Industry Committee on Sept. 26th, 2016

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Thank you.

Thank you, gentlemen, for being here today and for your presentations.

I think we miss one thing. There have been wonderful conversations around the table, but I think we need to put a rural focus on something sometime. I'm from a rural riding in Newfoundland and Labrador, and we've had, as I said, wonderful conversations.

Mr. Brown, you have some impressive experience dealing with major companies. Do you have any experience you can share with us with smaller, rural companies, SMEs, that you could tell us about?

[Stephen Brown]

A big part of Deloitte Canada's practice is focused on smaller private companies. We do serve those kinds of companies coast to coast.

With respect to the topic we're discussing today, though, with the trends that we see, even for smaller companies, the need for technological sophistication, the need to be in and around other companies or other sources of talent or intellectual property and distribution channels and whatnot would tend to draw the capital and the talent from around the world to the urban centres where there's attractiveness of a different sort.

The rural piece of this is a bit of a paradox, because as a result of this critical aspect around talent, the trends would not be pushing us in that direction.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Mr. Deveau, I'm familiar with the geography of Yarmouth and where your other facilities are. Would you put a different rural lens on this than Mr. Brown?

[Jean-Paul Deveau]

I think rural Canada provides a tremendous amount of opportunity, particularly on natural resource development. In our case, we're taking what was an undervalued raw material—marine plants that nobody was doing anything with—and turning them into value-added products and exporting them around the world.

Our manufacturing base and our R and D base are in rural Nova Scotia and New Brunswick, whereas our head office is in Halifax, a more major metropolitan area, but the combination of those two has allowed us to be very successful. We're extremely proud of the workforce that we have in those areas and the opportunity to be a significant part of those rural communities.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

That's perfect. Thank you.

You and I could have a conversation about rural areas, because there is the magic and there are the opportunities that arrive.

We're running out of time, but I'd like to hear from each of you.

You have more experience, Mr. Deveau, so what is the one thing we could do to help rural businesses and rural manufacturing businesses?

[Jean-Paul Deveau]

From my point of view, I would look at whatever strategic advantage the rural community has and I would find a way to exploit it. What is there that it can offer and then turn into something for the world?

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Mr. Brown, how can we do this with the help of the federal government? How can we help to do that?

[Stephen Brown]

There's something as simple as the ability to move people in an efficient way to a location that maybe balances the cost pressures of some of our urban locations, and to draw on the talent, the spirit, and, as Mr. Deveau said, the competitive advantage of some of the rural areas. My mind would go to infrastructure and how we can move people or provide high-speed Internet access in those kinds of things that businesses are dependent on.

[Gudie Hutchings, Liberal, Long Range Mountains, NL]

Thank you, gentlemen.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Finally, Mr. Cannings, you have two minutes to close us off.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

Mr. Deveau, you mentioned SR and ED and IRAP. People have been talking about them. You intimated that SR and ED had been cut back and that part of that slack has perhaps been taken up by IRAP.

I wonder if you could explain to me—I literally know very little or nothing about these programs—what you would like to see. Would you like to see SR and ED grown again? We've heard that perhaps it could be simplified, thus taking some business away from Mr. Brown. In terms of the R and D side of your business, what would benefit you most?

[Jean-Paul Deveau]

First of all, it was scaled back. A number of things were scaled back, including the per cent of the tax credit, but also some of the ways the calculations were done. If that were reversed, that would certainly be quite beneficial to us. That would allow us to invest even more in R and D.

There is also the administration of the program. Historically, throughout the years, it would be a pendulum. It would get tighter and it would get looser, depending on who was leading the organization and what direction was being provided. Today it's as tight as it's ever been, with basically everybody looking for ways to disqualify activities from counting for that tax credit program.

I think it should be looked at from the top. What behaviours do we want? If an activity falls into that suite, which would have to be clearly defined, then we want to be able to credit that particular aspect.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

How's my time, Mr. Chair?

[The Chair, Liberal, Dan Ruimy]

You have nine seconds.

On that note, thank you to our guests. I wish we had more time to spend with you. There were great comments and great questions.

Thank you very much. We're going to suspend for no more than five minutes to get our bearings, and then we'll get back into our business.

[Proceedings continue in camera]