International Trade Committee on Dec. 6th, 2012

[Todd Winterhalt]

In terms of non-tariff barriers, it probably won't seem all that surprising to you. Certainly, what we encounter most often, and what we see our Canadian clients faced with most often, are things like the bureaucracy. That is, as I mentioned, endemic in terms of trying to obtain permits to conduct business. In particular sectors, it is particularly challenging, infrastructure investment, for example, or resource development in India, or things surrounding real estate development. Anything that has a land element to it is very challenging in terms of working through the Indian bureaucracy. The time and expense that are required to get to an outcome, to get a permit, is certainly something that's a disincentive to Canadian companies, be they exporters or investors.

The other thing I would mention is around the regulatory environment attached to the bureaucracy comment I made earlier, but here it's not either the simple lack of the regulation or the complexity of the regulation. It's a predictability issue. I think that's the key word for many Canadian companies. If there are clarity and predictability in what to expect from a regulatory perspective, that's something that can be mitigated and planned against. It's the changeable nature of the regulation, in some respects, that does make it very challenging to know from one day or year to the next what's required in terms of permitting and in terms of regulatory compliance in India.

I think we would be sugar-coating things, frankly, if we didn't say there were corruption concerns and issues still present in India at multiple levels and in multiple locations in the country, as there are in many emerging markets, to be fair. This is very much something which I would classify as a non-tariff barrier and that often dissuades Canadian companies that have a choice of where to put their hard-earned capital. For example, do they look elsewhere in the region, elsewhere in South Asia or Southeast Asia, where returns may be as strong and where there's not as much of either corruption or bureaucratic delay?

Those would be the top three that I would mention. I would hasten to add, though, that I think over the last 5 to 10 years we have seen the numbers greatly increase. Trade has picked up. Investment has picked up. Even with these constraints in place, we do see the numbers continuing to grow. We're certainly looking at a continued 7% growth in the overall economy in India, even as a slowdown, so we would see greater opportunities there.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, witnesses, for coming here.

Mr. Winterhalt, not only do we always talk about the significance and the importance of transportation and all those infrastructure issues, but we also talk about building partnerships. You talked about that. I'm wondering how you fit into that. Where do you fit in with assisting Canadian companies that are looking for relevant, strong, productive partners there who will help them move through what you call the bureaucracy over there, which is a concern to Canadian companies, or through some of those non-tariff barriers to trade?

[Todd Winterhalt]

Thank you for the question.

I might actually turn to my colleague, Mark Bolger, who has been present and active in working with EDC in Asia, and South Asia in particular, for the better part of the last 15 years, if not slightly longer.

Mark, perhaps you could add some comments.

[Mark Bolger, Regional Manager, Asia, Export Development Canada]

Sure.

Thank you, honourable member.

The role that EDC plays is one small part of a much bigger set of partnerships that are required to do trade with India. For us, we utilize our network, whether it's our bank partners that can assist Canadian exporters in understanding the financial regulations that exist there, or entities such as the Canada-India Business Council, the Indo-Canada Chamber of Commerce, and the diaspora that exists within Canada, which have a very real and tangible understanding of how to do business in India.

I'd be remiss if I also didn't mention the trade commissioner service in India as a very critical partner in helping to understand the regulatory regime and overcome the very real challenges in distributing your goods across India.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

It sounds as though we tend to think about large corporations when you think of this, but my understanding—and we've had some witnesses come in on this—is that actually there are opportunities, because of the partnerships that you've talked about, for bringing in small and medium-sized businesses.

Because of the partnerships, are there opportunities? In my riding, there are many small businesses. I don't have large corporations in my riding. Are there opportunities for small businesses, whether they're in manufacturing or even in agriculture, to bring it together and be successful in India?

[Mark Bolger]

My personal view is yes, there are.

EDC works very closely with our Indian business partners to try to engage in matchmaking, which provides a lot of value to small and medium-sized customers regardless of what sector they are in. We utilize everything from web channels, to face-to-face, business-to-business meetings, and to organized trade missions into Canada and into India in order to help get small and medium-sized companies in front of the Indian private sector buyers that present those opportunities to Canada.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Actually, Canadian businesses have grown. I think it's an amazing statistic. It was less than $400 million in 2005 and it's now at $1.7 billion. That is over 400% in five years.

One of the things we're finding in our discussions on free trade agreements is that in six years we've had to cover a lot of ground. There was this huge vacuum that was left before.

I'll go to the education component of it. We've not only had to go from the ground up to strengthen our economy; we've had to move from a brain drain to a brain gain. We've done that now. We didn't have anything in place prior to 2006 for keeping the intellectual people and wanting to attract people to Canada.

You talked about the small number of Indian students in Canada, some 4,000 students. That number is continuing to increase, from what I understand. When I look at the demographics in India, I think that 70% are under 40 years of age and 50% are under 25, or something like that, and there are 550 million people. In the education component, we have a great opportunity to bring people to Canada.

Can you expand on how important that is to our economic growth and to changing our demographics? Our demographics are going the other way. We're all getting a little older.

How can we attract those people and then have them stay, once they get the higher education that is needed?

[Paul Davidson]

There are a number of things that Canada is really doing right.

The changes in Canada's immigration policies with regard to international students have really improved over recent years. It used to be a penalty if you said you wanted to work while you were in Canada as an international student. It used to be a penalty if you said you wanted to stay in Canada. Those rules have changed. Now international students can work while they're in Canada. They can work after they graduate, and they can be fast-tracked for citizenship. That really helps in our competitive bid to get top talent to Canada.

The other thing that has changed in this regard, and it's constantly moving, is that there have been significant improvements in visa processing times around the world. We could do all the marketing in the world, but if we can't get the visa processed in a timely way, that student would slip away to Australia or the U.K.

With the increased demand in key markets, there's an increased need for staffing in those key markets, and because of the deficit reduction action plan, Citizenship and Immigration Canada has been less able to meet some of the most urgent demands. You'll see that we're suggesting there should be some work there.

The trade commissioners were mentioned by my colleague. DFAIT officials also do tremendous work in India, including, for example, creating an alumni network of Indian citizens who have received their education in Canada and are helping to promote the Canadian brand, as alumni, in India.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Folks in research, development, and innovation; would the right step be to continue to do that?

[Paul Davidson]

Absolutely.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

I'll intervene here for a second. The committee had about 10 minutes to do some in camera business at the end of this meeting, but we had an intervention earlier that caught us a little short. I'm going to ask whether you want to continue questioning the witnesses or move into that session.

[Wayne Easter, Liberal, Malpeque, PE]

Let's move into that session, Mr. Chair, but I have one question first.

[The Chair, Conservative, Rob Merrifield]

A question for whom?

[Wayne Easter, Liberal, Malpeque, PE]

Well, I'll make it as a point of order then.

Mr. Davidson brought up the report that your—

[The Chair, Conservative, Rob Merrifield]

I'm okay with continuing the questioning, if that's what we want to do. You're next.

[Wayne Easter, Liberal, Malpeque, PE]

I'm only going to ask one very short question, Mr. Chair.

[The Chair, Conservative, Rob Merrifield]

Okay, but I want to know whether we want to go into questioning or whether we want to go into the business meeting.

[Wayne Easter, Liberal, Malpeque, PE]

I think we do have to do business. We have to finish the motion that the parliamentary secretary—

[The Chair, Conservative, Rob Merrifield]

Okay, so you want to go into business. Is that what you want to do?

[Wayne Easter, Liberal, Malpeque, PE]

But I have a point of order first.

I want to know the details on this from the clerk.

[The Chair, Conservative, Rob Merrifield]

The details of what?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Davidson talked about a study that the organization did, with a number of recommendations—

[The Chair, Conservative, Rob Merrifield]

It's available online, is what I'm hearing.

[Wayne Easter, Liberal, Malpeque, PE]

Yes, but there's a problem sometimes in doing committee reports; if it's not tabled in evidence, we can't use it.

I want to know if we can use the recommendations that are in that report—those that apply to the federal government—as evidence. If I don't ask that question—