Evidence of meeting #21 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.
A recording is available from Parliament.
4:15 p.m.
Liberal
June 16th, 2016 / 4:15 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Right off the bat, I will table the motion that has been circulated to the committee and ask for unanimous consent to move on it immediately, rather than having to go through subcommittee, which I believe I need to do, because it is not on the current subject at hand.
4:15 p.m.
Liberal
The Chair Liberal Dan Ruimy
Right.
Just to clarify, we have a notice of motion. Mr. Nuttall would like to move the motion so that we could debate it now.
Is there unanimous consent?
No.
4:15 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Just for the record, we moved another motion to request a meeting with Bombardier, which is being blocked again. I will get back to witnesses.
Ms. Peters, you mentioned something that stuck with me, the first being technological advancement versus manufacturing. I've had conversations recently with GM and others, and one of the things that's starting to stick out fairly bluntly is that while some of the larger corporate entities are investing heavily in innovation and areas where they believe the economy is going, I'm starting to question whether they are investing in the manufacturing arms of those places that will remain in this country?
Can you comment on that? I understand that we have manufacturers investing heavily in innovation, but what about the thousands of workers?
4:15 p.m.
Vice-President, External Relations, Communitech
That's a great question.
I am by no means an expert in the manufacturing sector. What I can say is that where we are dealing with manufacturing firms, or food processing firms, or what have you—those that are creating physical goods—the advantage they are finding to strengthen their business and to gain more customers is to do things more quickly, more efficiently, with fewer errors. Part of what the technology businesses are trying to add is value to other industries, whether it's manufacturing, agriculture, or health care. It's a matter of helping a particular business solve a problem or meet a challenge. I really can't speak to the labour question.
4:20 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Further to that, a recent study found that 40% of Canadian employees will be replaced by automation in the next 20 years. We are really seeing that starting to transpire in some of the heavy areas of services. For example, GM has invested heavily in their autonomous vehicle, and in Lyft. These innovations will essentially replace taxi drivers, Uber drivers, the horse and carriage, whatever. Do you have a comment on that? Did you see the study?
4:20 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Maybe I should send it to you. I'd love to hear your comments on it.
Victoria and Julia, the organizations you work with deal directly with new entrepreneurs. One of the conversations that Victoria and I have had, along with others from Startup Canada, especially with Rona Ambrose, is about access to capital. Do you think there is sufficient access to capital for new businesses or start-ups, especially in the manufacturing field?
4:20 p.m.
Co-Founder and Chief Executive Officer, Startup Canada
The question of access to capital is complex. Not everybody has the same access to capital, particularly as shown by the stats on women entrepreneurs. That is something I want to highlight. There are opportunities—and not just in the manufacturing sector, which is only part of it—around crowdfunding and how we regulate it and make it accessible and standardized across the country, so that our entrepreneurs can raise capital from friends, family, and others, both equity and non-equity based crowdfunding.
I would say that funding is available, but that there could be more. It's about removing barriers to funding and equalizing opportunities for funding. It's also about creating incentives for people to invest, so that Canadians can be investors in this space. I would say that looking at crowdfunding could be interesting, particularly for new-stage makers and early-stage start-up manufacturers.
4:20 p.m.
Conservative
4:20 p.m.
Chief Executive Officer, Futurpreneur Canada
I think it depends on the entrepreneur and their endeavour, and probably where they live in the country as well. We have an offering that allows them to get $45,000 in non-collateral financing. They can leverage that up and get more money. Can they get enough, depending on what the nature of the capital is? Maybe not. We do our best to help them and bring in other funders. It's not a black-and-white thing.
4:20 p.m.
Conservative
Alex Nuttall Conservative Barrie—Springwater—Oro-Medonte, ON
Tell us about BDC and whether it is meeting the demands? Do they need to be more free-flowing with capital? Do they need to get out of the boxes or products that they create?
4:20 p.m.
Chief Executive Officer, Futurpreneur Canada
BDC has an obligation to make money. Like other financial institutions, they're not a not-for-profit institution. It takes a lot of time spent with, and hand holding of, young entrepreneurs to bring them along and to get their business plans along to a place where they're not going to crash and burn in the first two years. That is a big thing. Our financial institutions aren't terribly well set up for that. BDC piggybacks on our loans, so they are lending through that, and that's going up. I think last year they were co-funding 60% of our loans, and that's a lot, and it's rising. When entrepreneurs need more money, we are also looking at how we facilitate, grab hold of them, and give them more money.
It's a work in progress.
4:20 p.m.
Co-Founder and Chief Executive Officer, Startup Canada
On the topic of inclusivity, and looking at BDC's loan rates to women entrepreneurs and indigenous entrepreneurs, it's not reciprocal. It's not at the same level that we're seeing with other types of companies, founded by males, for instance—and it's blatant. It needs to be fixed now and yesterday. I think that looking at the opportunities there is really important.
4:25 p.m.
Liberal
The Chair Liberal Dan Ruimy
Thank you very much.
We're going to move to Mr. Masse.
You have seven minutes.
4:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
I'm going to carry on the questioning with regard to the BDC. I've been a Member of Parliament for 14 years and have met with the BDC a few times. They can't really provide you with a lot of information. They claim it's corporate entitlement in terms of disembarkment of agreements, and I get that to a certain degree. You could sign a confidentiality agreement, though, or you could even get some generalities. The meetings have been cordial, but I can't say much of what they do in my community, to be frank. All I can tell you is that I don't have anybody saying how wonderful it's been to have had BDC in the community.
We've had them testifying here and saying that they're going to be more open and more accessible. I see their commercials on TV and I get angry because they now focus on how they're going to be spending money on start-ups and so forth. The reason I get angry is that I'd like to know how much money they spend on commercials versus access. I have done some research, and I'm glad to hear there are other acknowledgements that BDC is at least somewhat representative of the Canadian mosaic with regard to its participation in start-ups.
I recognize that a role they should be playing when we have gaps in the system right now in financing from traditional lenders is that they should be more assertive and have a heightened response to risk, to a certain degree, given that they have these advantages. It does fall within the national spectrum of some of the things we're trying to accomplish in general in Parliament.
I'll turn it over for comment.
What would you do to help to bring accountability, which in my opinion is necessary? It's interesting. I see their big, shiny buildings, but I've basically been a social worker in the past on the streets helping people with disabilities to find work and training them on site. I don't see the same things happening from the big towers they have. I'm sure that after making these comments I will get calls from the BDC, which is fine, because this is how I feel.
I'm just looking for a model, or at least an accountability or measurement about how they can actually change this and do what, in my opinion, is necessary. I think they finally recognize it, many years and the many times I've had them in front of this committee.
4:25 p.m.
Vice-President, External Relations, Communitech
On the ground, in the facility day-to-day with BDC, we've been seeing more of them in the last four-or-five months. I find that encouraging. I understand the concern and frustration. I think there really has been a shift in the intention to be more accessible and to have their feet on the ground in local ecosystems. Certainly, and this is anecdotal from our perspective, we are seeing more of the BDC folks.
One of the critical pieces for them is partnership, because when they are a follow-on investment to a program like Futurpreneur, then they're adding their weight and their finances to a set of founders and small business owners that Julia's team has already done due diligence on, is coaching, and is mentoring. I think those partnership mechanisms are one good way to get more dollars into companies more quickly.
4:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
I like that, but on that, just briefly, is that, “Yes, I want to see them more in those partnerships than just lurking about”?
4:25 p.m.
Co-Founder and Chief Executive Officer, Startup Canada
Those are great comments, Avvey. Agreed.
Accountability also comes from representation, I think. If we look at the BDC board of directors, we might think about making sure it reflects Canada's mosaic. We were talking with Mr. Longfield about connecting the dots and communications, and I think that's exactly what it is. BDC has the potential to be a transformative institution in Canada if we can just connect the dots and leverage them effectively—in the ecosystem even more so.
It's contentious, but I would suggest looking at EDC and BDC. I did work for Industry Canada, and I was responsible for the BDC legislative review. Taking at look at their roles and responsibilities, particularly as BDC goes global, with EDC being global, is really looking at how we're duplicating, and maybe creating some complementary alliances in looking at why there are these two crown corporations and so on.
As well, when you talk about entrepreneurs, you might be thinking of the hipster guy with his laptop, but remember, there are people who choose to be entrepreneurs and there are people who have to be entrepreneurs. If BDC is the bank for entrepreneurs, we need to think about how they're working with every entrepreneur.
I'll just leave it there.