Ease of Doing Business Roundtable

July 27, 2016—Vancouver, BC
Ease of Doing Business
Hosted by Mark Podlasly

Area of Focus

To enhance and align agile marketplace regulations and standards, and enable market access so Canadian businesses can thrive globally:

  • How can regulations be designed to promote innovation across key sectors?
  • What new approaches could be explored to improve government services to businesses?
  • What could be done to use the development of international standards to advantage the commercialization of Canadian products and services?

Highlights

Need for outcomes/performance-based regulations that are not prescriptive on implementation; national harmonization of standards and regulations across numerous industries; recognition and alignment with international standards; access to capital; and hiring global talent.

Summary of Discussion

Regulations often impede innovation as they cannot anticipate disruptive technologies/approaches, nor can they keep pace with the rate of change. Need to look at best practices.

Harmonization across Canada is critical. Varying provincial standards are a disincentive to domestic business expansion and attracting foreign investment.

Regulations should be performance based and market driven. Consultation with business is important to ensure that regulations and standards are developed through the lens of industry, not through the lens of regulators.

Build a culture of higher risk tolerance, and be innovative in terms of solutions.

Key Implementation Considerations/Challenges

Talent: Participants raised the difficulty in attracting top talent from foreign countries due to current immigration policies (timelines of process, temporary foreign work visas/grants). Competition for top talent is international, and this will hurt Canada's competitiveness and ability to attract top talent.

Education: It was raised that Canada is the only country in the world that does not have a national education standard (provincial responsibility), which leads to extra complexity and costs for companies trying to set up in multiple provinces.

Access to capital: Participants raised the need for easier access to capital in order to fund research projects, as well as more federal funding for projects. VCAP program and IRAP were both provided as examples of programs that could be expanded to assist in this regard.

Tax barriers: It was raised that when exiting/selling companies, taxes are high, and there are few incentives for industries to use profits to build or invest in another organization. Lowering tax barriers could be an incentive. In addition, tax policies related to duties on imports are not in line with the realities of e-commerce.

SR&ED: The Scientific Research and Experimental Development (SR&ED) Tax Credit was seen by several participants as a strong program, with some gaps or areas for improvement noted.

Comparative examples: It was suggested that Canada should look to examples of what has worked in other countries/jurisdictions and apply any successful innovation policies (copy them, adapt them, apply them). It's a world market for products; it's a world market for policy ideas.

Top Ideas/Outcomes

International certifications: In order to sell internationally, Canadian companies need to meet international certification requirements (e.g. U.S., EU) and Canadian standards are not always comparable. It would be helpful if the Canadian standards were slightly better than the international standards so that a Canadian-developed product, in achieving certification in Canada, would have a much easier time being U.S., EU, or world-standard approved.

International standards: Canada can play a much more proactive role in setting international standards. Canada is often seen as being more "neutral" than the U.S., China or the EU when it comes to trying to protect proprietary industries, so we could play a valuable role in helping set the world regulatory standards for technology, bio sciences, software, etc. Such participation would assist Canadian companies in knowing that they are developing products that would be regulatory compatible in larger markets.

National harmonization of carbon pricing: Federal leadership in this area could result in a North America-wide regime that would prompt MNEs to respond. This would provide a clear signal that could spur investment.

Shift programming and policies to articulate the outcomes/performance desired: Streamline processes and stimulate innovation instead of prescriptive approaches designed on inputs. Establish regular review cycle of regulatory regimes, such as every 5 years. Look at specific sectors in which to invest that are in front of regulation.

National harmonization of standards and regulations: Required across industries (e.g. building codes, electrical codes, utilities operation). Important to focus on national harmonization before looking at international harmonization. There is also a need to facilitate industry engagement in international standards development and ensure market alignment (look to possible adoption of international standards).

Support to business: Consider more support to help business navigate through various government programs and regulations. For example, dedicated outreach advisors that help businesses navigate programs and issues. 

Expand access to capital: More and ongoing VC funding needed (e.g. increased VCAP every four years, angel tax credit programs, tax incentives for investors).

Talent: Review the Temporary Foreign Worker Program and fast-track hiring of top global talent. Put programs in place to mentor talent in Canada.

Partnerships: Look at partnerships with international original equipment manufacturers (OEMs) where product testing would be finished in Canada and the product would be sold in Canada. Encourage, incent and provide greater recognition/acceptance of international standards in Canada.

Modernization: Modernize tax and regulatory regimes to reflect the reality of a digital world. Hold regulatory agencies to turnaround times.

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