International Trade Committee on Feb. 3rd, 2014

[Jock Finlayson]

We have very strong companies in engineering, in project management, in the IT side of the public sector. IT is a huge chunk of the procurement dollars spent by public sector entities. We have great companies in that area. Those would be three. Infrastructure providers. We're building a lot of infrastructure here in B.C. We have people and companies that know how to do it. There are lots of infrastructure opportunities I would think in Europe.

We focus a lot on tariffs, than what I would call kind of traditional trade barriers, but I think the bigger opportunities in agreements like CETA are potentially in services, government procurement, and investment more than just reducing tariffs, although that will be helpful as well.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I have one quick question for Mr. Maynard.

I know we're talking about breaking down tariffs internationally, and something we have talked about before is the interprovincial trade barrier. We worked with our provinces, the territories, and local governments. This is a historic trade agreement as far as even negotiations go.

Do you see the opportunity for the provinces to come together—and territories—to help break down those Canadian barriers so we can be more competitive internationally as well?

[James Maynard]

Yes. A lot of it is not explicit, but within the provinces, focus on excluding other provinces within their competitive process. It's one of those things where if you're from B.C., it's hard to do business in Ontario and vice versa. I think we need to find a way to work with the provinces and understand we need to build a Canadian economy, not just focus on regional performance.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I know Minister Moore is passionate about that as well.

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Pacetti, the floor is yours.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chair. Thank you to the witnesses for coming here. I'm from Montreal so I guess I had to come here, but thank you for actually coming before us.

I have a question for Mr. Finlayson. The first thing you said was the Canada-Europe free trade agreement is going to reduce costs to taxpayers. Your member companies...are we going to get a guarantee that the consumer is actually going to benefit from this, or are your member companies going to pocket the profits or the benefits? What's your feeling on that?

[Jock Finlayson]

Every profit-maximizing business will try to maximize its profit. That's how market economies work. When I referred to more competition, I meant in the Canadian marketplace. If we reduce trade barriers in Canada, whether that's with the Europeans or anyone else, there's going to be heightened competition in our domestic marketplace, which will tend to reduce costs and actually reduce profits in industries that might be earning unusual profits today. That's how open trade works.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I have limited time, but when you're talking about bigger markets, you didn't mean Canada. You meant Canada's going to have access to a bigger market. Wouldn't that also mean more competition and wouldn't that pose a bigger threat to Canadian companies?

[Jock Finlayson]

It will mean more competition at home, and not all companies will welcome that, but it will be good for the Canadian economy over time, and business in general will benefit from that. There may be some companies that don't, but that's not our problem.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay.

[Jock Finlayson]

The other side of it is in the procurement area, to the extent that we have more competition in public sector procurement markets in Canada. In principle, that should be beneficial to taxpayers. I'm a taxpayer; I'd like to see my governments be as efficient as possible in the procurement of—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

My next question has to do with the fact that we're out here in B.C. How much influence or how much effect will trade with Europe have on businesses out here in B.C.? Just to get out to the Atlantic provinces requires a six- or seven-hour plane ride.

[Jock Finlayson]

That's a very good point. I think Europe, the EU collectively, is our third- or fourth-largest commercial partner here in British Columbia. Like some other provinces in the west, we are quite heavily focused on the U.S. but also on Asia-Pacific. I don't think Canada-EU trade is going to transform the B.C. economy or anything along those lines. It will have a modest benefit. There are probably some other parts of the country that may have more commercial linkages than would the EU. We're part of Canada. We want to see Canada succeed even if we're not necessarily going to do quite as much trade with the EU as Ontario or Quebec.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay.

I have a question for Mr. Maynard. I have a tendency to agree with you in terms of smaller companies having a more difficult time exporting or even taking on the challenge, because normally they don't have the resources. I'm talking about personnel. They'll trade with the U.S. if doing that is something they're familiar with, but as soon as it starts getting a little bit more complicated, it's not necessarily that they don't have the brainpower, but they don't have the time. In your industry or your sector, is the wireless more focused on selling services or on selling the actual products or goods?

[James Maynard]

That's an interesting definition, because typically one of the challenges with our trade tracking is that we've tended to track hard goods manufacturers. If you look at a company like Nortel, which is actually tracking manufactured devices, in that case it's very little, but a significant part of it is software products. It's in that grey area. I'm sorry to be vague, but I would say the majority of the opportunities are in goods for Canadian companies in software and software services.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Is it easier for your member companies to sell to the bigger companies? For instance, Sierra is not a small company, but would your smaller companies not be in a better position to take partnerships with existing Canadian companies?

[James Maynard]

It seems as though in Canada you need to go and establish yourself in the international market before Canadian companies will give you the credibility to do trade here in Canada.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

That's interesting.

How's your sector in terms of dealing with Europe right now?

[James Maynard]

For us in the ICT sector, Europe's a huge opportunity. This is one of the differences: we often view trade policy through a resource lens or an advanced-manufacturing lens, and we see it as a mature market. Europe right now is making huge investments to increase its competitiveness around manufacturing and infrastructure. These are all net new opportunities for Canada. I think one of the real wins in the ICT sector is that we can see the opportunity for immediate, large amounts of growth whereby Canadian companies can literally go from 10 or 20 employees to 100 employees in two or three years.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Where's the competition in Europe in the ICT sector?

[James Maynard]

It's in Finland.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Is it in Germany?

[James Maynard]

There's a little bit in Germany, but mostly it's in northern European countries. Finland is amazing in terms of their ability to deploy. For a small country of five million people, they punch well above their weight class.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I have just a quick question. You mentioned 33% faster shipping of goods because people have worked with the centre of excellence. How do you determine that number?

[James Maynard]

We track them.