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We'll call the 39th meeting of the Standing Committee on Industry, Science, and Technology to order. Pursuant to Standing Order 108.(2), we will be continuing our study of Canadian science and technology policy.
First of all, I do want to apologize to the witnesses for the delay. We did have a vote in the House and all members had to be there. The government lost that vote, so we may be into an election later this afternoon; I'm not sure. We'll see what the opposition decides to do with that. Anyway, it looks like we will have almost an hour and a half for presentations and for questions from members.
We have with us here today four organizations.
From the National Angel Organization, we have the president, W. Daniel Mothersill. We have the chairman of the board of directors, Andrew Wilkes. Welcome.
We have joining us again from Precarn Incorporated Mr. Paul Johnston, president and CEO, who was with us on Tuesday.
From VenGrowth Asset Management Incorporated, we have a general partner, Jay Heller. Welcome.
Fourthly, from the Business Development Bank of Canada we have the executive vice-president, investments, Jacques Simoneau.
Perhaps we could have presentations in that order, except Mr. Johnston, because he made a presentation on Tuesday. We'll have three presentations. So we'll do that in that order.
We'll start with the National Angel Organization. You have up to five minutes for your opening presentation, and then we will go to questions from members.
Mr. Mothersill, will you be starting?
:
Yes, Mr. Chairman, thank you very much.
To the committee, thank you for including us in today's discussion.
Today I'm going to actually split the presentation between Andy and me. So with that, what I would like to do today is explain the role of angel investors in Canada's commercialization ecosystem--and yes, there will be a test.
Angel investors, individually and via formal angel groups, invest approximately $3 billion annually in seed and early stage companies. Those are Industry Canada statistics.
The National Angel Organization, of which I am president, is the industry association that represents angel investors throughout Canada, including over 30 formal angel groups, representing about 4,000 angels and angel investors. We are a grassroots, non-profit organization that runs from coast to coast, whose mission is to promote best practices in angel investing, to facilitate the formation of angel groups as a means of overcoming the barriers to investment in early stage companies by accredited investors, to facilitate deal co-investment and syndication via increased investor communications and networking, both nationally and internationally, and to facilitate and organize channels of communication with government researchers, entrepreneurs, and the capital markets.
As the industry association for angels and angel groups in Canada, NAO is also partnered with other angel groups in the U.S., Europe, and Asia, to promote foreign direct investment into Canadian companies.
We--that is, business angels--are the oldest, largest, and most-often-used sources of funds for entrepreneurial firms. Most Canadian start-up companies have been funded in some form by angel investors. Most angel investors—this is not family money—are entrepreneurs, often serial entrepreneurs who have successfully founded and/or operated one or more companies. They typically invest in and mentor several start-up companies at the same time. Angel investments in Canada facilitate the transformation of R and D into successful businesses that public institutions, venture capital funds, public investors, and banks can then finance.
The bottleneck holding back the benefit of the government's large investments in research has been a shortage of coordinated angel investments. According to Sustainable Development Technology Canada, Canada faces an estimated $5-billion annual funding gap, sometimes known as “the valley of death”, in financing early stage companies.
Interestingly, as the venture capital industry has come under some pressure, they are not investing as much in early-stage companies and certainly in seed rounds. This has increasingly fallen to angel investors in terms of supporting. The emphasis by all levels of government in Canada has been on the funding of research and development. Proportionately few resources have been allocated to commercialization of innovation. However, this commercialization is one of Canada's only true sustainable natural resources.
With that, I'm going to turn it over to my colleague and chairman, Andy Wilkes.
I'd like to say a few words about investing, a program that is working effectively in an industry, and two or three quick recommendations to put out to the committee for review.
The first thing is about the first principle of investing, that being that investment flows to businesses or sectors with the highest returns in relation to the inherent risk of the venture. So that's relevant in harvesting our science and technology resources, which are primarily, as Dan Mothersill mentioned, invested by the government to develop a commercialization of our knowledge-based industries. So a good example of an industry that attracts commercialization capital is the resource industry.
In 2006, over $1.1 billion was invested in new publicly listed mining and oil and gas resources through flow-through shares on the TSX Venture Exchange. That amount is only on the Venture Exchange. These flow-through shares enable taxpayers to reduce their income through the deduction of Canadian exploration expenses, Canadian development expenses, and Canadian renewable and conservation expenses. This program helps attract capital by mitigating the risk of drilling or mining a dry hole.
So it's interesting that this flow-through share program, the $1 billion in investment capital, is primarily going to the provinces of British Columbia, at 48%, and Alberta, at 28%. Provinces like Ontario receive less than 16% of the investment funds. It should be noted that eastern Canadian provincial treasuries are indirectly subsidizing other provinces, often in sectors that may actually be less friendly to sustainable development.
One reaction to this example would be to question the need for the program in the resource industry. I would argue that this very successful program is a best practice that should be used to mitigate risk and attract private capital in the knowledge-based industries, and further that $1 billion a year times five would go a long way to dealing with the valley-of-death stage Dan mentioned that Sustainable Development Technology Canada has identified.
We have learned some lessons from this resource example: strong investment returns attract large capital flows, tax incentives that reduce risk and improve return on capital attract capital, and strong sector food chains attract early-stage capital as investors know there will be a well-defined exit.
The significance of the resource example ties into the following three recommendations for the standing committee, to attract capital for the knowledge-based businesses. There are many ways of doing this, but here are three successful programs:
Establish an angel co-investment fund. We put a number at it in our report, but the principle is that we need this if it's important for public policy to commercialize. We give an example of the State of Ohio very effectively using this program.
We also talk about the innovation and productivity tax credit, which is successful in eighteen U.S. states and five provinces in Canada, soon to be six. The federal government should join in this program.
The third thing is to help establish angel groups across the country. We list in the appendix some groups that support these recommendations, like the Conference Board of Canada, the Canadian Federation of Independent Business, etc.
On that, Mr. Chair, I guess I've said my words.
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Thank you, Mr. Chair and members of the committee, for inviting me here this morning.
I'm with VenGrowth, Ontario's largest venture capital firm. Since our inception in 1982, VenGrowth has invested over $1.1 billion in more than 180 small and medium-size Canadian businesses, mainly in the high tech and life sciences sectors.
I'd like to speak to you this morning about the state of Canada's venture capital market, but first I think it's important to point out why venture capital is so critical. The answer, simply, is jobs. Venture capital builds knowledge-based businesses that create high-paying jobs in cutting-edge sectors such as software, semiconductors, therapeutics, and clean energy. The biggest challenge that companies in these sectors face is access to capital.
Knowledge-based businesses create jobs by turning ideas into businesses. This involves three stages.
First, a researcher conceives and tests the idea. Often this occurs in a public institution such as a hospital or a university that, obviously, is largely publicly funded. This is what we call the primary research stage.
Second, an entrepreneur starts a company around the idea. He or she continues research and development, develops a business plan, and starts talking to customers. We call this the early growth stage. Companies at this stage rely on funding from angel investors and from early-stage venture capital firms. This is what our colleagues from NAO call the valley of death. As I'll discuss further, this type of venture capital is rapidly declining in Canada, particularly in Ontario.
Finally, a company reaches the expansion stage. Business ramps up, sales and marketing and productive capacity expand, and a product is completed. These types of companies are funded by expansion-stage venture capital, and sometimes by going public. Canada's domestic supply of expansion-stage venture capital is, like early-stage venture capital, also in decline, but foreign investors have taken up some of the slack.
To continually create knowledge-based businesses, we need the pipeline to be full at all three stages all the time. It requires ongoing funding for basic research, for early-stage start-up companies, and for expanding firms. Unfortunately, Canada is experiencing a significant decline in financing for the second stage, the early growth stage. As I mentioned, this is when basic research is first taken out of the lab and put into a company. It's also generally when a company first raises outside capital.
In the past four years, the number of companies receiving first-time venture capital investment has declined by 25% in Quebec and by 50% in Ontario. Over the same period, the U.S. grew by 100%. Ontario saw fewer new companies funded in 2007 than at any time in the past 10 years.
Why is early stage venture capital in such decline, especially in Ontario? The answer is that all four sources of money for the industry have contracted concurrently.
The first source of capital of the four is institutions, such as banks and pension funds. Except in Quebec, these institutions have in recent years cut back their allocations for venture capital in favour of other sectors.
The second source of capital is retail investors, largely through the labour-sponsored venture capital, or LSVC program. Fund-raising in this program has fallen dramatically in recent years, particularly in Ontario, where the provincial government is phasing out its support for the program.
The third source of capital is government. The federal government remains a critical supplier of venture capital funding, largely through BDC and to a lesser extent EDC, but federal spending on the LSVC program has declined in recent years to less than half the level of eight years ago.
The fourth and final source of venture capital is foreign investors, mainly from the U.S. This source of capital is actually growing in Canada, but it's focused largely on later-stage expansion companies. Foreign investors generally will not fund early-stage Canadian companies. In 2007, there were only four disclosed early-stage venture investments in Canada that did not have Canadian investors.
The lack of early-stage venture capital in Canada has reached serious, perhaps crisis proportions. Entrepreneurs are already leaving Canada for the U.S. to get their companies funded. I invite you to look at the last page of my written material, which contains quotes from a number of leaders of Canada's venture capital industry attesting to the enormity of the problem.
The federal government simply must devote more resources to facilitating early-stage venture capital or the inevitable result will be fewer high-paying jobs in knowledge-based industries.
Thank you for your time. I would welcome any questions.
Honorable members of the committee, ladies and gentlemen, it is a privilege to be here today. I thank you very much for your invitation
[English]
As you know, BDC is Canada's business development bank. We offer tailored financial services, information, and advice. These services include, of course, venture capital investment. Parliament and the government have instructed us to facilitate the commercialization of R and D, and we dedicate considerable money and energy to this task.
Commercializing R and D is not for the faint of heart, the impatient, or the poor. Turning an idea into a successful company is very risky, complex, and expensive. It takes patience, specialized knowledge, superior management skills, and lots of money.
As a nation, we have made impressive public investments in R and D, but we have yet to see this investment trigger a sufficient creation of globally successful technology firms such as RIM. We must do a better job of commercializing and fostering a greater commercial focus for our R and D. The government's role in helping catalyze these changes is as crucial as its support for the original R and D.
Fundraising for venture capital has been declining for several years, a predictable result of the industry's bad returns of the past several years. Large financial institutions such as pension funds--which have a fiduciary duty to maximize returns--have abandoned the field for more lucrative, less risky investments. And because up-front tax incentives for labour-sponsored funds have disappeared from large parts of the country, retail investors are also shunning it. This disappearance of institutional and retail money has happened at a time when, to succeed, technology firms need larger investments, for longer periods of time.
Canadian venture capital funds--which are not performing well--are too young, too small, and too many. Compared to their American peers, they lack scale, sophistication, experience, and capital. The average Canadian venture capital investment is usually only half that of an equivalent American investment.
The results are predictable. Canadian technology firms are deprived of money they need. Managers spend more time hunting for money than developing their businesses. Because there is still no late-stage Canadian investment fund, foreign investors are free to cherry-pick the most promising late-stage firms, dictating financial terms that are detrimental to the firm and its initial Canadian investors, as well as to the national economy.
In Canada, we oblige our new technology firms--at a very early point in their lives--to live without grant support and immediately capture investor support. This cliff-like step is a fundamental feature of our market, and it has great consequence for all parties. If the young firm's idea fails to attract investment dollars, it dies. If the investment is enough for continued existence, but not much more--as is often the case--the firm has little latitude to learn from error. Many fail at this stage, destroying venture capital value. Venture capitalists must put their money in very early, and leave it there much longer. At this early point in any firm's life, the range and scale of the risks are daunting, even for hardened venture capitalists. And even if the firm succeeds, the value of investor's return is lessened by the longer period of time it took to generate it. What this means is that our returns tend to be much lower.
I believe this fundamental point is worth repeating. For new Canadian technology firms, the transition from grants to private sector investments is a sudden, do-or-die affair. It is not a gradual or scaled decline in grants accompanied by a corresponding rise in venture capital investments.
Entrepreneurs and venture capitalists face another hurdle when they try to acquire clear ownership of intellectual property. In universities across Canada--the fonts of the R and D---there is no consistent approach to technology transfer. For the most part, despite best intentions, the people who work in university technology transfer offices lack the authority to make the quick, firm decisions that the business world needs, or to structure deals that benefit both parties.
Finally, Canada lacks a sufficient number of a particular breed of entrepreneur--serial entrepreneurs--with enough experience and management expertise to take small companies global. Simply put, we need more of these people. Our economy is fundamentally constrained by our shortage of them.
I'll now describe what we at BDC do to facilitate commercialization in this generally sobering environment. We are and continue to be a crucial contributor to commercialization and technology adoption by Canadian companies.
Since 2001 we've focused on very early-stage investment to help entrepreneurs cope with the capital shortage I have described. We also invest in venture capital funds across Canada, to stimulate the market. In an independent report of last year, which we commissioned at the request of the government, Dr. Gilles Duruflé, a Canadian venture capital expert, found that we are fulfilling our role in the marketplace in accordance with our mandate and best industry practices and meeting many market needs, and that stakeholders perceive our presence as essential.
I will be candid. We have done a good job of seeding and building more than 400 technology companies since we started, but in recent years our financial returns in venture capital have been negative. This is true even when we set aside the impact of the new, obligatory, and purposely cautious accounting method called fair-value accounting, which is further depressing our results. When I compare our results with those of the private sector funds in which we've invested, I note that their results are similarly uninspiring. I'd invite you to regard BDC as a barometer of the industry at large.
Please allow me to offer a few observations and suggestions.
Broadly speaking, I believe we should take a more holistic approach to building a vibrant venture capital industry. We should act to improve its attractiveness to institutional and retail investors. We have to help our entrepreneurs improve their ability to take Canadian companies onto the global stage and to succeed. This is a question of management skill. So the challenge is clear: We must increase the number of people who master this skill.
With regard to the shortage of early-stage funding, we may wish to look at the different durations of time for which other countries allow new technology companies to be eligible for grants. Here in Canada we stop them at a relatively early stage. It may be that prolonging their eligibility for grants, grants made contingent on the company's potential commercial viability and proven ability to also attract investors, would spare them the travails of multiple financing rounds begun too early, with the consequential lower rate of return for investors.
As for the scarcity of late-stage funding, the government's recent decision to give BDC $75 million with which to create a new $500 million private sector later-stage venture capital fund is a decisive, practical way to help remedy this problem and help reduce the number of too-soon exits through sales to strategic buyers or initial public offerings. As you can imagine, attracting this kind of private sector money will be a challenge.
We might also wish to examine our tax incentives. We know that upfront tax credits often attract the wrong types of investors. Tax-free exits might attract more sophisticated investors.
Other incentives to reward successful investments at exit, a concept that several countries have applied, may have more meaningful impact. Israel is notable in this regard.
With regard to the transfer of intellectual property at universities, the University of Waterloo is a striking example of success. Its policies and practices merit close study, and perhaps emulation.
In conclusion, I believe that fixing this industry will take money, patience, expertise, and the combined efforts of legislators, policy-makers, and practitioners. BDC welcomes any opportunity to help. We are collaborating with NRC and NSERC, looking at how to integrate fundamental research into the creation of economic value. This fall we plan to host a round table of industry players to ensure we have a thorough understanding of the industry's problems, as well as ideas on how to improve things.
I thank you for your time and look forward to questions in English or French.
I thank the witnesses for being here today. I think you gave us a fairly accurate, apt--if not grim--picture of the problems that are facing innovation and new technologies.
It seems to me that in summation, it would be fair to say that not only do you have to be smart, innovative, and ahead of most in terms of new ideas, but you also have to be rich in order to get your products into market.
I will begin with Mr. Wilkes and Mr. Mothersill.
The National Angel Organization would put together groups that would ultimately provide funding for new ideas if those new ideas were worthy and had merit. In terms of the extent of the investment you would make, do you hear some concerns about how much is required up front, the percentage of ownership of the patent or the new idea? Is this a bit of a barrier?
In other words, if you were putting together a group that demands, for example, 75% ownership in order to get through the early seeding, the early, past-the-bootstrap level, how much of a disincentive would that be to someone who just says, “Well, I'm going to lose that anyway”?
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Depending on whether there's going to be a follow-on VC round, in which angels are typically diluted, you're looking at probably something in the neighbourhood of between 20% and 30%, because we want to keep entrepreneurs motivated to show up. Over the last ten years that I have been involved in angel investing, there have been too many times when I've had entrepreneurs come to me and say “Look, I just need another $200,000 to get me over the next tranche. The problem is I've raised $1 million in $100,000 tranches, and I'm now down to 7% ownership of my company.” At that point I've turned to individuals like these and asked why they bother showing up. There's nothing in it for them.
Besides, one of the things that angels do, one of the characteristics of angels, is that they not only provide early-stage financing--and they're about the only people who are doing that right now in this country in any volume--but they also mentor companies, because most are serial entrepreneurs who have built successful businesses. Sometimes, the more you get outside of large cities like Ottawa, Toronto, Montreal, Calgary, or whatever, you find that there's an added component to it.
I spent a lot of time this year in places like Thunder Bay, North Bay, and the Soo. Angel investors, of course, want to make money, but they also have a real desire to give back to the community. That may sound a little like motherhood, but it is really part and parcel of the role that angels are playing. What we really have to do--which is why this year alone, the National Angel Organization will build ten new angel groups in Ontario alone--is provide discipline around investing and have term sheets that make sense and exit strategies that people can all adopt and feel good about to keep these entrepreneurs alive so they can go on to the next stage of investing. Without angel investors they never get to the VC landscape.
That's a very long answer, but it's so fantastic.
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Thank you, Mr. Chairman.
Thank you to the witnesses.
I'm going to throw out a few questions. Then, if you could hold your powder dry, whoever wants to can jump in.
It's been a while since I looked at this issue, so I feel a bit dated, especially when you talk about a national angel organization, because my impression then was that in the continuum of finance, angel capital was friends and relatives, and that moved then to venture capital, which was slightly different. That has evolved, obviously, when you have a bunch of friends and relatives gathering into a national organization, so maybe you could help me to better understand the difference between angel capital and venture capital.
By the way, one of the issues I had with the labour-sponsored venture funds was that they wouldn't look at anything less than $500,000, so they started to group it together, and it seemed to lose some of its value over time.
We're looking at tax advantages. Surely making the scientific research tax credit refundable would help early-stage companies in loss carryforward positions in their early stages. Making that research credit refundable is something that's been around, and people have proposed it.
Also, I was glad the government extended the accelerated capital cost allowance, but surely they could have extended it for a period beyond one or two years if you look at the planning horizon of corporations.
When we looked at this some time ago, one of the problems.... Actually, this group I was with was looking at commercializing federal government research, because there is a fair bit of federal government research going on. We looked at commercializing it. One of the things we bumped into was intellectual property rights.
You know the problem of researchers: a lot of them aren't very good at tech transfer or tech diffusion, so intellectual property rights could maybe be an incentive. We looked at models. Mr. Simoneau, you mentioned the University of Waterloo. I was familiar with that one. Also, Guelph had a company called GUARD Inc. , which was the bridging corporation between the scientists and the capital markets. It seems to have worked very well; in fact I wondered, and we wondered, if we should actually do that at the federal level--have a bridging company between the scientists and the capital markets to help put the prototypes together and advance the file and get the capital to do that.
I'm wondering if you think we should be doing anything on intellectual property rights and if we should be doing anything with that particular model--building on the University of Waterloo model or the Guelph model--to provide that mechanism in between.
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In the very early stage, there are three forms of funding. The first is usually from the entrepreneur, who puts in cash, maximizes his credit cards, mortgages his house, and sells his kids for medical experiments. That's the first money in. That's skin in the game.
Second are, of course, the three Fs: friends, family, and fools. These people are usually relatives or acquaintances, and they put in a little bit of cash, usually less than $100,000.
Once you get past that, you get into angel investing. Angels are, according to the various securities commissions within the provinces, sophisticated high-net-worth individuals who can assume the kinds of risks that they take. All members of an NAO, for instance, and all members of angel groups have formally signed off on the fact that they are indeed accredited, sophisticated investors. That's when the angels begin to play.
There are those three early stages. Then it may pass on, depending on the size of the investment, to venture capital. One very quick trend that's happening is that angels, because they're investing together, are now getting into VC rounds, so it's not uncommon to see $3 million, $4 million, or $11 million rounds just in angels alone.
I think I would start with a general statement that just says again that it relates to a balance in the system, but it also relates to the gap.
I'll use very specific anecdotal evidence. Back in 1990 we were funding a program in universities called IRIS. There's a graduate student by the name of Shahram Tafazoli who invented some technologies for managing heavy equipment: monitoring it, etc.—all sorts of different aspects. When he graduated, he started a small company called Motion Metrics, and through our Precarn side, through Precarn funding, we were able to provide small amounts of funding into that company. Following that, he actually worked with Syncrude on a larger project.
So we filled the gap, as it were, and now literally his company is selling his technology around the world. It's still a very small company, but that's an example of what I mean, because now he employs nine or ten other high-value-added people in his company. It's a matter of getting the technology matched against a user need and then filling the gap a little bit so that the company can become successful.
But that's only part of it. We've talked about tax credits, the dollar, capital cost allowance. All of these things have to be balanced to create the right environment. My argument is related to filling in the gap as well.
It is extremely interesting to follow this discussion between people asking questions and people having answers and suggestions. It is impossible to avoid the conclusion that Canada has a cultural problem.
A while ago, I asked my colleagues why these people are so depressing. Their answer was that it is quite normal because they are bankers. I have been told that Canadians make excellent bankers.
In Quebec, we would like to make entrepreneurs but, if you talk to entrepreneurs in our province, they will tell you that, if you suggest a business opportunity to a Quebec entrepreneur, he will immediately ask you how much money you want to make. On the other hand, if you make the same suggestion to an American, he will tell you how much money he will make.
If you were to gather ten Canadians, you could easily get them to admit after a few minutes that what government does is never very successful and that government is not very effective. However, if you were to continue your conversation with those same ten Canadians and were to submit a specific problem to them, they would tell you in a few minutes that government should do something about it.
In a country where economics is not taught in high schools, do you think we will ever be able to have a culture of entrepreneurship where people are willing to risk their money on other people's ideas? Are we not rather moving more and more towards a society where people ask government to resolve their problems and, if there is any money to be made, they want to know how much the other guy is going to get? Is there any hope that the Canadian economic culture, in Quebec or English Canada, will one day be able to change if we do not start soon to teach economics to our children?
I'm sorry, we're going to have to table that question.
Witnesses, I have a couple of questions myself that I do want to put on the record. Perhaps we could ask you to come back, and if you're amenable to that we could finish off this session, because you were deprived of 40 minutes of time because of the vote.
I want to put two questions on the table.
Mr. Heller, you have a very good presentation here. You talk about the four funding sources, and you talk about the role of government. How do we ensure that government funds, whether they partner with the private sector or not, continue to fund early-stage companies, where you said the need was, rather than become conservative and fund at a later stage? How do we ensure they're fair to taxpayers? What sort of a governance structure would you recommend?
The second thing is about the National Angel Organization, with respect to flow-through shares, innovation, productivity, and tax credits—very intriguing ideas. Flow-through shares have been promoted to me by Ballard and other companies for years. As you know, the finance department is not all that amenable to that. With the innovation and productivity tax credit, if there is any further information you have on those two initiatives that you can supply, stacked like that to the committee and that we can chew on, that would be very helpful to us.
I just want to put those two on the table from the chair. Unfortunately, we can't have any responses, because we are out of time. The vote prevented us from being here earlier.
I want to thank you for your time here today. It was a fascinating discussion.
Members, we are going to suspend for a minute, and then we'll discuss the motion.
Thank you.
:
Okay, members, let's find our seats.
Does everyone have a copy of Mr. Brison's motion?
As the chair, I'm going to explain what I'm going to do in the context. The motion and the context surrounding it have put the chair in a very difficult position. I hope you all know I try my best to be a very fair chair and to govern by the rules. I am going to rule a certain way on this motion, but I do want to give the context to the committee.
This motion does not technically satisfy the 48-hour notice requirement. The clerk advised Mr. Brison's office that the committee would require unanimous consent to allow a member other than Mr. Brison to move his motion, given that Mr. Brison would be absent today. Based on this advice, the office of Mr. Brison advised the clerk not to put the motion on notice for the meeting of Thursday, May 15.
But in fact if a member is properly signed in as a substitute for Mr. Brison, that member would indeed be allowed to move the motion. That was, I think, the McGrath committee recommendation in 1985. So a substitute enjoys the same rights and privileges as a regular member of a committee being replaced. Substitutes are counted for purposes of establishing a quorum, and they may participate in debate of motions and votes.
What happened here was that the motion does not technically satisfy the 48-hour requirement, but that is a result of incomplete advice from our clerk, unfortunately.
The notice of motion was originally sent to the clerk on Monday, which was within the 48-hour requirement, but because of the advice given and because of the action of Mr. Brison's office as a result of the advice, we do not have the 48-hour requirement fulfilled.
I am going to rule this motion out of order. Obviously, if the motion is ruled out of order, any member can appeal that decision. If the decision is not sustained, the motion would be debated and voted upon, and that's an option.
Another option is that committees can deal with motions at meetings while they travel. If we do travel the week of May 26, the motion could be debated in Winnipeg on May 27.
I want to give the context, I want to give options to members, and I want to explain why I'm ruling this way. The reason I'm ruling this way is that I accept fully that incorrect advice was given unbeknownst to me, but the advice was not given in bad faith. Technically it does not satisfy the 48-hour requirement, and I'm ruling the motion out of order for that reason.
Mr. Silva.