2015 Annual Meeting Proposed Resolution Amendments (16 October 2015)

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1 2015 Annual Meeting Proposed Resolution Amendments (16 October 2015) Below are proposed amendments to resolutions which have been submitted for this year s Policy Session. Please remember that these have no official status until someone actually moves the amendment. For each amendment marked MOTION, an official delegate on the floor will need to make a motion to consider the amendment. A seconder to the motion will also be needed. Once moved, there will be a debate on the amendment and then a vote on whether to approve the amendment. If there is not two-thirds support for the change, debate reverts back to the original resolution text. Proposed amendments to preambles are provided for information purposes only. There will be no discussion of preambles during the policy session. Canadian Chamber staff will make changes to preambles after the AGM has concluded to ensure that they match up to the recommendations. If you have an objection to a proposed preamble change, please bring it to the attention of one of the Canadian Chamber policy staff at the AGM. If you would like to propose an amendment prior to the policy debate, please send the amendment text to Brighid Meldrum at bmeldrum@chamber.ca and it will be added to this document. An updated Proposed Resolution Amendments will be handed out at the AGM and periodically updated on the website. At the AGM session, you may also bring the amendment text to Policy Team members in the AGM Policy Office. We strongly encourage you to send proposed amendments to us prior to the policy session in order to allow us to have them translated prior to the debate as well as to enable us to share them with other chambers to inform their pre-debate discussions. 50. Harmonizing Transportation of Oversized Shipments Across Canada (Pages 94 95) MOTION 1: Amend the background by removing the word process with unit so that it reads: recently lost a bid to manufacture and ship 80 units valued at $12 million Proposed by the Sarnia Lambton Chamber of Commerce 51. Moving the Goods: Transportation of Canada s Natural Resources (Pages 95 97) MOTION: Replace recommendations 2, 3 and 6 with: 2. Mitigate the inherent risk associated with the efficient movement of resources and related supply chain hazardous materials by harmonizing transportation regulations with the United States and adopting best practices, policies, processes and technologies for HAZMAT-related tracing and emergency response. Proposed by the Richmond Hill Chamber of Commerce Page 1 of 9

2 20. Citizenship and Immigration Canada Regional Settlement (Pages 37 39) MOTION: Amend the first recommendation by replacing the words assist newcomers or re-opening the offices. with assisting newcomers or re-opening select or target offices based on the results of the research. Proposed by the Greater Sudbury Chamber of Commerce 45. Proposed Resolution in Support of TransCanada s Energy East Project (Pages 85 86) and 46. Support for TransCanada s Energy East Project: a Nation-Building Opportunity (Pages 86 87) MOTION: Replace the two resolutions with: Support for TransCanada s Energy East Project: a Nation-Building Opportunity All Canadians should benefit from Canadian oil. Energy East is a rare nation-building opportunity that will move oil from the West to refineries and terminals in the East, creating jobs and economic growth from Alberta to Ontario to Quebec and New Brunswick, while reducing our reliance on foreign oil. The 4,600 km pipeline will transport about 1.1 million barrels of oil per day from Alberta and Saskatchewan to the refineries of Eastern Canada. The project implies converting part of an existing natural gas pipeline to an oil transportation pipeline. The business communities of Ontario and Quebec are encouraged to see TransCanada and the gas companies (Gaz Metro, Enbridge and Union Gas) have signed an agreement to ensure a continued reliable and affordable supply of natural gas to help power both provincial economies. The project also implies constructing new pipelines in Alberta, Saskatchewan, Manitoba, Eastern Ontario, Quebec and New Brunswick. Finally, it includes constructing the associated facilities, pump stations and tank terminals, including marine facilities. This critical new piece of energy infrastructure will result in the expansion of Canada s oil transportation network, generate additional tax revenues for federal, provincial and municipal governments and, according to the Conference Board of Canada 1, Energy East will also generate an estimated $11.5 billion in additional GDP for the Canadian economy during the seven-year development and construction phase and $24.9 billion the first 20 years of operations. On the issue of job creation as related to Energy East, The Conference Board of Canada predicts the project will support high quality direct and indirect jobs in several provinces during the seven year construction phase and the first 20 years of operation of the new pipeline 2. The Energy East Project is subject to extensive evaluation by the National Energy Board (NEB), a recognized authority on pipelines in Canada that is committed to examining 16 different areas of interest before approving, amending or not approving the project. Among the conditions is whether the project will follow sustainable development practices of creating wealth while respecting the environment and communities. There is a lot of dialogue around this project and it is important for the national voice of business to weigh in on this conversation because of its economic benefits, potential for trade and new jobs across the country. Recommendation That the federal government: Ibid. Page 2 of 9

3 1. Create favourable conditions for the Energy East project to move forward, as the project will have significant economic benefits for Canada. SUBMITTED BY: GREATER PETERBOROUGH CHAMBER OF COMMERCE AND SAINT JOHN REGION CHAMBER OF COMMERCE AND FÉDÉRATION DES CHAMBRES DE COMMERCE DU QUÉBEC (FCCQ) Co-sponsored by the Belleville Chamber of Commerce, Sarnia-Lambton Chamber of Commerce, Thunder Bay Chamber of Commerce, Regina & District Chamber of Commerce, Fort McMurray Chamber of Commerce, and the Manitoba Chamber of Commerce THE NATURAL RESOURCES AND ENVIRONMENT COMMITTEE SUPPORTS THIS RESOLUTION. Proposed by the Greater Peterborough Chamber of Commerce, the Saint John Region Chamber of Commerce, and the Fédération des Chambres de commerce du Québec (FCCQ) 04. Counteracting the Growing Productivity Gap: Call for the Public Debate MOTION 1: Amend the background by removing the last sentence: Canada needs to focus on building global centres of research excellence, better commercialization of research efforts to create jobs and wealth, better models of business-university partnerships, and better market-based means of financing the application of innovation. MOTION 2: Amend the recommendations by adding a fourth: 4. Focus on building global centres of research excellence, better commercialization of research efforts to create jobs and wealth, better models of business-university partnerships, and better market-based means of financing the application of innovation. Proposed by the Spruce Grove & District Chamber of Commerce 06. Encouraging Innovation in the SR&ED Program MOTION: Replace the resolution with: ENCOURAGING INNOVATION IN THE SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT ( SR&ED ) PROGRAM Creating a positive and supportive environment for innovation in Canada is the key to a prosperous economic future. It is well known that Canada lags other countries in Research and Development ( R&D ) spending, and in development and commercialization of new products and services. Improving Canada s global competitiveness is one of the most important issues on the national agenda and innovation is a key component to competitiveness. Navigating the path forward is challenging and complex. A report done for the federal government in October 2011 on R&D spending in Canada (The Jenkins Report) made a number of recommendations. For instance, the Jenkins Report recommended that the SR&ED program be overhauled and simplified. Unfortunately, the 2012 Economic Action Plan implemented increased restrictions in the SR&ED program (see below) in lieu of promises for alternate mechanisms, Page 3 of 9

4 which never materialized. The increased restrictions have adversely affected small and medium enterprises (SMEs). In particular, the Jenkins report recommended the formation of a central authority for innovation, aimed at ensuring there was a consistent set of rules. The panel also recognized that other technical activities (like determining whether potential markets for technology exist, or designing for eventual manufacture) are equally important to survival of innovators and therefore should be considered eligible. No progress has been made on either of the recommendations. Key measures implemented in the 2012 Federal Budget were 1) Removal of capital items as being eligible for SR&ED claims; 2) Reduced federal input tax credit (ITC) rates (15% instead of 20%) for larger companies and associated companies (larger companies have prior-year taxable income over $500K and taxable capital over $10M). 3) Gradually lowering rates for the salary proxy from 1.65 to 1.55 (the measure to account for indirect costs of managing staff); 4) Allowing only 80% of contract costs to be claimed (amounts paid to contractors to perform duties). Three years later, the 80% recovery on contractor costs and the reduced proxy rate are especially felt in smaller companies, where funds are limited and more people may be involved in technological development. The reduction of ITC rates, aimed at larger companies, actually affects significant numbers of SMEs, i.e. the threshold is fairly low and does not truly only apply to large companies. The removal of capital items simplifies claim processing but disadvantages companies developing large devices, who are investing over several periods and may have a risk of failure i.e. they are developing through capital expenditures. In 2013, CRA adopted a new format for SR&ED claims. Much more emphasis is placed on documentation, the documentation is not immediately obvious and many businesses might not normally create and/or keep such documentation. Courts have repeatedly ruled that records normally generated in the course of the work are sufficient. Therefore, we have a higher standard of documentation required by the CRA than what is normally seen in practice. Businesses face enough uncertainty without worrying whether their supposed refund qualifies, or whether they will be subject to a time-consuming CRA review to then have their claim rejected due to insufficient documentation. Compared to designated program spending (upfront government grants for planned expenditures), SR&ED expenditures are quite efficient. Designated programs are often limited by sector or region, and are subject to parliamentary delay. Designated programs normally require competitive proposals, which take time and expense for business to prepare. Even if a proposal is successful, the program may have run out of funds. The work plan outlined in a successful proposal must be followed exactly, even if circumstances change through research and development process. By contrast, SR&ED expenditures are incurred by business owners - prior to any claim. Business owners invest their money where their mouth is. The business owner must judge, in real time and with market feedback, what technology development to invest in. Further, such adept response will become more important going forward, as technology accelerates. Indeed, it is not clear whether an Innovation super-authority could be any more responsive than business people spending their own limited funds. A pre-2012 study by the Department of Finance indicated that each dollar refunded by the SR&ED program generated $1.11 in net economic growth. Recommendations The Chamber recommends that the Federal Government: 1. Acknowledge the effective role of SR&ED in encouraging innovation, and restore incentive levels to at least the values offered, prior to the 2012 budget. 2. Examine potential eligibility of other innovation activities (such as technology market research, or industrial design) in the SR&ED program. 3. Re-examine the eligibility of capital items in the SRE&ED program. 4. Look for ways to increase the certainty to business of receiving funds from the program, without increasing administrative or compliance burdens. SUBMITTED BY THE KAMLOOPS CHAMBER OF COMMERCE Page 4 of 9

5 Co-sponsored by the Langley Chamber of Commerce From A 2007 Department of Finance working paper provides an economic evaluation of the SR&ED tax credit and finds that it creates a net economic gain for the Canadian economy.the study shows that the positive economic benefits associated with the SR&ED tax credit are derived from the spillovers that occur when the benefits of SR&ED extend beyond the performers themselves to other firms and sectors of the economy. These spillovers amount to about 46 cents per dollar of tax expenditure and more than offset the costs of the credit, estimated to be 36 cents per dollar of tax expenditure. Thus the SR&ED tax credit creates a gross economic gain of $1.11 for every dollar spent on it, and a net economic gain of 11 cents per dollar.12 These estimates are sensitive to the underlying assumptions used in the working paper, but the study shows that the SR&ED tax credit generates positive net economic benefits under a range of reasonable assumptions. 11 M. Parsons and N. Phillips (2007), An Evaluation of the Federal Tax Credit for Scientific Research and Experimental Development, Department of Finance, Working Paper The methodology used in the working paper cannot be used to calculate the effects of marginal changes to the program. Deriving the optimal incentive levels would require equating the program s marginal benefit with its marginal cost, which is outside the scope of the paper. Proposed by the Kamloops Chamber of Commerce 21. Commercial Truck Drivers Need to be Recognized as a Skilled Trade in Canada MOTION 1: Replace the first four paragraphs of the preamble with: The trucking industry consists of more than 180,000 drivers in the long-haul sector and provides transportation services of 90% of consumer goods and foodstuffs in Canada. Trucks are the preferred mode for moving 60% of our trade with the United States. In short, efficient trucking services make markets work better. The sector s workforce is aging at twice the average rate in Canada and the Conference Board predicts a supply gap of 25,000 to 30,000 drivers by This represents a potential 14% of the required workforce. Due to the shippers enormous reliance on trucks in their supply chain logistics, a shortfall in required workforce will cause the industry to have to reallocate resources which will in turn have a significant negative impact on businesses. Limited driver resources will migrate to large scheduled loads, and the local market for transportation will be limited Driver supply gap will contribute to longer longer order and delivery times resulting in the need for increased inventories and associated carrying costs. These increased costs will then be passed on to the consumer. Smaller businesses, carrying smaller loads, will experience decreased access to transportation services, increased costs and decreased competitiveness This looming supply gap can be attributed to several issues, most of which are related to the perception that the occupation is a low wage and low skill career. Employers are experiencing difficulty in attracting youth and immigrants due to the low rating on skills.currently, truck drivers are classified in the 2011 Statistics Canada National Occupation Classification (NOC) as unskilled (7511 transport truck drivers). As a result, funding for truck driver training is not available except through Employment Insurance in most provinces in Canada. Moreover, it is next to impossible to recruit experienced immigrant truck drivers to Canada, except on a very limited, costly and usually temporary basis. The Temporary Foreign Workers Program requires a considerable Page 5 of 9

6 investment for carriers. ($5,000 to $7,000 for training and workers are only able to stay for 2 years. With changes to the program, costs for TFW applications have increased from $175 to $1,000 and as of 2016 workers can only stay for 1 year.) MOTION 2: Amend recommendations 2 and 4 by adding footnotes that read Canadian Trucking Alliance Report of the CTA Blue Ribbon Task Force on the Driver Shortage in Trucking, and Ibid. Proposed by the Greater Moncton Chamber of Commerce 02. CanNor and Territorial Business MOTION: Amend recommendation 4 by replacing it with: Mandate CanNor to provide access to information on the variety of sources of capital available to business enterprises and entrepreneurs. This information is to include matching sources of capital to business lifecycle, stage of commercialization and ability to provide required financing information to capital providers. Capital providers would include, but not be limited to: government agencies and programs (both federally and provincially), the Business Development Bank of Canada, private banking institutions, credit unions, alternative financing providers, venture capital, angel investors and private equity. Proposed by the Sarnia-Lambton Chamber of Commerce 03. Capitalizing on Growth Opportunities in Canadian Auto Parts Manufacturing MOTION: Amend the recommendations by adding a fourth: 4. Direct Ray Tanguay, Canada/Ontario Auto Adviser, to advise the Canadian Chamber of Commerce of his strategic plan within 6 months. Proposed by the Windsor-Essex Regional Chamber of Commerce 07. Financial Protection for Canada s Fresh Fruit and Vegetable Industry MOTION: Amend the first sentence of the recommendation by replacing the words federal government support the creation of a limited statutory deemed trust that provides financial protection with federal government create and implement a limited statutory deemed trust in the first legislative session after the 2015 election that provides financial protection. Proposed by the Windsor-Essex Regional Chamber of Commerce 11. Support Biotech in Agriculture Page 6 of 9

7 MOTION: Remove recommendations 1 and 2 on the basis that it is not the role of the government to affect public perception. Proposed by the Sarnia-Lambton Chamber of Commerce 12. Timely, Reliable, Comparable Government Data for Canada s Businesses MOTION 1: Amend recommendation 2 by replacing the words open formats, free of charge, and without restrictions with open formats, at little to no cost and never more than cost recovery, and without restrictions. MOTION 2: Replace recommendation 3 with 3. Ensure that Statistics Canada has the ability to deliver data that is timely and reliable to meet Canadian business needs.. Proposed by the London Chamber of Commerce 18. Renewing the Canada-U.S. Trade Relationship MOTION: Remove recommendation 5. Proposed by the London Chamber of Commerce 19. Address Issues in Foreign Worker Programs MOTION: Amend recommendation 2 by replacing the words after three years of work experience with his/her employer with after three years of work experience in Canada. Proposed by the Sarnia-Lambton Chamber of Commerce 29. Developing a National Urban Policy for Canadian Cities MOTION: Amend recommendation 1 by replacing the words Develop a long-term National Urban Policy for Canadians that: with Develop, in co-operation with the provinces and territories, a long-term National Urban Policy for Canadian Cities and Municipalities that:. Proposed by the Hamilton Chamber of Commerce Page 7 of 9

8 33. Increasing Rental Inventory Through Fair Tax Treatment MOTION: Amend recommendation 1 by replacing the words within a six-month period with within a twelve-month period. Proposed by the London Chamber of Commerce 36. Road Travel Rebate Incentive Program for Increased Tourism Revenue MOTION 1: Amend recommendation 1 by replacing the words on goods exported from Canada; with on goods purchased in Canada;. MOTION 2: Amend recommendation 2 by inserting the word ground-based so that it reads: Authorize ground-based Duty Free operators. Proposed by the Windsor-Essex Regional Chamber of Commerce 37. Simplification of the Taxing Statutes MOTION: Amend the recommendation paragraph by replacing it with: That the federal government: 1. Immediately undertake a comprehensive review of taxing statutes with the objective of identifying, recommending and ensuring the implementation of ways and means to simplify tax legislation, reduce compliance costs and ensure Canada s tax system is neutral, simple, efficient and as fair as possible. 2. Establish a committee to continuously monitor changes and publicly report progress at least annually. Proposed by the Ontario Chamber of Commerce 40. Clean Technology and the Renewable Energy Sector in Canada MOTION: Remove recommendation 1. Proposed by the Hamilton Chamber of Commerce 43. Greenhouse Gas (GHG) Emission Reduction through Economic Instruments MOTION: Amend recommendation 2 by replacing it with: Page 8 of 9

9 2. Work with the provinces and territories to: a. Adopt carbon pricing mechanisms that will help realize Canada s international commitments to reduce GHG emissions. The selection of these mechanisms must take into consideration the actions of competitor jurisdictions and the impact on Canada s global competitiveness. b. Ensure revenue collected from carbon pricing mechanisms directly facilitate businesses transition to a lower carbon economy and should not go into general revenues. Further, the allocation of that revenue should be objective and transparent. Proposed by the Greater Sudbury Chamber of Commerce Page 9 of 9