmann.

[Corinne Pohlmann]

I would agree. I think digital technologies are more.... We focused on these because this is where we have the data and the information and, frankly, it's where it hits home mostly for smaller firms right now. We understand the huge advantages that can exist with digital technologies, especially, I think, for smaller firms. So encouraging them to look at some of the technologies that Mr. Smith has been talking about, I think, is important.

I don't really have much more to add. In looking at ways we can reduce those barriers, I do think small Canadian firms want to embrace digital technology. I think that's very clear. I think they are moving forward and that it is growing at a fairly rapid pace. I'm looking forward to our next survey to see where it's moved yet again. I think now it's more about how to get them involved in cloud computing and social media and all those other things that we think could be of great benefit to smaller firms, ultimately making sure we understand that the costs at the smaller business level are higher relative to larger businesses. So finding ways to minimize those costs is going to be the most important thing to get them to access these technologies.