December 3 2007 House of Commons Finance Committee Pre-Budget Consultations

Committee evidence

Mr. Gordon MacKinnon (As an Individual):
     Thank you.
    When you people are looking for the proper balance between the private sector being taxed and the citizen--the proper balance between the two--I think when you're evaluating that you have to look at what our needs are in terms of human and financial capital for the coming years. Because of the growth we anticipate, we're going to need large amounts of capital, and we'll also be facing extreme shortages of human capital. So there has to be a balance between what we're offering in terms of being able to reward capital while also offering rewards to human capital.
    People are motivated a little differently from businesses. People will make a choice that is positive, perhaps at a little bit of discomfort and not necessarily in their own self-interest. They might choose altruistically. Because of the Canada Corporations Act, businesses are typically responsible to their shareholders to deliver the best returns and advocate those policies, so their decision process is based on the best results for their shareholders.
    The challenge we have is creating a brand for Canada that's going to attract international capital that doesn't necessarily come at the lowest cost for taxation. There's a theory in business that you don't want the low-cost customer, the people who will go to shop across the street because it's a dollar less. Those people do not return; they do not invest in your commerce, so they're not the most valued customer. What you want to do is develop a customer who recognizes value-added that you're delivering, and court them, because their partnership is going to bring more value. They recognize the value they're investing for the value that is hidden.
    Part of this process, I believe, is that if we start evaluating our capital investment decisions based with real options accounting strategies that recognize hidden value that's delivered through future flexibility, where a decision will be made based on not necessarily the best cashflow, but more that there's a future option that gives you flexibility, that's worth more than the underlying cost of securities. This is covered a bit in my brief.
    Basically, what I would like to see is the opportunity to develop a brand for Canada where we are leveraging our ethics, our community, where we have high respect for the rule of law. We are reducing the risks for the investor by our very community, inasmuch as we have a great deal of political stability, fiscal stability and we're looking at a very prosperous future. That means we don't necessarily need to reward investors with lower taxation rates because we've already mitigated the risk.

Read more: Committee Evidence

Submitted to House of Commons Finance Committee for Pre-Budget Consultations, 2007


We need to anticipate the challenges and opportunities of the next generation and position our nation to best leverage our opportunities. We are blessed with natural resources currently in high demand which causes some stress on the critical availabilities of financial and human capital. The optimal strategy would be to balance the burden of taxation equitably by evaluating hidden value and using real options theory to help create value and allow ample reward to best manage critical availabilities.



We compete globally.



Our greatest hidden value is our brand. With attention to developing and maintaining our brand we can attract the human and financial capital we will need to manage the growth.



There are a number of issues impacting the balance of corporate and individual taxation. It is important that we identify the value of public policy and expenditure to better account for the benefits. Consider the fact that last year Ontario surpassed Michigan in automobile production. This was largely due to the cost advantage of public health care.


Read more: Committee Submission

BC Finance and Government Services Committee 2001


B. Lekstrom (Chair): I see no further questions, Sandi. I would like to thank you for taking time out of your schedule to come and present to our committee this evening.

           Our next presenter this evening is Gordon MacKinnon.

           G. MacKinnon: My name is Gordon MacKinnon, and first off, I'd like to say I'm a constituent of Ida's in Oak Bay–Gordon Head.

           Anyway, I'll get to my presentation here. I have to apologize for being a little nervous. Last time I put everyone to sleep when I did a presentation. It's getting a little late here, and I hope that doesn't happen this time.

               [T. Bhullar in the chair.]

           I'm the sole proprietor of a small business. With the budgetary issues that we're facing, it seems to me that everyone's approaching it as an accounting situation. I'd like to approach it as a business situation rather than an accounting situation.

           I've read in some of the previous presentations that there's a focus on being competitive with Alberta and Ontario as the low-tax jurisdictions. I believe this is a misguided approach, if it's based solely on costs.


Read more: 2001 BC Committee Appearance

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