Evidence of meeting #43 for International Trade in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was strategy.
A recording is available from Parliament.
12:40 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Maloney. Your time is up.
We now go to the Bloc Québécois, with Monsieur Vincent, who is a member visiting from the industry committee. Welcome, and please proceed.
February 1st, 2007 / 12:40 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
Thank you, Mr. Chair. Thanks as well to my colleagues who have given me the opportunity to speak.
Good morning. I've been listening to you for a while, and you clearly have some experience in international trade. I'd like to know what you think are the three main factors explaining why we're not competitive with the emerging countries.
12:40 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
We talk about the competitiveness problem in our report. The low productivity that characterizes our country is another important factor. That causes problems for us.
12:40 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
There are a number of factors. We've considered approximately 13.
In overall terms, the barriers imposed here in Canada are, above all, what prevents us from becoming competitive. There are interprovincial barriers, but also international barriers, that is between us and other countries. That explains why there is less competition here in the country. The low level of competition here means that we tend less to want to innovate or try to do things differently.
I spoke with a group of entrepreneurs in Sherbrooke. Among other things, those people told me about growing pressures from China. For a number of years, they sold the same product solely to the Americans, using the same technology. It became a habit. This kind of strategy can no longer really meet our needs as a country.
These entrepreneurs are suddenly feeling pressure from China and are wondering what to do. In that sense, you have to have a strategy for investing in new technology, in innovation. For the government, the idea is also to help entrepreneurs seize new business opportunities in these markets.
Our innovation group has conducted an analysis with this in view. From what we've found, the government has a lot of Web sites that entrepreneurs can consult to identify potential markets. However, the interface between the individuals in the foreign market and these entrepreneurs is quite poor. We would do well to improve these relations in order to help entrepreneurs, especially small Canadian businesses, seize these new markets.
12:45 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
What do you think about the intellectual property problem? I know perfectly well — and we've talked about this for hours and hours — that products are developed by the industry, but that other countries violate intellectual property by developing those products in those countries and subsequently selling them in the Canadian market at lower prices as a result of the low wages paid to workers in those countries.
What do you think about that? Should we pass a bill to protect intellectual property?
12:45 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
We're already protected under the intellectual property provisions. That doesn't prevent these people from selling copyright elsewhere.
What is important is not to protect those rights, but rather to stimulate marketing in Canada in order to expand it. That's what we're lacking. We don't have an effective marketing strategy.
12:45 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
I'm going to go back to the intellectual property issue. Business representatives have told us that it wasn't worth the trouble to spend thousands of even hundreds of thousands of dollars in lawsuits against Japanese, Chinese or other companies. In their view, it's pointless to assert that they've stolen from us a product that belongs to us, that we've developed and marketed.
Do you agree on that?
12:45 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
I don't know how you interpret the word “stolen”.
12:45 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
I believe that, in a way, there could be an agreement on the sale of intellectual property.
12:45 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
I'm going to give you an example. Imagine you have a new product and, at a trade fair, people from other countries take three or four pictures of that product, buy one, go home and manufacture a similar, even virtually identical item and market it in Canada. What do you think about that?
12:45 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
That's another story. That goes on everywhere in developing countries: not in Japan, but definitely in China. We often talk about similar cases. We observe that this is a major international problem. Intellectual property is stolen — the term is appropriate here — and copied without any compensation for the development work done. This is a situation we should examine in international negotiations in order to find protective solutions.
We talked about negotiating a trade agreement with China. There are some items that can be included in the negotiating method. Under the North American agreement, for example, we also signed an agreement on the environment, as well as on the labour market, that is workers.
12:45 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
The Canadian government invests in industrial research and development activities and then takes the representatives of those industries to China on missions designed to make the research and development that it has financed pay in those countries. What do you think about that?
12:45 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
The idea...
12:45 p.m.
Conservative
The Chair Conservative Leon Benoit
You're out of time. That was the last question.
If you could, just give a short answer.
12:45 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
The idea of missions is to help develop markets to which our entrepreneurs currently don't have access so that they can sell their products rather than see them copied.
12:45 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
I'm talking about research and development. Let's suppose you've designed a product. You're taken on a mission and you're introduced to a partner who is going to manufacture your product.
12:45 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
Yes, that's part of the global production lines. All that is a strategy that must be... I'll give you an example, clothing production. Take the case of a shirt: the largest percentage of the price you pay for that shirt will go to the merchants and those who designed it. Those who make it up receive virtually nothing. That's today's economic reality. The same is true in the case of other products. So there's no problem.
12:50 p.m.
Bloc
Robert Vincent Bloc Shefford, QC
You don't see a problem? You talked about grey matter at one point. So we don't need more grey matter, if we're going to manufacture our products elsewhere in order to sell them in our market. We don't need people either; we'll never need workers. You're telling us that we lack labour, that we'll have to resort to immigration in 2012. If we design our products here with government assistance, have them manufactured in China and introduce them to our market, ultimately, we need workers to do that.
12:50 p.m.
Vice-President, Policy, Business and Society, Conference Board of Canada
You have to consider the comparative advantages between countries. With our grey matter, we can design products, but not necessarily manufacture them and sell them in Canada. We can come up with the design, the content, and production can be done elsewhere.
12:50 p.m.
Conservative
12:50 p.m.
Conservative
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Thank you. I'll be sharing my time with my colleague.
I just wanted to ask a question. We spoke about exporting, but we also want investment in Canada. We're talking about trying to improve border access, border crossings, and making the border more seamless. Down in the Windsor area, I know we're looking at improvements that we can make there.
The government has also made a huge announcement about investing in the Pacific gateway. I don't know whether you've had the opportunity to look at the Pacific gateway and what sorts of opportunities this might bring to Canada. I'm wondering if you could comment on what you see that doing for Canada.
12:50 p.m.
Senior Vice-President and Chief Economist, Conference Board of Canada
At this time yesterday morning, I was sitting there looking out the window at the Pacific gateway, because I was in Vancouver. I actually had a discussion very much like that with three or four players, people who are doing analyses of the B.C. economy and the Pacific gateway.
The question I have is whether it's big enough in terms of adequacy. There's a huge debate about Prince Rupert and whether or not there's actually economic viability in expanding. But I think the really critical question is whether Vancouver and the Pacific gateway, flowing across the national economy, will be of sufficient scale to attract our fair share of the trade compared to Long Beach, compared to Portland, compared to the expansion in Mexican ports. So that's one level.
The other risk, however, is what happened with the information superhighway. Are we all going to make a massive investment and end up with double the capacity that we actually need on an ongoing basis? There's a real scope for some debate around that.
Fundamentally, if we're going to attract our fair share, we have to make sure the investment is adequate. Of course, the true investment being made there is far beyond what the federal government has announced. The provincial government has invested billions of dollars. The private sector will too. One of the things we would like to see happen, in fact, is extending it across and seeing how we can actually build the entire linkage for things like cross-shipment of containers and taking some of the capacity away from the port, to ensure that we can become a gateway across the entire North American economy.
But it's a great question to ask, and I guess our question mark at the end of the day is whether or not it's actually big enough. There's no doubt in our mind that the investment has to happen. Otherwise, trade will be diverted to Long Beach, Portland, and all the ports along the west coast, including the expansion in Panama. The Panama Canal expansion offers another alternative.