International Trade Committee on Feb. 27th, 2007

[The Chair, Conservative, Leon Benoit]

Good morning, everyone.

As you all know, this committee has been examining Canada's international business policy, what obstacles stand in the way of improved trade and investment ties around the world, and what policies are needed to achieve those goals.

We will continue today in that vein, with witnesses from the Canada-Arab Business Council. We have Dwain Lingenfelter, the chairman and CEO, who is vice-president of government relations of Nexen Inc.; David Hutton, the director general; and Paul Mariamo, who is senior vice-president, Middle East, of SNC-Lavalin Group Inc.

Gentlemen, we've discussed your program here today. Please go ahead and make your presentations as you have planned. When you've finished the presentations, we'll go directly to the questions.

Thank you for being here this morning. I'm looking forward to this meeting very much.

[Dwain Lingenfelter, Chairman and Chief Executive Officer, Vice-President, Government Relations, Nexen Inc., Canada-Arab Business Council]

Thank you very much, Mr. Chairman.

Thank you for inviting the Canada-Arab Business Council here today to participate in the committee's important review of the opportunities and challenges that Canada and Canadian businesses face in the increasingly competitive and rapidly changing world of international business and trade.

I'm joined here by Paul Mariamo from SNC-Lavalin--Paul, thank you for coming as well--and also David Hutton, who is one of our directors general with the Canada-Arab Business Council. David, thank you for being here and helping out today.

I'm going to follow some notes, Mr. Chairman, because I gave them to the translator, just to try to keep from having too much confusion.

I just wanted to start by saying that we had been asked to focus on six countries from the Gulf Cooperation Council, or the GCC, which is comprised of Saudi Arabia, Kuwait, Bahrain, Qatar, UAE, and Oman. We will also speak to Yemen, which is an associate member and will likely be asked to join the GCC in the foreseeable future.

I should note, Mr. Chairman, that while the GCC is an enormous growth potential for Canadian businesses, there are many other trading partners in the Arab world that also enjoy and have been enjoying spectacular growth. In the Maghreb, Libya and Algeria are certainly examples of that kind of growth.

Now, our message to you this morning is a simple one, and that is that this region is important to Canada. As the minister said in addressing the Canada-Arab Business Council recently, it is in fact a very important part of Canada's future.

As I mentioned, I have with me today Mr. Paul Mariamo, the senior vice-president of the Middle East for SNC-Lavalin, and David Hutton. David served most recently as the ambassador to the UAE, up to September of last year. We are pleased that he is working now with Rick Mann, a former ambassador from Kuwait with our council, and they add a lot of weight to what we are attempting to do.

The Canada-Arab Business Council will celebrate its 25th anniversary next year as an organization of Canadian business leaders active in the region. The Canada-Arab Business Council was established by a group of business leaders in Toronto and Montreal in 1983. They saw a need and the opportunity to build closer business relationships with the Arab-speaking world and Canada, and we continue to make modest steps.

We have about 85 members at the present time. A lot of the leaders of Canadian companies are involved with our organization, and we are active in all the provinces. Our board includes representatives from all levels of government. I should note that the Canada-Arab Business Council is non-political: our business is simply the prosperity agenda.

The Canada-Arab Business Council is committed to sharing its business knowledge and to developing serious business opportunities for Canadian companies that have interest, commitment, and to some extent the financial capability to establish a business presence in the Arab-speaking world. Our organization organizes missions to the Middle East, and it also hosts in-country missions coming from those countries.

I want to refer to that, and I think Paul will be referring to that.

Just on that point, I think it's hugely important for the Canadian government and members of Parliament to realize how many hundreds of these groups and parliamentarians come from these regions and how little we go back. The perception in many of those countries is that Canadians are disinterested because we don't send our legislators and members of committees like this to those areas of the world. I think we should really analyze how many of them we invite to Canada. There needs to be a counterbalance of elected members, not just business people, going back to those regions to get the proper results.

On Tuesday, February 13, as I mentioned, the Canada-Arab Business Council, together with the dean of the Council of Arab Ambassadors--that would be the UAE's ambassador, Al-Suwaidi--hosted a gala dinner at the Museum of Civilization, and Minister Emerson gave us his views on the business opportunities in the Middle East and North Africa, the MENA region, which I am very pleased to say reflected our own ideas, and he referred several times to a document released last November, “Advantage Canada”. I think it really needs to be looked at as a blueprint, because I think many of the ideas in “Advantage Canada” should be and could be implemented in order to build this relationship.

Earlier that day, February 13, the Canada-Arab Business Council and the Department of Foreign Affairs and International Trade co-hosted a conference on the Canada and Arab world business opportunities in 2007—and I want to thank David for all the effort he put into it. Unfortunately, I was away, but I understand that day went very, very well, and we hope to replicate that next year in February when we have our silver anniversary gala here in Ottawa.

I've taken time of the committee to briefly describe some of the workings of the Canada-Arab Business Council in order to put a marker down about the role of the councils and trade associations in promoting Canada's trade and investment concepts. In no way do I think we have found the only way to do business or that we're the only alternative. In fact, I think we operate at a much lower level than we should and could. However, we do believe that business associations play an important role in our trade relations, and with the cooperation of government in doing more things in partnership with government and industry, we can do an even better job.

Two years ago, almost to the day, David Hutton and I addressed the subcommittee on international trade on the subject of trade and economic opportunities in the GCC, and what we said then is still very relevant. We are grateful for the opportunity to reinforce that message here today. The GCC offers Canada one of the best, perhaps even the best, opportunity for greatly expanded trade and economic relationships in the world.

I just want to point out a few statistics, because I think they're relevant and I think they make the point.

The GCC is a billion-dollar-plus export market for Canada and has been for several years. In fact, it has grown by 90% in the last five years and is now the 17th largest export market. With 50% of the world's energy reserves, it is now the 17th largest economy. It's interesting to note that during that same five-year period, Canada's exports to China grew by 13% as compared to 90% to that region; exports to India, by 59%; and to Brazil, 15%. Our exports to GCC are greater than they are to India, Brazil, or even Russia.

Canadians are remiss in not taking a greater advantage of the unique historical opportunity afforded to us in building a stronger relationship with this important region. Collectively, we need to consider fully why the region is not being given the priority and the treatment that even a cursory look by economists would confirm it merits. We look forward to the discussion on this important point.

I want to conclude my remarks and ask David Hutton to say a few words, and then Paul Mariamo will give insight into his company's workings and some of the issues that he sees.

David, I turn the floor over to you.

[His Excellency David Hutton, Director General, Canada-Arab Business Council]

Thank you very much.

Thank you, Mr. Chairman. It is indeed a very great privilege for me to meet with you and your colleagues this morning.

In the next few minutes I'd like to briefly build on Dwain's introduction by outlining some of the conclusions that emerged from the Canada-Arab Business Council-Department of Foreign Affairs Conference on Canada and the Arab World, Trade and Investment Opportunities 2007, which was held just a few weeks ago. Before I do so, let me make several very brief observations. I'm confident that each group that has been asked to address your committee has offered a very similar message--our region, or our country, should be accorded a higher priority by the Government of Canada. We will do the same, but I most sincerely believe that we will do so with stronger facts and with stronger figures. It seems it's often hard for our country to recognize its own vested interests, and the work of your committee is very much appreciated.

During my four-year posting as Canada's ambassador to the United Arab Emirates, our trade increased by over 250%. I should have left that posting with a feeling of accomplishment, and indeed, in many ways I did, but I would be fooling myself if I did not confess, Mr. Chairman, that I personally felt it could have been and should have been a 500% increase during my watch.

The gross domestic product of the Gulf Cooperation Council, the GCC, was $725 billion in 2006 and will grow to $790 billion by the end of this year. Fuelling this growth is an oil wealth and a windfall that is almost unique in history, and it is being converted into an investment boom. There are $1.1 trillion U.S. in projects planned in this region alone. In the UAE, with 10% of the world's oil reserves and a population of four million people, an estimated 15% to 20% of the world's cranes are busy at work in their construction.

It's important to note that it is not only the quantity of Canada's exports to the region, but also their quality. The top 10 Canadian exports to the region are as follows: specialized vehicles, helicopters and planes, flight simulators, motor vehicles, barley, wheat, gold, lumber, electrical apparatus, and machinery parts. That is over 60% manufactured products and I believe a very good balance for our traditional hewers of wood and drawers of water. The flight simulators are an important item to note, with over $250 million worth, as it reflects the very large joint venture that CAE from Montreal has with Emirates airlines in Dubai. Trade follows investment in so many ways.

Canada has several billion dollars invested in the region, and the region has over a trillion dollars in foreign assets, of which billions are no doubt invested here in Canada. DP World is one recent example. In addition, as was said earlier, you must also add the high-value service sector. Canadian engineers, architects, project managers, etc., are very active in the GCC. Their effort makes this in fact a $2 billion market per year.

Canadian business has very clearly shown the way in developing this market. However, what is still lacking is the political and economic architecture to support this rapidly expanding opportunity. Government support, and indeed leadership, has a very important role to play in developing this market, as is evidenced by the actions of other governments. Australia could serve as a very good market.

Two years ago, as Dwain was saying, the Canada-Arab Business Council made three recommendations. I believe they're still relevant. We must take advantage of the existing favourable view of Canada and the growing markets of the region by swiftly acting to build on our momentum.

Secondly, we must build relationships with partner countries. Government figures such as yourselves must be more involved in developing partnerships in the regions through strategic high-profile market visits, delegations, missions, and so on; and government members must continue to support these relationships by participating and hosting return visits. These partnerships are a key element. We should strive to provide a greater infrastructure for government offices in the region, as well as trade agreements, foreign investment protection agreements, and so on.

These recommendations were repeated in the conclusions of our conference, which was held just two weeks ago. Canadian business leaders, Arab and Canadian diplomats, and government officials again came to a similar conclusion. To the list they added and emphasized the need for free trade agreements, and as I said, foreign investment protection agreements, air services agreements, and so on. At present we have, I believe, only three double taxation agreements in the region and one or two air services agreements.

I believe there is a broad consensus as to what has to be done. Minister Emerson reflected that consensus in his speech, as Dwain noted, and of course in the government's “Advantage Canada” documents. The challenge we face, and indeed have faced for a number of years, is to take the necessary action and to commit the necessary resources to accomplish these agreed goals. Simply said, we need to just do it. It takes resources and it takes our collective will. The European Union, the United States, Australia, India, China, Singapore, and many others are steps ahead of us.

Former Trade Minister Peterson set a goal of doubling our trade to the UAE when he visited that country in 2005. That's a reasonable goal and I think one that could be easily attained.

In closing, I hope the committee will come to the conclusion that the GCC and other Arab countries should be viewed as priority markets, and the Canada-Arab Business Council will continue to work collectively with all levels of government and business in building this relationship.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you, David.

Paul, do you want to make your remarks now?

[Paul Mariamo, Senior Vice President, Middle East, SNC-Lavalin Group Inc., Canada-Arab Business Council]

Thank you, Mr. Chairman, for giving me the opportunity to take part in today's meeting to discuss SNC-Lavalin, our expertise, the work that we do in the Middle East, our current outlook and the difficulties that our company has encountered in the Middle East and more particularly in the GCC countries since the 1970s.

Because of the recent increase in oil prices, GCC countries have an enormous surplus that they have begun to invest in all areas: in infrastructure and highways, electricity, in other words, they are seeking to improve the standard of living for their rapidly growing population.

As you know, GCC countries experience one of the highest growths of population. They have major surpluses. They have no local labour; most of their labour is imported from outside. Consequently, because of these ex-pats coming in, there's demand for housing, electricity, roads, malls, all kinds of things. We see a tremendous opportunity for SNC-Lavalin and other businesses to do business with the GCC.

I have personally been involved with the market there for many, many years, first with CAE Electronics, when I used to work for them, and then with SNC-Lavalin. The market is enormous. The market provides challenges. One of the challenges we are facing there is basically the ownership, but we cannot establish a business, particularly by ourselves. We have to have partners. Things are changing. We see the changes now in the UAE, but they're not changing as fast as we would hope.

For example, in the U.A.E., we established a company with Tabreed to do the district cooling. We've won a lot of jobs accordingly. We started a company called SNC-Lavalin Gulf Contractors. We've been doing business with Aramco for many, many years. But the issue of visas to go into the country is difficult; to get people into Saudi Arabia is difficult. We have to have some kind of bilateral arrangement with them in order to facilitate us, the Canadians, travelling into the region and doing business in the region.

We are also planning to invest at least $25 million in the energy sector in the Middle East alone, in the Gulf Cooperation Council, or GCC countries, in order to meet the demand over the coming five years. That is a huge opportunity for SNC-Lavalin.

As to current projects, our costs are much higher than those of other countries; for example, our travel expenditures are higher. There is no direct flight to the Gulf countries. There is always a stop-over in Europe, so it ends up costing us more and taking us longer to get there. Other companies have a real advantage over us in that area. When the projects involve hundreds of millions, or even billions of dollars, then these amounts are not that significant, but in the case of projects costing $2 million or $3 million, a difference of $200,000 or $300,000 is substantial. It will be difficult for companies that are smaller than SNC-Lavalin to do business there without the help of the government, of our parliamentarians, our ministers and our Prime Minister.

When we were there, we were often asked about Canada. They told us that they wanted to do business with us, but that we were only there once in a while, and that we would have to have a greater presence and be more active if we wanted their business.

There is a move to break up the cartel of European, Japanese or American companies. We are seen as a civilized country with North American expertise, and without the American imperialism or the European colonialism. We must capitalize on that now because within the next few years, once China has made its move into these countries to completely dominate the market, it will be too late. We have to gain a foothold in there now and establish a relationship that will be strong enough to provide future benefits for Canada, our employees and Canadian investors.

I don't want to belabour the point, but I must admit that it has not always been easy. Take Oman, for example.

In Oman at one time we were the incumbent of one of the projects, and Exxon put up a very heavy fight with the backing of the American government. We ended up losing the job. That was a multi-million-dollar job and hundreds of millions, close to a billion dollars. We would have loved to have the support of our government. Sometimes it doesn't stop at the embassador; it has to go much higher. We would love to see our Prime Minister or ministers there often, promoting our product. We can fight companies, but we cannot fight governments. We need you to fight the governments for us; we cannot do it ourselves. We're ready to fight and compete with other companies, but we cannot compete with France at a 25% tax rate. We cannot compete with England at a 30% tax rate, when our tax is 32% to 39%. We cannot compete with the Japanese when they have a 30% tax rate, but they have incentives left and right that we don't have.

From taxation also we have a foreign tax credit. They have what they call territorial taxes; they don't pay taxes if they're doing business in those countries. We have to pay this extra cost for us, and it's really hurting our business.

We have to look at all these issues. We're here today to participate in this discussion. I've opened a lot of doors to things we can discuss. I can give you some inputs.

We're pursuing at the moment close to $3 billion in business. I don't know if we're pursuing a lot, actually, for SNC-Lavalin. The market there is tremendous. We have a token of the market compared to the big international companies that are doing business there. They lead; they get business in the billions and hundreds of billions. We have to be there, leading our other Canadian companies to that market and helping them penetrate that market and establish business there.

Thank you very much.

[The Chair, Conservative, Leon Benoit]

Thank you very much, gentlemen.

Your message is very clear. We will now go directly to the questioning.

Mr. Maloney is first.

[John Maloney, Liberal, Welland, ON]

Mr. Hutton, I believe it was you who said the political and economic architecture is absent. I assume you're referring to FIPAs or the air service agreements or free trade agreements. What in fact is the barrier? Why don't we have the economic architecture?

[David Hutton]

It's a difficult question and an extremely relevant one. I'm sure there are many factors, but I would think the basic one is just the lack of resources.

First of all, I think one needs to do the analysis we're doing--and that has been done before--as to where our priorities are. Priorities have been set. The gulf area in particular has been ranked as one of the top 10 priorities, but not in the lower echelon; I think the lower echelon countries, up to this point, have been given the resources.

This is not the case with other countries, though. I think every one of our trading partners is in an active negotiation for a free trade agreement with the GCC at this time. In fact, in the case of the European Union there are always stumbling blocks, but if they do sign, it would be the first time there would be an agreement between two economic blocs, and this I think would have some great historical significance.

The U.S. has adopted a different approach. They've gone for a series of bilateral agreements. They have one with Qatar. I believe they have them with Oman and Jordan and some of the other countries, but the GCC now has reacted against that and has said they will no longer do bilateral agreements; it'll have to be an agreement with the group as a whole. Australia was very active in courting the UAE in particular, but after that decision it is now opening negotiations with the GCC, China, India, Singapore, and others. There's a 5% tariff barrier that the common economic GCC zone has, but in that competitive market it is significant enough to disadvantage Canadians enormously.

In terms of foreign investment protection agreements and others, quite frankly, I don't know why they haven't been given the priority, because, as I'm sure Dwain will tell you in his remarks, Nexen's investment in Yemen is exceptional. SNC-Lavalin's operations, CAE's operations in the UAE--all of these I think would merit the benefit of these sorts of agreements.

Air agreements are another important question. Our policies have been different from others', although from what I understand, the government's thinking is changing very quickly on this. Australia adopted an open-skies approach during the four years that I served in the UAE. There are now I think over 60 flights a week between Australia and the United Arab Emirates; there are three flights a week via Brussels to Canada. It's not because there isn't the interest in the airline that services that region; in fact, they're clamouring for the opportunity, but we haven't allowed them the access they've been seeking.

In all of these things, of course, in trade agreements and in air traffic agreements, there are winners and losers, but the Australian case is an interesting one because their trade relationship has expanded astronomically in virtually every aspect--not only in direct trading figures, but also in terms of visitors, inflows of investment, education interests, and so on. All of these elements are linked.

The answer to your question--and I apologize for being long-winded--is that we just need to establish this as a priority and then give the resources to our negotiating departments to go forward and put these agreements in place.

One small footnote, based on other people's observations as well as my own, is that we tend to take a fairly complicated approach to these things. It would serve all of us well if we could simplify our agreements and perhaps tailor them for different markets, and I believe the department is actively looking into this.

It's a question of urgency and of the push that's needed to move these things forward, rather than the collective will or the realization of what needs to be done.

Thank you.

[John Maloney, Liberal, Welland, ON]

There's tremendous wealth in this area, as you've indicated. Do we need a FIPA? Are our operations that trade, or could trade, at risk? Would we be okay?

[David Hutton]

I'll let my colleagues respond in introducing their comments.

To my knowledge, we have not had a lot of trade disputes over that sort of thing, and that's a very valid point. The disadvantage, though, is that there is an importance in these instruments in their own right. It's very time-consuming to have meetings between government officials and so on, but the advantage is that their tax lawyers get to know our tax lawyers, their investment protection authorities get to know ours, and this economic relationship is built up. So there's more to it than simply the protection that's afforded. It's a network of contacts, and that is of service not only government to government, but also government to business.

Dwain, maybe you could expand on that.

[Dwain Lingenfelter]

I can speak for Nexen.

When were on a mission in the Maghrib in North Africa, one of the things that surprised us was how much durum market was being lost to the Americans. When we went around and talked to people, we asked why we were unable to compete. Under the bilateral agreements with several of the countries, because there's a trade advantage and a certain percentage of reduced tariffs as a result of these bilaterals with the U.S., Canadian durum finds it very difficult to find its way into what used to be mainly a market that was exclusive to Canadian durum because Canadian durum was superior. It could be that Canadian durum finds its way there through the United States.

Having said that, I think these bilaterals, it would seem to me, would be very simple to do. I think we have boilerplate agreements that you can modify very quickly, but we're just not flexible enough, and when it comes to trade and trade relations or how we support our companies, we don't move as quickly as the Chinese or the French or many other countries.

I have another good example, and I use it with some trepidation because it's our own company. Nexen has been in Yemen since 1993. We've produced a billion barrels of oil. Current levels are $50, but if you averaged it at maybe $35, that's $35 billion worth of value that we've produced in a very small country. We're about 30% of the GDP of the country.

We've been asking the federal government for 10 years to have a presence in Yemen. We have 1,000 employees. Hundreds of them--Ted, you would know about this, because you fly with many of them out of Calgary. First, there's no direct air link. There's no federal government embassy; there's no representation, even though this country has had an embassy in Canada for the past eight or ten years. It's these kinds of things that are taken by the Yemeni as a lack of interest by the government, as well as the fact that no ministers travel there or show interest.

I don't think we realize how we're perceived in this part of the world. What we say we're too busy to do is perceived by them as, at best, ignoring them and at worst as insulting them. I think this is a real issue. Maybe travelling with some of the trade missions to these parts of the world and even holding meetings could be a very useful part of the work of the committee.

[John Maloney, Liberal, Welland, ON]

It's almost a cultural thing. Certainly they feel insulted or affronted by government officials, ministers, prime ministers, or parliamentarians not going there. If parliamentarians go there, it's considered a junket, but there's a lack of appreciation even within the Canadian culture.

[Dwain Lingenfelter]

I think that as Canadians we have a very bad opinion of our politicians that's unwarranted and not helpful, but that is not the way Canadian politicians are seen in many of these countries--either politicians or the Governor General. If the Governor General, the minister for industry and trade, or a former prime minister were to go to Yemen, they would roll out the red carpet. These are very important and significant symbols, and you're showing respect for those governments. As Canadians we think that if it's an MP or a minister, the best we can do is yell and holler at them and insult them. That's not the way it is in many parts of the world, and we should put ourselves in their shoes to understand what is really needed there.

[The Chair, Conservative, Leon Benoit]

Mr. Maloney, your time is more than up, but I wanted you to continue with your line of questioning.

Mr. Cardin is next.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chairman.

Good morning gentlemen. I'm happy to see you here today. I might have missed some of the comments. A few years ago, I had to deal with some countries, including Qatar. When I asked for Canadian representatives, they were sent from Kuwait. Do they still come mostly from Kuwait? Does Canada have an official presence in any other Gulf country?

[Paul Mariamo]

Not in Oman. There is an office in the UAE and in Saudi Arabia. They have none either in Bahrain. There is an office in Kuwait. That puts us at a great disadvantage. I will give you an example. When we make a bid, it is important for us to visit the country, but the ambassador and the minister should both pay a visit as well.

[Serge Cardin, Bloc, Sherbrooke, QC]

Why is that?

[Paul Mariamo]

The tribal mentality still applies in those countries. It is always the country's leader, the head of the government, who is in charge of everything, who is the one who gives the orders. Without his consent or his blessing, nothing will work, particularly when it comes to large scale undertakings. He won't speak to me or to my boss, or even to the president of my company, but if the prime minister shows up, then he will deal with him.

To answer your question, I would say that there is not enough in terms of representation, and any representation we do have is inadequate. We often asked for help, and there are two or three people working in the ambassies, which are short staff and can't really do much to support us and work with us. We need them to help open doors and meet with the people in high places. We can do the negotiating ourselves, but it is essential that we have the involvement of the government to represent us. As I said earlier, we are seen as a country with a very civilized, very advanced form of government, and they do want to do business with us, but they always wonder where we are, and why we are not established over there. They don't consider us to the active or interested in their region. In their minds, we are a bunch of companies working on the odd contract, and looking out for opportunities. They don't think that we are in it for the long haul, and they are wrong. SNC-Lavalin has been there for quite some time. Nexen has been there for 10 years, maybe even 13 years. I know of other countries, like CAE and Bombardier, that have been there for quite some time as well. But that is not how they see us, and, as Canadians, it puts us at an enormous disadvantage.

[Serge Cardin, Bloc, Sherbrooke, QC]

Through the contracts that I signed with people in those countries, I came to realize that they do indeed have a great deal of respect for elected representatives, but when the time comes to sign a contract or an agreement, I think that they would rather have the country's representatives there to close the deal.

You said that there is $3 billion trade with these countries, or $1.6 billion in exports and $2 billion in imports.

However, Mr. Lingenfelter, you alluded to more substantial amounts arising out of trade relations with these countries. Of course, you would like that to be re-established. You seem to relate this future or repeated success to Canada having a presence in these countries and to any help that the government can provide in terms of exporting and relations with these countries. Is that, essentially, what you were saying earlier?

[David Hutton]

I think the question of statistics and the measurement of our trade is an extremely challenging one. It's not only in the service sector, which by very rough back-of-the-envelope calculations is probably equal to our merchandise trade, but an enormous amount of our exports pass through the United States.

I think anyone who has visited Saudi Arabia will see a significant preference for Mercedes-Benz, of course, but also for large Canadian Fords and Chryslers. I don't have the exact figures, but there are probably 50,000 or 60,000 Canadian automobiles that are shipped out of our plants here in Canada, from Quebec and Ontario, to Saudi Arabia. They all pass through the United States and wouldn't be in our figures.

Those are very, very real issues.

On the question of embassies, I think our staff does extremely well with the resources that we have on hand, but there is no question that there is a very strong demand for a Canadian presence. I'll let Dwain expand on this point. It's not a zero-sum gain that we're talking about here, taking away from other resources that are needed in other sections. What we are asking the committee to consider is a larger pie. The return on investment from these facilities would be enormous, absolutely enormous.

[Dwain Lingenfelter]

I'd just use the example, again, of the number of employees we have in Yemen. If you do some quick calculations on the amount of tax Nexen pays to the federal government--and our employees pay to both the federal and the provincial governments--it's multi-millions of dollars every year.

If we open an office in Yemen, there's little doubt about the return, and I'm not talking about having to take money from Brazil or India. As a business person, if you look at it as a stand-alone or a profit centre, over the last 10 years the profit coming back to the Canadian government or to the Alberta government from Yemen is phenomenal on the $35 billion worth of oil that we have produced and sold, and that's just from Nexen. We probably now have 30 other Canadian companies doing service for Nexen in Yemen. The total number of employees who are employed by Canadian companies doing work around this one oil field is probably in the area of 2,500 in that country. I don't think the factor of how much profit is created and how much revenue flows to the government is questionable at all.

[Serge Cardin, Bloc, Sherbrooke, QC]

Then you probably agree with the Conference Board report that advocate integrated trade, through foreign investments that would also create jobs here in Canada.

It would be difficult to have an accurate accounting of the amounts invested in these countries without revealing the true value of the companies. Earlier, though, Mr. Mariamo did not hesitate to state that SNC-Lavalin has been or will be investing soon several billions of dollars.

[Paul Mariamo]

All of our projects are valued at several billions of dollars.

[Serge Cardin, Bloc, Sherbrooke, QC]

Yes. So the investments in these countries do not seem very transparent. How much does Canada currently invest in these countries? How many potential jobs could be generated in Canada?

[Dwain Lingenfelter]

Those are the kinds of things I think this committee should be asking of the staff who do this kind of work. I think they would be able to provide that information for you.

I know as a practitioner of business development in the oil industry that when I go to Angola and we are bidding on blocks offshore, we are competing with the national oil company from China. When the President of China comes and says on the same day that he will build airports, the infrastructure around the port authority, and a railway, and that, by the way, he would like them to talk to the Chinese oil company that's there with him, you can imagine that Nexen doesn't have any conversation or any need to stay in the meeting to talk to them about getting those blocks for oil. This is what we're up against.

It's not only the Chinese. The French operate this way with Total in Nigeria. When it comes to debt forgiveness, they have meetings while Total is in another room having a different discussion. They're not linked, but there's a dotted line between the discussions that go on between the French government and Total. Norway is the same with Stats.

In Canada we don't operate that way, and we can continue to do that, but we are at a huge disadvantage as companies when we're told to go and compete with the rest of the world. The playing field is not level when we compete with Chinese companies, with French companies, with American companies, or with British companies.

That's what we have to understand as Canadians and as Canadian legislators. If you're telling your companies to go and compete, don't assume that it will get you the results. It's much more complicated than that.