Evidence of meeting #13 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ceta.
A recording is available from Parliament.
12:35 p.m.
Conservative
The Chair Conservative Rob Merrifield
He makes such good use of his time, it's really very good to watch.
Thank you, Mr. Pacetti.
Mr. Hiebert, the floor is yours for seven minutes.
12:35 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Thank you very much, Mr. Chair.
Thanks to both witnesses for being here this afternoon.
I'm going to try to direct most of my questions to Ms. Leonard from the Information Technology Association.
I noted with interest the level of support for CETA and the number of jobs. Some 521,000 jobs is an enormous amount of employment in the country. You highlighted the fact that in 2011 the percentage of exports to the European Union increased to 12% overall, and in the same year 64% was to the United States. The total of that is about 75%.
Can you tell us where the balance of your trade is, or in which countries?
12:35 p.m.
Senior Vice-President, Information Technology Association of Canada
There is emerging interest, as I said, in the Pacific Rim. There's a fairly major initiative going forward now around trade to India and south Asia. Latin America is becoming a very important market, particularly in the wireless sector. They're nascent markets in their evolution and their interest to us.
12:35 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
I note that those are all countries or regions anyway that Canada has negotiated free trade agreements with.
Mr. Rice highlighted all the potential industries and their prospective growths in the European Union. Can ITAC tell us what your growth prospects are? We know what your current sales are, at $1.4 billion. How much do you think those will increase?
12:35 p.m.
Senior Vice-President, Information Technology Association of Canada
I'm sorry, I'm not equipped to answer that. We haven't done that study, and we haven't done a canvass on that, but I think it's incumbent on us to do so going forward.
12:35 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
What are the tariffs you're currently paying for your industry?
12:35 p.m.
Senior Vice-President, Information Technology Association of Canada
I'm not aware of what the tariff levels are. I apologize.
12:35 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Okay.
With regard to services, you highlighted the fact that about 50% of your exports are services. You also highlighted the fact that the brainpower associated with that sometimes is connected to a body that has to travel.
Do you have any idea of what percentage of your services are provided without Canadians leaving the country, that are provided to European Union markets via information technology? I'm thinking of something similar to what Canada is currently seeing with a lot of exports to India. Accounting firms will reconcile the books overnight while here in Canada and during the day in India, or architectural designs will be done there, or chip designs will be done in India and exported back without people having to transit a great distance.
Can you help us understand to what degree that's happening between Canada and the European Union, where the work is being done here, the service is being performed here, but the beneficiary is there and the travel is not necessary?
12:40 p.m.
Senior Vice-President, Information Technology Association of Canada
Foreign investment by Canadian companies in the labour market certainly takes place even among very small companies. If you're providing contract research capability that requires advanced mathematics in the calculus of that work, it's possible that you will seek a sort of higher level of quality and a lower level of cost in jurisdictions like eastern Europe. That function may be performed specifically in that region and gets meshed with all of the other consultative services embedded in that contract research.
Depending on capacity, depending on the quality of the knowledge product, and depending on its cost, you may have various aspects of your workforce deployed throughout the world to provide your clients with the best quality of service at the most competitive price. For a number of our companies, Europe certainly features prominently in that equation. On the proportionality of it, I don't have statistics, but it's a classic profile of global enterprises.
12:40 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
It sounds to me like you're describing a scenario where Canadian companies actually contract workers in emerging eastern Europe or other places. Their global workforce is not resident in Canada, but they're doing work from their home country in another destination. Is that what you're suggesting?
12:40 p.m.
Senior Vice-President, Information Technology Association of Canada
I'm not suggesting that. I'm suggesting that portions of the workforce may be located in various parts of the world, depending on access to expertise and depending on access to specific price points in the service equation.
12:40 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Well, it certainly defines a scenario where you no longer require citizenship in any one country. To be an employee of a Canadian company, for example, you could be, it sounds like, resident anywhere and servicing the needs of the customer also anywhere.
At the end of your testimony, you highlighted a number of aspects of CETA that you really appreciate. You referenced that it acknowledges knowledge-based sectors, protects intellectual property, and deals with regulatory cooperation and government procurement. Then you referenced that it's forward looking and deals with or accommodates electronic commerce.
I'm wondering if you could help us understand to what degree the agreement addresses the situation or the area of economics.
12:40 p.m.
Senior Vice-President, Information Technology Association of Canada
I have only the technical overview to fall back on, but I think for us the fact that electronic commerce is mentioned at all is a very strong indication that it's at least in the countenance of the agreement.
12:40 p.m.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Are there certain provisions that would make it easier to participate in electronic commerce?
12:40 p.m.
Senior Vice-President, Information Technology Association of Canada
There are obstacles, certainly, that can emerge in terms of electronic commerce being treated in different ways from regular commerce, so recognition that...the technical overview kind of indicates that those distinctions won't prevail.
12:40 p.m.
Conservative
12:40 p.m.
Senior Vice-President, Information Technology Association of Canada
The distinctions between electronic commerce and regular commerce.
12:40 p.m.
Conservative
12:40 p.m.
Conservative
The Chair Conservative Rob Merrifield
I want to thank the witnesses for coming forward.
It's great to see an agreement where, quite often, the public doesn't recognize particularly with IT the advantages. We think of ourselves as a resource country on trade, and agriculture is an obvious one, but your testimony has been very good. I appreciate your coming forward.
With that, we will now suspend as we move to an in camera session to take care of some business of the committee.
Thank you again for being here.
We'll go in camera.
[Proceedings continue in camera]