Good afternoon. I thank the members of the committee for inviting my colleague Marc Whittingham and myself.
I understand that you've received a copy of our corporate plan, which was tabled in Parliament two weeks ago, on May 1, and it amplifies many of the comments that I'll make today.
At CCC, since we are a smaller crown corporation employing only 100 people, the interrelationships between us and other government departments and agencies are paramount to our success. Before I speak about these linkages, let me tell you a bit about CCC and how it helps Canadian exporters.
The Canadian Commercial Corporation's focus is to increase trade by helping foreign governments to benefit from Canada's export capabilities through CCC's procurement and contracting expertise. It works in areas where there is a clear role for government intervention in the procurement and contracting process. In practice, this means CCC focuses on two main markets. The first is defence, which comprises approximately 75% of the contract billings of the corporation, or about $1 billion a year. The sensitive nature of defence products and the significant role played by governments in this market necessitate a government-to-government contracting mechanism to inter-mediate trade.
The second business line for CCC is emerging and developing country markets. In particular, the corporation works with countries that do not have the capacity to undertake effective contracting and procurement efforts on their own. This latter part has been part of CCC's focus since it was created in 1946 to assist with the reconstruction of Europe after World War II by connecting Canada's export capabilities to European needs after the war. To enable its work, CCC was given broad legislative powers to develop trade between nations by exporting or importing.
Now I am going to compare the two main business lines, government-to-government contracting and supply officer services. In government-to-government contracting, the CCC signs a contract with a foreign government buyer and another contract with a Canadian exporter. As the middle man, the CCC makes sure that the contract with the exporter is carried out in accordance with the terms of the contract reached with the international buyer.
We transfer the contractual obligations to the Canadian exporter. This results in a secure government-to-government contract reached under the best of conditions for all parties. As well, the CCC manages the payment cycle between the foreign government buyer and the Canadian exporter. This allows a predictable and regular schedule of payments to be established and maintained.
As regards the supply officer services, the CCC accesses goods or services on behalf of public buyers or a multilateral organization for final use abroad, and manages both the contracting process and the purchasing cycle. In 2006-2007, the CCC worked with almost 200 Canadian exporters in 25 countries and conducted business worth in excess of $1 billion.
Let me talk a bit more about CCC's defence business line.
Since 1956, CCC has been responsible for helping Canada meet its commitments under the Defence Production Sharing Agreement. The DPSA is an important part of the Canada-U.S. relationship. For Canadian companies, the agreement has ensured that they are able to compete on equal footing with American defence companies when bidding on American military contracts. For the U.S. and Canadian governments, the DPSA has ensured a strong North American defence industrial base. It remains the single largest element for the corporation, and between $650 million and $750 million of business with the U.S. DOD annually.
In addition, CCC facilitates procurement for NASA from Canadian sources, in a similar type of arrangement as that under the DPSA. While it remains optional for NASA to work with Canadian exporters through CCC, over 90% of all NASA work from Canadian sources is managed through the CCC, demonstrating the corporation's value to NASA and Canadian exporters.
Going forward, CCC will continue to strengthen the relationship with the U.S. government and examine other ways to work together to achieve a strong North American defence industrial base.
CCC has also leveraged its relationship with Canada's Department of National Defence. This has two distinctive elements.
First, the corporation leverages the Canadian Forces' traditional relationship with other militaries to learn about opportunities for Canadian suppliers in markets abroad.
Second, CCC leverages domestic equipment procurement internationally to the benefit of Canadian exporters. As Canada and our allies consider purchasing or upgrading equipment, changes in military operations require highly sophisticated capability and quality over quantity.
The cost of acquisition for highly complex equipment in very small quantities is often prohibitive for many militaries. CCC is well placed to provide to like-minded countries the ability to join with Canada in programs that DND has initiated or is considering. The combination of two or three buyers has the potential to provide economies of scale and make a program more affordable for both Canada and allied forces.
Let me talk a little bit about CCC's work in emerging and developing country markets. In these countries, where there is often insufficient capacity within local government to conduct efficient and transparent contracting activities, this can be an impediment for Canadian exporters and for achieving effective international development results. CCC employs unique relationships and contracting expertise to address these issues and generate benefits for both parties. CCC's government-to-government contracting and procurement services offer a valuable competitive advantage to Canadian companies operating in these complex public sector markets.
CCC contracts with a foreign government in an emerging or developing country to ensure due diligence and a fair and reasonable transparent proposal from Canadian exporters.
CCC also works with international funding and financing institutions to provide transparency in contracting and procurement in order for them to deliver their official development assistance programs.
On average, CCC's work in emerging and developing countries and markets represents about 25% of our business, or $250 million to $350 million per year.
I'm also very proud of CCC's contribution to wider Government of Canada policy goals, which have made a real difference to Canadian exporters and help foreign governments access Canadian solutions. For example, because of CCC's excellence in contracting and procurement, we were brought on board to Action Canada's contribution to promoting peace in the Sudan.
CCC is also making a tangible contribution to stabilization and reconstruction efforts in Afghanistan, for example, through our organizing and executing delivery of equipment for the Afghan National Police force. The dedication and professionalism of CCC personnel has made this possible.
With the Canadian International Development Agency, CCC is well positioned to work with companies that use CIDA Inc., a cost-sharing program that provides financial support to Canadian companies to carry out feasibility studies or provide implementation support in developing countries. With CIDA Inc.'s financial support at project inception and completion, CCC's role as a final contractor fits squarely in the middle and acts as a complement to CIDA Inc. to support Canadian firms wishing to undertake development infrastructure projects.
With EDC, the focus has been on connecting CCC's government-to-government contracting and procurement service options with EDC's finance and insurance offerings for the benefit of Canadian exporters. Joint EDC-CCC missions to Asia, Africa, and the Caribbean have proven to be valued tools for Canadian exporters wishing to advance and secure contracts in emerging and developing country markets.
Finally, CCC was recognized by the Treasury Board Secretariat with the award of excellence for outstanding teamwork in developing online client-centric service. Specifically, the award commended the electronic client relationship management and the virtual trade commissioner services created through a partnership with CCC, DFAIT, EDC and Agriculture and Agri-Food Canada. This initiative underlines the collaborative approach that exists throughout the federal government to better coordinate service offerings to Canadian exporters through a single point of entry.
As Ken Sunquist, the assistant deputy minister for global operations and Canada's chief trade commissioner, mentioned when he was here to speak to you last week, CCC has recently signed an MOU with DFAIT to implement a pilot project in Montreal. Officers in the regions will do the front-line work of promoting and counselling for the corporation. CCC will also sign an MOU with EDC and DFAIT to enhance business development and information-sharing activities.
In summary, the CCC works in collaboration with several departments and federal government agencies. This year, our goal, as our business plan shows, will be to work even more closely with the Department of Foreign Affairs and International Trade, Export Development Canada, the Department of National Defence, and the Canadian International Development Agency to develop more sophisticated partnerships in order to better serve Canadian exporters and to increase Canada's international trade.
Thank you for the time that you have kindly granted me and I am at your disposal to answer all your questions.