Thank you, Mr. Chairman.
The Canadian Services Coalition would like to thank you and members of the committee for their invitation this morning. In that regard, we have submitted a brief paper for the committee. I'll be speaking in terms of some overview remarks. I'm joined, as you noted, by Shirley-Ann George, who is the executive director of the coalition.
We also applaud the committee for its efforts and leadership in reviewing the vital importance of the service sector to the Canadian economy. We're confident that your final report will be as thorough and play as key a role as did your reference and report on Canada's manufacturing sector.
The coalition is a relatively new membership-based organization with a mandate to provide a strong and cohesive voice for the Canadian services industry. Our mission, in essence, is to seek the liberalization of service markets across the world as well as the removal of trade and investment barriers within our country itself.
As the committee is acutely aware, the Canadian economy is in the midst of a major transition, generally from one of production and manufacturing to one of services and ideas. To be sure, manufacturing will continue to be a pivotal source of economic opportunities in our national economy, but at the same time we have to also take hold and note of the recent trends, not only in our country but in economies around the globe.
A few statistics really paint the tale. Services are responsible for almost 70% of our national GDP. As of last January, they represent roughly 76% of all jobs in Canada. For the last 15 years, or thereabouts, almost 80% of new jobs were created in the service sector. At the same time, services account for only 13% of Canada's exports, with 60% of those flowing to the United States.
The economy will continue its transition, and therefore it's important for the Government of Canada to develop a service sector strategy. Given the vast scope of the service sector, something that was mentioned previously, a multifaceted approach would provide the best framework.
Among other things, a coherent service strategy would seek to develop skilled human resources, open markets that trade in investment and services, create innovation policies for the service economy, promote entrepreneurship, adopt flexible labour laws, and create a tax environment to support the service sector.
Given the diverse nature of the service industry, many of the benefits that flow from that sector are difficult to quantify and measure. However, many services bring with them a host of intangible benefits that often escape typical statistical measure. For instance, telecommunications ensure that information and knowledge are efficiently and economically disseminated; transportation enables the efficient distribution of goods; and business services, such as accounting and legal services, are essential in reducing transaction costs.
It's also noteworthy to add that services have a positive impact on the competitiveness of the manufacturing sector. Just last year, the OECD put out a report that essentially confirmed that fact. They found that the availability and quality of producer services, defined as services that enter directly into manufacturing firms as production and cost functions, can form the basis of comparative advantages in service-intensive manufacturing sectors and facilitate manufacturing firms to move up the value-added chain.
In terms of Canada's economy, it's clear that services are playing an increasingly important role. At the same time, they reflect and impact on the competitiveness of our economy. I would also suggest that the development of a service sector also impinges directly on the quality of life citizens have, not only in our country but in countries around the globe.
In the paper we submitted we offered seven recommendations for the consideration of the committee, and because of time I'm not going to go through them all. If I can, I'd like to quickly highlight three of them.
The first is the need to reduce barriers. In short, the key for Canadian services export growth is ensuring that our offerings are world-class through open and fair competition. By working to assist emerging market economies to reduce their barriers, Canadian service providers will be given new opportunities. Therefore, the Government of Canada, through its multilateral and bilateral negotiations, should endeavour to eliminate the non-tariff barriers that are currently inhibiting the trade of services to ensure that new opportunities arise and that all countries can take advantage of the benefits that are attributed to services.
This also applies to our internal trade barriers within provinces. The point here, Mr. Chairman, is that the government will hopefully continue, and redouble, its efforts to bring down the barriers between our jurisdictions that inhibit economic activity.
The second recommendation is in statistics gathering. Clearly services are much tougher to trace and document than goods. A truck of widgets crossing the Windsor-Detroit border is one thing; legal services crossing that border are something else. We hope your committee can encourage Statistics Canada to try to collect and disseminate better service-related data so that government will have a better foundation with which to cement future policy and trade negotiation strategies.
Our sister organization to the south, for example, has put out a report, which we provided to the chairman, that allows a breakdown state by state and by congressional district of services, by company, sector, and GDP, which I think can be a very, very useful legislative and government tool.
I see that my time is coming to an end, Mr. Chairman.