Industry Committee on May 30th, 2013

[Paul Preston]

I did read his article in The Huffington Post. I do know some of the words that were written by Mr. Geist.

I think it's a complex set of issues. There's certainly improvement that can be made, but it's a complex set of issues in Canada. We looked at the issue internally. We think there are elements of culture in Canada in how we operate the systems that come into play.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Preston, do you feel, though, that the government could set the pace, could play a leadership role?

I was mentioning in our previous meeting that it's to align the planet so that everybody will be on the same page, and to just give leadership in making sure that the federal programs are aligned, that business is on board, and that everybody is.... Right now, we seem to see a piecemeal approach—small programs that get cut off, programs that are working well or are becoming well known. We have heard other testimony saying, hey, we didn't know there was this fabulous program, especially for the SMEs, the small and medium-sized businesses, and then the program, boom, is cut off, finished, because sometimes it lacks promotion, and it takes time.

I want your feeling on the leadership role that should be taken to have a strategy, and a long-term strategy, to align everybody alongside partners with business and things like that, that will correspond to business needs, and to have good communication there.

[Paul Preston]

I think your last point was very important. It is more about government partnering. I think government needs to set the stage, to set the ecosystem to help business be successful, but ultimately, they need to be the drivers of their own success. Certainly, there are areas for improvement in coordination and communication. A lot of different programs are offered through different government departments, and we hear from SMEs that we talk to that it's very difficult to navigate. Improvements have been made in that regard, and there are those definite winners, like IRAP and some of those programs, that industry speaks very favourably of.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Does the Conference Board have any thought about the spectrum auction that is coming up? Do you feel it is going to help e-commerce and digital adoption for SMEs? Do you think the conditions that are put in the spectrum auction rules will create a favourable condition for that alignment?

[Paul Preston]

I haven't read the specifics of the new auction. I was more familiar with the public safety broadband auction from a couple of years ago.

I think if it is done right, and if you can bring down total cost of usage for SMEs—because cost tends to be a big concern for a lot of SMEs, so if you can do anything that brings down cost for them and that lowers complexity and offers them more viable solutions, it would be an improvement.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

You mentioned that you are a think tank. We were looking for a report that was related a little to our subject. Has the Conference Board presented any reports regarding a digital strategy and something that would be of value for Canada as far as a digital strategy that could be proposed by the federal government?

[Paul Preston]

We had a great report about a year and a half ago that looked at how Canadian SMEs can really access global markets through digital technology. There were certain best practices that came out of that. I can certainly provide the title and a link to the report, if you would like that.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Certainly.

[Paul Preston]

One of the biggest things they mention in that report is the need for a Canadian organization, for example, to have a visible online presence that's well respected, so that other countries can look to it and recognize it as a valuable business. You wouldn't just open up your business and say you're going to work globally. You need to have an established, strong brand presence.

That was one of the key findings of that report. We've done other studies on that in the past, but that's the most recent.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

I think the committee would be interested in having a link to the report related to that subject, and actually some recommendations regarding a digital strategy. We could start that conservation, since it doesn't seem to be moving yet from the government side, so we would know exactly what the strategy would be for that.

Mr. Collins, you are shipping across the world and so on. How do you organize this logistically using ICT?

[Gary Collins]

We use a proprietary system, which we built over the years. It's internal to the company. A number of the original people who founded the business, including Mr. Hardy, had a background in logistics. They actually came from the courier business. In the case of Roger, he had been a contact lens salesperson and had worked in logistics. He saw the two and put them together and said there was a real opportunity to innovate in that sector.

We have our own proprietary system. We have a shipping department that is mostly automated. We work with a variety of shippers globally, including Federal Express, Canada Post, the U.S. Postal Service, and Purolator, right across the sector.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Collins and Madame LeBlanc.

We now go to Mr. Warawa for seven minutes.

[Mark Warawa, Conservative, Langley, BC]

Thank you, Chair.

Thank you to the witnesses for being here. I want to thank the Conference Board of Canada for the work they do and for being non-partisan. I think it's very important that we have that perspective. The government's responsibility is to create an atmosphere in which business can thrive, be prosperous, and create jobs, so focusing on the importance of the Internet and of ICT for small and medium-sized businesses is so important.

First of all, I want to talk to Mr. Collins. You come from one of the most beautiful parts of Canada.

[Gary Collins]

I'm from one of ten provinces that are beautiful, yes.

[Voices]

Oh, oh!

[A voice]

You're good.

[Gary Collins]

Not to mention the three territories.

[Mark Warawa, Conservative, Langley, BC]

We come from the same part of the world.

[Gary Collins]

I've been there.

[Mark Warawa, Conservative, Langley, BC]

You've shared your story with Clearly Contacts.

I started wearing glasses I think when I turned 25, maybe 20. My eyes progressed and the glasses needed to be tweaked and changed into bifocals and then trifocals. Over the years, it has been a challenge to get a set of frames that would fit. I would have my eyes checked and then I would try on different frames. Some of them would be too long along the side, some would be too wide. I have a large bridge on my nose, and to get a frame that would fit, that was on the rack, was very difficult.

When I was told you could order them online, I found it very helpful to be able to find the frame. I put in the parameters of what I'd need with those sizes—the bridge size, the width size—and suddenly those were all the frames that came that would fit on my face and be useful to me. You do not have that when you go to the mall or to your optician or whoever to try to get a pair of glasses. You have a much greater opportunity to choose a set of glasses. That's what I really appreciated.

I did buy a set of glasses and it was quite nice, and there's your commercial.

[Gary Collins]

Thank you.

[Mark Warawa, Conservative, Langley, BC]

I was very happy.

You are expanding into a global market. We live in the same part of the world, where you have the United States competing in the Vancouver market, and yet the Canadian market does not aggressively go after a larger market south of the border. It's always baffled me why that is not happening.

About eight years ago, a study from the Centre for the Study of Living Standards—I'm sure both of you are aware of that study—highlighted that fact, that the U.S. is moving forward more quickly and adopting these new technologies more quickly than Canada. Why is that? I don't know if you want to refer to that study, if you have your own opinions, but I'm surprised that, as business entrepreneurs, Canadians are not grasping....

Mr. Collins, you've done it yourself, but why are other Canadians not doing what you've done?

[Gary Collins]

I've spent time in elected public office and I've spent time in business. I have found it fascinating trying to relate public policy at the board table level in business and trying to relate business to political leaders. I sometimes feel as if I'm translating ancient Greek into Mandarin or something. They have very different environments and different cultures, but both manage risk.

I think when business manages risk, they look at what they have. They're always trying to grow their business, and trying to do that in a profitable way. They look at the risks that are available to them or the risks that are in front of them, and then they determine how to allocate that capital.

In the United States, you can amortize that investment over a much larger market. The U.S. market is immense. It's the single largest market, I guess. The European Community is very large as well. I think that's why U.S. businesses see the upside of that capital investment and that risk-taking to be immense. The downside is you can only go to zero. In Canada, it's often a challenge to grow a business, given our interprovincial non-tariff trade barriers. We sometimes downplay that impact, but it's often very difficult to do business across jurisdictions in Canada.

If I had one thing to advise or to suggest as a public policy initiative.... On the books of 10 provinces, three territories, and the federal government, there are, literally, thousands of pieces of legislation and millions of regulations. The vast majority were drafted and implemented before the Internet existed. Given my time in public office, one of the things I found most advantageous was to make sure that we made it easy for business to take their capital and invest it and minimize their risk. One of the ways we can do that is to make it easier to do business and to modernize our regulations and our legislation.

So I think one of the simplest things—I shouldn't say it's simple, it's very difficult, but one of the biggest things that government could do to advance Internet technology and the risk-taking by entrepreneurs that needs to happen in the economy is to make sure an obstacle is not being created just because we haven't got around to modernizing the legislation and regulations.

[Mark Warawa, Conservative, Langley, BC]

Very good.

Mr. Preston, could you comment on that study from the Centre for the Study of Living Standards?

[Paul Preston]

Yes. It's interesting why Canada would compare differently to the U.S. Andrew Sharpe and CSLS came out with another report related to that today. I haven't had a chance to read it, but if you look it up, you might find it.

We've speculated that because a lot of development came out of the U.S.—through Silicon Valley and other regions—they had a natural inclination to go that way. We think maybe there's a cultural thing in Canada where we don't adopt ICT as readily. We're a resource economy. We have a sparse, spread population creating those innovation clusters. We just don't have the same scale as the U.S.

We think it could be a combination of any or all of those factors. But certainly over the last three to four years, with the dollar being so strong, we've seen an uptick in machinery and equipment investment by Canadian firms that are buying equipment abroad. A good portion of that is ICT technology. Time will tell what impact that will have.