Finance committee  I think in that case specifically, the tax system was sufficiently flawed in terms of how it was structured at the time and how it was laid out. I don't think we should perpetuate a system that's not particularly neutral because that is what happened in the past. I think what needs to be done is that any tax changes should be well telegraphed and gradually implemented so that individuals are able to change their business structure so as to not be immediately subject to significant and higher taxes.

Finance committee  I think that speaks to the need for gradual implementation of tax changes, and that stakeholders are consulted in that process as well. I don't know the numbers on just how many businesses are part of this. What is, say, the level of passive income that's part of this? Do we continue to maintain a structure for businesses that exist today in perpetuity—not perpetuity, but for a long period of time so as to allow them to maintain the structure?

Finance committee  Good afternoon Chair, Vice-Chair, and committee members. Thank you for inviting me to speak today as part of the study of Bill C-74. As requested, I will focus my remarks on part 1 of Bill C-74, more particularly on the section pertaining to the small business tax rate and dividend tax credit, as well as the small business deduction based on passive income and on preventing income sprinkling.

Transport committee  Absolutely, as we've discussed, it really comes down to working with municipalities and provinces to make sure that you're funding plans and well-thought-out plans so that those municipalities and subnational jurisdictions overall can get the best bang for their buck, including indigenous communities.

Transport committee  l would also argue, though, that we don't have a long history of these contracts, and of these contracts being taken to completion. While there are examples of ones that have been shown to be quite successful, there are also other examples of ones that have not been successful, not just in Canada but internationally.

Transport committee  I'd be happy to.

Transport committee  Absolutely.

Transport committee  That's right, and that—

Transport committee  Of course. I think the role that the federal government can play is helping to build capacity to make sure that the planning framework is done well and that those investments will benefit those municipalities as much as they possibly can.

Transport committee  Certainly private sector involvement has been found to benefit public sector investment in both being on time and on budget. I would say that on average it's slightly better. But at the end of the day, the benefits are relatively small and the jury is still out on the financing cost, which is always higher because in Canada the federal government obviously has the lowest cost of financing of any jurisdiction, particularly relative to the private sector, which has a comparatively small borrowing capacity.

Transport committee  Ultimately I think it really comes down to the increased likelihood—I would say not dramatically increased, but the increased likelihood—of being on time and on budget with PPPs, offset in part by the higher financing costs. I think it's those two together. When it comes to broader private sector investment, that's the one that I'm still not 100% sure of in terms of the CIB, for instance, crowding in private sector investment and all the talk about bringing in private sector innovation and that kind of thing.

Transport committee  Starting with your second point, if that's okay, working with municipalities to increase capacity in terms of their infrastructure investments and asset allocation is superb, and the more stable and predictable the funding source is for infrastructure or for any transfer is incredibly beneficial because it allows cities to actually make those three-year, five-year, and 10-year plans and predictably be able to ensure that they're able to make those investments and be able to plan going forward.

Transport committee  When it comes to the infrastructure bank overall, while I agree that small and rural communities may not benefit as much as larger communities, I think the traditional mechanisms for funding infrastructure are still going to be there. I still think that's going to be a consideration, and the infrastructure bank really is just a small piece of that overall, so I don't think there's any real risk on that side of missing out on infrastructure investments that communities would otherwise get.

Transport committee  On the topic of public-private partnerships, in the context of the Canada Infrastructure Bank, these are certainly not mutually exclusive. One is a mechanism for designing, building, operating, maintaining, and financing, so they're not necessarily mutually exclusive. The Canada Infrastructure Bank could use public-private partnerships for investment purposes.

Transport committee  As the folks at the PBO mentioned, I think there are two parts to that. The first part is that not as much money has flowed as was expected at the time of budget 2016. The second is that the economy wasn't at the same stage of the business cycle as it was at the time of budget 2009 when the fiscal multipliers included in budget 2016 were originally released.