Thank you, Mr. Chair. I just want to thank the committee for this opportunity to provide comments on the global markets action plan, or as we've all come to call it, the GMAP.
My name is Cam Vidler and I'm the director of international policy at the Canadian Chamber of Commerce, which represents over 200,000 businesses of all sizes, sectors, and regions across Canada.
As you know, the Canadian Chamber of Commerce was part of the advisory council that provided input into the GMAP. Upon the announcement of the GMAP, our president, the Honourable Perrin Beatty, called it a “comprehensive international trade strategy that will help businesses of all sizes expand and grow in new markets around the world.”
He added, “By prioritizing markets, focusing on core strengths and ensuring that government services reflect the needs of exporters, the plan is right for the times, and its adaptability will help Canada increase its competitiveness over the long term.”
We continue to hold this view, Mr. Chair.
However, recent signs that Canada's trade has not yet recovered from the recession are causing industry to look at the plan with a renewed sense of urgency. Earlier this month, the Governor of the Bank of Canada told the Commons finance committee that Canada's exports are $40 billion lower than where they should be, according to the bank's models. There are in fact now 9,000 fewer firms exporting than in 2008, and the problem isn't limited to exports. Businesses are reluctant to invest abroad as well, especially in emerging and frontier markets where the bulk of future growth opportunities lies. According to the United Nations Conference on Trade and Development, only 1.5% of Canada's foreign investment stock is located currently in developing countries in Asia or Africa. This is by far the lowest share among the G-7. Once the epitome of a trading nation, clearly Canada is quickly falling behind our peers.
The GMAP holds the potential to get our trade and investment back on track. Its focus on key markets and sectors should make our existing efforts more effective, and the ongoing push to sign trade and investment agreements, such as the ones recently announced with Europe and Korea, is very important. But we need to do much more.
I'd like to focus here on the GMAP's commitment to a new trade promotion plan that promises to enhance the services available to Canadian companies and ensure that Canada's diplomatic presence is leveraged to support our businesses on the ground.
As you may be aware, on Monday, the Canadian Chamber of Commerce released a new report titled Turning it Around: How to Restore Canada's Trade Success. I've circulated copies to the committee. Based on consultations with our members and a look at what our competitor countries are doing in this area, the report offers a set of recommendations under four themes.
The first theme is that we need to make the most of what we already have by integrating trade services and connecting them with businesses. There are literally dozens of departments and agencies at the federal and provincial levels offering valuable training, business development, financing, and marketing support for international expansion, but these efforts are often poorly coordinated and the system is very difficult to navigate, particularly for SMEs, which are largely the target of the global markets action plan.
Service providers need to be better at working together and sharing information on their domestic clients and foreign leads. We understand that the government is already taking steps to do this. An MOU between Export Development Canada and Business Development Canada, for instance, has led to a rapid rise in the number of two-way referrals. A similar MOU has been signed recently between the trade commissioner service and Export Development Canada. We would encourage the government to deepen and broaden these coordination efforts to include other federal departments and ministries that may be involved in international trade promotion, as well as provincial agencies that play a role in what we can increasingly call a trade promotion ecosystem. We should also explore an online portal that would bring together all of these services, as well as up-to-date market intelligence and leads on foreign opportunities, in a way that is easily accessible for businesses.
Second, we need to put the business back in Canada's global brand. International polls repeatedly show that Canada's reputation is virtually unmatched, and this government can take a lot of credit for the economic management that has helped to perpetuate that reputation. But we need to do a better job of extending this brand into the business realm and not just as a destination for investment. High-level business representation on state visits would help bridge the awareness gap. CEOs are often approached just days before prime ministerial trips. One suggestion we have is that the Prime Minister could appoint a special trade ambassador from the private sector who would be dedicated to working closely with the provinces and the heads of major Canadian companies to organize high-level delegations to priority markets under the national banner.
We should also consider a more active national branding program that would monitor and manage our business reputation among those of key influence in priority markets. Currently a lot of our national branding efforts are fragmented according to specific sector objectives and are not united in a more holistic story about Canada's business capabilities.
Third, we need to strengthen the front lines. The trade commissioner service is at the heart of Canada' s economic diplomacy, and they need to have the resources and skills set to get the job done right. Despite rising service requests, budgets and staffing are at the same level as they were in 2007 and are set to stay flat for the foreseeable future. As a share of GDP, the United Kingdom now spends twice as much as Canada on its trade diplomats.
Finally, we need to do a better job of connecting trade and aid. The government has taken some steps in this direction, but we have some more specific suggestions. The involvement of Canadian business in international development projects is currently well below its potential. Canada should make more use of direct programming, managed by Canada with target countries. Nearly 80% of our official aid in 2013 went to foreign agencies, often on a sole-sourced basis, and tenders on federal websites for international development projects have slowed to a trickle. More could be done to connect Canadian expertise to multilateral development banks and international humanitarian institutions, where our share of contracts is particularly low relative to other countries.
The government also needs to expand the financing tools it has to stimulate Canadian private investment in developing countries. For decades, Canada has been the only G-7 country not to have a dedicated national development finance institution that can offer concessional loans, equity, risk guarantees, and grants for technical assistance and feasibility studies.
The serious decline in Canada' s trade performance deserves immediate attention. The GMAP certainly points in the right direction, but we need to do more than just sign trade agreements and shuffle resources within our existing trade promotion model. The time has come for bold action, to make sure our companies have the best tools and the muscles behind them to succeed in an increasingly competitive world.
Thank you.
