Industry Committee on Nov. 20th, 2014

[Julia Deans]

Oh, no, they don't get lost; they actually get sort of an added bonus. If somebody walks into the enterprise business centre in the city of Toronto, they will say, “This is wonderful. Here are the things we can do for you, but you should also be talking to Futurpreneur Canada because you can get financing and a mentor and you can use their supports, and then we can help you with some things that are maybe Toronto-specific.”

You have people working together, and we will pay a small fee to the agency that may be doing a lot of the heavy lifting with them on their business plan. We have that relationship with about 250 organizations across the country.

Then we have referral partners, which may be university placement offices. You're about to graduate and you say that you want to be an entrepreneur. They will say that you should go and talk to Futurpreneur Canada who can help you develop your idea and get yourself started. The relationship we have is defined in an agreement of how we're going to work together. The young person actually gets the benefit of our working together to help them.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Mr. Lavoie, I am speaking to you.

I believe it was you who mentioned that BDC is here really to fill a gap. I was talking to a businessman just the other day, hearing a great story how BDC was the gap financing that they needed to succeed, and that was wonderful to hear.

In your remarks, you were very careful to say how you ensure that BDC doesn't ever encroach on the banks' role, which is great because, if we're competing with the private sector, why are we giving taxpayers' dollars to you? That's good.

I want to hear in your view how do...because everybody isn't bank-centric in this country. Where I come from there are a lot of credit unions.

How do you work with the credit unions to make sure that the BDC and the Export Development group work with and not against the credit unions?

[Martin Lavoie]

I've never heard stories about the unions. It's funny you're raising that. The concerns I raised that I heard from my members were all related to financial federal chartered banks.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

In western Canada not everybody goes to a chartered bank; they often go to credit unions.

Maybe Mr. Hodgson has actually heard of it. Would you like to weigh in on this?

[Glen Hodgson]

I'm a long way from the ground now so I haven't heard any stories about credit unions.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Okay. I guess the point is that I think it's very important that we're filling a gap, and it's very nice to hear that you're taking care not to get in the banks' way.

[The Chair, Conservative, David Sweet]

We'll have to leave that at the gap filling right at the moment and move on to Mr. Regan.

It's good to see you back, Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman. It's a pleasure to rejoin the committee at least for this morning and to see that it's engaging today in some industriousness. You will recall I had some concerns on that point.

[The Chair, Conservative, David Sweet]

We're working assiduously here.

[Geoff Regan, Liberal, Halifax West, NS]

I'm delighted to hear that's been done, Mr. Chairman, and it's a joy to enjoy your chairmanship as well, may I say.

Thanks very much to the witnesses today for coming.

Let me start with Ms. Deans. I had the pleasure on Monday of participating in the program the “a day in the life of an entrepreneur”. I want you to know I spent a good part of the day undercoating vehicles at House of Auto Details in Bedford, Nova Scotia. That's a plug for them. I can't take a commission for advertising, but I'm happy to support that local business in my riding.

Would you like to talk a bit more about the history of your organization and why you changed the name from the Canadian business youth foundation to Futurpreneur?

[Julia Deans]

You just sort of solved that answer because you said the “Canadian business youth foundation”. We had a name that was hard to say. It was actually Canadian Youth Business Foundation.

We had the name Canadian Youth Business Foundation, a different name in French, a different acronym in English and French, and some words that didn't mean a lot to the people we were dealing with. We help people who are 18 to 39, and not too many 33-year-olds see themselves as youths. “Youth” is a bit of a dodgy term. I don't know about you, but I used to think it was up to 18.

We aren't a foundation, and we sounded like we were a bank. In the past, we worked only through agencies, and now we are also more of a retailer; you can come to us directly. We wanted a name that made some sense to the people we help, and one that worked in both French and English.

Futurpreneur Canada speaks to the future. It speaks to entrepreneurship. When we tested it with the people we want to talk to, 18- to 39-year-olds, 88% said that this sounded like an organization that could help them and that it's about building entrepreneurship.

To us, that was a home run. We changed the name in May, and it's been brilliant. I'm absolutely thrilled. My team is lifted, but most importantly young people say “I get what you do”. It doesn't really matter what older people think; it matters what they think. And we're pretty excited.

[Geoff Regan, Liberal, Halifax West, NS]

I don't see “youth” as a dodgy term.

I see it more and more—

[Julia Deans]

Not dodgy—misunderstood.

[Geoff Regan, Liberal, Halifax West, NS]

—as an enviable term.

[Some hon. members]

Oh, oh!

[Geoff Regan, Liberal, Halifax West, NS]

I think the chairman agrees.

[Julia Deans]

We should have extended it to 70.

[Geoff Regan, Liberal, Halifax West, NS]

No, you have a great name.

Would you like to talk more about the amendments to division 12 that you began to speak about earlier?

[Julia Deans]

I understand that BDC is in a position now to give guarantees to for-profit organizations—and my friends from BDC can correct me if I'm wrong—but not to not-for-profit organizations. We have the track record that allows them to have a high level of comfort in giving a guarantee for this purpose. They understand our operations extremely well, as they are our co-funder. They can provide that guarantee on a basis that's cost-effective for us and doesn't mean pulling money away from young entrepreneurs.

Without the amendment, they are not allowed to make that guarantee , and that means we'd be leaving $50 million in private sector funds on the table that could be going into the hands of young entrepreneurs.

[Geoff Regan, Liberal, Halifax West, NS]

Let me turn to Monsieur Lavoie.

On the issue of patent rights and the idea of the easing of the Canadian patent registration system to allow international registration, the question is whether that opens the door to patent rights holders who make excessive use of the rights that are awarded.

In other words, what is the situation in relation to patent trolls, which is a big issue, a big problem, in the U.S.? Would this lead us more in that direction? What measures are needed, and what measures are in this bill to prevent that from happening?

[Martin Lavoie]

There have been a lot of discussions about patent trolls in the consultations that Minister Moore has had.

From what I've seen from these amendments—I've seen a lot of international agreements, harmonization—to be honest, maybe it's going to help. I haven't looked at the specifics and I'm not a patent expert, but I can say that in the patent world out there, the more the risk, the less that people want to patent what they've discovered. We have some members who tell me that they don't actually patent. They think it's not worth it.

We all think it's the right thing to do; you should patent everything. However, out there in the business sector, some SMEs don't feel it is worth it.

I'm worried about it, and I'm sorry that I don't have a solution for that as yet. It's a conversation that we need to have. There is a lot of open-source innovation being done over there with the Internet right now. I just don't know that that is reflected in our patent system, to be honest.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Regan.

Now on to Mr. Daniel for five minutes.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you, Chair.

Thank you, witnesses, for being here.

My first question is to Futurpreneur, Ms. Deans.

One of the things you said was that your success rate for small business start-ups is about 50%. That seems pretty low, since you're already preparing the business plans and mentoring them, etc.

Can you make any comments on that?

[Julia Deans]

It's actually higher. Across Canada, the average five-year survival rate is just under 50%, and for our businesses it's between 50% and 60%.

Sometimes people don't want to be entrepreneurs; they get out of it. Sometimes the business fails. Sometimes they sell the business. There are a lot of reasons that people don't continue.

What I look at is the fact that they're repaying their loans as well, at a rate of up to 90%. That tells me that even if they're not in that original business, they have the economic wherewithal to pay a loan.

I wouldn't consider somebody who starts a business and gets out of it and then goes to work for Bank of Montreal or the House of Commons as a failure. They have those entrepreneurial skills. I see that as really exciting.

[Joe Daniel, Conservative, Don Valley East, ON]

Good.

Do some of these changes help entrepreneurs get well established and actually be successful in their entrepreneurship?