Evidence of meeting #150 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was regulatory.
A video is available from Parliament.
9:20 a.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
Thanks, Paul.
In terms of the interaction with the federal government, does something like this new technology need to go through some type of an approval with the federal government, or is this something where we could look at sandboxes to be able to transfer information faster and make audits cheaper?
9:20 a.m.
Managing Director, North America, NSF International
This will make audits cheaper, it will make audits faster, and it will also make audits better, I believe. We already conducted a demo about a month ago for one of the CFIA offices, the one in Guelph.
We are also conducting a demo for the Association of Supervisors of Public Health Inspectors of Ontario in the next two months. The regulators are very interested in the technology.
9:20 a.m.
Liberal
The Chair Liberal Dan Ruimy
We now have Mr. MacGillivray back. Welcome, sir.
We will give you seven minutes for your presentation and then we'll get back to our lines of questions.
Thank you. Go ahead, sir.
9:20 a.m.
Michael MacGillivray Owner, Kirkview Farms
Good morning, my apologies for the delay.
My name is Michael MacGillivray. I am a small business owner. I own a farm about 100 kilometres due east of here in a little place called North Glengarry. It's part of the regional municipality of SDG.
I've been asked to come to represent the regional food council, which I'm a member of, to talk a bit about some of the challenges facing small business owners, small ag producers and ag-food processors.
Our family farm has been in our family since the early 1800s. I'm the seventh generation, and hopefully not the last, but there are a lot of challenges facing ag-food businesses today, especially on the regulatory aspect.
To give you an idea, I'll talk about three different members of the committee.
One is a processor, meaning an abattoir. A couple of producers have been trying to get them to look at becoming a federally inspected abattoir, because in eastern Ontario there are no federally inspected abattoirs, so we have to use provincially inspected ones, whereas in Quebec—our neighbours—they can actually come in. They have the federally inspected abattoirs, so they can access our market, but we can't access theirs.
This gives you an idea of some of the challenges that we have in creating a local food system. We don't have access to a market that... In my case, I'm a lot closer to Montreal and I could be selling into the Montreal market, but that's not possible because there are regulations in place. That's a really quick overview of one of the challenges.
We also have the region of Akwesasne within our territory, which is another challenge because that region sits between Quebec, Ontario and New York state. There are, of course, food security issues for first nations, but it makes it very difficult for us as local producers in that region to be able to serve that market because of a lot of the regulations that our local businesses face.
Of the other two, one is a local brewer, which is a start-up. They were hoping to be producing about six months ago, but because of a lot of the regulatory compliance they've had to go through and a lot of the challenges, they are still not producing. That is a challenge.
We also have a local winemaker who has expressed frustration with dealing with a lot of the regulations for starting a winery. He has made a significant investment. He has about 10 acres of grapes growing, but he's been struggling with a lot of the regulatory compliance issues. Again, it goes back to the Ontario and federal aspect. A lot of the federal aspect...he's having trouble understanding why they're involved in the first place.
These are some of the challenges that are facing our businesses in our region and are having a negative impact from an economic development point of view.
Thank you.
9:25 a.m.
Liberal
The Chair Liberal Dan Ruimy
Thank you very much.
We're going to move to Mr. Nuttall. You have seven minutes.
9:25 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Before I get going, I just want to ask Paul if Lloyd looks better on TV, or if he looks better in person, if you see each other. You don't have to answer that because we wouldn't want you to say anything embarrassing.
9:25 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
You're welcome. I know that I look bad in both. I just want to know which one Lloyd looks better in.
9:25 a.m.
Voices
Oh, oh!
9:25 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Mr. Moody, I could listen all day, and the reality is that I would love some sort of report, I guess, on every single one of these regulations that make you sit there and go, “I'd rather bang my head against the wall than deal with this.” Where you are in Alberta, it sounds like there are a lot of them. Some of them are going to be federal and some provincial.
I want to pick up on something you said in your testimony regarding the current system, the tax code. There is a debate. There's constantly a debate as to whether we try to fix what's there or go to a blank slate, start from scratch and phase something in to improve the competitiveness of our tax code versus those of other jurisdictions.
You're falling on the side of starting from scratch. Is that correct?
9:25 a.m.
Director, Canadian Tax Advisory, Moodys Gartner Tax Law
That's absolutely correct, yes.
9:25 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Okay.
You are a tax specialist. Is that correct?
9:25 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
You want to put yourself out of business. Is that correct?
9:25 a.m.
Director, Canadian Tax Advisory, Moodys Gartner Tax Law
Let's just say this. Would it be good for my business? Absolutely not. But would it be good for the country? Absolutely.
9:25 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
That's what I wanted to get to, because I think that sometimes in Ottawa we start talking about philosophies and political positioning and all of these things, but when we have somebody who's an expert on the tax code and makes money off the tax code being “inexplicable”, I think is the word you used, or something along those lines.
9:30 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Yes, incomprehensible. When somebody like you is telling us that these changes need to take place, it certainly holds a lot of weight with me.
Mr. Moody, would you be able to provide a sort of a piece-by-piece of where you see, (a) duplication between provincial and federal governments that is affecting some of your clients or some of the industry sectors that you are doing business in, and (b) those things where you sit there and say that this is literally affecting the competitiveness of our businesses against those south of the border?
Perhaps even more important than that—and I'm not sure how far across the country you operate or if you're just operating within your own home province—is where you see a lack of competitiveness from province to province. One of the things that every government tries to do and seems to be unsuccessful at doing is removing those barriers between provinces to make our small businesses competitive across the country and to make this certainly a more competitive place for us to do business, versus places like the United States.
9:30 a.m.
Director, Canadian Tax Advisory, Moodys Gartner Tax Law
Well, there is a lot to add there, and I only have a little bit, but I could literally talk all day on a lot of the problems.
I'll give you two quickies here. You're probably familiar, generally, with the new passive investment rules that were passed as a result of the July 18 private corporate tax proposals and, ultimately, what was landed on.
Ontario, as you probably know, chose not to follow the lead of the federal government with respect to the passive investment proposals. In my view, that's great leadership because those rules are ridiculous. They're ridiculous in terms of their complexity and ridiculous in terms of policy. They ultimately result in a marginal tax rate of about 130%, if you're affected by them, on every dollar that's affected. So Ontario chose not to follow them.
Now what do you have? You have a situation where businesses, if they could, transfer from, say, Alberta—which, by the way, our office operates in, as well as Ontario—across the country. You could literally transfer a business to Ontario from Alberta and pick up a significant tax benefit by doing so, in order to avoid these implications.
Now, who would have thought about that? Nobody, other than somebody who would run the math. That's point number one.
Point number two, just to pick up on your opening comments about whether I fall on the sword of this being bad for my business, by starting from scratch again, I don't say so very lightly. I've been in leadership positions in the tax profession for a good chunk of my career, and I see the damage that a complex code, a complex income tax act, does. My hourly rate is over $1,000 an hour. Am I proud of that? Not really. Do I think the average business owner can afford that? No, they can't, and I think it's crazy that you must have a person like me, of whom there aren't many across the country, deployed to give private business owners proper advice.
There are academics across the country who suggest that all we need to do are little tweaks. That shows, to me, a lack of practical experience. I mean no disrespect to the academic community, but the bottom line is that it shows they just simply don't....
9:30 a.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
I have 40 seconds. I just want to confirm what you're saying, which is that you'd like to see one of the recommendations out of this report be that we will at least consider starting from scratch, and what that would look like. What you're saying is that there is a lack of vision when it comes to the academics in the field in terms of the results they're actually looking for. It's not a tweak here and there. We need a big restart.
9:30 a.m.
Conservative
9:30 a.m.
Liberal
9:30 a.m.
NDP
Brian Masse NDP Windsor West, ON
I'll start with Mr. MacGillivray.
When you started your business, you obviously found some geographic issues related to regulatory measures. Did you just discover them as you developed your business model? I'm willing to bet that most of those have been in place for a long time or been part of a systemic thing and so forth. This is not a criticism. It's part of getting a lens of how it evolves, because that's part of what we are trying to look for in solutions: how to get out of that.
When starting a small business, you certainly can't know everything. You've now found these geographical anomalies that are trapping you where you're producing, which obviously is a very good spot.
Maybe you can highlight how that took place. What supports, if any, have been out there for you to try to deal with those types of barriers that you've identified with regard to Montreal or the first nations reserve in New York?