Thank you.
On behalf of the Greater Kitchener Waterloo Chamber of Commerce, I'd like to thank the committee for the opportunity to speak this afternoon about this important topic. I'm honoured to join the Honourable Perrin Beatty from the Canadian Chamber of Commerce and Morgan Elliott from Research In Motion, a great chamber supporter of ours.
The Greater Kitchener Waterloo Chamber of Commerce has a long and storied history going back 125 years to the creation of the Berlin Board of Trade. Over the years, we have grown, particularly after merging with the Waterloo chamber in 1992 and the Woolwich chamber in 2001. The Greater KW Chamber of Commerce is among the largest chambers in the country.
In preparing for this presentation I have consulted extensively with my colleague Greg Durocher from the Cambridge Chamber of Commerce. He's president and CEO of that chamber. Together our two chambers represent nearly 4,000 member companies and organizations that hold an employee footprint of over 100,000 individuals within the Waterloo region.
One of the hallmarks of our chamber has been the ability of our business community to adapt from its origins as an agricultural-based economy in the 19th century and to evolve over the years into a manufacturing capital, then an insurance capital, and now an education centre with two world-class universities and a community college, and also a technology hub. The entrepreneurial spirit and sense of collaboration in our business community has been integral to our success in business and as a community.
While our membership in the chamber ranges from sole proprietors to worldwide corporate leaders like Research in Motion that employ thousands, our membership base is primarily small business. When I say small business, I'm talking about companies with 20 or fewer employees, as we've just heard. They are the backbone of our chamber.
Today I'll be focusing on several areas of interest that our local businesses shared with me and the difficulties they face on a daily basis. Our members understand that they need to innovate not only to stay competitive locally but also to expand their reach in the global marketplace.
There are four main issues I would like to focus on today: one, more competitive options and pricing in telecommunications and banking; two, cost-effective data transfer; three, improved safeguards to retain valuable intellectual property; and four, minimizing red tape and bureaucracy. We believe these four key factors need to be addressed in order to increase the adoption of e-commerce more broadly not only among our members that do business in the heart of Canada's technology triangle of Kitchener-Waterloo-Cambridge, but also right across the country.
Our financial institutions and communications leaders have strong partnerships with both our local chamber and the Canadian Chamber of Commerce. They play a strong role as partners, but changes to increase competition in banking and communication sectors are essential to reduce pricing structures for these sectors, which are critical to small business investment.
New technologies being developed within the e-commerce sector around the world and within Canada can offer choice to businesses and consumers, and increase the usage of e-commerce offerings. Growing mobile payment systems are examples of these. These technologies can make it easier for small retail businesses to become technologically nimble in serving their customers and to focus on growth by lowering traditionally high financial costs. These emerging e-commerce options should be encouraged and nurtured in order to help small businesses find better ways of being productive, innovative, and successful.
Recent reductions in corporate tax rates have been a welcome development for business. But small businesses face other challenges related to the costs of e-commerce, including the high cost of data transfer. Canada is one of the world's most expensive countries with respect to data transfer costs. These high costs have potentially been stifling the number of start-ups and up-and-coming business and media technology companies in Canada.
A very well-known start-up of the past three years that has a purely media focus is the Swedish-based Spotify, an emerging global player in paid music streaming, with over 10 million paying users in just two years. After they were founded, they moved to the U.K., the U.S., France, Spain, the Netherlands, and a range of other nations, but not Canada. Their services are not even available in Canada due to current laws—but most of all because our data uploading speeds and costs just aren't effective for potential consumers. The cost is too high; the service is too weak; and the regulatory hoops are too numerous. This is a real problem to our seeing growth from a key e-commerce industry that's growing in other parts of the world. As a nation, Canadians consumes more online content per capita than any nation in the world, yet we risk being left behind in e-commerce media development, which is becoming an emerging sector for new technology start-ups around the world.
In this ever-changing business environment, legal and regulatory frameworks also need be agile and be refreshed frequently to keep up with the pace of innovation and change that businesses deal with on a day-to-day basis. As the committee looks at this issue, it would be wise to be cautious when it hears calls for new regulations of these technologies and to consider the reason. Any progress in technology, from the printing press to Kodak cameras, has been a subject of concern, ultimately because it represented change.
We share the view that the Internet and digital economy are key drivers of growth and productivity in Canada's economy. Some argue that the success in this area may largely be a result of fewer regulations in this area, as opposed to our creating more regulation. While regulation may be necessary, it should be clear, understandable, and fair, especially for small businesses.
We also applaud the government's initiative to streamline and reduce red tape, and we look forward to Minister Bernier's report and recommendations. The Jenkins panel report made some interesting recommendations. I look forward to better understanding all of them. One of the key points was the need to simplify the SR and ED program for small and medium size business by narrowing the base for tax credits. We hope that report will be thoroughly reviewed and considered.
For many businesses the SR and ED tax credit has been important and has encouraged research and development within new online industries in Canada, and more broadly as well. However, the administration of this SR and ED tax credit can be difficult for small business owners. These types of programs are important but need to be made easier to understand and more transparent, so that a small or medium size business can apply and receive tax credits and the company can focus on developing its cutting-edge product and spend less time on filling out complicated paperwork and forms.
Thank you for the opportunity to appear today. We represent almost 4,000 employers who are truly small business. The Greater KW Chamber and the Cambridge Chamber of Commerce believe that in these challenging economic times, every level of government needs to find ways to support the small business sector, because it is the foundation and engine of our economy. Because e-commerce is such an important factor in today's economy and for our future economic growth, this review is both timely and welcome.
Thank you.