One of the most perplexing and urgent dilemmas Canadians are facing these days is finding ways to grow this country’s economic productivity.

Sudbury native Ryan Minor, PhD’24, has invested a lot of time in studying that problem, which he points out is not new. Nor is it one that’s easily solved. “Politicians, policy makers, and business leaders have been looking for ways to increase Canada’s productivity almost since the time of Confederation,” he says. “They’re still trying.”

Minor knows that well. He’s written a doctoral thesis that explores the arguments for and against Canada implementing a preferential tax treatment for intellectual property (IP) income that could spark a surge of innovation and productivity.

Minor, who has worked as a Chartered Professional Accountant (CPA) since 2003, delights in musing about economic issues, industrial policy, and the tax system. “I’ve thought a lot about what Ottawa can – or should – be doing with regard to tax policies that might move the needle where productivity is concerned,” he says. “I wonder if the government should take a laissez faire approach, or rather should it put a finger on the national pulse and try to steer the economy in a particular direction?”

It was with the idea of delving into those and similar questions – and to fulfill a longtime personal dream – that in the autumn of 2017 Minor enrolled in doctoral studies at Queen’s Law. He began studying under the supervision of Professor Art Cockfield, one of the world’s leading tax law scholars. “He and I hit it off from the time of our first meeting,” Minor recalls. “Art was brilliant, and he was a gifted motivator. I loved that he was so supportive whenever I met with him.”

Minor was on campus for the first three years of his doctoral studies. However, with the pandemic raging in 2020, he opted to return home to his family and his job in Sudbury with the national accounting firm Baker Tilly SNT. Then, over the next three years after putting in long days at the office, in the evenings and on weekends Minor devoted to his studies any spare time he could find. He occasionally traveled to Kingston to visit Cockfield. Other times, the two spoke via phone or Zoom.

Sadly, those conversation came to an abrupt end in early January 2022. That’s when Cockfield died suddenly at the age of 54 as a result of an undiagnosed suspected heart condition.

Associate Dean Cherie Metcalfe steeped into the breach to serve as Minor’s supervisor, and he soldiered on to complete his PhD studies. The work he did while doing so was as detailed as it was complex. Minor explored some of the possible reasons why Canada’s economic productivity lags behind those of other industrialized nations, and he looked at possible tax changes that could help correct that situation.

One issue Minor studied in depth is the impact – perceived or real – of multi-national corporations shifting Canadian-generated profits to branch operations in countries with lower tax rates. “Some European countries have adopted a tax initiative that’s called a ‘patent box.’ That’s a policy measure that affects research and development (R & D) and associated concerns by setting a lower tax rate on intellectual property. The idea of doing this is controversial.”

Minor was eager to investigate concerns that could factor into any discussion if Ottawa looked at following Europe’s lead. However, doing so was easier said than done.

There was little empirical data available in Canada that could help Minor evaluate the case for or against adopting the idea of a patent box. As a result, he conferred with tax practitioners and set to work creating his own database of financial information about 80 multi-national corporations with Canadian operations. Doing the latter was labour intensive and time-consuming; Minor had to rely on the Access to Information Act to compile Canada Revenue Agency data that’s not generally available. “I was looking for evidence of ‘profit shifting.’ That is, I wanted to learn how many companies in my study had applied for at least one patent in a low-tax jurisdiction that had nothing to do with creating the patent. This is something no one ever talks much about,” says Minor.

What his inquiries revealed might surprise you. He found that while profit shifting does happen, it doesn’t happen often enough or on a scale that indicates its a problem that’s serious enough to prompt changes to Canada’s corporate tax regimen. Says Minor, “At least part of the reason why is that about 140 countries have agreed to a global minimum tax that imposes a tax of at least 15 per cent on companies.”

Any questions about profit shifting aside, Minor’s studies also evaluated some of the steps the federal government might take to help boost this country’s economic productivity, which ranks eighteenth in the list compiled by the Organisation for Economic Co-operation and Development. “Although Canada doesn’t have what you could call a formal industrial strategy, tax policy often has been used to try to further business incentives. As a result, the tax code is riddled with incentives that try to promote R & D and investment,” says Minor.

“My sense is that tax credits, grants, and other such measures that foster R & D are more efficient and are better tools for governments than lowering tax rates in hopes of spurring innovation.”

Minor knows that this and some other ideas he considers in his doctoral thesis may be controversial. He also accepts that the debate about how Canada can improve its economic productivity will continue. Going forward, once his thesis is published – as it will be when Minor can find time to get it ready – he hopes what he has to say will help to further any discussion.

Minor “loves generating and discussing ideas,” and so he’d relish the opportunity to work in academia someday. “I’m currently involved in a policy role with CPA Canada, my professional association, and I really enjoy that. For me, it’s like writing my doctoral thesis. It’s a labour of love.”

By Ken Cuthbertson, Law’83