International Trade Committee on May 6th, 2014

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

My other question would be, at what point does a country come off the list? You mentioned Russia because of certain difficulties. Is that a criteria, where a country should be removed from the list, or do we look at environmental or labour? We had discussions with Honduras, with human rights for example.

What's your view? What's your institution's view on that?

[Daniel Schwanen]

I certainly didn't say or mean to imply that Russia should come off the list. I was just saying that it's not because you're on the list that all of a sudden it's going to be a great market for the next two years, and it's not because you're off the list. Actually, the people in the trade commissioner service assured me that if you're not on the list and you have an opportunity, we'll still help you.

It's just a cautionary note to say that theses things come and go sometimes. There are quick changes and opportunities, up and down. I didn't mean to criticize the list as such, only to say that I was very happy it explicitly said that it was flexible and would be reviewed as circumstances—

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

In general then, you would promote trade with any country, whether on or not on a list, and not even worry about their political environment? To include some countries like Venezuela or Iran, not that they are necessarily the same, but with different circumstances, different instability let's just say—you would have no problem with that?

[Daniel Schwanen]

No, I didn't say that, not under the current circumstances.

What I'm saying is that, as we've seen in Russia and other places, political circumstances change. We need to be ready to change with those circumstances. That really was my point.

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

That leads to 3.0, right? We have to be ready for 3.0.

Mr. Curtis, I have a question for you.

Thanks for the presentations. This is quite helpful. We sometimes don't get them on time.

You state that we need to focus more on domestic economy. I have a lot of questions I can ask, but this one was a little bit more interesting. You say we need to focus more on domestic economy, but you didn't really expand on that. I have my own theory on that. I have limited time, but could you expand on that?

You go on to your next paragraph, saying we're also not increasing our trade as we should be, so I'm tying the two together. Is that where you're going with this?

[John Curtis]

To some extent, I was responding to your vice-chair, saying that education, infrastructure, labour market development, intellectual property reform and revision, and the factors that lead to innovation, all, I think, should be seen as part of the ultimate trade agenda. I think I used the expression, Chair, in December that trade is an imperial subject. It touches literally on everything, especially for a country like our own, so that's what I was getting at.

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

Should we be expanding our domestic supply to have a vision for the future so we can trade, then?

[John Curtis]

Yes. Trade and invest—

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

Which comes first, though, the horse or the cart? That's the question. Do we start by expanding our supply before we are even able to get into market? Or do we wait until we go into the markets? That's where the problem is. We're not able to get into those markets for various reasons.

[John Curtis]

I think the former. I think on the whole we haven't been restricted in getting into markets. There aren't that many obstacles. There are issues like exchange rates and things. I think the problem is that the country as a whole is not as “modern” as it once was. Investors aren't as attracted because of our problems, for example, of getting around Toronto. It's much more pleasant to be involved in a country that's working, for example, than it is in others.

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

I don't know of any big cities where it's not difficult to get around. Some of—

[John Curtis]

Some are better than others. Mind you, I know Vancouver traffic jams.

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

No, but not including Canadian cities. There are a lot of cities—

[John Curtis]

That's true. I guess my central point is that the domestic economy and the international are ultimately all one. How successful a country is in participating in the international marketplace—trading, investing, and innovating—depends ultimately on the strength of your domestic economy.

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

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Mr. Cannan.

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

Thank you, Mr. Chair.

Thanks again to our witnesses for being here. Thank you for your comments.

It's the first meeting we've had on this very important document. I was thinking, instead of the analogy of 3.0 or 4.0, it could be the 43.0 because when I started on the committee in 2006, we had trade agreements with five countries, and now we have 43. It's emerging, and the commitment to expanding our trading partners shows how serious the government has been, and is, about opening new markets.

To the chair's opening comments, do we continue with our biggest ally, the U.S., and focus there or expand? I don't think it's either/or; it's both. We need to continue. I was reflecting that when I graduated from business school in 1981, the dean of the faculty was saying, “You have to go into international marketing”. I'm wondering now, from my educational perspective....

It's easier to go to the United States where the infrastructure's in place. How many decide to go that route because they don't want to take that risk? We're risk adverse by nature as Canadians, so maybe you'd like to expand on that. That would be my first question, please.

[John Curtis]

Is that directed to me?

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

Both of you.

[John Curtis]

I guess, trying to answer a couple of points that have already been made, specifically, trade and the success of the domestic economy depend not only on the economics, they depend on cultural behaviour. To answer your question directly, I think risk taking, which is part of the Canadian culture. I'm talking in the private sector. They always say this is the case. They are not prepared to risk as much as entrepreneurs in other countries. I've talked to individual Canadians working now in Dallas who've come from Edmonton, Boston, and elsewhere. There's a succession of anecdotes. But the point is that they all say, “The reason I, as a 35-year-old, left Edmonton for Dallas was because people are willing to take risks here, which they weren't in Canada”. So, yes, the answer is we're not prepared to undertake the risk.

I go on and make the point, to some extent in the trade area I think government, your government included, has done a bang-up job in opening markets. I think the private sector, speaking generally, has not bellied up to the bar as much as it should have.

[Daniel Schwanen]

I don't have a lot to add. I think we are living in a pretty nice country with a big market next door. I think that just overwhelms the thinking sometimes when you start a business. We still have interprovincial trade barriers, and all that kind of stuff, to overcome. I agree with John; I think it's a mindset. We have to understand the national economy. Our well-being is integrated with that of the global economy. That means we have to actually—

[John Curtis]

Take some risks.

[Daniel Schwanen]

—go out there, take some risks, and find the financing to do it. That can sometimes be an issue, and that's addressed in the document as well.

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

Interprovincial barriers have always been a big pet peeve—I come from the Okanagan—when we've tried to get our wines into Ontario. I know the Canadian vintners are on the Hill today actually, so my colleagues around might hear from them.

I have one other quick question.

[The Chair, Conservative, Rob Merrifield]

I'll let you do that.

Just to answer some of your questions, we're hearing from the private sector next panel, so you've cued them well.