Evidence of meeting #63 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 chair.
A recording is available from Parliament.
12:50 p.m.
Conservative
12:50 p.m.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
Thank you, Mr. Chair.
Thank you once again to the witnesses for being here today.
I have just a couple of questions.
I am certainly familiar with BDC and EDC. CCC, for the first time.... That's one of the nice things about being in this job; as a member of Parliament, you learn new things every day.
We're talking about crown corporations or government agencies. Can you talk about the continuum, how you guys work together—or maybe you don't work together—in terms of the overlaps of products and services? I understand, Mr. Siegel, what you guys do at Export Development a little bit, in terms of financing. So maybe you could just talk about where you guys are in the continuum of working with businesses.
12:50 p.m.
President, Canadian Commercial Corporation
Thank you very much for the question. I appreciate that.
CCC is contracting and procurement. BDC is financing and risk products; we're contracting and procurement.
We work for foreign governments to help them buy things in Canada by either acting on behalf of Canadian exporters to sell products to foreign governments or helping advise foreign governments on how best to procure things in Canada.
Sometimes I say we're like the international Public Works. Public Works contracts for the Canadian government when it's buying things; we work with foreign governments to help them contract and procure. We do that in very specific markets, because in general exporters should be able to do contracting and foreign governments should be able to do contracting and procurement themselves.
Of our two focuses, one is defence, because the nature of the business and the nature of the product is very government dominated, very sensitive kinds of products. We work in defence, government-to-government defence contracting, and in developing countries. And I really mean developing countries, countries that don't have the capacity to undertake complex procurements.
Maybe it's best to illustrate it through an example: we're currently contracting on behalf of Acon, a Canadian supplier, to build an airport in Quito, Ecuador. We're the contractor. We subcontract with Acon. We have a relationship with the Government of Ecuador to secure that contracting. EDC is providing part of the financing to the project and providing many of the risk products. They're providing risk products for the export transaction, they're providing financing for the export transaction, and we provide the contracting and procurement mechanism where necessary. We fit in very specifically in contracting and procurement.
12:55 p.m.
President, & Chief Executive Officer, International Trade, Export Development Canada
In simple terms, EDC is really associated with facilitating foreign transactions, be they export or be they investment abroad. We're doing that with a variety of products, insurance products and financing products. In that way we're helping Canadian companies to build up, but we're not really involved, except to a very limited extent, in the formation of new companies here in Canada. I'll let BDC speak to that.
EDC has a small equity program, which is focused both on foreign markets and trying to help, with equity, leverage companies into those markets, and potentially at the later stages in helping companies that are going into the export market to be able to be active participants or expand their reach in those markets.
Primarily we are a financier and insurer, facilitating trade transactions associated with companies.
12:55 p.m.
Executive Vice President, Financing and Consulting, Business Development Bank of Canada
BDC, as my colleague was suggesting, is involved in the creation of companies. So we do, actually, venture capital. The business of venture capital is to commercialize research and development from university and other research labs in Canada.
We are involved in the creation of companies, but we're also involved in the growth of these companies. We do support globalization of these companies in one way or another. When it comes to the more traditional financing, it's financing projects. Usually an entrepreneur has a project they want to expand, they want to buy a new piece of equipment, or they want to invest in researching a new market, a new product. So we call ourselves project financing.
We also provide management support, consulting services, because with an SME, there are two things that are growing at the same time. There's the business and there's the management that has to evolve, and we have to invest in that. So that's why we have those three lines of business. Venture capital is in the creation and formation of companies. Traditional financing for us is more the support and the growth of these companies.
At the higher end, when these companies become more global, we do work with EDC.
12:55 p.m.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
I'm assuming you cooperate right now. Is there any way to make those synergies better?
12:55 p.m.
Executive Vice President, Financing and Consulting, Business Development Bank of Canada
Yes, we do. That's why we're engaged in discussion to see what would be the next level of cooperation.
But as we speak, the representative of EDC in the field and our people are working together. We do refer business to EDC when we see the need with our SMEs, and we are engaged in discussion to actually collaborate even more.
12:55 p.m.
President, & Chief Executive Officer, International Trade, Export Development Canada
Yes, I would just build on that. I think there has always been a level of collaboration, but I think in the world we're now facing--we've talked before to the committee about integrative trade and more difficulty in drawing boundaries--it is even more important that we step up the dialogue and the collaboration, and that's happening.
We mentioned the memorandum of understanding that is being signed with DFAIT and CCC and EDC. It's all about that. We regularly plan with the department. We're engaging in the same level of dialogue with BDC, and it's followed out in the operational engagement as well, which Ms. Métivier has spoken of.
So it's going to even yet another level of intensity.
12:55 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you very much, Mr. Allison.
Thank you all for coming today. I do appreciate it immensely. There was a bit of a holdup, but I think you got a lot of information into a short time.
So thank you very much. I'm sure we'll talk to some of you again.
The meeting is adjourned.