International Trade Committee on March 23rd, 2015

[Jim Reynolds]

If I can I'll narrow down your question to companies that are already export-ready or are exporting.

[Don Davies, NDP, Vancouver Kingsway, BC]

Sure.

[Jim Reynolds]

It's access to capital. We're not using the EDC. We're a cashflow positive self-funding company and we don't have partners or VCs or anything like that.

[Don Davies, NDP, Vancouver Kingsway, BC]

The same answer as Mr. Lang, really. It's about access to capital.

What about SMEs that aren't exporting? We have a target set of how many we want to get ready. How do we accomplish that?

[Jim Reynolds]

I've been thinking about that for some time. The programs like Go Global are starting to go in absolutely the right direction. I think, though, that if you get down to SMEs that aren't exporting, you're almost addressing those on a one-by-one basis. Those are very personal decisions those companies have to make. So to target and bring your organizations down to personalized services and communications, they'll get those out.

I'd wrap it up by saying SMEs that aren't exporting don't know about what the government offers, don't know about TCS, the trade commissioner service. Get that message out.

[Don Davies, NDP, Vancouver Kingsway, BC]

I have 30 seconds and I'll ask a quick question.

What role does investment play? This Conference Board report came out today, and it talked about Canada lagging behind the rest of the world in our investment profile, particularly in Asia. They pointed out that investing in these markets is a way to establish a market footprint and build relationships. Is there a way that might help expand Canadian investments in some of these markets?

[Jim Reynolds]

I'll take the technology sector as an example. If we were there and we had offices, technology presence perhaps from the TCS or whoever's there, that would help a lot.

[The Chair, Conservative, Randy Hoback]

Thank you, Mr. Davies.

We'll go on to Mr. Allen.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Mr. Reynolds and Mr. Lang, thank you for being here.

Mr. Reynolds, I'd like to start with you and pick up a little from where you just left off in the Go Global workshops. About 1,200 companies or so have participated in those so far. With that in mind in your metric of getting so many per day, eight to nine exporters per day, I guess getting some of them used to that, to use Go Global, would have to be a positive impact as a way to start getting those companies?

[Jim Reynolds]

It's been very positive in two ways. At the session that was held in Waterloo back in late January, Minister Fast made a great 40-minute presentation about why it's important to export, and it was all focused on SMEs. So the SMEs in the room came away saying, boy, the government is targeting us.

Second, many large organizations were also in the room. There were bankers and university people. I met somebody who introduced himself afterwards who was from a big trading organization, in the $20 billion to $40 billion a year range internationally, and they are looking for SMEs.

So there's that message of going out to the SMEs, going into some of the smaller markets, rather than hitting Toronto and Vancouver. Go Global is hitting some of the smaller markets, and I think it's very good that way.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay, thank you.

You talked a little bit about the trade commissioner service and the new staffing and program resources that were rolled out by the Prime Minister last week, but you also said that there's some disruptive change going on here because of all the new markets. We're used to operating in basically a handful, and now we've expanded that. When the trade commissioner folks were here a couple of weeks ago on this, I asked them how nimble they were. Obviously, you wouldn't have every expertise in every trade commissioner service all around, but they'd have to be fairly fluid in terms of how they could access the experts in those areas and the markets and those types of things.

Are there areas, as part of this expansion, that the Government of Canada should really be looking at in terms of making the trade commissioner service more nimble so that they can react to this disruptive change?

[Jim Reynolds]

I'd say, yes, there are. In our local area, there's one trade commissioner, and that trade commissioner can't go out and meet with a hundred different SMEs, otherwise they'd be overwhelmed. If you've got programs coming out of Ottawa that generate an awful lot of interest on the street, you've got to have a number of trade commissioners there who can handle that uptake and capitalize on that interest. If you get SMEs interested and then you can't follow through, then you may lose them. That would be one thing.

The budgets of the trade commissioners are primarily set right now. I'm not sure how the additional funding, the other $42 million that's going to be available in increments of about $8 million a year, is going to be deployed, but it's important that it get deployed most effectively. Perhaps one of the suggestions is that they take a look at where they deploy their resources. Is it here or offshore?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Having done some work in the enterprise resource planning software business in the past in a previous life, I know that when we were working between Canada and the U.S. it was pretty easy, with the free trade agreement and other things, for people to move. That's one of the areas where I think we have tremendous potential in terms of people and resources doing work in other countries.

Do you partner with other major ERP platforms as part of the work that you do in manufacturing, and have you seen any challenges in moving people?

[Jim Reynolds]

I think, first off, given your background in ERP, the answer to your question as to whether or not we partner with them is no, but we'd like to. The software that we have is supply chain software that automates the supply chain inside the four walls of plants. We pick up where ERP solutions leave off, and then we take the complex deliveries throughout, say, any manufacturing plant and we synchronize those so they get the parts to the line, where they're consumed just in time. Our clients have had 5% to 10% productivity improvement in the eight-hour shift, without adding extra resources, and they've reduced conveyance teams by up to 20%. There's a compelling justification for it, so we're at the point of looking for some partners to take the software beyond. But we don't compete with ERP companies. All the major ones don't have this particular type of process and software.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay. You have your own professional staff within your own company—

[Jim Reynolds]

Yes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

—who obviously are exported as well, as part of the process?

[Jim Reynolds]

Yes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay, thank you.

Have I got a minute and a half left?

[The Chair, Conservative, Randy Hoback]

Yes, about that.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay.

Mr. Lang, I'd like to go to you with just a clarification question on your commercialization and the financing of that. I think you said you got some diversification. The Atlantic Canada Opportunities Agency does the same kind of thing with the business development program loan. You also talked about SDTC being in that a little bit as well. Do you see them partnering better going forward as part of this commercialization piece?

[Neil Lang]

I think the challenge in a partnership, for a small company, is knowing all the different opportunities that are available. Even when we go back to Go Global...that was the first time I had seen all the major institutions in one place at one time.

The different opportunities are all there, but it's a question of getting one point of access to guide SMEs through the processes and through the opportunities and the things they might need.

In our case, SDTC and Western Innovation were quite different. SDTC was about putting an example project out into the market—putting a large battery system into an electric ferry. The wind financing is more about our continued product development at an in-house level. The two are complementary.

Do they work together? I guess the more support you can focus on successful companies, the more likely they are to be successful. If the funding is spread very diversely, then there's a risk that it doesn't benefit anyone.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you for that clarification.

Thank you, Chair.

[The Chair, Conservative, Randy Hoback]

Thank you, Mr. Allen.

Ms. Freeland.

[Chrystia Freeland, Liberal, Toronto Centre, ON]

Thank you, Mr. Chairman.

I'd like to start with Mr. Lang.

I won't ask you to brag about your great west coast weather. I have my dad visiting from Alberta this week, and I've already heard enough western bragging about our terrible climate.

I was really interested in the point you made about the difficulty in commercializing our research in Canada. That's something I hear about a lot. Can you talk more specifically about what we're not getting right in that space and what we could be doing to do it better?