Finance committee  —from the federal government point of view. Particularly in a high tech business or in a manufacturing business where capital spending and investment in R and D, in product development, is running ahead of profit, as it would be in a growth business, then it becomes very important to be able to exercise those credits where you may not be earning as much revenue as you're spending in R and D.

Finance committee  The way this is run right now is that this is a long-term repayable loan, so it's hardly a grant.

Finance committee  Yes, because it's a long-term loan.

Finance committee  First of all, I think governments around the world are playing a role as a partner in investment, and often that money doesn't have to be that large. Here we have maybe three major funds that have been put aside that support very important sectors of industry, particularly the automotive investment fund and the aerospace funds.

Finance committee  Since 2007, we've seen approximately 8,000 manufacturing establishments disappear from Canada as a result of the recession. Yet on the other hand, we're at record levels right now of investment in new machinery and equipment. That investment has increased from approximately $8 billion to $15 billion over the last five years.

Finance committee  I'd focus particularly on the elimination of capital expenditures from the SR and ED. I know the logic behind it, at least in the Jenkins report, was to make it easier to file and to remove some of the complication from it. But I can tell you for many of our companies if they're going to make R and D investments the issue is not necessarily whether or not they would make the investments; it's whether they would make the investments in Canada.

Finance committee  Yes, I think it would. In many companies, like Lorraine's and Kevin's for instance, the investment horizon or planning cycle may take four or five years to do and, of course, you're not eligible for the accelerated writeoff until the equipment is actually in place. So there are many companies that can't take advantage of this in their planning cycle and, therefore, revert to the old 30% depreciation rule in their business plans, which makes it more difficult to secure the investment.

Finance committee  In manufacturing, everybody is focusing on delivering customer value and eliminating all of the processes that don't add value. That, to me, is what regulation should be about: delivering the outcomes—the health, safety, environmental performance—and doing that in the least costly, the least complicated way possible.

Finance committee  When companies are looking at creating jobs, they're especially looking at the total expense of employment. A reduction in premiums tied to job creation, I think is a very useful policy measure.

Finance committee  You go ahead.

Finance committee  Thank you very much for the question. I think our comprehensive economic and trade agreement with Europe is a real game-changer, and it's for Canada's advantage here. Very shortly, we will be the only country in the world with access not only to the European market but to the American market, without a lot of the hindrances and trade obstacles that stand in the way.

Finance committee  This is also extremely important. My fear is that we may have freer trade between Canada and Europe than we will within Canada itself, particularly in areas of transportation standards, moving people across the country; the restrictions we have on apprentices, for example, moving from one province to the other and recognition of professional certifications.

Finance committee  Thank you, Mr. Chair. It is always a pleasure to meet with the committee members. Thank you very much. I'm joined today by Lorraine Royer from Williams Energy and Ken Faulkner from NOVA Chemicals, two of our members who have spent the last day and a half with a contingent of members in meeting about 150 MPs on the Hill to talk about manufacturing, the importance of manufacturing, and a number of challenges and opportunities facing the sector.

International Trade committee  That's a good question. To some extent it's not just the exchange rate. I think this is where Joy's expertise is really useful. It's also that small Canadian companies, whether they're importers or exporters, usually take on the border risk as well, so I think apart from overall sound economic and fiscal policies, which are extremely important, there are agencies like EDC, for example, that play, I think, a crucial role in being able to offset some of the financial risk around exchange rate volatility.

International Trade committee  That's a good question. I think there was a sense that in any strategy you needed to set a stretch goal or an aspirational goal. So, it's a target. That's very much what we were looking at here, recognizing that there may be various ways of getting there either through direct exports or through indirect exports by building up a presence through supply chains, or in some cases, a direct presence in these markets.