Industry committee  I'll just make two quick points. First, there is a lot of evidence to show, even with charitable giving, that when taxes on charitable giving change, there is a big change in actual charitable giving. So I do agree with the general point that the financial incentive and how people respond differ between singers and artists and business people, but I think that just reinforces the point we are trying to make, that having one policy that makes all of us pay to protect Canadian content is the wrong way to go.

Industry committee  Yes, I completely agree. I would add that there are three sectors that I call critical infrastructure sectors. These are telecommunications, finance, and transportation. I'm just going to give a quick example of transportation. I know it's off topic, but if you think of the recent debate in Alberta, there are a lot of people from Alberta going to Dubai or to Abu Dhabi, because there is a lot of investment going on between these two locations.

Industry committee  They're telecommunications, finance, and transportation.

Industry committee  I don't have much to add. I agree with everything Professor Morck has said. It's well known that these labour-sponsored venture capital funds in Canada do exactly that: they don't do a very good job at screening. So what ends up happening is that the good projects are subsidizing the bad projects, and you get bad outcomes.

Industry committee  First of all, the issue of the Privacy Act is very important. At the University of Toronto, we do a lot of work on outsourcing, the whole idea being that when you have these U.S.-affiliated companies getting access to servers, and so on, with Canadian information on them, all of that can be transmitted to the U.S. government.

Industry committee  Well, investment, for example, in broadband access in Canada lags that in other countries. That's what the World Economic Forum has demonstrated. But I think, as was alluded to earlier, that Canadian companies adopt new technologies at a slower rate than foreign companies do. Canadian companies invest, on net, less in innovation.

Industry committee  That's a very good point. I was at Industry Canada back in January, where we had a round table discussion on exactly this issue. There are many areas in which there can be improvement. One of them has to do with the idea of Canadian businesses having the capability to make the business case either to get funding for innovation, or, once an innovation is undertaken, to make the business case to move it to commercialization.

Industry committee  I've given lectures and short courses in probably a dozen countries in South America, the Middle East, and Asia. In July, I'll be in China interacting with MBA students for a couple of weeks. There is one thing that I would say about Canadians that's different from what I see globally, and I speak here of the experience at the Rotman School.

Industry committee  I can't speak to the domestic content rules globally, but in terms of restrictions on entry, yes, the OECD study rates Canada as one of the most restrictive developed countries. When you start thinking of developing countries, they tend to be more open to foreign investment, but that openness often comes with additional rules around joint ventures.

Industry committee  No, not at all, in the sense that you have to think about government regulation and where it allows entry and where it doesn't. For example, if the broadcasting and telecom industries have different sets of regulations, then obviously that's going to impact the kinds of investment you're going to see coming into Canada.

Industry committee  Yes. I think the only issue for Canada.... I agree with everything Professor Morck stated, but in terms of Canada, the issue of whether there's a structural deficit or not is something that we have to keep our eye on going forward. It is true that Canada's finances.... In 1992-93, Canada had a horrible situation where our deficit in that one year alone was over $40 billion, almost entirely going to interest payments on the debt.

Industry committee  I don't know the answer to that, but I would say that Professor Morck alluded to this. If you look at the indicators, again, you can cut the data whatever way you want, but another source that Professor Morck didn't allude to is the World Economic Forum. When we look at the indicators of quality and how competitive our telecom sector is, we lag a lot of other companies in other countries.

Industry committee  I don't see it as an either/or. I don't see allowing for foreign entry into this sector as necessarily resulting in the demise of Canadian culture. I haven't studied the Canadian cultural industry in depth, and I couldn't say we should eliminate the regulations around that. But one thing I will say is there is a general principle in economics, which is essentially that if you want to fix a problem, you fix it as directly as possible.

Industry committee  When you look at the broad economic data, increasingly we're seeing Canadian companies move beyond the traditional market, that being the United States. If you look back, the share of foreign investment, the share of all investment by Canadian companies operating outside of Canada, outside the United States, has been growing.

Industry committee  There are several points I'd like to make here. First, by allowing foreign companies to come into the Canadian market--as you mentioned, these large global multinationals--the evidence clearly shows that when you have a foreign company operating in Canada, they're able to use the R and D, the innovation that's in the network.