Industry Committee on Sept. 26th, 2022

[Konstantinos Georgaras]

Thank you very much for the question.

Why is the system so complex? What we are providing here are intellectual property rights, and these rights define the boundaries of an invention, an idea. It also gives the applicants a tool that they could then use to trade with, to license and to protect in the marketplace. There are lots of complex issues around having that IP right well defined, and it must adhere to domestic laws as well as treaties that we're part of. As a legal instrument, it is complex.

As I mentioned, what we are doing is providing very focused awareness and education material to applicants, as well as to potential applicants, to help them understand the value of IP and whether or not they need it, and also how to navigate the system. Our job here is to provide that information to help SMEs go through the process.

Larger companies, of course, are well versed in IP, and complexity is less of an issue.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

That's great. Thank you.

My second question is this: A gentleman from your team mentioned that AI is being used in the process of streamlining. Could you expand on that a little bit?

[Konstantinos Georgaras]

Yes. On that I'll turn to my colleague Mesmin Pierre to elaborate.

[Mesmin Pierre]

Thank you very much for your question.

We've recently, in fact, looked at automation for some of the repetitive elements of our process in order to provide information to applicants with respect to goods and services so that when they apply for a trademark, they have to define which goods they want to protect or which services they want to protect. Using automation, or artificial intelligence, we're able to fast-track those elements and provide that information, which in turn improves the time it takes us to return to the applicant with a decision.

[Konstantinos Georgaras]

Perhaps I may add to that. Again, my apologies for the technical challenges here.

What Mr. Pierre described, again, is a tool to help our examiners. Ultimately the decision of trademark registration falls to an individual, a trademark examiner. The use of those technologies really is a tool.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

That's great. Thank you.

Chair, I'd like to cede the rest of my time.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Go ahead, MP Dong.

[Han Dong, Liberal, Don Valley North, ON]

Thank you, Chair. My first question is for Mr. Wudrick.

Are you aware that the 2022 budget changed the tax ceiling to allow a small business to grow into a medium business? What are your thoughts on that? Do you think that was a good move?

[Aaron Wudrick]

Yes. I think there was a ceiling. There has always been the debate over the small business tax rate as well. It means that you create disincentives for businesses to become bigger. I think anything that smooths out that process, that makes it easier, that creates fewer barriers for businesses to go from small to medium to large is a good thing.

[Han Dong, Liberal, Don Valley North, ON]

The small businesses do still enjoy lower taxes now that the ceiling has been lifted to $50 million, so that allows them to grow into medium-sized businesses.

Also, especially during question period, often the government is criticized for providing subsidies to large corporations because they qualified for them, especially during the pandemic. What are your thoughts on that? Do you think these benefits should be more targeted towards small and medium-sized businesses or that large corporations should also qualify for them?

[Aaron Wudrick]

Well, I think first of all that the pandemic is obviously a special circumstance, so I think the usual arguments against government subsidies to private business probably don't apply in the pandemic circumstance.

Otherwise, no, I think the wisdom of subsidies should be questioned significantly. I'm skeptical about them. I've been an advocate against them in various capacities for close to a decade now. I don't think that the eligibility for subsidies should be dependent on size. I think that if you do decide to do it—and I caution you against doing it—you shouldn't give preference to a business as a recipient based on its size.

[Han Dong, Liberal, Don Valley North, ON]

Do you agree that during COVID the rental subsidy and wage subsidy were instrumental in saving some of the large and small corporations in Canada, and making sure that people got employed and that our economy remained strong coming out of COVID?

[The Chair, Liberal, Joël Lightbound]

Please answer very briefly, Mr. Wudrick.

[Aaron Wudrick]

Absolutely, I don't think anybody argues against the measures. You can play Monday morning quarterback on it, but they had to move quickly, and so they weren't going to be perfect.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

I now give the floor to Mr. Lemire, for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Mr. Pecman, as a former commissioner, have you had an opportunity to look at the situation in hockey—particularly in junior hockey—at the competition between different leagues, the professional status of players aged 18 to 20 and the Canadian junior hockey leagues?

[John Pecman]

As the former commissioner, I know we may have received complaints about that issue. Of course, they wouldn't have made it to my level, the commissioner level, but on the issue of labour rights and rights of hockey players, clearly there can be competition issues when dealing with large leagues and teams. Often it comes down to bargaining, and the act does allow labour to bargain, so there could be some bargaining issues there.

We did intervene on occasion to allow certain teams to move to different locations, because there were barriers to movement, but in terms of drilling down to the player level, that may be an active issue or an issue that took place after my term as commissioner. I just can't give you a comment on that, and if I could, a lot of it would be confidential. Clearly there are potential considerations there of the rights of players in a monopolized league with an imbalance of power, and there could be potential abuses in that scenario.

Again, if the bureau could take action and it was a priority, I'm sure they would look at it closely and do the appropriate thing.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

Subsection 48(1) addresses this issue of intervention and prohibits a league from unreasonably limiting a player's ability to participate in professional sports or imposing unreasonable conditions on them. I understand that some thought has been given to this issue, and I thank you for answering this question.

I would have liked to have your comments, but I understand that may be for another time if your mandate allows it.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Masse, the floor is yours for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

You've mentioned credit card rates and the credit card industry. I think financial management systems in our country are probably the biggest inefficiency in our economy. On the consumer side, we're at upwards of 19% to 27% interest on some credit cards in general, with some even higher, and some lower if you get the right one.

I asked the Bank of Canada about the charges and service fees that are being applied to SMEs and the lack of competition there, and whether or not they had investigated providing their own credit card for small and medium-sized businesses, and they said they had actually done a study in the past.

If we don't see much adjustment in the markets, do you think we might actually look at regulation to make sure that they're in line? There's a disproportionality in terms of the amount of investment that these companies have made in order to make a profit based upon the movement of money among customers and consumers. It seems rather inefficient for SMEs to have to rely upon this cabal system and lose their profit margins. A convenience store or a gas station only makes two or three percentage points per sale, and it's almost all eaten up by credit cards.

[John Pecman]

It's a very complex area. Obviously, the use of credit cards is a benefit to small and medium-sized enterprises. Clearly, it helps with attracting consumers and attracting business.

In terms of the right price for the right to use these cards or the ability to use the cards, that's a very tough question. What is the right price? Market forces usually determine that, and if the prices are too high or there is what we call an exercise of market power, it means that there could be a monopoly situation or just that markets are failing. A study may look at the complexity of these issues and provide recommendations on how better to go forward to make sure that if the process is perceived to be unfair to certain customers, there will be ways of perhaps providing solutions for such situations.

Again, as I sit here—

[Brian Masse, NDP, Windsor West, ON]

If it was independent like the Auditor General or something like that, there would be credibility in these studies because the body would be independent and have to report to Parliament and not to anything else.

[John Pecman]

It's obviously important for the recommendations to be unfettered and independent, and based on the evidence and independent experts, if they're used. The bureau undertook a financial technology study when I was commissioner. We made recommendations to Finance Canada on how to introduce more financial technology services to help with competition. That is moving through the process, and hopefully, when there's more competition in financial technology, you may see activity in the credit card side as well.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

I wish to thank all of the witnesses.

Mr. Blanchet, before we wrap up, I would like to ask you a quick question.

You talked about the Canada training benefit that the federal government put in place for the workforce. That was in the 2018 budget, if I'm not mistaken. Have you looked at how popular that is among Canadians?

[Dr. Yves Blanchet]

No, not yet.

The measure is fairly recent, as it was included in the 2018 budget. However, it did not show up on our tax returns until 2019. Then there was the pandemic.

I am very interested in knowing how much the public uses this measure. It will take some time to accumulate enough data, so let's wait about five years, until 2024, before we begin studies on how popular this measure is and how it is used. This is something to keep an eye on.